Cablegate: Ukraine: Codel Price Greeted by Rada Crisis, Has

DE RUEHKV #0921/01 1071307
P 171307Z APR 07




E.O. 12958: N/A


Sensitive but unclassified, please handle accordingly.

1. (SBU) Summary. The visit Codel Price and members of the
House Democracy Assistance Commission to Kyiv on April 1-3
came at a contested moment for the development of Ukraine's
parliament--a constitutional crisis over whether the ruling
coalition majority was formed unconstitutionally and whether
President Yushchenko has the right to dissolve the Rada and
call new elections. The Codel participated in a large number
of meetings with Rada leaders and MPs, as well as with Prime
Minister Yanukovych and FM Yatsenyuk, and was presented with
a range of views on the current political standoff. The
Codel also engaged in substantive exchanges about how the
Rada functions on a regular basis. Some Rada committees were
trying to strengthen their oversight capabilities, which have
been traditionally weak. MPs voiced views on NATO
membership, MP criminal immunity, the need for decentralizing
power, and the budget process. The meeting with FM Yatsenyuk
will be reported septel. End summary.

Yanukovych: New Political System Working Fine

2. (SBU) Prime Minister Yanukovych cited peaceful rallies on
March 31 as a sign of Ukraine's political maturity. He said
that the Rada was now in the process of developing
legislative underpinnings for the constitutional reforms that
were passed in December 2004 and implemented on January 1,
2006, with the goal of smoothly coordinating the work of the
executive and legislative branches. Speedy passage of
WTO-related legislation was one of the first fruits of
constitutional reform, he argued. The PM argued that the
Constitutional Court had the ultimate responsibility to
decide how the constitutional reforms should be implemented;
relevant appeals were before the Court now. Responding to a
question whether the coalition would refrain from assembling
a 300-member majority, Yanukovych asked rhetorically whether
someone would deliberately injure himself by knocking his
head against a brick wall. He claimed that the constitution
had no applicable provisions for early elections before the
end of the Rada's term in 2011. Ukraine had to operate
within a constitutional framework, he insisted.

Support for Europe, but NATO Remains an Open Question
--------------------------------------------- --------

3. (SBU) Yanukovych told the Codel that while the Ukrainian
public had a positive attitude toward EU membership, its
attitude toward NATO was less positive. The government had
authorized funding for the first time to support an
information campaign (note: funding actually began in 2006.
end note); unlike his predecessors, Yanukovych would not be
arguing that Ukraine had to join NATO immediately, so as not
to alarm the Ukrainian public and provide ammunition to
fringe parties. Euro-Integration Committee Chair Propokovych
(Our Ukraine) also admitted that NATO was a tougher sell than
the EU. Europe was the proper focus for Ukraine, since 70
percent of Ukraine's Foreign Direct Investment (FDI) came
from EU countries, and the Rada had successfully passed WTO
legislation. NATO integration posed greater problems, she
stressed, and Yanukovych's promise of an information campaign
was probably the best they could hope for right now. Ukraine
needed more information from countries that had recently
joined NATO, in particular, the economic advantages of NATO
membership, to show to the Ukrainian public. Big business
was already working towards European standards, but the rest
of the country still needed to be convinced.

Political Crisis: the Majority View

4. (SBU) Both before and after President Yushchenko's April 2
announcement that he was dissolving the Rada and calling new
elections, most MPs led off their discussions with Codel with
their views on whether new elections were constitutional and
whether they were a good idea politically.

5. (SBU) Expressing the majority coalition view, Rada Speaker
Moroz said there was no crisis because there was no
question--new elections and dissolving the Rada were
unconstitutional. President Yushchenko, he complained, was
interfering in the work of the Rada. Since the major parties
Regions, BYuT, OU, and SPU all shared political priorities,
they should be able to agree on agenda, but the opposition
was trying to resolve issues by disrupting Rada sessions.
Nevertheless, the Rada would continue working; the current
Rada had already passed 138 bills, 108 of them by at least a
2/3 majority.

KYIV 00000921 002 OF 003

6. (SBU) Representatives of the newly renamed National Unity
Coalition--Party of Regions' Oleksandr Peklushenko and Leonid
Kozhara, Socialist Ivan Bokiy, and Communist Petro
Tsybenko--met the Codel together to make the case that

dissolving the Rada was not constitutional. They claimed
that Article 90 of the constitution listed the specific
circumstances under which the Rada could be dissolved, but
that Yushchenko's decree did not cite this article as its
justification. Bokiy added that the Rada was ignoring
Yushchenko's order to cease working immediately because
article 60 obliges citizens not to carry out "criminal
decisions," which is what they consider Yushchenko's decree
to be (note: the most common reading of Ukrainian law holds
that the Presidential decree should be considered legally in
force until overturned by constitutional court review. End
Note). Peklushenko explained that recent constitutional
reforms had stripped Yushchenko of his authority to dismiss
the Prime Minister and he was now attempting to get it back
again by unconstitutional means.

Our Ukraine dissenting views from Yushchenko

7. (SBU) Underscoring the ongoing fractured nature of Our
Ukraine, MP Serhiy Bychkov, sent to represent the OU faction,
launched a meandering attack against his own faction,
Yushchenko, and opposition leader Tymoshenko. Bychkov
started the meeting saying that there would be new elections
in accordance with the decision made by Yushchenko, but he
later sharply criticized this decision. He said that there
were three points in the President's decree that could be
grounds for the Constitutional Court to declare it illegal,
including the lack of mention of Article 90. He argued that
negotiations were the only way out of the crisis. A
Regions-OU alliance, without the Communists and BYuT, would
provide much needed national unity; in his view, it would be
a natural union because Regions and OU were on the right side
of the political spectrum, while the others were on the left.
Another OU member, EuroIntegration Committee Chairwoman
Nataliya Propokovych, told the Codel that preterm elections
were a bad idea because democratic forces would lose.

Developing Law Enforcement Capabilities and Rada Oversight
--------------------------------------------- ------------

8. (SBU) In one of the most substantive exchanges of the
visit, Codel met with the chairmen of the Rada's three main
legal/law enforcement-related committees to discuss oversight
and deputies' immunity. Chairman of the Committee for
Supporting Law Enforcement Agencies Volodymyr Stretovych (OU)
said that Ukraine was a young democracy and it took time to
build up a good law enforcement structure. One of the
committee's basic efforts was to protect ordinary people from
arbitrary attacks by law enforcement officials. Judiciary
Committee Chairman Serhiy Kivalov (Regions) said that his
committee had many concrete protects, including two key
laws--on the Status of Judges and the Law of the
Judiciary--which Yushchenko had submitted to the Rada.
Kivalov had taken them to the Venice Commission in March, and
they had received a positive review. (Note: The two bills
were subsequently adopted in the first reading on April 3.
End note.) In response to a question on how the Rada used
oversight powers, Kivalov said that his committee was trying
to improve parliamentary monitoring of legislation
implementation and had tabled a law on this subject.

9. (SBU) Chairman of the Committee for Combating Organized
Crime Mykola Dzhyha (Regions) said his committee was working
on laws on the Prosecutor General's Office (PGO), Ministry of
Interior (MOI), and Security Service (SBU). Dzhyha favored
reconciling so many different organizations playing a role in
fighting corruption, perhaps creating one new organization.
On Rada MPs' wide-ranging immunity from prosecution,
Stretovych said he was firmly in favor of canceling it
outright. He said that when the 1996 constitution was
written, the authors had tried to cancel immunity, but
then-President Kuchma had fought to retain it. Stretovych
added that when the Rada had voted in April 2006 to remove
immunity from deputies at the local level granted by the Rada
in September 2005, it had been hard to implement. However,
Dzhyha added that the cancellation had made a difference in
restoring some power to law enforcement organs. He also
supported canceling MPs' immunity, but cautioned that it
should be a consensus decision from within the Rada, not one
made just for PR/image reasons.

Security and Defense Committee: Striving for Professionalism
--------------------------------------------- ---------------

KYIV 00000921 003 OF 003

10. (SBU) At a lunch with three members from the Committee
for National Security and Defense--Acting Chairman Yuriy
Samoilenko (Regions), Lev Hnatenko (Kinakh group), and Oleh
Antypov (BYuT)--the Codel covered a wide-range of topics,
including oversight of the military and intelligence
agencies. The three MPs boasted that the NSDC was the most
apolitical committee in the Rada, because Ukraine's national
security was too important to subject it to partisan
bickering. In addition, 12 of the 17 members of the
committee had background either in the military or in the
security services, increasing the level of professionalism
and expertise in the committee. The committee did hold
closed door hearings to examine the actions of the MOD and
SBU, and the committee was working on enhancing its oversight
capability, but the MPs claimed that military was not often
cooperative in letting the Rada observe what it was doing.
Only around budget time did the MOD come calling. The
committee members also pledged they would bring the annual
foreign military exercise authorization bill, which would
enable Partnership for Peace exercises to go forward, to the
Rada for a floor vote the following day. (Note: Samoilenko
did, but the bill fell victim to the political crisis and
received only 5 votes in support. It successfully passed on
April 6.) The MPs also asked about new funding for disposing
of the rest of the solid motor fuel in Pavlograd. HDAC
Chairman Price said that he hoped to have good news for the
Rada on that front sometime this year.

State Building Committee Trying to Decentralize Power
--------------------------------------------- --------

11. (SBU) Chairman Tykhonov (Regions), whose powerful State
Building Committee controls important legislation such as the
controversial CabMin law, stated that an important objective
of his committee was to prepare a framework of laws that
would make "(constitutional) reform irreversible." He said
his committee was now focused on a law on local
self-government; during the 2006 Rada election campaign, all
parties courted local-level officials with promises of
greater autonomy, but soon as the election was over, their
approach changed. Nevertheless, he argued, the current
system of centralized control was cumbersome and unworkable;
Ukraine should move to a system of local control over budget
and financing. For example, he complained that his native
eastern Ukraine subsidized the relatively poorer western
regions. Tykhonov also said that he favored a type of
federalism for Ukraine and that he had "paid a high price"
for his opinion. (Note: a possible reference to the criminal
charges brought against him, later dropped for his advocacy
of separatism during the Orange Revolution. Federalism is
banned under the Ukrainian constitution. End note.) Tykhonov
also advocated creating an Upper House of parliament to
better represent the interests of Ukraine's oblasts (Note:
similar to what exists in Russia, a federated state).

Budget Committee Chairman Makeyenko

12. (SBU) Budget Committee Chairman Makeyenko (Regions) took
pride in the fact that the 2007 budget and an amendment were
both approved by the Rada and signed by Yushchenko; he argued
that the budget addressed the needs of the people. Makeyenko
commented on the difficulty of preventing members from using
the budget process to line their own pockets and acknowledged
that this had been a common practice. He remarked on the
difficulties of being chairman of the 32-member committee
(the largest in the Rada) and said he often "feels like a
diplomat, not a legislator." He also said that in the past,
budget impasses were frequently broken by appealing to the
particular needs of single-mandate members, but the switch in
2006 to a Rada drawn entirely from party lists made
compromise more difficult. He also noted that his committee
was receiving assistance from the IMF and the World Bank to
amend the Budget Code. His committee also cooperated with
the Finance and Banking Committee to draft a new tax code
that would reduce the role of the shadow economy, which now
compromises up to 50% of Ukraine's economic activity, by some

13. (U) This cable has been cleared by Codel Price.

14. (U) Visit Embassy Kyiv's classified website:

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