Kuchma’s Sausage-Slicing Business

Government pressure on independent media and businesses supporting the opposition continues unabated. by Ivan Lozowy 25 March 2004 KIEV, Ukraine--“May you live in interesting times” goes an old Chinese curse. And Ukraine's opposition must certainly now be feeling cursed. Their lives are made more “interesting” by constant pressure from President Leonid Kuchma's government, which is using a kielbasa strategy: slicing off one thin bit of sausage after another until the sausage is all but gone.

The government has already cut many slices. Ukraine's independent media are being shut down. Business people who support Viktor Yushchenko, the opposition’s chief candidate for the presidency, or who themselves were elected to parliament on Yushchenko’s Our Ukraine ticket found their business interests subject to investigations. Criminal cases have been opened against some of them personally or against their business partners. Organized, concerted pressure aimed at subjugating or destroying the victim has become such a commonplace that it now has its own word, nayizdy, literally “run-overs.” Some have found the pressure unbearable: around 20 of the 120 members of parliament originally in the Our Ukraine faction have left the bloc. All of them had been subject to nayizdy, either directly or indirectly.

The pressure has intensified of late. One of Yushchenko’s main backers is Petro Poroshenko, an Our Ukraine MP and head of the influential parliamentary budget committee. His business interests include the confectionery-making factory Roshen and the Lutsk Automobile Factory, Ukraine’s leading producer of light trucks and buses.

Ukraine’s tax service has been investigating Roshen for more than a year, accusing Poroshenko of “tax manipulation.” Tax officials have also targeted the Lutsk Automobile Factory, claiming it conducted “fictitious” export operations and evaded taxes. Then, in October 2003, Kuchma signed a decree repealing the factory’s privileges, while leaving similar privileges in place for two competitors based in Lviv and Zaporizhya. Japan’s Isuzu Motors had invested over $70 million in the Lutsk Automobile Factory and planned to invest $120 million more. These plans have now been canceled and Japan’s ambassador to Ukraine has publicly stated that he will recommend that not a single yen be invested in Ukraine’s economy.

Other supporters of Our Ukraine have fared no better. Yushchenko has complained of 25 criminal cases initiated against MPs in the Our Ukraine faction. Criminal cases against another leading opposition leader, Yulia Tymoshenko, have once again been reopened, even though they have already been thrown out of court twice.

The only TV channel that regularly provides air time for members of Our Ukraine is Channel 5, which is financed by Poroshenko. Officials are now threatening to revoke Channel 5’s license. In regions outside the country’s capital, Kiev, the state-run broadcasting monopolist regularly switches off the channel’s programs.

Yet these nayizdy pale in comparison with what has been taking place since last year in the western Ukrainian city of Mukachevo. There, Our Ukraine’s candidate for mayor, Vasyl Petiovka, won elections held in June 2003. The results were then annulled by a court notorious for issuing decisions that are unsupported by facts in favor of the Social Democratic Party of Ukraine (United), whose chairman, Viktor Medvedchuk, is head of Kuchma’s presidential administration. The Mukachevo election commission, however, reinstated the election results and recognized Petiovka as mayor.

Kuchma then replaced Petiovka by presidential decree. His replacement fired Petiovka’s deputies and other staff. Two of Petiovka’s deputies applied for political asylum in the United States. The city court in Mukachevo defied Kuchma and confirmed Petiovka’s victory, but Kuchma immediately reorganized the city court, in effect liquidating it. New elections are now planned for 18 April in Mukachevo, and opposition deputies claim that 300 riot police have been deployed in Mukachevo in order to forestall mass demonstrations.

Two MPs from Our Ukraine, business people from the Ternopil region, Yaroslav Dzhodzhyk and Oleh Humaniuk, have had their businesses practically destroyed with punitive fines levied against their companies and employees arrested in their homes. In mid-March the Ternopil City Council, which is dominated by Our Ukraine supporters, was raided by masked tax police who seized financial records to support a criminal case opened against council members for non-payment of value-added tax. Council member Ivan Stoyko expressed surprise at such an accusation, “given that there is a corresponding constitutional court decision that the local government does not pay this tax.” The raid came hot on the heels of a visit from Kiev by a delegation from the central tax service. At the head of the delegation was Viktor Medvedchuk’s younger brother, Serhiy, who was recently appointed first deputy chairman of the State Tax Administration.

Serhiy Medvedchuk was appointed to his current post after a turbulent term of office as the top tax official in the western Lviv region, where he was accused of demanding kickbacks from business people and demanding that they join the Social Democratic Party (United), which is also known under the abbreviation SPDU(u). In response, thousands of Lviv business people protested against what they said amounted to political extortion. But, in the end, up to a dozen Lviv City Council members switched allegiance from the Our Ukraine faction to one controlled by the SPDU(u).

Small wonder that the opposition and many observers associate repression against the opposition and against Yushchenko, in particular, with Viktor Medvedchuk. Medvedchuk’s post provides him with almost unlimited powers, and he is referred to as the de facto president. He has heavily armed SWAT-type police units at his beck and call, and officials from local raion (county) leaders to regional governors depend on him for their positions.

For his part, Serhiy Medvedchuk is widely considered the mastermind behind the new pressure from the tax service being exerted on opposition businesses. He may be out to prove himself, even to become head of the tax service. For the opposition this creates a nightmare scenario, in which the two Medvedchuk brothers would practically run the country.

SILENTLY TURNING THE OTHER CHEEK

Yushchenko's reaction to the pressure has been predictable, but lackadaisical. Yushchenko has addressed diplomatic missions in Ukraine and international organizations such as the Council of Europe, but he has not issued a single leaflet designed to raise public awareness of repression against the opposition. With the major media outlets blocked and the number of independent media dwindling, it’s small wonder the general population is blissfully unaware of the real state of affairs.

In contrast, Yushchenko’s opponents have been very active, issuing 2 million anonymous leaflets last year designed to poison Yushchenko’s relations with Tymoshenko.

Much of the blame for Yushchenko’s consistently flagging campaign as well as his lack of response to government-backed repression has been placed at the door of Our Ukraine’s campaign headquarters chief Roman Bessmertny, a former Kuchma aide. Yet Bessmertny has withstood sustained criticism and has even remained among Yushchenko's closest confidantes. The dam, though, seems bound to crack at some point. A strong signal of criticism has already come from an unexpected quarter--from Taras Chornovil, who is a household name thanks to his dissident father, Vyacheslav. Chornovil recently quit the Our Ukraine faction after criticizing the Yushchenko campaign as a disaster-in-waiting. To be abandoned by Chornovil is a hard blow for Yushchenko, who has always enjoyed strong support among Ukrainian patriots.

Other Yushchenko supporters are not so sure that Yushchenko’s campaign is in a desperate plight. Pavlo Kachur, a parliamentarian, has said that “If they [the government] don't stop soon, the people will not take it.” But such warnings, which echo Yushchenko's own warnings of a popular uprising, have fallen flat. A failure to inform people makes the flatness unsurprising. To top it all off, despite having provided at least 30 rich business people with parliamentary seats in the 2002 general elections, the Our Ukraine campaign seems bereft of cash.

The overemphasis on the international community is another sign of things going seriously wrong with the Yushchenko campaign.

Former U.S. Secretary of State Madeline Albright warned in an opinion piece in the New York Times on 8 March that Kuchma’s cronies can expect to have their bank accounts abroad frozen and to experience trouble getting visas if the upcoming elections are falsified. Yet, despite an unusually harsh statement from the Council of Europe this month and heightened attention from other organizations such as the Organization for Security and Cooperation in Europe, pressure on Ukraine’s opposition continues and is likely to intensify as the presidential elections approach.

It should be no surprise that Kuchma is thumbing his nose at the West. Kuchma has, after all, already outlasted a serious scandal involving the murder of journalist Georgy Gongadze, which included a “Get Kuchma Out” campaign and severe criticism from the Western powers. Practically inadmissible as a guest to the developed Western powers, Kuchma satisfies himself with visits such as one in mid-March to Brunei. In this respect Kuchma has been hardened against an international backlash to shenanigans in the upcoming presidential elections. The opposition’s “interesting times” look set to continue.

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