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Ukraine's Rich Get Richer

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Ukraine's Rich Get Richer INSIDE: • Taras Hunczak on Ukraine and Russia — page 6. • “The Red Prince,” Ivan Vyshyvanyi — page 8. • “Generation Uke”: music and film — page 11. HE KRAINIAN EEKLY T PublishedU by the Ukrainian National Association Inc., a fraternal non-profitW association Vol. LXXVI No. 27 THE UKRAINIAN WEEKLY SUNDAY, JULY 6, 2008 $1/$2 in Ukraine Ukraine’s rich get richer Ukraine’s Internal Affairs Ministry Country now has 23 billionaires issues report on bribes in 2008 by Zenon Zawada by Danylo Peleschuk aide, Channel 24 reported. The single Special to The Ukrainian Weekly Special to The Ukrainian Weekly highest bribe – in the sum of $5.2 million (U.S.) – went to a township council mem- KYIV – Ukraine’s rich are getting even KIYV – Nearly 17 years into its inde- ber in Crimea. richer as there are now 23 billionaires in the pendence, Ukraine is still experiencing “The overall sum of bribes is increas- country, compared to nine billionaires just widespread corruption, particularly in the ing dramatically,” said Leonid Skalozub, two years ago, according to an annual sur- public service and real estate sectors. head of the economic crime unit of the vey of the 50 wealthiest Ukrainians con- According to a report released last Internal Affairs Ministry, said during a ducted by Kyiv’s Russian-language week by the Ministry of Internal Affairs, press conference in June. “But [the min- Korrespondent magazine. the Dnipropetrovsk Oblast ranks first the istry] is the single driving force behind Rinat Akhmetov’s wealth has swelled to country’s regions in terms of the amount stopping bribery and economic crime, and $31 billion, making the 41-year-old Donbas of bribes accepted this year. we have increased the number of crimes businessman the wealthiest man in Europe Since the beginning of 2008, police we have stifled.” and the seventh richest man in the world, officials have uncovered 11 sizeable Today, the average sum for a bribe, Mr. according to the June 14 issue of bribes – the largest having been a Skalozub said, is about $5,000. Korrespondent. $600,000 pay-off to Dnipropetrovsk City “In general, those in the top 50, whose Council Chair Ivan Kulichenko and his (Continued on page 4) assets are in mining and metallurgy, gained ground much quicker in the last year,” Ivan Dadiverin Korrespondent reported. “Businessmen Rinat Akhmetov whose property encompasses energy, land, Presidents of Ukraine and Azerbaijan mass media and real estate grew as well.” Ukraine’s wealthiest are heavily involved in politics and dominate the mass unveil monument to Shevchenko in Baku media, and thereby have enormous influ- ence over how the country will develop in BAKU, Azerbaijan – Presidents Viktor creative work is relevant for every nation. the future, the survey revealed. Yushchenko of Ukraine and Ilham Aliyev “I am convinced that in the image of The wealth acquired by Leonid of Azerbaijan on June 30 unveiled a mon- Taras Shevchenko we have a genius who Chernovetskyi, the mayor of Kyiv, is esti- ument in Baku to Ukrainian poet Taras served all of mankind. Shevchenko is mated at $750 million, Korrespondent Shevchenko (1814-1861). great because he glorified the values that reported. Mr. Yushchenko thanked Azerbaijan’s are important for every nation,” the Billionaire Valerii Khoroshkovskyi ($1.6 president for implementing an agreement Ukrainian president said. billion) serves in Yulia Tymoshenko’s gov- reached a year ago on construction of the ernment as state customs chair and Serhii monument and noted that Shevchenko’s (Continued on page 4) Buriak ($887 million) serves as state tax AP/ Sergei Chuzavkov inspection chair. Billionaire Petro Poroshenko ($1.1 bil- Victor Pinchuk lion), whose business empire includes truck manufacturer Bogdan Corp., confectionery finance Vitali Klitschko’s mayoral and city manufacturer Roshen and shipbuilder council campaigns. Leninska Kuznia, serves as chair of the Most of Ukraine’s wealthiest citizens are supervisory council of the National Bank of from the industrial east, where they were Ukraine. able to privatize the nation’s most prized It was the supervisory council that inter- industrial assets for below-market prices during the Kuchma era – which many fered with the National Bank’s May 22 Ukrainians still view as stealing from the decision to appreciate the hryvnia against government – and sell, develop or modern- the dollar, making imports to Ukraine ize them. cheaper and exports more expensive. Perhaps no one was as successful as Mr. Ukrainian President Viktor Yushchenko Akhmetov, whose System Capital is godfather to at least one of Mr. Management (SCM) conglomerate is Poroshenko’s four children, and Mr. becoming an international business empire, Poroshenko has been a close ally of Mr. recruiting top business managers from the Yushchenko for many years, helping to West to serve in its ranks. Mr. Akhmetov is finance the Our Ukraine political project so wealthy because he and his wife, Liliya and launching the Channel 5 TV news Smirnova, own 100 percent of SCM shares. channel that reported on the Orange Just how big is their holding company? Revolution. SCM consists of 25 mining and metallurgy Of the 50 wealthiest Ukrainians, nine companies, 12 in the energy sector, six belong to the Russian-oriented Party of the media companies, five financial firms, five Regions of Ukraine, four are Yulia brewing companies, four machine-building Tymoshenko Bloc members and one, Mr. factories, three clay-making companies, as Poroshenko, is a member of the Our well as a telecommunications firm, an oil- Ukraine – People’s Self-Defense Bloc. trading company and food retailer. Mr. Chernovetskyi formed his own Mr. Akhmetov is currently warring with eponymous bloc for the Kyiv City Council, Ms. Tymoshenko to retain control of a sig- industrial magnate Volodymyr Boiko ($3.2 nificant package of shares in the billion) financed the Socialist Party of Dniproenergo electric generating company Official Website of Ukraine’s President Ukraine and real estate magnate Lev Presidents Viktor Yushchenko of Ukraine and Ilham Aliyev of Azerbaijan at the Partskhaladze ($580 million) helped to (Continued on page 10) unveiling of a monument to Taras Shevchenko in Baku. 2 THE UKRAINIAN WEEKLY SUNDAY, JULY 6, 2008 No. 27 ANALYSIS NEWSBRIEFSNEWSBRIEFS Will the parliamentary crisis PRU’s Constitutional amendments delivered to Ukraine in 2009 will reach the level of an average European price KYIV – The opposition Party of the and may total $400 (U.S.) per 1,000 cubic lead to Tymoshenko’s dismissal? Regions presented draft amendments to meters, said Alexey Miller, Gazprom’s the Constitution on July 1, proposing a chairman of the board at a June 28 news by Pavel Korduban election; and he signaled his readiness to new electoral system envisaging elections Eurasia Daily Monitor return to the prime minister’s chair (UT1 conference following the annual meeting to the Parliament by a proportional system of Gazprom shareholders. Mr. Miller TV, June 6). with open lists. According to PRU repre- The coalition of Prime Minister Yulia Mr. Yatsenyuk, however, refused to specified that a final decision on the gas Tymoshenko’s bloc and President Viktor sentative Oleksander Lavrynovych, the price for Ukraine depends on agreements pronounce the coalition dead. This is party that wins the parliamentary elections Yushchenko’s Our Ukraine – People’s because YTB and OU-PSD insisted that with Central Asian countries. President Self-Defense (OU-PSD) no longer has a should have the right to form the govern- Viktor Yushchenko recently presented the coalition still exists de jure. They ment. At the same time, the party after its majority in the Ukrainian Parliament. pointed to a constitutional provision say- directives to Prime Minister Yulia Two deputies quit the coalition, so it con- victory should get 226 votes in the Tymoshenko for holding gas talks with ing that a parliamentary coalition consists Parliament, that is, the majority in the trols 225 seats in the 450-seat chamber, of party caucuses rather than individual Russia. During the talks the government one seat short of a majority. 450-seat Parliament. Other parties that run has to determine the volume of gas to be deputies. Messrs. Rybakov and But did in the elections should receive Rada seats As a result, the Rada has been para- not leave the respective caucuses of the delivered to Ukraine in 2009 and the vol- lyzed, and the fate of the Tymoshenko in proportion to the percentage of votes ume of gas Ukraine is to transmit to YTB and OU-PSD de jure, so their de received. The proposed amendments sub- government is in the hands of President facto quitting the coalition had no legal European countries. In addition, the gov- Yushchenko and his team in Parliament. stantially decrease influence of the presi- ernment is to determine a clear formula consequences, according to YTB and dent on the political processes. In particu- Should even a small group from OU- OU-PSD representatives (Interfax- for gas prices. The Ukrainian president PSD back a no-confidence motion lar, it is proposed that the prime minister said, “this must be an economic price, not Ukraine, June 6). not be nominated by the president, but by against Prime Minister Tymoshenko, her When the PRU officially demanded a political one.” (Ukrinform) government will be doomed. the coalition, and that the Verkhovna Rada that Mr. Yatsenyuk clearly state whether should approve the candidacy. According Court rules on deputies and factions Two factors have led to this situation. the coalition still exists, he declared that First is the confrontation between the to Mr. Lavrynovych, the proposed amend- it did exist since neither of the two con- ments do not envisage amendments KYIV – The Constitutional Court on Tymoshenko and Yushchenko teams that stituent caucuses had left the coalition June 27 declared unconstitutional clauses view each other as rivals in the presiden- regarding presidential elections.
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