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RUSSIA, UKRAINE READY FOR 'NEW STAGE' IN RELATIONS. Ukrainian President Leonid Kuchma and Prime Minister Viktor Yanukovych were in Moscow on 9 December for talks with their Russian counterparts, Russian news agencies reported. "I cannot see the future of my country without the warmest-possible relations with Russia," Kuchma told journalists, according to RosBalt. Meanwhile, Prime Minister Mikhail Kasyanov and Yanukovych ordered specialists to complete a treaty on the creation of a free-trade zone between the two countries. The agreement "should open a new stage in the development of trade relations within the CIS," Kasyanov was quoted by RosBalt as saying. According to, the treaty could be ready for signing as early as February 2003. RC

...AS 3 MILLION ILLEGAL IMMIGRANTS LIVE IN RUSSIA. An estimated 3 million illegal immigrants reside in Russia, and every year they take some $8 billion out of the country illegally, according to statistics released on 9 December during State Duma hearings on immigration policy, REN-TV reported. The largest numbers of undocumented immigrants come from Ukraine, China, Turkey, and Vietnam. Duma Foreign Affairs Committee Chairman Dmitrii Rogozin (People's Deputy) observed that immigration policy has already been strengthened by the passage of a new law on acquiring Russian citizenship (see "RFE/RL Newsline," 22 April and 11 May 2002) and the Duma's provisional approval last month of a bill on leaving and entering Russia, ORT reported. According to REN-TV, Rogozin also suggested that Russia could attract young, strong immigrants by creating a foreign legion similar to the one that exists in France. LB

OUR UKRAINE CONTINUES TO LOSE LAWMAKERS... The Our Ukraine parliamentary caucus dwindled to 103 deputies as seven lawmakers left it in recent weeks, UNIAN reported on 10 December. "These wanderings from caucus to caucus are the work of the authorities, and this process is now at its peak," Our Ukraine head Viktor Yushchenko commented. The pro-government majority now reportedly numbers 233 deputies. The current lineup in the Verkhovna Rada is as follows: Our Ukraine (103 deputies); the Communist Party (60); the Party of Industrialists and Entrepreneurs-Labor Ukraine (42); the Social Democratic Party-united (39); Ukraine's Regions (40); Democratic Initiatives (22); European Choice (20); the Socialist Party (20); the Yuliya Tymoshenko Bloc (18); Power of the People (16); the Agrarian Party (16); the Popular Democratic Party (16); People's Choice (15); and, finally, nonaligned deputies (22). JM

...AND WANTS TO FORM 'NONPARTISAN' OPPOSITION GROUP IN PARLIAMENT. Yuriy Kostenko, a leader of the Our Ukraine parliamentary caucus, told UNIAN on 9 December that Our Ukraine is going to initiate the formation of a nonpartisan opposition association in the Verkhovna Rada. He made clear that Our Ukraine has in mind only opposition caucuses, the Socialist Party and the Yuliya Tymoshenko Bloc in particular. Kostenko also said Our Ukraine continues to hold talks with "possible political allies" on forming a broader coalition for the presidential election in 2004. JM

ESTONIA AND EU CONCLUDE MEMBERSHIP TALKS. Estonia completed its EU membership negotiations on 9 December, ETA reported the next day. Foreign Minister Kristiina Ojuland said the country won some concessions, including rights to import steel from Russia and Ukraine without price restrictions; fish for Baltic herring, which is smaller than envisaged by EU standards, and continue hunting bears and lynx. The EU will also finance the testing of oil-shale products for entering the European markets and support improving borders to Schengen levels, including with some 60 million euros of funding. The annual milk-production quota was set at 646,000 tons -- a compromise between the EU's proposed 562,000 tons and Estonia's appeals for 900,000 tons -- but the figure may be raised if other candidate countries' quotas increase. SG


RFE/RL Poland, Belarus, and Ukraine Report Vol. 4, No. 47, 10 December 2002

A Survey of Developments in Poland, Belarus, and Ukraine by the Regional Specialists of RFE/RL's Newsline Team


THE CLAN FROM DONETSK (PART 2). In order to bring peace to the Donetsk region, President Leonid Kuchma appointed Viktor Yanukovych head of the Donetsk state administration in May 1997. Kuchma chose Yanukovych because he knew that Yanukovych was very close to Rynat Akhmetov, the real boss of Donetsk. With the death of Akhat Bragin, the Industrial Union of Donbas (PSD) was taken over by Vitaliy Hayduk, the fuel and energy minister in Anatoliy Kinakh's and Yanukovych's cabinets.

In 1998, to further solidify his position as he was preparing for his re-election campaign, Kuchma came to Donetsk and, according to reliable sources, made the clan a very generous offer: If they stayed out of politics but supported him for re-election, he and the Kyiv government would not ask questions about how they made their money and what became of it. It was a gentlemanly offer and gladly accepted. In 1999, Donetsk brought out the pro-Kuchma votes and dealt a devastating blow to the local Communist Party branch, considered by most to be the strongest political organization in the oblast. In the 2002 parliamentary elections, Donetsk repeated this feat and secured the pro-Kuchma For a United Ukraine a majority of deputies. It was the only oblast in Ukraine that gave them a majority.

The newly re-elected president told the parliament during his inaugural address that they would "see a new Leonid Kuchma," and as proof he nominated Viktor Yushchenko as prime minister. Yushchenko, considered by most to be a real reformer and pro-Western politician, was given a free hand to choose his cabinet. He then made Yuliya Tymoshenko the deputy prime minister for energy. When asked why he chose her, Yushchenko told the author of this article that she was the only one who understood all the intricacies of the energy sector in Ukraine.

Tymoshenko quickly went to work to try to bring some order to this sector, beginning with the gas traders and the leadership of Naftohaz Ukrayiny, the state gas-trading company led by Ihor Bakay, a close friend and supporter of Kuchma.

At that time, Bakay was already suspected of siphoning off Russian gas from the pipeline going to Western Europe and then reselling this gas to Slovak, Polish, and other gas traders. Bakay also owed the gas companies Itera and Gazprom millions of dollars. At one point in his career, Bakay created a dummy corporation in Cyprus, named it Itera International, and sent money to it, claiming that he was repaying the real Itera in Moscow, but in reality he was putting this money into his own pocket. Bakay was forced to quit.

In November 2000, Tymoshenko went after the coal barons. Her immediate enemy in Kyiv became Serhiy Tulub, the coal minister and a prominent member of the Donetsk clan. In the winter of 2000, Tymoshenko asked Kuchma a number of times to remove Tulub, but the president refused to do so.

What Tymoshenko had done by going after the Donetsk coal barons was to stir up a hornet's nest. She was promptly fired by Kuchma in January 2001, and soon afterward the prosecutor-general suddenly discovered that there had been grave irregularities at Unified Energy Systems of Ukraine when it was under Tymoshenko's leadership. Her husband was promptly arrested and thrown in jail, and a criminal case was opened against her. The government dropped the idea of trying to reform the Ukrainian coal industry.

Taking advantage of the Kuchma deal of 1998, the PSD expanded and presently consists of some 600 enterprises located in the three eastern oblasts of Ukraine: Donetsk, Dnipropetrovsk, and Luhansk. Today, the PSD is considered by many to be the backbone of the Donetsk clan.

The main commodity the PSD deals in is coal, especially coking coal used in the metallurgical industry. According to the director of the ARC Company of Donetsk, Ihor Humenyuk, his company and the PSD control 75 percent of the coking coal mined in Ukraine. This coal supplies the giant Azovstal and Krivorogstal steel works and keeps them under their control. As to the other companies under their control, the PSD is still suspected of stripping their assets.

One of the secondary pillars of the Donetsk clan is the Zvyahilskyy group. As was mentioned earlier (see Part 1 in "RFE/RL Poland, Belarus, and Ukraine Report," 26 November 2002), Yukhym Zvyahilskyy returned to Ukraine from Israel alive and well, if somewhat poorer. He went back to being the director of the giant Zasyadko coal mine, the largest coal mine in the world, and soon went about setting up a semipolitical structure called the Donetsk Zemlyachestvo, a type of fraternity of Donetsk-born men who were of some importance.

A partner in this group is the former mayor of Donetsk, Volodymyr Rybak. He is said to control the construction business in Donetsk. The Zvyahilskyy group also controls the First Ukrainian International Bank (where Yushchenko's brother is a member of the board.)

The man whom most consider to be the head of the Donetsk clan is Rynat Akhmetov. A Tatar by nationality, he is also one of the founding members and an active sponsor of the Muslim Party of Ukraine. He is the founder of the Donetsk City Bank (DonGorBank) and has great influence over the activities of most major companies that form the PSD. Akhmetov is the owner of 51 percent of the shares of the company Vizavi, one of the founding partners of the PSD. He is considered to be close to Boris Kolesnikov, the deputy head of the Donetsk Oblast Council and director of the Kyiv-Konty company, and to Viktor Yanukovych, the new prime minister of Ukraine. He is said to be worth more than $1 billion.

By comparison, in a bold show of transparency, Yanukovych revealed his personal finances for 2001, declaring that his total income for the year was 21,363 hryvnyas 35 kopecks ($ 4,272.60). This consisted of his salary (17,526.43 hryvnyas) plus honoraria from his academic activity (2,548.92 hryvnyas). He also received financial aid for the needy from the government in the sum of 1,288 hryvnyas. He does not own a car, a boat, or any property and lives in a comfortable, yet not ostentatious, apartment measuring 108 square meters. He is just a regular civil servant.

This report was written by Roman Kupchinsky, the author of "RFE/RL Crime and Corruption Watch." Part 1 was published in "RFE/RL Poland, Belarus, and Ukraine Report" on 26 November 2002.

THE SLOW ROAD TO CHURCH UNITY. A group of Ukrainian members of the parliament have established a parliamentary group called A Single Orthodox Church for Ukraine. More than 200 members have joined so far, representing all parliamentary parties and factions. They advocate the union of the three Orthodox churches currently registered in Ukraine into a single national church and have expressed a hope that, since they, as politicians, have agreed on church unity, the clergy will follow suit.

Ukrainian politicians have, in fact, been urging church unity ever since part of the Orthodox Church in Ukraine broke with the Moscow Patriarchate in 1992 and established its own Kyiv Patriarchate. However, the Ukrainian Orthodox Church of the Moscow Patriarchate considers the breakaway Ukrainian Orthodox Church of the Kyiv Patriarchate to be schismatic and noncanonical. It likewise refuses to recognize the Ukrainian Autocephalous Orthodox Church, established during Ukraine's window of independence following the breakup of the tsarist empire, which survived the Soviet years only in exile and reestablished its presence in Ukraine after the restoration of independence in 1991.

To the Moscow Patriarchate Church, "union" means union under the leadership of Moscow. The Kyiv Patriarchate Church and Autocephalous Orthodox Church, however, maintain that Ukraine should have its own, Ukrainian-led church, and have already embarked on negotiations for union, with the ecumenical patriarch of Constantinople, Bartholomew II, the "first among equals" of all Orthodox hierarchs, in effect brokering the deal.

Politicians, and those concerned with Ukrainian state building, perceive the union of Orthodox Ukrainian believers into a single Ukrainian Orthodox Church as an important step in establishing a clear national identity. The pro-Russian agenda of the Moscow Patriarchate Church, however, would appear to make such a union unlikely. However, one Ukrainian member of parliament, Les Tanyuk, maintains that things are changing. Senior clerics of the Moscow Patriarchate Church, he told the media, are becoming "increasingly supportive" of Ukrainian spirituality. They have given up "politicizing and Russifying" church life and "fighting Ukrainian culture," including such practices as redrawing Ukrainian icons and "ruining" Ukrainian church buildings, he said. But even Tanyuk puts the possibility of a unified national church in Ukraine as "perhaps in 15 years' time."

In the meantime, another emigre church, the Ukrainian Autocephalous Orthodox Church-Sobornopravna, has now established its presence in Ukraine. (Editor's note: It is hard to render the term "sobornopravna" satisfactorily in English. It may mean "synodical-rightful" or "universal-rightful" or combine both these notions.) Its leader, who went to the United States several years ago and was ordained there, has now returned, under the title of Metropolitan Moisey of Kyiv and All Rus. He told a news conference in Kyiv that his church is recognized by the ecumenical patriarch, who appointed him as metropolitan, and that his, and his church's, mission is to unite all Ukrainians, Orthodox and Greek Catholics, in a single, truly national church (all existing churches in Ukraine are, he said, subject to foreign influences). Ironically, his arrival has, indeed, created a small degree of unity among the clerics of the existing three Orthodox churches: They have all protested that Moisey's church should not be accorded legal recognition.

The head of Ukraine's Greek Catholic Church, Cardinal Lyubomyr Huzar, has made no overt reference to Moisey's arrival. However, in a statement issued on 25 November, Huzar expressed a willingness to meet with Patriarch Aleksii II of Moscow during his forthcoming visit to Ukraine in order to improve Catholic-Orthodox relations in Ukraine and, hopefully, to resolve disputes over the ownership of church buildings, and he also expressed his "sincere hope" that "the visit by the Moscow patriarch to Ukraine would serve to establish correct evangelical relations between the three branches of Ukrainian orthodoxy." Three, be it noted, not four!

"RFE/RL Poland, Belarus, and Ukraine Report" is prepared by Jan Maksymiuk on the basis of a variety of sources including reporting by "RFE/RL Newsline" and RFE/RL's broadcast services. It is distributed every Tuesday.