Pavlo Lazarenko
Encyclopedia
Pavlo Ivanovych Lazarenko is a former Ukrainian
politician and former Prime Minister
who, in August 2006, was convicted and sentenced to prison in the United States for money laundering
, wire fraud
and extortion
. According to the official count by United Nations, approximately $200,000,000 has been looted by Lazarenko during 1996–1997 from the government of Ukraine.
Leonid Kravchuk
, Lazarenko served as the presidential representative in Dnipropetrovsk Oblast
from 1992 till 1995. Although Lazarenko sided with incumbent Kravchuk in the 1994
elections, he managed to establish close ties with the election winner, Leonid Kuchma
. President Kuchma initially reappointed Lazarenko as the head of the state administration (governor) of Dnipropetrovsk Oblast
and, later, promoted him to the Cabinet of Ministers of Ukraine
.
by President Kuchma on 28 May 1996. The appointment was never considered by the Verkhovna Rada
(parliament) because at that time the right to unilaterally appoint the Prime Minister was vested with the President under a provisional constitutional agreement.
Early in his career as PM, Lazarenko survived an attempt on his life when a bomb exploded near his blocked car en route from Kiev
to Boryspil
airport.
While in charge of the Cabinet, Lazarenko reportedly exercised control over many lucrative business projects and charged 50 percent of profits for his patronage. At that time, he maintained a close business relationship with Yulia Tymoshenko
, then the CEO of Yedyni Energosystemy Ukrayiny (United Energy Systems of Ukraine
), a monopoly that imported Russian natural gas.
Lazarenko was involved in a prolonged and bitter struggle for economic domination with the emerging "Donetsk clan" (an industrial group based in Donetsk
). At the time, some Ukrainian media indirectly accused Shcherban, the leader of the Liberal Party of Ukraine
, of the 1996 assassination attempt on Lazarenko. Conversely, others speculated that Shcherban's murder was a tit-for-tat order by the Prime Minister.
He may have also plotted against Oleksandr Volkov, a close associate of President Kuchma. Reportedly, Volkov became aware of the planned assassination and made a phone call to Lazarenko threatening adequate revenge.
By mid-1997, Lazarenko had fallen out of favor with Kuchma, who suspected him of making plans to run for presidency in 1999. Kuchma later regretted Lazarenko's appointment as "my gravest mistake".
Lazarenko, who had no previous record of serious illness, was unexpectedly hospitalized in late June 1997. He most likely spent the two weeks of the leave for his supposed sickness in vain attempts to mend fences with Kuchma. Technically, under the Ukrainian labor code law, a hospitalized individual may not be fired. However, when his dismissal became imminent, Lazarenko resigned on 2 July 1997, on his own initiative. Thus far, he remains the only Ukrainian Prime Minister who formally resigned at his will.
(parliament) in March 1998
, where he headed the parliamentary faction of his political party "Hromada
". "Hromada" frequently sided with the parliamentary faction of Oleksandr Moroz
.
In December 1998, Lazarenko was detained on money-laundering charges as he crossed by car from France into Switzerland
. In a few weeks, he was released on bail in the amount of three million dollars.
Meanwhile, details of his arrest in Switzerland led to a political scandal in Ukraine. Apparently, Lazarenko attempted to cross the Swiss border with a valid Panamanian passport
even though Ukrainian law prohibits dual citizenship
.
The public uproar was, in part, instigated by Kuchma's administration who pressed for Lazarenko's arrest. The parliament finally acquiesced to waive Lazarenko's parliamentary immunity
on 17 February 1999. However, Lazarenko fled the country on the eve of the parliamentary vote.
He initially stopped in Greece
, but was later detained in the New York JFK
airport on 20 February 1999 on suspicion of illegally entering the United States. Reportedly, Lazarenko had a stack of documents with him, including a Ukrainian diplomatic passport with an outdated U.S. visa, and requested political asylum.
Subsequently, Lazarenko was transferred to a jail in San Francisco, since his family owned a ranch in California. In 2000, the Ukrainian authorities requested his extradition after charging him over the 1996 killing of Yevhen Shcherban
and two attempts on the lives of high-ranking officials. The office of the Prosecutor General of Ukraine
also claimed that Lazarenko instigated the assassination of Vadym Hetman
in late April 1998.
In the United States, Lazarenko was put on trial for money-laundering, corruption, and fraud. Attorney Daniel Horowitz represented Lazarenko on charges arising out of his operation of the Ukrainian gas business, Doron Weinberg represented him regarding charges of extortion of a business partner. The judge dismissed more than half the charges but allowed the remaining charges to be presented to the jury for decision. In late May 2004, a federal jury in San Francisco found him guilty of using his position to get rich through a series of business schemes. In October 2005, Lazarenko stated his intention to return to Ukraine in order to run in the March 2006 parliamentary elections
.
From June 2004 until August 2006, Lazarenko remained under house arrest at an undisclosed location on $86 million bail after being convicted by a 12 member jury.
In 2004 Transparency International named Lazarenko the eighth most corrupt political leader in recent history.
On 25 August 2006, Lazarenko was sentenced to 9 years in federal prison.
On 18 October 2006, an appeal stemming from Lazarenko's conviction (but not the appeal of the conviction) was heard by a three judge panel of the United States Court of Appeals for the Ninth Circuit
, which included former Associate Justice
of the Supreme Court
Sandra Day O'Connor
sitting by designation.
Lazarenko is incarcerated at the Federal Correctional Institution
in Dublin
, California. On 19 November 2009 U.S. District Court Judge Charles Breyer cut Lazarenko's sentence from 108 to 97 months in prison. The court took into account the fact that the Ninth Circuit Court of Appeals had dismissed his conviction on approximately half the counts of conviction leaving convictions only for acts committed 17 years ago.
In November 2009 Ukrainian Interior Minister Yuriy Lutsenko
stated that if Lazarenko returns to Ukraine he will be detained as he is on the international wanted list.
In a special investigative report conducted by Kelly Carr and Brian Grow, two Reuter's journalists, it is stated that Lazarenko "was once ranked the eighth-most corrupt official in the world by watchdog group Transparency International" and that "Court records submitted in Lazarenko's criminal case and documents from a separate civil lawsuit, as well as interviews with lawyers familiar with the matter, indicate Lazarenko controls a shelf company incorporated in Cheyenne that owns an estimated $72 million in real estate in Ukraine through other companies". That shelf company, a special type of shell company, is named Capital Investments Group.
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...
politician and former Prime Minister
Prime Minister of Ukraine
The Prime Minister of Ukraine is Ukraine's head of government presiding over the Cabinet of Ministers of Ukraine, which is the highest body of the executive branch of the Ukrainian government....
who, in August 2006, was convicted and sentenced to prison in the United States for money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
, wire fraud
Wire fraud
Mail and wire fraud is a federal crime in the United States. Together, 18 U.S.C. §§ 1341, 1343, and 1346 reach any fraudulent scheme or artifice to intentionally deprive another of property or honest services with a nexus to mail or wire communication....
and extortion
Extortion
Extortion is a criminal offence which occurs when a person unlawfully obtains either money, property or services from a person, entity, or institution, through coercion. Refraining from doing harm is sometimes euphemistically called protection. Extortion is commonly practiced by organized crime...
. According to the official count by United Nations, approximately $200,000,000 has been looted by Lazarenko during 1996–1997 from the government of Ukraine.
Early career
Under PresidentPresident of Ukraine
Prior to the formation of the modern Ukrainian presidency, the previous Ukrainian head of state office was officially established in exile by Andriy Livytskyi. At first the de facto leader of nation was the president of the Central Rada at early years of the Ukrainian People's Republic, while the...
Leonid Kravchuk
Leonid Kravchuk
Leonid Makarovych Kravchuk is a Ukrainian politician, the first President of Ukraine serving from December 5, 1991 until his resignation on July 19, 1994, a former Chairman of the Verkhovna Rada and People's Deputy of Ukraine serving in the Social Democratic Party of Ukraine faction.After a...
, Lazarenko served as the presidential representative in Dnipropetrovsk Oblast
Dnipropetrovsk Oblast
Dnipropetrovsk Oblast is an oblast of central Ukraine, the most important industrial region of the country. Its administrative center is Dnipropetrovsk....
from 1992 till 1995. Although Lazarenko sided with incumbent Kravchuk in the 1994
Ukrainian presidential election, 1994
The Ukrainian presidential election, 1994 was held on June 26, 1994 and July 10, 1994. The presidential election was ahead of schedule, following a political compromise between the President and Parliament...
elections, he managed to establish close ties with the election winner, Leonid Kuchma
Leonid Kuchma
Leonid Danylovych Kuchma was the second President of independent Ukraine from 19 July 1994, to 23 January 2005. Kuchma took office after winning the 1994 presidential election against his rival, incumbent Leonid Kravchuk...
. President Kuchma initially reappointed Lazarenko as the head of the state administration (governor) of Dnipropetrovsk Oblast
Dnipropetrovsk Oblast
Dnipropetrovsk Oblast is an oblast of central Ukraine, the most important industrial region of the country. Its administrative center is Dnipropetrovsk....
and, later, promoted him to the Cabinet of Ministers of Ukraine
Cabinet of Ministers of Ukraine
The Cabinet of Ukraine is the highest body of state executive power in Ukraine also referred to as the Government of Ukraine...
.
Prime minister
Lazarenko was appointed Prime Minister of UkrainePrime Minister of Ukraine
The Prime Minister of Ukraine is Ukraine's head of government presiding over the Cabinet of Ministers of Ukraine, which is the highest body of the executive branch of the Ukrainian government....
by President Kuchma on 28 May 1996. The appointment was never considered by the Verkhovna Rada
Verkhovna Rada
The Verkhovna Rada of Ukraine is Ukraine's parliament. The Verkhovna Rada is a unicameral parliament composed of 450 deputies, which is presided over by a chairman...
(parliament) because at that time the right to unilaterally appoint the Prime Minister was vested with the President under a provisional constitutional agreement.
Early in his career as PM, Lazarenko survived an attempt on his life when a bomb exploded near his blocked car en route from Kiev
Kiev
Kiev or Kyiv is the capital and the largest city of Ukraine, located in the north central part of the country on the Dnieper River. The population as of the 2001 census was 2,611,300. However, higher numbers have been cited in the press....
to Boryspil
Boryspil
Boryspil is a city located in the Kiev Oblast in northern Ukraine. Serving as the administrative center of the Boryspil Raion , the city itself is also designated as a separate raion within the oblast....
airport.
While in charge of the Cabinet, Lazarenko reportedly exercised control over many lucrative business projects and charged 50 percent of profits for his patronage. At that time, he maintained a close business relationship with Yulia Tymoshenko
Yulia Tymoshenko
Yulia Volodymyrivna Tymoshenko , née Grigyan , born 27 November 1960, is a Ukrainian politician. She was the Prime Minister of Ukraine from 24 January to 8 September 2005, and again from 18 December 2007 to 4 March 2010. She placed third in Forbes Magazine's List of The World's 100 Most Powerful...
, then the CEO of Yedyni Energosystemy Ukrayiny (United Energy Systems of Ukraine
United Energy Systems of Ukraine
United Energy Systems of Ukraine, abbreviated to UESU , was a natural gas trading company in Ukraine. In mid of 2000s, it was the largest natural gas importer in the region. Since 2000 the company had been affected by a series of scandals....
), a monopoly that imported Russian natural gas.
Lazarenko was involved in a prolonged and bitter struggle for economic domination with the emerging "Donetsk clan" (an industrial group based in Donetsk
Donetsk
Donetsk , is a large city in eastern Ukraine on the Kalmius river. Administratively, it is a center of Donetsk Oblast, while historically, it is the unofficial capital and largest city of the economic and cultural Donets Basin region...
). At the time, some Ukrainian media indirectly accused Shcherban, the leader of the Liberal Party of Ukraine
Liberal Party of Ukraine
The Liberal Party of Ukraine is a political party in Ukraine, led by Volodymyr Shcherban. It was established in September 1991 and was officially registered the next month. It is based mainly on Donets Basin area...
, of the 1996 assassination attempt on Lazarenko. Conversely, others speculated that Shcherban's murder was a tit-for-tat order by the Prime Minister.
He may have also plotted against Oleksandr Volkov, a close associate of President Kuchma. Reportedly, Volkov became aware of the planned assassination and made a phone call to Lazarenko threatening adequate revenge.
By mid-1997, Lazarenko had fallen out of favor with Kuchma, who suspected him of making plans to run for presidency in 1999. Kuchma later regretted Lazarenko's appointment as "my gravest mistake".
Lazarenko, who had no previous record of serious illness, was unexpectedly hospitalized in late June 1997. He most likely spent the two weeks of the leave for his supposed sickness in vain attempts to mend fences with Kuchma. Technically, under the Ukrainian labor code law, a hospitalized individual may not be fired. However, when his dismissal became imminent, Lazarenko resigned on 2 July 1997, on his own initiative. Thus far, he remains the only Ukrainian Prime Minister who formally resigned at his will.
Imprisonments and trials
Lazarenko was elected to the Verkhovna RadaVerkhovna Rada
The Verkhovna Rada of Ukraine is Ukraine's parliament. The Verkhovna Rada is a unicameral parliament composed of 450 deputies, which is presided over by a chairman...
(parliament) in March 1998
Ukrainian parliamentary election, 1998
The second Ukrainian parliamentary election after the collapse of the Soviet Union took place on 29 March 1998. In comparison to the first parliamentary election, this time half of 450 parliament seats were filled by single-seat majority winners in 225 electoral regions , and the other half were...
, where he headed the parliamentary faction of his political party "Hromada
Hromada (political party)
All-Ukrainian Association "Hromada" is a Ukrainian political party registered in March 1994 and reregistered in March 2005. The party is led by former Prime Minister Pavlo Lazarenko....
". "Hromada" frequently sided with the parliamentary faction of Oleksandr Moroz
Oleksandr Moroz
Oleksandr Oleksandrovych Moroz is a Ukrainian statesman and politician. He was the Speaker of Verkhovna Rada of Ukraine twice: July 2006 to September 2007, and previously in 1994 through 1998. Moroz is one of the founders and leader of the Socialist Party of Ukraine, which was an influential...
.
In December 1998, Lazarenko was detained on money-laundering charges as he crossed by car from France into Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
. In a few weeks, he was released on bail in the amount of three million dollars.
Meanwhile, details of his arrest in Switzerland led to a political scandal in Ukraine. Apparently, Lazarenko attempted to cross the Swiss border with a valid Panamanian passport
Panamanian passport
Panamanian passports are issued to Panamanian citizens to travel outside of Panama. Panamanian citizens enjoy visa-free access to approximately 100 countries and territories...
even though Ukrainian law prohibits dual citizenship
Multiple citizenship
Multiple citizenship is a status in which a person is concurrently regarded as a citizen under the laws of more than one state. Multiple citizenships exist because different countries use different, and not necessarily mutually exclusive, citizenship requirements...
.
The public uproar was, in part, instigated by Kuchma's administration who pressed for Lazarenko's arrest. The parliament finally acquiesced to waive Lazarenko's parliamentary immunity
Parliamentary immunity
Parliamentary immunity, also known as legislative immunity, is a system in which members of the parliament or legislature are granted partial immunity from prosecution. Before prosecuting, it is necessary that the immunity be removed, usually by a superior court of justice or by the parliament itself...
on 17 February 1999. However, Lazarenko fled the country on the eve of the parliamentary vote.
He initially stopped in Greece
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....
, but was later detained in the New York JFK
John F. Kennedy International Airport
John F. Kennedy International Airport is an international airport located in the borough of Queens in New York City, about southeast of Lower Manhattan. It is the busiest international air passenger gateway to the United States, handling more international traffic than any other airport in North...
airport on 20 February 1999 on suspicion of illegally entering the United States. Reportedly, Lazarenko had a stack of documents with him, including a Ukrainian diplomatic passport with an outdated U.S. visa, and requested political asylum.
Subsequently, Lazarenko was transferred to a jail in San Francisco, since his family owned a ranch in California. In 2000, the Ukrainian authorities requested his extradition after charging him over the 1996 killing of Yevhen Shcherban
Yevhen Shcherban
Yevhen Shcherban was a Ukrainian businessman and politician from the Donetsk Oblast.In the mid-1990s, Shcherban was among the richest people in Ukraine and prominent and influential member of parliament for the Liberal Party of Ukraine. He and his wife were assassinated at Donetsk Airport in...
and two attempts on the lives of high-ranking officials. The office of the Prosecutor General of Ukraine
Prosecutor General of Ukraine
The Prosecutor General of Ukraine heads the system of official prosecution in courts known as the Office of the Prosecutor General of Ukraine...
also claimed that Lazarenko instigated the assassination of Vadym Hetman
Vadym Hetman
Vadym Petrovych Hetman was a Ukrainian statesman and banker. He is credited with the creation of the central bank of the country, the National Bank of Ukraine....
in late April 1998.
In the United States, Lazarenko was put on trial for money-laundering, corruption, and fraud. Attorney Daniel Horowitz represented Lazarenko on charges arising out of his operation of the Ukrainian gas business, Doron Weinberg represented him regarding charges of extortion of a business partner. The judge dismissed more than half the charges but allowed the remaining charges to be presented to the jury for decision. In late May 2004, a federal jury in San Francisco found him guilty of using his position to get rich through a series of business schemes. In October 2005, Lazarenko stated his intention to return to Ukraine in order to run in the March 2006 parliamentary elections
Ukrainian parliamentary election, 2006
The Ukrainian parliamentary election took place on March 26, 2006. Election campaigning officially began on July 7, 2005. Between November 26 and December 31, 2005 party lists of candidates were formed....
.
From June 2004 until August 2006, Lazarenko remained under house arrest at an undisclosed location on $86 million bail after being convicted by a 12 member jury.
In 2004 Transparency International named Lazarenko the eighth most corrupt political leader in recent history.
On 25 August 2006, Lazarenko was sentenced to 9 years in federal prison.
On 18 October 2006, an appeal stemming from Lazarenko's conviction (but not the appeal of the conviction) was heard by a three judge panel of the United States Court of Appeals for the Ninth Circuit
United States Court of Appeals for the Ninth Circuit
The United States Court of Appeals for the Ninth Circuit is a U.S. federal court with appellate jurisdiction over the district courts in the following districts:* District of Alaska* District of Arizona...
, which included former Associate Justice
Associate Justice
Associate Justice or Associate Judge is the title for a member of a judicial panel who is not the Chief Justice in some jurisdictions. The title "Associate Justice" is used for members of the United States Supreme Court and some state supreme courts, and for some other courts in Commonwealth...
of the Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
Sandra Day O'Connor
Sandra Day O'Connor
Sandra Day O'Connor is an American jurist who was the first female member of the Supreme Court of the United States. She served as an Associate Justice from 1981 until her retirement from the Court in 2006. O'Connor was appointed by President Ronald Reagan in 1981...
sitting by designation.
Lazarenko is incarcerated at the Federal Correctional Institution
Federal Correctional Institution, Dublin
The Federal Correctional Institution, Dublin is a federal prison in the United States, primarily housing women. It is located near the city of Dublin in Alameda County, California, southeast of Oakland and approximately east of San Francisco....
in Dublin
Dublin, California
Dublin is a suburban city of the East Bay region of Alameda County, California, United States. Located along the north side of Interstate 580 at the intersection with Interstate 680, roughly east of Hayward, west of Livermore and north of San Jose, it was named after the city of Dublin in...
, California. On 19 November 2009 U.S. District Court Judge Charles Breyer cut Lazarenko's sentence from 108 to 97 months in prison. The court took into account the fact that the Ninth Circuit Court of Appeals had dismissed his conviction on approximately half the counts of conviction leaving convictions only for acts committed 17 years ago.
In November 2009 Ukrainian Interior Minister Yuriy Lutsenko
Yuriy Lutsenko
Yuriy Vitaliyovych Lutsenko is a Ukrainian politician and statesman and former Minister of Internal Affairs, he occupied this post in the two Cabinets of Yulia Tymoshenko and in Cabinets of Yuriy Yekhanurov, and Viktor Yanukovych...
stated that if Lazarenko returns to Ukraine he will be detained as he is on the international wanted list.
In a special investigative report conducted by Kelly Carr and Brian Grow, two Reuter's journalists, it is stated that Lazarenko "was once ranked the eighth-most corrupt official in the world by watchdog group Transparency International" and that "Court records submitted in Lazarenko's criminal case and documents from a separate civil lawsuit, as well as interviews with lawyers familiar with the matter, indicate Lazarenko controls a shelf company incorporated in Cheyenne that owns an estimated $72 million in real estate in Ukraine through other companies". That shelf company, a special type of shell company, is named Capital Investments Group.