Another shady privatisation [updated]

"On 11 March the Ukrainian State Property Fund sold a 92.79 percent stake in Ukraine's telecom monopoly, Ukrtelecom, for 10.57 billion hryvnia (around $1.3 billion). The shares have been bought by Epic Services Ukraine (ESU), a daughter company of the Austrian EPIC group.

The opposition claims that the company was sold to a pre-agreed buyer (ESU was the only bidder submitting the final tender) and that in reality Ukrtelecom has been sold to Ukrainian businessmen, most probably closely linked to president Viktor Yanukovych. They also accuse the government of setting a far too low asking price for the company. Former prime minister Yulia Tymoshenko, claims that the transaction has caused the state to lose between $3 and $4 billion." [Source here.]

The long-running privatisation saga of this company has been a sorry tale indeed. There were times when it was valued at $25Bn. Companies having a state-owned portion greater than 25% were denied permission to bid, so giants Deutsche Telekom, FranceTelecom, Nortelecom and several Russian companies were shut out. Ukrainian mobile 'phone operators MTS and Kyivstar were also officially excluded.

The former head of the Ukrainian State Property Fund, Oleksandr Bondar was asked about the privatisation in an interview with the 'Nashi Hroshi' website on Monday. He claims the ownership of ESU was transferred to a Cyprus offshore company just prior to the sale - who the true end owners will be is therefore unknown. They could be Rinat Akmetov, head of presidential administration Serhiy Lyovochkin, members of the Yanukovych 'Family', or a combination of these and others.

Bondar estimates that in a fair contest, the state should have received at least $2Bn rather than $1.3Bn from the purchasers.

One websites speculates: "There remains uncertainty over EPIC due to persistent speculation that the fund is acting as a front for another, non-disclosed party, previously rumoured to be connected to cellular group MTS, part of Russian conglomerate Sistema, which operates in Russia, Ukraine and other CIS countries."

ESU's representative who signed the deal last Friday remained tight-lipped after the company had won this one-horse race.

However, what is clear is that the current State Property Fund and the Ukrainian Anti-Monopoly Committee have both failed in their duty to ascertain who the true owners of UkrTelekom will be.

Update From 'U.P. : EPIC Goldsheider and Wurmbuck (EPIC, Vienna, Austria) have claimed they remain the sole owner of EPIC Services Ukraine (ESU Ukraine, Kyiv) who gained a controlling packet of shares of 'UkrTelekom'.

EPIC is the exclusive owner of EPIC Advisors Ltd (EAL), which via its daughter company EAL is the sole owner of ESU, and has decided to optimise the structure of the holding, adapting it to the privatisation of 'UkrTelekom', by transferring the right of direct ownership to ESU, of the EPIC Telecom Investment Ltd (ETI).

ETI is the 100% owner of EAL. In this manner EPIC remains 100% owner of ESU.

Earlier two reputable Ukrainian newspapers 'Delo' and Dilova Slolytsya' reported that 100% of the statute fund of ESU were transferred from the fund of Epic Advisors Ltd, to the recently-formed Cypriot Epic Telecom Invest

'U.P. say that ETI have not even declared their registered legal address...this whole "alphabet soup" still smells fishy - are they good for the $1.3Bn? LEvko wonders...

They should be...when you consider what they are getting for the money.. the country's entire fixed cable telecom network...the exchanges...many many millions of subscribers...

Sport and politics should not mix

European Champions' League quarter finalists, Shakhtar Donetsk, were beaten 1-0 last Saturday in Lviv by Ukrainian premier league rivals, 'Karparty'.

Some of the home team fans displayed a huge portrait of Stepan Bandera and also a banner: "Nothing will hold back an idea whose time has come".

Oh dear....

[Ukraine's Euro-2102 co-hosts Poland, and UEFA will not be happy..]

Ukrainian obshchak

In recent months some of the activities of the current Ukrainian authorities, e.g. grain export quota machinations, selective application of customs control and import duty on petroleum products, etc., below-cost selling off of prime development sites and property to favoured buyers and so on, have been ever more frequently described by some commentators as the creation of an 'obshchak' set up for the benefit of 'those who now must be obeyed'.

The excerpt below from this academic paper provides an explanation of this term.

"Thieves and bandits

The legendary Soviet criminal underworld, the world of thieves (vorovskoi mir), has received a fair amount of scholarly attention. Formed in labor camps and prisons in the early-Soviet times, the world of thieves became a powerful informal organization that survived until the end of the Soviet system.

Thieves observe a complex set of mores and prohibitions that regulate their relations with one another, with authorities and with outsiders. Prohibitions are particularly strong with reference to having a legitimate job and a family, the cooperation with prison or any state authorities, the use of violence towards other thieves unless a collective decision is taken, and personal luxury.

The central element of the world of thieves is the so-called obshchak, the communal fund which accumulates the money acquired by theft and other illegal methods. Having donated the money to the obshchak, the thieve then receives from it his share that makes his living. But the bulk of obshchak is used to support those who serve their prison term. The elite of this underworld consists of the so-called "thieves-in-law" (vory v zakone), whose main function is obshchak management and exercise of criminal justice"

Fist fight on live TV over poet [updated]

Watch this funny Monty Pythonesque altercation on the 'Velyka Politika z Yevgeniyem Kiselovym' political discussion programme yesterday between two of Ukraine's most unpleasant provocative commentators..

I love the way the anchor man Kiselyov calls out in a strained voice, after assailant, Oles Buzyna, tries to grab his victim, Serhiy Poyarkov, by the testicles: "Okhrana.." - A stunned audience looks on.

The other speakers with concerned mutterings comically but pathetically try and retain a sense of decorum..

And after fighting starts again near the end of the clip Kiselyov declares: "Reklamnaya pauza.."

The theme of the discussion was Taras Shevchenko...

Buzyna, a 'special correspondent and writer' who works for 'Segodnya' is known for his provocative and frequently scandalous anti-orange, anti-Europe articles. Will he face criminal charges? The video evidence against him is clear. Will he be sacked by 'Segodnya'? He has undoubtedly breached the newspaper's defined terms of behaviour for staff. He is now saying he will only appear on Kiselyov's show again if he receives an apology from Kiselyov himself!?

Managers of other TV stations have already declared they would not be against Buzyna appearing on their programmes. They will show any crap as long as it gets them ratings. To slightly misquote H.L.Mencken, "No one ever went broke underestimating the taste of the Ukrainian public."

Grain export madness [updated]

This article from "Ukrainian Week" [in English] explains how the Ukrainian grain–export market is being monopolised by the Donetsk clan.

A company called Khlib Investbud Ltd. (KhIB) last year was granted a major portion of the country's grain export quotas, whilst other big grain export traders were shut out. Agriculture minister, Mykola Prysyazhnyuk, tried to convince the mass media that this was all OK and 'above board' because KhIB was 61% state-owned.

However, the Ukrainian version of 'Ukr.Week', 'Tyzhden' magazine, has documents revealing that the state no longer controls 'KhIB' - which is now Ukraine's main grain trader. It seems 'KhIB' is in the hands of a company linked to business spheres close to the minister himself - 'Kalasar Ltd'.

'Tyzhden' says 'Kalasar's joint owners are Oleksandr Kozyryev [connected to the Yenakiyiv business group], and also Genetechma Finance Limited, an offshore company registered in Cyprus [surprise, surprise]. The latter is a daughter company of the Luxembourg-registered Belevue Industries Sarl, who, in turn, are a daughter company of VEB-Leasing. They are a daughter company of the Russian VneshEkonomBank [VEB]....and the head of the supervisory council of VEB is PM of Russia, Vladimir Putin, no less.

'Tyzhden' calls this classic layering arrangement a new 'RosUkrEnergo', or 'RosUkrZerno'.

The periodical declares: Now Putin's bank has found easy money on the Ukrainian grain market. Last summer, the state lost control of 'KhIB' but nevertheless selected the company to be the state's chief grain trader. 'KhIB' received a contract to purchase 5 million tons of Ukrainian grain for 7 billion hryven [1,400 hryven/tonne], then received the lion's share of grain export quotas. As a result, other large transnational corporations who for years worked in Ukraine were squeezed out of the grain business. 'KhIB' monopolised the market and Ukrainian farmers have been forced to sell their grain to the company at a depressed price. Now the main state exporter sells the same grain inside Ukraine at a higher price. The activity of the 'KhIB' in the domestic grain market is one of the reasons why cheap flour has disappeared from store shelves, and the price of bread has increased.

Last month the Ukrainian Agrarian [strategic reserve] Fund decided to buy well over 2 million tons of grain from KhIB in three batches. It will have to pay 1.55 Bn hryven for each batch - providing a tidy profit the 'KhIB', basically for doing nothing..

Several weeks ago and article entitled: "Quotas threaten 'collapse' in Ukraine grain output" was posted on 'Agrimoney' site.

"The head of one of Ukraine's major farm operators has warned of a potential "collapse" in the country's grains production if it does not repeal quotas which could cost farmers up to $1.3bn.

Eugene Leng, the chief executive of Ukrzernoprom Agro warned that a fall in sowings of winter crops would herald an even greater drop in spring plantings unless the government lifts the quotas which are denying farmers the full benefit of high world crop prices."

Last week the respected Ukraine-watcher Anders Aslund, in a TV interview with Mykola Knyazytsky, stated he was very disturbed about the monopolisation of grain trade in the country -"There is no reason for it", [apart from the obvious.]

Agrobusiness is one of the great hopes for the future of Ukraine, but short-term greed is threatening its future development. In Ukraine export scams such as those described above are still then norm rather than the exception.

Update: A comment note in an article in Wednesday's 'Ekonomichna Pravda' which fleshes out this story], claims the above-mentioned Oleksandr Kozyryev has close business ties, via another company to the daughter's of agriculture minister Mykola Prysyazhnyuk and of head of the council of ministers of Crimea, Vasyl Dzarty,

More on the dapper Dzarty from a previous blog here

"50`year`old Prysyazhnyuk is considered to be a member of Yanukovych’s team. He met Yanukovych in Yenakiyevo in the 1980s and at that time Prysyazhnyuk was production manager at Ordzhonikidzevuhillya agrarian economy. Yanukovych was head of its motor pool.

They say Prysyazhnyuk was appointed first deputy head of Zhytomyr Oblast State Administration in 2002 under Yanukovych’s patronage. By that time he founded and became head of the PR oblast organization in Yenakiyevo. Prysyazhnyuk was elected MP from the PR in 2006. In the VR of next convocation he was promoted to the office of head of the agrarian committee.

Prysyazhnyuk’s main business is little related to agrarian sector, though. He mostly profits from extraction of quartzite (used for production of ferroalloys) and gravel. Mass media estimated his fortune as US $80 — 90 mn." source: Kyivweekly.com

Worst customs service in the world - but smartest uniforms..

Deputy head of the Ukrainian customs service, Serhiy Syomka, appeared in the Friday's 'Shuster live' show which focussed on the theme of corruption. He looked magnificent in his flashy royal-blue uniform, starry epaulettes and gold braid - not one crease on his well groomed, carefree schoolboy-complexion face.

He fended off challenges from other speakers in the studio, on massive scams at Ukraine's ports and customs clearance centres, with smug disdain.

I couldn't help compare his demeanour with this, from one US publication:

"The inventiveness of the [Ukrainian] Customs Service in finding new ways to collect money from companies and individuals trying to do business in Ukraine surpasses that of some of the worst kleptocracies in history. The issue finally boiled over in a July meeting between the U.S.-Ukraine Business Council—representatives of U.S. firms that have operations in Ukraine—and Deputy Prime Minister Sergei Tigipko.

The overall theme of the meeting was the irreparable harm done to the business environment by the Customs Service. But the specific focus was how their practices are a complete disaster for express mail and parcel services like FedEx, DHL, UPS, and others."

“There are only few countries in the world which ‘outperform’ Ukraine as the worst in the world. It is important to understand the impact of the shipments delayed at Customs which often result in lost revenues, additional costs for companies and the Customs Services itself. It generates numerous complaints from business community and private individuals. Last but not least it constantly deteriorates Ukraine attractiveness among potential investors,” said Vadim Sidoruk from DHL’s office here in Kiev.

“It has become common knowledge that Ukrainian Customs laws regulating express delivery are some of the most, if not the most, complicated in the world,” he complained.

“It is hard to imagine just what would lead the parliament and the Customs Committee to make the changes necessary to remove the roadblocks. However, I cannot help but think that if they understood the many development projects that have gone elsewhere in part because of the antiquated customs procedures, that alone would have a very strong impact on their thinking--and actions.”

In July, DHL moved into a new 8,000 square meter, $12 million package processing facility. It is one of the largest of its kind in the world for the simple reason that backlogs created by Ukrainian customs require this kind of capacity. Of all the packages held by customs in all of eastern and central Europe, 70 percent are being held in Ukraine, according to DHL."

[More at the link above]

Syomin's approval rating, which was constantly being assessed by Shuster's studio audience as he spoke, quickly dropped to percentage figures in the low teens..

Massive increase in anti-opposition TV air-time bias

This from the 'Telekritika' media watchdog website:

100% of video clips on the [state-run] First National Television Channel are on the ruling authorities - opposition is not represented at all

In February, an imbalance unprecedented since 2002 was recorded

In December 2010, the duration of time granted in news programme [political reports] on Ukrainian TV channels to representatives of the authorities was, on average, 70%. Only 26% was granted to the opposition. Other politicians received the remaining 4%.

These were the results of the Academy of Ukrainian Press [AUP] - "Monitoring of political News: December 2010, February 2011". In February the imbalance increased: 84% to the authorities; 14% to the opposition, and 2% to other politicians.

AUP President Valery Ivanov said that the situation at the First National Television Channel [NTU] was especially disturbing: in December, the news channel [political reporting] was 95% dedicated to politicians in power. In February no-one else apart from them was granted air-time.

He added that bias of this magnitude has not been recorded on any Ukrainian channel since [his organisation] started monitoring television news broadcasts in 2002.

Tymo's fate already pencilled in by 'vlast'...

US Vice President Biden yesterday joined the chorus of spokesmen of Western governments when he expressed concern, personally to Yanukovych, about the importance of "avoiding any selective prosecutions of opposition officials".

Although no names have been mentioned, all of these comments must primarily have in mind leaders of two of Ukraine's biggest opposition parties, former PM Yulia Tymoshenko, who has for many weeks been questioned by the prosecutor general's investigators, and former minister of Internal Affairs Yuriy Lutsenko, who has been imprisoned for over two months.

The current authorities recently staged a coordinated PR campaign in the US and Europe in an attempt to allay these concerns, revealing that they take all of this seriously because it damages their reputation.

The pro-Yanukovych 'Segodnya' newspaper speculates about what fate awaits the pair in an article entitled: "Tymoshenko could receive three years, and then be amnestied, adding, ex-PM to be tried next year, and her former minister by Summer."

In some countries this kind of speculation by serious observers would be regarded as highly prejudicial for cases that are 'sub judice', but it exposes the dilemma faced by the current authorities and the pathetic mess the country's law enforcement agencies find themselves in.

Apparently the case against Tymoshenko comprises 180 volumes of evidence of between 250 and 300 pages each. If she familiarises herself with 20-30 pages per day i.e. at a rate of about two volumes a month, as required by Ukrainian law, it would take over seven years to read all 180 volumes ....Lutsenko has 47 volumes to read...but he started last December...

[If a fair trial is to take place shouldn't the judges, prosecutors, defence councils all be forced to endure this nonsense too?]

Anyhow, a source told 'Segodnya' that the prosecutor general's office themselves admit 80% of the stuff is 'makulatura' [waste paper for recycling...(only 80%?)] allowing them to predict the dates for any possible trials to be timed as in the article's headline..[Lutsenko has been detained and arrested for failing to familiarise himself with 'makulatura'!?...LEvko]

Under a sub-heading "Two years for Yuriy, three for Yulia", the newspaper reveals their source in the P-G's office claims, that if found guilty, these are the sort of sentences they could expect. However, according to 'Segodnya' "this is where it gets interesting". All of the experts they questioned say that the pair will not 'serve time', "the reaction from the West would be too harsh" and their sentences will be suspended.

However, according to Ukraininan law, as convicted felons they would not be able to stand for political office in the Autumn 2012 parliamentary elections. This would again cause an uproar, and would provide a reason for some of Ukraine's neighbours to consider the elections illigitimate. The current authorities therefore face a dilemma - if they drop the cases against the pair, or if the cases collapse in court, it would mean that the authorities had been set on repression, but were scared off by Western pressure...quite a humiliation and a moral defeat for Yanukovych, according to one well-known observer, Vadym Karasyov.

[Quite why it would be a humiliation for the government if the case would be thrown out or the pair were found not guilty by truly independent judges is not made clear..]

Karasov surmises that Tymoshenko will be found guilty of the charges against her, will receive a suspended sentence, but will then receive an amnesty, perhaps on Independence Day 2012. "By showing clemency and letting her stand for election, the authorities could claim a moral victory," and resolve their dilemma.

The article declares in Tymoshenko's case, "Experts believe they [the charges] are completely provable, however they are flawed from a political point of view. Any previous prime minister could be prosecuted for the same reasons. They often allowed diversion of funds in order to plug holes in the budget, meeting the shortfall from other sources."

As for Lutsenko, "our sources in the police, say these sorts of things also happened under former ministers to increase the income of people close to them." [Lutsenko is charged with overpaying his driver and promoting him to a rank about his station.]

The Russian 'Nezavisimaya Gazeta' claims that the usual " source" has told them former president Yushchenko may soon be appointed prime minister. Introducing "a liberal, a marketeer, and a democrat" would be would be beneficial in terms of negotiations with the EU and the U.S. It would immediately neutralise the Tymoshenko factor in Ukrainian politics and would remove all suspicion of authoritarianism of the new government in the West". Would it really?

p.s. Latest opinion polls have Yanukovych at about 25%, and Tymoshenko at about 15%.

If recent trends in their respective popularity continue, it is not beyond the bounds of possibility these two heavyweights could be 'neck and neck' by next year - could a trial of Tymoshenko be considered anything but political in such circumstances?

p.p.s. 'Segodnya' posts a video of a rather sheepish and uncomfortable-looking Yanukovych making his latest slip of the tongue, confusing the Brazilian cosmodrome in Alkantara, with a fictional place called "Balkantavra"....the video is preceded by.... a beer advertisement. Could this not be regarded as disrespectful...making commercial capital out of the president's poor memory and inability to familiarise himself with his brief?

'Segonya' online readers unhappy with Yanuk..

Interesting straw poll on the big-selling Akhmetov-owned, pro-government "Segodnya" newspaper's website.

Online readers were asked: "February 25th was the first anniversary of president Viktor Yanukovych's inauguration. How would you assess his first year's work [out of a maximum 5 points] ?"

5 - excellent - 5%

4 - generally working well, but with some shortcomings - 15%

3 - mediocre - pluses and minuses in equal measure - 15%

2 - poor - few successes - 12%

1 - everything absolutely terrible - 54%

[Total votes cast, at time of writing: 2203]

Trouble is, the opposition would probably score no better right now...

On-line readers are by no means representative of the nation as a whole, but they will be younger, smarter, brighter, more dynamic and forward-looking...

p.s. some of the comments at the bottom of the 'Segodnya' article are quite amusing too..

e.g - Wrap the chandelier around his neck...and throw him in swamp..."

and "It's never been worse than now. In Egypt the average wage is $200 - the nation starts a revolution. Here it's $100 and 20% still vote for them...nonsense.."

[only a bit of fun...nothing to worry about..LEvko]

"The Family" - and a toe-rag

The 'Levyi Bereg' website frequently posts reviews of articles from the Ukrainian media. In its latest posting it quotes portions of an article from "Kommentarii" entitled: "The Family has finally secured the Tax Administration for itself"

L.B. says: The term "Family", in relation to top administrators appointed by, and close to the family of President Viktor Yanukovych, is now firmly entrenched in the mass media, even in newspapers.

"The Family" now has loyalists in the Prosecutor-General's office, at the highest levels of the judiciary, in the ministry of internal affairs, [see previous blogs on reasons for not believing the current authorities] and now, it seems, in the Tax Administration.

Below are some portions from 'Kommentarii":

"After the appointment just before the New Year, of Vitaly Zakharchenko as chairman of the State Tax Administration of Ukraine and Andriy Holovach, as his first deputy, [both of whom are linked to Alexander Yanukovych, eldest son of the President] Head of S.T.A.U. in Donetsk region, Olexander Klimenko was also promoted. The new deputy head of the Tax Administration is also considered to be a nominee of the presidential family. Together with Holovach, Klimenko will control V.A.T. refunds and the extraction of taxes from oligarchs at the national level. "

The 'Kommentarii' article includes a note surprisingly linking the appointments of Klimenko and the current head of the National Bank of Ukraine Serhiy Arbuzov, to former president Viktor Yushchenko, all in the context of the "Family".

"30-year-old Olexander Klimenko owes his swift career rise in the S.T.A.U. to his older brother Anton Klimenko, who is still head of the Donetsk regional organization of "Our Ukraine ".

According to rumours, it was he, that after the Orange victory in 2005 managed to set up his younger brother as deputy chief of the specialist state tax inspectorate appointed to concentrate on the major taxpayers of the city of Donetsk.

When the old long-time head of the National Bank of Ukraine, Volodymyr Stelmakh was replaced by Arbuzov, [who is close to the businesss of the Oleksandr Yanukovych], some observers recalled that the 34-year-old Arbuzov had had close ties to the 'Orange' team of Anton Klimenko. Arbuzov was not just an ordinary member of "Our Ukraine" through 2005 and 2006. He was No. 6 on the O.U. list of party candidates in the Donetsk regional council elections, but was not elected because the O.U. bloc failed to overcome the 3% barrier. "

The "Kommentarii" article also describes how some of the 'top bananas' at the S.T.A.U. who had "represented the interests" of PM Mykola Azarov, Rinat Akhmetov, and first VP Andriy Kluyev, including some who had overseen VAT refunds, have been replaced.

-----------------------------------------------------------------------

On the first anniversary of being appointed president, Yanukovych last Friday invited the three previous presidents of the country for a cup of tea, and a cosy chat.

I wonder did Yushchenko, [and the other three] have a laugh about what mugs Ihor Lutsenko and Yulia Tymoshenko were. Without their massive support, and that of many, many more back in 2004, Yushchenko have never, ever have become president.

Now Ihor Lutsenko is 'banged up' in prison for a third month on the flimsiest of charges, even though nearly one hundred parliamentary deputies have signed a declaration, presented to the prosecutor-general, vouching for Lutsenko if he were to be released on bail before any court trial. Their appeal has been denied.

Tymoshenko is constantly required to present herself for questioning at the P-G's office several days a week since before Christmas.

Did Yushchenko laugh about the thousands and thousands of his fellow citizens who shouted themselves hoarse calling out his name while standing for hours and days in the freezing cold in 2004?

What a toe-rag..

Two anniversaries

From Olena Bilozerska's blog:

"55 years ago, on 25th February 1956, the First Secretary of the Central Committee of the Communist Party of the Soviet Union, head of state and head of the Communist Party, Nikita Khrushchev, in his speech at the 20th Congress of the CPSU denounced the cult of Stalin. The decisions of that Congress have never been rescinded.

More than 50 years later, Zaporizhzhya renegades who have nothing in common with the ideals of communism, illegally erected a memorial to Stalin, mass murderers of many nations, outside its office. The purpose was to increase tensions inside Ukrainian society for the benefit of a neighboring state.

Young boys who took steps to ensure no such monument stood in our land are now sitting in prison.

But today we are commemorating not only that date, but also the first anniversary in office of President of Ukraine, Viktor Yanukovych, during whose period in office people who disagree with the existence of monuments to a mass murderer, are put in prison.

P.s. In his speech, Krushchev said: "Stalin put the Party and the NKVD up to the use of mass terror when the exploiting classes had been liquidated in our country and when there were no serious reasons for the use of extraordinary mass terror.

This terror was actually directed not at the remnants of the defeated exploiting classes but against the honest workers of the [Communist] Party and of the Soviet state"

Poke in the eye for Firtash,

Bully Firtash gets poke in the eye in London court

also this from FT

Firtash's crumby complaint here

All reminds me of a friend who took a case to court....then lost.

After talking with my friend, his lawyer told him, "You know what, you've got a verrrry goood case....."

After the court hearing my friend asked the lawyer, "What happened?..you said we had a good case."

The lawyer replied, "Yes, we had a very good case...but we lost....and oh, here is my bill...and you better pay me within the month, if you know what's good for you.."

I'm hope the English lawyers don't sell themselves short with the billing..

p.s. Tomorrow, Friday 25th February, president Yanukovych will be appearing on television after exactly one full year in office. Viewers have been asked to send in question to the the programme, which is entitled: "A conversation with the country".

'Unian' reports that of the 7,000 questions submitted to their site, the most popular was, "How can one survive on a monthy pension of 800 hryven, or on a wage of 1000 hryven? 'Unian' notes the questioners do not say, 'how can one live' on such an income, 'but how can one survive'...

Many ask, "Where are the promised improvements to life today, already?" - this had been Yanukovych's presidential election campaign slogan..

Today it was reported that a chandelier for Yanukovych's Mezhyhirya residence has been purchased... for and eye-watering $50,000...

Another of the president's residences, 'Synyohora' in the Carpathian mountains has been refurbished at a cost of 33 Million hryven, even though it's is just a few years old...l

IMO it still looks like sh*t.

Reasons for not believing today's authorities, part 2

See previous blog for part 1.

16. Caution - president approaching

The president's cortege of about 10 vehicles always travels along Kyiv's roads at about 100km/hr, constantly causing traffic jams. Everyday, morning and evening, many thousands of Kyiv's drivers are forced to sit in traffic jams as the president goes to work in the centre of town, and returns to his out-of-town residence in Mezhyhirya later in the day. The closing of adjacent roads has become general practice wherever Yanukovych travels.

17. Halfhearted fight against corruption

Yanukovych promised that on coming to power his first priority would be to fight corruption. Neither he, nor the parliament he controls can even pass the essential laws to do this. E.g. on December 17th 2010 the Verkhovna Rada cancelled a whole raft of anticorruption laws which should have come into power on January 1st 2011. Pro-presidential deputies failed to support Arseniy Yatsenyuk's bill requiring high-ranking officials and their families, to declare both their incomes and their expenditures. Without such measures, the fight against corruption remains a fiction.

18. Biassed television reporting

The activities of the ruling authorities are reported to a much greater extent and with a significantly more positive 'spin' that those of the opposition. News bulletins on some channels are beginning to resemble those of Soviet times. The PRP media watchdog company reports that in May 2010 17% of reports in main mass media had a negative spin on president's activites. By September this figure had dropped to 11%. Quite the opposite was observed when it came to the reporting of the activites of the opposition. Over the same period the frequency with which opposition activities were reported dropped from 33.5% to 20.6%. Undesireable [opposition] politicians and banned topics were not broadcast on many television channels at all.

Many experts link such selectivity with the owners of these stuctures - the leading channels belong to oligarchs whose businesses depends on decisions made by government. The most popular channel, Inter, is controlled by structures close to the head of the SBU [Ukrainian Security Service]. This swing has been reflected in international ratings of press freedom -'Reporters without Borders' have downgraded Ukraine from 131st to 178th position - a huge 42 position drop in its list of countries over the last year.

19 Audit of the work of Yulia Tymoshenko's cabinet

The current president's team announced a wide-scale investigation of the work of the Tymoshenko-led Cabinet even before it come into office. The 'Regional's had no doubt the results would be resonant. PM Azarov's Cabinet of Ministers secured an agreement with the American law firm Trout Cacheris PLLC, who then called in Akin Gump Strauss Hauer & Feld LLP to assist. The latter's partners, Mark G. Macdougall, have on several occasions represented the interests of Party of Regions' deputy Rinat Akhmetov in various court cases.

These auditors did not reveal any facts indicating major corruption. It turned out Tymoshenko's biggest infringement had been using 200 million euros obtained from selling greenhouse gas quotas, which should have been earmarked for ecological programmes, to pay pensions on time. Another transgression of the BYuT leader's team was the purchase of one thousand Opel Combo ambulances, on credit, for the Ministry of Health, at a cost of $12.5 Mn. The vehicles had "Tymoshenko government [health] programme" stickers applied to them. They went into service on the eve of the elections.

The Prosecutor-General's office did not worry too much that the Kyoto protocol money was not appropriated personally by Tymoshenko; any previous Ukrainian prime minister or president could easily have been accused of using their official position for electioneering. Tymoshenko is now being regularly summoned for questioning by the Prosecutor General's office, and she has been banned from travelling abroad.

20. Roads just for their own

A 13 km stretch of the Staroobukhiv Road and adjacent main roads along which the president and premier travel every day between work and home, were recently upgraded and relaid. "The president's road" was laid with super durable ashphalt, in record time. The cost to the state budget, according to UkrAvtoDor, was 50 Mn Hn. which is only 19 Mn Hn less than the total spent repairing all of the capital's roads a year previously. Most of the city's roads are in a poor state of repair. 'Avtodor' claim the work was done at the demand of UEFA in preparation for Euro-2012, but it seems the European football association made no such demand.

21. Gas capitulation

Thanks to the passive position of Ukraine in the Stockholm Internation Court of Arbitration the state gas company Naftohaz Ukrainy has had to give back12.1 Bn cu.m. of gas which were supposedly taken by Tymoshenko's cabinet from RosUkrEnergo [as agreed between Tymoshenko and Putin]. RUE is part-owned by Dmytro Firtash. It became clear that Naftohaz would lose its dispute with RUE even before Yanukovych's victory, when in 2009 the SBU, on the order of its deputy head at that time, Valeriy Khoroshkovsky, entered into confrontation with Tymoshenko, unsucessfully trying to overturn the transfer of gas from RUE to Naftohaz. With the arrival of the new adminstration law suits were opened against the officials that had nationalised this gas, and Naftohaz admitted it was at fault in Stockholm and agreed for $4Bn, the value of the gas in question, to be given to RUE from state coffers. This unprecented step, which even members of today's authorities called a surrender of state interests, was described by the opposition as a reward to Firtash, who was one of his main presidential election campaign sponsors.

22. His house - his fortress

How Yanukovych obtained his huge fenced-off residence Mezhyhirya is one of the most secretive topics in Ukrainian politics. Details revealed by 'Ukrainska Pravda' indicate that the state property was illegally appropriated before Yanukovych became president, and was developed during Yanukovych's presidency. In 2007 Yanukovych's Cabinet of Ministers sanctioned the transfer of 137 hectares of Ministry of Environment land. Having passed through several intermediaries, a major portion fell into the hands of little-known firms and also into the hands of the top 'Regional'. The president claims only a building of 600 sq m and 1.7 hectares of land belong to him, which he rents for a laughable 300 hn. per hectare per month...

During one foreign visit he let slip that he and some friends were building a clubhouse there using German contractors. This building comprises several thousand sq. metres and its luxurious fittings are of the highest possible quality. E.g. just one door is made of Lebanese cedar, at a cost of $64K. The property will include a zoo with ostriches and lamas, peacocks etc. No-one knows who is financing the entire project and Yanukovych refuses to permit any journalists to visit the site, even though he has publicly promised to do so.

23. One of the Family at the head of the National Bank of Ukraine

The president has appointed 34-year old Serhiy Arbuzov, a native of Donetsk, as head of the National Bank. Until then Arbuzov had not held any leading positions in any large financial institution - he had worked in regional branches of smaller banks, but had never worked in the field of state finances. However, he has close business ties with the president's older son Oleksandr. Arbuzov's mother is one of the co-founders of the Donsnabtar company, which belongs to Oleksandr Yanukovych.

24. Economising - it's for others only

From the first day of coming to power both Yanukovych and premier Azarov declared that their government would reduce the costs of maintaining the state apparatus. This promise has not been kept. According to the state purchasing register, in the previous year the Presidential Administration [P.A.] overturned a series of transactions, with the aim of providing even more comfortable conditions of work for the ruling elite. E.g. the P.A. purchased an elevator for 900,000 Hn. and modernised two Il-62 aircraft, used by high-ranking officials, at a cost of over 1 million Hn. Another 5 million Hn. was provided for the reconstruction of a swimming pool at the elite state sanatorium in Koncha-Zaspa. The P.A's. fleet of cars was enhanced by the purchase of a further 40 automobiles, including three Toyota Sequoia SUV's at 130,000 Eu apiece. The latter are to be used as quick-response vehicles for the president and other highly placed officials.

25. Working with youth

The Security Service of Ukraine, breaking Constitutional norms, attempted to prohibit civic activists from taking part in protest actions. One SBU officer, on May 18th 2010 demanded Borys Gudziak, rector of the Ukrainian Catholic University in Lviv, to warn students not to participate in street meetings against Minister of Education, Dmytro Tabachnyk.

26. Tightened control of the airwaves

On 8th June 2010 the Kyiv administrative court, following a legal action instigated by the Inter group of television channels belonging to SBU head Valeriy Khroshkovsky, suspended the granting of additional frequencies to Channel 5 and TVi. These additional frequencies had been previously issued to the latter two companies by the National Council of Television and Radio. An attempt by the two television companies to appeal against the court decision failed. It is suspected that all of the broadcasters who had earlier received additional frequencies had infringed rules, but only those who regularly criticise the government were penalised by the court.

27. Face to the table

On December 16th 2010 a group of PoR deputies assaulted BYuT deputies who were blocking the parliamentary presidium. Five BYuT deputies were taken by ambulance to hospital. Amongst the assailants were Petro Tsyurko, Oleksandr Peklushenko, Anatoliy Horbatyuk, Vadim Stolar, Oleksandr Volkov, Oleh Tsarev, and also the Minister for the Ecology and Natural Resources, Mykola Zlochevksy and Dmytro Salamatin, head of 'UkrOboronProm' arms company. The entire assault with fists and chairs was recorded on video by television companies and is widely available. The victims of the assault submitted a complaint to the Prosecutor General, but the matter has been shelved. However, P.G. investigators have questioned the opposition deputies about earlier events that took place on 27th April 2010, the day when the Kharkiv accords were ratified and smoke bombs were ignited and eggs thrown in the main chamber of parliament.

28. Hands up! [Hande hoch!]

On June 26th 2010 the head of the Conrad Adenaer Foundation in Ukraine, Nico Lange, was detained at Kyiv airport by law enforcement officers. He was held for ten hours before he was allowed to enter the country. The P.G. explained that he was detained for meddling in Ukraine's internal affairs. Lange, who has worked in Ukraine since 2006 and has never experienced any such problems before, fell from grace after the website of his organisation posted evidence of authoritarianism in the president's activities.

29. Fighting the police is equated to pornography

At the end of last year Dmitro Groysman, the coordinater of the Vinnytsya civil rights protection group, who for many years has fought against police misdeeds, himself received a blow from law enforcers. The local prosecutor accused him of spreading pornography and outrageous images above state symbols. As evidence they claimed Groysman posted a photograph of a male statue with his erect phallus laying on the Constitution. The case remain s under investigation.

30. An example of unprecedented generosity

Last summer the Azarov government granted a small Kremenchuk company, 'Livela', the exclusive right to import petroleum products without paying any excise duty or tax. By the end of the year the fuel trading company had imported a colossal quantity of fuel - about a million tons, or about 20% of the country's light petroleum products [annual?] requirements. As a result of this gift, state coffers esperienced a loss of about 3 Bn Hn. Other traders are perplexed how a small company, known only for its business links to billionaire Ihor Kolomoysky, can recieve such a generous benefit from the government. Neither the state customs agency nor the tax administration, who are both investigating the company's activities, can provide any explanation.

Update: 'Washington Post' says: "The United States should be pressing harder to stop the democratic erosion -[in Ukraine]. One way to do so is to explicitly link further progress in economic relations with Ukraine to improvements in human rights - and to urge the governments of the European Union to follow suit."

Reasons for not believing today's authorities, part 1

The politically middle-of-the road 'Korrespondent' magazine's cover story for its 11th February 2011 print issue was entitled:

"30 reasons why it is difficult to believe today's authorities"

'Korrespondent' has collected together 30 facts which cast doubt on declarations by president Yanukovych and his colleagues to turn Ukraine into a contemporary democratic state.

I've loosely translated some of these below:

1. Reduction in the size of the state apparatus - for show only

The number of 'chynovnyky' at city level was to be halved in order to save 1Bn Hn and reduce corruption by 50%. The President abolished 4 ministries out of 20, reduced the number of ministers and vice ministers from 36 to 17, and halved number of central executive organs.

In actual fact little has changed. In the 2011 budget the costs for maintaining the administrative apparatus, according to the opposition, has actually increased by a quarter. Importantly, administrative reform has not brought any qualitative changes. The state organs have not become a place for the self-realisation of talented and energetic people, but rather remain a means of enrichment for those who make up the rules of the system.

2. Companies linked to the authorities are making money out of Euro 2012

Multibillion state investments intended for preparations for Euro-2012 are granted by vice-PM Boris Koresnikov - the minister directly responsible for this, without any tendering process, e.g. as is the case for the main focus for the event, the NSK Olympiysky stadium in Kyiv. The projected cost for its reconstruction has now risen from 1.5 Bn Hn to 3 Bn Hn. According to 'Ukrainska Pravda' website, [U.P.] one of the companies involved in construction, AK Engineering, started work on the project only after Kolesnikov took over the Euro 2012 preparations. Other major projects have recently also been taken on by this company without tender competition. Investigation by U.P. reveal that the company is half-owned by Kolesnikov's lawyer from the early '90's. [And is also linked to shadowy off-shore companies in Belize..Levko]

3. Conflicts of interest

One of Ukraine's richest men, Andriy Kluyev, who is also the Minister for Economic Development and Trade, not only manages the economy of the country but also helps his own companies obtain large state contracts. According to U.P. his government commission gave one fifth of the total state investment earmarked for hi-tech development projects - 200Mn Hn, to the Zaporizhzhya semiconductor plant [ producer of semi-finished products for solar panels], which, via the Austrian Activ Solar GmbH, is linked to Kluyev.

4. Shadow capital

The president and his family have at their disposal assets of over $100Mn, the origins of which are not known. Just their publicly declared business assets, president's son Aleksandr's MAKO corporation [the biggest business centre on Donetsk], and his property in Sevastopol, are estimated by 'Korrespondent' to have a value of about $100Mn. The president's daughter-in-law owns an elite business club. The Yanukovych family occupies a whole block of expensive houses in Donetsk, and he himself 'owns' the massive Mezhyhirya residence [more on this later]. Official biographies of the president state that he never ran any business but lived on a civil servant's salary for many years, e.g. in 2009 he officially earned less than $30,000. He says his oldest son is a dentist, but it is unclear how the dentist son of a civil servant came to own such huge business assets in just a few years.

5. Pressure on business

The coming of the new administration has brought with it increased pressure on entrepreneurs and businessmen from fiscal organs in the form of inspections and extortion by state 'chynovnyky'. Some enterprises claim the number of inspections has risen tenfold. The result has been the portion of Ukrainians forced to give bribes has greatly increased. Transparency International claim the the number who gave a bribe at least once has risen, from 21% in 2009, to 34% in 2010. Importers claim that their format of operation has dramatically changed. Apart from paying usual customs duties, they are forced to give bribes just to bring in their products into the country.

6. Fight over natural resources

Mykola Zlochevsky, who was actively involved with mineral resources extraction, is now head of the Ministry of Ecology and Natural Resources - the body which controls the granting of licences for development of mineral deposit extraction. But resisting temptation was too difficult- with the coming of Yanukovych the state-owned Naftohaz Ukrainy has been deprived of its licence to develop the largest gas-condensate deposits in Ukraine, and the place of the state gas company has been taken by 'Ukrneftobureniye', a commercial enterprise. Until recently the current minister of the ecology was one of its owners..

7. Value Added Tax - but not for all

The authorities return VAT to businesses selectively, providing conditions for unfair competition. Currently one company, Arcelor-Mittal Kryviy Rih, is owed 10% of the total shortfall for the entire country. In response to the company's protest that they are owed 3Bn Hn, they were 'hit' with a law suit for 23 Million Hn for importing low quality coal. A pr representative for the company claims one of their rivals, SCM which is owned by PoR deputy Rinat Akhmetov, does not appear in the top five in a list of creditors, despite SCM's huge turnover.

8. Action against leaders of Maidan-2

Over 100 people who took part in recent protests against proposed tax laws directed against small and medium businesses are being questioned and investigated. 132 stakes driven in Independence Square apparently caused 230,000 Hn damage. In 2007 similar actions by Party of Regions [PoR] who were in opposition at that time did not result in any criminal action being taken against PoR.

9. Police search of Yelena Bilozerska

On 12th of January 2011 police raided journalist and civic activist Yelena Bilozerska's apartment, then they took her in for questioning. Her 'crime' was publishing news about the New Year's Eve attempt to burn down the Party of Region's offices in Kyiv. She had reposted a YouTube video, apparently filmed by the alleged perpetrators. Ministry of Internal Affairs took all of her technical equipment, computers, hard drives etc. Some of the equipment has been returned, but not the storage media. [Her website is here]

10. President rewrites Constitution to suit his purposes

On 1st October 2010 the 2004 version of the Constitution was invalidated by the Constitutional Court of Ukraine and the 1996 version came back into force again, returning many levers of power from parliament back to the president. According to the law, changes to the Constitution can only be made by a 2/3 majority in parliament, which the president did not command. On coming to power the president bypassed parliament, having first appointing 4 loyal judges from the east and the south having close ties to PoR, to the Constitutional Court. The chief examining C.C. judge overseeing this matter was Serhiy Vdovychenko, who for five years was head of the Makiyivka city court [Donetsk oblast].

11. National interests given away in return for gas

On 27th April 2010 parliament ratified the Kharkiv Agreement signed by the Ukrainian and Russian presidents. Kyiv received a 10 year discount for Russian gas, while the Russian Black Sea fleet extended its lease in Crimea for 25 years. As a result, Ukraine nullified any possibility of joining NATO while the foreign fleet is stationed on its territory. In 2019, when the gas contract ends, Ukraine will again have to renegotiate a price for gas, while the Russian fleet will remain in Crimea until 2042.

The president personally took the decision, which to a large degree determines the external political direction of the country and protects the centre of Russian influence in Crimea for the next 25 years. Yanukovych was completely aware that a significant part of the Ukrainian population was categorically against such a deal.

12. Cadillac for the head of the Ministry of Internal Affairs

Last year, NUNS deputy Hennadiy Moskal publicly claimed that the ministry's motor pool had been augmented by a $64,000 Cadillac Escalade. The ministry accepted this was true but stated the vehicle had been a gift from an anonymous donor, not to the minister himself, but rather to the whole department. In most countries giving such a gift for unknown services would be regarded as corruption and a reason for a criminal case to be set up. To clear up the scandal the vehicle was passed on to the Ministry of Foreign Affairs for the purpose of transporting foreign delegations. Moskal's requests for the Prosecutor General to investigate the matter have not received any response, and Anatoliy Mohilyov, the Minister at the centre of this affair, remains in place.

13. One of their own for Prosecutor-General

Last November Viktor Pshonka was appointed Prosecutor-General by Viktor Yanukovych. Pshonka, a native of Donetsk, worked there as a state prosecutor. His son Artem has twice been elected PoR parliamentary deputy. Such a close relationship calls into question his objectivity and impartiality - qualities essential for a prosecutor. After his appointment a whole series of criminal cases have been opened against members of former prime minister Tymoshenko's cabinet, whilst clearly not by chance, obvious legal transgressions by members of PoR have been ignored.

14. Methods of operation against former Minister of the Interior Yuriy Lutsenko

A criminal case, minor by Ukrainian standards, has been opened against the former mininster. He allegedly promoted his personal driver to a status higher than he should have attained. The prosecutor claims the driver had been overpaid by 40,000 Hn as a result. [This later grew to 360,000 Hvn]. Lutsenko was arrested and detained for failing to familiarise himself with the case against him. Whilst behind bars, two further cases were opened against him: for sanctioning illegal investigations into the poisoning of former president Viktor Yushchenko, and for approving an overspend for 2009 Day of the Police celebrations. The whole case looks trumped up, particularly against the background of the gifted luxury Cadillac.

15. Only the best for big business

On December 2nd 2010 parliament passed a new tax code into law. The document, awaited for many years by the country, did away with many local taxes, reduced certain tax rates, and granted preferential rates for ten years to certain spheres of economic activity. The greatest beneficiaries of the new tax code have been big businesses, whose most visible representatives are members of PoR or are close to today's authorities. The new tax code has only complicated life for small business, judicially imposing more social injustice. The tax code has also given the green light to mass inspections, without simplifying the taxation system as a whole.

In developed countries, small and medium business accounts for about 50% of GDP, in Ukraine it is about 10%. After the new tax code was passed entrepreneurs have started handing in their business licences 'en masse'. It is hardly likely small and medium businesses will become the economic locomotive they should be.

More to follow shortly...LEvko

Some ambulances

Yanukovych decides who to free, who to blame..

On February 14th, head of the Supreme Court of Ukraine,Vasyl Onopenko [who is considered pro-BYuT] met with Viktor Yanukovych. The next day a criminal case against his younger daughter Iryna was closed, and the husband of his eldest daughter, former First Deputy Justice Minister Yevhen Korniychuk, was released from detention, on parole.

Even though former PM Yulia Tymoshenko has been questioned almost daily this year in connection with charges of misuse of official powers, and has been twice banned from travelling abroad at the invitation of European Union bodies, Bruce Jackson, an American lobbyist, having met the president, recently claimed : "The first thing Yanukovych told me: ‘Yulia is not going to jail.’ And what everybody says is that Yulia is not going to jail. [So] Why summon her to the Prosecutor’s General? They said they didn’t know."

Tymoshenko has been invited yet again to attend a meeting in Brussels.

This time, after 'bollockings' from European leaders, Yanukovych, answering journalists’ question whether the General Prosecutor’s Office decision to take such precautions against Yulia Tymoshenko was justified, said [according to his official website]: "I agree that there should be no law enforcement agencies rush in these issues. In any case, all these issues should be decided by the courts. But without any court decision, a person is free, and cannot be blamed or restricted in anything.”

...The President informed that he had had a conversation on the subject with the Prosecutor General. He expressed the opinion that the decision was not correct."

He added that he had communicated with leaders of European structures who wished to see Tymosenko going Brussels, and said: "I think that such a procedure should take place, because restriction, if a person wishes to travel, [should be] impossible, but the Criminal-procedural codex should be adhered to."

So it looks like Yulka T., like Cinderella, may well "go to the ball", after all.

Respected journalist Sonya Koshkina, in a recent article, describes, how friends of former head of Naftohaz Ukrainy, Ihor Didenko, appealed directly to Yanukovych on his behalf, following his arrest last Summer. The answer they got was: "[Go with] this - to Firtash".

Firtash apparently told Didenko's friends:" No, he will sit [be locked up in jail]. And sit for a long time. So the whole world knows that it's impossible to do this to me, to Firtash. " [meaning take my gas.]

Koshkina claims that after his arrest Didenko asked to meet Valeriy Koroshkovsky, the head of the Security Service of Ukraine, with whom he was acquainted -they played football together. Didenko spent some time handcuffed, in Khoroshkovsky's waiting room, while other visitors came and went. Eventually they had a brief meeting, but it was surely unpleasant for both of them. Didenko is still behind bars..

It is pretty clear that the present regime is persecuting only senior BYuT loyalists and ministers from the Tymoshenko cabinet, even though some ministers were from the Yushchenko's Our Ukraine party.

According to the former Economy Minister in the Tymoshenko cabinet, Danylyshyn who was recently granted political asylum in the Czech Republic, the former president most likely did a deal with Yanukovych to get himself and his team' off the hook'.

All this of course adds to the impression that the Ukrainian legal system really is being used selectively - the president having the power to save..or to condemn...

And it helps if the top man at the Prosecutor-General's declares that he is "a member of President Viktor Yanukovych's team".

"There's a man goin' 'round takin' names. An' he decides who to free and who to blame. Everybody won't be treated all the same. There'll be a golden ladder reaching down, When the man comes around.... ."

"When the man comes around." - Johnny Cash

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p.s .Ukraine refuses to support Visegrad Group’s position on Belarus. More here

Respected journalist Vitaliy Portnikov claims that had Putin attended the Visegrad summit, even he may well have signed its declaration on Belarus.

Polish delegation laughs at clowns in VR

A couple of weeks ago I called the Ukrainian parliament a 'shabby circus'

Today a Polish pariamentary delegation visited the Verkhovna Rada just as voting was taking place.

As usual, a handful of 'piano player' deputies ran around from seat to seat voting on behalf of their colleagues. This caused much amusement amongst the Polish visitors, some of whom recorded the event on their camera-phones and video cameras [see video here]

In Poland voting on behalf of a parliamentary colleague is strictly illegal and would result in a major scandal - any transgressor would be kicked out of parliament.

In Ukraine, according to the Constitution it is also not permitted, but hey, what can you expect from a bunch of clowns..

p.s. President Yanukovych was in Kharkiv today. As he entered a meeting of the local regional council for economic reform, a stern-voiced master of ceremonies announced: "Ladies and gentlemen!....the President of Ukraine!...Viktor...Yushchenko!...[see funny video here] - You can almost hear the grating teeth..."Why am I surrounded by imbeciles.."

Yanukovych's BBC interview - and cryptic messages

"Justin Rowlatt, of the BBC World Service "Business Daily", reported last Friday from Ukraine on the problems of its economy. He talked to ordinary families about rising gas prices, and to business people, big [Petro Poroshenko] and small, about corruption and bureaucracy.

[18 minute long audio clip here ]

Rowlatt puts their concerns directly to the country's President Viktor Yanukovych, who defends his government against charges that corruption is present at the highest level.

Yanukovych accuses members of the opposition of paying lobbyists, both at home and abroad, to promulgate the view that they are victims of political persecution."

A much fuller version of Yanukovych's rather arrogant interview [in Ukrainian] can be heard, and read here.

Some portions:

Qu. You hear from businessmen who took part in [recent] protests they feel they could be persecuted. Then you see a fence around the main square of the capital - and you say protests harm the image of Ukraine. Do you want to say that you do not want to see demonstrations of people who are distressed by what is happening in Ukraine?

A. I think you misunderstand what I'm saying. I'm not scared of anything. I think I do not resemble a person who is frightened. Do you think that I look like someone who is frightened? I won all the elections which took place in the last 5 - 6 years, including the elections of 2004....democracy should be based on the supremacy of the law, freedom of speech, defence of human rights. It's a totally different matter to hide behind democratic slogans, hiding corruption and bureaucracy behind these slogans. I'm talking about these matters - and what are talking about?

Qu. But those elections in 2004, which you say you won, were declared to be dishonest by the Supreme Court, wasn't that so?

A. The commentary of lawyers confirm that the decision of the Court broke the laws of the Ukrainian Constitution. All subsequent elections that took place since 2004 were convincingly in my favour and my team - my political force.

LEvko's says: Can comments of lawyers override the Supreme Court? Just like that?

2010 presidential elections Yanukovych 12,481,266, Tymoshenko 11,593,357

2006 parliamentary elections: PoR 186 seats, BYuT 129 seats, NU 81 seats.

2007 parliamentary elections: PoR 175 seats, BYuT 156 seats, NU 72 seats.

p.s.

Ukrainian politics is frequently peppered with sinister undertones and nuances. Independent journalist Olena Bilozerska has posted in her blog a piece entitled: "Who is threatening Yanukovych with death? She describes and article in the Akhmetov-owned "Segodnya" and posted on its website.

Here are portions:

"The Phantom of the Kiev Opera

He came to power, having the support of many millions, and with slogans of stability and reforms. Having established stability and started reform, he betrayed those who supported him for the sake of "national unity". And five years later he was killed by those with whom he sought union, having support from nowhere else. He is buried in the Kiev-Pechersk Lavra.

This is not a utopian story about the near future - it is the story of the great Russian reformer Pyotr Stolypin. The finale of his drama unfolded in Kyiv a hundred years ago, in 1911. And every Kiyevan can go to the opera house to see where the Russian prime minister was killed by anarchist student Bogrov, the Maidan, where a monument to him was erected, or the Lavra, where his grave is located.....

..This is all history. But this story shows that everyone who comes to power and turns his back on those who supported him, comes to a bad end... "

Everyone knows Yanukovych fearful of being killed.

This from Taras Chornovil, from the series of "OstroV" interviews I've mentioned in my previous blogs:

"It is a Stalinist type of psychology, when a person fears everyone..I would not like to find myself in his [Yanukovych's] skin - he constantly worries all the time about assassinations..In actual fact there were several attempts to kill him. He himself told me how they wanted to poison him..."

Chornovil says that those around the President constantly play on his fears..He is constantly surrounded by security men and drives around in large convoys of vehicles. Even on his recent trip to Davos, he was escorted by about a dozen 'bone-crushers'.

It beggars belief that the "Segodnya" article was not run without serious consideration. What was it's aim? A shot across the bows of "The Family"?

"Do you think that I look like someone who is frightened? ...Hmmm..

p.p.s. To rise to the top of Ukrainian politics it helps to have survived an assassination attempt, or to have been in prison, or preferably both...

p.p.p.s. Is the above the Ukrainian version of the horse's head in the bed? Or the package of dead fish? Maybe I'm getting carried away here...

President's boys like money..

Below is a summary from the third of series of brief interviews with Taras Chornovil on the 'Ostrov' website. [See my blog of 8th February for summary of the first of the series.]

Chornovil believes the president's elder son Oleksander Yanukovych is a very bright boy who knows how to make money and loves to count money - the methods he employs to do this though, verge on what is legal...but not beyond.

He alleges the business interests of "The Family" of President Yanukovych, in matters that are "beyond legal limits", are 'sorted out' by an old friend of the president from the 'bad old days' - the mysterious Yuriy Ivanyushchenko. a.k.a. Yura Yenakiyivskiy. These matters include major shipping container customs clearance scams. [Note - Complaints about these have been sent to the president by many businessmen, including some from ruling coalition partners. And some commentators allege Yuriy Ivanyushchenko also controls grain export flows on behalf of "The Family", who benefit hugely from the disproportionate granting of tightly limited export quotas. These quotas could cause losses of over $2Bn to country's agricultural sector.]

Although Chornovil claims Rinat Akhmetov is now positioned on the fringes of politics, the more-loosely tied Donetsk group, which also includes Kluyev and Azarov, will become more unified in order to counteract the challenge of the rapid financial growth and advance of "The Family", which may be "measured in billions" over the entire country.

Meanwhile, 'Ukrainska Pravda' exposes some dubious business involving Oleksander Yanukovych's younger brother [and parliamentary deputy], Viktor Viktorovych. Young Viktor has recently been seen driving a high-class Range Rover SUV - one that had been used previously by former president Yushchenko.

It turned out that the vehicle was one from the motor pool of the 'State Administration of Matters' [D.U.S.] - one of whose functions is to provide transport for prominent state officials.

The president's administration and the head of D.U.S. claim young Viktor was renting the vehicle; and the lad himself explained that he had been paying 200 hryven an hour for its use. From August to September he claims he had paid 8,000 hryven, and October to December 14,000 hryven - a small fraction of normal market rate for rental of this type of vehicle. He refused any paperwork backing up his claim to be photographed.

Further investigation by 'Ukrainska Pravda' revealed that throughout its years of existence of the D.U.S. they have never rented vehicles to anyone - this is just not their function. So it looks as if the whole "renting" story is most likely a banal attempt to conceal a misuse of official position.

Interestingly, the story has also been run by the normally pro-PoR 'Segodnya'.

Why can't Oleksandr Yanukovych, who recently bought himself a bank, get his younger brother a fancy motor for his birthday rather than allowing him to burden the state with the cost of this expensive 'boy's toy'?

p.s. the author of the above-mentioned U.P. article, Serhiy Leshchenko, who has written many investigative pieces about all of Ukraine's leaders, is the target of disgusting, thinly veiled death threat, as described today on the international "Reporters without Borders" blogsite. The person who is the source of these threats should not be allowed to enter any country where journalist's work is valued and respected.

British Foreign Secretary concerned about democracy in Ukraine

"Foreign and Commonwealth Office

King Charles Street

London

08 February 2011

Dear Mr......

Thank you for your e-mail of 29 December to the Foreign Secretary, William Hague, concerning Ukraine. I have been asked to reply.

Together with the EU and international partners, we have raised our concerns about the development of democracy in Ukraine directly with the Government of Ukraine. Foremost among our concerns are the conduct of local elections held in October 2010 and the weakening of media freedom. Most recently, we have become concerned with the manner in which the Rule of Law is being applied.

Ukraine has recognized the necessity for judicial reform and President Yanukovych has publicly called for the combating of corruption in Ukrainian institutions. We actively support this. However, we have pointed out that corruption cannot be fought with selective application of the law - a situation which not only has an impact on the political climate but on future economic growth as well. An independent judiciary to ensure equal treatment under the law and advance justice in a predictable and fair way is imperative to further economic growth.

Until recently, the development of Ukraine into the most democratic country in the CIS bolstered Ukraine’s reputation - and that of its leaders - and helped to promote relations with key international partners. Ukraine has a stated aim to achieve full membership of the European Union. We have made clear that this can only be achieved by a truly democratic Ukraine.

Our bilateral relations with Ukraine are based on the principles of democratic and economic freedom, the rule of law and respect for human rights. We are committed to the strengthening of cooperation between the UK and Ukraine. And we are prepared to support Ukraine as it faces the challenges of protecting and developing these fundamental principles.

Yours Sincerely,

K Dockray

Kristina Dockray

Deputy Head of Section

Ukraine & Belarus Desk Officer

Belarus, Ukraine, Moldova & Neighbourhood Policy Team

Eastern Europe and Central Asia Directorate"

[Click on image below to enlarge..]

What Yanukovych really craves..

In a most interesting brief interview on the 'Ostrov' website, Taras Chornovil, one of the country's most 'promiscuous politicians, who in his time has been a member of both Yushchenko's and Yanukovch's innermost circles, claims politics in Ukraine is not determined in the Ukrainian parliament, but predominantly in Moscow via one of several shadowy domestic groups influence.

One of the groups mentioned is led by the his long-time buddy, Yuriy Ivanyushchenko. a.k.a. Yura Yenakiyivskiy - But the most significant group, according to Chornovil, is 'The Kremlin Quartet' - Lyovochkin, Firtash, [Boyko], and Khoroshkovsky.

Chornovil claims Koroshkovsky: "is totally dependent on the Kremlin. He receives instructions only from there. I think he is on a taboo - he is forbidden to take instructions and orders from the President of Ukraine, only from the president or prime minister of Russia. And the group that is associated with him: Firtash, is held on a a very serious hook there, Lyovochkin, who was directly imposed on Yanukovych ... It's there that politics in Ukraine are formed. Not in the Ukrainian parliament and even not in Ukraine, but they come directly from Russia. "

However, according to Taras Chornovil, Yanukovych is definitely not a puppet of Moscow - but he is lazy and greedy - easily influenced and manipulated by his close environment. Yanukovych's overriding concern is to amass great wealth and ensure that he can hold onto it in peace and quiet in the future. This is what the groups of influence provide.

Chornovil notes that in Yanukovych's address last week during the opening of the 8th session of the 6th convocation of parliament, most significantly, the president does not mention Russia at all, while the first concrete point raised is reform of legislation by means of which which Ukraine will embark on modernisation of society and formalise association relations with the EU. Chornovil claims this is a warning to the Kremlin Quartet.

TV audience thinks democracy under threat in Ukraine

Following recent 'fuzzy' statements by European and U.S. authorities expressing concern about the possible roll-back of Ukrainian democracy, one of the topics under discussion in Last Friday's "Shuster Live" UT-1 channel show was: "Is there a threat to democracy in Ukraine?"

A supposedly balanced studio audience, comprising a group of students/graduates and a group of employers, were asked this same question. The results [about 70 minutes into this video], were as follows:

Students/graduates, at start of programme 16% No, 84% Yes,

after the discussion 12% No, 88% Yes.

Employers, at start of programme 20% No, 80% Yes,

after discussion 8% No, 92% Yes...

Party of Regions fielded some of their biggest hitters in the debate, but their arguments were clearly not persuasive.

Herman says Yanuk legend in his own lunchtime

For buttock-clenchingly embarassing a**-licking from deputy head of the presidential administration, Hanna Herman, this surely "takes the biscuit"..

"The most valuable thing I have gained, thanks to the years of working with Viktor Yanukovych, is experience. Never, anywhere, in any university in the world would I have received such a great understanding of people and processes than from communicating with that person, politician, and state figure."

According to her, Yanukovych's greatness has not yet been fully recognised and valued properly.

"Very few people really know Yanukovych. The full value of this man has not yet been fully assessed. Even his election as president, a very high position, but even so, is far from a full assessment of this political figure".

"Many years will pass..and some time in the future our great-grandchildren will be told legends about a little orphan boy who had the hardest life you could imagine. Who overcame all difficulties. Was strong. Became good and fair to the people and brought the country to the path of prosperous development", gushed Herman.

"Yanukovych will become a legend for generations to come, because even in the next hundred years it is hardly likely anyone will be able to repeat what he has managed to do in his life. I learned a lot fromYanukovych. And, perhaps most importantly - to encounter life's losses and life's gains, with dignity."

What drivel..

"In Greek myth and tragedy, hubris (or hybris) is the pretension to be godlike, and thereby fail to observe the divine equilibrium among god, man, and nature...In other words, hubris is the capital sin of pride, and thus the antithesis of two ethics that the Greeks valued highly: aidos (humble reverence for law) and sophrosyne (self-restraint, a sense of proper limits).

Words and phrases like the following—overweening pride; self-glorification; arrogance; insolence; overconfidence in one’s ability and right to do whatever one wants, to the point of disdaining the cardinal virtues of life; ignoring other people’s feelings; overstepping boundaries; and impiously defying all who stand in the way—are found in descriptions of people who have hubris.

In Greek literature, hubris often afflicted rulers and conquerors who, though endowed with great leadership abilities, abused their power and authority and challenged the divine balance of nature to gratify their own vanity and ambition. Thus hubris was no common evil: It led people to presume that they were above ordinary laws, if not laws unto themselves—to presume they deserved to exceed the fate and fortune ordained by the gods.

Acts of hubris aroused envy among the gods on Mt. Olympus and angered them to restore justice and equilibrium. Nemesis, the goddess of divine vengeance and retribution, might then descend to destroy the vainglorious pretender, to cut man down to size and restore equilibrium."

From "Beware the "Hubris-Nemesis Complex - A Concept for Leadership Analysis"

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Yanukovych and spokesmen for ruling authorities claim the spate of arrests of Ukraine's opposition parties leaders, and criminal proceedings directed against them, are strictly non political.

In an interview with the "Washington Post", Yanukovych says:"The country has started a broad campaign against corruption and violation of the law. It is not a selective approach based on political reasons. This campaign affects representatives [regardless of] political party."

The normally urbane and mild-mannered former Minister of Foreign Affairs Boris Tarasyuk, challenges this proposition in his blog.

On 16th December last year, parliamentary opposition deputies who were blocking the dais were physically assaulted and driven out of parliament in a planned, premeditated attack by an organised mob of Party of Regions deputies [video here]

Tarasyuk and 25 MPs from the opposition wrote to the Prosecutor General of Ukraine demanding a criminal investigation on the circumstances surrounding these events during which several opposition deputies received nasty injuries. In his blog he publishes the reply from the Kyiv P.G.'s office.

It says that Tarasyuk's demands has been combined with materials of a criminal case opened on account of "illegal influence on the Chairman of the Verkhovna Rada of Ukraine and Verkhovna Rada of Ukraine which prevented them from executing their duties, committed by individuals using their official position", in other words, it is the opposition deputies who could possibly be charged with committing a criminal act, [subject to the removal of their parliamentary immunity], not their violent assailants..

Blocking the Verkhovna Rada has taken place many times over the years. Tarasyuk estimates that during the first six sessions of 6th convocation, when the Party of Regions, were in opposition, the working of Parliamentary pleniary sessions was blocked completely for at least 54 full days, but no criminal charges were ever raised, nor were brute force tactics ever used to unblock Parliament.

At 7 p.m. on 16th December 2010 when the attack on the opposition deputies occurred, parliament was not it session and most deputies had already gone home.

Tarasyuk recalls that at the end of December 2006 year and the beginning of 2007, when he was Minister of Foreign Affairs, a group of deputies from Party of Regions physically prevented him from attending meetings of the cabinet in the cabinet office. This criminal act has not been investigated by the Prosecutor General to this day.

"I have no doubt that the criminal assault on deputies also will not receive proper legal evaluation by law enforcement agencies. On the contrary, most likely, this criminal case will be used as one lever [to apply] pressure on the opposition, and the use of chairs as an argument in political debate will become normal practice by parliamentary majority parties.

Unfortunately, this is yet another vivid piece of evidence of the path taken by the current government to build an authoritarian state regime, where the law enforcement system plays a repressive role when dealing with dissenters, to protect those in power," says Tarasyuk.

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"They lie without conscience, twist the facts, hire people in Europe, the USA and inside the country, with stolen money..and disorientate the whole world and Ukrainian society." says president Yanukovych.

But it may just as well have been Yulia Tymoshenko talking about Yanukovych and his mob..

Shabby circus in Kyiv

Last Tuesday, 310 parliamentary deputies voted in support of amendments to the Ukrainian Constitution enabling the next parliamentary elections to take place in Autumn 2012, [after the Euro 2012 football tournament], and the next presidential election to take place in Spring 2015.

There are a total of 450 seats in parliament; 301 or more votes, i.e. 2/3 or more are needed

to be cast by deputies in order to make changes to the constitution.

However, it was clear to everyone that fewer than 300 deputies of those who supported the motion were actually physically present during voting. As usual, unconstitutional, illegal absentee voting took place.

Bearing in mind the current wave of criminal persecution of opposition leaders, it is not unreasonable to assume that some opposition deputies were blackmailed or coerced into voting with the ruling parties, or simply bought off, in the traditional manner.

One opposition deputy, Volodymyr Aryev, who apparently had "voted" in support of the motion, has protested because he was on board aircraft over the Atlantic Ocean at the time..In response, the Party of Regions parliamentary leader, Oleksandr Yefremov, has told him not to turn the occurrence "into a circus".

His words are apt. The Verkhovna Rada has been a circus for years - and the deputies of all colours who flout procedural rules with such disdain are clowns who use the Constitution as toilet paper...but we knew this all along.

p.s. It sometimes appears that some of the male deputies buy their clothes at the circus outfitters.... and female deputies buy their cosmetics at the circus make-up shop...do you really want to be around when they take their clothes off in the Summer..apart from maybe one or two..?

And another thing - the Ukrainian Football Federation is already run by the circus brothers... ;-)

Finally, we all know what can happen in Ukrainian circuses...

Ukrainian police out of control..

"During 2010 and the beginning of 2011, more than 50 people have died in police stations [in Ukraine]..setting a bleak record...

Details and more, in English, here..

"..woman fell from the third floor [of a police station]. She had spent more than five hours in the investigator’s office, confessed to stealing a sack of potatoes.. then asked to go to the toilet and jumped from the third floor window..."

p.s. Former minister of internal affairs, Yuriy Lutsenko, who is currently being held in custody for 'failing to familiarise himself' with the case against him, has requested the investigator in his case be replaced. Lutsenko claims he had been kept handcuffed for seven hours several days ago. His attorney had been prevented from attending.

The former minister is being investigated for overpaying his driver whilst he was minister, for illegally continuing surveillance of Volodymyr Satyuk - a suspect in the Yushchenko poisoning, and for cost overruns during the Police Day celebration in 2009.

With shocking crimes like that being held against him, and in the hands of Ukrainian police, Lutsenko should consider himself lucky not to have his finger nails pulled out with pliers or be thrown out of a fourth storey window..