Verkhovna Rada asks Kuchma to dismiss prime minister for financial irregularities (01/25/98)

Verkhovna Rada asks Kuchma to dismiss prime minister for financial irregularities

by Pavlo Politiuk
Special to The Ukrainian Weekly

KYIV - Six months after the Verkhovna Rada confirmed Valerii Pustovoitenko as Ukraine's latest prime minister, it has asked President Leonid Kuchma to fire him over allegations of serious financial improprieties that have surfaced involving the renovation of a state-run conference and entertainment facility.

On January 16, 226 national deputies - the exact number of lawmakers who approved the appointment of Mr. Pustovoitenko to the highest executive post in government - approved a resolution to replace the prime minister, after hearing a one-hour report by a special parliamentary committee that looked into the lush renovation of the Ukraina Palace of Culture (Palats Ukraina) located in Kyiv.

National Deputy Yevhen Smirnov, a member of the opposition Yednist faction in the Verkhovna Rada and head of the investigative committee, speaking before the legislature charged Mr. Pustovoitenko, as well as Minister of Culture Dmytro Ostapenko and Kyiv's Mayor Oleksander Omelchenko with stealing more than $40 million (U.S.), and asked for their dismissal.

Mr. Pustovoitenko was minister of the Cabinet of Ministers at the time of the Palats Ukraina renovation and was in charge of the project, which was rushed in order to be completed in time for celebrations of Ukraine's fifth anniversary of independence.

Mr. Smirnov said the renovation cost Ukraine more than $80 million, "of which at least half was stolen in one way or another." He also said contracts were awarded in very questionable ways.

The government quickly responded to the parliamentary declaration. It issued a statement that day sharply denying the accusations and charging the Verkhovna Rada with destabilizing society.

"The speeches of some lawmakers show that it was a planned provocation with the intention of inflaming passions to cause destabilization and discord within society," said the declaration released by the Cabinet of Ministers.

The Cabinet also requested that the president, as the guarantor of the Constitution, stop any broadening of the controversy. The government stated that it hopes the Procurator General's Office will review the results of the special committee's investigation carefully and refute the charges.

Although the Verkhovna Rada sent the documents pertaining to the investigation to the Procurator General's Office on its own initiative, according to Ukraine's Constitution, investigations by the Verkhovna Rada cannot be considered decisive by either the procurator general or Ukraine's courts.

Also, the Verkhovna Rada resolution is non-binding and, therefore, government officials are not obliged to act on it. Indeed, they are unlikely to do so.

Prime Minister Pustovoitenko responded to the charges at a press conference on January 19 by stating that everything had been done legally. "I am very experienced, and at the very first meeting I warned everyone that there would be reviews of the contracts, and that is why everything had to be done legally and carefully," Mr. Pustovoitenko said.

The prime minister told journalists that the renovation actually cost 108 million hrv ($57 million), and not $80 million as the parliamentary committee reported. "Everything was under our control," he said.

But Mr. Pustovoitenko refused to comment on charges in the report that an absurd amount of money was spent on one wing of the concert hall used by President Kuchma, which includes a desk that cost $15,080 and curtains worth $8,000.

At first the President's Office attempted to stay out of the fray and refused comment on the charges and the investigation. But, according to Interfax-Ukraine, on January 19, Anatolii Halchynskyi, a top economic advisor to President Kuchma, suggested in an Interfax-Ukraine news report that the president should dissolve the Verkhovna Rada and institute presidential rule in Ukraine for the next two to three years.

Mr. Halchynskyi said the committee report was an effort at "red revenge" in Ukraine. Oleksander Moroz, chairman of the Verkhovna Rada, rebutted by accusing the economic advisor of "stepping on the Constitution" and urging the president to make unconstitutional moves.

The scandal involving the Palats Ukraina is the latest battle in a three-year-long confrontation between the executive and the legislative branches of power in Ukraine.

Political pundits say the parliamentary investigation, led by the Yednist faction, was conducted in answer to criminal charges brought against former Prime Minister Pavlo Lazarenko, a member of the Yednist faction and leader of the Hromada Party, which has declared its official opposition to the government. Earlier this month the Procurator General's Office charged Mr. Lazarenko with financial improprieties and illegally holding a foreign bank account.

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