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Ex-Ukraine PM alleges fraud by govt

LONDON: A former Ukrainian prime minister has offered to testify that the present government misappropriated millions of dollars in International Monetary Fund (IMF) loans, the Financial Times reported.

Pavlo Lazarenko, who is wanted in Switzerland on money laundering charges and is in custody in the United States, has been in contact with US Reps. Dan Burton, and Curt Weldon about the possibility of testifying before a House Committee, the Financial Times said.

Lazarenko, who led Ukraine's government in 1996-97, is seeking political asylum in the United State.

He alleges that $613 million in IMF funds was diverted into speculative government bonds in 1997, the Financial Times quoted Joel Bartow, a former FBI agent retained by Lazarenko, as saying.

Lazarenko alleged that about $200 million was deposited in Belgian and Swiss accounts held by associates of Ukrainian President Leonid Kuchma.

In Washington, IMF spokesman Thomas Dawson said, the fund would "take a careful look at both allegations" and contact Ukrainian authorities about them.

He said that in the summer and early fall of 1998 issues arose with Ukraine's central bank over reporting reserves, and that quarterly audits were instituted. No irregularities have been found, he said.

Natalia Zarudna, spokeswoman for Prime Minister Viktor Yushchenko, said in Kiev that Lazarenko's story as reported by the Financial Times "absolutley does not correspond to reality."

She described the report as "as an attempt by some former (officials) to somehow resurface and prove that they are not the only ones who are bad."

Ukrainian authorities have charged Lazarenko with stealing $2 million from the government and illegally hiding about $2 million in foreign banks. He was first detained by Swiss police on money-laundering allegations last December, but was released on $3 million bail.

The IMF and Ukraine are negotiating a $2.5 billion loan programme that was suspended last summer after the country failed to meet economic targets.