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October 10, 2008

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Reference ID Created Released Classification Origin
08KYIV2022 2008-10-10 13:30 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv


DE RUEHKV #2022/01 2841330
P 101330Z OCT 08 ZDK

C O N F I D E N T I A L KYIV 002022 
E.O. 12958: DECL: 10/10/2018 
REF: KYIV 1145 
Classified By: Ambassador for reasons 1.4 (b,d). 
1. (C) In a meeting with the Ambassador on October 8, 
billionaire industrialist and Party of Regions MP Rinat 
Akhmetov expressed support for President Yushchenko's plans 
to dissolve the Rada, saying elections were the only 
"democratic" way forward for the country.  Akhmetov said that 
Regions would be together for the upcoming election, and 
expressed hope that his party could form a coalition with 
Yushchenko's faction after the election.  He noted that such 
a coalition could be formed if both sides compromise on NATO 
MAP and other difficult issues.  Akhmetov noted that the 
global financial crisis has affected his business, especially 
in lower demand for metallurgy products, and would negatively 
impact Ukraine's economy in general.  He told the Ambassador 
that he was still interested in acquiring coal producing 
assets in the United States, as it would allow Ukraine to 
diversify supplies and lessen its dependence on Russia in the 
long-term.  End Summary. 
Yushchenko: "Brave and Honorable" 
2. (C) Akhmetov spoke positively about President Yushchenko 
and his push towards early Rada elections.  He told the 
Ambassador that he was against early elections, but they were 
the best and only "democratic" option to pull Ukraine out of 
political turmoil.  He expressed respect for Yushchenko's 
honesty, and said that while Yushchenko won't benefit from 
the elections, at least he is not "cheating society" by 
creating a coalition that won't work.  Yushchenko was a 
"brave and honorable" man, Akhmetov said, who remained 
consistent in his positions "whether he is in the East or the 
West of Ukraine." 
Tymoshenko Neither of the Above 
3. (C) Akhmetov was critical of PM Tymoshenko's "politics of 
populism," and her attempts to create a coalition with 
Regions.  He was convinced that her only goals are to hold on 
to power and "destroy the presidency."  There was strong 
support in Regions for a pairing with BYuT, but Regions MPs 
were only looking at government positions and other "certain 
motivations" without thinking about the consequences of a 
BYuT/Regions coalition; such a pairing would set the country 
back years, Akhmetov claimed.  He said he had worked "very 
hard" to prevent a coalition with BYuT and had convinced 
Yanukovych not to pursue it.  Akhmetov said there was "now no 
chance" that BYuT and Regions would form a coalition. 
Elections: Yushchenko Will Do Well, Regions Will Stay Together 
--------------------------------------------- ----------------- 
4. (C) Forecasting a much rosier scenario for Yushchenko than 
we've heard anywhere else, Akhmetov told the Ambassador he 
expects Yushchenko's bloc would receive a minimum of 15 
percent of the votes in early Rada elections.  Akhmetov 
posited that voters would support Yushchenko because he 
hasn't departed from his core values, including his positions 
on language and NATO membership.  "He comes to Luhansk and 
talks about NATO," Akhmetov said in a subtle jab at what many 
see as PM Tymoshenko's propensity to change positions, and 
appearance, to fit her audience. 
5. (C) Akhmetov said that Interior Minister Yuriy Lutsenko 
and his People's Self-Defense movement is already a branch of 
BYuT, so their departure from OU-PSD will not negatively 
affect Yushchenko's chances in the Rada election.  Similarly, 
Akhmetov believed that former Defense Minister and Chairman 
of the National Security and Defense Committee Anatoliy 
Hrytsenko could leave Yushchenko's bloc with no ill-effects 
on Yushchenko's level of popular support. 
6. (C) Akhmetov complimented NSDC Chair Raisa Bohatyreva and 
Rada Speaker Arseniy Yatseniuk, saying that they had bright 
futures in Ukrainian politics.  But, he added, neither 
Bohatyreva nor Yatseniuk could create a credible political 
project in time to be competitive in this election.  Akhmetov 
said Ukrainian politics needs "fresh blood and new faces," 
but said that the election was now, and they are not ready. 
7. (C) Turning to issues within his party, Akhmetov said that 
Regions will stand together for the election, saying that it 
would be "inappropriate" to split the party at this time. 
Akhmetov underlined his admiration for US politicians' 
ability to stay on message, saying that Regions agrees on an 
issue, but then everyone goes out and says different things 
to the media.  He said that Regions is working to develop 
message discipline, and will focus their campaign on a 
comparison of their achievements in government to the current 
coalition's failures. 
Regions/Yushchenko/Lytvyn: A "Dream" Coalition 
--------------------------------------------- - 
8. (C) Akhmetov argued that a new coalition with Regions, OU 
and the Lytvyn bloc is "what the country needs."  He said it 
was not possible now, however, because their platforms were 
 different.  Akhmetov expressed hope that both Regions and 
OU could "cleanse" their party lists of "radicals" to allow 
OU and Regions to come together after the election.  He said 
that the coalition could focus on what unites Ukraine, and 
"find compromise on what divides us."  He said compromise was 
possible if both Regions and OU lose something but "the 
country wins." 
9. (C) Responding to the Ambassador's question about the 
foreign policy of such a coalition, Akhmetov said that their 
positions on the EU are identical, and that, on NATO 
membership, both parties support a national referendum. 
Akhmetov said Regions' position is "if the people support it, 
we support it."  He added that Regions would also support a 
referendum on NATO MAP, comparing the position to Germany and 
France, whose leaders have stated that they won't vote for 
MAP, in part, because a majority of their populations don't 
support it.  Akhmetov agreed that Regions' position on MAP 
differed from Yushchenko's, but again claimed that they could 
find compromise.  He said that he didn't know what such a 
compromise would look like, but said whoever finds it "would 
make history" and unite the country. 
America Sneezes, Akhmetov and Ukraine Catch Cold 
--------------------------------------------- --- 
10. (C) Turning to the economy, Akhmetov said that he prays 
daily for the US economy.  He said that his business 
interests are feeling the effects of the financial crisis, 
and that anyone in Ukraine who hasn't felt it yet will soon 
enough.  Finding a bright side, Akhmetov said that the 
international financial turmoil's effect on Ukraine shows 
that its economy is integrated into the global economy: It 
will share the pain but will also share in the benefits of 
11. (C) Akhmetov said that he can't find markets for his 
metallurgy products. For example, a product that previously 
sold for more than 1000 dollars in international markets now 
finds no buyers at 500 dollars, a price 44 percent below 
current production costs.  Akhmetov feared that a slowdown in 
production would have a cascading effect on Ukraine, as 
energy and other input consumption would decrease, 
transportation and other services would be scaled back, and 
unemployment would rise. 
But Akhmetov Still Interested in US Coal Assets 
--------------------------------------------- -- 
12. (C) Akhmetov told the Ambassador that his investment in 
US coal-producing assets is "still on the agenda."  He said 
that the current crisis will pass, but Ukraine will always 
need coal resources.  If Ukraine does not start importing 
coal from elsewhere, he said, Ukraine would become more 
dependent on Russia.  He said that he is also planning to 
develop a deep-water port capable of receiving coal imports 
by ship as current Ukrainian ports "can't handle them" now. 
Akhmetov said that purchasing US coal-producing assets made 
good economic sense to him, as there are 30 to 40 years of 
reserves in the assets, which will provide energy security 
and independence from Russia.  He said that he has lined up 
financing and has been reassured that lenders are still 
interested in going forward with the deal. 
A Way Forward on Vanco? 
13. (C) Akhmetov said that he will buy Shadowlight's shares 
in Vanco (Ref A), and has already proposed a purchase price. 
When the Ambassador suggested that an international oil 
company may be interested in joining the deal, Akhmetov said 
it would be an "excellent solution" and suggested that he 
could help to transfer shares from Shadowlight to a new 
investor.  He expressed confidence in the project, adding 
that Vanco's problems would have "gone away" if he had agreed 
to a BYuT/Regions coalition -- a step he could not take in 
good conscience. 
14. (C) Akhmetov was very open and engaged throughout the 
meeting.  We were surprised by his forecast for a strong 
Yushchenko election result, a minority opinion in Ukraine. 
Akhmetov appeared earnest when complimenting Yushchenko, 
echoing a theme we have recently heard from our Regions 
contacts, including Party head Yanukovych and nominal party 
spokesperson Hanna Herman.  This may be a Regions signal for 
a potential post-election alliance between themselves and 
Yushchenko -- which could be a factor in Yushchenko's 
calculus for calling the elections. 




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