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Property Fund of Ukraine Struggling

In the struggle between President of Ukraine Victor Yushchenko and Prime Minister of Ukraine Yulia Tymoshenko for control of the State Ukraine Property Fund, Ukraine's prosecutor general filed criminal charges on May 19 against acting chair Andriy Portnov for illegally attempting to privatize state property and exceeding his authority.

Portnov is candidate from BYuT to become a leader of the Fund, while Yushchenko supports Valentyna Semeniuk-Samsonenko. Experts are divided on who legitimately chairs the State Property Fund.

"These criminal charges weren't filed against but against me personally, against the whole state, and against honest privatization and establishing order in the country," said Tymoshenko, comparing Yushchenko to his authoritarian predecessor, Leonid Kuchma, ex President of Ukraine.

Who will be the head of the Fund also determines the fate of the Odesa Portside Plant, the nation's largest producer of ammonia and nitrogen fertilizer which Tymoshenko wants to auction off to raise revenue to pay for social programs and payments.

Yulia Tymoshenko planned to hold an auction the estimated $1 billion Odesa Portside Plant on May 20, but the charges filed against Portnov pushed the government to postpone its sale by at least a month, Tymoshenko officials said.

"The decision to postpone the privatization is connected to, unfortunately, pushing from the Presidential Secretariat, after which we were unable to get first-class investors which the government was counting on," said Yevhen Korniychuk, the first deputy justice minister.

Meanwhile, Portnov's candidacy to become Fund head appears unlikely.

Parliament planned to consider dismissing Semeniuk-Samsonenko and replacing her with Portnov at its May 22 session.

But recently, Presidential Secretariat Chair Viktor Baloha reported the pro-presidential Our Ukraine-People's Self-Defense faction won't support Portnov's candidacy, which would have been critical for its approval.

As a result, Tymoshenko will have to nominate another candidate that suits Yushchenko if she wants to have his permission for future auctions.

"If Tymoshenko wants to continue privatization, she will continue it without Portnov," said Vadym Karasiov, a political advisor to Baloha. "The Tymoshenko Bloc quota for this position remains, but she will propose some other candidate more loyal not only to her, but also to the president."



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