TYMOSHENKO FACES CRIMINAL CHARGES.

Ukrainian Deputy Premier for Energy Yulia Tymoshenko’s struggle for survival in government seems close to an end. From the beginning of her government career, Tymoshenko has been a hostage to her past. The private energy company she used to head, United Energy Systems of Ukraine, was closely involved in the shady gas schemes introduced in Ukraine in 1995-1996 by Pavlo Lazarenko, then Ukrainian premier and now a Californian prisoner accused of money laundering. Despite this, Premier Viktor Yushchenko took Tymoshenko in the government as an expert he thought able to boost the efficiency of the country’s energy market. Tymoshenko’s introduction of open market rules in the industry provoked anger of the “oligarchs” entrenched there. President Leonid Kuchma apparently sided with them (see the Monitor, July 11, November 21, 29, 2000). Having swapped her seat in parliament for the government position, Tymoshenko lost her immunity from prosecution. The prosecutors who investigated Lazarenko’s corruption schemes were eventually given the green light to go after Tymoshenko.

On January 5, Deputy Prosecutor General Mykola Obikhod, who happens to be the main investigator of Lazarenko’s affairs in Ukraine, announced that criminal proceedings were being launched against Tymoshenko. He accused her of forgery, smuggling Russian natural gas worth US$445 million, and tax evasion to the order of US$149,000. The prosecution also launched a new criminal case against Tymoshenko’s husband and former business partner, Oleksandr, who has been behind bars on fraud charges since last summer. Oleksandr Tymoshenko is now accused as well of bribing Lazarenko for some US$75 million in 1996.

Yulia Tymoshenko has denied the charges against her as “absurd” in a statement published in opposition newspapers. She said that it was technically impossible to smuggle gas, denied that she or her husband ever transferred money to Lazarenko’s accounts and claimed that the criminal investigation against her was “ordered by criminal oligarchic clans which de facto rule the country.” She noted that the prosecution accused her of crime shortly before she was going to launch reforms in the coal industry, which she defined as “the most corrupt industry in Ukraine.” Tymoshenko maintained that she would neither resign of her own will nor leave Ukraine. She claimed that Deputy Speaker Viktor Medvedchuk is heading a secret plot to destroy Yushchenko’s government by implicating her in corruption. Medvedchuk is close to Tymoshenko’s reputed enemy, “oligarch” Hryhory Surkis, whose vast interests in the energy sector had reportedly been disturbed by Tymoshenko’s policies. It was therefore no surprise that Tymoshenko chose him as the target of her counteroffensive. Medvedchuk has denied the allegations.

Tymoshenko was indirectly defended by Major Mykola Melnychenko, the main player in the ongoing tape scandal, in which top Ukrainian officials are implicated in removing a muckraking journalist and other grave crimes (see the Monitor, December 13, 2000). Melnychenko, who claims to have bugged Kuchma for many months, is now in hiding abroad. In an interview with RFERL on January 9, Melnychenko claimed that there was evidence that the prosecution had fabricated the accusations against Tymoshenko of blackmailing Yushchenko to, in Melnychenko’s words, “make him [Yushchenko] do anything Kuchma wants.”

Yushchenko tried to defend his deputy. His interference behind the scene reportedly prevented the law enforcement agencies from arresting Tymoshenko on January 5. On January 7 in Lviv, commenting Tymoshenko’s predicament, Yushchenko said that “extremely big figures have been affected” in the energy sector, thus indirectly corroborating Tymoshenko’s claims about a plot by the oligarchs. On January 12, Yushchenko praised Tymoshenko’s performance in the government and warned the prosecution against politicizing her case.

But his warnings did not prevent the prosecution from bringing official charges against Tymoshenko. On January 15, after a five-hour interrogation in the Prosecutor General’s Office, Tymoshenko was charged with forgery and gas smuggling. She agreed in writing not to leave Kyiv. This means that she may be arrested should the investigators deem it appropriate. If convicted in court, Tymoshenko would face up to ten years in prison. Her work in the government is paralyzed. Her dismissal may be only a question of time. On January 16, Prosecutor General Mykhaylo Potebenko officially requested that Kuchma dismiss Tymoshenko.

Yushchenko is losing one of his strongest allies in the government. This dramatically weakens his position vis-a-vis the oligarchs, who are wary of Yushchenko’s pro-Western orientation, dedication to open market principles and strict monetarism. So far, Tymoshenko, vulnerable to corruption allegations because of her past connection to Lazarenko, has been the main object of their criticism. Reforms in the energy industry–necessary in order to make this lucrative industry “transparent” and, consequently, immune to corruption–were one of the main tasks President Kuchma and Western creditors assigned Yushchenko. If Tymoshenko goes and the weakened Yushchenko fails to continue her reform course in the energy industry, well-connected businessmen may regain some of the influence earlier lost (UNIAN, January 5-11; New Channel, January 7, 15; RFERL, January 9; Silski visti, January 10; Ukrainska pravda, January 12; Zerkalo nedeli, January 13).

ARMENIA UNPERTURBED BY PUTIN’S WOOING OF AZERBAIJAN.