Kyiv, 25 January 1999 (RFE/RL) -- Despite an ongoing corruption investigation of former Ukrainian Prime Minister Pavlo Lazarenko, the political party he created has nominated him to run for president in an election due in October.
Lazarenko won the backing of his Hromoda party at a party congress on Friday on a vote of 258-1.
The party also gave Lazarenko permission to negotiate a coalition deal with other opposition parties ahead of the election.
Lazarenko was an ally of President Leonid Kuchma until Kuchma fired him in July 1997. Since then, he has grown increasingly critical of Kuchma, who is expected to run for re-election.
Meanwhile, the corruption case against Lazarenko continues to build. It garnered international headlines early last month when Lazarenko was detained by Swiss police (Dec. 2) as he attempted to cross the border from France using a Panamanian passport issued to a "Mr. Lopez."
He was charged with laundering 20 million dollars, but released two weeks later (Dec. 18) when an unknown benefactor put up three million dollars [four million Swiss franc] in bail. If convicted of money laundering under Swiss law, he faces up to five years in prison.
Swiss authorities confirmed earlier this month that they would also continue helping Ukraine with its own inquiries into Lazarenko's Swiss bank accounts. Lazarenko is accused by Ukrainian authorities of taking millions of dollars out of Ukraine and putting them into his private Swiss accounts through the United Energy Systems company. The firm was granted exclusive contracts to distribute natural gas to one-third of Ukraine during Lazarenko's term in office from June 1996 to July 1997. In 1996, United Energy Systems earned 1,000 million dollars in profits, but paid under 6,000 dollars in taxes.
The Ukrainian Prosecutor General, Mykhailo Potebenko, has repeatedly said that his office has enough evidence to charge the former prime minister, but has declined to release details while Lazarenko is protected by parliamentary immunity. Parliament is due to consider lifting his immunity next month. The debate is expected to be highly contentious.
Lazarenko has denied any wrongdoing, and has said that the allegations against him -- both in Switzerland and at home -- are part of a plot to discredit him and his party ahead of the election.
And it is clear that the investigators' net continues to spread: Police in the Netherlands confirmed this month that, at Ukraine's request, they had made inquiries into a Dutch company involved in a cattle-for-metal deal. During the deal, put together by Lazarenko's close ally and fellow Hromada party member Mykola Agofonov in 1995, large amounts of money allegedly ended up in Lazarenko's accounts.
There is widespread speculation that some of Lazarenko's political opponents continue to profit from exactly the same gas monopolies that Lazarenko allegedly exploited. There has also been speculation that, if Lazarenko is formally indicted, he may seek to bring down with him many of his former allies still in government.
Vyacheslav Pikhovshek, an analyst at Kyiv's Independent Center for Political Research, spoke recently with our correspondent and said, quoting, "Lazarenko can speak out if he wants to. But does he want to?" Pikhovshek speculated that Lazarenko may "choose to talk closer to the elections."
Many political analysts consider the investigation of Lazarenko not as a concerted effort to expose corruption but rather as a power struggle within the so-called Dnipropetrovsk "clan" which still dominates the Ukrainian government. President Kuchma, former boss of the Dnipropetrovsk rocket plant Yuzhmash, has surrounded himself with colleagues from the eastern Ukrainian city.
In 1996, Kuchma asked Lazarenko to leave his post of Governor of the Dnipropetrovsk region to become deputy prime minister. Lazarenko remained in government until Kuchma fired him. Lazarenko then created and built his Hromada party into a significant political force with over 40 seats in parliament. Its political platform is little different from that of the People's Democratic Party, the group most closely allied with Kuchma.
Pikhovshek finds that "it's hard to assess Lazarenko's activities as those of an opposition leader." Rather, the analyst says, "he's more like a counterpart or double [of those in power]." Pikhovshek added that the current legal and political battle "is a competition between clans for access to the state budget, gas distribution and the system of banking capital."
At his Kyiv press conference last month, Lazarenko insisted that he had not broken any Swiss laws. But he acknowledged he was a participant in what he called a "dirty war" in which each side had overstepped a predetermined line.
According to Pikhovshek, "that means that there was a deal" between Lazarenko and those still in power. He says the parties to the deal "agreed that they would not break specific rules --and these rules have nothing in common with the law."
Despite all the allegations, nothing has been proven in a court of law. It is therefore difficult for an observer to draw conclusions about the Lazarenko affair.
However, two things seem clear. It is adding to the perception abroad that corruption plays a large role in business dealings in Ukraine, a perception widely seen as a key factor in holding down foreign investment. Second, the affair is also adding to the cynicism with which many ordinary Ukrainians view their country's political leaders.