Personnel Decide Everything. The Battle for the Antitrust Committee and the State Property Fund

Personnel decide everything. The battle for the Antitrust Committee and the State Property Fund

On the last day of the May holidays 11 May, President Petro Poroshenko unexpectedly decided to meet with his faction in the conference hall of the Verkhovna Rada.

For the deputies it was a surprise – they were notified about the meeting with the president two hours before it began. So many parliamentarians could not be present.

Poroshenko, dressed in camouflage, was in no mood.

Unexpectedly for everyone present he decided to give a scolding to deputies who poorly attend parliamentary sessions. From a sheet of paper he read the names of the truants. Like a headmaster to high schoolers.

The most notorious truant turned out to be the former speechwriter for Tymoshenko and Klitschko, Vitaliy Chepinoga, who entered the BPP faction under the quota of the UDAR party.

“He did not vote for 85% of the bills,” Poroshenko began.

The president also took aim at one of the BPP deputy faction heads Mustafa Nayyem, who did not vote at 48% of plenary sessions, and at deputies Svitlana Zalishchuk and her colleague Maria Ionova. Deputies grumbled among themselves at the president’s behavior. Some excused themselves with work in their constituencies and business trips that coincided with the plenary week.

“Don’t you think it’s an outrageous luxury for the president of a country at war to come to a faction meeting and scold deputies for absenteeism?” asked Zalishchuk, whose almost all absences were related to delegations to the PACE.

Poroshenko reacted calmly to that accusation, replying that the faction carries his name, and therefore he bears personal responsibility for the deputies.

At one point, the prime minister Arseniy Yatsenyuk, wearing a sweater and accompanied by two security guards, entered the hall where the meeting was taking place. He embraced Poroshenko, whispered something to him, and left without saying a word to the MPs.

In fact, the president had not gathered his deputies to resolve disciplinary issues.

Poroshenko was trying to persuade his faction to vote for candidates for the positions of head of the Antimonopoly Committee of Ukraine and the State Property Fund. They are approved by the Verkhovna Rada on the submission of the prime minister.

The president also asked to support the candidacy of Nina Yuzhanina for head of the parliamentary committee on tax and customs policy. At the beginning of May his former head, also a member of the presidential faction, Roman Nasirov, following the results of a competitive selection, became head of the State Fiscal Service.

Deputy Oksana Prodan, who entered parliament under the UDAR quota, decided to nominate herself for the committee chair.

This was not her first attempt – in December Prodan was also one of the contenders for the committee and was greatly disappointed when Nasirov headed it. She also participated in the competition for head of the SFS but did not make the final and accused Yatsenyuk of blocking her candidacy.

There may be motives for the prime minister’s decision. Prodan’s husband Vasyl Prodan is part of the team of the former secretary of the Chernivtsi City Council Vitaliy Mykhailyshyn, a person associated with Firtash. So in the Narodnyy Front they believe Prodan entered the Rada on a Lyovochkin–Firtash quota, with whom Yatsenyuk is now at war.

The day after the faction meeting, 12 May, Prodan decided to withdraw her candidacy for the committee chair. This happened after her nighttime meeting with the president the previous evening, at which the deputy was told that the Narodnyy Front would not support her candidacy.

The tax committee ultimately was headed by Yuzhanina – a person close to Poroshenko. Before her election to the Rada she worked as director of the TV company "Express-Inform," which was the founder of the president’s "5 channel."

It is even more difficult with candidates for the State Property Fund and the Antimonopoly Committee – two critically important agencies for carrying out reforms and filling the state budget.

A few weeks ago BPP faction head Yuriy Lutsenko said the presidential faction was ready to nominate the former head of the State Fiscal Service Ihor Bilous, who resigned in March.

This decision was preceded by Yatsenyuk’s order to start an internal investigation against the leadership of the Fiscal Service and to suspend him from performing his duties.

As a result the Cabinet dismissed two of Bilous’ deputies – Volodymyr Khomenko, who was responsible for the tax police, and Anatoliy Makarenko, who was responsible for customs.

Bilous’ candidacy provokes much controversy among people's deputies, especially business representatives.

They complain that under Bilous it was also difficult to get VAT refunds from the Tax Service, and complain about corruption at customs, which the head of the fiscal service turned a blind eye to.

However none of the factions proposed an alternative candidate. Two interlocutors close to the president say that Bilous is being actively lobbied for this post by the head of the presidential administration, Borys Lozhkin.

Even within part of BPP they are not ready to vote for Bilous, although he even came to a faction meeting to try to convince them to support his candidacy.

“About 20% of our faction are against him,” a deputy of the Poroshenko bloc told Ukrayinska Pravda.

“Why did Vitaliy Khomutynnik (head of the parliamentary group 'Vidrodzhennya' – UP) come to negotiate with you when you headed the tax service?” Pavlo Ryzanenko asked Bilous during the BPP faction meeting on 11 May.

Bilous said he never met with any Khomutynnik while working at the SFS. He also denied earlier in the year that he vacationed in the Maldives with Yuriy Kosiuk, whose enterprises last year had no problems with VAT refunds.

At that time at the meeting of the anti-corruption committee Bilous said he had never been to the Maldives. Let alone with Kosiuk.

Ukrayinska Pravda obtained an airline ticket that his former subordinates sent to the editorial office. It shows that at the end of last year Bilous could have vacationed in the Maldives.

Copy of a ticket in the name of Ihor Bilous for the Kyiv–Maldives route. Bilous himself says he never flew there. Click to enlarge

The Narodnyy Front also does not want to vote for the former tax official.

“It’s strange to vote to appoint a person who resigned from office amid scandal. It’s illogical,” says Viktoriya Syumar, one of the Narodnyy Front faction leaders.

Samopomich decided to hold a long interview within the faction with the candidate, as they did with almost all ministerial candidates, and to decide based on the results of those interviews.

On Tuesday evening the president had a meeting with Samopomich in the presidential administration building. The meeting lasted 2,5 hours and, according to parliamentarians, Poroshenko was very cordial.

“He asked for nothing. He praised us for constructive behavior in parliament. Mostly we told him what should be done, but he asked that details of the meeting not be disclosed to the media,” says one Samopomich deputy.

The Radical Party faction also does not want to vote for Bilous, but their motives are material.

According to two sources in both BPP and the Narodnyy Front, faction head Oleh Lyashko wants the radicals to be given the position of head of the Accounting Chamber in exchange for supporting Bilous. BPP and the Narodnyy Front are not ready to make such concessions.

It is simpler with the candidate for head of the Antimonopoly Committee, a position that under the quota should go to the Narodnyy Front.

At the beginning of the year Yatsenyuk’s faction seriously considered for this post a close friend of the prime minister, business partner of Ihor Kolomoisky, Andriy Ivanchuk. Narodnyy Front deputies were gathering votes in the session hall to support him, but BPP and Samopomich opposed.

Now, according to Narodnyy Front deputies, Ivanchuk has lost his former levers of influence in the faction. After the scandal with Ihor Kolomoisky, when Ivanchuk, as chair of the committee on economic policy, blocked consideration of a bill that effectively stripped Kolomoisky of control over Ukrnafta, Ivanchuk had a difficult conversation with the prime minister.

So currently both Ivanchuk and Mykola Martynenko, who is under investigation by the Swiss prosecutor’s office, effectively do not take part in the management of the Narodnyy Front faction.

Therefore another candidate was found instead of Ivanchuk. Already at the end of April during a meeting with faction heads President Poroshenko proposed appointing Yuriy Terentyev to the Antimonopoly Committee. His candidacy had previously been agreed by Yatsenyuk.

Terentyev is a person from business. In 1997–2000 years he headed legal support for the activities of the American pharmaceutical company Bristol-Myers Squibb in Ukraine, later was legal advisor at the international tobacco company JT International Company Ukraine.

Then for 10 years he worked in METRO Cash & Carry Ukraine in managerial positions. For the last three years he was deputy chief legal counsel of ArcelorMittal Kryvyi Rih.

“I spoke with him. Legally he is a very well-versed person. He knows the legislation well. But I asked him directly whether as head of the Antimonopoly Committee he is ready to fight our oligarchs – Firtash, Akhmetov, Kolomoisky, because the position mostly requires that. I didn’t get a definite answer, and I did not get the impression he was ready,” says one BPP deputy.

Thus there is a high risk that this plenary week the coalition again will not vote for the appointments of the heads of the Antimonopoly Committee and the State Property Fund. Consultations on this issue are still ongoing within the factions, and at the coalition council on 14 May these personnel drafts were not even discussed.

Earlier Narodnyy Front MP Ostap Semerak suggested that the coalition would not have time to complete all the procedures necessary to vote on these posts. So deputies will vote only the next plenary week, scheduled for 19–22 May.

Agreements on the candidates for the heads of the State Property Fund and the Antimonopoly Committee are a compromise between the president and the prime minister. The Narodnyy Front is ready to support Bilous in exchange for BPP votes in favor of Terentyev.

The “package” is mutually beneficial – it is important for Poroshenko to have his person in the State Property Fund to control privatization processes in the country. The president already has agreements with potential foreign investors, particularly in the energy sector: the French Gas de France Suez plans to take part in the privatization of Centrenergo, and Yan Kulchyk, according to Ukrayinska Pravda, is interested in buying Zakhidenergo.

For Yatsenyuk and his circle the position of head of the Antimonopoly Committee is vitally important. In particular for the business partner of Ivanchuk, Ihor Kolomoisky, who may face questions about a monopolistic position in oil trading. It is also no secret that Yatsenyuk provides a secure rear for Rinat Akhmetov’s business – in particular the DTEK company.

In the near future the Antimonopoly Committee must carry out an independent and objective investigation into the company’s monopolistic position in the energy market. For this both the president and the prime minister are ready to demonstrate a show of unity.

UP