ANALYSIS
The clan from Donetsk
by Roman Kupchinsky
RFE/RL Poland, Belarus and Ukraine Report
PART I
On November 16, 2002 Ukrainian President Leonid Kuchma fired the government of Anatolii Kinakh on the pretext that it had been unable to ensure financing for education and science, and he proposed that Viktor Yanukovych become the 10th prime minister in Ukraine's 11 years of independence. On November 21, Mr. Yanukovych's candidacy was approved in Parliament by a less-than-overwhelming vote of 234 for and 0 votes against, as opposition factions decided not to participate in the voting.
Viktor Fedorovych Yanukovych was born on July 9, 1950, in the city of Yenakievo in the Donetsk Oblast. According to his official biography, which was circulated by the UNIAN news agency shortly before the vote, he worked as a laborer in a metallurgical factory, a car welder and a mechanic. Later he worked as the general director of a number of enterprises, most of which were somehow connected to the transportation sector. In August 1996 he was appointed as vice-chairman and in September as first vice-chairman of the Donetsk Oblast Administration. On May 14, 1997, President Kuchma appointed him the head of the oblast administration.
Mr. Yanukovych's biography says that he graduated from the Donetsk Polytechnic Institute in 1980. It also mentions in passing that in 1968 he was arrested (the reason is not provided) and sent to a penal institution for minors. In 1970 he was arrested for the second time and found guilty of assault and battery. However, a different version of this second arrest was broadcast on November 18 on ICTV television (a station belonging to Viktor Pynchuk, Kuchma's son-in-law), which reported that he had been charged with manslaughter and theft of state property.
As soon as Mr. Yanukovych's name was announced by the president as his candidate for the prime minister's job, a number of political observers in Kyiv were quick to comment that with his appointment, power in Kyiv would shift to the Donetsk clan. Some believed that the West would not be too happy with Mr. Yanukovych's appointment, given his very close connections with what they claimed to be a criminal and corrupt clan.
The Donetsk clan is not a well-known group, even among Ukrainians. More people tend to know about the large and more prominent Dnipropetrovsk clan, or, as it is often called, "Dnipro." Mr. Kuchma is part of that group, as was Pavlo Lazarenko (presently in a prison cell in California, awaiting the start of his trial in March 2003 and many others in the Ukrainian government. Even members of the opposition, like Yulia Tymoshenko, are also part of the Dnipro group.
The Donetsk clan began its formation in the late 1980s and early 1990s. The first step took place in the settlement of Oktiabrsk in 1988. A local resident, Akhat Bragin, a man of "great authority" in both local official and underworld circles, took control of the local market. At that time, 22-year-old Rynat Akhmetov, a young man of Tatar nationality, was close to Mr. Bragin. Mr. Akhmetov, born in Donetsk in 1966, was noticed by many local men of authority for his quick mind and ability to get things done. Mr. Bragin kept him close and taught him the business of doing business Donetsk-style.
In the early 1990s two other business enterprises came into being in the region: the Anton company, headed by Yevhen Shcherban, and Delo Vsekh, belonging to Volodymyr Shcherban (the two Shcherbans were not related).
In the early 1990s, men of authority from Donetsk realized that they could influence decisions in Kyiv by the sheer might of their industrial and natural resources. Thus, in 1993, a wave of coal-miners' strikes, organized by their own management, swept the region and forced then-Prime Minister Leonid Kuchma to appoint as his deputy a powerful "coal baron" from Donetsk, Yukhym Zviahilskyi. Mr. Kuchma left his post soon afterward to concentrate on his presidential campaign, and Mr. Zviahilskyi became acting prime minister. During his short time in office, Mr. Zviahilskyi did manage to slow inflation somewhat and arranged for Russian energy supplies to reach Ukraine.
In 1994 Mr. Kuchma was elected to his first term as president, and matters rapidly changed. Mr. Zviahilskyi soon found himself the object of an investigation into his dealings while acting prime minister - he was accused of having stolen some $20 million - and he fled to Israel in fear for his life. After some time, Mr. Zviahilskyi returned to Ukraine; he is presently living in the Donbas region, where he is still very powerful. Being a member of Parliament, he has immunity from prosecution.
While Mr. Zviahilskyi was hiding in Israel from the wrath of his enemies in 1995, Donetsk came under the control of the two businessmen mentioned earlier: Mr. Bragin, by this time the owner of the local soccer club, Shakhtar, where Mr. Akhmetov was his deputy; and Yevhen Shcherban. They enjoyed the full support of Volodymyr Shcherban, President Kuchma's choice in 1994 to head the Donetsk Oblast Administration.
In December 1995 the Industrial Union of the Donbas was registered as a corporate entity in the city of Donetsk. Its acting director was listed as Serhii Tartyta, and its founding members were the Donetsk regional branch of the Academy of Technical Sciences of Ukraine, the Ukrainian Academy of Economics, the Donetsk Chamber of Trade and Industry, the construction company Azovinteks from the city of Mariupol and the joint-stock company Vyzavi from Donetsk. But most people in Donetsk knew that Mr. Bragin and Mr. Shcherban were the real muscle behind the Industrial Union.
Initially, the corporation stated that its goals were to coordinate the work of different regional enterprises in the new economic situation that arose after the collapse of Soviet communism. But the true original purpose of the Industrial Union of the Donbas was to make a lot of money by supplying natural gas to enterprises in the region and by stripping assets from the companies they acquired during the early period of privatization.
At this time, some people in Donetsk began to show political ambitions, and some were openly predicting that Volodymyr Shcherban would be a presidential candidate in the next election. (The most vocal proponent of this line of thinking was Yevhen Shcherban.) By late 1995 certain events convinced the Donetsk clan that this was in fact a very bad idea. Near the end of that year, Mr. Bragin was gunned down in Donetsk, and his young deputy Mr. Akhmetov, almost immediately took over the soccer club. From that day on he was the most powerful member of the clan.
From January through July 1996, a number of less prominent Donetsk businessmen affiliated with the Industrial Union of the Donbas were killed, and in July 1996, Yevhen Shcherban, at the time a member of Parliament, was killed, along with his wife and bodyguard, at the Donetsk airport. A car filled with people dressed as police officers drove up to his plane as Mr. Shcherban was exiting the aircraft. The men jumped out and opened fire with automatic weapons, then walked back to the car and drove off at a leisurely pace without any difficulty.
The real killers have never been found in any of the cases named above, but earlier this year, Ukrainian Procurator General Sviatoslav Piskun stated that former Prime Minister Lazarenko was the person who ordered the contract hit on Yevhen Shcherban. This revelation came at the same time that rumors began circulating that Mr. Lazarenko had decided to cooperate with the prosecution in California and was naming some very important people in Kyiv as participants in his criminal dealings.
Roman Kupchinsky is the author of RFE/RL's Crime and Corruption Watch.
PART I
Copyright © The Ukrainian Weekly, January 12, 2003, No. 2, Vol. LXXI
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