Tymoshenko declares separate path in Ukraine's 2006 parliamentary elections

by Zenon Zawada and Yana Sedova
Kyiv Press Bureau

KYIV - After her sudden firing last week, former Prime Minister Yulia Tymoshenko declared she would blaze a path that is parallel, yet separate from that of President Viktor Yushchenko, toward the March 2006 parliamentary election.

Ms. Tymoshenko said she does not want to align with Our Ukraine People's Union because of the corruption that the president's entourage is mired in.

"It does not mean we are at war," she told a national television audience on September 9. "But we have two different teams, two very different sets of people. I will not go to the elections together with the people who have so discredited Ukraine."

In declaring her independence, Ms. Tymoshenko also revealed her determination to reclaim the prime minister's position.

She expressed full confidence in her ability to harness enough votes to give her party or faction the most members in the Verkhovna Rada's next session. A faction may be a coalition of political parties or individuals.

Under the constitutional changes that take effect January 1, the party or faction gaining the most parliamentary seats will nominate the prime minister. Currently, the president does that.

Political experts said the Yulia Tymoshenko Bloc has a good chance of gathering the most votes in a highly fractured political field in which no single party will have a parliamentary majority.

"We will see a very tough election, where Tymoshenko and Yushchenko will become the main antagonists," said Volodymyr Kornilov, a director at the Center for Strategic Planning.

Millions of Ukrainians eagerly awaited Ms. Tymoshenko's reaction and explanation to her firing by President Yushchenko, which he announced on September 8, citing internal conflicts that obstructed the government's ability to work.

The next evening, she appeared on a live broadcast on the Inter network in which she explained her version of events.

The telegenic politician appeared confident and convincing. She portrayed herself as an unbending crusader for reform while casting her enemies in the Yushchenko camp as selfish and corrupt politicians interested only in lining their own pockets.

Virtually from the first day, the president's inner circle was put in charge of all the powerful cash flows in the state, Ms. Tymoshenko added.

Employees felt that corruption increased two- or threefold and everyone knew who was taking bribes, where and how, Ms. Tymoshenko said.

She accused Mr. Yushchenko's close associate Petro Poroshenko, the former secretary of the National Security and Defense Council, of trying to run the government and using his position to advance his private business interests.

"When Petro Oleksiyovych came to the National Security and Defense Council, he assumed the role of prime minister and started issuing a large number of totally unfair instructions and inquiries to Ukrainian ministers," Ms. Tymoshenko said.

She said Oleksander Tretiakov, the president's suspended first aide, was "virtually becoming a bottleneck blocking access to the president."

Ms. Tymoshenko also pointed fingers at Mykola Martynenko, the chair of Our Ukraine parliamentary faction, and Roman Bezsmertnyi, the former vice prime minister for administrative and territorial reform. It was Mr. Bezsmertnyi who suggested to Mr. Yushchenko that he sack the whole Cabinet, Ms. Tymoshenko said.

"I can say that this was a unique, destructive idea," she said.

Ms. Tymoshenko took painstaking steps to avoid criticizing President Yushchenko directly, insisting that it was this corrupt circle that was pressuring him.

"The president was merely held hostage to the ultimatum made by his closest entourage, who demanded that the government must be sacked," she said.

Two days later, the president accused Ms. Tymoshenko of taking advantage of her position to gain influence in the privatization of the Nikopol ferroalloy plant in the Dnipropetrovsk Oblast.

The president launched a second attack on Ms. Tymoshenko in a September 13 interview with the Associated Press, accusing her of attempting to wipe out $1.5 billion in debt owed by her defunct gas-trading company, Unified Energy Systems.

Mr. Yushchenko's allegations shocked her, Ms. Tymoshenko said. The president is trying to rebuild "an old repressive machine, that Kuchma used against me and my family," Ms. Tymoshenko said. She also denied the allegation of trying to eliminate $1.5 billion in debt.

Ms. Tymoshenko began her speech by touting the successes of her government. Ukraine experienced GDP growth of 4 percent in the first half of 2005, and more than 3,000 regulations that complicated business have been canceled, she said. For the first time, agriculture posted 7 percent growth in the first half, she said.

Partly as a result of the Contraband Stop! program, the government managed to take $4.4 billion out of the shadow economy and bring it into the national coffers, she said. "This is a figure Ukrainian budget has never had," Ms. Tymoshenko said.

The gross income of families increased by 43 percent, she said.

Perhaps the most notable achievement that Ukrainian voters will remember in the March elections is the boosting of pensions by an average of 21 percent. Wages in science, cultural and educational fields increased 44 percent, Ms. Tymoshenko said.

During her appearance, Ms. Tymoshenko held a blue ribbon side-by-side with an orange ribbon, pointing out that they make the color of the Ukrainian flag.

"I want us to unite Ukraine, so that as a single powerful team that has not betrayed its moral values we could come and build Ukraine in which there is justice, prosperity, economic growth, investment and everything we are dreaming about," Ms. Tymoshenko said.

Ms. Tymoshenko's demise - or the last straw as Mr. Yushchenko put it - involved her attempts to influence the fate of the $200 million Nikopol ferroalloy plant.

The Ukrainian government was supposed to retake ownership of Nikopol after an August 26 High Appellate Economic Court ruled the government's sale of shares to billionaire Viktor Pinchuk in 2003 was illegal.

Its owners included billionaire Viktor Pinchuk, former President Leonid Kuchma's son-in-law.

He bought 25 percent of Nikopol's shares from the government for $41 million in May 2003, a sharply discounted price that immediately drew alarm. He bought another 25 percent plus one share stake for $41.1 million in August 2003.

He purchased the plant just as Pryvat Group, a Dnipropetrovsk partnership that invested in metal factories, had planned to acquire the rest of the Nikopol shares, of which it had already had 13 percent stake.

Pryvat Group was seeking to create a monopoly on a metals market, having already owned the Zaporizhskyi and Stakhanovskyi ferroalloy plants.

The Nikopol plant could be sold for more than $1 billion at an open tender, Ms. Tymoshenko said at a September 3 press conference.

However, State Property Fund Chair Valentyna Semeniuk said she received an order from Ms. Tymoshenko on August 30 to allow Assistant Minister of Industrial Policy Serhii Hryschenko to take part in a Nikopol stockholders meeting in her stead.

The order stated that Pryvat Group representatives must be appointed as Nikopol's managers, said Ms. Semeniuk, who believes the state should take ownership of Nikopol.

Ms. Semeniuk accused Ms. Tymoshenko of exceeding her authority and criticized the shareholders meeting as illegal. "The person who ordered this must face responsibility," Ms. Semeniuk said on September 3, identifying Ms. Tymoshenko.

It wasn't clear why Ms. Tymoshenko would have wanted to pressure a transfer of Nikopol to shareholders until Ukrayinska Pravda reporter Oleksii Moldovan reported a possible arrangement she had with Pryvat Group.

Billionaire Ihor Kolomoyskii, a Pryvat Group partner, declared on August 20 his intention to buy 40 percent of the stake in 1+1, the second-highest rated television network in Ukraine. Though not a partner in Pryvat Group, Ms. Tymoshenko was allegedly eager to have influence upon a television network, Mr. Moldovan reported.

Ms. Tymoshenko has denied she was involved in secret agreements with Pryvat Group.

However, Ms. Tymoshenko might not have been the only official in Mr. Yushchenko's government seeking a stake in a Ukrainian television network.

Russian businessmen Oleksander Abramov and Viktor Vekselberg wanted to "purchase the Inter channel and then transfer it to Mr. Yushchenko's inner circle in exchange for the Nikopol ferroalloy plant," Russian Communist Deputy Viktor Iliukhin alleged during an August 15 live radio broadcast.

Mr. Poroshenko was interested in the deal, Mr. Moldovan reported.

Mr. Yushchenko named the Nikopol scandal "a fight between two gangs" in his September 8 address sacking the Cabinet.

"I agree with the President," Ms. Tymoshenko said the next day. "This was the gang of Pinchuk fighting the gang of Poroshenko and a Russian businessman who was linked with Poroshenko."

In a September 13 press briefing with Western journalists, the president said his government could not tolerate another Nikopol scandal, in which thousands of workers were protesting and brought to the brink of bloodshed.

"This kind of reprivatization is not necessary," Mr. Yushchenko said. "We will not survive two or three of those scandals."

Copyright © The Ukrainian Weekly, September 18, 2005, No. 38, Vol. LXXIII

| Home Page |