Europe

Vatican Cleric, Secret Service Officer Implicated in $26 Million Vatican Bank Scandal; Leads Bank Director, Deputy to Resign

by Tony Iozzo
Impunity Watch Reporter, Europe

ROME, Italy – The director of the Vatican bank and his deputy resigned Monday amidst a financial scandal that has led to a prelate and an Italian Secret Service Officer being arrested by Italian authorities.

The Vatican bank finds itself marred by a large financial scandal. (Photo courtesy of BBC news)

The prelate, Monsignor Nunzio Scarano, the bishop of Salerno, and the secret service agent, Giovanni Maria Zito, were detained after an investigation arising out of a three-year examination into the Vatican Bank.

Italian prosecutors allege that the men planned to sneak $26 million into Italy and avoid facing financial controls on the money. They allegedly hired a private plane last July with the intention of bringing the cash from Switzerland to Italy, where the money was to be picked up by Zito, who, by virtue of his position as a Secret Service Agent, would not be required to declare it at the border.

According to reports, Scarano needed the money to pay off a personal mortgage, and was advised to ask 56 friends to accept 10,000 euros each to launder the money and inconspicuously hide it.

The Vatican bank, known as the Institute for Religious Works (IOR), saw its director, Paolo Cipriani, as well as its deputy director, Massimo Tulli, step down “in the best interest of the institute and the Holy See,” the Vatican said in a statement.

The IOR has been under strict scrutiny amid concerns that it was being used as an offshore tax haven. It has undergone drastic changes in an effort to adhere to international norms to fight money laundering and terror financing. The “old guard” management of the bank did not always whole-heartedly conform to the scrutiny, and Monday’s resignations represent a final overthrow of the “old guard” management.

The European Union and the United States have notified countries that they would no longer tolerate tax havens such as Switzerland and Luxembourg. Pope Francis and Pope Benedict XVI have tried to bring the bank into compliance with European norms so that it can use the euro. As such, the Vatican has been complying with investigators on the case, which has largely been unprecedented its history as a sovereign entity.

In years past, the Vatican has refused to assist in investigations into a murder, a kidnapping, and an assassination attempt on Pope John Paul II.

“This time the collaboration is real, and the Vatican has announced that it would do its own internal investigation,” a Turin reporter indicated.

A commission of cardinals was appointed by Pope Francis that will report on further activities of the IOR and collect both confidential and non-confidential information on the bank.

For more information, please see:

BBC News – Vatican Bank Director and Deputy Resign Amid Scandal – 1 July 2013

Yahoo News – Vatican Bank Director, Deputy Resign Amid Scandal – 1 July 2013

Al Jazeera – Vatican Cleric Arrested in Corruption Case – 28 June 2013

Corriere – Prelate and Secret Service Officer Arrested in Vatican Bank Inquiry – 28 June 2013

New York Times – Cleric Arrested in $26 Million Bank Plot, Leaving New Blot on Vatican Bank – 28 June 2013

 

Former UK Undercover Cop Alleges Police Spying on Murder Victim’s Family

by Tony Iozzo
Impunity Watch Reporter, Europe

LONDON, England – British Prime Minister David Cameron ordered an investigation into a former undercover police officer’s claims that he was ordered to spy on the family of the black victim of one of Britain’s most notorious racially-motivated murders.

New controversy has come to light in the murder case of Stephen Lawrence (pictured above) (Photo courtesy of Al Jazeera)

The former police officer, Peter Francis, has stated that superior officers at Scotland Yard, formally the Metropolitan Police Service, ordered him to investigate and find any information that could be used against the members of the victim’s family, specifically to determine whether any individuals were political activists, involved in public demonstrations, or drug dealers.

The victim, 18 year old Stephen Lawrence, was stabbed to death at a London bus stop on April 22, 1993. He and his friend, Duwayne Brooks, were waiting for a bus on their way home from night classes, and were victimized by a white youth-gang.

Francis, who reported to The Guardian newspaper on Monday, said that he posed as an anti-racist activist with three other officers and infiltrated the Youth Against Racism in Europe, a group led by Lawrence’s parents that held protests.

Francis said that the spying was to discredit the Lawrence family’s campaign against racial violence because senior officers believed that the public protests could trigger Rodney King-esque rioting similar to the events in Los Angeles in 1992.

“They wanted the campaign to stop. It was felt that it was going to turn into an elephant,” Francis stated.

These allegations are the latest controversy in a case that has had its fair share. An official report by a high court judge found that “institutional racism” via insensitivity and lack of investigative rigor tainted the original investigation. Last year, 19 years after the killing, two men were convicted of the murder.

Cameron has promised that government investigators would “get rapidly to the bottom of what’s happened” and “get the full truth out.”

“To hear that, potentially, the police that were meant to be helping them were actually undermining them-that’s horrific,” Cameron stated.

Home secretary Theresa May, the overseer of policing in Britain, has stated that two existing probes into police misconduct would investigate Francis’ claims.

Bugged Meetings

Amid these assertions by Francis, an additional claim has surfaced, suggesting that the Metropolitan Police secretly recorded its officers’ meetings with Brooks, the friend of Lawrence who was with him the night of the killing in 1993.

BBC reported on Tuesday that a senior police source from the Metropolitan Police stated that orders were given to record two meetings between Brooks, his lawyers, and the police officers.

Brooks’ lawyer, Jane Deighton, stated that she was under the impression that the purpose of the meetings were to brief Brooks and her colleagues on the progress of the investigation into Lawrence’s murder.

“Under the guise of briefing us they were covertly recording us.”

Scotland Yard said it was investigating these additional claims and treating them with “huge seriousness.”

For more information, please see:

BBC News – Lawrence Friend Duwayne Brooks “Bugged by Police” – 25 June 2013

The Guardian – Stephen Lawrence’s Mother to Meet Home Secretary Over Smear Claims – 25 June 2013

The Independent – Stephen Lawrence Case Witness Was Secretly Recorded by Police – 25 June 2013

Al Jazeera – UK Police Spied on Race Victim’s Family – 24 June 2013

New York Times – In Britain, New Inquiry is Ordered in Bias Killing – 24 June 2013

New York Times – Two Sentenced to Prison in Racial Killing That Scarred Britain – 4 January 2012

Council of Europe’s Rapporteur Presents Explosive 41-Page Report on the Magnitsky Affair Completely Rubbishing the Russian Government’s Version of Events

Press Release

25 June 2013 – Today, the Council of Europe’s Rapporteur, Andreas Gross MP, presented the results of a detailed six-month review of the torture and death of Sergei Magnitsky in Russian state custody and the state sanctioned cover-up which followed. His 41-page report entitled, “Refusing Impunity for the Killers of Sergei Magnitsky,” was presented to the Human Rights and Legal Affairs Committee of the Council of Europe this morning.

The report labels as “unacceptable” the ongoing impunity of those responsible for Mr Magnitsky’s death and for the largest known theft of public funds in Russian history that Magnitsky had exposed.

The Rapporteur condemns in strong terms the failure of the Russian authorities to conduct a proper investigation into Sergei Magnitsky’s torture and beating in custody, and calls the Russian government’s efforts “belated, sluggish and contradictory.” He describes as “legally unfounded” the tax evasion claims levelled posthumously against Sergei Magnitsky and against William Browder in absentia. He describes the Russian government’s latest allegations against Hermitage of the “theft” of Gazprom shares as “selective justice” and “politically motivated,” and finally he condemns the “cover-up” in this case organized at a “high level.”

“Sergei Magnitsky had denounced a gigantic robbery whose victim was Russia herself. He died because he refused to give in to the pressure that corrupt mid-level officials had put on him in order to get away with their crimes. Why, then, does the Russian state, and at such a high level, try so hard to cover up this crime?” asks the Rapporteur in his report.

Following fact-finding missions to Russia, Cyprus, Switzerland and the UK, the Rapporteur dismisses as “unconvincing” and “doubtful” the explanations offered by the Russian government authorities who exonerated officials for their role in the thefts and then blamed Sergei Magnitsky himself, after his death, for the crimes that he had uncovered.

The report cites evidence that the same persons and officials were involved in a series of thefts from the Russian budget during a long period of time, both before and after the $230 million theft, using the same Moscow tax offices.

“Thanks to the above-mentioned investigations of the “money trail,” it has been shown that the same suspects (the so-called “Klyuev group”), using the same modus operandi (annulling a fraudulently re-registered company’s profits of the previous year through sham damages claims…) [did so] using the same Moscow tax offices No 25 and 28 and the same money-laundering paths… In my view, all these similarities cannot be mere coincidences.”

The Rapporteur relies on this evidence to reject the Russian government’s posthumous allegations that Sergei Magnitsky orchestrated the $230 million tax theft.

“A very strong argument against blaming the USD 230 million tax reimbursement fraud on Sergei Magnitsky himself is the fact that similar tax reimbursement frauds were committed before and after Mr Magnitsky was taken into custody, and even after his death,” said the Rapporteur.

The Rapporteur also points out the lack of credibility of the Russian government’s version of the $230 million theft given that it relies on the alleged involvement of a person who died before the theft took place.

“The conclusions of the accusation [signed by Russian Deputy General Prosecutor Grin] appear to believe Mr Markelov’s testimony that he opened a new bank account for Parfenion with Intercommerz Bank in mid-December on an instruction from a Mr Gasanov, who had been dead since 1 October 2007. Such inconsistencies tend to undermine the credibility of Mr Markelov’s new testimony that Sergei Magnitsky was the one who gave him his instructions,” notes the Rapporteur.

The Rapporteur concludes:

“I am personally convinced that this crime was not committed or in any way aided or abetted by Mr Magnitsky, but by a group of criminals, including the persons he had accused before these persons took him into custody, where he died.”

The Rapporteur criticizes the Russian government for their evasive and unconvincing responses.

“In light of this information [money trail], the attitude shown by the Russian authorities so far is not really convincing. …The spokesperson of the Ministry of the Interior, Ms Dudukina, publicly stated that the whereabouts of the tax money fraudulently paid into Universal Savings Bank could no longer be established because a truck transporting the bank’s documentation had accidentally burnt. My interlocutors at the Ministry of Interior and at the Investigative Committee evaded my question when I enquired about the credibility of this statement. Regarding the treasury funds ending up in Mr Stepanov’s account, I was told that this had been verified and that the funds…could be explained by his successful business activities, including building tunnels in Russia…But in my view, this does not explain that the same treasury funds, whose disbursement had been authorized by Ms Stepanova, ended up in her husband’s or ex-husband’s account, via the complicated path described above,” says the Rapporteur.

Concerning the case opened by the Russian Interior Ministry against Hermitage Capital’s client, Kameya, used to seize documents for Hermitage Fund’s companies and steal their $230 million tax payments, the Rapporteur finds that it was not a bona fide investigation:

“The Russian authorities did not deny to us any of the information on the Kameya case, they merely stated, without substantiating, that the search and seizure actions on 4 June 2007 were motivated by a bona fide criminal case concerning underpayment of taxes by Kameya. In view of the precise, substantiated and well-documented presentation of the facts on the Kameya case by the representatives of Hermitage, I conclude that the criminal case must have been opened for other reasons than the bona fide pursuit of criminal justice.”

Concerning the tax evasion accusation made during the posthumous trial of Mr Magnitsky and in absentia against Mr Browder, CEO of Hermitage Capital Management, the Rapporteur finds the claims by the Russian government to be legally unfounded:

“The Kalmyk law requiring an additional agreement came into force only in July 2002 and did not apply to the year 2001, during which the underpayment in question is alleged to have occurred. It would therefore appear that the accusation in question is legally unfounded.”

“The detailed and well-documented replies received have gone a long way to convince us that Hermitage did not violate the law. This was also confirmed by an audit carried out by the competent tax authorities… The tax evasion accusations are suspect also in light of the peculiar circumstances of the (re)-opening of the criminal case, which had been opened in 2004 on the basis of an FSB report and closed for “lack of any crime…”

“Legal pursuits for any tax underpayments concerning 2001 would also appear to be time-barred…Consequently, the formal indictments dated 22 March 2013 and the posthumous trial against Sergei Magnitsky and the trial in absentia against Bill Browder appear to violate Russian law.”

Concerning the new case opened by the Russian government and accusing Hermitage Capital of “stealing” Gazprom shares, the Rapporteur finds it to be exemplary of “selective justice” and “indicative of politically-motivated cases”:

“The retrospective prosecution of the Hermitage executives for any violation of this decree would appear to violate the principle…enshrined in Article 7 ECHR…In my view, the authorities cannot now change their minds retroactively, in addition solely to the detriment of one of the “grey market” participants and not the others: this would be a case of selective justice, which in the practice of the Assembly is often seen as an indication for the “political” motivation of criminal prosecutions.”

The Rapporteur examines the failure of the Russian authorities to investigate Sergei Magnitsky’s killing in custody and the subsequent cover-up, issuing a damning verdict:

“The belated, sluggish, and contradictory investigations lead only to indictment of two Butyrka doctors, one of them for negligently failing to diagnose diseases that Mr Magnitsky never actually had, whilst exonerating all others – including all those who were present when Mr Magnitsky died at Matrosskaya Tishina, those responsible for the failure to treat his actual, diagnosed diseases, those responsible for the beatings and for the numerous cover-ups.”

The Rapporteur finds that Magnitsky was beaten shortly before his death and brands “doubtful” the explanations presented by the Russian authorities to the contrary.

“I was told by several representatives of the authorities that Mr Magnitsky was not beaten upon his arrival at MT prison…I am not convinced by the explanations given to me during my second visit in Moscow that this document [the report about the use of rubber batons] is “out of context” and that the mentioning of rubber batons as part of the special measures used against Mr Magnitsky was purely “automatic.”… In addition, the autopsy, the testimony of Mr Magnitsky’s mother and photographs taken by family members when they were first permitted to see the body confirms that Mr Magnitsky had visible injuries on his body that had never been explained…It is therefore clear for me that Sergei was indeed beaten shortly after his arrival at MT prison, whereas the reason mentioned in the official report about the use of batons – a nervous breakdown – is doubtful both for legal and factual reasons,” concludes the Rapporteur.

“In my view, the manipulation of the initial “death act” [with reference to a suspected cerebral injury removed in one version] is a strong indication for an official cover-up. So is the rejection of the two requests for an independent autopsy made by Mr Magnitsky’s family on 17 and 19 November 2009,” says the Rapporteur.

The Rapporteur condemns as “cynical” the cover up by Russian authorities of Sergei Magnitsky’s complaints from custody detailing his ill-treatment and cites a litany of complaints and their refusals by Russian authorities, including the decision by Interior Ministry officials to “archive” the complaint without any consideration.

“Officials in Moscow…told me that Sergei Magnitsky had neither complained about his detention conditions, nor about lack of health care provided to him in detention. …Mr Magnitsky’s mother and Hermitage provided me with a long list of the complaints.. The replies speak for themselves… The complaint was assigned for review to Major Silchenko who recommended it to be archived as this complaint was “not within our competence”. Mr Silchenko’s recommendation was approved by his superior, Colonel Karlov,” writes the Rapporteur.

“In light of the well-documented, specific complaints reproduced above, I find it downright cynical that the authorities now say that Sergei Magnitsky never actually complained about his treatment in detention and the lack of medical treatment…In my view this is unacceptable,” says the Rapporteur.

The Rapporteur points out that the objective of his report is to “contribute to a better protection of individuals against lawless behaviour of state officials in future.”

The Rapporteur states that the impunity of Magnitsky killers must be unacceptable for both the Russian people and the international community.

“This result – complete “impunity of the killers of Sergei Magnitsky,” as it is formulated in the title of the motion underlying this report – is simply unacceptable… This result should first and foremost be unacceptable for the Russian people and the Russian state,” says the Rapporteur.

“The international community must not accept the outcome of this case so far. In the interest of the Russian people themselves and of their state, corrupt officials must not be allowed to plunder state property whilst brutally silencing those standing in their way, with impunity,” says the Rapporteur.

During the course of the preparation of the report, Rapporteur Gross met with Magnitsky’s family, his clients at Hermitage Capital, Hermitage’s lawyers, as well as with Russian officials, including officials in the Russian Prosecutor’s Office, Interior Ministry, Investigative Committee, and Chair of the Russian Central Bank Mr Ignatiev.

In his report, the Council of Europe’s Rapporteur states that he had asked for meetings in Russia with many more witnesses and officials but these meetings did not materialize.

“I would have liked to speak with the prison doctors, guards, the members of the civilian psychiatric emergency team and others whose testimony I could only refer to through written sources…I had provided a detailed list of these persons to the Russian authorities already before my first visit in February 2013, and again before my second visit, in May. These meetings never materialized,” says the Council of Europe’s Rapporteur in the draft report presented to the Legal and Human Rights Committee.

Andreas Gross (http://assembly.coe.int/ASP/AssemblyList/AL_MemberDetails.asp?memberID=3498) is a Swiss MP, chair of the Socialist Group of the Parliamentary Assembly of the Council of Europe, and a co-author of the 2012 report “The honouring of obligations and commitments by the Russian Federation” (http://assembly.coe.int/ASP/XRef/X2H-DW-XSL.asp?fileid=18998&lang=EN).

The report on the Magnitsky case will be discussed at the forthcoming meeting of the Council of Europe’s Human Rights and Legal Affairs Committee in the fall and used by the Parliamentary Assembly of the Council of Europe to decide on a resolution about how the Council of Europe should react to the impunity of officials in this case. The report will also be used by the governments of member states of the Council of Europe as they consider their own policy on sanctions, and other responses.

For further information, please see:

Law and Order in Russia

Accused Hungarian Nazi War Criminal Awaits a Trial That May Never Come

By Ben Kopp
Impunity Watch Reporter, Europe

Hungarian prosecutors have charged Laszlo Csatary with war crimes, including the deportation of Jewish people to Auschwitz in WWII. Authorities state that the 98-year-old man tops the Nazi-hunting Simon Wiesenthal Center’s wanted list.

Laszlo Csatary has been placed on house arrest since July 2012, as he awaits trial for war crimes during WWII. (Photo courtesy of CNN International)

Nevertheless, some criticize the Hungarian authorities for refusing to extradite Csatary to Slovakia, where a court sentenced him to death in 1948.

In 1944, Csatary commanded the Kosice internment camp, where authorities claim that he beat and whipped approximately 12,000 Jews before sending them to Auschwitz for execution. Additionally, before sending Jews to Auschwitz in a cramped railcar, he refused to allow other officers and soldiers to drill ventilation holes in the railcars’ walls. Following the Second World War, Slovakia sentenced Csatary to death for his involvement in the genocide. However, the Slovak court order was made in abstentia because Csatary had already fled to Canada.

Csatary obtained Canadian citizenship in 1955 by telling authorities that he was a Yugoslav national. Until authorities discovered his lie, Csatary worked as an art dealer in Montreal. In 1997, authorities deported him to his native Hungary.

Until recently, Csatary lived undisturbed in Budapest. Only after a Jewish organization that specializes in bringing suspected Nazi war criminals to justice, the Simon Wiesenthal Centre alerted Hungarian authorities did prosecutors charge Csatary.

The prosecution released a statement that “Csatary willfully assisted in the unlawful execution and torture of the Jews deported from Kosice to concentration camps in territories occupied by the Germans.”

The case of accused Nazi war criminal Sandor Kepiro appears to be precedent for Csatary. In July 2011, Hungary acquitted Kepiro, who admitted his involvement with raids and denied knowledge that such raids involved the massacre of about 400 Jews and 800 Serbs. In a hospital two months later, Kepiro died while prosecutors appealed the decision.

Since July 2012, Csatary has been returned to house arrest in Budapest.

Efraim Zuroff, head of the Wiesenthal Centre’s Jerusalem office, plans to attend the trial in three months. “We welcome the indictment and call upon authorities to expedite the trial in light of the defendant’s advanced age,” Zuroff said. “This is a very strong reminder of the importance of achieving justice even many years after the crimes were committed.”

Lucia Kollarova, a spokeswoman for the Federation of Jewish Communities in Bratislava, the capital of Slovakia stated that “We would prefer the war criminal Laszlo Csatary to be extradited to Slovakia. We don’t believe that given his age there is a realistic chance [he would be imprisoned in Hungary].”

Nevertheless, Slovakia has not requested extradition in light of the pending trial.

Weighed against the imminence of death from advanced age, the decision to conduct thorough trials against war criminals in the name of justice will only become more difficult unless we can decide whether any such criminals have suffered since.

For further information, please see:

The Jerusalem Post – Hungary Criticized for Not Extraditing War Criminal – 20 June 2013

Times of Israel – Already-Condemned Nazi Faces New Trial in Hungary – 20 June 2013

The Windsor Star – Hungary Accuses Ex-Canadian Citizen, 98, of Nazi-Era War Crimes – 19 June 2013

CNN International – Hungarian Prosecutors Charge Man with Nazi War Crimes – 18 June 2013

The Independent – Hungary Charges Nazi Police Chief Suspect Laszlo Csatary with War Crimes – 18 June 2013

Reuters – Hungarian Man, 98, Charged with World War II Crimes: Prosecutors – 18 June 2013

Czech Prime Minister’s Resignation Amid Bribery Scandal Leaves Country in Political Uncertainty

by Tony Iozzo
Impunity Watch Reporter, Europe

PRAGUE, Czech Republic – Petr Necas stepped down as Prime Minister of the Czech Republic on Sunday after his top aide has been heavily implicated in a bribery and spying scandal.

Czech Prime Minister, Petr Necas, resigned on Sunday. (Photo courtesy of Reuters)

Mr. Necas’ chief of staff, Jana Nagyova, has been charged with bribing members of parliament and giving orders to intelligence agents to spy on certain individuals. Nagyova allegedly offered government posts to these members of parliament, contingent upon relinquishing their parliamentary seats. She then allegedly ordered military intelligence to spy on three people.

The charges were brought after armed police raids in which roughly 400 police officers searched government offices, bank safes, and 31 different houses. Approximately $6 million in cash and tens of kilograms of gold were seized during the raids.

Seven other individuals were also arrested in connection with the bribery scandal, including the current and former heads of military intelligence, and former lawmakers in Necas’ Civic Democratic Party.

The Prime Minister is reported to be involved on a personal level in addition to his professional relation to the case. One of the spy targets in the scandal is said to be Necas’ wife, Radka, whom he is now divorcing. Though Necas has denied any sort of personal relationship with Nagyova, he stated upon his resignation, “I am fully aware how the twists and turns of my personal life are burdening the Czech political scene and the Civic Democratic Party.”

Necas has maintained his innocence as well as his party’s, however, stating: “I am personally convinced that I did not do anything dishonest and that my colleagues have not done anything dishonest either.”

Members of Necas’ coalition had indicated that they could no longer support him amidst the scandal, and members of the opposition Social Democrats coalition planned to raise a “no-confidence” motion in parliament. The resignation, which will send the country into a period of political uncertainty, will necessarily induce the entire government to step down as well, pursuant to the Czech Constitution.

Necas has stated that his coalition would attempt to form a new government with new leadership, to take charge until June 2014 and new elections. However, the Czech President Milos Zeman, a member of the Social Democrats, is not obligated to agree with Necas’ recommendations and can name his own interim government. Reports indicate that President Zeman has asked Necas to remain a “caretaker” until a new administration is in place.

This raid was a part of a larger anti-corruption operation, the largest the country has had since Czech dissident Vaclav Havel led a “Velvet Revolution” that overthrew Communist rule over 20 years ago. Since this revolution, however, the Czech Republic has experienced great corruption.

For more information, please see:

BBC News – Czech PM Petr Necas Resigns Over Aide Scandal – 17 June 2013

The Independent – Czech PM Petr Necas to Resign: ‘Mr. Clean Hands’ to Quit in Effort to End Political Turmoil Over Aide Spying and Corruption Scandal – 17 June 2013

Al Jazeera – Czech PM Resigns Amid Aide Scandal – 16 June 2013

New York Times – Czech Premier to Resign Amid Scandal – 16 June 2013

Reuters – Czech Prime Minister Steps Down After Graft Scandal – 16 June 2013

Impunity Watch – Czech President Impeached and Charged With Treason For Amnesty – 4 March 2013