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Poland, Belarus & Ukraine Report: January 12, 2005

12 January 2005, Volume 7, Number 2
POROSHENKO EXPECTING TO GET YUSHCHENKO'S FIRST PRIZE. Ukrainian lawmaker and businessman Petro Poroshenko announced last week on Channel 5 that he is prepared to accept the post of prime minister from Viktor Yushchenko, whom the Central Election Commission on 10 January announced as the official winner of the 26 December presidential vote.

Poroshenko's public declaration of readiness to head Ukraine's new cabinet followed those of Yushchenko's two other political allies -- Yuliya Tymoshenko and Anatoliy Kinakh. Ukrainian political observers mention two more names of possible hopefuls for the post of prime minister -- Socialist Party leader Oleksandr Moroz and Our Ukraine Party head Viktor Pynzenyk. Thus, Yushchenko may develop a headache due to the large number of candidates for the premiership when he returns this week from a vacation in the Carpathian Mountains.

Just who is Petro Poroshenko? And why does he think he may be taken seriously by Yushchenko in the company of such political heavyweights as Tymoshenko and Moroz? Indeed, even Kinakh and Pynzenyk are better known in the Ukrainian political arena than Poroshenko. All of Poroshenko's supposed rivals for the post of prime minister have previous experience in top government jobs: Moroz was parliamentary speaker in 1994-98; Tymoshenko was deputy prime minister in Yushchenko's cabinet in 2000; Kinakh was prime minister in 2001-02; and Pynzenyk served in the government as a minister and deputy prime minister in 1992-93 and 1994-97. As for Poroshenko, his most prestigious public post to date is his leadership of the parliamentary Budget Committee, which he has headed since 2002.

To begin with, Poroshenko is the owner of the Channel 5 television station, which has made a huge propagandistic contribution to the success of the Yushchenko-driven "Orange Revolution" in Ukraine. Channel 5 was the country's only television channel sympathetic to Yushchenko's presidential bid throughout the 2004 election campaign and in the first week of the "Orange Revolution" that followed the discredited 21 November second election round that favored then-Prime Minister Viktor Yanukovych. It was only in the second week of the ongoing protests of orange-clad Ukrainians on Independence Square in Kyiv that journalists on other television channels, both private and state-controlled, launched a rebellion against official censorship and started to cover events in Ukraine in a more unbiased manner. Channel 5 spearheaded a major breakthrough in Ukraine's electronic media toward more pluralistic and objective news coverage, which clearly benefited opposition presidential candidate Yushchenko.

Also notable is that Poroshenko is a very rich businessman, and his financial contribution to the Yushchenko presidential campaign -- in addition to that from Tymoshenko -- has surely been hefty, although we will most likely never learn exactly who paid what in sponsoring Yushchenko's campaign. Poroshenko runs the Ukrprominvest concern, which includes five confectionery plants and a business that sells foreign-made automobiles and motorcycles, and also manufactures domestic motor vehicles and ships. Poroshenko is the largest manufacturer of confectionery in Ukraine and has been dubbed the country's "Chocolate King." He once said that "more than $100 million" has been invested in Ukrprominvest.

Asked by Channel 5 to comment on Yushchenko's requirement that the next prime minister not have business connections, Poroshenko said that he has no business interests "from a formal point of view." This may be true to some extent. According to some Ukrainian media, a significant part of the Ukrprominvest property legally belongs to Petro Poroshenko's father, Oleksiy Poroshenko, who is now general director of Ukrprominvest.

Petro Poroshenko was born on 26 September 1965 in the city of Bolhrad, Odesa Oblast, near the Ukrainian-Moldovan border and near the Danube Delta. He debuted in big politics in March 1998, when he was elected to the Verkhovna Rada from a first-past-the-post constituency in Vinnytsya Oblast. At that time, Poroshenko was a member of the Social Democratic Party-united (SDPU-o) led by Viktor Medvedchuk and was on its Political Bureau. In 2000, Poroshenko quit the SDPU-o and formed its own parliamentary caucus, called Solidarity, and a political party called the Party of Solidarity of Ukraine. By the end of 2000 his party joined the Party of Regions of Ukraine (now headed by Yanukovych), of which he become a cochairman. In 2001, Poroshenko left the Party of Regions, recast his former party into a Solidarity Party and joined Yushchenko's Our Ukraine election bloc. Poroshenko become manager of the Our Ukraine parliamentary election staff in 2002 and, after being elected to the Verkhovna Rada in March 2002, became head of the Budget Committee.

Poroshenko, who was deputy manager of Yushchenko's presidential campaign in 2004, is generally described as a very influential person in the Yushchenko entourage and seen as a moderate, particularly in comparison with radical populist Tymoshenko. Although Poroshenko has kept a low profile in politics so far, his maneuverings in party politics and the Verkhovna Rada have demonstrated as a minimum that he is capable of forging political alliances with oligarchic groups, a talent that no doubt boosts his stock as a potential prime minister. Poroshenko's very good political relations with parliamentary speaker Volodymyr Lytvyn are also an advantage, especially as Lytvyn's 30-strong Popular Agrarian Party parliamentary caucus is tapped to join a pro-Yushchenko coalition in parliament, while Lytvyn himself, whose political stature has risen noticeably during the 2004 election standoff, is expected to guarantee the stability of the pro-Yushchenko parliamentary coalition in the first year of his presidency.

What can be seen as Poroshenko's most serious shortcoming as a candidate for the top cabinet job is his strong business connections, despite the fact that he may be "formally" free of them. Too many businessmen in Ukraine seem to perceive Yushchenko's victory as an opportunity for revenge against the oligarchs who supported the Kuchma-Yanukovych regime and for a "redivision" of the spheres of economic influence under the new regime. Therefore, Poroshenko may not be totally free of the temptation to mete out "economic justice" and promote his "wronged" associates to the posts and benefits they were denied during the era of President Leonid Kuchma.

In other words, Yushchenko will think long and hard before deciding on the nomination of Poroshenko to the post of prime minister. Because Yushchenko does not need a war with Ukrainian oligarchs, but their cooperation, primarily in replenishing the state budget. Poroshenko said in a press interview in mid-2004 that it is quite possible for the Ukrainian budget to immediately have annual revenues of 100 billion hryvnyas ($19 billion) by recovering part of the money from the shadow economic sector. (The budget revenues projected for 2005 stand at 86.5 billion hryvnyas.) Arguably, to make this happen, the government needs to cajole the old oligarchs into leaving the shadow economy rather than to replace them with new ones, "wronged" or not. author biography. (Jan Maksymiuk)

TYMOSHENKO LEAVES FEW UNMOVED. Admired by her supporters as a charismatic leader and castigated by her opponents as a corrupt turncoat, Ukraine's Yuliya Tymoshenko leaves few people indifferent. Now, Tymoshenko, who does not mince words, says she expects to be Ukraine's next prime minister.

She has compared herself to Joan of Arc and called outgoing Ukrainian President Leonid Kuchma a "red-haired cockroach."

But Yuliya Tymoshenko can turn on the charm and win over an audience -- even in enemy territory -- as she demonstrated with a recent visit to the eastern city of Donetsk.

At the height of opposition demonstrations in Kyiv in December 2004 that forced a rerun of the presidential election, adoring crowds dubbed her the "Orange Princess."

Tymoshenko portrays herself as a tough-talking crusader, a passionate Ukrainian nationalist, and woman of the people who is on a mission to clean up the country's morass of government and business corruption.

It has been an amazing transformation.

A decade ago, Tymoshenko had no nationalist credentials. In fact, she spoke no Ukrainian and had no more than a pragmatic interest in politics. A trained economist from the eastern city of Dnipropetrovsk, she used her connections to former Prime Minister Pavlo Lazarenko to build a natural gas trading empire that made her the country's richest businesswoman -- until her ambitions ran up against the designs of President Leonid Kuchma.

RFE/RL regional analyst Jan Maksymiuk explains: "In the 1990s, Tymoshenko was generally perceived as one of the most powerful oligarchs in Ukraine. Reportedly, in 1996, when she was the chairwoman of Ukraine's Unified Energy Systems, her company controlled one-fourth of the Ukrainian economy. But then she got into conflict with other oligarchs who were supported by Kuchma, and her career as a businesswoman ended."

While her career as a businesswoman may have been cut short, she proved more deft than Lazarenko, who had to step down. He ended up fleeing the country, only to be tried and convicted on 29 extortion and money-laundering charges in the United States, which he is now appealing.

In 1999, Tymoshenko joined the new reformist cabinet of Prime Minister Viktor Yushchenko and turned against her former business partners with a vengeance. Tymoshenko was credited with forcing Ukraine's energy sector to pay back some $2 billion into state coffers and stripping the oligarchs of some of their power.

Soon after she left the government in 2001, her legal troubles began. She was indicted on fraud and money-laundering charges and jailed for several weeks. A Kyiv judge eventually dismissed the charges against her.

Still, questions remain over what happened to Tymoshenko's share of the Unified Energy System profits. "Nobody knows for sure. At one time, she was indicted for channeling more than $1 billion dollars abroad to foreign accounts. Some of those accounts were controlled by the infamous former Ukrainian Prime Minister Pavlo Lazarenko. She was also indicted for gas smuggling, tax evasion, and a lot of other crimes. But she was able to shake off all those allegations. Everybody believes that she's a very rich person in Ukraine. But apparently, she doesn't pursue any business activity right now," Maksymiuk says.

Observers say Tymoshenko's short time in prison and the destruction of her business empire by Kuchma's allies -- which she calls politically motivated persecution -- had a profound psychological impact.

While such events might have crushed weaker personalities, Tymoshenko used them as a springboard to forge a new identity as an opposition crusader and born-again nationalist advocate, complete with traditionally braided hair and flawless Ukrainian.

So who is the real Tymoshenko? Cunning business woman or genuine reformer?

That has yet to be determined. But one thing is for certain. She is one of the smartest public figures in Ukraine and has always been fiercely determined to attain her goals -- be they in business or politics.

"No doubt she's a pragmatist. But she's also a very passionate and determined pragmatist, and whatever she sets her eyes on, she goes for it in a big way -- in a very determined, systematic, and effective way," says Kataryna Wolczuk, a Ukraine analyst at Britain's University of Birmingham. "So from that point of view, when she was a 'gas princess,' she did it in an extremely competent way -- milking the system to the extent it was possible under Lazarenko. When she became the deputy prime minister and tried to deal with the system which was created in the mid-1990s, again she was extremely competent and effective. And she trampled on many vested interests in Ukraine. So, in a way, she is a pragmatist, but whatever she does, she does it without compromising, and that's perhaps her greatest strength. But from the outgoing regime's point of view, it's the greatest threat she presents to them."

Tymoshenko told The Associated Press that she has a formal agreement with Yushchenko that leaves no alternative than for her to become prime minister after he is inaugurated as the country's new president.

Wolczuk says this demand poses a dilemma for Yushchenko. She is more than competent, but her polarizing nature means it could be difficult for the Yushchenko camp to win enough support among former Kuchma backers, who fear her.

Ironically, says Maksymiuk, Tymoshenko could also prove a threat to Yushchenko himself -- especially if reforms that cut the president's powers are enacted as planned.

"In the longer term, yes. If Tymoshenko becomes prime minister and if the political reform goes into action, as it is planned in 2006, then, of course, Tymoshenko could become the most powerful figure in Ukraine. So, that's perhaps why she's willing to be prime minister," Maksymiuk says.

Yushchenko's office has so far declined to say who will be nominated for prime minister. (Jeremy Bransten)

MOSCOW PONDERS HOW UKRAINE WAS 'LOST.' As Ukraine's former Prime Minister and defeated presidential candidate Viktor Yanukovych clears out his government office in Kyiv, pundits, journalists and political analysts back in Moscow continue to ask what went wrong. With so much financial backing from Russian businesses and political support from Russian President Vladimir Putin, why did Yanukovych lose?

Many Russian and Ukrainian analysts have hesitated to place primary responsibility on the Kremlin or Putin for misjudging the Ukrainian situation. Instead they have been blaming the "aggressive tactics" of a gaggle of Russian campaign consultants who began arriving at Kyiv's Borispol Airport sometime in July, RFE/RL's Russian Service reported on 28 December.

In an interview with "Lviv ekspres" on 22 December, outgoing President Leonid Kuchma's chief speechwriter, Vasyl Baziv, said that Foundation for Effective Policies head Gleb Pavlovskii, former ORT Deputy General Director Marat Gelman, and Russian businessman Maksim Kurochkin "made themselves at home" in the Ukrainian presidential administration during the lead-up to the first round of presidential voting on 31 October. He said that he even saw one Russian spin doctor, whom he declined to name, sitting beside Yanukovych during an official meeting. "This is not a matter of campaign tricks but an erosion of our sovereignty," Baziv complained.

Naturally, the spin doctors themselves have a variety of explanations for what happened in Ukraine. First of all, they assert that Yanukovych did not in fact lose. At a news conference in Moscow on 28 December, Pavlovskii asserted that Yanukovych won the second round on 21 November but that through a series of "manipulations of the results...the political process became one based entirely on force," RFE/RL's Moscow bureau reported.

At the same time, in what might be considered an apparent contradiction, they proffer at least three different explanations for why Yanukovych did not win or why they should not be blamed for Yanukovych's failure to perform better. First and foremost, they claim that they were outgunned next to U.S. and Polish resources, according to Sergei Markov of the Institute for Political Research. Second, they had too little time to refashion Yanukovych's image. Third, Yanukovych, a former prison convict, was too difficult a candidate to make palatable to the broad public.

Marat Gelman told "Lvivska hazeta" on 16 November that Yanukovych's "criminal record [was] a formidable issue, a brick wall that no brilliant scheme [could] break down." In an interview with on 30 December, Markov said: "If you ask me, I would say that the candidate should have been someone else. It was unwise to put forward as a candidate for president someone with two previous criminal convictions. I can assure you that this was not Moscow's decision."

According to on 10 December, Pavlovskii complained that he and his colleagues were invited too late and that they should have started 12 to 18 months before the election in order to remake Yanukovych's image. In an interview with on 27 December, Markov voiced a similar sentiment. "I believe that Russian spin doctors had extremely limited opportunities: They spent only three months working with Yanukovych," he said.

But the biggest problem, according to Markov, was not the candidate or any lack of time but that Russia and its spin doctors were outnumbered and outgunned by the West. In the interview, Markov claimed that "Americans and Poles spent several years working with Yushchenko." Asked to explain what he meant by Poles and Americans, Markov said that there was "American and European collaboration with elite structures and the public across a broad front." Markov also said that while Russia spent only millions of dollars on the campaign, the United States and European Union spent hundreds of millions of dollars in Ukraine. Therefore, according to Markov, Yanukovych's defeat was not a defeat for Russian spin doctors but for "Russia's ruling class, which proved incapable of achieving such a major strategic task."

Pavlovskii put forth a more obscure defense of his and other spin doctors' roles in Ukraine. In an interview with "Nezavisimaya gazeta" on 7 December, he faulted himself and others merely for being unable to "draw the attention of our partners in Ukraine that an 'overthrow' project was in preparation." He continued, "The point is that the opposition circles were not preparing for elections. They were preparing for the seizure of power, in the guise of elections." He then claimed that neither he nor his colleagues "had the power to advise our Ukrainian partners on preventive counterrevolution and not only on elections, [otherwise] this misfortune would not have happened." In a later interview with on 28 December, when asked whether he was willing to share responsibility for the defeat of Yanukovych, Pavlovskii responded, "Yes, but as a politician, not as a spin doctor. Unfortunately, I did not work in the latter role in Ukraine." What he was doing, he said, was "liaising with the group of politicians that put Yanukovych forward. Unfortunately, this was not enough. You need to have the powers to make decisions." So, in Pavlovskii's view, he did not have the power to inform his Ukrainian colleagues of what was going on, even though by his own admission he was acting as a liaison with Yanukovych's supporters.

Of course, if Yanukovych were about to assume Ukraine's presidency, it is not difficult to imagine Pavlovskii and others taking credit for his victory. In an interview with "The Washington Post" on 2 January, former political adviser Dick Morris explained how he managed to contribute a key element of President-elect Viktor Yushchenko's strategy without ever managing to actually visit Ukraine. Morris told the paper that an acquaintance from a previous overseas campaign put him in touch with Yushchenko's campaign manager. Because of unspecified "security concerns," he met with Yushchenko campaign officials in an undisclosed East European capital. According to Morris, his main contribution to the campaign was to urge exit polling on election day and the immediate publication of those results. In this way, according to Morris, Yushchenko's campaign would draw supporters to the streets to celebrate -- thus presenting Ukrainian authorities with an angry mob if they tried to tamper with the vote.

So far, though, it's the CIA's acumen rather than Morris's that is being hailed in Moscow. In an interview with Radio Rossii on 7 December, Aleksandr Konovalov, president of Moscow's Institute for Strategic Assessments, suggested that Russia believes "the myths created by our spin doctors" and "now we probably will believe their explanations, the main one being [that Ukraine was lost because of] a CIA conspiracy." He asked ironically, "How can poor Gleb Pavlovskii handle the whole Central Intelligence Agency on his own?"

In an interview with RFE/RL's Russian Service on 9 December, former leader of the Union of Rightist Forces (SPS) Boris Nemtsov suggested that the stories of excessive Western influence in Ukraine might be more than just a yarn by Russian spin doctors to avoid taking responsibility for losing a key election. According to Nemtsov, it might be a device that the Russian authorities are using to avoid telling the truth about what really happened in Ukraine. He said Russian authorities "treat their own people cynically and invent such arguments of the type that the West influenced [events], or the campaign consultants worked poorly -- anything but the truth that the people were tired of Kuchma's regime, that people were living in despair and lawlessness and their last drop of patience went when the election was falsified." (Julie Corwin)

"If the [Ukrainian Supreme] Court does not satisfy our demands, we reserve the right to act in accordance with the existing law and appeal to the European Court [of Human Rights]. And we will never accept the results of the so-called re-run of the election." -- Presidential candidate Viktor Yanukovych in Kyiv on 11 January, pledging to appeal against the Central Election Commission's official announcement that his rival, Viktor Yanukovych, won the 26 December presidential vote; quoted by an RFE/RL correspondent.

"The country split into two parts: eastern Ukraine and western Ukraine. They were on the verge of a civil war. The economy has now slipped into recession. Ukraine's economy had grown at a good pace in recent years and now it has gone downhill. I don't know, maybe the West won the battle with Russia there now, so maybe the West will make them happy. But I don't think they can improve the lives of 50 million people in that country by giving them their breadcrumbs.... Who came to power as a result of the revolution? Democrats? Look at that 'gas lady' [Yuliya Tymoshenko] who will apparently become prime minister. She is an international fugitive and is believed to be the most corrupt person on the territory of the CIS. And now she is a revolutionary, a democrat." -- Kyrgyz President Askar Akayev, speaking about Ukraine's Orange Revolution on 9 January, during a meeting with local officials in Tokmok, Kyrgyzstan; quoted by an RFE/RL correspondent.