Back Stabbing, Corruption And Masked Gunmen: Just Another Week In Ukrainian Politics

KIEV, Ukraine -- One would assume it would raise the odd eyebrow if Barack Obama were to name Rupert Murdoch deputy head of the CIA. Yet In Ukraine, President Viktor Yushchenko has apparently had no such qualms.

Yushchenko (L) and Tymoshenko are destroying the country with their constant political bickering.

Six weeks ago, the Ukrainian president appointed Valery Khoroshkovsky, a billionaire media magnate, as deputy director of Ukraine's spy agency, the SBU.

Khoroshkovsky has been useful to the president and his allies. His television station Inter has pulverized Yulia Tymoshenko, the prime minister who has long coveted Yushchenko's job.

But he proved even more useful last week, when masked SBU agents toting machine guns stormed the Kiev offices of Naftogaz, the state gas company.

The raid, which has further battered Ukraine's already tarnished image, was political payback.

In January, Tymoshenko brokered a deal with Russia to end a two-week gas dispute that left millions of Europeans without heating in the middle of winter.

The deal was praised because it locked out RosUkrEnergo, a controversial business entity that acted as a gas intermediary between Russia and Ukraine. RosUkrEnergo has made billions of dollars in the past three years, but for what no-one really seems to know.

A 50-50 venture between Russia's Gazprom and Ukrainian business, the Ukrainian face behind RosUkrEnergo is another oligarch by the name of Dmitry Firtash.

European diplomats would be delighted to see the back of him, but Firtash has refused to go quietly -- and he has friends in high places.

Not only does Firtash supposedly have business connections with Khoroshkovsky, he is also close to Yushchenko himself, although the president has denied any impropriety about the relationship.

Angered at being locked out of the gas trade with Russia, Firtash was also infuriated after Tymoshenko successfully managed to confiscate over US$ 1 billion worth of gas held in storage by RosUkrEnergo.

Hence last week's raid, presumably ordered by his chum Khoroshkovsky with, critics say, the tacit blessing of the president. The SBU gunmen were also under orders to confiscate papers related to the deal with Russia, which would have meant Ukraine could not make its monthly payments to Gazprom.

The president's men might have got one over Tymoshenko if the raid had been successful (it wasn't), but at the cost of re-igniting the gas crisis.

The unwholesome incident highlights the disastrous relationship between big business and politics in corruption-plagued Ukraine.

But if it seems that Tymoshenko is the victim in all this, nothing could be further from the truth.

An ambitious political opportunist, she has plotted against Yushchenko from the moment they came to power after the Orange Revolution.

Ukraine desperately needs political unity to see it through the financial crisis.

Yet instead of putting aside their differences, the two are using the crisis to score points off each other.

Two weeks ago, under intense Western pressure, Tymoshenko and Yushchenko issued a statement promising to work together for the sake of Ukraine.

A detente was essential to get the IMF to release the second tranche of a stalled $16.4 billion loan that stands between Ukraine and potential economic oblivion.

Tymoshenko promised to marshall her party in parliament four days later to pass two laws needed to secure the release of the second tranche.

Instead, Tymoshenko used the parliamentary session to sack the foreign minister Volodymyr Ohryzko, a close ally of the president. As for the two bills, one was rejected, the other shelved. The following day, the SBU raid on Naftogaz happened.

So, even though the IMF has made concessions -- widening the amount that the budget is allowed to go into deficit to 3 per cent of GDP -- the egos of Ukraine's leaders are still preventing a settlement to the impasse.

Ukraine's hard-pressed people deserve better.

Millions face losing their homes or cars because they can no longer afford to pay back loans as unemployment soars and the hryvnia collapses against the dollar.

With so many facing misery and disaster, many Ukrainians would like to see the country's leaders putting aside their differences for the sake of Ukraine. But most Ukrainians, inured to dashed expectations, are not holding their breath.

Source: Telegraph UK