UKRAINE: YATSENYUK, RISING POLITICIAN

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 001300

SIPDIS

E.O. 12958: DECL: 07/03/2018
TAGS: PGOV PREL PINR UP
SUBJECT: UKRAINE: YATSENYUK, RISING POLITICIAN

REF: 07 KYIV 00924

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


1. (C) Summary. Rada Speaker Arseniy Yatsenyuk has become one
of the most interesting senior politicians in Ukraine to
watch. Only 34 years old, Yatsenyuk has already served not
only as chair of the parliament, but Foreign Minister,
Minister of Economy, and Acting Governor of the National
Bank. Some of his success may be credited to his ability to
reach out to various camps and appear nonpartisan -- he
received his FM and Speaker positions as a compromise
candidate -- and to his ties to a number of older politicians
and businessmen who championed his career at various stages.
Yatsenyuk has grown as Speaker, learning to exert his
authority to try to keep the often deadlocked parliament
moving forward. He has also embraced the role of mediator,
trying to keep the coalition intact, while encouraging the
opposition to act constructively. Privately, Yatsenyuk has
founded a think tank to promote Ukraine's international
image, increase discussion of key security issues, and give
financial support to young leaders -- the Speaker also made
the list of the country's top philanthropists in 2007. Now
press and politicians are beginning to speculate whether
Yatsenyuk might be in line to become Prime Minister, head of
a new political project, or may harbor presidential ambitions
of his own. When asked about future plans, Yatsenyuk has
been relatively coy, saying that he would only lead a party
of his own making. He has been open in his support for the
coalition, for now, and his opposition to a new constitution.



2. (C) Comment. Whether Yatsenyuk's ambitions include making
a run for the presidency next year or whether he is biding
his time until the current crop of leaders has faded is
unclear at this point. Given Yushchenko's dismal popularity
ratings, and the fact that Yanukovych and the Party of
Regions have not succeeded in recent elections at breaking
their 33 percent support cap, there could be an opening for a
fresh face in 2009. However, Yatsenyuk has been careful not
to burn bridges and may decide to wait before making any
political alliances or moves in his own interest, since he
does not know who might win next year's election. Although
Yatsenyuk is clearly close to President Yushchenko, he has
maintained decent ties with PM Tymoshenko and with
politicians and oligarchs in other camps. His immediate goal
may be to avoid being sent back to a low-profile position
like the National Bank if there is a government shake-up.
Based on his current attitudes and actions, if he were to one
day take the PM or President's seat, we expect him to be a
pragmatic and forward-leaning leader, with a strong emphasis
on economic goals. End summary and comment.

Improving as Speaker, Mediator
--------------


3. (C) We have observed that Yatsenyuk's skills as Speaker
have developed significantly since he took the post in
December 2007. During early challenges, such as the failed
confirmation vote for Tymoshenko on December 11 and Regions's
blockade of the rostrum during the NATO MAP controversy in
January 2008, Yatsenyuk often seemed ill at ease while trying
to restore order. He was soft spoken and too hung up on the
rules of procedure to deal with MPs shouting and charging his
dais. However, since then he has become more comfortable
speaking definitively and moving procedure forward over
objections. He has learned how to run a vote and how to
delay a vote when it is clear it will fail. For example,
Yatsenyuk proudly told the press on April 16 that he had
saved Yushchenko's CabMin law from sure death by canceling
the final vote when the coalition lacked the votes to confirm
it. (Note. The law was passed at a later date after a new
agreement with BYuT. End note.) He also became comfortable
docking the pay of MPs who blockaded the rostrum and
prevented the Rada from working -- applying this rule equally
to Regions and BYuT.


4. (C) Publicly, Yatsenyuk has repeatedly dismissed the need
for early elections, saying they won't change anything, and
has defended the current coalition, arguing that he won't
help terminate it until ordered to by the Constitutional
Court. He also told the press on June 6 that he did not
think the political situation would change until the fall,
when a constructive dialogue could be held. He referred to
BYuT's proposed constitutional changes as a "latent coup
d'etat" and later rejected attempts to write a new
constitution by any party, including the President.


5. (C) However, it may be Yatsenyuk's role behind the scenes
that is most important. He has become a key negotiator and
mediator -- trying to keep the coalition going and Yushchenko

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and Tymoshenko speaking, and reaching out to the opposition.
He has tried to broker negotiated settlements to allow the
Rada to work, holding many meetings with the faction leaders,
sometimes with Committee Chairmen as well, and meetings with
Yushchenko and Tymoshenko in various formats. On June 4, he
sent a letter to the President, PM, and Rada faction leaders
proposing the parliament adopt an action plan called "Ukraine
2008." He wanted the document to focus on economic, social,
judicial, and law enforcement reform, as well as preparations
for the Euro 2012 soccer tournament. On June 20 he called on
all factions to refrain from insulting one another and
issuing ultimatums. On June 24, he held a meeting with
Tymoshenko, OU-PSD faction leader Vyacheslav Kyrylenko, and
BYuT deputy faction leader Andriy Kozhemyakin to try to work
out how to save the coalition. Afterwards, he said they had
reached a tentative agreement to adopt a law called "external
and internal policies until 2010," which would serve as the
basis for the coalition's future work. He said the law would
address key macroeconomic issues, such as lowering inflation
and increasing GDP, and would provide concrete goals for
improving social standards. Yatsenyuk said that only by
defining the nation's priorities could the coalition and
government move forward and possibly gain support from others
in the parliament. Presidential Chief of Staff Baloha and
Presidential Spokeswoman Vannikova said on separate occasions
that Yushchenko believes Yatsenyuk has to take the lead in
restoring the democratic coalition.

Nonpartisan Appeal
--------------


6. (C) Yatsenyuk's meteoric career has, in part, been due to
being viewed as a compromise candidate who can reach out to
all camps. He was confirmed as Foreign Minister on March 21,
2007 with 426 votes after months of fighting about who would
be the new FM. His surprise candidacy was seen as part of a
deal between Yushchenko and then PM Yanukovych, and Rada MPs
from various factions indicated to us at the time that they
found Yatsenyuk more palatable than other alternatives.
Yatsenyuk's nomination as Rada Speaker in December was
equally surprising, but again more broadly approved of than
some of the other OU-PSD candidates being discussed.
However, he was confirmed with only the support of the 227
coalition members. More recently, respected newspaper
Dzerkalo Tyzhnya suggested that Yatsenyuk was one of three
candidates the Presidential Secretariat would want to see as
PM in a new broad coalition.


7. (C) Political analyst Volodymyr Fesenko told us that he
was amazed how quickly Yatsenyuk -- whom he termed a
representative of the new elite -- had learned all the
intricacies of political intrigue. Fesenko said that
Yatsenyuk comes off as an open, democratic, and western-style
politician, but he also understands the art of survival in a
soviet-type bureaucratic environment, where interpersonal
connections and patron-client ties are key.

A New Political Project on the Horizon?
--------------


8. (C) At a June 15 function, Yatsenyuk told the Ambassador
that Ukrainians were tired of the political squabbling
between the three top politicians. He called Our Ukraine and
United Center "dead projects" and said he would associate
with neither. He said that a new political project would
emerge, but he would not say what it would be or what it
would stand for. The Speaker also said that his version of
the Ukrainian national idea was European values. He spoke
for the need to maintain the current coalition for now, but
suggested that it would be better to try to diminish the
roles of Presidential Chief of Staff Baloha and NSDC
Secretary Bohatyryova in the process. Interestingly, Regions
MP Nestor Shufrych told the Ambassador that same day that
Yatsenyuk was one of two young politicians to watch in the
next year or two (the other was Mykola Katerynchuk.)
Shufrych believed that the two MPs might form a joint
political project in the future.


9. (SBU) On a political talk show in early June, Yatsenyuk
dismissed the rumors that he might soon become the head of
United Center. He said that if he decided to lead a
political project, it would be one of his own making. In
addition, in response to the question when he or someone of
his generation would run for president, he said, "as soon as
society will support (such a candidate),you will see (him)."


10. (SBU) There has been plenty of speculation about
Yatsenyuk's short-term future. On-line news site Ukrainska
Pravda on June 20 wrote that a rumor was circulating that
Yatsenyuk was playing two games at the same time. According
to the rumor, Yatsenyuk was delaying the announcement of the

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break-up of the current coalition, while negotiating with
Regions on a possible senior-level appointment, such as
Deputy Prime Minister for Economics, in a new government.
The Akhmetov-owned Segodnya newspaper published a list of
scenarios for solving the political impasse and stated that
the preferred Regions solution was a broad coalition, with
Yatsenyuk as First Deputy PM. Regions MP Chechetov told the
press that Regions had also not ruled out leaving Yatsenyuk
as Speaker in the advent of a new coalition.

Yatsenyuk Is on People's Minds
--------------


11. (C) Focus groups conducted in six cities across Ukraine
by the International Republican Institute (IRI) revealed some
interesting thinking on Yatsenyuk. Initially, IRI solicited
opinions mainly on the three main political leadesr --
Yushchenko, Yanukovych, and Tymoshenko -- but were surprised
by the strongly positive reactions when Yatsenyuk's name was
raised. Although participants generally held the Rada to be
a bastion of corruption populated by MPs who bought their
spots on party lists and did not care about the electorate,
they described Yatsenyuk as "smart with a systematic
approach," "the future of the nation," and "the next
generation of Ukraine and a new generation of politician."
They saw him as an independent actor who had allies in more
than one camp and could work intrafactionally. The main
negative cited by participants is that they did not know a
lot about Yatsenyuk as a person, that although he was honest
about having money and where the money came from, beyond that
he was somewhat of a mystery. There was also a somewhat
negative perception that he was being groomed by Yushchenko.
(Note. The information provided by the focus groups cannot
be taken as representative of national opinion, as the data
from a poll would be, but the comments are still interesting
given the contrast between the praise for Yatsenyuk as a
leader and the excoriation of the Rada as an institution.
End note.)


12. (SBU) An opinion poll conducted by the Ukrainian
Sociology Services in April-May indicated that 33 percent of
respondents supported the idea of a new "third way" political
party. When asked who should lead this party, Yatsenyuk was
the top choice, with 13 percent of respondents selecting him.
Currently, Yatsenyuk does not often register in polls on
future presidential elections, but that may be due to the
fact that most people probably do not consider him to be a
candidate at this time.

Friends in High Places, Sharing the Wealth
--------------


13. (SBU) In December 2007, investigative journalist Serhiy
Leshchenko wrote an in-depth article in Ukrainska Pravda
about Yatsenyuk's roots titled "The riddle of Arseniy
Yatsenyuk," which points to a number of powerful patrons in
the Speaker's past. Leshchenko argues that Yatsenyuk became
a success in the law and business world at the age of 22 due
to ties to now deceased media mogul Ihor Pluzhnikov, former
Labor Minister Mykhaylo Papiyev, and former Yushchenko Chief
of Staff Oleksandr Zinchenko, all of whom hail from
Yatsenyuk's hometown of Chernivtsi. (Note. Interestingly,
all were also members of the Social Democratic Party (united)
at some point, as was current Chief of Staff Baloha, who
brought Yatsenyuk into the Presidential Secretariat in 2006.
End note.) Yatsenyuk co-founded a law firm during his second
year of university, the clients of which included Papiyev.
These SDPU(o) ties were later echoed on the respected
political talk show Svoboda by Shufrych, who also used to be
in SDPU(o). Yatsenyuk denied Shufrych's accusations, but the
ties to Papiyev, at a minimum, seem to be more broadly
confirmed.


14. (SBU) Leshchenko wrote that Yatsenyuk moved to Kyiv in
1997 to enter the banking industry, and was then put forward
to be the Crimean Minister of Economy by the then head of the
Crimean government, who was a member of oligarch Viktor
Pinchuk's Working Ukraine (Trudova Ukraina) -- Leshchenko
says Yatsenyuk and Pinchuk remain close. (Note. Serhiy
Tihipko, Yatsenyuk's boss at the NBU before Yatsenyuk took
over as Acting Governor, was also from Working Ukraine. End
note.) The article says Yatsenyuk attends every Davos and
Yalta (YES) event hosted by Pinchuk. Leshchenko says that
Yatsenyuk also formed ties to Defense Minister Yuriy
Yekhanurov, Deputy Secretariat Head Oleksandr Shlapak,
Yushchenko backer Petro Poroshenko, and former Presidential
Chief of Staff Oleh Rybachuk -- and when Yekhanurov became PM
in September 2005, he recommended Yatsenyuk to be Minister of
Economy. Yatsenyuk also has ties to Vitaliy Haiduk and
Katerina Yushchenko, according to Leshchenko.


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15. (SBU) According to the publication Novynar, Yatsenyuk was
the twelfth largest philanthropist in Ukraine in 2007. Much
of this money may have gone to fund a think tank Yatsenyuk
co-founded with a Polish businessman called Open Ukraine
Foundation. The foundation's mission statement says its goal
is to support public diplomacy and to raise the profile of
Ukraine internationally. To that end, it organizes
conferences on key security issues, such as energy security,
frozen conflicts, the Black Sea Region; it also sponsors a
program on young leaders in a variety of fields. According
to the organization's website and conference materials, its
two key financial sponsors are the Pinchuk Foundation and
Industrial Union Donbas (co-owned by Haiduk). (Comment. The
two organizations' financial support for Yatsenyuk's project
could merely be a meeting of the minds on this issue, but it
does suggest that he has ties to major businessmen, should he
need to reach out to them if he decided to run a campaign.
Interestingly, Pinchuk recently gave a long interview to
Dzerkalo Tyzhnya in which he said that Ukraine needed a new
generation of leader to fix the country. He did not mention
Yatsenyuk by name, but the Speaker fits the profile of the
type of leader Pinchuk expressed a desire to find. End
comment.)

What Would Yatsenyuk Be Like as a Leader?
--------------


16. (C) As described in reftel, Yatsenyuk is an engaged,
thoughtful, and pragmatic leader. Our impressions in
meetings with the Speaker, and when he was Foreign Minister,
are that he is a well-spoken, forward-thinking young
politician. As PM or President, he would likely be reform
oriented, while relying on his political ties to get laws
passed. His economic background suggests he would approach
foreign policy from an economic standpoint, but he has shown
himself open to NATO cooperation and his think tank
demonstrates that he is cognizant of Ukraine's international
image.


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