KIEV, Ukraine - The government of former Ukrainian Prime Minister Yulia Tymoshenko misappropriated nearly half a billion dollars, according to an audit by three U.S. investigative firms released Thursday.
The three firms were hired by the government of President Viktor Yanukovych, her fierce rival. Tymoshenko was the main driving force behind the 2004 Orange Revolution street protests that threw out Yanukovych's fraud-tainted election victory. But Yanukovych won February's presidential vote amid public discontent over economic problems and vicious infighting in the Orange camp.
A top Tymoshenko aide denounced the audit as politically driven and incompetent, and charged that one of the firms had previously represented Yanukovych's financial backers, in a conflict of interest.
"Instead of reforming the Ukrainian economy they are engaged in a witch hunt of the opposition," Hrihoiry Nemyria, deputy head of Tymoshenko's faction in parliament, told The Associated Press. "We denounce these findings. They are obviously politically motivated."
The study by Trout Cacheris PLLC, Akin Gump Strauss Hauer&Feld LLP and Kroll Inc. claimed that Tymoshenko's government committed fraud and resorted to "classic international money laundering mechanisms" while buying sugar, vaccines, importing expensive foreign cars and even selling carbon credits to other countries.
The audit, which covered the period from 2008 to the beginning of this year, claimed that Tymoshenko's Cabinet spent US$140 million on German minivans for alleged medical use by the Health Ministry which were later used as Tymoshenko's mobile campaign advertisements.
It also said that the former Ukrainian government misappropriated some $280 million that were received for the sale of carbon credits as part of the Kyoto protocol and never used the money on environmental projects, as required. That money was transferred to the Pension Fund which was strapped for cash amid a severe recession, the audit said.
In addition, the three firms claimed that Tymoshenko's government misspent $24 million on sugar which was never delivered to Ukraine, and misappropriated $44 million while importing vaccines and medical equipment.
"The investigation revealed evidence of misapplication of state funds and apparent fraud involving the highest levels of the previous administration, specific ministries, and private corporations," the auditors said in a statement. "We have gathered powerful circumstantial evidence of conduct that is not typical of honest officials and businesspeople."
Nemyria dismissed the audit as part of a "systematic attack on the opposition." Since Yanukovych took power, a number of former officials who worked in Tymoshenko's government have been investigated, questioned and one has been jailed.
Nemyria would not comment on the specific accusations, saying he hasn't read the report yet, but said that the previous government committed no wrongdoing.
