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07KYIV1507, UKRAINE: OLIGARCH AKHMETOV CONSIDERS STAYING OUT

June 21, 2007

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Reference ID Created Released Classification Origin
07KYIV1507 2007-06-21 06:41 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

VZCZCXRO1519
PP RUEHDBU
DE RUEHKV #1507/01 1720641
ZNY CCCCC ZZH
P 210641Z JUN 07
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 2788
INFO RUCNCIS/CIS COLLECTIVE
RUEHZG/NATO EU COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 03 KYIV 001507 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 06/19/2017 
TAGS: PGOV PINR UP
SUBJECT: UKRAINE: OLIGARCH AKHMETOV CONSIDERS STAYING OUT 
OF PARLIAMENT NEXT ROUND 
 
REF: KIEV 3304 
 
Classified By: Ambassador for reasons 1.4 (b,d). 
 
1. (C) Summary:  During a June 14 dinner, oligarch and Party 
of Regions financier Rinat Akhmetov said he was considering 
making a graceful exit from Parliament.  He was disappointed 
and frustrated with his role as a Parliamentary Deputy and 
preferred to focus his efforts on his business activity and 
on a 22-point economic reform plan that had been drafted by 
U.S. consultants McKinsey and Company with the financial 
support of his foundation.  He had to find a way, however, to 
surrender his Parliamentary seat in a way that could not be 
interpreted as a falling-out with Prime Minister Yanukovych. 
Akhmetov argued that a Regions-Our Ukraine coalition would be 
the best outcome of September 30 pre-term elections and said 
that he had been supportive of such a coalition since the 
March 2006 parliamentary election.  Both political groups had 
to moderate their electioneering so that they could build 
bridges to each other after the election.  A Regions-Our 
Ukraine coalition could also include Yuliya Tymoshenko in the 
role of Parliamentary speaker and would set the stage for 
Yushchenko's re-election as President in 2009. 
 
2. (C) Comment:  Akhmetov is a moderate within the Party of 
Regions who, with his interest in market-oriented reforms and 
promotion of a good investment climate, balances more 
hard-line elements within the party.  His departure from 
Parliament could potentially mean that he would be less 
involved in the implementation of the Party of Regions 
specific policies.  President Yushchenko, in public comments, 
and Yuliya Tymoshenko, in private comments to Ambassador, 
recently both praised Akhmetov's role in the Party of 
Regions, and former NSDC Secretary Haiduk worked closely with 
Akhmetov during the April-May political standoff to bring all 
sides to a political compromise and to avoid violence. 
Nonetheless, Akhmetov seemed to be 90% decided to leave 
Parliament, although probably not until after the next 
election.  End summary/comment. 
 
3. (C) During his trip to Donetsk (septels), Ambassador had 
dinner June 14 with Ukrainian billionaire and Party of 
Regions financier Rinat Akhmetov.  Akhmetov admitted he had 
been disappointed during his tenure as a deputy in Parliament 
(Verkhovna Rada).  Politicians were required to say what 
their voters wanted to hear, so, frankly speaking, were 
"under pressure to lie."  As a businessman, Akhmetov said 
that he made promises and was able to deliver.  He had told 
Donetsk residents that he would build a world-class hotel, 
and he did.  He had said he would transform the Donetsk 
soccer team into a national powerhouse, and he did.  Akhmetov 
said he wanted to find a graceful way to exit from the Rada, 
but he had to do so in a way that his departure would not be 
interpreted as a falling-out with Prime Minister Viktor 
Yanukovych. 
 
4. (U) Akhmetov said U.S.-based McKinsey and Company had been 
working with the Ukrainian government for the past three 
months to develop a 22-point economic development program 
that covered areas such as judicial, tax, and fiscal reform. 
While his foundation had paid for McKinsey's work, his only 
other contribution "was not to interfere."  The program was 
presented June 13 to President Yushchenko, who had responded 
enthusiastically.  Akhmetov commented the McKinsey program, 
which incorporated "the best international practices," was 
consistent with Yushchenko's approach, being progressive and 
Western-oriented.  The program had the potential to help 
unite the country, since Yanukovych also was a strong 
McKinsey supporter. 
 
5. (U) His task was finding ways to advance the reforms, 
Akhmetov said, with one approach being to attract the best 
Ukrainian minds to his foundation, so that it could function 
as an "independent auditor" that would not just say what the 
President, Prime Minister, and Speaker wanted to hear. 
Ukrainians needed to understand that globalization was an 
inevitable process that would affect Ukraine and that Ukraine 
could not build a fence around itself. 
 
6. (C) Akhmetov noted that he had originally been reluctant 
to run for a Rada seat, but had decided to do so after a long 
conversation with Yanukovych.  He had wanted to concentrate 
on the work of his foundation.  During the campaign, Akhmetov 
had stressed three goals: to create economic growth, to 
decrease unemployment, and to fight poverty.  The idea of 
working with his foundation and on McKinsey's economic 
program appealed to him, but he had to leave the Rada in a 
way that would not be seen as a betrayal of Yanukovych and 
lose one or two percentage points of Regions' support.  He 
had no support in Western Ukraine, since he did not speak 
Ukrainian and was not well known, but he had a strong base of 
 
KYIV 00001507  002 OF 003 
 
 
support in his home of Donetsk.  Showing that his mind was 
not completely made up about whether or not to remain in the 
Rada, Akhmetov also mused that, if he were to continue to be 
a parliamentary deputy, he could ensure that the Committee on 
Economic Po
licy considered the McKinsey program.  (Note. 
Given Akhmetov's personal clout, we suspect that it would be 
easy for him to get the appropriate Rada committees to 
consider the McKinsey program, regardless of whether he 
remained in the Rada or not.  End note.) 
 
Pre-Term Elections 
------------------ 
 
7. (C) From the beginning of the current political 
uncertainty, Akhmetov observed, he had advocated that a 
political settlement be reached before a Constitutional Court 
decision was rendered.  Had this been possible, an election 
could have been avoided and a different coalition could have 
emerged on the basis of the "Universal" agreement.  Now, too 
much water had gone under the bridge and the September 30 
pre-term elections were the only solution.  He was glad there 
had been an agreement to hold elections on September 30. 
 
8. (C) The conduct of the parliamentary election campaign 
would be a determining factor whether a "broad coalition" 
(between Party of Regions and pro-presidential Our Ukraine 
bloc, OU) would emerge after the election, according to 
Akhmetov.  He had favored a broad coalition after the 2006 
parliamentary elections, and he still did so.  In Akhmetov's 
view, both Regions and OU had to be careful to structure 
their campaign messages in a way that would not set back the 
process two or three years.  When President Yushchenko had 
referred to Party of Regions as "bandits" in 2004, the 
name-calling may have been good for OU' ratings, but in the 
future, such attacks should be avoided.  Akhmetov said that 
both sides should place the interests of the country above 
their own narrow political ones. 
 
9. (C) Akhmetov noted that he had warned Presidential Chief 
of Staff Viktor Baloha and National Security and Defense 
Council Secretary Ivan Plyushch that OU faced a dilemma 
regarding its conduct of elections.  Akhmetov laid out the 
following analysis.  If President Yushchenko wanted OU to get 
two more percentage points of the vote, then OU should be in 
sharp opposition to Regions.  If OU did not do so, then Bloc 
Yuliya Tymoshenko (BYuT) would steal votes from OU's support 
base.  If, however, Yushchenko thought about the country and 
the 2009 presidential election, then he would moderate his 
messages to the electorate with the tactic of losing some 
votes now to gain more in two years.  By his statements, 
Yushchenko could split the country, or unite it. 
 
10. (C) A democracy needed balance, noted Akhmetov.  He 
wanted to see Yushchenko reelected as president in 2009 
because he was opposed to the concentration of too much power 
in one hand, and had told Yanukovych as much six months ago. 
In Akhmetov's view, the best outcome of the next elections 
would be the return of Yanukovych to the prime ministership, 
with current opposition politician Yuliya Tymoshenko as 
Verkhovna Rada Speaker.  Such an arrangement would ensure 
that Yushchenko would stay on as president in 2009. 
Ambassador noted that Tymoshenko had said something similar. 
Her first preference would be a coalition of OU, BYuT, and 
Lutsenko's People's Defense.  If that were not possible, she 
would prefer to see a coalition between Regions and OU, 
because the alternative otherwise would be a coalition of 
Regions, the Communists, and Nataliya Vitrenko's Progressive 
Social Democrats. 
 
11. (C) Akmetov reiterated his support for a Regions-OU 
coalition, noting that within days of the 2006 parliamentary 
elections, he had called a press conference in which he had 
publicly called for a coalition between Regions and OU. 
There would be no love between the two parties, just a 
contract marriage, but such a coalition would be good for 
Ukraine.  He had made the same point privately to Yanukovych. 
 The conditions were now right for such a coalition to be 
formed.  The alternative, a Regions coalition with the 
Communists and Nataliya Vitrenko's party, would put Ukraine 
ten years behind and destroy prospects for further progress 
on economic and market reforms.  He was convinced that 
Yanukovych was focused on forming a coalition with OU and 
would not be able to tolerate a coalition with the Communists 
and Vitrenko's party. 
 
BIO Note 
-------- 
 
12. (U) When Ambassador mentioned that he had visited the 
Belozersk mine earlier the same day, Akhmetov said mine 
safety was an important issue.  His father, who had died at 
 
KYIV 00001507  003 OF 003 
 
 
the age of 25, had been a miner underground for ten years. 
He and his older brother had also been miners. 
 
13. (U) Visit Embassy Kyiv's classified website: 
www.state.sgov.gov/p/eur/kiev. 
Taylor

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