PRESIDENTIAL SECRETARIAT CHIEF QUITS, DENOUNCES

C O N F I D E N T I A L SECTION 01 OF 02 KYIV 000864

SIPDIS

E.O. 12958: DECL: 07/04/2019
TAGS: PGOV PREL UP
SUBJECT: PRESIDENTIAL SECRETARIAT CHIEF QUITS, DENOUNCES
YUSHCHENKO

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

SUMMARY
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1. (C) Presidential Secretariat head Viktor Baloha, famous
for vitriolic condemnations of PM Tymoshenko which included
charges of treason, announced his resignation on May 16. On
May 19 Baloha turned his attacks on President Yushchenko,
saying he had betrayed the promises of the Orange Revolution
and had no "moral right" to seek a second term. Yushchenko
appointed Kyiv region Governor Vera Ulyanchenko, a longtime
ally, on May 20 to replace Baloha. This garnered approval
across party lines. Ulyanchenko's calmer style stands in
stark contrast to Baloha's and has the potential to improve,
at least in tone, Yushchenko's relationship with Tymoshenko.
Baloha has not departed from the political scene. He retains
influence over the ten member United Center group in the Rada
and many regional governors. His connections and economic
resources make him an attractive potential partner for such
forces as the opposition Party of Regions. That said, Baloha
has many powerful enemies and is the target of corruption
allegations. His influence may wane now that he is removed
from the Presidential orbit. End Summary.


BALOHA RESIGNS, ATTACKS YUSHCHENKO
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2. (U) Presidential Secretariat head Viktor Baloha announced
his resignation on May 16 and, in a statement released to the
press on May 19, attacked President Yushchenko. Baloha gave
three reasons for his resignation. First, Baloha said he
disagrees with Yushchenko's decision to seek a second term.
He said that the president has no "moral right" to run again
because he has not implemented the systemic reforms he
promised during the Orange Revolution. Second, he claimed
that Yushchenko tolerates corruption and nepotism in his
inner circle. Finally, he blamed Yushchenko for engineering
a constant stream of crisis and political conflict in
Ukraine.


BALOHA SAYS HE QUIT, WAS NOT PUSHED
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3. (U) In a May 21 press conference Baloha did not further
criticize Yushchenko and emphasized that he was still willing
to work with the president and other political parties.
Baloha emphasized that he personally made the decision to
resign and that Yushchenko repeatedly asked him to
reconsider. He said that while Presidential Secretariat
head he was a loyal member of Yushchenko,s team and that all
his actions, including the vitriolic attacks on Tymoshenko,
were authorized and directed by the President. Despite his
earlier criticism of Tymoshenko, however, Baloha did not rule
out that he could find common ground with her in the future.


YUSHCHENKO APPOINTS LONG-TIME ALLY
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3. (U) Yushchenko, who has thus far remained silent on
Baloha's accusations, on May 20 appointed Kyiv region
Governor Vera Ulyanchenko as the new head of the Presidential
Secretariat. Ulyanchenko, prior to her appointment as
Governor in 2006, served on Yushchenko's staff while he was
Prime Minister from 2000-2002, as his Chief of Staff for the
2004 presidential race, and a principal advisor following his
election. Ulyanchenko also served as a Rada MP from
Yushchenko's Our Ukraine party until becoming Governor.
While serving as an advisor to Yushchenko, analysts described
her as the President's gate-keeper and confidant.
Ulyanchenko was also elected on May 16, before the
announcement of Baloha's resignation, as the head of Our
Ukraine party's political council in an effort to reunify and
revitalize the party.


POSITIVE REACTION TO ULYANCHENKO'S APPOINTMENT
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4. (U) Politicians across the political spectrum have
welcomed Ulyanchenko's appointment. Opposition Party of
Regions deputy faction leader Hanna Herman applauded
Ulyanchenko's appointment and described her as a capable
manager able to broker compromises between political forces.
Prime Minister Tymoshenko bloc (BYuT) MP and deputy Rada
speaker Mykola Tomenko said that Ulyanchenko will be a
positive force in the president's office and is someone who
favors cooperation over confrontation. Our Ukraine-People's

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Self Defense bloc (OU-PSD) pro-presidential MP Kseniya
Lyapina said Ulyanchenko is an effective organizer able to
take on big challenges.


POTENTIAL FOR IMPROVED YUSHCHENKO-TYMOSHENKO RELATIONSHIP?
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5. (C) Ulyanchenko's appointment could also lead to an
easing in the conflict between Yushchenko and Prime Minister
Tymoshenko. OU-PSD deputy faction leader and pro-coalition
MP Ruslan Knyazevych said that Ulyanchenko could act as a
mediator between Yushchenko and Tymoshenko. BYuT MP Serhiy
Sobolyev told us that Ulyanchenko's appointment points to a
potential softening of the war between the President and PM.
He said the appointment may signal Yushchenko's willingness
to improve cooperation with Tymoshenko. BYuT MP Konstantin
Bondaryev told us that although Yushchenko and Tymoshenko's
rivalry will continue, he hoped that at least the "dirty
tricks war" orchestrated by Baloha would end.


BALOHA STILL A VALUABLE COMMODITY
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6. (C) Baloha's break with Yushchenko leaves him a
potentially valuable free agent, according to BYuT MP Valeriy
Pysarenko. He told us that with influence over ten Rada MPs,
many regional governors, and with economic resources at his
disposal, Baloha could be a valuable addition to another
political party. Pysarenko said that despite the animosity
between Baloha and Tymoshenko, BYuT might even seek Baloha's
cooperation. Regions deputy faction leader Volodomyr
Makeyenko told us that it would be "natural" for Baloha to
cooperate or join Regions. He said that one of the main
themes of Baloha's tenure as Presidential Secretariat head
was his effort to convince Yushchenko to cooperate more
closely with Regions. Makeyenko said that Baloha has close
contact with most Regions leadership and Baloha's animosity
to Tymoshenko would push him to back Regions head Yanukovych
in the upcoming presidential election.


COMMENT
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7. (C) The antagonism between Yushchenko and Tymoshenko
extends far beyond Baloha, but his departure could at least
improve the tone of relations. We expect Baloha to use his
influence and political connections to remain a political
player. His inside knowledge of the Yushchenko
administration and experience in attacking Tymoshenko would
make him especially attractive to the Party of Regions in the
upcoming presidential election. That said, Baloha has many
enemies and is the target of corruption allegations. Now
removed from the Presidential orbit, his political pull could
well diminish.
TAYLOR