Ukrainian Elections: the oligarchs are hedging their bets

On 28th October, Ukrainians will elect a new parliament. Their country has moved in the last few years from the forefront of democratic transition in the post-Soviet space to a clan-based authoritarian regime, taking its lead from its neighbour Belarus. Serhiy Leshchenko reports on the state of play.

The central issue around which elections are fought in democratic countries no longer applies in Ukraine. The victory of the Party of Regions, whose honorary leader is the country’s president Viktor Yanukovych, is a foregone conclusion. Attention is therefore focussed on other questions.

The first of these is whether the Party of Regions will for the first time emulate Vladimir Putin’s ‘United Russia’ by winning an absolute majority. Or will it be forced into an alliance with the Communist Party, and continue to share out government posts and the revenue from the Customs and Excise department, headed by a Communist for the last three years? 

'The victory of the Party of Regions, whose honorary leader is the country’s president Viktor Yanukovych, is a foregone conclusion.' 

The second question is which party will take second place in the election. The race is on for the title of official opposition. The contestants are the ‘Fatherland’ Party, whose leader Yulia Tymoshenko has spent the last fourteen months in prison, and ‘UDAR’ (literally ‘punch’), the party headed by reigning World Heavyweight Boxing Champion Vitaly Klychko. Opinion poll results have been embargoed for the ten days leading up to the elections, but the last figures published showed a gap of less than 1% between the two parties. If Klychko’s party does come second, it will be an amazing result for a politician who in the space of a year has turned from an unsuccessful candidate for Mayor of Kyiv to a leader of public opinion across Ukraine.

The contest between these two opposition parties is keener by far than that between them and President Yanukovych, since its outcome will affect more than their place on the official results board. The party that wins second place will have the moral right to put up a candidate against Viktor Yanukovych in the presidential election of 2015. This is, if you like, the semi-final match between Arseny Yatsenyuk, who has taken over ‘Fatherland’s’ leadership from Yulia Tymoshenko, and legendary boxer Vitaly Klychko. Whoever comes second to the Party of Regions will immediately propose that all anti-Yanukovych fractions unite behind him to go forward to the final in 2015. 

'If Klychko’s party does come second, it will be an amazing result for a politician who in the space of a year has turned from an unsuccessful candidate for Mayor of Kyiv to a leader of public opinion across Ukraine.' 

With nine days to go before the election, Tymoshenko’s team tried to play their own game with Klychko, by suggesting he sign an agreement to form a coalition of democratic forces in the new parliament.  This was, however, a pure PR stunt, since the agreement consisted of ‘Fatherland’s’ own election manifesto, and in any case the very concept of a coalition is absent from Ukraine’s constitution. Not surprisingly, Klychko did not show up at the signing ceremony. Obviously, if ‘UDAR’ comes in ahead of ‘Fatherland’, he will be the one to propose an alliance, on his own terms.

One sign of this growing conflict within the opposition was the failure by the two parties to agree to put up joint candidates in the local constituencies which will elect 50% of MPs on a first-past-the-post basis – the other 50% will be elected by proportional representation from party lists. Each party blamed the other for the failure of this initiative, which will result in more seats won by the ruling Party of Regions.  

The divided oligarchy

These elections also mark a split in Ukraine’s oligarchic clans. The country’s wealthiest citizen, Rinat Akhmetov, a crony of the president and a Party of Regions MP since 2007, has decided not to stand for another parliamentary term. He will, however, enjoy the support of a very large group in parliament, which will allow him to exercise influence over not only the ruling party, but Ukrainian politics as a whole.

About a third of the names at the top of the Party of Regions electoral list are close associates of Mr Akhmetov (and include his own driver). He also controls most of the candidates for constituencies in his home region of Donetsk, a major industrial area, where he has the unofficial title of ‘godfather’. The only exception here will be the constituency being contested by Oleksiy Azarov, son of the current Prime Minister.

'The clans have also been hedging their bets by cosying up to opposition parties through so-called satellite projects. The Akhmetov faction has been offering support to Natalia Korolevska’s party, ’Ukraine –Forward!’, whose star attraction is Ukraine’s football hero, the illustrious former Chelsea striker Andriy Shevchenko.'

All the ruling party candidates are running pretty cynical campaigns, crediting themselves for improvements carried out by local government bodies. The Donetsk region has been notable in this context for the generous gift of ambulances donated by candidates to local communities, but in fact paid for out of local authority budgets.

The clans have also been hedging their bets by cosying up to opposition parties through so-called satellite projects. The Akhmetov faction has been offering support to Natalia Korolevska’s party, ’Ukraine –Forward!’, whose star attraction is Ukraine’s football hero, the illustrious former Chelsea striker Andriy Shevchenko. Despite Shevchenko’s multi-millions, however, the latest polls showed the party’s share of the vote as below the 5% required to gain any parliamentary seats. An angry Korolevska accused the pollsters of taking bribes and even took Ukraine’s most respected polling company to court, demanding they produce copies of the more than 20,000 survey forms completed in the election run up. 

The second clan on whose support Viktor Yanukovych has relied is the ‘gas lobby’, which has flourished on the back of the notorious RosUkrEnergo transit company. Its interests are represented in government by Serhiy Lyovochkin, head of the presidential administration; Energy Minister Yuriy Boiko and First Deputy Prime Minister Valeriy Khoroshkovsky, who is trying to restore his reputation in the west after heading Yanukovych’s  repressive security police for two years. 

'In the last few weeks the ruling party, which is completely controlled by its Donetsk regional organisation, has switched direction in its election campaign and is now focussing on blackening the reputation of Klychko’s ‘UDAR’.  

The gas lobby has in fact lost the internal battle for control of the Party of Regions. The party’s electoral candidate list contains only a few names from this group, one of them the head of security for Dmytro Firtash, the oligarch who received 45% of the income from RosUkrEnergo’s activities. It can, however, win seats in the constituencies, with the support of government. Indeed, the administrative head of one region of Ukraine campaigned for the gas lobby candidate by warning voters that if they didn’t support its man, their village’s gas supply would be cut off.

But RosUkrEnergo’s biggest secret weapon is its satellite project: the development of friendly relations with Vitaly Klychko’s party, which is set to do well in the elections. ‘UDAR’s list includes the names of several people close to this clan, and ‘Inter’, Ukraine’s most popular TV channel, has helped turn Klychko into an iconic figure for the country’s young people.

The Party of Regions machine seems to have realised that if Klychko’s party were to come second in the elections, this would allow the founders of ‘RosUkrEnergo’ to raise their political capital with President Yanukovych. And the members of the Akhmetov clan who were supporting Korolevska and Shevchenko have also seen their party lose out to the ‘gas lobby’. So in the last few weeks the ruling party, which is complete controlled by its Donetsk regional organisation, has switched direction in its election campaign and is now focussing on blackening the reputation of Klychko’s ‘UDAR’. 

The Party of Regions’ pseudo-noir video, which is never off the TV screen, is hardly a masterpiece, but it does show a close understanding of the regional electorate. A man sitting in a small kitchen, his shirt unbuttoned over his vest, throws aside a newspaper with an ad for Klychko. ‘I love boxing’, he says, ‘but how can a boxer run a country?’ His browbeaten wife, who is obviously a victim of domestic violence, calms him down with a cup of tea, after which he announces that he will vote for the Party of Regions.       

 

'I vote for the Party of Regions'. The Party's imagemakers might not do subtlety well, but they certainly understand their voter

The ad is in fact aimed not at the boxer Klychko, but against the gas lobby, the ruling party’s main rival, whose influence in the next parliament it is keen to limit.

'The ad shows a man sitting in a small kitchen, his shirt unbuttoned over his vest. He throws aside a newspaper with an ad for Klychko. ‘I love boxing’, he says, ‘but how can a boxer run a country?’

Other oligarchs have been less active in this election, but one has been making his own mark. Viktor Pinchuk, owner of a London mansion and friend of Elton John and Paul McCartney, has focussed his energies on the election of the CEO of one of his steel plants to a constituency in Dnipropetrovsk. Pinchuk’s father in law, Leonid Kuchma, Ukraine’s president from 1994 to 2005, was the creator of the country’s clan-based economy and politics, but Pinchuk himself has been at loggerheads with the system since the Party of Regions candidate actively started using it to foil his nominee’s chances. In return Pinchuk has thrown immense resources into the ring, bringing in political strategists from Moscow and inviting the Polish Socialist MEP Marek Siwiec to be an election observer in his constituency. 

Both Portuguese MEP Mario David and former president of Poland Aleksander Kwaśniewski have also taken part in a video alleging shady election practices in the constituency. All this is not as surprising as it might seem; Kwaśniewski now works for Pinchuk as leader of one of the projects of the Yalta European Strategy, the organisation set up by Pinchuk to promote Ukrainian membership of the EU, and Siwiec and David are members of its governing body. At the same time, Ukraine’s opposition leaders feel a considerable obligation towards the oligarch, and both ‘Fatherland’ and ‘UDAR’ have withdrawn their candidates in the Dnipropetrovsk constituency, to boost Pinchuk’s candidate’s chances. And it must also be said that Kuchma’s son in law has managed to have his own nominees included in the electoral lists of all three major parties: not only the opposition ‘Fatherland’ and ‘UDAR’, but also the Party of Regions.

The ugly face of Ukrainian nepotism

The new parliament may be not only a showcase for standoffs between the various Party of Regions oligarchic clans, but also a hotbed of nepotism, with a record number of MPs related to top figures in the regime. One of the names at the top of the Party of Regions list, for example, is that of Yanukovych’s younger son, and Artem Pshonka, the son of Ukraine’s Procurator-General, is the ruling party candidate in a Zaporozhets constituency.

'The record for nepotism is held by the Zakarpattia region, where four of the six constituencies are occupied by the current for Emergencies Minister Viktor Baloga, his two brothers and a cousin.'

Other candidates include the PM’s son Oleksiy Azarov, who for the sake of being an MP is returning to Ukraine after living in Austria for several years, and ex-president Yushchenko’s brother, caught bribing voters in the Sumy region with sausage and kasha. The record in this area is held by the Zakarpattia region, where four of the six constituencies are occupied by the current for Emergencies Minister Viktor Baloga, his two brothers and a cousin.

The opposition has discredited itself, civil society is dormant and journalists live under the censor’s yoke. In these circumstances one has look for positives in unlikely places. So, a standoff between oligarchic clans in the Party of Regions might just inject some pseudo-competition into Ukrainian political life. And the clans’ attempts to hedge their bets through ‘satellite projects’ suggest that they accept the possibility of losing their power, or even of Yanukovych losing his.  

About the author

Sergii Leshchenko is an investigative and political journalist. He is deputy-editor-in-chief of Ukrainska pravda, Ukraine's leading independent online media. He was a 2012 Fellow of the John Smith Memorial Trust and a Reagan-Fascell Fellow from 2013-2014. All views are expressed in a personal capacity. 

Read On

Current Politics In Ukraine, blog

Kyiv Post, English-language newspaper

Ukrainian News Agency, website

Human Rights in Ukraine, Information website of the Kharkiv Human Rigths Protection Group

History of Ukraine, by Paul Robert Magocsi, University of Toronto Press Incorporated, 1996

Borderland: A Journey through the History of Ukraine, by Anna Reid, Basic Books; New edition 2000, 272 pages

Andrew Wilson: Ukraine’s Orange Revolution, Yale University Press 2005

What's left of Orange Ukraine?, by Mykola Riabchuk, Eurozine, March 4, 2010