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Ukraine^s Gas Company Raided

// 05.03.2009 07:46 //
Masked state security officers armed with automatic weapons raided the headquarters of Ukraine's national gas company Wednesday in a dramatic escalation of the feud between the country's top leaders during a crippling financial crisis.

President Viktor Yushchenko said the operation was part of a criminal investigation into the firm, Naftogaz, which was at the center of the dispute with Russia this year that left gas customers in much of Eastern Europe shivering.

But Prime Minister Yulia Tymoshenko condemned the raid as an attempt by "corrupt groups" to disrupt the company's operations just days before Ukraine must make a critical payment to Russia or risk another gas cutoff.

She demanded the release of a customs official detained in the investigation, accusing Yushchenko of issuing "evil orders" and engaging in "large-scale political repressions against people trying to resist corruption," according to a statement from her office.

The accusations came as Yushchenko and Tymoshenko have been trying to set aside their differences in an attempt to persuade the International Monetary Fund to follow through on a stalled $16.4 billion economic rescue program.

Ukraine's economy has been hard hit by the global financial crisis, and battles between the two leaders have hampered the government's response.

Ukraine's failure to pay for natural gas from Russia triggered a two-week impasse in January that halted Russian gas shipments through Ukrainian pipelines to Europe. Tymoshenko worked out a compromise with Russian Prime Minister Vladimir Putin to end the standoff, but Yushchenko has repeatedly criticized it as a bad deal for Ukraine.

The security forces that raided Naftogaz were seeking the original contract for the Jan. 19 deal, the company said. Marina Ostapenko, a spokeswoman for the National Security Service, told the Associated Press the agency was investigating whether Naftogaz had improperly diverted about $900 million worth of natural gas.

Tymoshenko said the raid was an attempt by a shadowy intermediary company that was cut out of the January deal to seize more than 11 billion cubic meters of gas belonging to Ukraine.

"They simply wanted to paralyze Naftogaz's activity and destroy the gas distribution system in Ukraine," she told reporters in Paris after a meeting with French President Nicolas Sarkozy. Tymoshenko has previously accused the intermediary firm, RosUkrEnergo, of having ties to Yushchenko and other political foes.

Presidential spokeswoman Iryna Vannikova defended the raid and said Yushchenko was personally supervising the investigation.

"The special services acted strictly on a lawful basis, within the framework of their authority as set down by legislation," she said in a statement, adding that the "political noise that went up around the case" signaled that "vested interests" had been affected.

The raid came three days before Naftogaz must make a payment of as much as $400 million to the Russian energy giant Gazprom.

A Gazprom official was quoted by the Interfax news agency expressing concern that the raid might cause Ukraine to miss the deadline and disrupt shipments to Europe again. But Ukrainian officials have issued assurances in recent weeks that they have the money, and Naftogaz officials said the raid was unlikely to affect gas deliveries.

Yushchenko and Tymoshenko were allies in the country's Orange Revolution, and Ukraine remains one of the few robust democracies to emerge from the former Soviet Union. The economy was one of the fastest growing in Europe until last summer; since then, Ukraine's gross domestic product has dropped an estimated 20 percent.



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