Procurator general opens investigation into Tymoshenko's past business practices

KYIV - Ukraine's Procurator General's Office opened a criminal investigation into the past business practices of Vice Prime Minister Yulia Tymoshenko on January 5 on charges of forgery, smuggling and tax evasion.

Ms. Tymoshenko denied the charges the next day and explained that they have been orchestrated by "criminal clans of oligarchs who de facto rule Ukraine."

"All the charges leveled at me by the prosecutors are simply a brutal falsification," said Mrs. Tymoshenko, according to Interfax-Ukraine.

The 38-year-old Dnipropetrovsk-born Ms. Tymoshenko has been under intense pressure from those players in the industry who were once both her colleagues and competitors since she was named vice prime minister in charge of the fuel and energy portfolio at the beginning of 2000.

Ms. Tymoshenko has come under increasing criticism from oil and gas barons for the way in which she has pursued energy sector reforms, mostly for her attempts to reign in the largely unregulated industry and force day-to-day transactions to be made on a cash basis and out of the barter mode.

She has received criticism also from President Leonid Kuchma who has said in the past that he would not trust her "to clean out a closet with a broom."

Although charges of illegal operations have dogged Ms. Tymoshenko's business dealings for years, President Kuchma did not put up strong resistance to her appointment by Prime Minister Viktor Yuschenko in January.

The investigation into her complicity in illegal business dealing in oil and gas trade come several months after the arrest of her husband on similar charges. Mr. Tymoshenko has been refused bail and remains incarcerated in a Kyiv jail because court officials believe there is a risk that he could flee the country for Great Britain, where the company the Tymoshenkos own has offices.

Ms. Tymoshenko is the founder and ex-president of United Energy Systems, once considered the primary player in the lucrative oil and gas business in Ukraine. The company's influence, which peaked in the mid-1990s when it was considered one of the most powerful firms in the region of the Commonwealth of Independent States, began to wane within the sector after Pavlo Lazarenko, one of the company's primary benefactors when he was prime minister of the country in 1997, was accused of corruption and illegal money operations in Ukraine and Switzerland.

After he was stripped of criminal immunity by his colleagues in the Ukrainian Parliament, Mr. Lazarenko fled to the United States, where he unsuccessfully requested political asylum before being charged by U.S. officials with more crimes. Since then he has pleaded guilty to corruption charges in Switzerland.

On January 8 Petro Yabochuk, a spokesperson for the Batkivshchyna Party that Ms. Tymoshenko heads, denied a report that Ms. Tymoshenko had been incarcerated. He called the rumor "another canard started by well-known circles."

A recent report by NISA Consulting, a think-tank based in Russia, named Ms. Tymoshenko the third richest person in the CIS and put her value at $8.4 billion. The consulting firm did not identify the source of its figures.

Copyright © The Ukrainian Weekly, January 14, 2001, No. 2, Vol. LXIX

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