UKRAINE: ONE VICTOR? CABINET OF MINISTERS LAW

C O N F I D E N T I A L SECTION 01 OF 05 KYIV 000135

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/19/2017
TAGS: PGOV PREL UP
SUBJECT: UKRAINE: ONE VICTOR? CABINET OF MINISTERS LAW
POISED TO REALIGN UKRAINIAN POLITICAL DYNAMICS

REF: A. KYIV 89

B. 06 KYIV 4681

C. 06 KYIV 4355

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


1. (C) Summary. A landmark Cabinet of Ministers law passed
January 12 via a presidential veto override (ref A) will
remake the Ukrainian political landscape once it comes into
effect, although President Yushchenko cited a technicality to
issue a renewed veto January 19 and returned the bill to the
Rada with his suggestions, already twice ignored by the
ruling coalition. Yushchenko told Ambassador January 19 that
he was furious with Yanukovych for breaking their January 10
agreement to work together but felt he had secured
Yanukovych's agreement to cooperate on changes at an
emergency January 18 session of the National Security and
Defense Council (NSDC). The CabMin law greatly empowers the
premier, further marginalizes the presidency, and, in tandem
with a new draft law on the opposition, promises a shift of
the "balancing force" in Ukrainian politics away from the
President and towards the opposition in the Rada
(parliament). The law also spells the effective end of FM
Tarasyuk's lonely campaign to stay in office, with a new
Foreign Minister almost certain to emerge in early February,
in spite of President Yushchenko's statements to the
contrary. Opposition leader Yuliya Tymoshenko claims she
joined the coalition majority for the veto override as a
tactical move in a greater strategy involving potential
Constitutional Court and Presidential decisions that could
overturn political reform in the courts and dismiss the Rada
for early elections. Regions MPs claim an alleged
politicization of the Security Service of Ukraine (SBU)
played a role in the sudden reversal of Yanukovych's stated
intent to pursue cooperation with Yushchenko, although
Yushchenko and Tymoshenko both suggested Yanukovych reached
out to Tymoshenko to maximize Regions' political gain. The
future direction of the SBU and law enforcement reform is one
of many open questions for Ukraine's 2007 political calendar
regardless.


2. (C) Comment: Yanukovych was significantly strengthened
January 12 by passage of the Regions-drafted Cabinet of
Ministers law without any compromise with Yushchenko's dozens
of concerns/amendments that would make the bill acceptable to
to the president's team. It is unclear as of January 19
whether an apparent Rada clerical error might give Yushchenko
an opening to claw back ground. There was no immediate
reaction by the PM to Yushchenko's renewed veto January 19,
because all major figures had travelled to Kharkiv for the
funeral of deputy Regions' leader Yevhen Kushnariov, but
Speaker Moroz alleged in a letter to the presidential
secretariat that Yushchenko had no right to veto it again.

SIPDIS
Since Our Ukraine (OU),the Tymoshenko Bloc (BYuT) and Moroz'
Socialists seemed poised in June 2006 to form a "Coalition of
Democratic Forces," in the span of a short seven months,
Yanukovych and Regions masterfully took advantage of the
desires and weaknesses of first Moroz, then Yushchenko, and
now Tymoshenko to achieve their goal of consolidating power
in a Regions'-led government. The USG needs to be thinking
mid-term, through the 2011 parliamentary elections, on how
best to engage Ukrainian leaders, on how to keep them looking
and moving westward. Yanukovych more than ever will serve as
the linchpin to the system going forward; we will need to
remind him of his promises in Washington in early December to
work with Yushchenko. End Summary and Comment.

CabMin law: More of an earthquake than a blip?
-------------- -


3. (C) The CabMin law as currently constituted represents
more of a realignment of power relationships than a blip or
adjustment in the two Viktors dynamics we've seen since
August (ref B). In essence, it resolves most of the
institutional arguments over unclear provisions in the
constitution over the past six months in favor of the PM and
Cabinet. The law thus appears to move Ukraine towards a
German model with a power Chancellor at its center and away
from a Polish-French Presidential-PM cohabitation model in
which the President has a higher profile even if the PM
formally heads the government (note: Poland and France were
the most frequently cited parallels of the Ukrainian
political system in 2006 after constitutional changes
referred to as "political reform" came into effect).


4. (SBU) Although there are plenty of opinions on both sides
and the constitutional court will eventually have to make a
final determination, our read of the law's provisions suggest
the following may encroach on Yushchenko's constitutional
prerogatives as president:


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- if the President fails to nominate Foreign and Defense
Ministers within a 15 day period, the Rada coalition may
nominate the Ministers (article 9);

- there is no differentiation between the dismissal
procedures used against ministers nominated by the president
(FM, DefMin) and the coalition/PM, giving dismissal
initiative/authority to the PM alone (article 19);

- the PM and a relevant minister gain mandatory
countersigning authority for many constitutionally defined
Presidential actions, including diplomatic appointments, NSDC
decisions, the decision to declare a state of emergency, and
the establishment of courts. The lack of a countersignature
constitutes an effective PM veto over relevant presidential
acts (article 27; note: while the countersignature provision
is envisaged in the constitution, previously that has been
only an after-the-fact clerical endorsement. After coming to
power in August, Yanukovych's legal team, led by current
Justice Minister Lavrynovych, claimed the PM had a
substantive process right of approval);

-- the NSDC, as well as the Presidential Secretariat and
other presidential bodies, are not allowed to give
instructions to the Cabinet of Ministers or interfere into
their activities (Article 29; note: the NSDC previously had
such authority on national security policy-related issues);

- The Rada endorses the Cabinet of Ministers program in the
form of a resolution rather than law (article 11; the
President can veto laws but not resolutions);

- chairmen of local state administrations (informally
referred to as governors) are under the control of,
accountable to, and disciplined by the Cabinet of Ministers,
which may overrule local government decisions and initiate
dismissal requests to the President (article 25).

Yushchenko: belatedly pushing back, using a technicality?
-------------- --------------


5. (C) In a January 17 news conference in Donetsk, Yushchenko
accused Yanukovych of breaking their January 10 agreement to
draft a bill jointly, called Yanukovych's veto override move
a "serious mistake," and said he would not sign the bill "for
ethical reasons." Late January 18, he called an emergency
session of the NSDC, with Yanukovych in attendance, taking
advantage of an apparent clerical error by the Rada that made
the December and January bill texts different to claim the
right to issue a renewed veto. Yushchenko told Ambassador
January 19 he had been "furious" and had "raised the roof"
during the NSDC session over Yanukovych's failure to follow
through on their agreements. He complained that he had to
"slap the hands of the government" every other day.
According to Yushchenko, Yanukovych sounded conciliatory at
the end of the session. Yushchenko said that he would send
Presidential Secretariat head Baloha to work with Yanukovych
on a road map on how to alter the bill. Although the issues
were not resolved, Yushchenko remained optimistic that they
could be.


6. (SBU) After the NSDC session, Yushchenko told the press
that the January 12 veto override had ruined all previous
efforts at cooperation between the President, Cabinet, and
Rada and that the Rada should revisit the bill to ensure it
was in line with the Constitution. Citing the Constitution
and a 1998 Constitutional Court ruling addressing the issue
of differently worded bills forwarded to the President, he
stated he had the right to return the law to the Rada for a
repeat examination, giving the Rada a chance to amend the
text. Yanukovych's terser remarks after the session
acknowledged a need to harmonize the CabMin law with the
constitution but did not indicate what mechanism or basis
might be used to do so. With all major coalition figures in
Kharkiv January 19 to attend the funeral of deputy Regions'
leader Kushnariov, accidentally shot to death in a January 16
hunting accident, there was no reaction from the PM to
Yushchenko's renewed veto January 19. However, Rada Speaker
Moroz, through the Rada Secretariat, sent a letter to the
Presidential Secretariat demanding that Yushchenko sign the
law and alleging that he had no right to veto it again.

The Rada opposition to emerge as a new counterbalance?
-------------- --------------


7. (SBU) Yanukovych's concluding remarks at the close of the
Rada's session January 12 consciously emphasized the triumph
of Ukrainian "parliamentarism" as opposed to cooperation with
the presidency, according to self-acknowledged Yanukovych
speechwriter and Regions MP Hanna Herman (ref A). The vote
tradeoff between Regions and BYuT -- veto override in

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exchange for a first reading of a draft law on the opposition
(with a final text still to be negotiated) and passage of a
local council imperative mandate -- also highlighted the
growing center of gravity at the Rada, between coalition and
empowered opposition, rather than between PM and President.
A January 17 op-ed by Yanukovych's Chief of Staff Lyovochkin
in "Ukrainska Pravda" stressed the importance of a strong
opposition, noting that the law on the opposition should
become an "integral component of the new political system's
legislation." Lyovochkin followed Yanukovych's lead in not
discussing the role of the president or presidential-premier
relations in the system of checks and balances.


8. (C) Other institutional actors will play key roles. The
Constitutional Court's role in particular looms ever larger,
since the Court now becomes the last legal resort for
resolving differing interpretations of the Constitutional
powers of the president and cabinet and faces a full docket
likely only to grow in the coming weeks. International
engagement, playing on Yanukovych's desire to be accepted,
and the Ukrainian media, generally unfettered since the
Orange Revolution, will also remain key components in helping
keep Ukraine moving in the right direction, although there
are signs of fatigue in both areas. There were fewer
journalists covering the Rada's closing session featuring the
veto override and Yanukovych's closing remarks than at any
significant Rada event since the Orange Revolution. While
Ukraine's citizens have not noticeably reacted to recent
political developments, the parliamentary elections scheduled
for 2011, while four years away, serve as a reminder that in
a competitive multi-party democracy with an electorate that
takes its right to have its vote respected seriously,
politicians and parties ignore citizen sentiment at their
peril.

The Yuliya factor: Courts key, goading Yushchenko
-------------- --------------


9. (C) A relaxed Tymoshenko explained her strategy and
tactics to Ambassador January 18. While claiming BYuT as the
opposition now served as the chief balance to Yanukovych, her
approach to her strategic ends -- forcing Yanukovych from
office and restoring "democratic forces" to power -- hinges
entirely on a series of potential decisions by two other
institutions, the Constitutional Court and President
Yushchenko. Her tactics are designed to influence those two
institutions to make decisions that could theoretically lead
to her cherished goals: reversal of political reform and
pre-term elections. She claimed 11 of the 18 Constitutional
Court judges were currently willing to rule on the merits of
law as opposed to political factors. This gave appeals a
real chance of success; "the Constitutional Court is at the
center of our attention and strategy." Less certain in her
mind was whether Yushchenko would display the courage to make
the tough political decisions following up openings the Court
might create.


10. (C) Tymoshenko claimed BYuT's package voting with Regions
was purely tactical, with the key being the local council
imperative mandate law. However, the implication and body
language of her comments indicated that the veto override
vote on Friday was also intended as a wake-up call to
Yushchenko, to force him to deal with her in backing up his
veto power and coordinating moves by BYuT and OU. She
claimed that since August there had been no high level
dialogue; Yushchenko had only met her once, immediately after
Yanukovych became PM, and refused to return her calls.
However, Yushchenko told the Ambassador January 19 that he
had called Tymoshenko just before the vote to urge her to "be
a patriot and not vote to override."


11. (C) Laying out her court-based strategy, Tymoshenko
claimed the local imperative mandate law was crucial because
it created the right climate for the Constitutional Court to
rule on a petition concerning imperative mandates in the
Rada, a decision she expected January 25. The Court ruling
in turn was critical to prevent BYuT and OU MPs from jumping
to the Regions-led coalition and giving them a veto-proof 300
MP majority. Since BYuT and OU alone could not secure a
positive vote on the imperative mandate law before January
25th, she had to cut a deal with Regions. Tymoshenko said
that her whole strategy would fall apart if Yushchenko vetoed
the local imperative mandate law. She noted that she had met
with NSDC Secretary Haiduk and his business partner Taruta in
the middle of the night January 16 to lobby them to convince
Yushchenko not to veto the law. In Tymoshenko's view,
passage of a good law on the opposition is important, but not
a key part of her current strategy.


12. (C) The next key constitutional court ruling, which
Tymoshenko predicted could come in late February/early March,

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would be on the technical legitimacy of the Yanukovych
government, based on the delay in its assuming office. She
assessed the probability of a positive outcome at 50-50. It
would then be up to Yushchenko to use the opportunity to
dismiss the Rada and call pre-term elections. In her view,
given current popular rating dynamics, by spring it would be
realistic to see: Regions, popularity to slip to 20-25%; for
OU to aim for 10% if former Interior Minister Lutsenko was
named head, 6-7% otherwise; BYuT to win up to 30%; and 25-30%
would be lost to small parties under the 3% threshold, with
Vitrenko the possible sole exception going over the
threshold. Redistribution of unrepresented small party
shares would give BYuT and OU a working majority.


13. (C) Tymoshenko concluded her analysis by stating that if
potential Court/Yushchenko decisions did not go the right
way, there would be no other mechanism to effectively counter
Yanukovych/Regions, who would be in power for the long haul,
and "democratic forces" essentially without influence. In
her view, there was no way of making a "good guy" out of
Yanukovych; the only feasible option was to try to remove him.

Tarasyuk's fate - a doomed FM?
--------------


14. (C) By giving the Rada coalition the right to nominate a
FM or DefMin after 15 days if the President declined to
nominate a candidate, the new CabMin law effectively dooms
Tarasyuk come February, no matter what the status of his
court appeals. While Yushchenko in Donetsk January 17
expressed confidence the Constitutional Court would support
him on Tarasyuk, it seems unlikely that Tarasyuk would still
be around by time the court rules. Yanukovych stated January
15 that the Rada would take up the issue of a new FM when it
reconvened February 6. Tymoshenko criticized Yushchenko's
stance on Tarasyuk to the Ambassador in conversations in
December and January, suggesting Yushchenko needed to protect
his right to nominate an FM of his choosing by nominating a
new Minister quickly rather than fighting the rearguard court
action to defend Tarasyuk and battling cabinet/rada efforts
to take action into their own hands in February.

The alleged SBU factor - security agency/sector adrift?
-------------- --------------


15. (C) The rationale for Yanukovych's about-face from
announcing intent to cooperate with Yushchenko on a joint
bill January 10 to voting with BYuT to override Yushchenko's
veto January 12 varies, depending on the source. Tymoshenko
claimed to Ambassador that Regions had quickly concluded
there was no common ground with the President over the CabMin
bill and that there would be continued squabbling over the
smallest of details. Her assertion that Regions had provided
a range of options in negotiations over the local imperative
mandate law, including override of the presidential veto,
suggests Regions was already searching for the best deal for
its interests. Yushchenko separately confirmed this
scenario, telling Ambassador that Yanukovych had turned to
Tymoshenko to strike a deal on the veto override.


16. (C) Not surprisingly, Regions sources - most recently
Regions' Taras Chornovil to Ambassador January 16 - claim
that SBU sources tipped off Yanukovych January 11 that
Yushchenko and Presidential Secretariat Head Baloha had
authorized the SBU to tap Moroz and even to target
Yanukovych, and that this was the decisive factor that led
Yanukovych to drop the promised cooperation with Yushchenko
in favor of the deal with Tymoshenko (ref A). On January 16,
the SBU spokeswoman held a press conference to dispute
allegations that it had tapped Moroz, suggesting that, on the
contrary, those behind the bugging of Moroz' conversations
with the British Ambassador in mid-2006 were likely the same
ones caught by the SBU monitoring calls of constitution court
judges (note: in late 2006, the SBU announced the arrest of
people involved in bugging both judges and Our Ukraine MPs,
indicating that those implicated had direct ties with
prominent unnamed Regions MPs).


17. (C) Comment: Whether Regions' allegation against the SBU
is true or is tit-for-tat for the arrests of
Regions-affiliated figures monitoring judges and OU figures,
the SBU remains faction ridden and adrift in the aftermath of
the early December dismissal of former chief Dryzhchany. In
fact, the overall fate of efforts to reform the entire law
enforcement/security sector are unclear. An outsider,
Dryzhchany pushed a reformist agenda and refused to allow the
SBU to be politicized in the struggle for power between the
Presidential and PM teams, as Presidential Secretariat Head
Baloha allegedly wanted.


18. (C) Comment, cont: The SBU factor bears further watching,

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particularly in the wake of ex-SBU chief Radchenko's
appointment January 12 as Deputy PM in charge of law
enforcement, national security, and defense related issues
and agencies. Also of concern is ongoing Ministry of
Interior housecleaning of reform-minded personnel affiliated
with ex-Minister Yuri Lutsenko. On January 11, new Minister
of Interior Tsushko appointed as deputy Minister General
Popkov, an Orange Revolution villain who, as head of the
Interior Ministry's Ground Forces, verbally authorized troops
to deploy against protesters on the Maidan the night of
November 27, 2004, before other security officials
intervened, warning Popkov to back down. Media sources
report that at a January 16 meeting, Tsushko invited nearly
all oblast police chiefs to submit their resignations.


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