Our favorite babe of politics has come out swinging in the settlement of the gas dispute between the Ukraine and Russia, and will be challenging the deal in court. The reason has little to do with the actual price negotiated, but much more to do with the single issue that she really stands out on: corruption. Apparently, the intermediary company is a bit shady; and by a bit shady, I mean a lot shady, and was once at the center of a Tymoshenko-led organized crime investigation nixed by the Yushchenko government. Neeka sums up the details.

But, as noted above, it’s a complex deal. The Reuters piece doesn’t mention Rosukrenergo as part of the scheme, an intermediary company that will be buying Russian gas from Gazprom for $230 and then selling both Russian and Turkmen gas to Naftogas for $95. A Gazprom affiliate and Austria????????s Raiffeisen Investment AG own 50/50 stakes in Rosukrenergo, which, in a way, means that Gazprom will be buying gas from itself. Rosukrenergo is registered in Switzedrland, and Raiffeisen Investment AG has, allegedly, nothing to do with Raiffeisen Bank. Oleksandr Turchynov, former head of SBU and Yulia Tymoshenko’s man, launched an investigation into Rosukrenergo in summer 2005, but was not allowed to finish it.

It sounds to me like someone stands to make a lot of money off of this, and the only reason something like this was able to get through is because there are people in te Yushchenko government that are making it happen. While the gas deal may have headed off to a degree an international political crisis, this is just the beginning of the next domestic political scandal. With just months to go before parliamentary elections, and Yushchenko and Tymoshenko about dead even in the polls, we could see Tymoshenko take a rise and a couple of people in government take a fall.

Apparently ex-PM Yanukovich is making some noise as well, bitching about how the price increase is going to harm consumers (while leaving out the fact that the deal is better than what Ukraine would have gotten with the original Russian demands). And, of course, he leaves out the simple fact that his friends across the border were the ones who orchestrated the price increase in the first place. Whatever. He’s shoring up his political base in the east against the Yushchenko government. Nothing new here.

Meanwhile, perhaps the most interesting part of this whole thing is not how it will affect consumers, but how it will help break the power of the industrial oligarchs who hold so much sway over parliament. Russia’s energy subsidy created a situation in which the oligarchs could cheaply do business, and it also allowed them to use up to 30% more energy than they needed to. This price increase will force them to become more competitive and efficient, in turn checking their power to a degree. Looking at it at this angle, the real reason that Yanukovich is making noise is because his power base is going to be most greatly affected.