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06KYIV4558, UKRAINE: LAND, POWER, AND CRIMINALITY IN CRIMEA

December 14, 2006

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Reference ID Created Released Classification Origin
06KYIV4558 2006-12-14 09:31 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

VZCZCXRO4896
PP RUEHDBU
DE RUEHKV #4558/01 3480931
ZNY CCCCC ZZH
P 140931Z DEC 06
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 0695
INFO RUCNCIS/CIS COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEHTV/AMEMBASSY TEL AVIV 0002

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 004558 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 12/14/2016 
TAGS: PGOV ECON PREL PHUM UP
SUBJECT: UKRAINE: LAND, POWER, AND CRIMINALITY IN CRIMEA 
 
REF: KYIV 4489 
 
Classified By: Ambassador, reason 1.4 (b,d) 
 
1. (C) Summary.  Land issues dominate the Autonomous Republic 
of Crimea's local agenda, according to a wide range of 
Crimean officials, journalists, and community leaders we 
talked to November 20-22 in the Crimean capitol of 
Simferopol, the separately administered city of Sevastopol, 
and Bakhchiserai, the former Crimean Khanate capital and a 
flash point for land-related interethnic conflict.  Land 
politics in turn are intertwined with questions of who 
asserts authority from within national and local structures; 
dozens of figures with known criminal backgrounds were 
elected to local office in the March 26 elections.  A new 
squatter movement, initiated by Crimean Tatars in the 
immediate wake of these elections, now includes "Slavic" 
residents frustrated at long delays in apartment and land 
allocation while the rich and criminally connected secure 
choice parcels of land through other means.  Local 
pro-Russian forces have tried to make political hay by 
condemning the squatter actions as the latest example of the 
"Tatar threat" to Slavic Crimea, inflaming interethnic 
tensions in spite of good personal relations between most 
Tatar and Slavic Crimeans.  The single biggest steps which 
could help stabilize Crimea's political, economic, and social 
situation would be completion of a land registry and sale of 
land via auction rather than nontransparent transfers.  Note: 
Reftel explored the external dimension of Crimean 
developments, specifically the multifaceted Russia factor. 
End Summary and Comment. 
 
It's mainly about Land 
---------------------- 
 
2. (SBU)  Since Crimea's most prized asset is the 
Mediterranean climate of its south shore, which draws an 
estimated seven million tourists annually, it should come as 
no surprise that land -- ownership, access, and sale -- is 
the hottest issue in Crimea.  There is both an economic 
component and a sharply socio-political one, since an 
estimated 300,000 Crimean Tatars have returned from exile in 
Central Asia since 1990 without any legal mechanism or hopes 
to lay claim to the properties their families controlled 
until they were deported en masse in May 1944.  There is also 
a foreign policy angle, with Ukraine and Russia still 
struggling over control of the considerable land assets 
formerly belonging to the Soviet Black Sea Fleet, not only in 
Sevastopol but across Crimea, with Ukraine maintaining that 
Russia should transfer control of many properties (like 
lighthouses) not specifically listed in the 1997 agreement 
for Russian use through 2017 and that the Russian BSF should 
stop sub-leasing facilities to commercial ventures. 
 
3. (SBU) The Ukrainian land code places local councils in 
charge of making decisions to grant communally- or 
state-owned land for permanent use, lease, or sale.  Crimea 
still lacks a land cadaster (registry), as a 2005 effort to 
set up one initiated after the Orange Revolution collapsed in 
the face of local opposition; National Security and Defense 
Council Department Head Oleksandr Lytvynenko told us December 
1 that only 4.7 percent of Crimea's most valuable south shore 
land is inventoried.  The lack of a unified registry creates 
freedom of action for local councils and those in a position 
to benefit from opaque transactions, particularly relatives, 
the wealthy, and criminals, according to Crimean journalists. 
 While certain categories of residents and returnees have 
theoretical legal rights to land/apartments, and land sales 
are meant to be conducted via open auction, the reality is 
quite different: multi-year waits for apartments, few 
auctions, and opaque giveaways to the rich and connected, 
with land scandals a regular feature of the Crimean news. 
 
4. (SBU) The local headlines during our November 20-22 visit 
focused on a scandal in Alupka, the south shore town which 
hosts the famous Vorontsovsky Palace.  Local authorities sold 
six hectares from a national children's sanitarium which 
provides long-term treatment for pediatric tuberculosis 
cases; the estimated value of the land was between $6-8 
million, with a standard 1/100th of a hectare slice going for 
$10-14,500.  The young TB patients now face years of 
construction dust and the loss of nearly all outdoor 
play/garden space, undermining the primary purpose of the 
sanitarium.  Meanwhile in Kyiv, the police arrested Russian 
businessman Maksim Kurochkin upon his arrival November 20 
from Moscow; Kurochkin had fled arrest warrants issued after 
the Orange Revolution for his efforts to acquire, through 
armed threats, control of hundreds of acres of a protected 
nature reserve around Yalta.  (Note: Kurochkin had formed the 
infamous "Russia Club" of businessmen, a pseudo think tank 
that openly supported the Kremlin,s agenda in Ukraine in the 
 
KYIV 00004558  002 OF 004 
 
 
2004 Presidential campaign). 
 
Illegal Acquisition: Dereban, Raiderstvo, Samozakhvata 
--------------------------------------------- --------- 
 
&#18
2;5. (SBU) Crimean Tatar returnees understood early on that 
they would not be able to reacquire the valuable south shore 
properties they and their parents owned through 1944. 
However, the ease with which connected insiders like Russian 
Ambassador to Ukraine Viktor Chernomyrdin and Russian 
billionaire Aleksander Lebedev snap up beachfront properties 
in places like Alushta, the south shore's second city after 
Yalta (the pair co-own Alushta's swank new "Morye" resort as 
well as several other prominent properties), while Tatars 
wait for years for allocations in much less favorable parts 
of Crimea, is a source of constant irritation.  (Embassy 
note:  Lebedev, during a recent visit to Kyiv, told the DCM 
that then-President Kuchma had arranged for the grant of the 
land, implying that he had very little to do with its 
acquisition.  End note.) 
 
6. (SBU) The process of acquiring/stealing state 
property/resources is known in Russian as "Dereban" - the key 
to understanding how Crimea operates, said many observers. 
When former PM Tymoshenko made headlines in early 2005 by 
suggesting a review of 3000 Kuchma-era privatizations, the 
vast majority were not enterprises but instead these sort of 
Crimea insider land-deals.  At the time, former General 
Prosecutor Piskun told us that many involved land from nature 
reserves.  A companion action by those with muscle and legal 
connections is "raiderstvo" - taking over property or land 
owned by someone else through a combination of physical force 
and after the fact rulings by sympathetic/bought courts.  The 
Crimean prosecutor's office accused local Cossack unions of 
being involved in these "raiderstvo" attacks on companies and 
enterprises throughout the peninsula. 
 
7. (SBU)  Cut out of the property grab and denied orderly 
distribution, Tatars launched a concerted land grab effort 
March 27, the day after local elections, using the one 
mechanism available to the disenfranchised: squatter actions 
("samozakhvata").  Echoing a similar campaign in the early 
1990s involving 150,000 squatters in 300 locations, Tatars 
began building simple one-room sandstone block huts in fields 
around Simferopol, Bakhchiserai, and other cities, a total of 
56 sites in all, according to Crimea's leading journalist, 
Liliya Budzhurova of Pervaya Krymska.  As the squatter sites 
proliferated, ethnic Slavs fed up with the long waits for 
apartments and outraged at "dereban" joined the movement.  An 
estimated 15,000 squatter huts have gone up in the past eight 
months, and squatters have become the main issue discussed in 
Crimean media and political circles. 
 
8. (SBU) While ownership of the underlying land remains in 
dispute, the shacks are considered private property under 
Crimean law and cannot be simply destroyed without 
compensation.  Another legal loophole allows squatters the 
right to privatize the land after a certain period of 
occupation/use.  Budzhurova told of a recent televised 
roundtable on the squatter issue which she initially feared 
would become a platform for anti-Tatar sentiment, but the 
program's discussion highlighted the Slavic squatters as 
well.  The unscientific phone-in poll of those watching 
favored privatization in favor of the squatters rather than 
forced confiscation.  Referencing the eventual settlement of 
the 1990s squatter wave, Budzhurova predicted: "Crimea will 
live through this phase as well." 
 
Using Land to Provoke Interethnic Conflict 
------------------------------------------ 
 
9. (SBU) Echoing the results of the TV roundtable, many 
observers said that personal relations between local Tatar 
and Slavic residents continued to be good, even as political 
rhetoric heated up.  Crimean Tatar communal leader Mustafa 
Jemilev and Nadir Bekir, a Tatar community activist and 
Jemilev critic, both accused Russian Bloc leader Oleh 
Radyvilov of turning an economic conflict over the location 
of a Bakhchiserai open air market into a political one. 
Radyvilov controlled revenues from a market located on an 
historic Tatar cemetery, resisted court orders to move the 
market, and sent in nearly 500 Russians associated with the 
Russian Bloc and affiliated organizations like the Crimean 
Cossack Union August 12 to assault Tatars gathered at the 
cemetery site.  The serious violence finally forced central 
authorities to move the market, but Radyvilov apparently 
retained control of market revenues at the new site and 
gained a PR tool for use in future recruiting, charged Bekir. 
 
10. (SBU) Pro-Russian groups--such as the Russian Bloc, 
Proryv, and Eurasian Youth Union (ref A)--who seek to stir up 
 
KYIV 00004558  003 OF 004 
 
 
anti-Tatar sentiment for a variety of political goals have 
tried to exploit the squatter situation.   Radyvilov has 
publicly threatened to use his "Bakhchiserai methods" at all 
locations where Tatars resort to squatting, noted Budzhurova. 
 The EYU called in Crimean TV to film their threat to burn 
out all squatters within a week, added Yunusov.  Communist MP 
Hrach drafted a law that would criminalize squatting, leading 
to Tatar fears of mass arrests, said Jemilev.  Two Russian 
community activists with only a localized agenda, Serhiy 
Shuvainikov and Syvatoslav Kompaniyets, separately told us 
that ethnic Russians needed to take stronger actions to 
defend their rights against the "Tatars'" squatter 
initiative, overlooking the Slavic participants in the 
movement.  The anti-squatting attention is misdirected, 
according to Maidan-Krym's Yan Sinitsyn, who claimed that 
there is more coverage of Proryv and EYU PR stunts 
threatening to smash squatter huts than of greater "dereban" 
outrages in which connected insiders steal hundreds of 
hectares of far more valuable land. 
 
11. (SBU) Pro-Russian forces attempt to maintain a constant 
level of interethnic tension for political reasons, claimed 
Bakhchiserai Tatar community leader Ahtem Chiygoz.  As soon 
as the Bakhchiserai cemetery/market conflict was resolved, a 
new one popped up several kilometers away: the Moscow 
Patriarchate-controlled Uspenski Monastery used a dubious 
court ruling giving it control of communal land to try to 
limit access on the narrow valley path that runs from the 
Bakhchiserai Khan's Palace, one of Crimea's major tourist 
draws, past the Monastery to a nearby former madreseh and the 
abandoned cliff city of Chufut Kale.  This new conflict came 
on the heels of the resolution of Moscow Patriarchate efforts 
to build a new cathedral on top of a different Tatar 
cemetery.  Local leaders finally agreed to build the church 
on the next hilltop, thanks to intervention by Hennadiy 
Moskal, Yushchenko's representative in Crimea.  "The struggle 
never ends," complained Chiygoz. 
 
Who's in Control? (No one, really) 
---------------------------------- 
 
12. (SBU) The weakening of central authority and Kyiv's 
inability to impose order in Crimea was a common complaint 
from everyone we talk
ed to, including Moskal himself, who 
received universally high marks from others for his 
effectiveness in defusing conflict through informal 
interventions.  NSDC's Lytvynenko stated that only 18 percent 
of the taskings in the first systemic Crimea-related NSDC 
decision, endorsed by Presidential decree in February, had 
been implemented, leading to a second NSDC document approved 
in October.  The vacuum has only partly been filled by 
Crimea's own authorities, particularly after the March 26 
elections brought a new group into the Crimean parliament 
with dubious pasts (below) and an agenda not focused on 
governance.  That left local councils to act in their own 
base interests, everyone agreed. 
 
13. (SBU) Even when there was an effort to forge some 
compromise on contested issues like land allocation--Jemilev 
told us he and Grytsenko had been working together for a 
peaceful resolution to the squatter situation--local councils 
sabotaged Grytsenko's efforts.  Radio Liberty's Volodymyr 
Prytula suggested Crimea's current power pecking order ran as 
follows: Anatoliy Grytsenko, Crimean Rada Speaker and head of 
Party of Regions' Crimean branch; Aleksandr Melnyk, head of a 
known criminal gang (below); and newcomers from Donetsk, with 
Anton Prigordskiy, Crimean Rada MP, in charge of Crimea for 
Regions' financier Rinat Akhmetov. 
 
Reemergence of Criminal Figures from the Past 
--------------------------------------------- 
 
14. (SBU) Former Interior Minister Yuri Lutsenko attracted 
headlines February 17 when he held a "public interest" press 
conference to name names of dozens of candidates running for 
the Crimean parliament who had "problems with the law"; the 
total number of ex-cons and those suspected of criminal 
connections ranged into the hundreds if local council races 
were included.  Leading this dubious honor roll, as it were, 
was the "Za Soyuz" party (For Union - with Russia), Party of 
Regions, which chose to run jointly with the "Russian Bloc" 
party, and Kunitsyn's Bloc.  When Crimea's leading 
journalist, Liliya Budzhurova, published "Lutsenko's list" in 
the February 24 edition of her "Pervaya Krymska" paper, the 
reaction of one of them turned personal.  Budzhurova's house 
was firebombed the night of March 1 (fortunately, her elderly 
mother saw the flames, which were extinguished before the 
house burned down). 
 
15. (C) Moskal, whom observers credit with ending rampant 
criminality in Crimea via a "get tough" campaign in 1997-98, 
 
KYIV 00004558  004 OF 004 
 
 
blamed the reemergence of known criminals squarely on 
Regions' shoulders, along with the blocs of Kunitsyn and 
Vitrenko, noting that they had knowingly included many 
figures with criminal pasts on their Crimea election lists. 
Moskal claimed that Grytsenko had taken money from Aleksandr 
Melnyk and Ihor Lukashev, two of Crimea's top organized 
criminals, for their inclusion on the party list.  However, 
he added that it had been National Rada members from Regions, 
not Crimean Rada MPs, who had lobbied for Melnyk to be 
released from custody under a travel ban after his September 
29 arrest; Melnyk immediately fled back to Moscow. 
 
16. (SBU) For her part, Budzhurova blamed Crimea's voters. 
"We published the names of criminals running for office, but 
the voters chose their blocs anyway." (Note: of 100 seats in 
the Crimean Rada, the "For Yanukovych" Bloc holds 44, 
Kunitsyn's Bloc 12, and Za Soyuz 10).  Prytula said that 
conversations about the most influential criminals in Crimea 
who had gained office in March focused around three 
individuals: Melnyk (Regions), Lukashev (Regions), and Ruvim 
Aronov (Kunitsyn Bloc).  Prytula stressed that such Crimean 
criminals were fundamentally different than in the 1990s: 
then, they were sportsuit-wearing, pistol-wielding "bandits" 
who gave Crimea a reputation as the "Ukrainian Sicily" and 
ended up in jail, shot, or going to ground; now they had 
moved into mainly above-board businesses, as well as local 
government. 
 
Melnyk, Lukashev, Aronov : Worst of a Bad Lot 
--------------------------------------------- 
 
17. (C) Lutsenko told Ambassador November 17 that he had been 
shocked that the General Prosecutor's Office (GPO) had 
refused to file charges against Melnyk, who in the 1990s had 
led the "Seilem" gang responsible for 52 contract murders, 
including: one journalist; two policemen; 30  businessmen; 
and 15  OC competitors.  Ukrainian authorities had lured 
Melnyk from Moscow back to Ukraine this fall after a 
journalist wrote an article suggesting Melnyk was afraid of 
Lutsenko.  Melnyk was arrested upon arrival, but after GPO 
non-action and Melnyk's release October 3, he fled back to 
Moscow.  Lutsenko alleged Melnyk was behind the March 1 
firebomb attempt of Budzhurova's house.  Melnyk's sister 
Svetlana Verba served as Crimea's Economics Minister, noted 
Prytula.  And Ihor Lukashev, who chaired the Crimean Rada 
budget committee, is known as the "wallet" of Melnyk's 
"Seilem" gang. 
 
18. (SBU) Rounding out the top three, Ruvim Aronov is 
currently on the lam in Israel.  Deputy Interior Minister 
Yevdokimov told reporters August 15 that Aronov was one of 
the leaders of the "Bashmaki" gang active between 1991-2005 
in Crimea, Zaporizhzhya, Kharkiv, and Kyiv.  The gang has 
been implicated in 50 murders and eight abductions. 
 
Lutsenko: Resurgent Criminality to be expected 
--------------------------------------------- - 
 
19. (C) Note: Prior to his dismissal December 1, Lutsenko 
argued to the Ambassador that there had been a resurgence in 
organized criminal activity in Ukraine overall since August, 
when Regions returned to power, after 18 months of calm under 
two orange governments.  In his view, the police and Interior 
Ministry were now at war with the PGO, led by Donbas native 
Medvedko, over the PGO's refusal to prosecute known criminals 
such as Melnyk and Kuchma-era heavyweight Volodymyr 
Shcherban, who had returned to Ukraine in November after a 
voluntary departure from the U.S.  "The PGO refusal to 
prosecute the likes of Shcherban and Melnyk was a green light 
to criminals that they could come back and operate in Ukraine 
with near impunity, able to cut a deal after the fact with 
authorities," Lutsenko charged. 
 
20. (U) Visit Embassy Kyiv's classified website: 
www.state.sgov.gov/p/eur/kiev. 
Taylor

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