A bit of history..and Lazarenko - his rise and fall...

Interesting interview with Aleksandra Kuzhel in 'Ostro' recently.

Originally from Konstyantynivka in Donbass, she's been at the heart of Ukrainian politics for many years. She's worked for Kuchma, and Yanukovych in PoR,  as well as for the murdered Yevhen Shcherban.

 Aleksandra Kuzhel was until recently a close confidente of Serhiy Tihipko in his now-defunct 'Strong Ukraine' project, but is now a defender of Tymoshenko.

Tihipko is currently deputy PM, and deputy PoR chairman..

Kuzhel complains bitterly about the two years that 'Strong Ukraine's' leader in Donetsk, Vladislav Dreger, has now spend in jail with no prospect of trial. She claims Dreger probably 'crossed' Yanukovych's son, Aleksander, in a business deal and is now paying the price...
                                                 
When asked whether Kuchma ordered the murder of Yevhen Shcherban, she replies:

- "Hardly. Kuchma is not capable of such a thing. When Gongadze was murdered, I was the first to confidently declare it was not Kuchma... Kuchma can yell at you and blow you out, but he is a man of the sixties. He could not even send anyone to prison. He did not imprison anyone all the time he was president. Gongadze's murder was blatant provocation. In the Scherban case, I'm sure it was not Kuchma. And it was not Yulia. Look where all his property ended up, and draw your own conclusions."

Kuzhel was asked: "You worked with Kuchma for quite a while you know this man well. Tell me why did he began to push Yanukovych [to head the cabinet, and to run in the 2004 presidential elections]?

Why did Kuchma go with the "Donetskiites?"

- "Kuchma never liked Yanukovych. Never trusted him. On this issue the decision was made more by his team - Litvin, and Liovochkin. They lobbied for Yanukovych. I myself asked Kuchma the question - why such a choice, why not Tihipko, who's from Dnepropetrovsk? Kuchma told me - your Tihipko has been frightened off... a comfortable place as the head of the National Bank suits him. Nobody at the time was ready to fund the authorities' election campaign, except Donetsk. At the same time, everyone knew that there would be a very serious fight put up by the "Oranges", and they needed something to oppose this. They understood the consequences of Yushchenko coming to power. Today Yushchenko says that he did not succeed, and puts all of the blame on Tymoshenko. You know, these are the complaints of an impotent man who blames a woman for his problems. He could never have been an effective president because he was never an effective prime minister."

- "Did you think that Yanukovych would be better?"

- "Do you know the difference between the campaign then and the campaign of 2010? They were built under different presidential powers. Yanukovych has usurped the powers Putin now has, but then Kuchma had it carefully all planned out. They were going to do what Putin and Medvedev did - place Yanukovych into the president's office, with Kuchma appointed as his powerful prime minister. In fact, it would have been a third term for Kuchma."

- "So why did a weak Yushchenko win, and Kuchma and Yanukovych lose?"

- "They lost not to Yushchenko. They lost to the people of Ukraine. He did not have the resources to disperse the huge number of people [who staged the orange revolution] to suppress such a protest. Kuchma would never do that....But Yushchenko was pushed all of his life by other people such as Tymoshenko. Poroshenko, Zinchenko. Without them, he would be a complete zero."

------------------------------------------------------------------

In a few weeks time, after serving a long prison sentence, former PM Pavlo Lazarenko will be released from jail in the USA.

'Forbes.ua' run an article about Lazarenko's business empire, the people who assisted in its construction, and what remains of it.

The article contains a small graphic with the following titles: In 1995-1997 Tymoshenko was president of UESU - "Lazarenko's milch-cow". Serhiy Tihipko ensured good cooperation between his PrivatBank, and Lazarenko and his structures.

Tihipko briefly served in Lazarenko's cabinet and also in Yushchenko's cabinet.

All these people became exceeding rich..some are now 'under the wagon, others are still riding on it..'

Anyhow, here's a brief resume of the 'Forbes' item:

When U.S. authorities froze the accounts of the former prime minister and his structures they were officially valued around $ 280 million. Right now this would place Lazarenko in 29th place in the list of richest Ukrainians. Some however, estimate Lazarenko's weath as exceeding $2bn. 'Forbes' say, "Judging from what we know today, it is no exaggeration."

Before the collapse of the Soviet Union, Lazarenko was chairman of a collective farm, in charge of the Department of Agriculture and Food Industry of the Dnepropetrovsk regional committee of the Communist Party.

At that time the heavily industrialised Dnepropetrovsk region was full of armament factories and steel plants; it was the preserve of "red directors" who were all-powerful. However, Ukraine's first president, Leonid Kravchuk got on badly with this Dnipropetrovsk clan, and in their turn the bosses of the defence, chemical and metallurgical enterprises of region hated Kravchuk, who they considered to be a traitor to the Soviet Union and a nationalist.

In March 1992, under strong pressure from the "red directors", Kravchuk agreed to appoint Valery Pustovoitenko, the Dnipropetrovsk City Council Chairman, as his governor in the region. But when the president issued his decree he dumped Pustovoitenko and surprisingly named the 'agrarian' Lazarenko as governor.

Lazarenko improved the local economy but also immediately intensively started 'growing' his own business empire which included, agrobusinesses, petrochemicals, retail outlets, gas stations, restaurants, pharaceuticals, etc. His companies were frequently engaged in barter chains between energy companies, farmers and exporters. He was active in accumulation of property assets via various privatisation schemes.

In September 1995, with the country facing serious economic problems, Kuchma transferred the energetic governor of Dnipropetrovsk to Kyiv, making him first deputy prime minister, in charge of fuel and energy.

As a member of the cabinet, he immediately undertook the redistribution of the most profitable branch of the Ukrainian economy - the domestic gas trade, which was in chaos. The Russian "Gazprom" were receiving little, if no payment for gas, and were demanding order be restored  At the end of 1995, all the regions had been divided between the three Ukrainian mediators who would supply gas to industrial consumers. Two of the most wealthy areas - Dnepropetrovsk and Donetsk - were assigned to "United Energy Systems of Ukraine" (UESU),  run at that time by Yulia Tymoshenko. She had worked under Lazarenko previously in the petroleum market in Dnipropetrovsk.

At its peak, UESU was served by 2,000 companies which formed long, interconnected barter chains. "Gazprom" was also paid by barter schemes. In 1996 UESU was turning over around about $10Bn.

Subjugation of the Donetsk region was much more difficult for Lazarenko. It was the only region where UESU had to work through a local broker - Industrial Union of Donbas [ISD]. The local elite rebuffed Lazarenko's appointee, Sergei Polyakov, and in August 1996, the Donetskiites insisted their nominee, Viktor Yanukovych, be appointed Polyakov's deputy.

The fall of Lazarenko was as rapid as his ascent. He had made enemies not only in Donetsk. Kuchma's inner circle, including secretary of the National Security and Defense Council Volodymyr Horbulin and head of the president's office Dmytro Tabachnyk [who is in PM Azarov' current cabinet], where whispering in in ear that Lazarenko was plotting to replace him.

Kuchma was annoyed by the-then Prime Minister's ambitious aims The president sacked the State Property Fund Secretary, Yuriy Yekhanurov, because he had begun to carry out Lazarenko's orders.  [No doubt for a piece of the action.  Yekhanurov claims that at the time he did not know about Lararenko's corrupt schemes...ho,ho,ho...Yekhanurov, of course, replaced PM Tymoshenko when she was sacked by Yushchenko and, as acting PM, arranged shady gas deals himself during the 2005-06 gas war...LEvko]

In the summer of 1997 Lazarenko was sacked, and in September 1998 prosecutors opened a criminal case against him. In December, the former prime minister was arrested in Switzerland. Released from prison on bail after a short stay in the country, he fled to America, where he remains to this day, serving 'time'.

Lazarenko's business empire began to fall apart soon after his departure. Kuchma immediately kicked UESU out of the gas business. Lazarenko later accused Kuchma's son-in-law Viktor Pinchuk of misappropriated nearly everything that owned, including the Nikopol Ferroalloy Plant.

Property, hotels and factories in Dnepropetrovsk, passed under the control of former colleagues and allies, especially those in the "Privat" group.

The new owner of one of the hotels, Hennadiy Axelrod was killed in the city several months ago, an event I wrote about in previous blog.