C O N F I D E N T I A L SECTION 01 OF 03 KIEV 000641

SIPDIS

E.O. 12958: DECL: 02/16/2016
TAGS: PGOV PINR ECON
SUBJECT: UKRAINE: REGIONS' BOSS YANUKOVYCH ON WTO, ELECTION
POLITICS

REF: KIEV 610

Classified By: Ambassador for reasons 1.4 (b) and (d).

Summary
--------------


1. (C) Party of Regions' leader Viktor Yanukovych told
Ambassador on February 15 that Ukraine had to coordinate
its WTO entry with Russia and said that President
Yushchenko would be making a "huge mistake" if he formed an
"Orange Coalition" with ex-PM Yuliya Tymoshenko before or
after the March parliamentary elections. Such a coalition,
Yanukovych asserted, would divide Ukraine, empower the
charismatic Tymoshenko, and turn Yushchenko into a lame
duck. Yanukovych acknowledged that Regions was conducting
separate talks with both the Tymoshenko and Yushchenko
camps about forming an "Orange/Blue" coalition. He
complained, though, that discussions with Yushchenko's team
were being complicated by what he alleged was the
continuing "repression" of his supporters. In particular,
separatism charges against former Kharkiv Governor Yevhen
Kushnaryov and Luhansk Oblast Council Chief Viktor Tykhonov
were a needless thumb in Regions' eye. In a follow-on
conversation with Ambassador, Presidential Chief of Staff
Oleh Rybachuk said he would not be surprised if, "in
certain areas," Yushchenko supporters were going after
Regions officials. Rybachuk denied, though, that there had
been any "instructions from the top." Separately, former
Ukrainian Foreign Minister Hryshchenko, running as part of
the SPDU(o)-led Ne Tak! bloc, told Ambassador on February
16 that former National Security and Defense Council Chief
Petro Poroshenko had recently visited Donetsk and urged
local officials to "resume cases" against Regions
politicians. Hryshchenko claimed that Poroshenko appeared
to be working hard to scuttle a possible deal between
Yushchenko and Yanukovych, because such a coalition would
likely freeze out the disgraced oligarch. End summary.

Proffesor Yanukovych on WTO...
--------------


2. (C) During a February 15 meeting that covered a range of
issues (reftel), Party of Regions leader Viktor Yanukovych
stressed to Ambassador that Ukraine's entry into the WTO

had to be coordinated with Russia; a lack of coordination
with Moscow would be "dangerous," he claimed, given that
"35 percent" of Ukraine's exports went to Russia. (Note:
According to official 2005 statistics, 21.9 percent of
Ukraine's goods exports went to Russia. This reality
undermines much of Yanukovych's argument. End note.) The
Kuchma-era prime minister incongruously added that if
Ukraine did not "defend its interests" during the WTO
accession process, it would "end up like Poland."
Ambassador noted that replicating Poland's economic
progress during the past 5-10 years would be a major
accomplishment for Ukraine; Yanukovych had no reply.
(Comment: This conversation did not shed positive light on
Yanukovych's grasp of WTO entry issues or the benefits of
membership to the Ukrainian economy. See septel. We will
address WTO questions to other Regions MPs. End comment.)

...An "Orange Coalition"...
--------------


3. (C) Shifting from economics to politics, Yanukovych said
he was closely following reports that People's Union/Our
Ukraine (PUOU) would soon form an "Orange Coalition" for
the March parliamentary elections. He ticked off several
reasons why such a coalition would be "a huge mistake,"
largely rehashing arguments he has made since the
the final Presidential debate before the December 26
re-vote, when he pitched Yushchenko to strike a deal with
him and make Yanukovych PM:

-- The eastern and southern regions of Ukraine would reject
Yushchenko, in effect making him President of only a part
of Ukraine;

-- Such a coalition would mean that Yuliya Tymoshenko would
be the next prime minister, triggering "fierce resistance"
in the east and south; and,

-- Tymoshenko serving as prime minister again would make
her the favorite to win the presidency in 2009 and quickly
turn Yushchenko into a lame duck.


4. (C) Yanukovych acknowledged, though, that -- despite
public proclamations that they would not form a coalition
with Regions -- both PUOU and Tymoshenko were quietly
talking to Regions about doing just that. Yanukovych added
that, with support from Regions, President Yushchenko
"would not need Tymoshenko" and would likely be re-elected
in 2009.
...Alleged Repression...
--------------


5. (C) The ex-PM complained that Regions' coalition talks
with PUOU were being complicated by what he called the
continuing "repression" of Regions supporters by the
government. He claimed, for example, that former Kharkiv
Governor Yevhen Kushnaryov and former Luhansk Oblast
Council Chief Viktor Tykhonov were being prosecuted for
separatism (note: based on their fiery calls at the
November 28, 2004 Severodonetsk congress). Yanukovych
explained that the court actions against them seemed
pointless, as both were oblast council members and enjoyed
immunity; they were slated to stand trial well after the
elections in any event (note: they are numbers 10 and 8
respectively on Regions' party list and thus shoo-ins to
have Rada MP immunity. End note). The charges, he
suggested, seemed to be a needless thumb in the eye.


6. (C) Pressed for more examples of "repression,"
Yanukovych claimed that Minister of Education Nikolayenko
was orchestrating a campaign of pressure on college
students who openly supported Regions candidates. It was
"ridiculous" for the government to resort to such tactics,
he groused. (Comment: Embassy contacts in the education
community report no such pressure on students. Moreover,
and in contrast, IRI related to us that the one known
egregious case of administrative pressure is coming from
Regions MP Anatoliy Kukoba, the de facto mayor of Poltava,
who is preventing the registration of any candidates for
the town council that do not have his personal approval.
End comment.)

And "Vengeance"
--------------


7. (C) Yanukovych asserted that he was doing all he could
to keep "his people" from going public with their concerns
and attacking the Yushchenko administration. He related
that, just before meeting with Ambassador, a group of
Regions supporters had come to his office with alleged
proof of government instructions to "go after" Regions
officials. Yanukovych said he had warned Yushchenko that
Regions supporters were being "oppressed, insulted, and
would take vengeance" on the government. The former prime
minister also said that he had personally muzzled former
Prosecutor General Piskun, Number 97 on the Regions party
list, who was itching to go public with allegations that
Yushchenko had used the Prosecutor General's Office (PGO)
to attack his political opponents. Yanukovych explained
that Piskun had been taken in by Regions in order to keep
him from joining Tymoshenko's bloc and helping Yuliya
undercut Yushchenko. Yanukovych acknowledged Ambassador's
points about the need to rein in Regions' supporters
post-election, and that a failure to do so would further
tarnish Regions' reputation in major western capitals.
Yanukovych added, though, that he was "not certain he could
control people."

Checking the Allegations
--------------


8. (C) Following the conversation with Yanukovych,
Ambassador spoke with Presidential Chief of Staff Oleh
Rybachuk about the allegations of "repression" against
Regions supporters. Rybachuk said that he would not be
surprised if, "in certain areas," people were going after
their political opponents. He denied, though, that there
had been any "instructions from the top" to target
Yanukovych's people. Rybachuk offered to look into
specific examples of alleged political persecution;
Ambassador urged him to talk directly to Yanukovych.


9. (C) During a February 16 breakfast meeting with
Ambassador, former Ukrainian Foreign Minister and deputy
head of the Ukrainian Republican Party Kostyantyn
Hryshchenko asserted that former National Security and
Defense Council Chief Petro Poroshenko had recently visited
Donetsk and urged Interior Ministry and PGO officials to
"resume cases against Regions officials." Hryshchenko
offered that Poroshenko appeared to be stirring up trouble
in order to kill any possibility of a Yushchenko/Yanukovych
coalition, because such an arrangement would likely leave
no significant role for the disgraced oligarch. (Note:
Hryshchenko's party leader is Yuri Boyko, ex-Naftohaz Chief
and allegedly a listed Ukrainian partner in RosUkrEnergo's
founding documents. They are contesting the elections as
part of the SPDU(o)-led Ne Tak Bloc, running on an
anti-NATO, pro-Russian language, pro-Single Economic Space
with Russia, Belarus, and Kazakhstan platform).

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

HERBST