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08KYIV1300, UKRAINE: YATSENYUK, RISING POLITICIAN

July 3, 2008

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08KYIV1300 2008-07-03 14:10 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

VZCZCXRO1569
PP RUEHLMC
DE RUEHKV #1300/01 1851410
ZNY CCCCC ZZH
P 031410Z JUL 08 ZDK
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 5951
INFO RUEHZG/NATO EU COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 001300 
 
SIPDIS 
 
E.O. 12958: DECL: 07/03/2018 
TAGS: PGOV PREL PINR UP
SUBJECT: UKRAINE: YATSENYUK, RISING POLITICIAN 
 
REF: 07 KYIV 00924 
 
KYIV 00001300  001.2 OF 004 
 
 
Classified By: Ambassador for reasons 1.4(b,d). 
 
1. (C) Summary. Rada Speaker Arseniy Yatsenyuk has become one 
of the most interesting senior politicians in Ukraine to 
watch.  Only 34 years old, Yatsenyuk has already served not 
only as chair of the parliament, but Foreign Minister, 
Minister of Economy, and Acting Governor of the National 
Bank.  Some of his success may be credited to his ability to 
reach out to various camps and appear nonpartisan -- he 
received his FM and Speaker positions as a compromise 
candidate -- and to his ties to a number of older politicians 
and businessmen who championed his career at various stages. 
Yatsenyuk has grown as Speaker, learning to exert his 
authority to try to keep the often deadlocked parliament 
moving forward.  He has also embraced the role of mediator, 
trying to keep the coalition intact, while encouraging the 
opposition to act constructively.  Privately, Yatsenyuk has 
founded a think tank to promote Ukraine's international 
image, increase discussion of key security issues, and give 
financial support to young leaders -- the Speaker also made 
the list of the country's top philanthropists in 2007.  Now 
press and politicians are beginning to speculate whether 
Yatsenyuk might be in line to become Prime Minister, head of 
a new political project, or may harbor presidential ambitions 
of his own.  When asked about future plans, Yatsenyuk has 
been relatively coy, saying that he would only lead a party 
of his own making.  He has been open in his support for the 
coalition, for now, and his opposition to a new constitution. 
 
 
2. (C) Comment.  Whether Yatsenyuk's ambitions include making 
a run for the presidency next year or whether he is biding 
his time until the current crop of leaders has faded is 
unclear at this point.  Given Yushchenko's dismal popularity 
ratings, and the fact that Yanukovych and the Party of 
Regions have not succeeded in recent elections at breaking 
their 33 percent support cap, there could be an opening for a 
fresh face in 2009.  However, Yatsenyuk has been careful not 
to burn bridges and may decide to wait before making any 
political alliances or moves in his own interest, since he 
does not know who might win next year's election.  Although 
Yatsenyuk is clearly close to President Yushchenko, he has 
maintained decent ties with PM Tymoshenko and with 
politicians and oligarchs in other camps.  His immediate goal 
may be to avoid being sent back to a low-profile position 
like the National Bank if there is a government shake-up. 
Based on his current attitudes and actions, if he were to one 
day take the PM or President's seat, we expect him to be a 
pragmatic and forward-leaning leader, with a strong emphasis 
on economic goals.  End summary and comment. 
 
Improving as Speaker, Mediator 
------------------------------ 
 
3. (C) We have observed that Yatsenyuk's skills as Speaker 
have developed significantly since he took the post in 
December 2007.  During early challenges, such as the failed 
confirmation vote for Tymoshenko on December 11 and Regions's 
blockade of the rostrum during the NATO MAP controversy in 
January 2008, Yatsenyuk often seemed ill at ease while trying 
to restore order.  He was soft spoken and too hung up on the 
rules of procedure to deal with MPs shouting and charging his 
dais.  However, since then he has become more comfortable 
speaking definitively and moving procedure forward over 
objections.  He has learned how to run a vote and how to 
delay a vote when it is clear it will fail.  For example, 
Yatsenyuk proudly told the press on April 16 that he had 
saved Yushchenko's CabMin law from sure death by canceling 
the final vote when the coalition lacked the votes to confirm 
it.  (Note.  The law was passed at a later date after a new 
agreement with BYuT.  End note.)  He also became comfortable 
docking the pay of MPs who blockaded the rostrum and 
prevented the Rada from working -- applying this rule equally 
to Regions and BYuT. 
 
4. (C) Publicly, Yatsenyuk has repeatedly dismissed the need 
for early elections, saying they won't change anything, and 
has defended the current coalition, arguing that he won't 
help terminate it until ordered to by the Constitutional 
Court.  He also told the press on June 6 that he did not 
think the political situation would change until the fall, 
when a constructive dialogue could be held.  He referred to 
BYuT's proposed constitutional changes as a "latent coup 
d'etat" and later rejected attempts to write a new 
constitution by any party, including the President. 
 
5. (C) However, it may be Yatsenyuk's role behind the scenes 
that is most important.  He has become a key negotiator and 
mediator -- trying to keep the coalition going and Yushchenko 
 
KYIV 00001300  002 OF 004 
 
 
and Tymoshenko speaking, and reaching out to the opposition. 
He has tried to broker negotiated settlements to allow the 
Rada to work, holding many meetings with the faction leaders, 
sometimes with Committee Chairmen as well, and me
etings with 
Yushchenko and Tymoshenko in various formats.  On June 4, he 
sent a letter to the President, PM, and Rada faction leaders 
proposing the parliament adopt an action plan called "Ukraine 
2008."  He wanted the document to focus on economic, social, 
judicial, and law enforcement reform, as well as preparations 
for the Euro 2012 soccer tournament.  On June 20 he called on 
all factions to refrain from insulting one another and 
issuing ultimatums.  On June 24, he held a meeting with 
Tymoshenko, OU-PSD faction leader Vyacheslav Kyrylenko, and 
BYuT deputy faction leader Andriy Kozhemyakin to try to work 
out how to save the coalition.  Afterwards, he said they had 
reached a tentative agreement to adopt a law called "external 
and internal policies until 2010," which would serve as the 
basis for the coalition's future work.  He said the law would 
address key macroeconomic issues, such as lowering inflation 
and increasing GDP, and would provide concrete goals for 
improving social standards.  Yatsenyuk said that only by 
defining the nation's priorities could the coalition and 
government move forward and possibly gain support from others 
in the parliament.  Presidential Chief of Staff Baloha and 
Presidential Spokeswoman Vannikova said on separate occasions 
that Yushchenko believes Yatsenyuk has to take the lead in 
restoring the democratic coalition. 
 
Nonpartisan Appeal 
------------------ 
 
6. (C) Yatsenyuk's meteoric career has, in part, been due to 
being viewed as a compromise candidate who can reach out to 
all camps.  He was confirmed as Foreign Minister on March 21, 
2007 with 426 votes after months of fighting about who would 
be the new FM.  His surprise candidacy was seen as part of a 
deal between Yushchenko and then PM Yanukovych, and Rada MPs 
from various factions indicated to us at the time that they 
found Yatsenyuk more palatable than other alternatives. 
Yatsenyuk's nomination as Rada Speaker in December was 
equally surprising, but again more broadly approved of than 
some of the other OU-PSD candidates being discussed. 
However, he was confirmed with only the support of the 227 
coalition members.  More recently, respected newspaper 
Dzerkalo Tyzhnya suggested that Yatsenyuk was one of three 
candidates the Presidential Secretariat would want to see as 
PM in a new broad coalition. 
 
7. (C) Political analyst Volodymyr Fesenko told us that he 
was amazed how quickly Yatsenyuk -- whom he termed a 
representative of the new elite -- had learned all the 
intricacies of political intrigue.  Fesenko said that 
Yatsenyuk comes off as an open, democratic, and western-style 
politician, but he also understands the art of survival in a 
soviet-type bureaucratic environment, where interpersonal 
connections and patron-client ties are key. 
 
A New Political Project on the Horizon? 
--------------------------------------- 
 
8. (C) At a June 15 function, Yatsenyuk told the Ambassador 
that Ukrainians were tired of the political squabbling 
between the three top politicians.  He called Our Ukraine and 
United Center "dead projects" and said he would associate 
with neither.  He said that a new political project would 
emerge, but he would not say what it would be or what it 
would stand for.  The Speaker also said that his version of 
the Ukrainian national idea was European values.  He spoke 
for the need to maintain the current coalition for now, but 
suggested that it would be better to try to diminish the 
roles of Presidential Chief of Staff Baloha and NSDC 
Secretary Bohatyryova in the process.  Interestingly, Regions 
MP Nestor Shufrych told the Ambassador that same day that 
Yatsenyuk was one of two young politicians to watch in the 
next year or two (the other was Mykola Katerynchuk.) 
Shufrych believed that the two MPs might form a joint 
political project in the future. 
 
9. (SBU) On a political talk show in early June, Yatsenyuk 
dismissed the rumors that he might soon become the head of 
United Center.  He said that if he decided to lead a 
political project, it would be one of his own making.  In 
addition, in response to the question when he or someone of 
his generation would run for president, he said, "as soon as 
society will support (such a candidate), you will see (him)." 
 
10. (SBU) There has been plenty of speculation about 
Yatsenyuk's short-term future.  On-line news site Ukrainska 
Pravda on June 20 wrote that a rumor was circulating that 
Yatsenyuk was playing two games at the same time.  According 
to the rumor, Yatsenyuk was delaying the announcement of the 
 
KYIV 00001300  003 OF 004 
 
 
break-up of the current coalition, while negotiating with 
Regions on a possible senior-level appointment, such as 
Deputy Prime Minister for Economics, in a new government. 
The Akhmetov-owned Segodnya newspaper published a list of 
scenarios for solving the political impasse and stated that 
the preferred Regions solution was a broad coalition, with 
Yatsenyuk as First Deputy PM.  Regions MP Chechetov told the 
press that Regions had also not ruled out leaving Yatsenyuk 
as Speaker in the advent of a new coalition. 
 
Yatsenyuk Is on People's Minds 
------------------------------ 
 
11. (C) Focus groups conducted in six cities across Ukraine 
by the International Republican Institute (IRI) revealed some 
interesting thinking on Yatsenyuk.  Initially, IRI solicited 
opinions mainly on the three main political leadesr -- 
Yushchenko, Yanukovych, and Tymoshenko -- but were surprised 
by the strongly positive reactions when Yatsenyuk's name was 
raised.  Although participants generally held the Rada to be 
a bastion of corruption populated by MPs who bought their 
spots on party lists and did not care about the electorate, 
they described Yatsenyuk as "smart with a systematic 
approach," "the future of the nation," and "the next 
generation of Ukraine and a new generation of politician." 
They saw him as an independent actor who had allies in more 
than one camp and could work intrafactionally.  The main 
negative cited by participants is that they did not know a 
lot about Yatsenyuk as a person, that although he was honest 
about having money and where the money came from, beyond that 
he was somewhat of a mystery.  There was also a somewhat 
negative perception that he was being groomed by Yushchenko. 
(Note.  The information provided by the focus groups cannot 
be taken as representative of national opinion, as the data 
from a poll would be, but the comments are still interesting 
given the contrast between the praise for Yatsenyuk as a 
leader and the excoriation of the Rada as an institution. 
End note.) 
 
12. (SBU) An opinion poll conducted by the Ukrainian 
Sociology Services in April-May indicated that 33 percent of 
respondents supported the idea of a new "third way" political 
party.  When asked who should lead this party, Yatsenyuk was 
the top choice, with 13 percent of respondents selecting him. &#
x000A; Currently, Yatsenyuk does not often register in polls on 
future presidential elections, but that may be due to the 
fact that most people probably do not consider him to be a 
candidate at this time. 
 
Friends in High Places, Sharing the Wealth 
------------------------------------------ 
 
13. (SBU) In December 2007, investigative journalist Serhiy 
Leshchenko wrote an in-depth article in Ukrainska Pravda 
about Yatsenyuk's roots titled "The riddle of Arseniy 
Yatsenyuk," which points to a number of powerful patrons in 
the Speaker's past.  Leshchenko argues that Yatsenyuk became 
a success in the law and business world at the age of 22 due 
to ties to now deceased media mogul Ihor Pluzhnikov, former 
Labor Minister Mykhaylo Papiyev, and former Yushchenko Chief 
of Staff Oleksandr Zinchenko, all of whom hail from 
Yatsenyuk's hometown of Chernivtsi.  (Note.  Interestingly, 
all were also members of the Social Democratic Party (united) 
at some point, as was current Chief of Staff Baloha, who 
brought Yatsenyuk into the Presidential Secretariat in 2006. 
End note.)  Yatsenyuk co-founded a law firm during his second 
year of university, the clients of which included Papiyev. 
These SDPU(o) ties were later echoed on the respected 
political talk show Svoboda by Shufrych, who also used to be 
in SDPU(o).  Yatsenyuk denied Shufrych's accusations, but the 
ties to Papiyev, at a minimum, seem to be more broadly 
confirmed. 
 
14. (SBU) Leshchenko wrote that Yatsenyuk moved to Kyiv in 
1997 to enter the banking industry, and was then put forward 
to be the Crimean Minister of Economy by the then head of the 
Crimean government, who was a member of oligarch Viktor 
Pinchuk's Working Ukraine (Trudova Ukraina) -- Leshchenko 
says Yatsenyuk and Pinchuk remain close.  (Note.  Serhiy 
Tihipko, Yatsenyuk's boss at the NBU before Yatsenyuk took 
over as Acting Governor, was also from Working Ukraine.  End 
note.)  The article says Yatsenyuk attends every Davos and 
Yalta (YES) event hosted by Pinchuk.  Leshchenko says that 
Yatsenyuk also formed ties to Defense Minister Yuriy 
Yekhanurov, Deputy Secretariat Head Oleksandr Shlapak, 
Yushchenko backer Petro Poroshenko, and former Presidential 
Chief of Staff Oleh Rybachuk -- and when Yekhanurov became PM 
in September 2005, he recommended Yatsenyuk to be Minister of 
Economy.  Yatsenyuk also has ties to Vitaliy Haiduk and 
Katerina Yushchenko, according to Leshchenko. 
 
 
KYIV 00001300  004 OF 004 
 
 
15. (SBU) According to the publication Novynar, Yatsenyuk was 
the twelfth largest philanthropist in Ukraine in 2007.  Much 
of this money may have gone to fund a think tank Yatsenyuk 
co-founded with a Polish businessman called Open Ukraine 
Foundation.  The foundation's mission statement says its goal 
is to support public diplomacy and to raise the profile of 
Ukraine internationally.  To that end, it organizes 
conferences on key security issues, such as energy security, 
frozen conflicts, the Black Sea Region; it also sponsors a 
program on young leaders in a variety of fields.  According 
to the organization's website and conference materials, its 
two key financial sponsors are the Pinchuk Foundation and 
Industrial Union Donbas (co-owned by Haiduk).  (Comment.  The 
two organizations' financial support for Yatsenyuk's project 
could merely be a meeting of the minds on this issue, but it 
does suggest that he has ties to major businessmen, should he 
need to reach out to them if he decided to run a campaign. 
Interestingly, Pinchuk recently gave a long interview to 
Dzerkalo Tyzhnya in which he said that Ukraine needed a new 
generation of leader to fix the country.  He did not mention 
Yatsenyuk by name, but the Speaker fits the profile of the 
type of leader Pinchuk expressed a desire to find.  End 
comment.) 
 
What Would Yatsenyuk Be Like as a Leader? 
----------------------------------------- 
 
16. (C) As described in reftel, Yatsenyuk is an engaged, 
thoughtful, and pragmatic leader.  Our impressions in 
meetings with the Speaker, and when he was Foreign Minister, 
are that he is a well-spoken, forward-thinking young 
politician.  As PM or President, he would likely be reform 
oriented, while relying on his political ties to get laws 
passed.  His economic background suggests he would approach 
foreign policy from an economic standpoint, but he has shown 
himself open to NATO cooperation and his think tank 
demonstrates that he is cognizant of Ukraine's international 
image. 
 
17. (U) Visit Embassy Kyiv's classified website: 
www.state.sgov.gov/p/eur/kiev. 
TAYLOR

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