UKRAINE: LAND, POWER, AND CRIMINALITY IN CRIMEA

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 004558

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/14/2016
TAGS: PGOV ECON PREL PHUM UP
SUBJECT: UKRAINE: LAND, POWER, AND CRIMINALITY IN CRIMEA

REF: KYIV 4489

Classified By: Ambassador, reason 1.4 (b,d)


1. (C) Summary. Land issues dominate the Autonomous Republic
of Crimea's local agenda, according to a wide range of
Crimean officials, journalists, and community leaders we
talked to November 20-22 in the Crimean capitol of
Simferopol, the separately administered city of Sevastopol,
and Bakhchiserai, the former Crimean Khanate capital and a
flash point for land-related interethnic conflict. Land
politics in turn are intertwined with questions of who
asserts authority from within national and local structures;
dozens of figures with known criminal backgrounds were
elected to local office in the March 26 elections. A new
squatter movement, initiated by Crimean Tatars in the
immediate wake of these elections, now includes "Slavic"
residents frustrated at long delays in apartment and land
allocation while the rich and criminally connected secure
choice parcels of land through other means. Local
pro-Russian forces have tried to make political hay by
condemning the squatter actions as the latest example of the
"Tatar threat" to Slavic Crimea, inflaming interethnic
tensions in spite of good personal relations between most
Tatar and Slavic Crimeans. The single biggest steps which
could help stabilize Crimea's political, economic, and social
situation would be completion of a land registry and sale of
land via auction rather than nontransparent transfers. Note:
Reftel explored the external dimension of Crimean
developments, specifically the multifaceted Russia factor.
End Summary and Comment.

It's mainly about Land
--------------


2. (SBU) Since Crimea's most prized asset is the
Mediterranean climate of its south shore, which draws an
estimated seven million tourists annually, it should come as
no surprise that land -- ownership, access, and sale -- is
the hottest issue in Crimea. There is both an economic
component and a sharply socio-political one, since an
estimated 300,000 Crimean Tatars have returned from exile in
Central Asia since 1990 without any legal mechanism or hopes
to lay claim to the properties their families controlled
until they were deported en masse in May 1944. There is also
a foreign policy angle, with Ukraine and Russia still
struggling over control of the considerable land assets
formerly belonging to the Soviet Black Sea Fleet, not only in
Sevastopol but across Crimea, with Ukraine maintaining that
Russia should transfer control of many properties (like
lighthouses) not specifically listed in the 1997 agreement
for Russian use through 2017 and that the Russian BSF should
stop sub-leasing facilities to commercial ventures.


3. (SBU) The Ukrainian land code places local councils in
charge of making decisions to grant communally- or
state-owned land for permanent use, lease, or sale. Crimea
still lacks a land cadaster (registry),as a 2005 effort to
set up one initiated after the Orange Revolution collapsed in
the face of local opposition; National Security and Defense
Council Department Head Oleksandr Lytvynenko told us December
1 that only 4.7 percent of Crimea's most valuable south shore
land is inventoried. The lack of a unified registry creates
freedom of action for local councils and those in a position
to benefit from opaque transactions, particularly relatives,
the wealthy, and criminals, according to Crimean journalists.
While certain categories of residents and returnees have
theoretical legal rights to land/apartments, and land sales
are meant to be conducted via open auction, the reality is
quite different: multi-year waits for apartments, few
auctions, and opaque giveaways to the rich and connected,
with land scandals a regular feature of the Crimean news.


4. (SBU) The local headlines during our November 20-22 visit
focused on a scandal in Alupka, the south shore town which
hosts the famous Vorontsovsky Palace. Local authorities sold
six hectares from a national children's sanitarium which
provides long-term treatment for pediatric tuberculosis
cases; the estimated value of the land was between $6-8
million, with a standard 1/100th of a hectare slice going for
$10-14,500. The young TB patients now face years of
construction dust and the loss of nearly all outdoor
play/garden space, undermining the primary purpose of the
sanitarium. Meanwhile in KYIV, the police arrested Russian
businessman Maksim Kurochkin upon his arrival November 20
from Moscow; Kurochkin had fled arrest warrants issued after
the Orange Revolution for his efforts to acquire, through
armed threats, control of hundreds of acres of a protected
nature reserve around Yalta. (Note: Kurochkin had formed the
infamous "Russia Club" of businessmen, a pseudo think tank
that openly supported the Kremlin,s agenda in Ukraine in the

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2004 Presidential campaign).

Illegal Acquisition: Dereban, Raiderstvo, Samozakhvata
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5. (SBU) Crimean Tatar returnees understood early on that
they would not be able to reacquire the valuable south shore
properties they and their parents owned through 1944.
However, the ease with which connected insiders like Russian
Ambassador to Ukraine Viktor Chernomyrdin and Russian
billionaire Aleksander Lebedev snap up beachfront properties
in places like Alushta, the south shore's second city after
Yalta (the pair co-own Alushta's swank new "Morye" resort as
well as several other prominent properties),while Tatars
wait for years for allocations in much less favorable parts
of Crimea, is a source of constant irritation. (Embassy
note: Lebedev, during a recent visit to KYIV, told the DCM
that then-President Kuchma had arranged for the grant of the
land, implying that he had very little to do with its
acquisition. End note.)


6. (SBU) The process of acquiring/stealing state
property/resources is known in Russian as "Dereban" - the key
to understanding how Crimea operates, said many observers.
When former PM Tymoshenko made headlines in early 2005 by
suggesting a review of 3000 Kuchma-era privatizations, the
vast majority were not enterprises but instead these sort of
Crimea insider land-deals. At the time, former General
Prosecutor Piskun told us that many involved land from nature
reserves. A companion action by those with muscle and legal
connections is "raiderstvo" - taking over property or land
owned by someone else through a combination of physical force
and after the fact rulings by sympathetic/bought courts. The
Crimean prosecutor's office accused local Cossack unions of
being involved in these "raiderstvo" attacks on companies and
enterprises throughout the peninsula.


7. (SBU) Cut out of the property grab and denied orderly
distribution, Tatars launched a concerted land grab effort
March 27, the day after local elections, using the one
mechanism available to the disenfranchised: squatter actions
("samozakhvata"). Echoing a similar campaign in the early
1990s involving 150,000 squatters in 300 locations, Tatars
began building simple one-room sandstone block huts in fields
around Simferopol, Bakhchiserai, and other cities, a total of
56 sites in all, according to Crimea's leading journalist,
Liliya Budzhurova of Pervaya Krymska. As the squatter sites
proliferated, ethnic Slavs fed up with the long waits for
apartments and outraged at "dereban" joined the movement. An
estimated 15,000 squatter huts have gone up in the past eight
months, and squatters have become the main issue discussed in
Crimean media and political circles.


8. (SBU) While ownership of the underlying land remains in
dispute, the shacks are considered private property under
Crimean law and cannot be simply destroyed without
compensation. Another legal loophole allows squatters the
right to privatize the land after a certain period of
occupation/use. Budzhurova told of a recent televised
roundtable on the squatter issue which she initially feared
would become a platform for anti-Tatar sentiment, but the
program's discussion highlighted the Slavic squatters as
well. The unscientific phone-in poll of those watching
favored privatization in favor of the squatters rather than
forced confiscation. Referencing the eventual settlement of
the 1990s squatter wave, Budzhurova predicted: "Crimea will
live through this phase as well."

Using Land to Provoke Interethnic Conflict
--------------


9. (SBU) Echoing the results of the TV roundtable, many
observers said that personal relations between local Tatar
and Slavic residents continued to be good, even as political
rhetoric heated up. Crimean Tatar communal leader Mustafa
Jemilev and Nadir Bekir, a Tatar community activist and
Jemilev critic, both accused Russian Bloc leader Oleh
Radyvilov of turning an economic conflict over the location
of a Bakhchiserai open air market into a political one.
Radyvilov controlled revenues from a market located on an
historic Tatar cemetery, resisted court orders to move the
market, and sent in nearly 500 Russians associated with the
Russian Bloc and affiliated organizations like the Crimean
Cossack Union August 12 to assault Tatars gathered at the
cemetery site. The serious violence finally forced central
authorities to move the market, but Radyvilov apparently
retained control of market revenues at the new site and
gained a PR tool for use in future recruiting, charged Bekir.


10. (SBU) Pro-Russian groups--such as the Russian Bloc,
Proryv, and Eurasian Youth Union (ref A)--who seek to stir up

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anti-Tatar sentiment for a variety of political goals have
tried to exploit the squatter situation. Radyvilov has
publicly threatened to use his "Bakhchiserai methods" at all
locations where Tatars resort to squatting, noted Budzhurova.
The EYU called in Crimean TV to film their threat to burn
out all squatters within a week, added Yunusov. Communist MP
Hrach drafted a law that would criminalize squatting, leading
to Tatar fears of mass arrests, said Jemilev. Two Russian
community activists with only a localized agenda, Serhiy
Shuvainikov and Syvatoslav Kompaniyets, separately told us
that ethnic Russians needed to take stronger actions to
defend their rights against the "Tatars'" squatter
initiative, overlooking the Slavic participants in the
movement. The anti-squatting attention is misdirected,
according to Maidan-Krym's Yan Sinitsyn, who claimed that
there is more coverage of Proryv and EYU PR stunts
threatening to smash squatter huts than of greater "dereban"
outrages in which connected insiders steal hundreds of
hectares of far more valuable land.


11. (SBU) Pro-Russian forces attempt to maintain a constant
level of interethnic tension for political reasons, claimed
Bakhchiserai Tatar community leader Ahtem Chiygoz. As soon
as the Bakhchiserai cemetery/market conflict was resolved, a
new one popped up several kilometers away: the Moscow
Patriarchate-controlled Uspenski Monastery used a dubious
court ruling giving it control of communal land to try to
limit access on the narrow valley path that runs from the
Bakhchiserai Khan's Palace, one of Crimea's major tourist
draws, past the Monastery to a nearby former madreseh and the
abandoned cliff city of Chufut Kale. This new conflict came
on the heels of the resolution of Moscow Patriarchate efforts
to build a new cathedral on top of a different Tatar
cemetery. Local leaders finally agreed to build the church
on the next hilltop, thanks to intervention by Hennadiy
Moskal, Yushchenko's representative in Crimea. "The struggle
never ends," complained Chiygoz.

Who's in Control? (No one, really)
--------------


12. (SBU) The weakening of central authority and KYIV's
inability to impose order in Crimea was a common complaint
from everyone we talked to, including Moskal himself, who
received universally high marks from others for his
effectiveness in defusing conflict through informal
interventions. NSDC's Lytvynenko stated that only 18 percent
of the taskings in the first systemic Crimea-related NSDC
decision, endorsed by Presidential decree in February, had
been implemented, leading to a second NSDC document approved
in October. The vacuum has only partly been filled by
Crimea's own authorities, particularly after the March 26
elections brought a new group into the Crimean parliament
with dubious pasts (below) and an agenda not focused on
governance. That left local councils to act in their own
base interests, everyone agreed.


13. (SBU) Even when there was an effort to forge some
compromise on contested issues like land allocation--Jemilev
told us he and Grytsenko had been working together for a
peaceful resolution to the squatter situation--local councils
sabotaged Grytsenko's efforts. Radio Liberty's Volodymyr
Prytula suggested Crimea's current power pecking order ran as
follows: Anatoliy Grytsenko, Crimean Rada Speaker and head of
Party of Regions' Crimean branch; Aleksandr Melnyk, head of a
known criminal gang (below); and newcomers from Donetsk, with
Anton Prigordskiy, Crimean Rada MP, in charge of Crimea for
Regions' financier Rinat Akhmetov.

Reemergence of Criminal Figures from the Past
--------------


14. (SBU) Former Interior Minister Yuri Lutsenko attracted
headlines February 17 when he held a "public interest" press
conference to name names of dozens of candidates running for
the Crimean parliament who had "problems with the law"; the
total number of ex-cons and those suspected of criminal
connections ranged into the hundreds if local council races
were included. Leading this dubious honor roll, as it were,
was the "Za Soyuz" party (For Union - with Russia),Party of
Regions, which chose to run jointly with the "Russian Bloc"
party, and Kunitsyn's Bloc. When Crimea's leading
journalist, Liliya Budzhurova, published "Lutsenko's list" in
the February 24 edition of her "Pervaya Krymska" paper, the
reaction of one of them turned personal. Budzhurova's house
was firebombed the night of March 1 (fortunately, her elderly
mother saw the flames, which were extinguished before the
house burned down).


15. (C) Moskal, whom observers credit with ending rampant
criminality in Crimea via a "get tough" campaign in 1997-98,

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blamed the reemergence of known criminals squarely on
Regions' shoulders, along with the blocs of Kunitsyn and
Vitrenko, noting that they had knowingly included many
figures with criminal pasts on their Crimea election lists.
Moskal claimed that Grytsenko had taken money from Aleksandr
Melnyk and Ihor Lukashev, two of Crimea's top organized
criminals, for their inclusion on the party list. However,
he added that it had been National Rada members from Regions,
not Crimean Rada MPs, who had lobbied for Melnyk to be
released from custody under a travel ban after his September
29 arrest; Melnyk immediately fled back to Moscow.


16. (SBU) For her part, Budzhurova blamed Crimea's voters.
"We published the names of criminals running for office, but
the voters chose their blocs anyway." (Note: of 100 seats in
the Crimean Rada, the "For Yanukovych" Bloc holds 44,
Kunitsyn's Bloc 12, and Za Soyuz 10). Prytula said that
conversations about the most influential criminals in Crimea
who had gained office in March focused around three
individuals: Melnyk (Regions),Lukashev (Regions),and Ruvim
Aronov (Kunitsyn Bloc). Prytula stressed that such Crimean
criminals were fundamentally different than in the 1990s:
then, they were sportsuit-wearing, pistol-wielding "bandits"
who gave Crimea a reputation as the "Ukrainian Sicily" and
ended up in jail, shot, or going to ground; now they had
moved into mainly above-board businesses, as well as local
government.

Melnyk, Lukashev, Aronov : Worst of a Bad Lot
--------------


17. (C) Lutsenko told Ambassador November 17 that he had been
shocked that the General Prosecutor's Office (GPO) had
refused to file charges against Melnyk, who in the 1990s had
led the "Seilem" gang responsible for 52 contract murders,
including: one journalist; two policemen; 30 businessmen;
and 15 OC competitors. Ukrainian authorities had lured
Melnyk from Moscow back to Ukraine this fall after a
journalist wrote an article suggesting Melnyk was afraid of
Lutsenko. Melnyk was arrested upon arrival, but after GPO
non-action and Melnyk's release October 3, he fled back to
Moscow. Lutsenko alleged Melnyk was behind the March 1
firebomb attempt of Budzhurova's house. Melnyk's sister
Svetlana Verba served as Crimea's Economics Minister, noted
Prytula. And Ihor Lukashev, who chaired the Crimean Rada
budget committee, is known as the "wallet" of Melnyk's
"Seilem" gang.


18. (SBU) Rounding out the top three, Ruvim Aronov is
currently on the lam in Israel. Deputy Interior Minister
Yevdokimov told reporters August 15 that Aronov was one of
the leaders of the "Bashmaki" gang active between 1991-2005
in Crimea, Zaporizhzhya, Kharkiv, and KYIV. The gang has
been implicated in 50 murders and eight abductions.

Lutsenko: Resurgent Criminality to be expected
-------------- -


19. (C) Note: Prior to his dismissal December 1, Lutsenko
argued to the Ambassador that there had been a resurgence in
organized criminal activity in Ukraine overall since August,
when Regions returned to power, after 18 months of calm under
two orange governments. In his view, the police and Interior
Ministry were now at war with the PGO, led by Donbas native
Medvedko, over the PGO's refusal to prosecute known criminals
such as Melnyk and Kuchma-era heavyweight Volodymyr
Shcherban, who had returned to Ukraine in November after a
voluntary departure from the U.S. "The PGO refusal to
prosecute the likes of Shcherban and Melnyk was a green light
to criminals that they could come back and operate in Ukraine
with near impunity, able to cut a deal after the fact with
authorities," Lutsenko charged.


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