NEWS ANALYSIS: Allegations of corruption abound in Ukraine (09/18/05)

NEWS ANALYSIS: Allegations of corruption abound in Ukraine

by Roman Kupchinsky
RFE/RL Organized Crime and Terrorism Watch

Kyiv, home of the Orange Revolution, was first thrown into shock by the resignation of Oleksander Zinchenko, the head of President Viktor Yushchenko's administration, on September 5. The repercussions of this resignation led to a major crisis and the dismissal of Yulia Tymoshenko's government on September 8.

Long-time Yushchenko supporter Yurii Yekhanurov was appointed acting prime minister and instructed to form a new government.

Mr. Zinchenko, the president's chief of staff, accused two members of Mr. Yushchenko's closest entourage, Petro Poroshenko, the head of the National Security and Defense Council (and godfather to one of Mr. Yushchenko's children), and Oleksander Tretiakov, Mr. Yushchenko's top aide, of "corruption."

As an example of Mr. Tretiakov's alleged corrupt activities, Mr. Zinchenko cited Mr. Tretiakov's membership on the supervisory boards of Oschad Bank, one of Ukraine's largest banks, and of Ukrtelekom, the state-owned telecommunications giant.

He also charged that Mr. Tretiakov plays a "controlling role" in the oil-and-gas sector. He had earlier been named by critics as the person lobbying for a continuation of earlier schemes in the gas sector that were being investigated by the Security Service of Ukraine (SBU).

Ukrainian experts contacted by RFE/RL believe that Mr. Zinchenko's charges have more to do with conflict of interest issues than the blatant corruption of the era of former President Leonid Kuchma.

There is a lack of clear legislation on conflict of interest in Ukraine, and earlier in 2005, for instance, Justice Minister Roman Zvarych was accused of lobbying his wife's business interests. Mr. Zvarych did not resign.

President Yushchenko accepted Mr. Zinchenko's resignation immediately and appointed Oleh Rybachuk, the deputy prime minister for European integration, to replace him.

Mr. Zinchenko did not accuse Mr. Poroshenko of any specific corrupt activities, but limited himself to criticizing him of staffing his apparatus with people "close to him" and "blockading the president from meeting with people" who were hostile to Mr. Poroshenko. Soon after Mr. Zinchenko's accusations were aired at a Kyiv press conference, the SBU announced it would investigate his charges.

Mr. Poroshenko resigned on September 8, as did Vice Prime Minister for Humanitarian Affairs Mykola Tomenko. Mr. Tomenko had not been accused of anything, but explained his resignation by claiming that Messrs. Tretiakov and Poroshenko had formed a shadow government and that a "Byzantine system of management" had evolved.

Mr. Tomenko blamed the two men, along with Parliament Chairman Volodymyr Lytvyn and the leader of the Our Ukraine faction in Parliament, Mykola Martynenko, of blocking parliamentary public hearings on the killing of journalist Heorhii Gongadze.

Interfax on September 8 quoted Mr. Tomenko as telling a press conference that, if nothing had changed following the previous day's late-night talks between President Yushchenko and Prime Minister Tymoshenko, "then it's evident the scenario of some people stealing, and other people resigning" would continue.

As the resignations began coming in, the Verkhovna Rada voted to deprive some members of the Yushchenko administration of their seats in Parliament. According to Ukrainian law, executive-branch officials are not allowed to serve in Parliament.

Mr. Poroshenko had delayed submitting his resignation and this had led to charges that he was trying to maintain his parliamentary immunity from prosecution. He eventually submitted his resignation.

However, on September 8, after he resigned from the National Security and Defense Council, Mr. Poroshenko tried to reverse his decision to leave Parliament - but Parliament rejected this bid.

The same day, Mr. Yushchenko announced that he was dismissing the government and named Mr. Yekhanurov acting prime minister, ordering him to take charge of forming a new government. He also said that he had accepted Mr. Poroshenko's resignation and had suspended Mr. Tretiakov while the SBU investigated the charges against him.

Mr. Yekhanurov, born in Yakutia in present-day Russia in 1948, is a Buryat by nationality and is presently the head of the Dnipropetrovsk Oblast Administration and a member of the presidium of the Parliament.

The conflict in the Ukrainian presidential administration has been brewing for some time, as has the broader conflict between Ms. Tymoshenko and Mr. Poroshenko. Over the past few months, the two have exchanged disagreements publicly and President Yushchenko has unsuccessfully tried to maintain peace within the ranks.

The major issue dividing the two sides was the delineation of responsibilities between the Cabinet of Ministers and the National Security and Defense Council. Ms. Tymoshenko charged that Mr. Poroshenko was attempting to take too much power and this was leading to confusion, especially in such matters as energy policy.

In August, Mr. Poroshenko announced unilaterally that he would go to Moscow to negotiate with Russia on gas prices and supplies. Critics close to Ms. Tymoshenko charged that Mr. Poroshenko was not qualified to do so.

Some critics have charged that Moscow was lobbying on behalf of Mr. Poroshenko and was adamant in refusing to deal with Ms. Tymoshenko, who had frequently accused the Russian state-controlled gas giant Gazprom of corruption in the transfer of gas from Turkmenistan to Ukraine and Russian oil companies of price-fixing in Ukraine.

Roman Kupchinsky is editor of RFE/RL Organized Crime and Terrorism Watch.

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