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Poland, Belarus & Ukraine Report: May 5, 2006

5 May 2006, Volume 8, Number 17
MURKY REVELATIONS ABOUT ROSUKRENERGO. On April 26, the Russian newspaper "Izvestia," owned by Gazprom Media, published an article naming two hidden beneficiaries of RosUkrEnergo.

The Swiss-registered company, which is half-owned by the Russian gas monopoly Gazprom, has been at the center of a storm of controversy in Ukraine over gas deliveries from Russia and Turkmenistan.

After Yuliya Tymoshenko became prime minister in January 2005, the Ukrainian Security Service (SBU) launched an investigation into RosUkrEnergo that failed to uncover the undisclosed beneficiaries of the remaining 50 percent stake in the company.

The investigation was dropped, reportedly on the orders of President Viktor Yushchenko, after Tymoshenko was dismissed as prime minister in September 2005. Just months later, following a bitter dispute between Ukraine and Russia over gas supplies, RosUkrEnergo was named as the middleman in a new deal for the supply of Russian and Turkmen gas to Ukraine. The development led to claims by the Ukrainian government that the Kremlin had imposed RosUkrEnergo's role on Ukraine.

While clearing up the issue of RosUkrEnergo's beneficiaries, "Izvestia" failed to shed light on many other outstanding questions regarding the company -- and raised a few new ones.

The article was signed by what appears to be a non-existent Russian journalist named "Vladimir Berezhnoi." According to a report in the April 27 edition of "The Moscow Times," the article was written by an "Izvestia" staff member under a pseudonym "after a Gazprom representative showed him the PwC [PriceWaterhouseCoopers] audit" that named the previously undisclosed beneficiaries of RosUkrEnergo. "Vladimir Berezhnoi" does not exist, "The Moscow Times" reported.

The hidden beneficiaries were named as Dmytro Firtash and Ivan Fursin, two Ukrainian nationals. Firtash, according to "Izvestia," holds 90 percent of the shares of the Austrian-based Centragas, which is part of RosUkrEnergo, while Fursin holds 10 percent.

According to figures provided by Raiffeisen Bank, RosUkrEnergo earned a profit of $500 million in 2005, half of which went to the hidden beneficiaries of Centragas and the other half to Gazprom Bank.

One of the points of contention in the RosUkrEnergo case is whether Gazprom was aware of the beneficiaries of a company they helped create. Gazprom spokesmen have consistently claimed that they did not know who the owners of Centragas were. The Ukrainian side has claimed that it would be inconceivable for Gazprom to enter into a multibillion dollar deal without first knowing who they were dealing with. A former SBU investigator close to the case told RFE/RL: "They could have been Chechen terrorists who were using the company to launder money for their own needs. The Gazprom story does not hold water."

Firtash's and Fursin's names were revealed after a Swiss-based branch of PriceWaterhouseCoopers audited RosUkrEnergo's activities from July 2004 to December 2005. The results of the audit were made available to Gazprom on March 31, 2006.

Three weeks later the names appeared in the "Izvestia" article, which came on the heels of a "Wall Street Journal" article that reported that the organized-crime unit of the U.S. Department of Justice was conducting an investigation into the ownership structure of RosUkrEnergo. According to the Austrian media, U.S. officials reportedly traveled to Vienna to discuss the case with Austrian banking and government officials, while RosUkrEnergo officials were summoned to Washington for talks.

The article in "Izvestia" was disdainful of the U.S. investigation and suggested that U.S. law-enforcement officials not interfere. One explanation offered by the "Ukrayinska pravda" website as to why the names of the beneficiaries were leaked was that Gazprom was worried that the U.S. investigation of RosUkrEnergo would follow a money trail that could lead to high-level Gazprom officials along with prominent Russian and Ukrainian officials -- both past and present.

Firtash and Fursin, according to comments printed in "The Moscow Times" on May 3 by Oleksander Chaliy, a former Ukrainian deputy foreign minister who was in charge of the latest gas negotiations with Russia, are not the ultimate beneficiaries of RosUkrEnergo. "Firtash is not the end of the chain. He is just the beginning and the beginning of a big scandal for the top leadership of Ukraine," Chaliy said.

The "Ukrayinska pravda" website commented that the release of the information by "Izvestia" was meant to preempt the U.S. Justice Department�s investigation and hopefully end the case before it got too close to the real beneficiaries. (Roman Kupchinsky)

FORMER SOVIET REPUBLICS LEAD WORLD IN PRESS CENSORSHIP. In the 15 years since the end of the Cold War, several former Soviet-dominated states have worked to establish liberal democracies. Others lag far behind, based on several criteria. One such yardstick is press freedom. On May 2 -- the eve of World Press Freedom Day -- the Committee to Protect Journalists (CPJ), a New York-based group that advocates press freedoms, issued a report on the "10 Most Censored Countries." Among them are three former Soviet republics: Turkmenistan, Uzbekistan, and Belarus. CPJ Executive Director Ann Cooper in New York spoke with RFE/RL.

The CPJ says the 10 countries cited in its report suppress the truth in a variety of ways and to a variety of degrees. But all share several patterns of behavior.

In most cases, the report says, their governments are controlled by autocrats who impose total control over what their citizens learn about their country and the world in general. And they promote what's known as the "big lie" -- permitting only good news about their countries and forbidding any critical reporting or other "bad news."

Speaking by phone from United Nations headquarters in New York, where she released the report, Cooper says forbidding the reporting of bad news can have a direct impact on the country's population.

"It means that really important issues are often not reported on at all. North Korea, for example -- the state media there -- they really didn't acknowledge that there was a terrible famine in the 1990s that affected millions of people,� Cooper said. �At some point the censorship begins to have an impact on the public welfare of citizens in these very censored countries."

The top five on the list of the "10 Most Censored Countries" are North Korea, Burma, Turkmenistan, Equatorial Guinea, and Libya. The remaining five are Eritrea, Cuba, Uzbekistan, Syria, and Belarus.

Among the former Soviet republics, CPJ says Turkmenistan is the worst offender in censorship. Not only does the state own all domestic media, but it also forbids the importation of foreign sources of news.

The report says the Turkmen media not only deny their consumers the news they need, but also covers President Saparmurat Niyazov with exaggerated flattery, supporting the personality cult in which he has proclaimed himself "Turkmenbashi," or the Turkmens' father.

Cooper says public reaction to such fawning coverage is anyone's guess.

"How do people [in Turkmenistan] really feel about this? It's very hard to know because media is so tightly controlled and all expression is extremely controlled in Turkmenistan,� she said. �People don't dare speak their minds. They wouldn't dare tell you what they thought of their autocratic leader because of fear of the consequences."

The CPJ says that in Uzbekistan, the government of President Islam Karimov uses Soviet-style intimidation to keep the local media from covering the country's Muslim opposition, and the police torture to maintain rigid order.

Specifically, the report accuses Karimov's government of mounting a huge crackdown on journalists for foreign media reporting on the Andijon massacre of May 2005.

"There was a handful of journalists there [in Uzbekistan] who filed eyewitness reports to the world that were very much in contrast to the rosier picture of things that was put out by the government,� Cooper said. �And for their trouble of reporting truthfully on the Andijon massacre, those journalists have all had to flee the country. So pressures in the wake of Andijon have certainly increased dramatically in Uzbekistan."

In addition, the report says, RFE/RL, the BBC, and the Institute for War & Peace Reporting had to close their Tashkent bureaus.

Meanwhile, it says, Uzbekistan also has more journalists behind bars -- six by the end of 2005 -- than any other former Soviet republic.

As for Belarus, it is often referred to as "the last dictatorship in Europe," and its press freedoms -- or lack of them -- support this portrayal, according to the CPJ. The report says the media there are nominally independent, but they're careful to avoid reporting on what Belarusian President Alyaksandr Lukashenka doesn't want his people to hear.

Cooper says Lukashenka's government uses what she calls "legal and administrative techniques" to keep the press under his control.

"Some of the techniques he [Lukashenka] relies on are ordering printing presses to not print those newspapers or the post office to not deliver them,� she said. �So they [the newspapers] may technically still be in business, but they can't get their news out to the people. So that's a less dramatic form of censorship, but it's still an extremely effective one, because it means that the people ultimately are deprived of that independent reporting."

Cooper says censorship in former Soviet republics is not confined to Turkmenistan, Uzbekistan, and Belarus. She tells RFE/RL that the problem exists to some extent in virtually all of them.

"Unfortunately what we've seen since the collapse of the Soviet Union in 1991, there's -- at the beginning -- something of an opening for press freedom, but in more recent years a closing down [of press freedoms] in most of the former Soviet countries."

In determining the "10 Most Censored Countries," the CPJ said it based its conclusions on 17 criteria including formal censorship, an absence of independent media, jamming of foreign news broadcasts and interference with publication. The group said all the countries on the list met at least nine of those criteria.

According to Cooper, the report on the "10 Most Censored Countries" is not one of a series of annual reports. She says the CPJ marks each World Press Freedom Day with a different report on threats to the media. Last year, for example, the group issued a report on the most dangerous countries from which to report the news. (Andrew Tully)

OPPOSITION SEEKS DIRECTION AFTER PRESIDENTIAL ELECTION. There are essentially two ideas among the Belarusian opposition about how to proceed after the presidential election in March, which led to the largest outburst of antigovernment protests in Belarus in the past decade. A younger generation of opposition activists wants former presidential candidate Alyaksandr Milinkevich, who has no party affiliation, to lead a broad movement focused on bringing about political change in Belarus. But some opposition parties appear wary of losing their political stature, and prefer to continue to make all strategic decisions pertaining to the opposition through a collective body or a national convention.

Despite the opposition's overwhelming loss to President Alyaksandr Lukashenka's in Belarus's presidential election in March, the organization that represents the major opposition parties in Belarus saw room for optimism in the election result.

The Political Council of Democratic Forces, which assisted opposition candidate Alyaksandr Milinkevich in his bid to prevent Lukashenka from winning a third term in office, has assessed the opposition election campaign as satisfactory.

Official results had Milinkevich winning just 6 percent of the vote in the March 19 election, which monitors from the Organization for Cooperation and Security in Europe (OSCE) said failed to meet democratic standards.

However, the Political Council has determined that Milinkevich actually achieved 20 percent support -- numbers that were confirmed last month by an independent post-election survey.

Those results, the Political Council believes, are strong enough for the entire democratic camp to build upon in posing a greater challenge to Lukashenka's authoritarian regime in the future. And here is where the problems begin.

Last month, a group of younger and more radical opposition activists, who protested against the election result in a five-day tent camp on October Square in Minsk, proposed that Milinkevich lead a broad movement in Belarus with the aim of deposing President Lukashenka.

One of those activists is Ihar Lyalkou from the Belarusian Popular Front (BNF). The BNF proposed Milinkevich as a presidential candidate during an opposition convention in August 2005, which gave Milinkevich a narrow edge over Anatol Lyabedzka, leader of the United Civic Party (AHP).

"The main thing we want today in the country and the democratic movement is to create the situation in which this movement could come to real power. We have, in both the provinces and Minsk, teams of professionals who are ready even today to become Alyaksandr Milinkevich's closest aides in the leadership of the movement," Lyalkou said.

Lyalkou and his colleagues do not want to abolish the Political Council of Democratic Forces. But Lyalkou told RFE/RL that they want Milinkevich to be solely responsible for executive decisions in the new movement.

"The movement should have the Political Council composed of the leaders of political parties. The council should remain in order to define basic, strategic directions of the movement's activity. And there must be some executive body -- which should be staffed not according to party quotas but according to exclusively professional qualities [of the staff]. This national committee should be formed by Mr. Milinkevich personally," Lyalkou said.

On April 26, during an opposition rally in Minsk to commemorate the 20th anniversary of the Chornobyl disaster, Milinkevich announced the creation of a Movement for Freedom. Milinkevich predicted that the opposition, if united, could depose Lukashenka in the next two years through actions of civil disobedience. But some are skeptical of the idea of making Milinkevich the primary voice of the opposition, including AHP deputy head Yaraslau Ramanchuk.

"The movement makes sense if it is built on the currently existing coalition and includes both [opposition candidate Alyaksandr] Kazulin's party [Social Democratic Party] and the youth that does not belong to any party or youth groups. I think this initiative is disastrous for Milinkevich as a politician," Ramanchuk said.

Ramanchuk said that the Political Council of Democratic Forces should continue to coordinate opposition actions in the future, with strategic political decisions being made at national conventions.

Ramanchuk told RFE/RL that the people who want Milinkevich to be a national opposition leader represent only one political party and do not speak for the majority of the demonstrators -- mostly young people with no party affiliation -- who came to October Square in March to protest the election.

"The people who promote the movement led by Milinkevich belong to one group -- the BNF. They have been, are, and will continue to be in politics and the BNF. What, are they essentially going to run this movement? Therefore, I don't want Alyaksandr Milinkevich's electoral potential to be lost because of such initiatives," Ramanchuk said.

But Lyalkou argues that from now on Milinkevich should be promoted in Belarus as an icon of the anti-Lukashenka opposition: "The situation is such that for the first time in the past 12 years we have had a real, generally accepted -- both within our country and abroad -- leader who is an alternative to Lukashenka. Therefore, the starting conditions for a real change of the situation in the country are very good."

Judging by Ukraine's example, Lyalkou may be right. The opposition to Ukrainian President Leonid Kuchma's regime began to score significant political successes only after Viktor Yushchenko united it under the banner of the Our Ukraine bloc in 2002 and became its clear leader. By the beginning of 2005, Yushchenko was heading the country. (Jan Maksymiuk) (Yury Drakakhrust from RFE/RL's Belarus Service contributed to this report.)