©2003 RFE/RL, Inc. All Rights Reserved.

With the kind permission of Radio Free Europe/Radio Liberty, InfoUkes Inc. has been given rights to electronically re-print these articles on our web site. Visit the RFE/RL Ukrainian Service page for more information. Also visit the RFE/RL home page for news stories on other Eastern European and FSU countries.

Return to Main RFE News Page
InfoUkes Home Page

ukraine-related news stories from RFE


RFE/RL Poland, Belarus, and Ukraine Report Vol. 5, No. 16, 29 April 2003

A Survey of Developments in Poland, Belarus, and Ukraine by the Regional Specialists of RFE/RL's Newsline Team

PREMIER TESTIFIES IN RYWINGATE. Prime Minister Leszek Miller on 26 April testified before the special parliamentary commission set up in January to investigate the bribery scandal dubbed "Rywingate" by Polish media. The commission is probing allegations by "Gazeta Wyborcza" that prominent film producer Lew Rywin in July 2002 sought a $17.5 million bribe from Agora, the newspaper's publisher, on behalf of Miller's Democratic Left Alliance in return for changes to a media bill to benefit Agora (see "RFE/RL Poland, Belarus, and Ukraine Report," 14 January 2003). Miller's interrogation, which was covered live by Polish Television, continued on 28 April.

Miller told the commission that he did not send Rywin to solicit a bribe from Agora, as alleged by Agora Chairwoman Wanda Rapaczynska in a note she made for "Gazeta Wyborcza" Editor in Chief Adam Michnik, following her conversation with Rywin in mid-July. Rywin subsequently repeated his bribe offer to Michnik on 22 July, but without mentioning Miller's name (this conversation was secretly taped by Michnik and published by "Gazeta Wyborcza" on 27 December).

"From the very start, the whole matter seemed to me to be so absurd that it did not seem to merit serious attention," Miller told the commission. "At the same time, however, as transpired from Adam Michnik's words and Wanda Rapaczynska's note, Lew Rywin had cited my plenipotentiary powers in this matter.... Nobody knows better than I do how unambiguously lacking in any basis what can be read in this regard in Wanda Rapaczynska's note. For me the content of this text is absurd, from the sphere of fantasy and delusion."

Miller said there was no need to send Rywin to solicit a bribe from anybody in July 2002, since the government and Agora had already agreed on a compromise version of the media bill.

Miller told the commission that in August 2002, Jerzy Urban, editor in chief of the "Nie" weekly -- who, according to Miller, was "well-informed" about Rywin's bribe offer -- urged him to make the Rywingate scandal public. "I replied that this was an absurd story and it was difficult to make something so absurd public and promote an atmosphere of gossip, sensationalism, etc.," Miller said. "And I told him that since he [Urban] knew so much about this case, he could make it public, too." According to Urban, who testified before the commission in March, Miller, in explaining his motives for not making the bribery scandal public, said: "The damage might be greater than the advantage because people might think about this as a confirmation, and the resulting impression will be negative."

In expounding on why he did not report Rywin's bribe offer as a crime to prosecutors, Miller said: "In my deep conviction, informing of a crime requires an appropriate justification and the manifestation of circumstances rendering probable the manifestation of a criminal event.... I judged that this story was improbable and not credible."

Miller vowed before the commission that he "will not rest" until he has clarified why he himself and his party have been involved in Rywingate.

Most Polish commentators agree that Miller -- in contrast to his earlier declaration that he will tell the commission "interesting things" -- did not add anything of substance to the Rywingate case on 26 April. Miller's interrogation on 28 April turned out to be even more insubstantial than the earlier one, and ended in a scandal. On this day, Miller was questioned by only one lawmaker, Zbigniew Ziobro from the opposition Law and Justice. Ziobro was primarily interested in why Miller did not notify prosecutors after he was informed about Rywin's attempt to solicit a bribe, and repeated this question in a multitude of variations. Miller was essentially repeating what he testified two days earlier or was repeating himself when Ziobro asked the same or similar questions.

Polish Radio presented the conclusion of the questioning on 28 April:

Miller: The behavior of deputy Ziobro can only by described by one word: despicable.

Ziobro: I can see that the prime minister doesn't intend to reply to questions, instead, he uses invectives. I understand that seeking the truth can be painful and unpleasant at times.

        Miller: You're nobody, deputy Ziobro.
        It is not known when the parliamentary commission will

continue the questioning of the prime minister. Seven more lawmakers are waiting to ask Miller questions. According to the head of the commission, Tomasz Nalecz, the questioning will probably continue after 8 June when the EU referendum takes place. (Jan Maksymiuk)


MOSCOW REACHES ENERGY ACCORD WITH KYIV. Ukraine has ended a three-year argument with the Russian gas monopoly Gazprom, but the solution may cost the Russian budget $700 million.

So far, Moscow appears willing to forgo an enormous amount of budget revenue in order to close the books on one of the longest-running disputes in the Commonwealth of Independent States (CIS), as it consolidates control over the region's gas supplies.

Earlier this month, officials announced that the Ukrainian state petroleum company Naftohaz Ukrayiny had agreed with Gazprom to pay $1.4 billion in debt for Russian gas with eurobonds.

Ukraine ran up the huge bill in 1999 and 2000 by diverting gas from the former Soviet pipelines that cross its territory on the way to Europe, which relies on Russia for one-fourth of its gas.

The problem of Ukraine's gas debt has ruffled relations with Russia for years. Officials previously announced they had settled the issue in October 2001, but eight months passed before they disclosed that they had overlooked a massive tax liability that stopped the debt deal dead in its tracks.

After nearly two years of negotiating the agreement, someone at Gazprom apparently realized that if it accepted Ukraine's bonds as payment, the company would owe $700 million in taxes to the Russian state. The discovery caused Gazprom to refuse acceptance of the bonds for more than a year.

It has taken that long for officials to figure out how Gazprom can collect Ukraine's debt while ducking the tax. On 18 April, Yuriy Boyko, Naftohaz's chief executive, told reporters in Kyiv: "We will transfer the papers by 1 July. We have found a scheme which is convenient for Gazprom."

The scheme involves transferring the bonds to Gazprom at a discount, while Gazprom will pay for much of its gas transit to Europe through Ukraine with gas instead of cash.

The murky details may matter less than the results, because the debt problem has been holding up the formation of an international consortium that will manage Ukraine's gas-transit system. The pipelines are Russia's main export route for gas to the European Union and a lifeline for EU energy supplies.

The consortium plan could end a decade of tension over Russia's ability to secure its export routes after the Soviet breakup, when Ukraine gained unexpected leverage through control of the pipelines.

The consortium plan will fudge the control question because neither country will hold a majority of the shares, although the group will be organized under Ukrainian law. If the gas companies of Germany and France join the consortium, as expected, it can be argued that Gazprom's power will be diluted even more, while billions of dollars in investment can be channeled to improving the Ukrainian lines.

On the other hand, Ruhrgas of Germany and Gaz de France are also top Gazprom customers and partners, making it a close call as to who will wield power. Fifty-one percent of Gazprom shares are owned by the Russian state and Gazprom itself. Ukrainian President Leonid Kuchma seems to see the benefit of proceeding anyway, in part because Russia has spent years planning bypass routes for gas transit around Ukraine.

Moscow now seems to be as ready to gloss over the tax question as Kyiv is willing to fudge the control issue. Both may see overriding benefits in going ahead.

But so far, there has been surprisingly little notice given to the size of Russia's tax loss. By comparison, the amount is almost as large as the $775 million that the government was supposed to get from the sale of its 5.9 percent stake in oil giant LUKoil on the London share market in December 2002. Last month, the Russian State Duma launched an inquiry after reports that those funds also never reached the state treasury.

But Gazprom's $700 million in taxes may be written off in the midst of a sweeping consolidation from which Russia may emerge as master of nearly all the region's gas. This month, Russia signed a 25-year import and cooperation deal with Turkmenistan that seems likely to dominate that country's gas sector.

Last week, Naftohaz's Boyko gave assurances that Ukraine would also sign a 25-year gas pact with Ashgabat, but Turkmen President Saparmurat Niyazov said that Kyiv's supplies will depend on building a new $1 billion pipeline, because commitments to Russia will fill all existing lines. Russia's move may again raise questions of energy security for Ukraine, making it eager to put the debt and consortium issues to rest.

Russia's deal with Turkmenistan follows a 10-year gas cooperation pact with Kazakhstan signed in late 2001 and the formation of a Gazprom joint venture last June for transit and foreign sales. In December, Uzbekistan also signed a cooperation and sales agreement with Gazprom, which is good through 2012.

In one sense, the consolidation may be a natural product of the geography that the Soviet Union left behind, making it hard for CIS countries to export without Russia. But there are also signs that Moscow wants to maximize its role in tangential spheres.

One example is President Vladimir Putin's recent call for CIS countries to coordinate policies on joining the World Trade Organization (WTO) as they move toward creating a unified economic space. Speaking at a meeting of officials from Belarus, Ukraine, and Kazakhstan, Putin said, "We know how to reach the goal, but there are major obstacles on our road to it," the RIA-Novosti news agency reported. "I mean the four countries must coordinate their stances as they join the WTO," Putin added.

The EU's demand that Russia raise its domestic gas prices to world levels remains the biggest roadblock to Russian membership. The EU is upset that its gas prices are kept high so that Russia's can stay low. But Russia's growing control over gas in all the neighboring countries could turn into a unified front to resist the EU's demand.

If Russia can hold the line on gas prices, $700 million in lost taxes might be a small price to pay.

"There is no confrontation [between me and Yuliya Tymoshenko]. This is like comparing what is better -- soup or dessert. When you sit down to eat dinner, you eat borshch first, then you take the main dish.... Regarding the segment [of the electorate] Yuliya Volodymyrovna [Tymoshenko] works with, I deeply understand it. But I want to add to this segment, which amounts to 6-7 percent [of voters], some 30-40 percent of those who are opposed to the government but have not declared their radical opposition to the authorities. They constitute that part of Ukraine that will probably decide the country's future." -- Our Ukraine leader Viktor Yushchenko about his relations with Yuliya Tymoshenko, leader of the radical Yuliya Tymoshenko Bloc; quoted by the "Ukrayinska pravda" website on 25 April.

"RFE/RL Poland, Belarus, and Ukraine Report" is prepared by Jan Maksymiuk on the basis of a variety of sources including reporting by "RFE/RL Newsline" and RFE/RL's broadcast services. It is distributed every Tuesday.

UKRAINIAN PRESIDENT SIGNS ANTICENSORSHIP BILL INTO LAW. President Leonid Kuchma has signed into law a bill defining and banning media censorship in Ukraine, Interfax reported on 28 April. The bill was passed by the Verkhovna Rada on 3 April (see "RFE/RL Newsline," 4 April 2003), and makes it a criminal offense for officials to "deliberately intervene in the professional work of journalists." It also limits financial penalties against journalists for defamation claims. JM

WIESENTHAL CENTER GIVES ESTONIA POOR MARKS FOR COOPERATION. Efraim Zuroff, the director of the Jerusalem Office of the Simon Wiesenthal Center, in a 27 April press release previewing the center's third Annual Status Report on the Worldwide Investigation and Prosecution of Nazi War Criminals, ranked Estonia as a country that has made "insufficient and/or unsuccessful efforts to prosecute perpetrators of the Holocaust," BNS reported on 28 April. In a ranking of grades ranging from A (highest) to F (lowest), Estonia received a "D" along with Argentina, Australia, Austria, Great Britain, Croatia, Denmark, Finland, France, Hungary, Romania, Slovakia, and Spain. Latvia and Lithuania received a "C," indicating "minimal success, which could have been greater; additional steps urgently required." The grade of "F," indicating total failure of prosecution, was given to Belarus, Belgium, Bolivia, Bosnia and Herzegovina, Brazil, Chile, the Czech Republic, Greece, Holland, Russia, Ukraine, Uruguay, Venezuela, and Yugoslavia. SG

POLISH PREMIER CLASHES WITH MEMBER OF PARLIAMENTARY COMMISSION. A special parliamentary commission on 28 April continued to interrogate Premier Leszek Miller over the "Rywingate" bribery scandal (see "RFE/RL Newsline," 28 April 2003), Polish media reported. Miller reportedly did not add anything substantial to what he told the commission on 26 April (see "RFE/RL Poland, Belarus, and Ukraine Report," 29 April 2003). But during questioning by opposition Law and Justice lawmaker Zbigniew Ziobro, an irritated Miller called the lawmaker's behavior "despicable" and Ziobro himself a "nobody." JM

GAZPROM, NAFTOHAZ AGREE ON DEBT AMID CONSORTIUM TALKS Naftohaz Ukraina CEO Yurii Boiko announced on 21 April that his company will transfer $1.4 billion in Eurobonds to Gazprom by 1 July as payment for Ukraine's gas debt, Interfax reported the same day. Gazprom will also pay $180 million in annual transit fees in the form of gas shipments. With the debt issue resolved, talks proceeded on 23 April in Kyiv between Russian, Ukrainian, and German representatives on the future of an international gas consortium the three countries agreed to form in June 2002, AP reported the same day. The consortium, which could be expanded to include France, Italy, and Turkmenistan, is intended to revamp Ukraine's aging pipeline system in order to maintain a steady supply of gas to Europe. Ukrainian Deputy Prime Minister Vitaliy Haiduk announced on 23 April that further study of key issues is required and Ukraine and Russia have decided to postpone a discussion of the consortium's business plan until June, "Vremya novostei" reported the next day. Sources in the German consulate told the newspaper that "substantive talks" will take place at a future meeting between heads of state. Viktor Nebozhenko, former director of the analytical department in Ukraine's presidential administration, told "Kommersant" on 23 April that the current talks focus on "trivial" technical issues, while the real issues are political. Nebozhenko noted that the consortium's creators "thought they were creating a structure that would become an instrument for solving geopolitical problems; instead, the consortium became captive to those problems after Germany, France, Italy, and Turkmenistan expressed a desire to join Russia and Ukraine." DK