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September 08, 2005

Ukraine: Corruption Allegations Abound

by Roman Kupchinsky

The president won't be looking over Tymoshenko's shoulder anymore

RFE/RL considers the issues as Kyiv's political crisis erupts amid a widening political scandal over continuing corruption in the government.
Prague, 8 September 2005 (RFE/RL) -- Kyiv, home of the Orange Revolution, was first thrown into shock by the resignation of Oleksandr Zinchenko, the head of President Viktor Yushchenko's administration, on 5 September.

The repercussions of this resignation led to a major crisis and the dismissal of Yuliya Tymoshenko's government today.

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

Zinchenko accused two members of Yushchenko's closest entourage, Petro Poroshenko, the head of the National Security and Defense Council (and godfather to one of Yushchenko's children) and Oleksandr Tretyakov, Yushchenko's first assistant, of "corruption."

As an example of Tretyakov's alleged corrupt activities, Zinchenko cited Tretyakov's membership of the supervisory boards of Oshchad Bank, one of Ukraine's largest banks, and of UkrTeleCom, the state-owned telecommunications giant.

He also charged that Tretyakov plays a "controlling role" in the oil-and-gas sector. Tretyakov 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 Ukrainian Security Service (SBU).

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

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

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

Zinchenko did not accuse Poroshenko of any specific corrupt activities, but limited himself to criticizing the head of the National Defense and Security Council of staffing his apparatus with people "close to him" and "blockading the president from meeting with people" who were hostile to Poroshenko.


Soon after Zinchenko's accusations were aired at a Kyiv press conference, the SBU announced that it would investigate his charges.

Today, Poroshenko resigned, as did Deputy Prime Minister for Humanitarian Affairs Mykola Tomenko. Tomenko had not been accused of anything, but explained his resignation by claiming that Tretyakov and Poroshenko had formed a shadow government and that a "Byzantine system of management" had evolved.

Tomenko blamed the two men, along with parliament speaker Volodymyr Lytvyn and the leader of the Our Ukraine faction in parliament, Mykola Martynenko, of blocking public hearings in parliament on the killing of journalist Heorhiy Gongadze.

Interfax today quoted Tomenko as telling a press conference that if nothing had changed following yesterday's late-night talks between 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, parliament 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 sit in parliament.

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 8 September, after he resigned from the National Security Council, Poroshenko tried to reverse his decision to leave parliament -- but parliament rejected this bid.

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

Yekhanurov, born in Yakutiya in present-day Russia in 1948, is a Buryat by nationality and is presently the head of the Dnipropetrovsk regional 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 been the broader conflict between Tymoshenko and Poroshenko. Over the past few months, the two have exchanged disagreements publicly and Yushchenko has unsuccessfully tried to maintain peace within the ranks.

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

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

Some critics have charged that Moscow was lobbying on behalf of Poroshenko and were adamant in refusing to deal with 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.
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