C O N F I D E N T I A L SECTION 01 OF 02 KIEV 000400

SIPDIS

E.O. 12958: DECL: 01/31/2016
TAGS: PGOV KDEM UP
SUBJECT: UKRAINE: PRESIDENTIAL ADVISER SEES POSSIBILITIES
IN PARTY OF REGIONS


Classified By: Political Counselor Aubrey Carlson for reasons 1.4(b,d)


1. (C) Summary: During a January 31 conversation with
visiting Project for Transitional Democracies President Bruce
Jackson and PolOff, Presidential Security Policy Adviser and
National Security Institute Chairman Volodymyr Horbulin said
the electoral list of ex-PM Yanukovych's Party of Regions,
most notable for its inclusion of criminal and anti-democracy
figures, also included progressive businessmen who wanted the
party to become more modern and democratic. Horbulin
predicted that Party of Regions' would maintain its lead in
the polls (25-30% support, compared to 15% each for the
parties of President Yushchenko and ex-PM Tymoshenko) through
election day (March 26). End summary.

A Changing Party of Regions
--------------


2. (C) Presidential advisor and eminence grise of the
Ukraine's strategic thinking set who also served President
Yushchenko's predecessor, Horbulin said the Party of Regions
was, first and foremost, a regional bloc that represented the
large enterprises and financial structures of the Donbas
region (note: Donetsk and Luhansk oblasts). To an extent,
the party also united the coalmining regions of Ukraine by
drawing support as well from neighboring oblasts Zaporizhzhya
and Dnipropetrovsk. The party of former PM and losing
presidential candidate Viktor Yanukovych was united, had
decided not to join other opposition forces, and enjoyed deep
pockets, being largely financed by billionaire Donetsk boss
Rinat Akhmetov.


3. (C) Party of Regions, Horbulin claimed, had appropriated
tactics for the 2006 parliamentary (Rada) campaign that had
served then-opposition candidate Yushchenko well during the
2004 presidential election campaign. Regions was claiming
that the government in power had promised much, but delivered
nothing. The party was saying that, if its candidates were
elected, it would deliver. Acknowledging that he might be a
"great optimist," Horbulin added that, while Party of Regions
included some "pure criminals," it was not just a collection
of corrupt individuals. The party's Rada electoral list
included several strong directors of former Soviet

enterprises, such as Vyacheslav Bohuslayev, chairman of
Zaporizhzhya-based Motor Sich, which produces aircraft and
helicopter engines. Another such person was Heorhiy Skudar,
one of the owners of the Novokramatorsk Engineering Works.
Concluding that the list was an interesting mixture, Horbulin
said he personally knew about 50 of the first 100 on Party of
Regions' electoral list. Of the 50, he felt that half wanted
Party of Regions to be a modern and democratic party. While
they were reluctant to surrender the favorable business
conditions that first provided their wealth, they also
understood the times were changing.

The Race is On
--------------


4. (C) In reply to Jackson's question, Horbulin said that,
while approval ratings would fluctuate in the two months
before the March 26 parliamentary elections, one result was
definite -- no single party would be able to claim a ruling
majority. Party of Regions enjoyed the highest ratings now
for two reasons. First, Party of Regions had gathered
together much of the political opposition to President
Yushchenko during the disputed 2004 presidential campaign.
Second, public disappointment over first the Tymoshenko
Cabinet's performance and now Yekhanurov's Cabinet had been
mounting over the past year. The September dismissal of
Tymoshenko had seen a rise in Party of Regions' ratings,
evidence that Party of Regions had been buoyed by evidence of
a split in the "Orange team."


5. (C) The natural gas dispute with Russia, however, had
brought down Party of Regions' popularity ratings, Horbulin
continued. In the latest polls, Party of Regions' ratings
were around 25 percent, down from 30 percent earlier. The
ratings of Yushchenko's People's Union Our Ukraine (PUOU), on
the other hand, had gone up from around 15 percent to as high
as 20. This blip did not necessarily constitute a trend,
Horbulin noted.


6. (C) Horbulin said PUOU and Bloc Yuliya Tymoshenko (BYuT)
would each garner a minimum of 15 percent and a maximum of 20
percent of votes in the parliamentary election, coming in
second and third to Party of Regions. The Socialist and
Communist parties would come in fourth and fifth places, but
neither party would get more than 7-8 percent of the vote.
The remaining bloc that would definitely get over the three
percent threshold to enter parliament was Ne Tak, based on
the Social Democratic Party of Ukraine (united) of former
President Kravchuk, former presidential chief of staff
Medvedchuk, and oligarch MP Surkis. Other parties that might
get into parliament were Rada Speaker Lytvyn's bloc, the
Pora-Reforms and Order bloc and Nataliya Vitrenko's
Progressive Socialist Party. (Note: A former National
Security and Defense Council Secretary and perhaps Ukraine's
foremost strategic thinker, Horbulin has in the past proved
an astute and relatively neutral observer of domestic
politics as well. His is the first confident prediction we
have heard that Ne Tak/SDPU(o) would get over the 3%
threshold.)


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