ANALYSIS: Kuchma orchestrates oligarchic takeover (12/29/02)

ANALYSIS

Kuchma orchestrates oligarchic takeover

by Taras Kuzio
RFE/RL Newsline

At his ninth meeting with Russian President Vladimir Putin, this time in Moscow on December 9, Ukrainian President Leonid Kuchma lauded the fact that he and Mr. Putin understand each other and speak the same language, both figuratively and literally. "We do not need to try to convince one another about many matters - while at the same time, in our conversations with our Western colleagues they often do not understand us," Mr. Kuchma told Mr. Putin. This, the Ukrainian president said, is because Ukraine and Western Europe evolved "in different conditions - we have different problems, different mentalities."

This is certainly the case with regard to the manner in which President Kuchma's domestic policies are completely undermining his declared strategic goal of Euro-Atlantic integration. It has taken only nine months for Mr. Kuchma to reverse the outcome of the March 31 parliamentary elections in which pro-presidential blocs won only 18 percent of the vote in the proportional half compared to nearly 60 percent for four opposition blocs. Mr. Kuchma has now ensured himself a trouble-free transition to retirement after October 2004, when the next presidential elections are scheduled to be held.

In May, Social Democratic Party-United (SDPU) strongman Viktor Medvedchuk was appointed head of the presidential administration. Mr. Medvedchuk has orchestrated, on behalf of the executive, a drive against the opposition and a takeover of all key state institutions by three main oligarchic clans (the SDPU-o [Kyiv], Labor Ukraine [Dnipropetrovsk], and Ukraine's Regions [Donetsk]); five smaller satellite clans (Democratic Initiatives, European Choice, Power of the People, People's Choice and the Agrarian Party); and the former "party of power," the National Democratic Party. All of these clans, with the exception of the SDPU, ran within the For a United Ukraine (ZYU) bloc that won only 11 percent of the vote in the March elections and fell apart immediately afterwards.

The former head of the presidential administration and leader of For a United Ukraine, Volodymyr Lytvyn, was installed as chairman of the Verkhovna Rada in May. Mr. Lytvyn received 226 votes, only one more than required, with the help of former Procurator-General Mykhaylo Potebenko. Mr. Potebenko was elected on the Communist Party list but was expelled after voting for Mr. Lytvyn. In 2000-2002, he stalled the inquiry into the still-unresolved murder of opposition journalist Heorhii Gongadze that sparked the "Kuchma-gate" crisis. In July, Mr. Kuchma's candidate Sviatoslav Piskun, was appointed to replace Mr. Potebenko as procurator general.

Although For a United Ukraine and the SDPU elected only 54 deputies in the proportional half of the elections, this faction has grown in number to 234 through the addition of deputies elected in districts that use the first-past-the-post system, which favors "independent" pro-presidential centrists, as well as through bribery and the intimidation of opposition deputies.

The culmination of the executive's takeover of Parliament is its redistribution of the position of heads of its committees, many of which have been controlled by the opposition since the March elections.

Because of the close corporatist links between business and politics, businessmen within the opposition or those funding the opposition are routinely intimidated through raids by the State Tax Administration (STA) and court cases. This is probably the reason that Yurii Kravchenko was appointed head of the STA.

Mr. Kravchenko is the discredited former internal affairs minister whom Parliament forced to resign in February 2001. He is heard bragging on the audio recordings illicitly made in the president's office by former security officer Mykola Melnychenko about his "Eagles" special unit after President Kuchma demanded that action be undertaken against Mr. Gongadze. The U.S. Federal Bureau of Investigation is now undertaking an analysis of this fragment of the Melnychenko recording.

Mr. Kravchenko, who is highly loyal to Mr. Kuchma and is not a member of any clan, is of key importance to the president's efforts to ensure that no single clan can dominate Ukraine and is reportedly Mr. Kuchma's favorite to succeed him in 2004.

The appointment of Donetsk Oblast Chairman Viktor Yanukovych as prime minister in November by a vote of 234 deputies heralded another step in taking control of state institutions. Nine pro-presidential factions representing the "parliamentary majority" have signed an agreement of cooperation with the new government after government positions were divided among the three main and six smaller clans.

Mr. Kuchma's candidate for the head of the Supreme Court, Vasyl Maliarenko, was elected in November. The Supreme Court will be important to head off any legal challenges to Mr. Kuchma's immunity deal and to regulate any potential disputes over the 2004 election results. In addition, Mr. Medvedchuk is also head of the Union of Ukrainian Lawyers. The only temporary setback for the Kuchma strategy was his failure to appoint the head of the Labor Ukraine oligarchic clan, Serhii Tyhypko, as chairman of the National Bank of Ukraine (NBU). The National Bank will be crucial to ensure a relaxation of financial discipline to support populist social measures by the new government and to have "administrative resources" available for the 2004 elections. Mr. Tyhypko's election to this post would have effectively divided the plum top-three positions between the three main oligarchic clans - presidential administration (Kyiv's SDPU), government (Donetsk's Ukraine's Regions), and the National Bank of Ukraine (Dnipropetrovsk's Labor Ukraine).

Mr. Tyhypko obtained only 214 votes in the first attempt to place him in the position of NBU chairman, but it is likely that the parliamentary majority will eventually succeed in having him elected. NBU Chairman Volodymyr Stelmakh is under severe pressure to resign, and an inconclusive vote on December 12 to replace him with Mr. Tyhypko ended in scuffles between oligarchs and the opposition.

The final element of President Kuchma's strategy is to take over the Federation of Trade Unions of Ukraine which is headed by Oleksander Stoyan. Mr. Stoyan was No. 2 on Viktor Yushchenko's Our Ukraine bloc and defected on December 6 to the parliamentary majority, which represents a major blow to Mr. Yushchenko's prestige and election chances in 2004. Mr. Stoyan has been quoted as saying, "I should not be in opposition to this government - I should work with it."

Just prior to Mr. Stoyan's defection the annual congress of the Federation of Trade Unions of Ukraine, Mr. Medvedchuk's SDPU backed the first serious challenge to Mr. Stoyan's decadelong leadership by his first deputy, Valentyn Pozhydayev. Regional governors attended the federation's congress for the first time to pressure delegates from their regions to vote for Mr. Pozhydayev. Mr. Stoyan defected to the Kuchma camp in return for this pressure being called off and was thus able to retain his position as head of the federation.

The political system emerging in Ukraine sees no role for the opposition, and current trends would seem to herald an entrenchment of oligarchic control. This politically authoritarian and economically "liberal" model is more typical of CIS states, including Russia, than of post-Communist Central and Eastern Europe, or of Western Europe, to which Ukraine ostensibly wishes to integrate.

Dr. Taras Kuzio is a resident fellow at the Center for Russian and East European Studies and adjunct staff in the department of political science, University of Toronto.

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