US embassy cable - 05WARSAW13

UNCLAS WARSAW 000013 
 
SIPDIS 
 
 
Sensitive 
 
STATE FOR EUR/NCE TARA ERATH AND MICHAEL SESSUMS 
USDOC FOR 4232/ITA/MAC/EUR/JBURGESS AND MWILSON 
TREASURY FOR OASIA MATTHEW GAERTNER AND ERIC MEYER 
FRANKFURT FOR TREASURY JIM WALLAR 
 
E.O. 12958: N/A 
TAGS: EFIN, ETRD, PARM, PREL, PL, Domestic Politics 
SUBJECT:  Further Press Stories on Alleged Polish Bribery 
Case 
 
Ref: 2004 Warsaw 4013 
 
(U) This cable is sensitive, but unclassified, and NOT for 
Internet distribution. 
 
1. (U) Summary: Polish papers continue to follow allegations 
that a shadowy Polish tycoon, Marek Dochnal, bribed a 
parliamentarian related to the privatization sale of a steel 
mill.  There are also allegations that Dochnal was involved 
in the campaign by Russian companies to buy shares in 
Poland's largest oil refinery.  On December 21, the district 
court in Lodz extended the term of Dochnal's detention by 
three months to give prosecutors additional time to build 
their case.  While formal charges have yet to be filed, 
parliament has lifted the immunity of the deputy whom 
Dochnal allegedly bribed.  End Summary 
 
2. (U) Since his arrest in September for allegations of 
bribery, Marek Dochnal has continued to attract considerable 
attention in the Polish press.  Polish prosecutors in Lodz 
are still investigating his activities, but it has been 
reported in the press that Dochnal bribed Andrzej Peczak, a 
parliamentarian from the Social Democratic Left Party (SLD), 
by giving him a Mercedes in exchange for information related 
to the privatization of a Polish state-owned steel mill to 
the Netherlands-Antilles based LNM company (reftel).  Some 
papers have also reported that Dochnal may have bribed 
Peczak on behalf of a Russian client seeking to buy shares 
in Poland's largest oil refinery, PKN Orlen.  (There is an 
ongoing parliamentary investigation into allegations that 
Russian companies and their Polish agents distributed $80 
million in bribes in pursuit of Orlen shares in what has 
been dubbed "Orlengate.")  Dochnal's spokesman has denied 
all charges in interviews with the press, telling reporters 
Dochnal "lent" Peczak the Mercedes. 
 
3. (U) Prosecutors are also investigating allegations that 
one of Dochnal's companies, Larchmont Capital Group, sought 
to influence the privatization sale of PHS to LNM. 
Larchmont earned substantial fees for its role in this 
privatization (in which US Steel was an unsuccessful 
bidder).  Polish papers have also reported that Larchmont 
was actively involved in a proposed sale of a second Polish 
steel mill, Czestochowa, in which LNM and a Ukrainian 
company were bidding.  Polish papers have reported that 
Dochnal was involved with LNM's Ukrainian competitor for the 
sale, Donbas, in a conspiracy to rig the bidding to create 
the impression of competition.  An LNM spokesman told the 
press the company "had no knowledge" of the allegations 
against Dochnal. 
 
4. (U) Meanwhile, Polish and British papers have reported 
extensively on Dochnal's elaborate social connections, 
having spent more than 5 million pounds over five years to 
become a leading figure in British polo.  Polish papers have 
asserted that Dochnal pursued such social connections as a 
way of gaining influence with top government leaders. 
 
5. (SBU) Comment: We will continue to follow this case in 
the press, although, for now, the primary impact seems to be 
on the ongoing investigation into the commercial activities 
of Poland's largest refinery, PKN Orlen.  On December 21, 
the district court in Lodz ruled that Dochnal would remain 
in custody for a further three months to give prosecutors 
more time to investigate the various aspects of this case. 
We will watch carefully to see if Polish prosecutors file 
any formal charges related to bribery of Polish officials on 
behalf of foreign companies. 
 
Ashe 
 
 
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 2005WARSAW00013 - Classification: UNCLASSIFIED