“Ukraine could have been one of the main sources of arms shipments to the Balkans during the war, despite the embargo”

5 June 2012, 07:55

Slovenian investigative journalists Matej Šurc and Blaž Zgaga and their families are being threatened with murder after they published their book V imenu države (In the Name of the State). The book is one of the most scandalous investigations of arms trade despite the UN embargo during the war in the former Yugoslavia. In the early 1990s, Slovenia was one of the key support centers for the storage and transportation of thousands of tons of ammunition from different countries, including Ukraine. The journalists suggest that Janez Janša, the current Prime Minister of Slovenia, and the top officials of several Balkan states played a crucial role in the illegal deals. The information they found triggered the first international investigation in the history of the EU, involving the police of three of its member-states. Matej Šurc and Blaž Zgaga researched 6,000 documents, collaborated with their colleagues from six more countries and found evidence of top officials in Slovenian intelligence and the army earning millions of dollars in kickbacks.

U.W.: An entire section in your book is dedicated to Ukraine. Could you summarize it for us? What was Ukraine’s role in this shady business?

BZ: I’m convinced that Ukraine could have been one the main sources of shipments to Slovenia. The first ship, the Sabine, arrived in April 1992, delivering weapons to Koper, which at that time was the only Balkan port that was not under international control. It was loaded with hundreds of anti-aircraft and anti-armour missiles. Altogether, eight so-called official ships arrived from different countries delivering 12,000 tones of ammunition, but this one was the first one found in the documents to be departing from the port in Mykolayiv. We were also able to decipher financial reports, which prove that as soon as the ship arrived at its destination, millions of dollars were transferred to the account of the Vienna-based Scorpion International Services, and from there – to its traditional recipient, Global Technologies International Inc., owned by a Ukrainian, Dmytro Streshynsky.

Another ship, the Island, delivered 96 containers with ammunition over several trips in autumn 1992. The cargo manifest and the documents from port authorities show that not only did it arrive in Koper and was unloaded there, but also confirmed that the containers with Ukrainian ammunition crossed the border between Slovenia and Croatia. The only ship that left Ukraine but did not arrive at Koper was the Jadran Express. It was halted by NATO, which confiscated the cargo.

U.W.: Is the information you discovered really new? For the last 20 years, no-one knew that so many weapons were delivered to Slovenia.

MS: I think nobody found the connection until now. The international scandal broke after the Jadran Express was captured. It started because of just one ship, although we discovered that it was the last of the eight ships involved.  It was one of the biggest ones, too, carrying 133 containers worth USD 22mn. At least, that was the amount transferred before the ship left the port.

U.W.: An investigation by a Ukrainian parliamentary committee undertaken in the late 1990s, that was closed down quickly, revealed that Ukraine ended up owning 1/3 of soviet arms, with an estimated value of USD 90bn in 1992. Over the subsequent six years, more than 30% of the ammunition and equipment, worth USD 32mn, was essentially stolen and sold illegally. What amounts are we talking about in terms of the trade between Kyiv and Ljubljana and who got the money?

BZ: All business with the Ukrainian party was conducted through Scorpion International Services. By the way, its owner, Konstantinos Dafermos, still has an office in downtown Vienna. Dmytro Streshynsky was the second intermediary. Based on Scorpion’s accounts, USD 86mn was paid by Slovenian, Croatian and Bosnian buyers from September 1991 till September 1993. Of this amount, about USD 40mn was paid to the Ukrainian party. USD 7mn was given directly to Global Technologies International Inc., registered by Dmytro Streshynsky in Panama.

MS: It is important to mention the fate of Dmytro Streshynsky, the key intermediary after NATO halted the Jadran Express. He and Russian businessmen Aleksandr Zhukov and Leonid Lebedev were taken to court in Italy as part of the big international investigation.

BZ: The Slovenian police were also interested in Streshynsky at the time. We have a copy of the inquiry to the Ukrainian police but we don’t know how the latter responded.

MS: This was one of the most important documents we used to decode data on cash transfers to Streshynsky. However, the Slovenian police did not continue the investigation. A former chief of Slovenian police once admitted that they could not dig too deep into a case involving another country. They wanted to convict the executors, leaving the “big fish” alone.

U.W.: In 2002, an Italian court sentenced Streshynsky to 11 months of probation and a symbolic fine of a few hundred euros. Are you tracking his current activities?

BZ : Streshynsky lives in Moscow. He is the director at Arsenal, a plant that makes miniature replicas of firearms. I’ve also seen a picture of him holding a miniature golden gun in a newspaper in one of the Gulf States. He sells them for several thousand dollars each as little toys for wealthy sheikhs. That’s how the circle closes. All in all, we can say that most of the people mentioned in our book that were involved in the illegal arms trade are all feeling pretty good today. For instance, the ex-chief of Slovenian military intelligence headed a carrier company that recently invested EUR 140mn in the construction of a terminal at one of the airports in Moscow.

U.W.: During Streshynsky’s trial, the Ukrainian authorities insisted that he was a fraudster using fake documents to deliver weapons to the Balkans with the help of the Russian mafia. Obviously, Streshynsky denied everything, claiming that Yevhen Marchuk, the then Minister of Defense, was aware of what he was doing. Did you discover any more information on the involvement of Ukrainian officials in the deals?

BZ: No direct proof was found of Marchuk’s involvement in the scams. I must say, though, that we only publish something when we have not even two, but at least three sources to support it. The fact that the Island delivered weapons from Ukraine was proven by bank accounts, documents from the parliamentary investigation in Slovenia and Streshynsky’s testimony in court. It has to be said that no source, other than the latter, mentions Marchuk.

MS:We focused on what was happening in the Balkans, so we couldn’t go into much detail about Russia, Ukraine and Bulgaria.

BZ: But, it was important for us to show that arms trading is big politics, not just some mafia manipulation. How can a criminal group possibly steal an entire ship with such cargo and transfer it through the Dardanelles in such a way that not a single patrol notices it? This is state business and the people involved in it use the mafia to cover things up.

MS: You can’t compare it to the drug trade. Drugs can be sold by individual government officials, for instance, not the state itself, but in the case of weapons, the involvement of top officials cannot be denied.

Matej Šurc and Blaž Zgaga researched 6,000 documents, collaborated with their colleagues from six more countries to find the evidence

U.W.: How would you describe to Ukrainians the consequences caused by illegally sold weapons in the Balkan violence, 20 years after the fact?

BZ: It’s very simple. Until 1991, Yugoslavia had the best living standards in the former socialist states. Today, Bosnia and Kosovo have turned into the black hole of Europe, with debts, refugees and educated people leaving their homeland because of the wars and arms trade. All this leads to blood money and corruption, the side effect of which is the death of people. According to the estimates of international monitoring entities, one third of the biggest corrupt deals are in arms trade, involving top government officials. Still, human lives matter more. In August 1994, Nikša Župa, one of the closest suppliers of Konstantinos Dafermos, was killed. He was flying to a Bosnian city from Pula in a Ukrainian AN-24. The pilot was Bosnian but the five crew members were Ukrainians. They all died.

MS: Vadym Prymachenko, the then Consul General of Ukraine to Bosnia and Herzegovina, was later appointed Ambassador in Slovenia. We tried to find out from him how the subsequent investigation ended. In a short email, he replied that he didn’t know the outcome. The most important thing is that the families of the five crew members killed in the plane crash have yet to learn what actually happened. Apparently, Župa was selling weapons to both parties to the conflict and lost his life as a result, but he was not the only one to die.

BZ: This was not the only plane from Ukraine. We are planning to write more about a Ukrainian Il-76 delivering weapons to a Slovenian airport from Sudan, but it was actually owned by a Hungarian company.

U.W.: All the deals involving the top officials that you mentioned are illegal, since they were made despite the embargo. Would there have been a case if there hadn’t been an embargo?

BZ: The arms embargo can be viewed as a positive move that supposedly halted the weapons flow. But we show in our book that it’s not that simple. According to SIPRI, a Swedish centre that looks into these issues, the ban only pertained to seven African countries until 1991. Later, Bosnia and Herzegovina, Slovenia, Macedonia and Yugoslavia were added to the list. The war was in full swing and the defense ministries of these newly-declared republics did everything possible to obtain weapons, legally or illegally. With the embargo in place, they could only get it on black markets, which was a direct path to corruption. Meanwhile, many countries in the West and East had a lot of weapons and were willing to cash in. Prices skyrocketed. If it hadn’t been for the embargo, the process would perhaps have been more transparent and less money would have ended up in the hands of intermediaries.

U.W.: How did top officials and law enforcers react to your book, after all, you revealed some illegal activities?

MS: Nothing has actually happened because any attempt to deny something will cause a domino effect, so it’s better to hush it up. Everyone has a skeleton in the closet. But the book sells well.

U.W.: Has anyone sued you?

BZ: Not yet, but there have been new threats, much more serious threats.

MS: Someone called my mother-in-law from an unidentified number and told her, “Is Matej your son-in-law? Oh, then he’ll be dead because of what he writes.” Needless to say, we turned to the police.

U.W.: Was it similar to how Finnish journalist Magnus Berglund was intimidated a few years ago, when he prepared a TV programme for Finland, with your assistance, about Janez Janša, the current Slovenian Prime Minister and then Minister of Defense, and top officials getting bribes from Patria, a Finnish arms producer, for a contract to buy armoured vehicles?

BZ: I did help Magnus with his investigation in 2008 and received an anonymous threat. A week earlier, he discovered that the left wheel on his car was damaged.

U.W.: The Patria case has been under investigation for three years now. How different is the process in Finland, which is considered to be one of the least corrupt states in the world, from the process in Slovenia?

BZ: With Patria, three countries including Slovenia, Finland and Austria, established a united team, unprecedented in modern Europe. They are all conducting separate trials at the same time. Finland is looking into the case of those paying the bribe – specifically, Patria. Austria is dealing with the intermediaries, i.e. companies and entities that transferred cash through offshore accounts. Slovenia is investigating the recipients of said bribes, including officials who were in power in the early 1990s. One of the five people being sued is Janez Janša, the current Prime Minister of Slovenia, an EU member-state. The trial started in Austria in January 2012 and we can’t wait to hear the verdict as the prosecution partly used the same evidence that we have.

MS: A recent survey in Slovenia showed that only 10% of the population thinks that our Prime Minister will be held liable.

U.W.: Which influential people outside Slovenia could find your investigation harmful?

BZ: Our trilogy touches many important people at the Croatian Christian Democratic Union. We have proof of Vladimir Šeks, Prosecutor General under Franjo Tudman, getting weapons free of charge, while General Martin Špegelj, ex-Minister of Defense, received truckloads of weapons. This could be a signal that the supply of these types of goods to Croatia and Bosnia was an international operation by the special services of different countries. According to documents on the transfer of assets and debts, Serbia got virtually all the weapons of the Yugoslavian People’s Army that included 220,000 tons of ammunition and explosives, while Slovenia received 10,000 tons and its leaders immediately handed it over to Croatia. Serbia used all of its reserves in the first three months of the conflict while the war went on for years. I find it scary to think about the amount of weapons we’re talking about here. According to our estimates alone, 20 ships with ammunition and explosives arrived in Koper, which is no coincidence. A vessel departing from Poland has to first cross the Baltic Sea, enter the territorial waters of Germany and Denmark, cross the North Sea, the English Channel, and pass Europe and Gibraltar. Surely this offers plenty of opportunities to check what is on board the vessel?  

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