2. WSI finances

From November 1985 the cashier’s of the Financial Section of the 2nd Directorate received funds for so called operating deposit of Department ‘Y’, which was to finance the operating activity in the event of any threat and period of war. As it can be seen from the book of Department ‘Y’, in 1985 "An amount of 9,000.00 USD was gathered, of which over 6,000.00 USD was paid to the cash desk of the Directorate". This money originated from off-budgetary income gathered on Department ‘Y’ operational activity. The income was acquired from "additional commissions, donations and extra remuneration earned by the under cover officers and co-workers acting in foreign companies and income from banking operations and illegal taking over of foreign legacies". Getting such funds was possible due to decision of the Chief of the General Staff No. POR/01643/74.
The funds originating from Department ‘Y’ operational deposit were never transferred to banking accounts and they were the source of financing the operations, in which their strict documentation was undesirable.
In the files relating to current currency deposit of Department ‘Y’ of the 2nd Directorate you may find many financial operations, which the Verification Commission can not explain up to now as regards their destination. However, there remained some documents, which indicated the placements of individual amounts.
In 1988 Department ‘Y’ granted to its employee a.k.a. "MER" [cryptic name for secret collaborator] (Jan Załuska) a loan amounting to USD 50,000.00 bearing 20% interest p.a. Załuska was recruited in 1986 and was used for purchasing devices on which an embargo was imposed (which usually meant electronic parts with prohibition of export to communist countries, to which the USA and other Western states wanted to hinder their participation in the arms race. At the beginning of the 90-ies, he was the owner of two companies registered in Poland ("Carpatia" and "Agaricus") and an Austrian Company "Riedrich". Granting the loan, Department Y obliged Załuska to employ the persons indicated to him and to transfer to them 5% of profits from domestic companies and 3% from Austrian Company. It may be supposed that the real purpose of the loan were illegal financial operations, though in the documentation the purpose of this loan was presented quite differently: "The objective of the loan was to establish a strict relation between "MERC" and command and securing the conditions to place our people in his company. "MERC" returned the loan together with interest to the command in January 1991.
Pursuant to decision of the Chief of Intelligence, in January 1991 all financial obligations of the employee towards the Head Office were annulled”.
On October 9, 1990 the amount of 7,000.00 USD was delivered from the cashier’s of Department ‘Y’ to Col. Konstanty Malejczyk, based on the letter of Col. Zdzisław Żyłowski. There is no evidence confirming return of this amount, nor any explanation of the purpose of its disbursement.
Another example of use of financial funds by Department Y was granting a loan amounting to 15 thousand US Dollars for undetermined investment purposes to consultant a.k.a. "YUGO" [cryptic name for secret collaborator, etc.]
Available documentation does not allow in many cases to determine the purpose and the financial operation for which the WSI officers used the funds taken from current currency deposit of Department Y, which is exemplified by a memo dated January 25, 1991 in which confirmed the receipt of the amount of 30 thousand US Dollars from Col. Żyłowski, constituting return of expenditure for investment realized in accordance with decision contained in the letter of Department Y No. 0213/PO-Y90. In addition, this document contains a handwritten annotation stating that "the benefits expected in a/m memo have not been achieved"
The 3rd Directorate also took advantage of Department ‘Y’ deposits. Among others Col. Eugeniusz Lendzion received, on April 14, 1992, with consent of B. Izydorczyk, an advance payment amounting to 100 thousand US Dollars. This amount was to be a security of “the objectives indicated in the plan of April 13, 1992 realized in the Military Counter-intelligence Services code name Contract No. 0110/92”.
Financial documentation contains also acceptance for disbursement of the amount 100 thousand US Dollars from Department ‘Y’ deposit in favor Marek Mackiewicz. B. Izydorczyk gave such consent on June 3, 1992 .
The funds of Department Y deposit were also raised by the funds originating from various operational undertakings realized in the country (the payments amounting to 1 thousand US Dollars, 500 USD etc. are noted.) and abroad by e.g. 3rd Department of WSI 3rd Directorate (the receipt of amount of DM 1,500.00) was noted.
The above financial operations, though noted in the "Current currency deposit of Department Y", have not been noted anywhere else. Particularly there is no mention of them in the files relating to WSI banking accounts, kept by the Chief of Financial Section. The Verification Commission did not establish what the further history of these funds was. Recent entry relates to the operation run out by Col. Malejczyk and Col. Dukaczewski, who on February 5, 1993 delivered to deposit of Financial Section the amount of FFr (French francs) 552,160.00 and PLN 43,700.00. Certain trace is also the record from 1991, which ordered to cease receiving additional off-budget funds under military intelligence operating activity until the moment in which the activity of military intelligence shall become legally sanctioned. At the same time a decision was made about opening a banking account in three independent Swiss banks, and depositing the amount of 500 thousand US Dollars in each of them.
This amount – USD 1.5 million taken out from Poland by intelligence, made a minimum resource, with which this structure started its activity in the 3rd Republic of Poland. This amount has never been accounted for. We do not know, how it was disbursed, what profits it brought, as it never has been balanced.
In the light of the above-cited facts the performance of the following persons fulfils the instruction in Art. 70 a subpar. 1 and 2 of the Act of June 9, 2006 Regulations Implementing the Military Counter-intelligence Service and the Military Intelligence Service Act and the Duties of the Military Counter-intelligence Service and Military Intelligence Service Officers Act Brig General Marek Dukaczewski, Major – General Bolesław Izydorczyk, Col. Zdzisław Żyłowski, Col. Konstanty Malejczyk, Col. Eugeniusz Lendzion. The activity of Jan Załuska fulfils instruction of Art. 70 a subpar. 2 p. 1 of the above cited Act.
In the described period the Chief of WIS was Rear Admiral Czesław Wawrzyniak