By Oleksandr Serhiyenko, "Working Ukraine on brink of split?"
Glavred, Kiev, Ukraine, in Russian, 29 Mar 04
BBC Monitoring Service, UK, in English, Apr 01, 2004

Shifting alliances within Working Ukraine mean that the party is heading for a split, a Ukrainian web site has said. The party of big business has close personal links with President Leonid Kuchma's family. The quarrel between Kuchma's son-in-law, Viktor Pinchuk, and media magnate Andriy Derkach is irreconcilable, while bringing in National Bank Chairman Serhiy Tyhypko as a conciliatory party chairman has failed, according to the web site.

The following is the text of the article by Oleksandr Serhiyenko entitled "Working Ukraine on brink of split?" published on the Ukrainian web site Glavred on 29 March; subheadings have been inserted editorially:

The Working Ukraine party has recently been invigorating its activity. Until recently the press was speaking about individual politicians from the party (Viktor Pinchuk, Serhiy Tyhypko, Andriy Derkach, Ihor Sharov). Now the party has decided to remind people of its existence and potential. By a decision of the party leadership, seminar conferences are being held in Ukraine for regional activists, not only discussing problems of the current political situation, but also providing training regarding the organization and functioning of election headquarters. It is not yet entirely clear what the party is preparing for.

It may be that the activists are learning how to create headquarters for the 2006 parliamentary elections (prepare your sledge in summer, as the saying goes). Or maybe for the [presidential] 2004 elections? Not for nothing is there talk in the political milieu about the possible candidacy for the highest state post in Ukraine of the leader of Working Ukraine, Serhiy Tyhypko.

Party's close links with presidential entourage

But in actual fact, the situation in the political milieu is far from ideal. Let us recall that in 1999-2000 Working Ukraine was formed as an oligarchic association of two powerful structures directly close to The Family - the structures of the president's [Leonid Kuchma] son-in-law Viktor Pinchuk and of the president's "godson" Andriy Derkach. In 1999 Messrs Pinchuk and Derkach formed a close and active friendship. They were active organizers of a number of PR actions and technological projects used during Mr Kuchma's election campaign. However, after 1999 their friendship ended. The peak of confrontation came in 2000.

It is said that in February 2000 confrontation started between Derkach senior [former Security Service head Leonid Derkach] and Derkach junior on the one hand and the newly appointed secretary of the National Security and Defence Council [NSDC, currently defence minister], Yevhen Marchuk on the other. Marchuk made a bold and successful attack, making public information about connections and actions discrediting Andriy Leonidovych Derkach. Derkach called on Viktor Pinchuk to act against Marchuk in a common front. Pinchuk chose a position of neutrality and turned down his former friend. Pinchuk needed Marchuk as a possible ally. Derkach refused to understand that.

Tyhypko the conciliator

By autumn 2000 the situation in the party had become incandescent. There was to be a party congress in November at which it was proposed to consider the question of the leadership. And then, at the suggestion of Ihor Sharov, Serhiy Tyhypko was invited to take the post of party chairman.

Mr Tyhypko had equally good relations with both Derkach and Pinchuk. Pinchuk could regard Tyhypko as "his" man: they both belonged to the so-called "Dnipropetrovsk clan". However, Derkach also had reason to see a "kindred spirit" in Tyhypko: both Derkach and Tyhypko strenuously emphasized their adherence to Orthodoxy. Apart from that, by autumn 2000 Tyhypko started to be in conflict with the Pryvat group (which he previously headed), especially with Mr Kolomoyskyy and also the spiritual leader of Pryvat, the Dnipropetrovsk rabbi, Shmuel Kamenetskyy. It is said that Tyhypko left Pryvat because of his "latent anti-Semitism". Andriy Derkach saw an argument in Tyhypko's anti-Semitism: after all, Pinchuk was also a Jew.

But Tyhypko did not take anyone's side. He simply tried to reconcile both Pinchuk and Derkach, sitting them down at the negotiating table several times and trying to act as an arbitration judge.

That situation continued for another three years. However, at the very beginning of 2004 it became clear that Tyhypko was increasingly unable to restrain the situation in the party. His work as chairman of the National Bank was swallowing him up and not allowing him to find sufficient time to control the party. Control functions were placed with people's deputy Ihor Sharov, whom Tyhypko several times in interviews called his closest friend.

Pinchuk strengthens position

What happened next? Next came the rise of Viktor Pinchuk and a strengthening of his position. And that is understandable: on the eve of presidential elections, The Family tries to concentrate the greater part of economic resources in its hands. Look carefully how at the very beginning of 2004 Viktor Pinchuk placed his people in various leading posts in the state. The posts of minister of economics and European integration, the minister of industrial policy, the chairman of the State Enterprise and Regulatory Committee and so forth - they are all Pinchuk's minions!

Apart from that, he decided to spread his influence to the power engineering sector. With that purpose, an attempt was made to create a national joint-stock company combining share packages in Ukrainian energy generating and energy distribution facilities in state ownership. [First deputy secretary of the NSDC] Oleh Dubyna, who is close to Pinchuk, was appointed to head the company.

Apart from that, an attempt was made to buy up or simply even seize shares in energy enterprises in private hands. For that reason, pressure started via Moscow on one of the major shareholders in Ukrainian regional electricity companies, Mr Babakov. It was precisely those shares that Viktor Pinchuk had decided to give to Ihor Sharov.

Sharov, it seems, decided to yield to temptation and adopted the rules of the game dictated by Pinchuk. He saw a way of getting back into big business: we remind you that at the beginning of the 1990's, Mr Sharov headed the Respublika company that traded in Turkmen gas in Ukraine. But the sad story of Respublika and its negative influence on the Ukrainian economy is a subject for consideration in a completely different article.

Split seems inevitable

During the vote on the government's action programme on 16 March 2004, many deputies in the session hall witnessed a brawl between Derkach and Sharov. The reason for the quarrel is not fully clear. Most likely any proposal by Sharov could be merely a pretext for conflict. Witnesses claim that Sharov had tried to explain to the Derkaches how they should vote on this or that issue. The reaction was unexpected: "Who are you to tell us what to do?" As a result, the Derkaches abstained from voting.

An apparently minor incident, but it is evidence that the party is coming apart at the seams. On the one side there is the Pinchuk-Sharov tandem, on the other Andriy and Leonid Derkach, whom the majority of the party are joining. Serhiy Tyhypko is again trying to be the referee and reconcile the hostile parties. But it seems that nobody is listening to him any more. Pinchuk became disillusioned with Tyhypko: he did not want to become an obedient "puppet" in the businessman's able hands. Sharov may become a more successful "puppet" - he is hardly likely to express his own opinions on this or that issue.

In private conversations, party functionaries admit that the conflict really exists and indicate the source of danger for the party - Pinchuk and Sharov. "They are uncontrollable, they do what they want without consulting with anyone. For them business is first, the party second," one member of party's political executive committee complains.

What can be forecast in the future? By summer 2004 the party may split in two. As a result, Pinchuk and Sharov, having strengthened themselves on the energy market and closed the economic "rear" will be able to build up a new political project - for 2006. The main components of that project most likely will be [former Economics Minister] Valeriy Khoroshkovskyy and [former head of the Enterprise and Regulatory Policy Committee] Inna Bohoslovska.

And the Working Ukraine party will have to find itself, find itself a niche and find an ideology. It can no longer be part of the "Dnipropetrovsk clan", nor part of The Family. It will be the party of Derkach and Tyhypko. In 2006 it will try to cross the 3-per cent barrier and, in the event of success will be able to survive until 2011. After that, its future is vague and gloomy.

It will be possible to place the following epitaph on the party's grave: "Fell in unequal battle as a victim of business interests and betrayal."