Publication: Monitor Volume: 5 Issue: 178

As Ukraine’s presidential election campaign enters its decisive stage, opponents of President Leonid Kuchma in the Verkhovna Rada have launched a war of “kompromat” (compromising materials) against some key presidential aides. Although the critical mass of Red deputies is behind this move, others have a vested political interest in it as well. Twelve of Kuchma’s fourteen competitors in the presidential campaign are parliamentary deputies.

On September 24, a majority in the Rada approved a motion instructing the Prosecutor General Mikhaylo Potebenko to launch a criminal investigation against deputy Oleksandr Volkov and to request the Rada to lift Volkov’s immunity, with a view to arresting him by October 5. On September 17, the parliament had approved a similar motion concerning Kuchma’s adviser Viktor Pinchuk.

Volkov, an affluent businessman, is a key presidential adviser and campaign manager; he had also helped run Kuchma’s successful 1994 presidential campaign. Elected to parliament in 1998, Volkov set up earlier this year the pro-Kuchma caucus “For Regional Revival” (see the Monitor, February 22). According to a study on Ukrainian oligarchs, published by the Kyiv-based Institute of Politics earlier this year, Volkov controls the Hravis television company and the Social Protection Foundation, and has as well some influence over the UT-1 and UT-2 television channels (UNIAN, April 7).

Little had been known to the public about Viktor Pinchuk until his election to parliament last year. Pinchuk, 39, belongs to the Dnipropetrovsk industrial elite, the initial political base of Kuchma and Lazarenko in the early 1990s. Pinchuk controls Ukraine’s largest-circulation daily, the decidedly pro-Kuchma Fakty i kommentarii. In the early 1990s, Pinchuk founded the Interpipe gas and metallurgical investment group, which currently controls large stakes in several of Ukraine’s leading steel plants. Pinchuk, jointly with Andry Derkach–son of the chief of Ukraine’s Security Service (SBU)–and several prominent members of the gas lobby, were behind the creation of another pro-Kuchma caucus in parliament, Labor Ukraine (see the Monitor, April 21).

The moves against Volkov and Pinchuk were initiated by a parliamentary ad-hoc commission which had been set up in July to examine allegations of money laundering abroad by high-placed officials. Heading the commission is the independent deputy Hryhory Omelchenko, a former police colonel with the reputation of an anticorruption crusader, who had played a major role in the proceedings against former Prime Minister Pavlo Lazarenko (see the Monitor, July 17). The commission initially targeted Volkov, but has since broadened the scope of its actions.

Accusations against Volkov are nothing new; the Verkhovna Rada has debated lifting his immunity for quite some time. The ad-hoc commission suspects Volkov of having acquired real estate in Belgium and laundering millions of dollars through bank accounts in that country. Volkov has repeatedly denied all of the charges.

The appeal to prosecutors to indict Pinchuk, however, is rather unexpected. Omelchenko’s commission suspects Pinchuk and Interpipe of tax evasion and the laundering of up to US$38 million in 1997-1998 through the Bank of Boston and the Bank of New York. The latter is currently in the epicenter of a massive scandal involving alleged money laundering by high-placed Russian officials (see the Monitor, August 24, 26-27, 31, September 7, 21-22, 27). The commission’s investigators are also trying to connect Pinchuk to the case of Lazarenko, who, suspected of embezzlement and money laundering in Ukraine and Switzerland, is currently seeking asylum in the United States. Pinchuk has denied the charges and threatened to sue Oleksandr Zhyr and Anatoly Yermak, the two members of Omelchenko’s commission and former KGB officers who publicized the allegations.

On September 21, Omelchenko attacked Prime Minister Valery Pustovoytenko, who unofficially coordinates the cabinet ministers’ electioneering for Kuchma. From the parliament’s rostrum, Omelchenko claimed possession of copies of documents allegedly showing that Pustovoytenko has both a company registered in his name in the U.S. state of Oregon and illegal bank accounts abroad. Pustovoytenko, in reply, produced a document issued by the SBU, which denied existence of the named company.

Omelchenko has been cited as claiming to possess “kompromat” against some thirty executive branch officials and parliamentary deputies. At this stage, however, Omelchenko is targeting the three men who have been most loyal to Kuchma over the past several years; the timing and selective focus of this effort throws a wrench in Kuchma’s reelection effort. In parliament, Omelchenko’s team is openly supported by Speaker Oleksandr Tkachenko, one of Kuchma’s most powerful rivals in this election (see Tkachenko’s profile in the Monitor, September 14). The “kompromat” these self-styled corruption fighters profess to offer could prove a handy tool in the hands of Red presidential candidates (UNIAN, September 3, 7, 17; Den, September 8, 18; Zerkalo nedeli, July 31, September 18; Fakty i kommentarii, STB, September 21; InfoBank, September 24).