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June 21, 2007

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Reference ID Created Released Classification Origin
07KYIV1516 2007-06-21 14:16 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

DE RUEHKV #1516/01 1721416
P 211416Z JUN 07

C O N F I D E N T I A L SECTION 01 OF 06 KYIV 001516 
E.O. 12958: DECL: 06/18/2017 
KYIV 00001516  001.2 OF 006 
Classified By: Political Counselor Kent Logsdon for reasons 1.4(a,b,d). 
1. (C) Summary.  On an early June trip to Dnipropetrovsk 
city, the capital of a major industrial center in the East, 
poloff found a wealthy city more blue than orange, but with a 
great deal of distrust of both Donetsk-based Party of Regions 
and Dnipro-native Tymoshenko, leaving an opening for other 
political forces.  In meetings with representatives of all 
major political forces and outside journalists and analysts, 
all talked about a population fiercely proud of their city 
and oblast, focused on economic issues, and disinterested in 
Kyiv politics.  They talked about the need for political 
decentralization, and cited a small but growing middle class 
that demanded a higher quality of life and a city free of 
garbage and environmental pollutants.  They also advocated 
decentralization, of the budget and the government as a 
whole, to give more power to the local governments and to be 
less dependent on Kyiv.  People were proud of 
Dnipropetrovsk's status as a military-industrial center in 
the Soviet Union and as the dominant political force in 
Ukraine in the 1990s, when most key politicians, including 
President Kuchma, hailed from Dnipropetrovsk.  Accompanying 
this regional pride was an equally high disdain for 
Donetsk--Dnipropetrovsk's rival during its glory days in the 
1990s.  Even former Prime Minister Lazarenko, the 
Dnipropetrovsk native currently in jail in San Francisco for 
money laundering, still holds sway here and is remembered for 
the wealth and structural improvements he brought to the 
2. (C) Summary contd.  In terms of a September 30 Rada 
elections, Regions is likely to be the highest vote getter in 
Dnipropetrovsk, as it was in the 2006 Rada elections (it got 
45 percent), but it does not dominate this oblast as it does 
neighboring Donetsk and Luhansk.  Moreover, Regions could 
lose some support to the Communists and Vitrenko's 
Progressive Socialists on one side and to the more populist 
orange parties, such as BYuT on the other.  Tymoshenko is 
likely to retain her foothold--15 percent in 2006--but there 
is potential for smaller parties, especially Lutsenko's 
People's Self-Defense to garner support here.  Everyone we 
spoke with acknowledged that Russian language and NATO would 
be major campaign themes again, although populist 
promises--higher pensions, salaries, etc--would dominate all 
parties' platforms.  People agreed that these elections would 
be dirtier than the 2006 elections, but that it was not 
possible to return to 2004 levels of voter fraud--no one 
party or group had that much control over the oblast.  There 
was also on ongoing race to buy media before the election; 
Regions was winning, but Tymoshenko and Lazarenko also had 
stakes.  End summary. 
BYuT: Vote for Tymoshenko, She Was Born Here 
3. (SBU) BYuT Rada MP Ivan Kyrylenko laid out the BYuT 
strategy--focus on social populism and remind people that 
Tymoshenko is from Dnipropetrovsk.  He said that they had 
just commissioned a poll that showed voters were most 
concerned with social and economic issues--utility costs, 
quality of medical care, garbage in the streets, and the 
level of wages.  But voters in Dnipropetrovsk blamed the 
central government for these problems, not the city or oblast 
administrations. When Dnipropetrovsk was in charge of Ukraine 
in the 1990s, they had built roads and bridges.  Now Donetsk 
is in power and does nothing for anyone else--this could hurt 
Regions, he believed. 
4. (SBU) According to Kyrylenko, BYuT wanted to raise the 
barrier to get into the Rada to between five and seven 
percent, so they could have a two party system, which would 
force good people to leave the smaller fringe parties and 
join one of the big parties.  Then, after elections, they 
would focus on getting a law on the opposition passed that 
gave the opposition an oversight function and other ways to 
represent its electorate.  He also said that it was time to 
move forward on the second stage of constitutional 
reform--decentralization of power to the municipal and oblast 
5. (C) Comment.  Poloff was struck once again by BYuT's 
well-structured party infrastructure.  Kyrylenko said he had 
overall responsibility for the campaign in the oblast, but 
the region is divided into "okrugs"--districts bigger than a 
rayon--with an MP assigned to each one.  He said he comes 
back to Dnipropetrovsk at least once a week to attend to 
party business. 
Party of Regions: We Don't Want Elections, But We'll Win 
--------------------------------------------- ----------- 
KYIV 00001516  002.2 OF 006 
6. (SBU) Oleksandr Parubets, head of Party of Regions' 
Dnipropetrovsk party secretariat, said that people in his 
oblast want stability, not new elections.  However, they will 
vote if the elections are based on constitutional grounds. 
Dnipropetrovsk is one of Ukraine's five o
r six donor oblasts, 
and people don't want to see their tax money spent unwisely. 
(Note--a "donor oblast" contributes more revenue to the 
central budget than it gets back. End note)  Parubets praised 
the Yanukovych Cabinet as one of the strongest governments in 
Ukraine's history, especially for its work in raising 
pensions and salaries.  In terms of what Regions saw as the 
key campaign issues for the region, it would be job creation 
and economic development.  But he said that they may be 
forced to raise the Russian language issue, even if was not 
at the top of the party's platform--if Regions doesn't, the 
Communists will.  Regions' ratings were probably about 10 
percent less than in March 2006, but they were stable at 
27-28 percent. 
7. (SBU) Parubets noted that Regions in Dnipropetrovsk ran in 
close conjunction in the 2006 elections with the Communists, 
and that the two parties are now in coalitions in most city 
and rayon councils, along with the Socialists and Hromada. 
He could envision the two parties cooperating again, even if 
not in a formal bloc.  He thought that both politicians and 
voters were more focused on politics at the rayon level than 
at national level.  Parubets also told us that Regions had 
boycotted oblast council sessions in June 2006 until they 
succeeded in securing the position of head of the council. 
8. (C) Parubets described Regions's national party structure 
in similar terms to how Kyrylenko described BYuT's--an okrug 
structure with MPs assigned to reach out to voters in 
different parts of the country.  He emphasized that the local 
Regions party takes it own decisions; although they talk to 
Kyiv headquarters daily, they do not feel pressured to make 
certain decisions. (Note.  Lutsenko's representative in 
Dnipropetrovsk said that Regions does not have a home grown 
presence, so the party anointed Dnipropetrovsk businessman 
Tsarov, now a Regions MP, to run the party in the oblast. 
Tsarov's brothers are Regions deputies in the oblast and city 
councils.  End note.) 
Journalist Sakhanov: No Political Force Dominates 
--------------------------------------------- ---- 
9. (SBU) Respected local journalist Hennadiy Sakhanov 
described Dnipropetrovsk as having a higher intellectual 
level than other parts of the country--there were a lot of 
university students and professors here, as well as the old 
intelligentsia.  He described the people as quiet, 
thoughtful, and mostly concerned with economic issues.  He 
commented that after WWII, Dnipropetrovsk became a major 
military-industrial center, which saw an influx of both 
workers and technological improvements. 
10. (SBU) He believed that exact election results were 
unpredictable, but the new Rada will likely end up split 
about 50-50 again between orange and blue.  Donetsk was not 
very popular in Dnipropetrovsk and Regions was tied very 
closely to Donetsk, which limits their popularity. 
Tymoshenko was very polarizing in Dnipropetrovsk--she is a 
native daughter and miners had respected her for increasing 
their salaries and cracking down on corruption in the mining 
industry, but Regions controls the mining areas now and have 
countered her influence.  Tymoshenko was now paying a lot of 
attention to rural areas.  Communist support seemed to be 
decreasing--they used to get 8,000-9,000 people to show up 
for May 1 rallies, this year it was less than 1,000.  Because 
of this ambivalence towards all the parties represented in 
the current Rada, Lutsenko had the possibility to build 
support here if he continued holding his regional meetings. 
11. (SBU) Sakhanov was not overly worried about election 
fraud, saying that the administrative resource chain from 
2004 had been broken.  He believed the local government had a 
lot of influence on elections, both through ownership of 
media outlets and in staffing district election commissions 
and polling stations.  However, the local administrative 
vertical did not work for Yanukovych or Yushchenko, but for 
local political interests. 
Analyst Romanov: New Parties Wanted, Lutsenko Could Benefit 
--------------------------------------------- -------------- 
12. (SBU) Vladyslav Romanov, director of the Prydniprovya 
analytical center, said that people will vote, despite 
passive political views.  However, no political force was 
offering anything concrete--the slogans are all about higher 
KYIV 00001516  003.2 OF 006 
wages and lower tariffs.  He thought that Regions will suffer 
in the upcoming election in Dnipropetrovsk because they had 
been discredited here.  Moreover, they were funding road 
construction in Donetsk ten times more than in 
Dnipropetrovsk, which caused tension between the two oblasts. 
 The BYuT strategy of portraying Tymoshenko as a 
Dnipropetrovsk native won't work because she is viewed here 
as having never done anything for Dnipropetrovsk.  Romanov 
believed this left an opening for other parties; Lytvyn and 
Lutsenko had a good chance here. 
13. (SBU) In terms of local politics, Regions members of city 
council seemed to get a lot of guidance from Kyiv.  In 
contrast, BYuT city council members had the majority, so they 
tended to ignore their Kyiv headquarters.  There was a lot of 
corporate consolidation underway in Dnipropetrovsk, along 
with greater efforts by businessmen to distance themselves 
from politics.  But business was suffering--in particular, 
they needed a land market; without it there would be 
stagnation.  There was no vertical chain in government from 
the center down to the city, instead there was an ongoing 
fight between civil servants at the oblast level, where 
Regions was in charge, and the local level, where BYuT had a 
majority.  Dnipropetrovsk would benefit from a 
decentralization of the budget--the current process was too 
CVU: Voter Fraud Will Be Low 
14. (C) Regional head of election watchdog Committee of 
Voters of Ukraine (CVU) Oleksandr Sidorenko expressed doubt 
that there would be an election on September 30, although he 
allowed it might happen at some point.  If there was an 
election, he said, he did not expect the mass falsifications 
of 2004 to reemerge because the administrative vertical from 
Kyiv through the regions to the local level has been 
destroyed.  There was a higher risk of falsification in some 
of the industrial cities like Kriviy Rih or Pavlohrad than in 
Dnipropetrovsk city.  In terms of party standings, Our 
Ukraine's ratings had dropped a lot, BYuT's and Regions' 
slightly.  Only BYuT had a strong party structure in the 
oblast, with MPs visiting at least once a week.   He also 
said that although people in Dnipropetrovsk do not like 
Donetsk, they still vote for Regions.   Moreover, Regions had 
increased its appeal to young people between 2004 and 2006, 
surprising people w
ith how well they did in Dnipropetrovsk, 
although he gave most of that credit to older voters. 
Sidorenko thought Lutsenko might get more than four percent 
of vote in Dnipropetrovsk. 
Lutsenko's Movement Targeting the Young and Disappointed 
--------------------------------------------- ----------- 
15. (SBU) Journalist Olena Harahuts, leader of the 
Dnipropetrovsk branch of the People's Self Defense movement 
(PSD), told us that PSD had a seven percent rating and 
Lutsenko's rallies have been well-attended, even in places 
that supported Regions or the Socialists in 2006.  Harahuts 
believed that the same old issues and slogans would be used 
again in the upcoming campaign, including Russian language. 
The older generation will support the Communists and 
Vitrenko, but PSD hoped to gain support from the youth. 
There were places around universities where Yushchenko beat 
Yanukovych in 2004, but these people were now disappointed in 
Yushchenko; this was a Lutsenko target demographic. 
16. (SBU) Regarding the Dnipropetrovsk political scene, 
Harahuts did not believe ideology was key to party 
membership; Tsarov had bought his seat in Regions and 
Vitrenko's Progressive Socialist faction had businessmen in 
it, including Socialist MP Shybko's son.  BYuT had 22 percent 
support in the oblast, but equally high levels of distrust. 
Although Tymoshenko was born here, people viewed her as 
having cheated Dnipropetrovsk in enriching her business. 
17. (C) Regarding its own plans, Harahuts said PSD had 
concerns about joining a megabloc with Our Ukraine and 
Pravitsya.  They would like to have their own faction in the 
new Rada, but cannot if they run as a bloc.  Moreover, 
tensions were high because Our Ukraine was exploiting a legal 
loophole to pressure PSD into joining the bloc.  Because PSD 
is not a party itself, Harahuts explained, it would need to 
run as a bloc, which legally must have at least two 
constituent parties.  However, one of PSD's two parties, 
Forward Ukraine, had been too inactive in recent years to 
meet all the legal requirements to be a party, an issue that 
Our Ukraine brought to the attention of the Ministry of 
Justice and several regional courts.  Lutsenko ally and 
former OU MP Mykola Katerynchuk was preparing a new 
KYIV 00001516  004.2 OF 006 
constitution, which Lutsenko and he will present on 
Constitution Day (June 28).  Other members of PSD were 
working on the movement's economic platform.  They were also 
planning an anti-corruption campaign, in which PSD would have 
two lawyers in each of nine oblasts who would provide legal 
council to regional organizations and journalists attempting 
to disclose and publicize corruption. 
Our Ukraine: Not Much of a Factor in Dnipropetrovsk 
--------------------------------------------- ------ 
18. (SBU) Serhiy Belikov, deputy head of the Our Ukraine 
branch in Dnipropetrovsk  city, acknowledged that new 
elections won't change the composition of the Rada much, but 
argued that MPs who switched sides deserved to be punished. 
He said that elections should be followed by the adoption of 
laws on the opposition and imperative mandate, and then the 
establishment of a constitutional commission to remove 
contradictions from the constitution.  OU's plan for its 
campaign in Dnipropetrovsk is to remind voters of the gains 
made in the Orange Revolution--a free press, a freer 
society--to point out that Regions' 2006 campaign promises of 
a better life for all have been empty, and to promise higher 
pensions and student stipends. Yushchenko has seen a bump in 
his ratings in Dnipropetrovsk since issuing his decrees on 
early elections--they would play up the President's 
affiliation with OU in the campaign. 
19. (SBU) There is a plan to unite with PSD and Pravitsya and 
to cooperate with BYuT, but they need to sign a memo with 
BYuT on holding an honest election and avoiding dirty 
campaigns.  Regions, Socialists, and Communists will raise 
the Russian language and anti-NATO issues again.  OU tried a 
purely economic platform in 2006, but it did not generate any 
interest.  In 2004, a lot of votes Yushchenko got in the 
third round in Dnipropetrovsk were really anti-Yanukovych 
votes.  In 2006, BYuT picked up this protest vote.  This 
time, they feared election fraud would be much worse. 
20. (C) Comment.  Our Ukraine has almost no presence in 
Dnipropetrovsk and most people we talked to did not take it 
seriously.  Outside observers agreed that Our Ukraine had 
damaged its reputation significantly when it put Mykola 
Shvets as the number one person on its 2006 oblast party 
list. (Note. Shvets was the Kuchma-appointed governor of 
Dnipropetrovsk from 1999-2003 and a blatant example of 
corruption and abuse of administrative resources, whom Our 
Ukraine had criticized sharply following the Orange 
Revolution.  End note.)  Harahuts said that Shvets had 
falsified 24,000 votes for OU in 2006.  Even the OU reps 
acknowledged that they weren't much of a factor in 
Dnipropetrovsk--that Tymoshenko was the only serious 
challenge to Regions.  End comment. 
Dnipropetrovsk's Oligarchs Still Active Behind the Scenes 
--------------------------------------------- ----------- 
21. (C) Although Dnipropetrovsk is not the power center it 
was in the mid-late 1990s, it is still home to two major 
"oligarchs"--Viktor Pinchuk and the Pryvat duo of Ihor 
Kolomoyskiy and Hennadiy Boholubov--and most people we talked 
to believed they kept their fingers in politics, albeit 
quietly.  Kyrylenko said Pinchuk is not on any specific team, 
but will work with Regions.  He acknowledged that BYuT had 
some ties with Prvyvat Group, but said they were distant. 
Romanov said that the role of business was changing, big 
business still tied to power/government--but slightly smaller 
non-oligarchic companies are trying to develop a public image 
separate from politicians.  Romanov said Tymoshenko and 
Pryvat had some ties, but he was not sure how deep they were. 
 Parubets said that Pinchuk and Pryvat are as involved in 
politics as anyone, especially Pryvat, but people just don't 
see it.  Parubets added that Pinchuk's charity work is, at 
least partially, for political reasons and he is still 
funding the Viche political party, which did not make it into 
the Rada in 2006, but has seats on regional councils. 
Belikov said that earlier Pryvat and IUD did not care who was 
in the government, but now, when they are losing money, they 
care a great deal.  Belikov believed Pinchuk wavers between 
Yushchenko and Regions.  Harahuts said that Prvyvat supported 
all major parties, but Regions a little less than the others. 
Civil Society 
22. (SBU) Beyond politics, life in Dnipropetrovsk appeared to 
be developing positively in other directions.  There was a 
lot of discussion of the city's small, but growing middle 
class--people who wa
nted a high quality of life and demanded 
things of their elected officials.  Analyst Romanov said that 
KYIV 00001516  005.2 OF 006 
these people were less interested in politics than in other 
issues--including ecological problems and garbage in the 
streets.  These people were willing to pay more for things 
like water and gasoline if the quality was higher.  Mostly 
they were concerned that there be no economic backsliding. 
Journalist Sakhanov said that the youth in Dnipropetrovsk was 
more socially active than middle age people.  The youth want 
a good life, no ties to the USSR.  He also said that 
Dnipropetrovsk had a multicultural heritage--before WWII the 
population was a mix of Ukrainians, Russians, Catholic, and 
Poles that brought religious diversity with them--that still 
resonated in the city today.  There was also a strong Jewish 
presence in Dnipropetrovsk; in his estimation the synagogues 
had more influence than the Orthodox Church in Dnipropetrovsk 
politics.  There was a lot of civic pride in the city, with a 
fondness for reminiscing about Dnipropetrovsk's former status 
as major center of Soviet military-industrial complex and 
about its control of Ukrainian politics under President 
Kuchma.  It was clear that there was some resentment that 
Donetsk, Dnipropetrovsk's rival for power and money, had 
taken such strong control of the central government. 
23. (SBU) Interestingly, Lazarenko--Prime Minister of Ukraine 
1997-1998, currently in San Francisco, convicted on money 
laundering charges--still has popularity and influence.  His 
party Hromada has the third largest faction on the oblast 
council and he still owned the most popular newspaper.  Last 
year, they rehung his picture in city hall.  CVU head 
Sidorenko said that although general views of Lazarenko are 
more negative than positive, people remember that he brought 
money and order to the oblast.  Harahuts said Lazarenko was 
still respected because when he was Prime Minister, 
Dnipropetrovsk got money, metro stations, bridges, pipelines, 
and improved transportation infrastructure, especially in 
agricultural areas.  People had been disappointed that 
Hromada had agreed to go into a coalition with Regions in 
Russia is an Important Neighbor, but Europe is More Desirable 
--------------------------------------------- ---------------- 
24. (SBU) There was general agreement that Russia was an 
important economic partner, but that Moscow should not 
interfere in Ukrainian politics and that the Russian path was 
not Ukraine's.  Sakhanov said Dnipropetrovsk residents view 
Russia as an economic partner, but not a political one.  If 
Russia verbally attacks Ukraine, they attack right back.  He 
said they also viewed the Single Economic Space as a 
negative.  Regions representative Parubets said that people 
in Dnipropetrovsk have good feelings toward Russia, both in 
terms of maintaining the industrial links from the Soviet 
Union and through the Slavic ties between Russia, Ukraine, 
and Belarus, but they do not want Russia interfering in 
Ukraine's internal affairs.  Harahuts said that in general 
Dnipropetrovsk did not feel a lot of pressure from Russia--no 
one wanted a union or a return the past.  Romanov argued that 
Russian pressure was very strong; the Kremlin was clearly 
unhappy with Yanukovych.  The Russians had lots of business 
interests in Ukrainian coal and metals sectors, Russian 
insurance companies are active in Ukraine, the financial 
market is attractive--all of which impacts on Ukrainian 
25. (SBU) In contrast, there was more focus on Europe as a 
possible future.  Romanov said that Dnipropetrovsk residents 
consider themselves Europeans--Europe has a positive context 
in terms of lifestyle and technology.   A majority of people 
supported joining the EU, especially young people.  Harahuts 
said people related well to the EU; there has been an 
increase of travel and now Ukrainians see how others live and 
want that for themselves.  The one negative most people cited 
was that there was still a lack of understanding about what 
NATO was and criticism that Western governments were not more 
actively engaged in prompting the alliance. 
Fight for Control of Oblast, City Media 
26. (SBU) Most people we talked to expressed concerns that 
Regions was buying up media in the oblast in anticipation of 
the September election.  In particular, they had used a 
so-called "raider" attack to get Dnepr Vcherni, the oldest 
newspaper in the oblast.  Harahuts said that Regions was 
snapping up regional media through the courts and the 
prosecutor's office.  She had received offers for her paper 
from Tsarov on behalf of Russian businessmen.  According to 
Harahuts, when she refused, they threatened her family. 
Overall, two-thirds of commercial papers and one-third of 
government papers tied to Regions.  Lazarenko, however, still 
owned the largest circulation newspaper, Dnipropetrovsk 
KYIV 00001516  006.2 OF 006 
Pravda.  Hromada also controlled a major tv network, although 
Harahuts said that since they were allied with Regions now, 
they expressed the same point of view. 
27. (SBU) The opposition, however, still had some press and 
BYuT had the city's television station.  Belikov said that 
only Regions, Hromada, and BYuT have money to fight for media 
in Dnipropetrovsk; OU is not a player.  Harahuts said that 
Pinchuk and Prvyvat also both had oblast television stations; 
in fact Pryvat's 9th Channel was the most popular in 
Dnipropetrovsk.  Harahuts added that Governor Nadeyeva did a 
good job of decreasing administrative pressure on the press, 
as well as on civil society as a whole.  Governor Chervonenko 
from neighboring Zaporizhzhya also helped with this. 
28. (U) Visit Embassy Kyiv's classified website: 




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