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09KYIV91, GAS CRISIS: RADA WEIGHS IN

January 15, 2009

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09KYIV91 2009-01-15 17:03 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

VZCZCXYZ0000
PP RUEHWEB

DE RUEHKV #0091/01 0151703
ZNY CCCCC ZZH
P 151703Z JAN 09
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 7033
INFO RUCNCIS/CIS COLLECTIVE
RUEHZG/NATO EU COLLECTIVE

C O N F I D E N T I A L KYIV 000091 
 
SIPDIS 
 
E.O. 12958: DECL: 12/31/2019 
TAGS: PGOV PREL PINR UP RS
SUBJECT: GAS CRISIS: RADA WEIGHS IN 
 
Classified By: Ambassador William Taylor for reasons 1.4 (b,d). 
 
SUMMARY 
-------- 
 
1. (C) On January 13 the Rada created an investigative 
commission to examine the causes of Ukraine's gas dispute 
with Russia.  The commission, led by Party of Regions, is 
likely to investigate allegations linking President 
Yushchenko to corruption in the energy sphere.  Rada contacts 
accused the President of involvement with shady gas 
intermediary RosUkrEnergo and scuttling a last minute gas 
deal with Russia prior to the cutoff.  They said the Party of 
Regions' call for ousting the Tymoshenko government over its 
handling of the gas crisis has little support in the Rada. 
Pro-Yushchenko MPs stress the need for unity with the 
Tymoshenko-led government in the face of Russian pressure. 
The gas shutoff is exacerbating divisions within Party of 
Regions and preventing the party from presenting an 
alternative to the government's actions.  Presidential Chief 
of Staff Viktor Baloha predicted that the crisis would unite 
political forces against Russia if it continued for another 
two weeks.  Baloha's deputy dismissed the investigative 
commission as a stunt.  End Summary. 
 
RADA INVESTIGATORY COMMITTEE CREATED 
------------------------------------ 
 
2. (U) The Rada voted 222 to 13 on January 13 to establish an 
11 member temporary commission to investigate the contract 
negotiations and eventual cutoff of Russian natural gas to 
Ukraine.  (Only 150 votes are needed to create a temporary 
commission.)  The vote received almost unanimous support from 
The Party of Regions, Communist Party and Lytvyn Bloc, and 
will be led by Regions MP Inna Bogoslovska.  All but two MPs 
from the Tymoshenko Bloc (BYuT) and all Our Ukraine-People's 
Self Defense bloc (OU-PSD) abstained or voted against setting 
up the commission.  Bogoslovska said that the commission's 
initial goal will be to help restore gas flow to Ukraine and 
then to determine responsibility for the gas shutoff. 
 
3.  (C) Presidential Deputy Chief of Staff Roman Bezsmertniy, 
meeting with the Ambassador January 15, dismissed the 
commission as "a toy army."  Past commissions amounted to 
little more than vehicles of self-aggrandizement for their 
chairmen.  He recalled the recent commission examining the 
GOU's transfer of arms to Georgia.  That commission was a 
publicity stunt prompted by the FSB's leakage of some 
documents to its agent, Regions MP Konovalyuk.  "They thought 
they could start a revolution," Bezsmertniy remarked, 
mockingly. 
 
ROSUKRENERGO 
------------ 
 
4. (C) Regions MP Nestor Shufrych told us that the temporary 
commission's investigation is aimed at President Yushchenko. 
Shufrych claimed that Yushchenko's intervention in the gas 
negotiations on the morning of December 31 scuttled a deal 
that had gas priced at 235 USD per thousand cubic meters. 
Tymoshenko was supposed to sign it in Moscow later that day. 
Shufrych claimed that Yushchenko's last minute insistence 
that Russia retain RosUkrEnergo (RUE) as a gas intermediary 
threw the negotiations into confusion and the deal with 
Gazprom fell through. 
 
5. (C) Rada contacts across the political spectrum have 
echoed Shufrych's claims of Yushchenko's willingness to 
intervene for RUE's benefit - or to deny Tymoshenko a 
political victory.  Communist Party leader Petro Symonenko, 
in a speech prior to the vote on the creation of the 
investigative commission, repeated an often-heard accusation 
that Yushchenko's brother Petro, himself an OU-PSD MP, has 
ownership interests in RUE.  Yushchenko publicly denied 
allegations that he intervened in gas talks or that he has 
any ties to RUE and has threatened to bring libel suits 
against his accusers. 
 
 
INSUFFICIENT SUPPORT FOR VOTE OF NO CONFIDENCE 
--------------------------------------------- 
 
6. (C) Regions party head and former Prime Minister Viktor 
Yanukovych called for a vote of no confidence in Prime 
Minister Yuliya Tymoshenko's government over her handling of 
gas negotiations.  Despite a motion for a vote being 
registered in parliament on January 12, Regions contacts tell 
us that a no confidence vote is unlikely to succeed.  A 
unified Regions would need the backing of the Communist Party 
and at least twenty-four Our Ukraine-People's Self Defense 
MPs. 
 
7. (C) Regions Deputy Faction head Volodomyr Makeienko told 
us that Regions is not seriously pursuing a vote to remove 
Tymoshenko and that everything done by the parties should be 
viewed through the prism of this year's presidential 
election.  He said that the Communist Party has told Regions 
that it will not support a no confidence vote and that 
Regions could expect a handful of its own deputies to defect 
as well.  Shufrych told us that Regions knows that Tymoshenko 
would win a no confidence vote and that there is no internal 
party effort to line up deputies for a vote.  He said that 
Yanukovych could still push for a vote knowing that Regions 
would lose, in order to show that he did all he could in his 
efforts t
o thwart Tymoshenko. 
 
8. (C) Pro-Yushchenko OU-PSD MPs told us that they would not 
vote with Regions to bring down the Tymoshenko government. 
MP Kseniya Lyapina said that the Rada needs to present a 
united front to Russia during the gas negotiations and that 
pro-presidential MPs would not vote to oust the Tymoshenko 
government over the gas crisis.  MP Lylya Grygorovych told us 
that a vote of no confidence is just a political game being 
played by Yanukovych that will fail.  She also reiterated 
Yushchenko's public statement that pro-presidential MPs need 
to work with the Tymoshenko government and show a united 
front to Russia in order to resolve the gas crisis. 
 
 
PARTY OF REGIONS DIVIDED ON GAS 
------------------------------- 
 
9. (C) Regions' conspicuous silence the week following the 
Russian gas cutoff and limited recent criticism are a result 
of internal party splits over how to handle the gas crisis, 
according to maverick Regions faction MP Taras Chornovil.  He 
told us (as have others) that the gas crisis had further 
widened divisions on two levels between the Dmitri 
Firtash/RUE group (which includes MPs Yuriy Boyko, Serhiy 
Lyvochkin, and Hanna Herman) and the group led by oligarch 
Rinat Akhmetov.  First, the Firtash group opposes any efforts 
to remove RUE as an intermediary in the gas trade with 
Russia.  The Akhmetov group and other industrialists receive 
no benefits from RUE and see it as an obstacle to a long-term 
gas contract for Ukraine with Gazprom.  Second, RUE's 
exclusion from the Russian-Ukrainian gas trade would be a 
serious blow to its ability to financially compete for 
control of Regions with the Akhmetov group.  Chornovil 
emphasized that because of these internal rifts, Regions' 
criticism has focused on general charges of government 
incompetence and unprofessionalism without providing 
specifics on the gas crisis. 
 
10. (C) These divisions were much in evidence January 14 when 
Regions Deputy Shufrych (reputed to be Tymoshenko's paramour) 
publicly attacked his fellow Regions MP Boiko over Boiko's 
comments that Tymoshenko was the one at fault for scuttling 
the gas deal with Russia.  Boiko claimed (as do others) that 
Tymoshenko seeks to create a gas intermediary headed by 
former Kuchma Chief of Staff Viktor Medvedchuk to replace 
RUE.  Shufrych dismissed it all as a deliberate lie. 
 
BALOHA WEIGHS IN 
---------------- 
 
11. (C)  In a January 13 meeting, Presidential Chief of Staff 
Viktor Baloha told the Ambassador that Ukraine would unite in 
opposition to Russia if the crisis continued for two more 
weeks.  He said that Russia was challenging Ukraine's 
sovereignty, and any president would have the same problems 
with Russia that Yushchenko is having.  Baloha stressed that 
Ukraine must be united in the face of continued Russian 
pressure, and he refrained from his usual vitriolic attacks 
on Tymoshenko and her government, saying he would reserve his 
comments on domestic politics for another time. 
 
 
COMMENT 
------- 
 
12. (C)  Rada sessions thus far have largely avoided 
nationalist rhetoric.  There is little sign as yet in the 
Rada of the broad-based opposition to Russia that Baloha 
foresees.  Regions leaders continue to focus their criticism 
on Yushchenko and Tymoshenko.  While Yushchenko lacks the 
political capital to unite the country, former Orange 
coalition forces seem to be coming together, temporarily at 
least, behind Tymoshenko. 
 
TAYLOR

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