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You're reading: Gas lobby quits party of power

Ukraine's party of power last week suffered its largest split in more than a year as seven deputies – most of them prominent players in Ukraine's gas market – quit the People's Democratic Party parliamentary faction.

The split defied the PDP's image as an unwavering supporter of President Leonid Kuchma. According to a party spokesman, the seven deputies quit the PDP faction because they didn't weren't sure the party would support Kuchma in the October 1999 presidential election.

Maksym Strikha, the PDP's chief ideologist, said the departing deputies were promised a better position for their businesses in exchange for support for Kuchma.

The seven deputies included five who won their seats under the PDP banner: Valery Akopyan, who was vice president of the gas trading company Intergaz when elected to parliament in March; Oleksadr Danylchuk, who was president of Ukrgazservis; Ihor Nasalyk, who was president of Tekhnotsentr; Oleksy Kucherenko, who was chairman of Intergaz's board of directors; and Konstantyn Zhevaho, who was a top executive at the state gas monopoly Ukrnafta.

Ukrainian law requires that parliamentary deputies give up other formal positions, including positions at private companies. However, most businessmen who win seats in parliament continue to wield influence at their former firms, and many carry on as de facto CEOs with titles such as 'honorary president.'

The two other departing deputies – Viktor Korol, who was board chairman of the National Gas Company when elected, and Leonid Pashkovsky, who was deputy head of the state tax administration – ran as independents and then joined the PDP faction in parliament.

Nasalyk told the weekly newspaper Zerkalo Nedeli that his group was unsatisfied with the PDP faction's achievements since the election.

'The representatives of business were not heard in the faction,' Nasalyk was quoted as saying. He added that the PDP's strategy in parliament was ineffective, noting that the party had failed to win key positions in parliament.

Out of 22 parliamentary committees, only four are chaired by PDP faction members, and the faction does not have a representative in the parliament's three-man leadership. PDP members gave other reasons for the split.

'It was recommended to them, and not from someone on Hrushevskoho street,' said PDP deputy Oleksandr Yemets. Both the Cabinet and Verkhovna Rada are on Hrushevskoho; the Presidential Administration building is not.

Strikha said the People's Democratic Party did not support the way the gas men were lobbying for their interests in parliament because the party is 'more moral.'

Strikha said the group would likely team up with former presidential aide Oleksandr Volkov, currently an independent deputy.

'[Volkov] is trying to make up a new faction to support the current president, but they won't be able to create a powerful one, because you can buy many things for money, but not everything,' Strikha said.

When elected to parliament, Volkov was president of the Gravis television company, which broadcasts on channel 35 and places programs on channel 7.

However, the newspaper Den described the splinter group as the group 'group of Bakai.' Igor Bakai, a former president of Intergaz, is currently director of Naftagaz Ukrainy, the newly created company that controls all of the state's interests in the oil and gas sector, including the state's share in Ukrnafta.

According to Zerkalo Nedeli, the splinter group will team up with deputies Oleksandr Abdulin, who was president of Intergaz when elected in March, and Yaroslav Kozak, who was president of Ukrnafta. Both ran as independents and remain non-aligned.

Intergaz is one of the major players in the hugely profitable business in which private companies win licenses from the Ukrainian state to buy gas from Russia and then sell it on to Ukrainian consumers.

The last major split in Ukraine's upper echelons of power revolved around another player in the same business, United Energy Systems. That company received the bulk of the contracts until Kuchma removed Pavlo Lazarenko as prime minister in June 1997. UES has since been shut out of the business and had its bank accounts frozen; Lazarenko now heads the Hromada party and is Kuchma's most bitter opponent.

Kuchma created Naftagaz Ukrainy by presidential decree this spring. Bakai has promised a major shake-up in the way the gas-transit contracts are awarded.

The split brings the PDP faction's size down to 70 deputies. It remains the second-largest faction in the 450-seat Verkhovna Rada after the Communist Party faction.

Although the PDP was created with support from Kuchma and was one of two parties that received his endorsement in the March 1998 elections, it has not yet confirmed that it will support Kuchma in the October 1999 election.

PDP officials have said the party will support the candidate with the best chances to win among those who are not leftist and have a strongly market-oriented program.

'We will support Kuchma as the current president until the last minute, and we might consider supporting him at the election, but that support would not be unconditional,' Strikha said.

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