Political insiders and pro-Ukrainian activists allege that the elites in the party of ousted president Viktor Yanukovych are behind the pro-Russian separatists that have taken over the eastern region of Lugansk. And bne investigations have traced the self-proclaimed “people's governor” of Lugansk to Party of Region's structures.

Valery Bolotov, Lugansk's “people's governor”, appeared out of nowhere in early April after the successful seizure of the Lugansk headquarters of Ukraine's security service SBU. The SBU headquarters have since become the seat of Bolotov's ragtag forces that grabbed enough power to conduct a region-wide referendum on May 11 and the next day declare independence from Ukraine for the “People's Republic of Lugansk”.

The speculation surrounding the mystery man Bolotov and his backers only increased the day after the declaration of independence when the 44-year-old was shot and wounded by unknown assailants on May 13. His representatives have blamed the government in Kyiv for carrying out the attack.

According to bne enquiries, Bolotov has links to the Lugansk networks of Yanukovych's Party of Regions, which was the ruling party until the pro-European protests on Kyiv's main square, the Maidan, turned bloody in February, causing the government to collapse and the president and his cronies to flee the capital. Yanukovych himself once served as the governor of Donetsk, another province in eastern Ukraine that has been taken over by separatists and in May held a referendum to secede.

Bolotov's only known position prior to assuming the mantle of Lugansk's “people's governor” was in 2010 when he founded and headed the Lugansk division of the Union of Paratroopers' Veterans, in Russian Soyuz Desantnikov. The Soyuz Desantnikov is to this day registered at 22 Kherson Street in Lugansk.

bne visited the address and found that it is the business headquarters of a former Party of Regions bigwig – businessman Vladimir Landik, and his conglomerate Nord. Along with a large number of firms related to Landik's business, the address also hosts the regional section of the Party of Regions itself, and the Party of Regions' youth division.

Landik, who split with, and has been publicly feuding with, the Party of Regions since 2011, has himself alleged that the Party of Regions' old guard are the main force behind Bolotov and the pro-Russian separatists in Lugansk. Head of the Party of Regions' parliamentary group, Oleksandr Efremov, a close associate of ousted president Yanukovych, is a former Lugansk regional governor and local business magnate.

Immediately following the emergence of the separatist movement in early April, Landik suggested Efremov was the instigator: “His aides organised the seizure of the district state administration and the security service headquarters, and attacks on opposition demos: his godson Rodion Miroshnik is director of the local TV station broadcasting programmes that advocate the country's split,” Efremov said in a TV interview. “He is head of the Party of Regions parliamentary group, and yet he never says a word to condemn the situation in East Ukraine.”

Landik, who also owns a local TV station that has been critical of the separatist movement, says he has received threats since making his comments. Police reported that shots were fired at his house on May 13. Landik declined to update his previous remarks that were critical of Efremov to bne. “I have left the region, and no longer have objective information on the situation,” he says.

Landik also tells bne that he did not know about Soyuz Desantnikov or its mysterious head Bolotov being registered at his business address. “I have a lot of companies registered there, I can't possibly remember them all,” he says.

Pro-Ukrainian activists and journalists in Lugansk also see Efremov as supporting the separatists. “If Efremov was dealt with, the problem of separatism would disappear overnight,” believes blogger Sergei Ivanov, who says he has seen Efremov's local political associates watching on as the separatists seize the seizures government buildings. Ivanov and most other critical voices have since fled the region due to violence, kidnapping and threats from the separatists, including the kidnapping of the 70-year-old father of journalist Vsevolod Filimomenko earlier in the week.

Efremov rejects the accusations that he is behind the separatists, but leads the opposition in Kyiv to the government's current “anti-terrorist operations” that are being directed against the separatists, and is calling on the government to hold talks and take heed of East Ukraine's interests. Efremov led his parliamentary group in a walkout on May 15 in protest at the ongoing anti-terrorist operation in the east of the country. “People are currently being killed in East Ukraine. We requested a stop to the anti-terrorist operation, but you keep pretending that nothing is happening," Efremov said in parliament. He could not be reached directly for comments.

Elite support

Separatists in Lugansk look like achieving more political institutionalisation than in neighbouring Donetsk, suggesting a greater level of local support from the Party of Regions' elite.

The Kyiv-appointed regional governor has no power on the ground across much of the region of 2.5m people, and bne sources report that the separatists are in the process of setting up a fully-fledged government for the region. The Party of Regions-dominated Lugansk regional assembly has said it will dissolve itself if Kyiv fails to allow the federalisaton of Ukraine, a key demand of Russia and the separatists.

In Donetsk, in contrast, the separatists' power base is not in the regional capital, but in the Kramatorsk-Slovyansk-Konstantinov agglomeration closely connected to former top law enforcement officials in the ousted administration of Viktor Yanukovych, who have also since fled Ukraine for Russia.

But the Lugansk separatists suffered a blow when Bolatov himself was shot and wounded May 13. The circumstances of the attack are unclear and Bolotov has left for treatment in Russia. “He is recovering in a clinic and should return to work soon,” his spokesman Vasily Nikitin tells bne.

Nikitin declined to provide any clarification of Bolotov's background, beyond that he had served in the army, studied at mining college and then had worked in business. Bolotov does not feature as owner or manager in any of Ukraine's corporate databases, except for founding and heading the Soyuz Desantnikov in 2010. Nikitin refused to comment to bne on Bolotov's business career, saying it was a “commercial secret.”