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Poland, Belarus & Ukraine Report: December 10, 2002

10 December 2002, Volume 4, Number 47
LUKASHENKA SUBDUED. Belarusian President Alyaksandr Lukashenka's meeting with Russian President Vladimir Putin in Moscow on 27 November took place a day after the United States banned the Belarusian leader from entering the country, citing "erosion of human rights and democratic principles" in Belarus. The U.S. move followed the decision of 14 European Union countries -- all member states except Portugal -- a week earlier to impose a travel ban on Lukashenka for human rights abuses. Taking into account the Czech denial of a visa to Lukashenka to prevent him from participating in the NATO summit in Prague on 21-22 November, one can say that the West has sent a powerful signal to Minsk, saying it prefers to refrain from dealing with the man often referred to as Europe's last dictator. Against this international background, Putin's inviting Lukashenka to Moscow looked like extending a helping hand to a friend and ally. Simultaneously, however, this meeting highlighted the stark truth that Lukashenka has found himself in a really tight corner in the international arena and is now almost fully dependent on Russia's support not only for Belarus's economy but also in international politics.

The Putin-Lukashenka meeting proved to contribute little substance to bilateral relations, at least judging by what was imparted by both leaders to the media. The only specific decision made at the meeting was to approve a new composition of the intergovernmental commission for working out a constitutional act for the Russia-Belarus Union. Since Putin clearly suggested earlier this year that the Kremlin sees Russian-Belarusian integration as the political incorporation of Belarus into the Russian Federation or, alternatively, the economic absorption of the smaller country by the larger one according to an "EU model," the decision to continue efforts for developing the "Yeltsin model" of integration seems to be a little bit contradictory. Many Belarusian commentators assert, however, that it does not matter which team of governmental experts will be busy with doing nothing about the constitutional act. According to these commentators, the Lukashenka-Yeltsin idea of building the Russia-Belarus Union as a suprastate with supranational governing bodies is dead forever. The Kremlin under Putin has apparently set a course toward taking full economic control over Belarus.

Putin told journalists that 80 percent of the time during his talks with Lukashenka on 27 November was devoted to economic issues. Again, there was little substance communicated to the media. Putin said the Kremlin is aware of Belarus's demand for energy resources, including natural gas, and declared that Russia will continue to satisfy this demand. But the Russian president was quick to add that the price for Russia gas supplies to Belarus is a "commercial" issue, which was not discussed during the talks. According to both Russian and Belarusian commentators, this pronouncement means that Lukashenka failed to persuade Putin to have Gazprom continue to supply cheap gas to Belarus at heavily subsidized prices. "Russia has given away so much during the past decade that now the question is not in giving away something more.... Now we will be taking," Putin told a joint news conference with Lukashenka in what was interpreted as a clear hint that Moscow's political patronage of President Lukashenka will now cost him a pretty penny.

Shortly before Lukashenka's trip to Moscow, the Belarusian legislature speedily passed a bill excluding Beltranshaz, the operator of Belarus's gas-transport pipelines, from the list of enterprises not subject to privatization. The bill is the Belarusian government's move to fulfill its earlier promise to remove obstacles to the planned sale of a stake in Beltranshaz to Russia's Gazprom. Gazprom reportedly expects to get a 25-30 percent stake in Beltranshaz as compensation for Belarus's gas debts. As for the Belarusian government, it expects that Gazprom will pay in cash for its stake in Beltranshaz. Since Gazprom, by reducing last month its gas supplies to Belarus, easily forced the Belarusian government to pay a portion of its gas debt and offer Beltranshaz for sale, it seems that the Russian gas monopoly will also gain the upper hand in the privatization of Beltranshaz without difficulty.

What is not known, however, is the time needed for Russia to take control of Beltranshaz, as well as other strategic Belarusian enterprises, in order to subdue Lukashenka even further and to reduce him to the posture of a Russian provincial governor. According to former Supreme Soviet Chairman Stanislau Shushkevich, Lukashenka's unusual docility during his last meeting with Putin testifies to the fact that the Belarusian president has begun seeking the Kremlin's approval for his apparent intention to run for the post of Belarusian president for a third time. "One should not expect any decency on the part of Moscow in this issue," "Nezavisimaya gazeta" quoted Shushkevich as saying. It is worth noting that during a recent meeting with students in Minsk, Lukashenka hinted that his running for presidency in 2006 for a third term is a preferable option. He may well succeed in making this option a reality, since Moscow appears to be interested in making Lukashenka more "docile" in issues of interest for Russian businesses, rather than in expanding the sphere of democracy in Belarus. While Lukashenka's third presidential term is still a matter of speculation, one thing seems to be already clear: Lukashenka's role of the chief unifier of post-soviet "Slavic lands" was recently superseded by one of a trader in his motherland's economic independence. (Jan Maksymiuk)

THE CLAN FROM DONETSK (PART 2). In order to bring peace to the Donetsk region, President Leonid Kuchma appointed Viktor Yanukovych head of the Donetsk state administration in May 1997. Kuchma chose Yanukovych because he knew that Yanukovych was very close to Rynat Akhmetov, the real boss of Donetsk. With the death of Akhat Bragin, the Industrial Union of Donbas (PSD) was taken over by Vitaliy Hayduk, the fuel and energy minister in Anatoliy Kinakh's and Yanukovych's cabinets.

In 1998, to further solidify his position as he was preparing for his re-election campaign, Kuchma came to Donetsk and, according to reliable sources, made the clan a very generous offer: If they stayed out of politics but supported him for re-election, he and the Kyiv government would not ask questions about how they made their money and what became of it. It was a gentlemanly offer and gladly accepted. In 1999, Donetsk brought out the pro-Kuchma votes and dealt a devastating blow to the local Communist Party branch, considered by most to be the strongest political organization in the oblast. In the 2002 parliamentary elections, Donetsk repeated this feat and secured the pro-Kuchma For a United Ukraine a majority of deputies. It was the only oblast in Ukraine that gave them a majority.

The newly re-elected president told the parliament during his inaugural address that they would "see a new Leonid Kuchma," and as proof he nominated Viktor Yushchenko as prime minister. Yushchenko, considered by most to be a real reformer and pro-Western politician, was given a free hand to choose his cabinet. He then made Yuliya Tymoshenko the deputy prime minister for energy. When asked why he chose her, Yushchenko told the author of this article that she was the only one who understood all the intricacies of the energy sector in Ukraine.

Tymoshenko quickly went to work to try to bring some order to this sector, beginning with the gas traders and the leadership of Naftohaz Ukrayiny, the state gas-trading company led by Ihor Bakay, a close friend and supporter of Kuchma.

At that time, Bakay was already suspected of siphoning off Russian gas from the pipeline going to Western Europe and then reselling this gas to Slovak, Polish, and other gas traders. Bakay also owed the gas companies Itera and Gazprom millions of dollars. At one point in his career, Bakay created a dummy corporation in Cyprus, named it Itera International, and sent money to it, claiming that he was repaying the real Itera in Moscow, but in reality he was putting this money into his own pocket. Bakay was forced to quit.

In November 2000, Tymoshenko went after the coal barons. Her immediate enemy in Kyiv became Serhiy Tulub, the coal minister and a prominent member of the Donetsk clan. In the winter of 2000, Tymoshenko asked Kuchma a number of times to remove Tulub, but the president refused to do so.

What Tymoshenko had done by going after the Donetsk coal barons was to stir up a hornet's nest. She was promptly fired by Kuchma in January 2001, and soon afterward the prosecutor-general suddenly discovered that there had been grave irregularities at Unified Energy Systems of Ukraine when it was under Tymoshenko's leadership. Her husband was promptly arrested and thrown in jail, and a criminal case was opened against her. The government dropped the idea of trying to reform the Ukrainian coal industry.

Taking advantage of the Kuchma deal of 1998, the PSD expanded and presently consists of some 600 enterprises located in the three eastern oblasts of Ukraine: Donetsk, Dnipropetrovsk, and Luhansk. Today, the PSD is considered by many to be the backbone of the Donetsk clan.

The main commodity the PSD deals in is coal, especially coking coal used in the metallurgical industry. According to the director of the ARC Company of Donetsk, Ihor Humenyuk, his company and the PSD control 75 percent of the coking coal mined in Ukraine. This coal supplies the giant Azovstal and Krivorogstal steel works and keeps them under their control. As to the other companies under their control, the PSD is still suspected of stripping their assets.

One of the secondary pillars of the Donetsk clan is the Zvyahilskyy group. As was mentioned earlier (see Part 1 in "RFE/RL Poland, Belarus, and Ukraine Report," 26 November 2002), Yukhym Zvyahilskyy returned to Ukraine from Israel alive and well, if somewhat poorer. He went back to being the director of the giant Zasyadko coal mine, the largest coal mine in the world, and soon went about setting up a semipolitical structure called the Donetsk Zemlyachestvo, a type of fraternity of Donetsk-born men who were of some importance.

A partner in this group is the former mayor of Donetsk, Volodymyr Rybak. He is said to control the construction business in Donetsk. The Zvyahilskyy group also controls the First Ukrainian International Bank (where Yushchenko's brother is a member of the board.)

The man whom most consider to be the head of the Donetsk clan is Rynat Akhmetov. A Tatar by nationality, he is also one of the founding members and an active sponsor of the Muslim Party of Ukraine. He is the founder of the Donetsk City Bank (DonGorBank) and has great influence over the activities of most major companies that form the PSD. Akhmetov is the owner of 51 percent of the shares of the company Vizavi, one of the founding partners of the PSD. He is considered to be close to Boris Kolesnikov, the deputy head of the Donetsk Oblast Council and director of the Kyiv-Konty company, and to Viktor Yanukovych, the new prime minister of Ukraine. He is said to be worth more than $1 billion.

By comparison, in a bold show of transparency, Yanukovych revealed his personal finances for 2001, declaring that his total income for the year was 21,363 hryvnyas 35 kopecks ($ 4,272.60). This consisted of his salary (17,526.43 hryvnyas) plus honoraria from his academic activity (2,548.92 hryvnyas). He also received financial aid for the needy from the government in the sum of 1,288 hryvnyas. He does not own a car, a boat, or any property and lives in a comfortable, yet not ostentatious, apartment measuring 108 square meters. He is just a regular civil servant.

This report was written by Roman Kupchinsky, the author of "RFE/RL Crime and Corruption Watch." Part 1 was published in "RFE/RL Poland, Belarus, and Ukraine Report" on 26 November 2002.

THE SLOW ROAD TO CHURCH UNITY. A group of Ukrainian members of the parliament have established a parliamentary group called A Single Orthodox Church for Ukraine. More than 200 members have joined so far, representing all parliamentary parties and factions. They advocate the union of the three Orthodox churches currently registered in Ukraine into a single national church and have expressed a hope that, since they, as politicians, have agreed on church unity, the clergy will follow suit.

Ukrainian politicians have, in fact, been urging church unity ever since part of the Orthodox Church in Ukraine broke with the Moscow Patriarchate in 1992 and established its own Kyiv Patriarchate. However, the Ukrainian Orthodox Church of the Moscow Patriarchate considers the breakaway Ukrainian Orthodox Church of the Kyiv Patriarchate to be schismatic and noncanonical. It likewise refuses to recognize the Ukrainian Autocephalous Orthodox Church, established during Ukraine's window of independence following the breakup of the tsarist empire, which survived the Soviet years only in exile and reestablished its presence in Ukraine after the restoration of independence in 1991.

To the Moscow Patriarchate Church, "union" means union under the leadership of Moscow. The Kyiv Patriarchate Church and Autocephalous Orthodox Church, however, maintain that Ukraine should have its own, Ukrainian-led church, and have already embarked on negotiations for union, with the ecumenical patriarch of Constantinople, Bartholomew II, the "first among equals" of all Orthodox hierarchs, in effect brokering the deal.

Politicians, and those concerned with Ukrainian state building, perceive the union of Orthodox Ukrainian believers into a single Ukrainian Orthodox Church as an important step in establishing a clear national identity. The pro-Russian agenda of the Moscow Patriarchate Church, however, would appear to make such a union unlikely. However, one Ukrainian member of parliament, Les Tanyuk, maintains that things are changing. Senior clerics of the Moscow Patriarchate Church, he told the media, are becoming "increasingly supportive" of Ukrainian spirituality. They have given up "politicizing and Russifying" church life and "fighting Ukrainian culture," including such practices as redrawing Ukrainian icons and "ruining" Ukrainian church buildings, he said. But even Tanyuk puts the possibility of a unified national church in Ukraine as "perhaps in 15 years' time."

In the meantime, another emigre church, the Ukrainian Autocephalous Orthodox Church-Sobornopravna, has now established its presence in Ukraine. (Editor's note: It is hard to render the term "sobornopravna" satisfactorily in English. It may mean "synodical-rightful" or "universal-rightful" or combine both these notions.) Its leader, who went to the United States several years ago and was ordained there, has now returned, under the title of Metropolitan Moisey of Kyiv and All Rus. He told a news conference in Kyiv that his church is recognized by the ecumenical patriarch, who appointed him as metropolitan, and that his, and his church's, mission is to unite all Ukrainians, Orthodox and Greek Catholics, in a single, truly national church (all existing churches in Ukraine are, he said, subject to foreign influences). Ironically, his arrival has, indeed, created a small degree of unity among the clerics of the existing three Orthodox churches: They have all protested that Moisey's church should not be accorded legal recognition.

The head of Ukraine's Greek Catholic Church, Cardinal Lyubomyr Huzar, has made no overt reference to Moisey's arrival. However, in a statement issued on 25 November, Huzar expressed a willingness to meet with Patriarch Aleksii II of Moscow during his forthcoming visit to Ukraine in order to improve Catholic-Orthodox relations in Ukraine and, hopefully, to resolve disputes over the ownership of church buildings, and he also expressed his "sincere hope" that "the visit by the Moscow patriarch to Ukraine would serve to establish correct evangelical relations between the three branches of Ukrainian orthodoxy." Three, be it noted, not four!

This report was written by Vera Rich, a London-based freelance researcher.

"The Belarusian-Russian Parliamentary Assembly intends to speed up the formation of the [Russia-Belarus] Union state so that Belarus will not suffer the fate of Yugoslavia, and its leader Alyaksandr Lukashenka will not share the fate of [Slobodan] Milosevic." -- Russian State Duma Deputy Grigorii Tikhonov in St. Petersburg on 9 December; quoted by Belapan.

"Lukashenka is being supported not because he is an outstanding man or a man of genius in the eyes of voters but because of the old habit, instilled during centuries, according to which a slave must adore his master.... Slaves will support any leader in power as long as his power does not shake [or] is not passed to another." -- Belarusian writer Vasil Bykau in an interview with "Belorusskaya delovaya gazeta" on 4 December.