UKRAINE: MOROZ AS SPEAKER;

C O N F I D E N T I A L SECTION 01 OF 03 KIEV 002651

SIPDIS

SIPDIS

E.O. 12958: DECL: 07/07/2016
TAGS: PREL PGOV PARM UP
SUBJECT: UKRAINE: MOROZ AS SPEAKER;
REGIONS-SOCIALIST-COMMUNIST COALITION UNDER PM YANUKOVYCH
TO COME?

REF: KIEV 2461

Classified By: DCM Sheila Gwaltney, reason 1.4 (b,d)


1. (SBU) Summary: In a maneuver which stunned Our Ukraine
(OU) and Tymoshenko Bloc (BYuT) only hours after they had
reached agreement with Party of Regions on a division of
responsibilities between the majority and opposition forces
in the Rada (parliament) to end Regions' 10-day blockade of
the Rada, erstwhile "Coalition of Democratic Forces" member
the Socialists allied with Regions and the Communists to
elect Socialist Leader Oleksandr Moroz Speaker late in the
evening July 6. Ex-deputy Socialist leader Vinsky, who
resigned from his party position (but not his Rada seat) July
6 to protest the coming "traitorous" actions of Moroz, laid
the blame for the collapse of the orange coalition on the
shoulders of Yushchenko and Moroz--Yushchenko for not
immediately signing the coalition agreement on election
night, March 26, and allowing the coalition negotiations to
take months, and Moroz for "betraying everything" the
Socialists and their electorate stood for in his deal with
Regions.


2. (SBU) The election of Moroz as Speaker proved a prelude to
a tentatively planned new Rada majority of
Regions-Socialists-Communists intended to replace the
previous BYuT-OU-Socialist majority created June 22 (reftel).
The Rada adjourned mid-day July 7 until Tuesday, July 11, to
give parties time to negotiate a new coalition. Regions left
the door open to the possibility that elements of OU and BYuT
could join the new coalition, amidst some signs that OU, or
at least some elements, would try to so. At the same time,
however, Regions announced that Regions-Socialists-Communists
would be the basis for the new majority and that Viktor
Yanukovych was Regions' choice for PM. Moroz told the press
late July 7, on his way to the Rada for a joint meeting with
Regions, that the Socialist Political Council had just
endorsed joining a "broad coalition," without defining what
that coalition would be.


3. (C) Comment: The political earthquake continues to rattle
Ukraine's political landscape late July 7; Our Ukraine and
BYuT were left flat-footed and stunned July 6, unable to
comprehend what was unfolding. A theoretical Our Ukraine
decision in the coming days to join a broad coalition could
lead Regions to drop the Communists in the Regions-led
coalition, significantly changing its makeup. Our Ukraine
should have seen Moroz' move coming, since he consistently
told them the Socialists would not support Poroshenko as
Speaker--as recently as the morning of July 6, when he
offered Socialists' support for anyone but Poroshenko.
Moroz' ambition to return as Speaker (he served as Speaker
from 1994-98) and desire to push his personal causes of
parliamentarism and political reform, combined with Regions'
money and wile and Our Ukraine's self-defeating support of
Poroshenko, ultimately made the difference. While many will
debate "who lost the orange coalition," Vinsky's first take -
assigning principal blame to Yushchenko and Moroz -- will
likely stand the test of time. End Comment and Summary

BYuT and OU outfoxed by Moroz and Regions
--------------


4. (SBU) Regions has been confident since the March 26
elections that no orange coalition would take office, despite
the June 22 establishment "Coalition of Democratic Forces"
formal Rada majority (reftel). With their 10 day blockade of
the Rada buying time, ensuring a sec-ret vote for Speaker,
and keeping the attention of Our Ukraine and BYuT distracted
on a complicated roundtable agreement between the majority
and the opposition, Regions took advantage of the personal
ambition of Socialist Leader Moroz and deep antipathy for OU
nominee for Speaker Petro Poroshenko to wreck the so-called
"Orange" coalition. After OU nominated Poroshenko as Speaker
and Regions nominated Mykola Azarov to stand against
Poroshenko, the Socialists held a mid-afternoon session July
6 to support common cause with Regions. With BYuT and Our
Ukraine worried that Azarov might secure the necessary 226
votes to be elected Speaker, the Socialists nominated Moroz
as well. OU then withdrew Poroshenko's name and begged the
Socialists to do likewise with Moroz. Regions and the
Communists threw their votes behind Moroz instead. In the
end, all 238 MPs who picked up ballots voted for Moroz,
including two MPs from OU, Zaplatinsky (former SPDU),and
Volkov (Ex-Soviet basketball gold medallist linked by the
media to RosUkrEnergo frontman Dmytro Firtash).


5. (C) The speed and deftness of the maneuvering late July 6
left well-informed members of Our Ukraine, BYuT, and the
media stunned, literally unable to comprehend what was

KIEV 00002651 002 OF 003


unfolding. At the Embassy's Independence Day reception,
Acting Foreign Minister Tarasyuk (a member of OU's Political
Council),BYuT MP and Tymoshenko foreign policy adviser
Hrihoriy Nemyria, and Yuliya Mostova, the country's leading
political journalist, all refused to believe at 2030 hours
that Regions and the Communists would vote in support of
Moroz less than an hour later, and that the vote would serve
as a prelude to a Regions-Socialist-Communist accommodation.
All felt Moroz' maneuver was aimed at knocking out
Poroshenko's candidacy, that Moroz and Azarov would split the
initial vote, and that the orange parties would have the
night to reconsider options. Tarasyuk somewhat sheepishly
acknowledged that Moroz had told them that morning that the
Socialists would support any OU nominee save Poroshenko, but
if OU insisted on tabling Poroshenko's name, the Socialists
would not support him. He added that in retrospect he was
surprised at how quickly Regions had unblocked the Rada that
morning. Tarasyuk and Nemyria both held out hope that even
if Moroz were to be elected with Regions/Communist support,
he might double-cross Regions on July 7 and return to the
orange camp rather than form a government with Regions. A
Moroz call to Tymoshenko later in the evening July 6
suggesting that he would still be willing to support her as
PM if BYuT and OU backed him as speaker--described by Nemyria
to Ambassador--bolstered such hopes.


6. (C) In contrast, Acting Interior Minister Yuri Lutsenko, a
member of the Socialist Party Political Council, had warned
Ambassador July 5 that a Socialist accommodation with Regions
and the Communists was under active consideration. Longtime
Moroz' staffer Olena Nikulina confirmed this possibility to
us July 5 and 6, telling us privately that she was absolutely
appalled at Moroz' ambition and willingness to destroy not
only the Coalition of Democratic Forces but the values the
Socialist Party stood for, all to achieve his desire to
return as Speaker. Nikulina had previously told us June 22,
just prior to the signing of the coalition document between
OU, BYuT, and the Socialists, that Moroz had told the
Socialist caucus earlier June 22 that if OU-BYuT-Socialists
did not conclude the coalition agreement that day, the
Socialists would cooperate with Regions. What seemed at the
time OBEd within 45 minutes now appears prescient in
hindsight.

Moroz as Speaker - plowing forward with Regions
-------------- --


7. (U) In his introductory remarks as Speaker late July 6,
Moroz suggested that the developments were not entirely
unexpected for him, drawing hisses from BYuT and OU MPs. He
stressed his desire to promote parliamentarism and ensure
political reform, his long-standing personal crusades. Moroz
opened his first session as Rada Speaker July 7 with
proposals on the table for the Rada to break until July 11
or, alternatively, to elect the two Deputy Rada Speakers.
While Regions was in favor of an immediate vote on deputy
speakers, the Rada eventually agreed to adjourn until July 11
to allow parties time to negotiate a new Rada majority and
coalition agreement.


8. (U) Within hours, Regions' deputy leader Kushnaryov
announced that the Regions' Political Council had approved
the formation of a new coalition based on the
Regions-Socialist-Communist bloc which had elected Moroz
Speaker and that Yanukovych would be Regions' nominee for PM.
Kushnaryov left the door open to "rational" elements of OU
or BYuT to join this new coalition, but said the
Regions-Socialists-Communists would hold a joint caucus at
the Rada late on July 7 to move forward. In his midnight
press conference denouncing Moroz as a traitor, Vinsky had
vowed to attempt to convince the Socialist Political Council
July 7 to stay true to its ideals and reject Moroz' deal with
Regions. Lutsenko, a member of the Socialists' ruling
council, told the press on his way into the meeting that he
supported Moroz as long as Moroz would support an orange
coalition, but that he would resign from the party and refuse
to serve in the next government if Moroz turned the party
into a puppet of the Donetsk clan. After the Socialist
Political Council broke up around 1700 local time, however,
Moroz told the press it had just endorsed joining a "broad
coalition," without defining what that coalition would be;
Moroz added that he was on his way to the Rada for the joint
meeting with Regions.

Other options?
--------------


9. (SBU) While outside commentators continued to express hope
early on July 7 that the orange coalition was not beyond
salvaging, the mood in the Rada starting from the July 6 vote

KIEV 00002651 003 OF 003


suggested the orange coalition was indeed dead. Kushnaryov
crowed about the end of the "orange horror" July 7. In her
comments from the floor, Tymoshenko claimed that the July 6
vote that had elected Moroz Speaker was unconstitutional
because the Socialists had not first formed a new coalition,
hopefully suggesting that Yushchenko might dissolve the Rada
as a result of the lack of a coalition. Moroz responded
tartly that Tymoshenko,s remarks made it sound like BYuT was
leaving the coalition formed June 22, which would give other
parties 30 days to form a new coalition (note: while there
are formal procedures to be followed to disband an
officially-registered Rada majority, they are simply
formalities).

Where was Yushchenko? Whither Our Ukraine?
--------------


10. (C) During the July 6 drama, President Yushchenko was in
Switzerland, unable to influence the rapid course of events;
Nemyria told us at the Embassy's Independence Day reception
that Tymoshenko had talked to Yushchenko by phone after the
coalition agreement with Regions over division of Rada
committees had been reached that morning. While we cannot
say with certainty why Yushchenko was absent, we know that
Yushchenko has made repeated unpublicized visits to
Switzerland for medical care related to his September 2004
dioxin poisoning. This would not be the first time Regions
took advantage of his absence to win a key vote in the Rada;
Regions worked with BYuT January 10 while Yushchenko was in
Kazakhstan to vote to dismiss the Yekhanurov-led government
over the January 4 gas deal with Russia. Even before the
votes were counted July 6, Regions MPs started a whisper
campaign that Yushchenko had blessed the Moroz-Regions
maneuver in an alleged meeting with Regions' financier
Akhmetov on the sidelines of Ukraine's June 30 World Cup
match in Hamburg, Germany. By the morning of July 7, even OU
and BYuT MPs were citing the alleged Yushchenko blessing to
us, without professing inside knowledge, a sign of the
disorientation within the orange camp. Yushchenko was back
in Kiev by mid-day July 7 to meet with Speaker Moroz at the
Presidential Secretariat, but hopes that the meeting might
lead to the salvaging of an orange coalition were dashed when
Moroz emerged after only ten minutes.


11. (C) Most of the speculation July 7 focused on what Our
Ukraine would do next. A party member told us that the OU
Caucus early July 7 was evenly split between those favoring
joining a "broad" coalition with Regions and those behind
going into orange opposition, reflecting well-known
preferences dating back to the March election. Socialist MP
Yaroslav Mendus, a close confidant of Moroz and fingered by
Vinsky as one of the backchannel negotiators with Regions,
predicted to us that BYuT would end up in opposition but that
component parties of OU would likely join the emerging broad
coalition one by one. Mendus speculated that the first would
be Anatoliy Kinakh,s Party of Industrialists and
Entrepreneurs (IEP); IEP held an emergency congress July 7,
also attended by acting PM Yekhanurov, long a proponent of a
broad coalition including Regions, and Presidential Chief of
Staff Oleh Rybachuk, but Kinakh afterwards cagily did not tip
his hand. Mendus suggested that, if OU joined with Regions
and the Socialists to form a broad coalition, the Communists
would not be included (note: there is long-standing animosity
between the Communists and Socialists, and Regions'
billionaire barons would rather work in government with OU's
millionaires than with the Communists). At the end of July
7, formal moves to create a Regions-Socialists-Communist
coalition notwithstanding, most observers expected a
Regions-Socialist-partial Our Ukraine broad coalition
eventually to emerge, with Tymoshenko and the Communists in
the opposition.


12. (U) Visit Embassy Kiev's classified website at:
www.state.sgov.gov/p/eur/kiev.
Taylor