Archive for June 24th, 2011

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Russia adds to Tymoshenko’s woes

June 24, 2011

When you are under the cosh in in politics in this neck of the woods, you are really under the cosh.

Not only is Ms Tymoshenko justifiably under investigation for several incidents highlighted by Kroll Inc relating to her tie in office, Russia has now dropped another PR bomb on her as well. (I say justifiably under investigation, that does not mean she is guilty, just that there is sufficient reason to investigate the results of the Kroll Inc report).

Whilst in the cabinet of ex-President Kuchma, Ms Tymoshenko ran Unified Energy Systems, a company whose role was very much the same as RosUkr Energy. In other words monopoly vehicles dealing with the import of Russian gas to then be sold on the Ukrainy Naftogaz.

Indeed dear readers, the same opportunities for backhanders, kickbacks, skimming and defrauding the public existed with UES when ran by Yulia Tymoshenko, as existed with RUE a company vilified by Ms Tymoshenko for allegedly doing those exact same things.

Needless to say Ms Tymoshenko’s wealth did not come from a governmental salary and neither did her nickname as “the gas princess”. To many in Ukraine it is no coincidence that an erstwhile ally of the time currently sits in a US jail after being found guilty of money laundering.

Those coincidences aside, she has never been found guilty of any crime relating to her dealing as the CEO of UES and has always claimed the public was never ripped off in her time running the company. She has always made a big point of saying all was above board, nobody ripped off the public of Ukraine and the company didn’t owe anybody anything despite many rumours to the contrary for numerous years.

The last thing you would want when being investigated for several offences of misconduct in office is to the be accused of being a liar by a foreign State and your claims for many years that UES owed no money anywhere to be officially rebutted by a nation you owe money to .

But this situation occurred yesterday with Russia claiming UES owes it $405.5 million from when she ran it.

There followed claims that the letter demanding repayment by Russian was a fake by Ms Tymoshenko’s supporters only for it to be confirmed it was indeed genuine. Difficult. Is it better to say nothing, continue with the historical argument that nothing is owed and say Russia has it wrong, or come clean and admit making repeated false statements. We should remember her statements from the end of 2010 relating to one of the charges she currently faces over the Kyoto affair. Statements of technical admission that her legal team will wish she had never made to the media.

Anyway, this is what Ms Tymoshenko said. “Look at Ukrainian and Russian laws and you will understand that no debt can be reckoned for 15 years. Then again, the debt has never been the size cited.” Hmmm – Not exactly consistent with “there is no debt” as has been the previous and historical line from her.

None of this would really matter at all if it was not for the fact that it reminds the Ukrainian people that any halo she pretends to have in reality should not be there or has lost its luster.

The question is why has Russia done this now? There is no such thing as coincidence when it comes to Russian foreign policy. That is particularly true of a large neighbour who has given all the signals and actions that it intends to head towards the EU rather than any Russian led group. What is there to be gained by throwing ammunition to the Ukrainian government relating to the past activities of an opposition leader who would also be leading Ukraine away from Russia? The long term loss of influence is neither helped nor hindered by besmirching (or accurately reflecting) the character of Ms Tymoshenko from a Russian point of view. There is no short term deal that will make up for the long term loss by helping the current Ukrainian authorities.

Or is there?

When it comes to Russian foreign policy it is fair to say that is generally well thought out. No nation has a perfect record in foreign policy but Russia is a very good player in the game. Russian foreign policy is usually hard, smart (from a Russian perspective of end results), and very difficult to counter.

It is important to see this action from a Russian perspective and put Ukraine into the background for a moment. From their perspective, regardless of who is running Ukraine from the major parties, it is clear that Ukraine is heading towards the EU. A significant blow in the public arena, not made any less painful by the refusal by Ukraine of various multi-billion $ carrots should it change course and not sign the DCFTA and AA with the EU this year.

If you cannot persuade Ukraine to change its mind, then you try to persuade the EU that Ukraine is not ready and/or suitable for signing such agreements with. The failure to sign these agreements would have not only a very bad repercussion on the current government but also on the mood of the Ukrainian public displaying that the EU has no real love for them in the budding romance.

The EU is already casting a very critical eye over the investigations of past Ukrainian officials. Whilst it has not formally accused the current Ukrainian authorities of absolute political persecutions, it has warned that the appearance as such does not do Ukraine any good.  Quite simply, for now, such accusations cannot be made with DCFTA and AA negotiations continuing as it is hard to justify continued negotiations under such circumstances for some EU members, and this is a geopolitical battle for influence that the EU wants to win.

Can it be that Russia feels that the best way to sink the EU DCFTA and AA with Ukraine is to give enough evidence to insure Ms Tymoshenko is either investigated for even more offences or indeed supply enough evidence of nefarious dealing with them when she was Prime Minister to get her jailed, an action they may see as enough to prevent several EU members from signing and ratifying any DCFTA and AA with Ukraine?

Whilst many commentators will say the Kremlin is siding with the current Ukrainian authorities in efforts to belittle Ms Tymoshenko with the timing of this incident, that looks at the issue from a purely Ukrainian point of view and does not take into account any Russian perspective. When Russian foreign policy does anything, the first perspective to look at is the Russian one.

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