UKRAINE: REGIONS FOCUSES ON CAMPAIGN; PUTS ASIDE

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 002481

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/27/2017
TAGS: PGOV PREL PINR UP
SUBJECT: UKRAINE: REGIONS FOCUSES ON CAMPAIGN; PUTS ASIDE
INTERNAL DIFFERENCES

REF: KYIV 002417

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


1. (C) Summary. Pouring money and manpower into its campaign
effort, Party of Regions leaders have put aside their
differences to aim for another win in the September 30 Rada
election -- as all polls show them doing -- but squabbles
over policy direction and coalition formation could resurface
in the wake of their victory. Although Regions remains the
most popular party in the country with a rating between 30-34
percent, it seems frustrated with the lack of a marked
increase in support over the last two months and concerned
that Tymoshenko may be enjoying a bump in popularity. To
that end, Regions has redoubled efforts to draw support in
the East and South from its coalition allies and has tried to
avoid public discussion of a broad coalition with the
President's team, which would be unpopular with its electoral
base. Inside the party, there seems to be a continued debate
about whether to work with Yushchenko and Our Ukraine or with
the Communists, and whether Yanukovych or Akhmetov has the
upper hand in the party leadership. At the same time,
Regions continues to run a well-financed and organized
campaign that has allowed it to make inroads into central
Ukraine, picking up some support from disillusioned orange
supporters and former Socialist voters.


2. (C) Comment. Regions' ability to overcome internal
tensions to achieve a common goal, in this case winning a
plurality in the elections, will serve it well as it moves
toward a first place victory on September 30. However, it is
unlikely to win an outright majority by itself. Therefore,
its main challenge will be to come to terms with what its key
goals are and what coalition will best serve those goals.
The business wing led by Akhmetov will push hard for a broad
coalition with OU that will advance better relations with
Europe, while Yanukovych will lobby hard for any variant that
guarantees him a return to the premiership. End summary and
comment.

Polls Show Regions Holding the Lead...
--------------


3. (SBU) Polls show Regions holding steady between 30-34
percent, although Regions leaders are now publicly claiming
that they believe they will win 38 percent of the vote. An
IFES poll released in mid-September showed Regions is
retaining a solid 70.7 percent of its 2006 voters. In
comparison, BYuT is showing similar retention of 73.4
percent, while OU has a retention rate of only 31.5 percent
of its 2006 voters absolutely committed to support OU again
this time. Moreover, Regions while not surprisingly dominant
in East and South, is now a close second behind BYuT in
central Ukraine with 27.5 percent to BYuT's 29.8 percent
support.

...But Regions Says Dirty Tricks Will Affect Vote Tally
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4. (C) However, given that that the difference of just a
couple of percentage points will affect the seat distribution
to their advantage or disadvantage, Regions has been
increasingly concerned about their ratings and the absence of
a significant increase in support over 2006. To that end,
Regions has moved to protect its flank from its Communist and
Socialist coalition allies, participating in September 4 and
20 Socialist-called rump Rada sessions and pushing forward a
referendum on an official status for the Russian language and
Ukrainian neutrality (read no NATO membership). In addition,
Regions at several points in the campaign, has threatened to
withdraw from the election entirely.


5. (C) Number 4 on the Regions list Inna Bohoslovska told the
Ambassador in early September that the polls showed
Regions/Communists and BYuT/OU-PSD running neck and neck,
with Regions/Communists ahead by 2 percent, or just 500,000
votes. They believed Presidential Chief of Staff Baloha was
preparing to falsify elections to increase the vote count for
orange by 5 percent. Therefore, Regions' goal was to be
ahead by 4 percent -- or by one million voters -- when the
campaign ended. To get to that point Regions needed to
"radicalize" the campaign and that meant, they would have to
talk about NATO membership and Russian language. Otherwise,
she said, "we won't win." That same day, Regions' campaign
head Kolesnikov announced that Regions would begin a campaign
to collect signatures in order to hold a referendum on making
Russian an official language and approving a non-bloc status
for Ukraine (reftel).


6. (C) Regions financier Rinat Akhmetov echoed this concern

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in a subsequent conversation with the Ambassador. He said he
believed dirty tactics could alter the vote results by 3
percent, comparing it to 2004, when the vote was almost 50-50
and, he argued, "corrupt courts" got involved and changed the
outcome by 2 percent. Therefore, Regions was working on ways
to protect its votes. This was what convinced Regions to
participate in the September 4 Rada session (note -- and
presumably the one on September 20). Akhmetov had not wanted
to go back to the Rada, but Regions' political consultants
had warned them that if they chose not to go, this would open
them up to criticism by the Socialists and Communists that
they were betraying the coalition, which could result in the
loss of 2-3 percent of the vote; Yanukovych told Akhmetov
that he was not willing to risk it, so he approved Regions
going to the session.

Regions' Moves Forward in the Center
--------------


7. (C) With the campaign winding down, all sides are now
focused on getting out the vote, with Regions concentrating
efforts not only on their base, but on expanding support in
central Ukraine. Bohoslovska told the Ambassador that
Regions had no hope of making ground in western Ukraine, but
was paying serious attention to the center. Before the
campaign began, Regions numbers were growing by about 5
percent. Zhytomyr was a test case for the center -- "if we
win in Zhytomyr , we will win in the center" -- and claimed
that Regions was now leading in Zhytomyr by 5 percent.
Bohoslovska said people in the center voted with their
stomachs; they understood that if Regions is in power, there
will be jobs and prosperity, but Orange in power means more
in-fighting and instability. (Note: She also argued that
western Ukrainians voted with their hearts and eastern
Ukrainians with their heads. End Note.)


8. (SBU) In travels across the country, Regions' oblast
campaign leaders have told us they are looking for support
from voters who did not vote in 2006, as well as from former
BYuT supporters. In Uman, for example, they hoped to tap
into the "reserve" of approximately 27,000 of Uman's 67,000
eligible voters who did not cast a ballot in 2006 and hoped
to see as much as a 35 percent showing for POR. CVU reps in
Cherkasy and Bila Tserkva (Kyiv oblast) said that
disappointed BYuT supporters, turned off by land grab
scandals and local mismanagement, might drift to Regions. In
2006, Regions got 13 percent in Bila Tserkva, but they were
hoping to get more this time, due to BYuT/OU inaction and
mishandling of local issues - predicted as much as 30 percent
support. In Zhytomyr, the POR group emanated discipline and
resolve, and said that POR expected to get about 30 percent
of the oblast vote, as it did in the third round of the 2004
elections. (Note. Regions received almost 18 percent in

2006. End note.) In the former Socialist stronghold of
Vinnytsyia, Regions hoped to improve its numbers from 8
percent in 2006 to 17 percent; counting on both disillusioned
Socialists and ex-Orange voters to provide support this time.


9. (SBU) Poloffs have found that Regions campaign
headquarters are well-funded and well-organized, with lots of
visible manpower. They are also increasing their staff size
as they try to expand into the center. In Uman and Odesa,
party leaders said there had been significant turnover in
party membership in the past two years; Odesa said membership
had doubled in the last 18 months. Interestingly, in
Cherkasy and Kirovohrad, according to election watchdog
Committee of Voters of Ukraine, party leaders loyal to
Regions leader DPM Klyuyev have been replaced by Kolesnikov
followers. CVU said that Regions will pick up support in
those central oblasts.

But Will it Help?
--------------


10. (C) Leading journalist and deputy editor of Dzerkalo
Tyzhnya Yuliya Mostova told the Ambassador in mid-September
that she thought that the electorate was unable to move
between the three groups (OU, BYuT, and Regions). For
example in Kharkiv, Regions got 78 percent of the vote in
2006; now Minister of the Cabinet of Ministers Tolstukhov was
panicking because only 48 percent supported Regions. But it
didn't matter -- those who do not support Regions now won't
vote for another force, they simply won't vote. This is the
same situation in the West. Political analysts Serhiy Taran
and Yevhen Poberezhny made a similar argument to Mostova's.
They said that Regions had a natural ceiling of support,
about 35 percent. They had reached that ceiling and there
was little else they could do.


11. (C) Leaders from other parties have told us they are

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hoping that frustration with the Yanukovych government will
lower turnout for Regions or will benefit other parties.
Bloc leader Volodymyr Lytvyn told the Ambassador that voters
in Luhansk were increasingly angry at political intrusion
from the Donetsk-based Regions, but also unwilling to support
orange, a situation he was hoping to capitalize on. Lytvyn
described voters throughout Ukraine as demoralized and
polarized and doubtful that voting would bring any change.
OU-PSD leader Yuriy Lutsenko said his hope is that these
voters will stay home, lowering the total turnout for
Regions.

Regions: Splintering or Holding Strong?
--------------


12. (C) There is always media and analytical attention in
Kyiv on the dynamics within Regions, with particular focus on
the relationship between Yanukovych and Akhmetov, and how
strong the party is. Number 5 on the Regions list Nestor
Shufrych -- a new party member -- told the Ambassador that
the Party of Regions was made up of several different groups,
but said that when threatened, all parts of the party will
always join forces against the threat. PM foreign policy
adviser Gryshchenko told us that he didn't buy the analysis
that Regions was strongly divided between Akhmetov/Kolesnikov
and Yanukovych/Klyuyev.


13. (C) Bohoslovska, another party newcomer, said she had not
expected to see democracy in the Regions political structure,
but was surprised to observe that not a single decision was
made unilaterally. There are many groups and interests in
the party and discussions are continued until a consensus is
reached. Bohoslovska said that she wasn't surprised that
there wasn't a "dominating force," but she also did not
expect to see the search for compromise within the party.
Twenty senior people, "not two or three," plus regional
leaders participate in decision-making. She acknowledged
that there were pro-Russian politicians in Regions' ranks,
but noted that they were not ideological, but instead had an
"old way of thinking." She argued that the easterners in
Regions' ranks were pragmatic.


14. (C) On the other hand, rumors in Kyiv are circulating
that the reason that Regions is the only party not using
pictures of party leaders in its campaign advertising is
because Akhmetov instructed the campaign headquarters to
avoid using Yanukovych's picture in order to limit the
increase of the Prime Minister's personal popularity any
further. In the final days of the campaign, Regions' tv ads
are now closing with a brief shot of the PM, but nothing like
the extensive personal coverage he received in 2006. In
turn, according to political analyst Volodymyr Fesenko, the
Yanukovych team was trying to weaken the Kolesnikov/Akhmetov
team now to prevent them from negotiating by themselves with
Yushchenko after the election.

Coalition Negotiations May Highlight Party Divides
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15. (C) Preferences within Regions for a new majority
coalition differ. Akhmetov has been very open that he wants
a Regions-OU coalition, which he told the Ambassador would
unite the country. He said that this view was not
universally held within Regions, but in the end he thought
the party would support it. Bohoslovska said that the
electorate does not want to hear talk of cooperation and
broad coalitions right now and that public discussion of a
broad coalition had hurt Regions and Our Ukraine. She added
that this did not mean that a broad coalition wasn't their
goal, but that discussion would come later.


16. (C) In contrast, Shufrych said that a broad coalition was
very unlikely given the fact that the country was about to
launch into the 2009 presidential elections. Shufrych argued
that every day Yushchenko was canceling more CabMin decrees
and was heavily involved in the OU-PSD campaign; if he wants
agreement on a broad coalition, why is he doing this?
Shufrych said that if Regions joins in a coalition with the
Communists, then he believes that Yushchenko will not submit
the designated name to the Rada to be PM. However, the
CabMin law is now the law of the land, and therefore, the
Constitutional Court would uphold Regions' right to submit
its own name to the Rada and Yanukovych will again become PM.
(Note. According to the controversial CabMin law passed in
January, if the President does not forward the coalition's
choice for PM to the Rada for consideration within 15 days,
the Rada coalition can call for the vote itself. End note.)

Mostova: Yanukovych's Position Within Regions Strengthening
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16. (C) Journalist Mostova told the Ambassador that Akhmetov
wants a coalition with OU. The question was whether the
coalition would be with or without Yanukovych. Mostova said
that she had talked to everyone in Regions and there was no
answer yet. Akhmetov would like to dump Yanukovych, but
can't. Yanukovych had succeeded in getting back the PM job
and was looking to hold onto it, in part by building up his
own financial resources. In the past, Mostova claimed,
Yanukovych had been given money, but had no resources or
property of his own and was dependent on others. Now others
like PM Chief of Staff Lyovochkin and shady businessman
Firtash were charged with amassing real estate and working as
business agents for Yanukovych. For example, the VAT
kickbacks weren't going to First Deputy PM and Finance
Minister Azarov -- they were going to the PM. Yanukovych now
had his own "serious money."


17. (C) In addition, Mostova said that Yanukovych was now
getting the love and support of the people. This meant
Yanukovych was not Akhmetov's puppet; he was the face of the
party that cements it together. In her view, Yanukovych was
increasingly questioning why some "thugs" should tell him
what to do when he was so popular with the people. Mostova
said that Yanukovych's support within the party was strong
and that if he joined a broad coalition with OU, he would not
lose support. In her view, if Yanukovych proposed joining
NATO tomorrow, his supporters would be calm, explaining this
change in policy as a result of a secret deal made with
Putin. In fact, a coalition with OU would be a gain for
Yanukovych since people in the West would understand him
better.


18. (C) Mostova added that because it was Yushchenko and
Akhmetov, followed by Baloha and Kolesnikov, who had reached
the agreement to hold pre-term elections, and because
Akhmetov did not speak for the whole of Regions (just as
Yushchenko/Baloha don't speak for the whole of OU-PSD),it
will fall on Akhmetov and Kolesnikov if the elections do not
go well. Mostova suggested that Baloha and Kolesnikov may
end up as the main scapegoats for each side's failures after
the election if events don't turn out as desired.


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