Tammy Lynch
Aug 10, 2006

Many analysts have reacted positively to the confirmation of the new Yanukovich government, welcoming the end of over four months of political turmoil.  But, when looking past the short-term goal of so-called “political stability” to Ukraine’s long-term development, the formation of the government causes a number of concerns. 

On August 3, US State Department Spokesman Scott McCormack suggested, “Mr. Yanukovych has come to the prime ministership in the old-fashioned, democratic way.  He worked hard for votes, he campaigned, he politicked.”  Yes – and no. 

It is true that Yanukovich’s Party of Regions ran a superb Western-style political campaign, based on the advice of several US Republican Party strategists. The party placed first in the parliamentary election, with 32 percent of the vote.  And, in the end, Yanukovich negotiated well with the president to secure his job. 

But the formation of the coalition that allowed Yanukovich to be in that position had as much to do with the physical blockading of the parliamentary rostrum, and the reported providing of “incentives” to MPs, as with “politicking.”

Almost immediately after the former “Orange” parties announced their own majority coalition, which would have nominated former Prime Minister Yulia Tymoshenko, the Party of Regions began blocking  parliament.  They blocked work for 10 days, assisted by at least one non-MP “hired gun.”  The unknown man was filmed physically defending the rostrum from those attempting to unblock it.

During that time, the Party of Regions was able to “convince” the Socialist Party, the smallest member of the “orange coalition,” to switch allegiances.  The Socialists did so spectacularly during the election of the parliamentary speaker.  The party provided no notice to its previous coalition partners, thus violating Ukraine’s parliamentary procedures.

Given the long history of bribery in Ukrainian politics, it was not surprising when a television camera captured Party of Regions deputy Andriy Kliuyev on the parliamentary floor making what appeared to be a gesture of counting money while speaking to the head of the Socialists (although the Socialists deny receiving money).  It also was not surprising for journalists to overhear a deputy from the Yulia Tymoshenko Bloc ask Kliuyev sarcastically whether they could “get” a committee membership for three million dollars since they missed the chairmanships “for 10.” 

There may be a reason why Kliuyev has been called the “money man” in Ukraine’s domestic press.  But one thing is certain – those watching the parliamentary majority’s creation saw very little that resembled Western-style parliamentary politics.

The inclusion of certain individuals in the new cabinet does little to assuage concerns.  Andriy Kliuyev was named Deputy Prime Minister for the Energy Sector.  This is the same post Kliuyev held in the 2004 pre-revolution Yanukovich government.  In fact, the new Yanukovich cabinet includes several individuals from that time, which is the period when the questionable gas intermediary RosUkrEnergo was formed.

RosUkrEnergo, which controls Ukraine’s gas contracts, has been severely criticized by Western officials for its lack of transparency.  Charles Tannock, a British European Member of Parliament suggested that the use of RosUkrEnergo in gas agreements with Russia suggests “there is a possibility of political corruption.” He and other Western officials have urged Ukraine to remove RosUkrEnergo from all gas transactions. 

Yulia Tymoshenko had vowed to do this.  During her tenure as premier, the company was investigated by the  Secret Service for money laundering.  “It is a front company,” she charged, designed to enrich certain Ukrainian officials. After her dismissal, the probe was shelved.  Now, the new cabinet can be seen  as a sign of support for the intermediary. 

Ukraine’s new Minister for Coal and Mining, Serhiy Tulub, served as Yanukovich’s Minister for Fuel and Energy in 2004, when RosUrkEnergo was formed.  Even more, Yuriy Boyko, the former head of Ukraine’s state gas company Naftohaz in 2004, will now serve as Fuel and Energy Minister.  Boyko sat on the original “coordinating council” of RosUkrEnergo.  The international watchdog Global Witness questioned the “curious relationship” between RosUkrEnergo, Naftohaz and Boyko and asked who profited from it. 

Meanwhile, Ukraine’s new First Deputy Prime Minister will be Mykola Azarov, a man known during the Kuchma administration for his use of the tax police against the political opposition. 

As head of the Tax Administration, Azarov is heard on the “Gongadze Tapes” – secret recordings of President Kuchma’s conversations in 2000.  These tapes were authenticated by the United States FBI.  Most individuals heard on the tapes, including then-Prime Minister Viktor Yushchenko, have said the conversations in question did take place.  Kuchma and Azarov have not, but they seem to correspond with real events.

In one conversation, a man identified as Azarov discusses his attempt to pressure Boris Feldman, a wealthy banker and supporter of Yulia Tymoshenko.  On the tapes, Kuchma is heard to tell Azarov, “Put him in a cell with convicts.  Let them pound him.” 

Three months later, Azarov explains that Feldman will go to prison.  “We agreed with the Luhansk court …,” he says on the tape. “I have talked about adding a charge. We have discussed this with the judges there, whom we can manipulate.” Feldman spent three years in jail before another court threw out the charges. 

Under Azarov’s direction, the tax administration also opened investigations into the work of the US-based organization Freedom House and the US-owned newspaper Eastern Economist.  Many Ukrainian organizations critical of Kuchma also endured excruciating tax investigations during Azarov’s tenure.

Now, Azarov is the second most important man in the cabinet. Though it includes reformers, its overall make-up and the tactics used to form the coalition, should give pause to those worried about corruption or possible oppression.  Any resurgence of RosUkrEnergo may concern Europeans focused on energy.

As usual, the country appears to be heading in two directions at once.  Despite concerns for the future, Ukraine conducted a free and fair election.  All politicians expressed their opinions throughout the coalition formation.  Perhaps most important, this government, unlike Yanukovich’s first, will be actively monitored by a real opposition. 

The Yulia Tymoshenko Bloc refused to participate in the government, suggesting that it could better serve Ukraine as a watchdog.  Tymoshenko’s new inter-party opposition may include disaffected members of President Yushchenko’s Our Ukraine party, which officially joined Yanukovich’s government.  The President has welcomed the creation of the opposition and pledged to protect it. 

In fact, protecting the opposition should be one of the president’s most important goals, given possible questions about the new cabinet.  Will this government truly be able to meet Western standards of democracy and transparency?  Ukraine will need its opposition to ensure that they do.

The author, Tammy Lynch, is a Senior Fellow at Boston University’s Institute for the Study of Conflict, Ideology & Policy.