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February 13, 2009

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Reference ID Created Released Classification Origin
09KYIV305 2009-02-13 13:14 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

DE RUEHKV #0305/01 0441314
P 131314Z FEB 09

C O N F I D E N T I A L SECTION 01 OF 03 KYIV 000305 
E.O. 12958: DECL: 01/29/2019 
REF: A. KYIV 02080 
     B. KYIV 02022 
Classified By: Ambassador William Taylor for reasons 1.4 (b,d). 
1. (C)  Party of Regions -- Ukraine's main opposition party 
-- is internally divided among competing political and 
business groups controlled by former Prime Minister Viktor 
Yanukovych, former Finance Minister Azarov and oligarchs 
Rinat Akhmetov, Dmytro Firtash, and Andriy Kluyev.  The 
Firtash group's increasing influence since 2006 has caused 
some internal strife and current infighting may be an effort 
by the Akhmetov group to regain influence.  Party of Regions 
faces longer term threats to its stability, with divisions 
over European integration and regional difference within 
Ukraine.  However, party members and outside observers expect 
the party to remain intact through the presidential elections 
expected in January 2010.  END SUMMARY. 
2. (C)  The Party of Regions (Regions) -- the largest party 
in the Rada -- is divided among three major and two minor 
internal factions, according to a variety of Regions 
contacts.  The two largest and most influential groups are 
led by Regions head and former Prime Minister Viktor 
Yanukovych and Regions MP and oligarch Rinat Akhmetov.  The 
Yanukovych group is primarily composed of MPs who worked 
their way up the political hierarchy of the Donetsk and 
Luhansk Oblasts.  These MPs are a part of or represent the 
political elite of Eastern Ukraine.  The Akhmetov group 
consists of MPs loyal to Akhmetov or brought in from his 
System Capital Management industrial conglomerate and related 
businesses.  Regions Deputy Rada Faction Leader Volodomyr 
Makeienko, who describes himself as a staunch Yanukovych 
supporter, told us that the core Yanukovych and Akhmetov 
groups each consist of about fifteen MPs.  He said that these 
two groups originally founded Regions to unite the political 
and economic structures of Eastern Ukraine. 
3. (C) Makeienko (and others) told us that the other major 
group in Regions is led by former Fuel and Energy Minister 
and MP Yuriy Boyko, who is loyal to controversial Ukrainian 
oligarch Dymytro Firtash.  Former Regions party member and MP 
Taras Chornovil told us that despite the Firtash group's 
small size -- it only has about  five MPs --  its financial 
resources have allowed it to exert a large influence on party 
decision making.  According to Chornovil, the Firtash group 
entered the party when Firtash stepped in to help fund the 
2006 parliamentary election campaign at a time when Akhmetov, 
Regions' primary financial supporter, was suffering some 
short-term liquidity problems.  The group solidified its 
influence in the party after Firtash group MP Serhiy 
Lyvochkin became then Prime Minister Yanukovych's chief of 
4. (C) Two smaller independent groups in Regions, led by 
former First Deputy Prime Minister Mykola Azarov and oligarch 
Andriy Kluyev, are often subordinated under the Yanukovych 
and Akhmetov groups because their interests generally align, 
according to Regions contacts.  Azarov and Kluyev each 
control about six deputies in the Rada.  Makeienko told us 
that there are a number of Regions MPs who do not belong to 
the five main groups but were brought in to the party because 
they either bring some unique experience or distinct 
constituency, such as the foreign policy experience of former 
Ambassador Leonid Kozhara.  The remaining MPs are individuals 
who were "invited" to join the party list after making 
significant financial contributions to the party and are not 
members of any of the five major groups, according to 
5. (U) The divisions within Regions contributed to a rare 
public display of infighting as Regions MPs traded 
accusations over who within the party bears responsibility 
for the failed vote of no-confidence against Prime Minister 
Yuliya Tymoshenko on February 5.  Regions MP Nestor Shufrych 
KYIV 00000305  002 OF 003 
and Lyovochkin have traded accusations over responsibility 
for the failed vote and accused each other of working against 
the interests of the party.  Akhmetov's trusted lieutenant, 
Regions MP Borys Kolesnykov, in an interview on February 10 
echoed Shufrych's criticism and accused Lyovochkin of 
corruption.  He said Lyovochkin and Boyko have tainted 
Regions' reputation because of their association with 
Firtash.  He said that Lyovochkin "drives a Mercedes worth 
half a million dollars but does not declare enough income to 
even buy a Zhiguly." Kolesnykov said that the "new-comers," 
Boyko and Lyovochkin joined Regions in 2007, brought nothing 
to the party and that all Regions would lose if they left are 
"the chairs they sit in." 
6. (C) Regions MP Yuriy Miroshnochenko told us that the 
current public infighting is an effort by Akhmetov and
in Yanukovych's group to undermine Firtash's influence and 
reassert the Akhmetov group's preeminence in the party.  With 
shadowy gas intermediary RosUKrEnergo (RUE), the main source 
of Firtash's wealth, cut out of the Ukrainian gas trade, they 
feel Firtash will no longer have the financial resources to 
challenge them.  Makeienko told us that the Firtash group had 
alienated many of his fellow Yanukovych group MPs by 
"parachuting" into a party that they had not helped build and 
then monopolizing influence and information to Yanukovych. 
He said that many MPs resented being below Lyovochkin and 
Boyko on the Regions' election list despite their work 
rebuilding the party after the disputed 2004 presidential 
elections.  Miroshnochenko said that it is unclear whether 
Yanukovych supports the attack on the Firtash group, but that 
he is at least not opposed because he could stop the dispute 
if he wanted to. 
7. (C) Analyst Ihor Kohut told us that Regions has other more 
fundamental internal divisions, in addition to rival groups, 
within the party that could contribute to a split.  He 
described two major divisions that could widen over time, but 
which Regions has so far been able to overcome.  First, 
Regions is divided by those members who would like to further 
integrate into European institutions (like Akhmetov) and 
members who would like closer integration with Russia (like 
Azarov).  Kohut said that the party has balanced between both 
tendencies, but that Ukraine's choices between Europe and 
Russia will increasingly be mutually exclusive.  Second, 
Regions is widely supported across Southern and Eastern 
Ukraine, but the party is dominated almost exclusively buy 
leaders from the Eastern Dontesk and Luhansk oblasts.  Kohut 
said leaders from other oblasts like Kharkiv, Odessa, 
Dnipropetrovsk, or Crimea could look elsewhere for political 
empowerment.  He said that a split along regional lines could 
also result from diverging regional economic interests.  The 
other oblasts are not as dependent on metallurgy and coal as 
Donetsk and Luhansk. 
8. (C) Regions' internal clash in September and October 2008 
over building coalitions with other political forces reveals 
another possible fissure that could widen over time.  Kluyev 
told the Ambassador then that he and a significant portion of 
the Yanukovych group had pushed for Regions to form a 
coalition with Tymoshenko.  Kluyev said that the deal, which 
ultimately failed (See REF A), was opposed by both the 
Firtash and Akhmetov groups who preferred a coalition deal 
with President Yushchenko.  Shufrych, part of the Yanukovych 
group who backed the coalition, told us that the Firtash 
group was opposed to any cooperation with Tymoshenko because 
of her pledge to remove RUE from the Ukrainian-Russian gas 
trade.  Akhmetov told the Ambassador then that he was 
actively fighting against forming a coalition with Tymoshenko 
(See REF B). 
--------------------------------------------- -- 
9. (C) Makeienko told us that despite internal divisions 
within the party, all the groups within Regions recognized 
that they were better off sticking together than on their 
own.  He said that there is no alternative presidential 
candidate to Yanukovych and the party is confident that he 
will win the upcoming presidential election.  Miroshnochenko 
told us that he expected Regions to remain united through the 
presidential election because any party split would cede the 
Presidency to Tymoshenko.  He said that no one in the party 
wants to continue to be excluded from governmental power. 
KYIV 00000305  003 OF 003 
10. (C) Former Justice Minister and OU-PSD MP (who has broken 
from OU and is now independent but allying with Tymoshenko) 
Roman Zvarych told us February 12 that he also expects 
Regions to stick together through the presidential election. 
He said that Regions' political structure is designed to 
enrich the party leadership and it needs access to government 
resources to help accomplish this.  Regions, he said, has no 
ideology apart from money.  With Yanukovych rising in the 
polls, Regions' MPs understand that leaving the party now 
would mean forfeiting the possible benefits of government 
power, should Yanukovych win the presidential election. 
11. (C)  While personal animosities play a role, the current 
attack on Boyko and Lyovochkin appears also to be an effort 
to distance the party from its relationship with Firtash, and 
the rumors of corruption that surround him, prior to the 
presidential election.  Ukraine's economic crisis is giving a 
boost to Yanukovych in the polls.  If Yanukovych fails again 
in his run for the presidency, he could undermine the 
expectation for a share in the proceeds of power that keeps 
the various factions of the party together. 




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