Did Biden meet with a murderer in Kiev?

Graham Stack in Kiev

Among the eternally quarreling Ukrainian politicians Joe Biden met during his visit to Kiev 20-22 July, one of the more pleasant interlocutors may have been speaker of parliament Volodomyr Litvin. Litvin’s ironic charm is a vital resource when bringing calm to Ukraine’s tumultuous and corrupt parliament, where fist fights are common place, and deputies openly conclude shady deals on their mobile phones during speeches. In a culture where looks are vital to political appeal, the 54 year old’s debonair features, coiffed silver hair and a past career as eminent scholar lend him sophistication lacking among the country’s notoriously unruly officials.

But for all his charisma, Litvin may be hiding a secret that could make Biden soon want to forget their meeting.

At exactly the same time as Litvin met Biden in Kiev on the afternoon of Tuesday July 22, security forces detained former police general Oleksiy Pukach, Ukraine’s most wanted man, in a village not far from the capital.

Pukach, in hiding since 2004, was in March 2005 found guilty in absentia of the brutal murder of journalist Heorhiy Gongadze, a journalist bitterly critical of former Ukrainian president Leonid Kuchma. Gongadze’s headless corpse was discovered in a shallow grave November 2000.

Three weeks later, a disgruntled presidential security officer produced audio recordings that implicated Kuchma and his then chief of staff directly in the murder. Kuchma’s chief of staff was none other than current parliamentary speaker Volodomy Litvin, at the time nicknamed ‘the grey cardinal’ of Ukrainian politics.

Litvin has understandably always denied the claims that he ordered the murder of Gongadze. However, investigators say he has refused to provide recorded voice samples needed to verify the authenticity of the recordings. And no one doubts that Pukach was acting on orders from above when carrying out the murder. With Pukach finally apprehended, everyone in Kiev is waiting for the next round of revelations.

They may not have long to wait. According to deputy head of Ukraine’s security service Vasyl Hrytsak, Pukach is singing like a nightingale after a long night of interrogation. “He has confessed to the murder and also confirmed the complicity of individual officials – there will be a lot of interesting information,” Hrytsak told the press. Hrytsak also said Pukach would lead investigators to the place where he buried Gongadze’s head.

Now the vultures are gathering around Litvin.

They may not have long to wait. According to deputy head of Ukraine¹s
security service Vasyl Hrytsak, Pukach is singing like a nightingale after a long night of interrogation. He has confessed to the murder and also confirmed the complicity of individual officials – there will be a lot of interesting information,” Hrytsak told the press. Hrytsak also said Pukach
would lead investigators to the place where he buried Gongadze¹s head.

Sources in the secret service were quoted today saying Pukach had named three former officials as having ordered the killing. One of these ‘occupies a very high position’, according to the sources, and one is dead. This would dovetail with the evidence contained in the tapes: with Litvin the high official, ex=president Kuchma the second still alive, and the deceased third man former interior minister Yuri Kravchenko, who shot himself after Kuchma lost power in 2004.

Ukraine’s President Viktor Yushchenko, himself the target of a near-fatal
and unsolved poisoning when he unseated Kuchma in 2004, confirmed “the public will soon learn very explosive things.” Yushchenko on taking office swore to find and prosecute Gongadze’s killers.

Litvin today accused Yushchenko of “politicising” the arrest of Puchak and the Gongadze murder.

Gongadze’s widow, 37 year old Miroslava, who has fought unceasingly to keep the memory of her husband alive, told the press, “there is every
reason for Leonid Kuchma to be afraid, and there is every reason for
Volodymyr Litvin to be afraid.”

The secret service has said that Puchak will take investigators to where he buried Gongadze’s head. That, together with justice for the men who ordered the murder, may finally bring her closure – nine years too late.

Litvin’s debonair cool may be in for its toughest challenge yet.

And US officials may take note just how deceptive appearances can be in Ukraine and other former Soviet countries.

Gongadze murderer could cause political earthquake in Ukraine

Graham Stack in Kiev

Ukraine’s Security Service deputy head Vasyl Hrytsak told a briefing that Oleksy Pukach, arrested July 21 for the murder of journalist Heorhiy Gongadze in 2000, has named the people who ordered the crime.

“[Oleksiy] Pukach has confirmed his complicity in that crime. He has also confirmed the complicity of individual officials – there will be a lot of interesting information,” Hrytsak said, according to Interfax.

President Viktor Yushchenko also said that “the public would learn very interesting things” following Pukach’s detainment.

Opponents have called the timing of the move to detain Pukach political. It turned out that Pukach had been living in a village near Kiev since 2005, and under secret service surveillance.

Gongadze, a fierce critic of former President Leonid Kuchma, disappeared in September 2000, and his headless corpse was found soon after. Tape recordings of conversations between Leonid Kuchma and top officials, including current parliamentary speaker Vladimir Litvin who met with US VP Joe Biden yesterday, indicated Kuchma’s displeasure with the journalist. Kuchma appeared to recommend Gongadze be “turned over to the Chechens.” The authenticity of the tapes, leaked by former head of Kuchma’s security detail Melnikov, has never been proven.

Gongadze’s murder and subsequent revelations played a key role in the development of democratic opposition to Kuchma, culminating in the Orange Revolution 2004.

Three former police officers have since been sentenced to 12 year prison sentences for the murders. They said they were operating under Pukach’s orders. Pukach went into hiding in 2005.

Cut the budget deficit and raise energy prices, Biden tells Ukraine

Graham Stack in Kyiv

In a speech in Kiev yesterday July 23, on the last of his Ukraine visit, US vice president Joe Biden told Ukraine to do exactly what the IMF says, and on two specific points: “The Fund requires that your government, and your government agreed to critical reforms to cut the budget deficit, revive a striving [sic*] banking system, and phase out energy subsidies, which I know from experience is a very difficult thing to do. Carrying out this agreement requires very hard choices and tough action, but it will help put you on the road to growth and competitiveness.”

Biden told Ukraine that, “moving toward market pricing for energy is brave, but also absolutely necessary pre-condition.”

Biden argued that shifting to market prices would strengthen Ukraine’s energy security. However, it also the Russian position that Ukraine must shift to market prices for gas.

If the US is resetting its relationship with Russia, it appears the US is also rethinking its relationship with Ukraine.

Biden as expected committed to Ukraine’s independence and sovereignty, and praised Ukraine’s democracy as the ‘the freest country in the region.” He emphasized however NATO or EU membership would be entirely Ukraine’s choice, and that the US would not push Ukraine to join. “The USA supports Ukraine’s deepening ties to NATO and to the European Union. But again, we recognize they are your decisions, your choices, not ours whether you choose the EU or seek to, or NATO. We recognize that how far and how fast to proceed on your choices is, again, a uniquely Ukrainian choice — it is not ours.”

Yesterday, Biden warned that the sustainability of Ukraine’s democracy was threatened by economic collapse and pervasive corruption.

“Mature democracies survive because they develop institutions such as a free press, a truly independent court system, an effective legislature – all of which serve as a check on the corruption that fuels the cynicism and limits growth in any country, including yours,” Biden said. Referring to Ukraine’s economic problems, Mr Biden asked: “Can you name me a place where democracy has flourished where the economic system has failed?”

He also harangued ruling politicians for their failure to work together. “Communications among leaders has broken down to such an extent that political posturing appears to prevent progress.”

Committing the US to respect for national sovereignty is a retreat from the neocon supremacist position, and, although delivered with an anti-Russian twist in the Georgian context, in facts coincides with longheld Russian and Chinese demands for the US to abide by international law.

Underlining the shift, Biden said the US was committed to a “multi-polar world” – an expression straight out of the Putin / Primakov phrasebook.

Ukraine’s poisoned president launches doomed bid for second term

Graham Stack in Kiev

Ukrainian president Viktor Yushchenko, the world’s most unpopular president according to opinion polls, climbed Ukraine’s highest mountain Sunday July 19 to prove his fitness for a second term in office. At the summit of Mount Hoverla (2016m) in the Carpathians, with a view westwards to the Europe he aspires to, Yushchenko announced officially that he would run for a second term in office in elections in January 2010.

“I would like to officially announce here that I will be running for the Ukrainian presidency in January,” he said.

A small band of supporters who had followed him to the peak in beautiful summer weather struggled with tears after his announcement. Opinion polls give Yushchenko an approval rating of only 2% – less than the margin of error – meaning he is facing utter humiliation in the elections. Pollsters point out that his rating constitutes a world record for unpopularity. His motorcade regularly encounters a hostile cacophony of blaring horns as it winds through Kiev streets.

Yushchenko’s record-breaking unpopularity is astonishing considering his initial approval rating of over 60% on taking office in January 2005. Yushchenko was swept to power by mass protests against electoral fraud in late 2004, known as the Orange Revolution. In the run-up to the rigged elections, opponents poisoned Yushchenko with dioxin. The images of his severe facial scarring that resulted have become an icon of people’s struggle for democracy.

The scarring, the medical term for which is chloracne, and facial immobility are still very obvious. The subtext of yesterday’s ascent of Hoverla was not only symbolic, but also simply to prove that the president is physically fit enough for high office in times of crisis.

Poisoned chalice

Leading international toxicologists familiar with the case argue however that the poison has massively impaired the president’s performance. They dispute Yuschenko’s claim that his body has got rid of 95% of what was one of the highest dioxin doses in humans ever recorded.

“My belief is that he will suffer many ill effects of dioxin for many years, including possible brain damage,” says dioxin expert University of Texas professor Arnold Schechter. “His chloracne not only affects the face, but the whole body – as every single follicle may be involved in severe cases as the one of president Yushchenko is,” agrees Vienna’s Alexandra Geusau.

Yuschenko has traditionally said little about the effects of the still unsolved poisoning, except to claim he is in good health. Last month, however, he admitted he had undergone 26 secret operations in the first two years of his presidency. “Nobody knew about the operations, because they were carried out at the weekend, on Friday evenings, and on Monday I was already back at work,” Yushchenko told journalists, adding that each operation lasted over three hours.

Toxicologists say Yushchenko’s out-of-touch performance in office is a direct result of the poisoning.

During the Orange Revolution, the poisoning added fuel to the popular fury at stolen elections. But according to Valery Khmelko, president of Kyiv International Institute of Sociology, “following the poisoning, Yushchenko became more interested in his presidential palaces, amateur history and bee-keeping than in running the country.” Crisis-hit Ukrainians see their president as out of touch with reality and incapable of exercising power.

British toxicologist Alastair Hay of Leeds University lists lethargy, enervation, numbness, liver damage and weakened immune system as medium-term consequences of dioxin poisoning

“Yuschenko’s behaviour is what you might expect from someone exposed to dioxin in the quantities he was,” says Hay. “The chloracne indicates he is genetically susceptible to dioxins, so he may have many systems of his body damaged. It must have taken an effort of will to continue in his high-octane job.”

Now, in a bitter irony of history, the clear favorite to win the upcoming elections is the man whom the Orange Revolution prevented seizing power in 2004, pro-Russian former Prime Minister Viktor Yanukovych.

A further bitter blow is the decision on the part of Barack Obama’s new US administration to send only the vice president to Ukraine, while Obama himself visited Moscow last week without any stop-over in Kiev. Yushchenko has staked everything on a pro-US foreign policy aiming at NATO membership, and Obama’s rapprochement policy with Moscow is making this look like a dead end.

Earlier this week, Yushchenko’s foreign policy spokesman said pointedly that the main topic of discussion with Biden would be to negotiate a visit to Kiev by Obama himself.

Say no to NATO, US experts tell Ukrainians

Graham Stack in Kyiv for Russia Profile

Following the Russian-U.S. reset, a new American policy institute has opened in Kiev to dissuade Ukraine from its bid to Join NATO. Its fellows argue that Ukrainian NATO membership would be bad for both the United States and Ukraine. But while their message is in tune with Ukrainian public opinion, they face an up-hill struggle convincing the foreign policy establishment in both countries.

“Ukraine’s NATO membership is not in Ukraine’s interests. Nor is it in U.S. interests. All that it will create is a nuclear trip wire at the heart of Europe,” argued Anthony Salvia, director of the American Institute in Ukraine (AIU), a non-commercial organization founded this year in Kiev, funded by U.S. citizens. “In Ukraine, U.S. opinion is often represented as being monolithically in favor of Ukraine’s future membership of NATO,” he added. “We’re here in Kiev to show this is definitely not the case.”

AIU is unique in being an American organization campaigning overseas against NATO expansion. “Other American organizations in Ukraine, many of which are funded by the U.S. government, actively promote Ukraine’s entry into NATO at the earliest possible date, despite the fact the majority of Ukraine’s population is opposed to NATO accession,” said Salvia, who served in Ronald Reagan’s White House.

The AIU is aligned, but not affiliated, with the Nixon Center, headed by legendary former U.S. Secretary of State Henry Kissinger, and which publishes the influential journal “National Interest”. In March 2009, the Nixon Center released a review of Russian-U.S. relations arguing that Ukrainian or Georgian NATO membership “could decrease rather than increase Europe’s overall security.” The review called for U.S. policy makers to “work closely with U.S. allies to develop options other than NATO membership to demonstrate a commitment to [Ukrainian and Georgian] sovereignty.”

“The U.S. should refrain from making promises to Ukraine it cannot honor, but which might embolden Ukraine to provoke a conflict. The Ukrainians should realize that the US will never fight Russia over Ukraine,” argued Doug Bando, senior analyst at the conservative Cato institute, and a recent AIU guest speaker in Kiev. The August 2008 Georgian war looms in the minds of all those warning against extending NATO deep into the unstable former Soviet Union. “Ukraine must learn to rely on its own resources for securing its sovereignty, and not to trust to U.S. promises,” said Bando.

“Ukrainian NATO membership, by ruining relations with Russia, would make Ukraine less secure than it is, not more. And it would also harm U.S. security, by ruining the chances for cooperation with Russia over vital issues such as Afghanistan, North Korea and Iran, all issues that the new administration has said it will prioritize,” agreed Salvia.

“There are other mechanisms available for strengthening Ukrainian security,” he added. “One is a new European security treaty, similar to that being proposed by Dmitry Medvedev. The other is for European Union membership. The Kremlin is basically open toward Ukraine’s future EU membership, especially if it is an alternative to Ukraine’s NATO membership”.

Reset in Action

The AIU is in fact part of a wider battle waged over the new U.S. administration’s Russia policy. U.S. President Barack Obama has famously called for “pressing the reset button” in Russian-U.S. relations, but he is advised on Russia by Zbigniew Brzezinski and Michael McFaul, both historic advocates of a tough line with Russia. “We hope Obama listens to a wider range of opinion,” said Salvia.

Underlining the potential of cooperation with Russia, on the other hand, last week’s Moscow summit between Obama and Russian President Dmitry Medvedev saw the Russians sensationally agree to the United States transiting weaponry through Russia to Afghanistan.

And equally sensationally, although little noticed in the West, Obama, speaking to Moscow students, said that NATO membership would require a majority of any country’s population to be in favor – which is not the case in Ukraine. He also said that America would not press any country to join the alliance.

Ukraine’s bid for NATO membership, and Russia’s adamant opposition to this, put the United States in a bind. Washington is unwilling to openly privilege Russian interests over Ukrainian. Changing the situation on the ground in Ukraine could help U.S. policy makers out of this dilemma, hopes the AIU.

It should also not be too hard, given that Ukraine public opinion is solidly anti-NATO. Polls have consistently shown support for joining NATO to hover at around only 20 percent of respondents, with over 50 percent against.

But at the other end of the scale, Ukraine’s powerful foreign policy bureaucracy has an entrenched ideological commitment to joining the military alliance, according to Yelena Biberman, a U.S. embassy policy specialist engaged in research on Ukraine’s foreign ministry.

“Foreign ministry officials are ideologically anti-Russian and nationalist to the extent that they may not always be able to objectively assess Ukraine’s real national interests,” said Biberman, who has interviewed many top foreign ministry officials. “They believe that Russia is inherently imperialistic and bent on regaining control over Ukraine as a step to rebuilding its empire, and NATO membership is the only way to stop this. Even for a new Ukrainian president, it will be very hard to change their perspective.”

This means that for AIU, it is work with opinion makers in the media that matters most. “We don’t engage in lobbying, but work exclusively in the public field holding conferences, talks and round table discussions,” said Salvia. “What we are trying to tell Ukrainians is simply that you can be pro-America and pro-European without having to want to join NATO.”

Ukraine prepares for EU exports with Europe’s largest poultry plant

Graham Stack in Kyiv for business new europe (www.businessneweurope.eu)

Once Europe’s breadbasket, Ukraine is only now pulling its agriculture sector out of the post-Soviet slump. Its revival is being driven by brash exchange-listed companies introducing new technologies and management techniques, for whom the devaluation of Ukraine’s currency has opened up new opportunities both at home and abroad.

The swank glass and steel headquarters of Ukrainian agricultural concern MHP glitters in the sun, and stepping into the marble-paved foyer it seems you have entered a five-star hotel. And the premises are all the more impressive for the view they afford of the surrounding countryside on the outskirts of Kiyiv: MHP’s headquarters look on to an open-air museum park of Ukraine’s rural past, dotted with ancient windmills and carved wooden huts. “The windmills don’t belong to us,” jokes Yury Kosyuk, owner and CEO of MHP, and Ukraine’s 12th richest man, according to Korrespondent magazine. MHP has a 39% share of Ukraine’s commercially produced poultry market, and is building Europe’s biggest and most modern poultry facility. With the second stage completed, the $550m Myronivsky poultry plant has an annual output of more than 200,000 tonnes of meat.

An inspection team from the EU’s Directorate General for Health and Consumer Affairs wrapped up a visit to Ukraine on June 18 concerning the certification of Ukrainian poultry plants for export to the EU, including MHP’s facilities. The official report will be released in July, though the commission met with Ukraine’s agriculture minister, Yuriy Melnik, and the chairman of the Ukrainian Committee for Veterinary Medicine, Petro Verbitsky, to discuss some of the results. According to Verbitsky, the commission has only a few concerns, and those relate to Ukrainian legislation rather than the quality and security of poultry facilities. In particular, he noted the inconsistency between Ukrainian and EU standards on the frequency of internal product testing (which occurs every 10 days in Ukraine compared with every seven days in the EU). He also mentioned discrepancies with regard to entities issuing export quality certificates for poultry in both the EU and Ukraine. “If the EU commission confirms that Ukrainian poultry producers satisfy its quality requirements, we believe that the next step should be an agreement on import quotas and tariffs,” say analysts at investment bank Troika Dialog. “Overall, we consider the news to be neutral to positive for MHP. Although it generates positive sentiment, there is still a great deal of uncertainty regarding the commission’s final ruling on import quotas and tariffs, as well as its timing.”

Kosyuk says the preliminary feedback from the EU inspectors has been positive, but he still fears increased protectionism on the part of the EU. MHP’s poultry products would be highly competitive in Europe, due to the weak hryvnia and lower operational costs. Prices for poultry products in Europe average 30-40% more than Ukrainian prices. “If they don’t certify us, it will only be because of politics,” he sighs.

Spring chicken

41 years old, suave and fluent in English, Kosyuk is the opposite of the reactionary kolkhoz manager that has shaped large-scale Ukrainian agriculture until now. Kosyuk talks about “delivering high-quality protein” rather than farming chickens, and discusses finance as readily as crop planting. He is, however, consumed by a passion for agriculture and food-processing that has seen him build up a billion-dollar business in the course of 10 years, leading to a successful float on the London Stock Exchange in 2008 – only Ukraine’s second LSE listing and the first company from the agricultural sector. Ukraine now boasts three international-listed agriculture set-ups, with sugar makers Astarta Kiev and grain producer and trader Kernel listed on the Warsaw stock exchange. These three flag-bearers of capitalist Ukrainian agriculture share not only Western-style high corporate governance standards, but also a vertically integrated business model, from field to factory, that creates high efficiency and synergy effects.

MHP, for example, farms 180,000 hectares of land to ensure self-sufficiency and high quality in chicken feed. The fields are in close proximity to its poultry plants, cutting transport costs, and fertilized with chicken manure, protecting against soaring fertilizers prices. At the other end of the production line, MHP runs its own meat sales franchise selling its “Nasha Ryaba” branded products. The franchise sales 50% of its produce, and thus reduces price pressure from supermarket chains. “Companies in the West would love to have such a structure,” argues Kosyuk, “but it too late for most of them to set it up.”

In many ways, vertical integration has been thrust upon these companies due to the stagnation and legal uncertainty afflicting Ukraine’s massively inefficient agricultural sector. MHP’s motto, according to Kosyuk, is “if you want something done well, do it yourself.”

“Vertical integration was born of fear,” says Kosyuk. “We were afraid of market pressure from supermarkets, so we set up our own franchise. We were afraid of problems with egg suppliers, so we set up our own incubation plants. We were afraid of low grain quality for fodder, so we organized our own crop production.”

Furthermore, “Everything we do here is basically green field,” says Kosyuk. “Our factories would not look out of place in Denmark.”

Agriculture could lead Ukraine out of crisis

Agriculture is the only part of the Ukrainian economy to have registered growth (1.5%) in the first quarter of 2009, reflecting the extent to which it has been decoupled from the rest of the economy. Now, thanks to devaluation, both Ukraine agriculture exports as well as producers oriented to the domestic market are doing fine. For MHP, the loss of agricultural subsidies and protection due to Ukraine’s accession to the World Trade Organisation (WTO) accession has been at least partially offset by the devaluation and also the fact that in times of crisis consumers tend to buy cheaper chicken rather than pork or beef.

The long-term prognosis for meat consumption is also good. Ukraine currently lags 15% behind Russia in terms of meat consumption, not to mention Western Europe.

Institutionally, agriculture is still hindered by a ban on sales of agriculture land. This means that MHP has to administer around 150,000 individual leases for land plots averaging 1.5 hectares for an average period of 15 years. Kosyuk does not believe the moratorium on land sales will be lifted “within the next five years.”

At the other end of the spectrum, Ukraine’s accession to the WTO in 2008 meant that its agriculture sector is part of the global trade regime. Although Kosyuk publicly criticized the terms of Ukraine’s WTO accession in 2008 for being too soft and leaving Ukraine agriculture insufficient protection, he says he only did so on the part of the sector as a whole. MHP, he insists, has nothing to fear from international competition.