C O N F I D E N T I A L SECTION 01 OF 02 KIEV 000471

SIPDIS

E.O. 12958: DECL: 02/03/2016
TAGS: PGOV
SUBJECT: UKRAINE: MOROSE MOROZ: SOCIALIST LEADER UNHAPPY
OVER GAS DEAL, YUSHCHENKO, TYMOSHENKO

REF: KIEV 367

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


1. (C) Summary: Socialist Party Leader Olexander Moroz
vented frustration with the gas deal with Russia, President
Yushchenko, ex-PM Yuliya Tymoshenko, and a perceived lack of
recent U.S. attention to the Socialist Party February 1 to
Bruce Jackson, President, Project for Transitional
Democracies and poloff. Moroz said he was being hammered on
the campaign trail for still being "with the President."
While Yushchenko defended a gas deal perceived to be against
Ukrainian interests; political allies had scant talking
points to defend the Government of Ukraine's (GOU) position
to skeptical voters. Moroz suggested the Socialist Party
painted a more balanced picture of developments in Ukraine
than did other political forces, and asked that U.S.
interlocutors encourage Tymoshenko to be more of a team
player. End summary.

Emotional Moroz blasts gas deal
--------------


2. (C) A clearly unhappy Socialist Party (SPU) leader
Oleksandr Moroz blasted the GOU handling of the gas crisis
and the resulting deals with Russia, said he was appalled at
the GOU decisions taken, and emphasized that Ukraine had
other options, even though filing an appeal at the Stockholm
Court of Arbitration would have taken too much time in the
dead of a cold winter. Moroz expressed particular irritation
at President Yushchenko's constant public statements that
everything was okay with the deal when it seemed clear that
the deal hurt Ukrainian national interests. Moroz expressed
sadness as well, because the handling of the contracts
clearly signaled that those who had signed off on the deal
had their personal interests in mind. Moroz could not fathom
why Yushchenko had said Ukraine had won, when it seemed clear
that Russia had stuck to its position and Ukraine had given
in.


3. (C) Moroz sought suggestions about how to neutralize a bad
situation. Jackson offered two pieces of advice for anyone
in trouble: seek experienced legal counsel, and talk to your
friends and allies, explaining honestly what had happened.
Jackson stressed that the January 4 MOU appeared to threaten
overall European interests, not just Ukraine's. Moroz

complained that Europeans seemed too afraid of their own
equities and vulnerabilities vis-a-vis Russia to stand up and
initiate a frank dialogue with Moscow; they offered moral
support to Ukraine but would do nothing. Moroz would be in
Brussels February 7-8 for a conference of European Socialist
and Social Democratic parties; although he had been invited
to brief them on the political situation in Ukraine, he
expected Russia and the gas deal to dominate the
conversation. (Note: The SPU became a full member of the
Socialist International January 31 after ten years of
participation, the last four as an associate member.)

Gas deal and loyalty to Yushchenko hurt on the stump
-------------- --------------


4. (C) Apologizing for sounding emotional, Moroz explained
that he had just come from yet another meeting in which he
had been hammered over the gas deal and the Socialists'
support of it, via support of Yushchenko and the government.
Moroz said that criticism of the deal and support of the GOU
position had dominated public reaction at his recent campaign
appearances, and he predicted the Socialist Party would pay a
price on election day, particularly in eastern Ukraine. "By
signing a bad deal, the government has given a trump card to
our opponents," he lamented. There were few talking points
to defend the deal, beyond a switch to cash payments and a
modestly higher transit fee, neither of which had much affect
on the average voter.


5. (C) Moroz asked if U.S. interlocutors could influence
Tymoshenko to tone down her criticism of the deal and of
Yushchenko. He accused her of fueling the sense of scandal
to further her personal ambitions and added, "she is
destroying the Maidan coalition." (Note: Moroz and his
party supported Yushchenko in the second and repeat rounds of
the 2004 presidential election, and were a constant Maidan
presence, but he maintains publicly that he was never part of
the Orange Yushchenko-Tymoshenko team. A desire to defeat
the Kuchma-backed candidate was the prime motivation, but
Moroz also sought, and received, from the Orange alliance a
promise to support constitutional reform as well as a few
ministerial slots for his party cohort. Moroz continues to
preserve his and his party's quasi-independence, despite
their participation in government, by running separately in
the March 2006 parliamentary elections. On February 1, he
rejected the recent Our Ukraine-proposed coalition pact
(reftel), but left open the possibility of cooperating after
the elections.)
Socialists can provide fuller picture
--------------


6. (C) Moroz offered that he and his party leadership could
provide U.S interlocutors a full understanding of the
dynamics in Ukraine. Note: Socialist Minister of Interior
Yuri Lutsenko will be in Washington for meetings with U.S.
officials February 8-9.


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