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March 20, 2006

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Reference ID Created Released Classification Origin
06KIEV1081 2006-03-20 15:31 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv
This record is a partial extract of the original cable. The full text of the original cable is not available.


C O N F I D E N T I A L SECTION 01 OF 03 KIEV 001081 


E.O. 12958: DECL: 03/20/2016 

Classified By: Political Counselor Aubrey Carlson, reason 1.4 (b,d) 

1. (C) Summary:  Most of the attention on the failure of the 
"Maidan" coalition to form a coherent, effective government 
team in office in 2005 justifiably focused on the bitter 
falling out of the two main Orange parties, President 
Yushchenko's Our Ukraine and Yuliya Tymoshenko's eponymous 
bloc (BYuT), as well as on Tymoshenko's difficult, even 
destructive, personality.  Yet Yushchenko's most unreliable 
partner in 2005 (and potentially in 2006, if a Maidan 
coalition re-forms after the elections) may well have been 
the pink members of the Maidan team:  Oleksandr Moroz and the 
Socialist Party.  The Socialist Rada faction seemingly 
opposed more government bills in the Rada than it supported, 
particularly on economic and national security issues.  A 
Socialist member of the Cabinet frequently claims to be "in 
the opposition," and Moroz staunchly opposes Yushchenko's 
desire to revisit constitutional reform.  What Our Ukraine 
and the Socialists share is not policy perspective but 
certain basic values and a European orientation.  With the 
voters, the Socialists' quiet, non-confrontational opposition 
to Yushchenko's priorities stand it in good stead, and the 
party appears set to benefit March 26 from voters 
disillusioned with fratricidal Orange squabbling, facilitated 
by the Socialists' claim to being the most fervent opponent 
of Kuchmaism and, by extension, of the Party of Regions and 
Rada Speaker's Lytvyn's bloc.  Over the past several years, 
the Socialists have overtaken the Communists as the leading 
"leftist" force in the country, even though they have for the 
first time accepted some big businessmen with dubious 
backgrounds into their ranks, as they seek to secure a modest 
but secure niche in Ukraine's evolving political spectrum. 
End summary. 

Who's the truly difficult Maidan partner? 

2. (SBU) The well-documented squabbling between former PM 
Tymoshenko and President Yushchenko and his Our Ukraine party 
over a range of policy and personality issues in 2005 
detracted attention away from the other Maidan party in 
government which consistently undermined the ability of 
Yushchenko and the government to pursue his stated goals: the 
Socialist Party, led by its often prickly leader Oleksandr 
Moroz.  While formally a member of the coalition government 
with an allotment of Cabinet seats, governorships, and other 
administration jobs, Socialist opposition covered the entire 
range of Yushchenko's agenda, from economic priorities (WTO), 
to security policy (NATO), to domestic policy (constitutional 

WTO and Economic Policy 

3. (SBU) When we compared voting records of Rada factions on 
bills introduced in 2005 to bring Ukraine into conformance 
with WTO requirements, the Socialists had one of the worst 
voting records in favor of government-sponsored bills (note: 
only the Communists, SPDU(o), and Regions were worse); they 
also failed to support several related bills brought before 
the Rada March 15, including a veternary medicine law.  The 
Socialists vigorously opposed one of the GOU's signature 
accomplishments of 2005:  the reprivatization sale of 
Kryvorizhstal to Mittal Steel, with Socialist State Property 
Fund Chair Semenyuk opposing the auction and calling in sick 
for several days to avoid any association with the sale, 
which went ahead as planned.  While Tymoshenko attracted much 
criticism for her reprivatization proposals, Semenyuk and the 
Socialists were even more radical: they wanted to nationalize 
the same properties, if not more, and keep them under state 
control, rather than reprivatize them.  Semenyuk has been 
featured on TV ads running a week before the March 26 
elections promising to battle for more of the same if the 
Socialists return to government. 

4. (SBU) Socialist Minister of Agriculture Baranivsky has 
repeatedly voiced public opposition to official GOU policy, 
particularly WTO-related measures, going so far as to claim 
that he was "in opposition to the government" - a ludicrous 
claim from a sitting member of the Cabinet, and one which 
drew calls for his resignation if he truly felt that way. 
Baranivsky instead clammed up; control of the Agriculture 
Ministry is a valuable tool for reaching out to the agrarian 
component of the Socialist electorate, particularly given the 
fierce competition with Rada Speaker Lytvyn's bloc -- built 
around the former Agrarian Party. 

5. (SBU) Moroz's February 17 election briefing for the 
diplomatic corps highlighted his many differences with 
Yushchenko's agenda, from WTO to NATO and constitutional 
reform, but demonstrated the indirect approach that has 
allowed the Socialist Party to remain in government and in 
the running for a repeat engagement after the March 26 
elections, if an Our Ukraine-Regions coalition does not 
transpire.  The Socialists were not against WTO membership 
per se, but they would "speak out against conditions imposed 
on Ukraine and could not support anything that hurt Ukrainian 

NATO and security 
00A;6. (SBU) On NATO, Moroz sidestepped any mention of the 
Socialists' official position (Ukraine should remain neutral, 
without joining any security alliance) and instead stressed 
his support for full exploitation of cooperation within the 
framework of Partnership for Peace.  The Socialists have a 
pattern of failing to support government-sponsored 
NATO-related bills the first time they come up for a vote, 
creating lost opportunities; even when they subsequently vote 
in favor after arm-twisting by Defense Minister Hrytsenko, 
the loss of other votes has torpedoed at least two important 
security-related bills that had no problems passing even 
under Kuchma-Yanukovych. 

7. (SBU) In the first vote to ratify a NATO-Ukraine MOU on 
strategic vote (November 2, 2005), only 4 of 25 Socialist MPs 
voted in support; the measure fell 19 votes short of the 226 
necessary.  On December 14, all 25 Socialists voted in favor, 
but leakage elsewhere prevented passage.  When we asked Moroz 
at the February 17 briefing why Socialist MPs had failed to 
vote on February 9 to authorize the annual foreign troops 
exercise bill (ref A), a bill routinely passed when Moroz was 
Rada Speaker, Moroz squirmed before replying that if Defense 
Minister Hrytsenko would lay out the case to the Socialist MP 
caucus and answer questions about Ukraine's national 
interests, the matter would be resolved (ref B).  As with the 
strategic lift MOU, a majority of Socialists did vote in 
favor when the measure came up for a vote in late February 
(but again it was too little, too late, due to defections 
from Lytvyn's bloc and even National Security and Defense 
Council Secretary Kinakh's faction). 

Constitutional Reform 

8. (SBU)  Regarding Yushchenko's headline proposal in his 
February 9 State of the Nation address to call for a new 
constitutional committee to redraft the constitution as a way 
of addressing real flaws (ref A), Moroz was adamant at the 
February 17 briefing:  "I will not allow Constitutional 
reform to be revised."  Indeed, it was Yushchenko's pledge to 
Moroz to support constitutional reform in early November 2004 
that led Moroz to throw his support behind Yushchenko in 
round two of the 2004 Presidential election, creating the 
orange-pink alliance that carried through to the Maidan 
(shorthand for Independence Square, the center of the Orange 
Revolution events). 

What are the ties that bind?  Values (not policy) 
--------------------------------------------- ---- 

9. (SBU) Given all the fundamental policy issues that 
separate the Socialists from Our Ukraine, and to a lesser 
extent BYuT (which favors more of the state intervention 
approach that is a Socialist staple), the basis for a 
productive partnership is more difficult to quantify, 
amounting to generally shared basic values and a European 
orientation.  During the televised, multi-party debate March 
10 on the "Svoboda Slova" (Freedom of Speech) program, deputy 
Socialist leader Iosef Vinnsky highlighted the contrast 
between policy dissonance but shared values.  Those values, 
which Vinnsky said for the Socialists included staunch 
anti-Kuchmaism, were crucial for ensuring Ukraine kept moving 
forward toward Europe, rather than sinking back into the past 
morass that Kuchmaism had represented. 

10, (SBU) In the same way Moroz and Interior Minister Yuri 
Lutsenko played a leading role in the "Ukraine without 
Kuchma" movement in 2000-01 and in publicizing the Gongadze 
affair, they have used the prominence of Lutsenko to attack 
the "Regions Party bandits" far more vigorously than either 
Our Ukraine or BYuT, which have spent more time attacking 
each other and have a number of dubious lesser oligarchs of 
their own.  On the March 3 edition of "Svoboda Slova," 
Lutsenko concluded the four-hour marathon by ripping into 
previous speaker, Regions' campaign chair and former Kharkiv 
governor Kushnaryov, detailing a half dozen Kharkiv banks and 
businesses that Kushnaryov had "stolen or self-privatized" 
while governor, and emotionally vowing that some day 
Kushnaryov and the other Regions leaders who had "stolen the 
country blind under Kuchma" would eventually answer for their 

2006 campaign: Adding businessmen, battling Lytvyn 
--------------------------------------------- ----- 

11. (SBU) The Socialists previously maintained a general 
image of being more honest than most other political forces 
by avoiding the practice of recruiting big businessmen onto 
their Rada list.  That changed for 2006; at the February 17 
briefing, Moroz trumpeted the Socialists' plans to "reanimate 
industry" due to their "strengthened industrialist lobby." 
Most notably, that includes No. 8 on the Socialist electoral 
list Volodymyr Boyko, the colorful "Red" director of the 
Mariupol Illich steel plant, who identifies himself as "a 
communist at heart" and supported Regions in 2004; No. 21 
Anatoli Buhanets, Director of Kharkiv's Turboatom plant; No. 
15 Myhailo Honcharov, Chairman of the Board of "East European 
Bank; Oleksiy Kunchenko, Chairman of the Board of 
Severodonetsk Azot plant (note:  a disputed privatization 
case); and No. 9 Andriy Derkach, owner of pharmaceutical and 
oil businesses, as well as a media empire centered around ERA 
Radio and TV plus the Kievski Telegraph newspaper. 

12. (SBU) The inclusion of Derkach made the most waves in 
early December because the Socialists simultaneously cut ties 
with 2002 Socialist MP candidate Mykola Melnychenko, whose 
2000-01 tapes of Kuchma's conversations authorizing the 
Kolchuga radar sale to Iraq and Gongadze-related discussions 
purportedly between Kuchma, Derkach's father Leonid (then 
head of the Security Service of Ukraine (SBU)), then-Kuchma 
Chief of Staff Lytvyn, and then-Interior Minister Kravchenko 
destroyed Kuchma's reputation within and outside of Ukraine. 
The Socialists have used the Gongadze case cudgel against 
Lytvyn more sparingly in the 2006 campaign than in the past. 
Nevertheless, the parties battle for similar electorates: 
the central Ukrainian agrarian electorate, plus urban voters 
who consider themselves neither "orange" nor "blue."  Moroz's 
rivalry with Lytvyn extends to both men's aspirations to 
return to the Rada Speaker's chair, and to provide the 
Kingmaker swing votes necessary for larger parties to form a 

Overtaking the Commies, finding an enduring niche 
--------------------------------------------- ---- 

13. (SBU) One of the interesting developments of the 2004 
presidential campaign, confirmed in the 2006 Rada cycle, is 
that the Socialists have overtaken the Communist Party as 
Ukraine's leading leftist (pink-red) political force.  The 
Communist electorate is literally dying off, its leadership 
bereft of any positive agenda, and its campaign all but 
invisible.  In contrast, the Socialists, who proudly joined 
the Socialist International as a constituent party in 
promote a "Building Europe in Ukraine" 
people-focused agenda, have built a party network across the 
country, and can lay claim to an identity and a future. 

14. (C) Comment:  The above developments appear to have 
secured a modest yet solid niche in Ukraine's shifting 
political spectrum for the Socialists, who are the only 
political force with nearly even support throughout the 
country (5-7 percent), slightly higher in agrarian central 
provinces like Poltava and lower in Donetsk/Luhansk/Crimea. 
The Socialists seemingly do not aspire to large party status, 
are content to consolidate a certain base and focus on a 
certain number of clearly defined causes, and will seek 
common cause with the Orange parties they joined in 2004 on 
the Maidan if the math, personalities, and preconditions 
allow.  While there are a number of post-election coalition 
scenarios, it would be safe to say that the least likely 
would be a government including both the Socialists and 
Regions.  A Maidan-plus arrangement of Our Ukraine, BYuT, 
Socialists and Lytvyn's Bloc would likely generate as much 
friction between the latter two as the former two, adding to 
the strains which would be inherent if a "Maidan 2" coalition 
manages to form after the elections. 

15. (U) Visit Embassy Kiev's classified website at: 





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