169623_100110 UKRAINE 3

Ukraine's Election (Special Series), Part 3: The Important Frontrunners Teaser: STRATFOR looks at the candidates of most interest in Ukraine's presidential election and the leverage Russia holds over each.

Summary:

Analysis: STRATFOR is not going to attempt to forecast the outcome of Ukraine's Jan. 17 presidential election. First, the poll numbers among the leading candidates are too close, and a runoff could be required. More important, no matter which of the frontrunners becomes president, the outcome will be the same: Ukraine's Orange Revolution will be reversed and Russia will hold the reins in Kiev once more.

Eighteen candidates are campaigning for the Ukrainian presidency. Of those, STRATFOR wants to highlight only three -- the most important among the frontrunners. We are examining these candidates to highlight not only what a victory for any of them would mean for Ukraine, but also how Russia will use them if they win. <h3>Viktor Yanukovich</h3> The unquestionable frontrunner in Ukrainian polls for most of the past year has been Viktor Yanukovich, head of the Party of Regions. Various polling organizations give Yanukovich between 33 and 46 percent of the vote.

Yanukovich is not a typical political candidate. He is not a charismatic public speaker and does not even speak Ukrainian very well (he was born in the Russian speaking region of Donbass). In his youth, he was imprisoned twice for theft and assault and has faced accusations of those and other crimes.

In the late 1990s, Yanukovich entered the world of politics and was plucked from relative obscurity in 2002 by then-President Leonid Kuchma, who made him prime minister. Yanukovich has never made a secret of his pro-Russian, anti-Western stance. During his 2004 presidential campaign, not only did Yanukovich receive support from Kuchma and billionaire Rinat Akhmetov, but Russian then-President Vladimir Putin campaigned on his behalf. Yanukovich won the first round of elections, but mass demonstrations led Ukraine's top court to throw out the election results on grounds of fraud. His rival and head of the pro-Western Orange Coalition, Viktor Yushchenko, won the subsequent election. Since then, Yanukovich has served as the face of Ukraine's pro-Russian faction, moving in and out of the Orangist government.

Throughout the Orange Coalition's rule in Ukraine, Yanukovich has taken direction from Moscow on when to work with the Orangists and when to work against them. If Yanukovich becomes president, he could well place former government officials from the Orange Coalition

in his government in order to placate the pro-Western parts of Ukraine. A Yanukovich victory would also help the causes of many Russian and pro-Russian Ukrainian oligarchs and businessmen. (I'd like to cut this -- for one thing, it seems like this would be true no matter which pro-Russian candidate wins, and for another we don't give any examples) Yanukovich has stated outright that if he becomes president, he will cut ties between Ukraine and NATO and pull Ukraine's bid for membership in the European Union (though he would maintain connections with the bloc). A Yanukovich presidency would mean further integration between Russia and Ukraine, possibly through an official political or economic union as Russia has recently formed with other former Soviet states. (Wouldn't that be true no matter who wins?)

Russia has not had to put forth any special effort to influence Yanukovich during the current campaign. Yanukovich knows his political cause could not exist without Moscow's support, so he will remain loyal to the Kremlin. <h3>Yulia Timoshenko</h3> Ukrainian Prime Minister Yulia Timoshenko, head of her eponymous Bloc Yulia Timoshenko (BYuT) party (I've looked and we don't have any set style on how to refer to this party or even how to abbreviate it -- we've done "Bloc Yulia Timoshenko" and "Yulia Timoshenko Bloc," and we've abbreviated it BYuT and YTB -- which is more common/correct?), holds a strong position behind Yanukovich, with 16-25 percent of the vote. Although Yanukovich currently leads in polls, if a runoff occurs Timoshenko could emerge victorious.

Timoshenko has long been one of Ukraine's most identifiable political figures, with her fashionable suits and long braided hair. Her political career has not been based on one ideology or another. She believes in self-preservation first and foremost, and will join whichever side is the most powerful in Ukraine at the time, whether pro-Russian or pro-Western.

Like Yanukovich, Timoshenko was born in a Russian-speaking area of Ukraine (Donetsk), though unlike Yanukovich she speaks impeccable Ukrainian. Outside of politics, Timoshenko is a powerful and wealthy figure due to her deep connections to Ukraine's energy and steel industries. In the 1990s, Timoshenko played a part in the government's privatization rounds which, like those in Russia, amounted to little more than asset-stripping. She thus contributed greatly to the creation of the Ukrainian oligarchs -- a class to which she essentially belongs.

Timoshenko has been involved in several scandals. She allegedly siphoned off natural gas from Russian pipelines that transit Ukraine on the way to Europe -- a common practice in the past -and then sold it to other entities, pocketing the profits (when did this allegedly happen & is this something from sources or public knowledge? Also is this the same "smuggling natural gas supplies from Russia" that we mention in the last sentence of this paragraph, or was that a separate incident?). She also reportedly made questionable deals with the Russian Defense Ministry that left the Russians enraged and Timoshenko about $400 million richer. (when? And where did this info come from?). Naturally, the Russians are not particularly fond of Timoshenko and even have an outstanding warrant with Interpol for her detention, though officially it is only for questioning. (Really? And they haven't nabbed her any of the times she's been to Moscow to

negotiate nat gas prices?) Timoshenko also spent time in jail in 2001after she was accused of forging customs documents and smuggling natural gas supplies from Russia (the charges have since been dropped).

When Timoshenko saw the pro-Western momentum building in Ukraine in 2001, she allied with Yushchenko to champion the Orange Revolution in 2004. Her charisma and fiery speeches were a huge part of the revolution's success. But the Yushchenko-Timoshenko political marriage could not last, as each kept undercutting the other until the coalition dissolved. Yushchenko even dismissed Timoshenko from the premiership for a time to bring in Yanukovich before allowing Timoshenko to reclaim her post.

Timoshenko -- ever the opportunist -- began loosening her ties to Ukraine's pro-Western movement in 2008, the year Russia made certain its former Soviet states knew that it was resurging and looking to reclaim its geopolitical turf. Timoshenko quickly began cooperating more with Russia then and has increased her interaction with the Russians ever since. She began by working personally with Putin to negotiate a series of natural gas deals between Ukraine and Russia. She then approached Russia to encourage investment in Ukraine during the financial crisis. Most recently, she negotiated a massive deal that will end with Russia owning enormous steel assets in Ukraine. Timoshenko has even backed away from the idea of Ukraine's integration into NATO and the European Union -- a subject she spoke passionately about during the Orange Revolution.

The thing that has made Timoshenko useful to both Yushchenko and Russia is her connection to the energy industry -- the chief moneymaker for Ukraine, which is the main transit state for natural gas supplies moving from Russia to Europe. Timoshenko has used this to keep from being crushed by either side over the past few years. However, Russia has been able to use Timoshenko's connections to energy, steel and other industries to Moscow's advantage. (How? Is Russia using Timo's business ties as a kind of leverage to keep her interested?)

Timoshenko knows that Ukraine is turning back toward Russia and that if she does not join the pro-Russian movement she will be crushed by it, like Yushchenko. Russia knows she is not a true believer in the pro-Russian cause, like Yanukovich, but that if they make it worth her while she will support the Kremlin's cause.

(We don't really say what it will mean if Timo wins) <h3>Arseny Yatsenyuk</h3> Sixteen other candidates rank behind the powerhouses of Yanukovich and Timoshenko. At the time of this writing, former Economy Minister Serhy Tihipko (is this spelling acceptable? I know we do "Timoshenko" instead of "Tymoshenko" and "Arseny" instead of "Arseniy" so I just sort of followed that logic) is in third place, but Tihipko is a member of Yanukovich's coalition and is too similar to the former premier to be of particular interest.

The candidate behind Tihipko, Arseny Yatsenyuk, is the only other candidate STRATFOR feels should be discussed. Yatsenyuk was in third place in polls until recently. STRATFOR feels he is

worth mention because of the media attention he has received for many months, prompted by his claims that he is the "independent" candidate -- neither Orangist nor pro-Russian.

Yatsenyuk is an economist and lawyer*, (why the asterisk?) by profession, but he has held many political positions, including economy minister, head of the National Bank of Ukraine, parliamentary speaker and member of the National Security Council.

At first glance, Yatsenyuk appears pro-Western, particularly in some of his ideas on economics and finance. Yatsenyuk led talks between Ukraine and the EU and World Trade Organization.

However, he has also held many pro-Russian positions, such as favoring the Russian military's continued presence in Crimea and ongoing Russian involvement with Ukraine's economy.

Yatsenuk's nominations to government posts have come from both the pro-Western and proRussian factions in Ukraine. He has received support from Yushchenko's party, considered a coalition with Timoshenko's party and holds regular talks with Yanukovich's party.

Overall, Yatsenyuk appears to be an enigma and a true wildcard in the election and in Ukrainian politics. He seems to be a fresh face in Ukrainian politics -- an arena that has only had three real players in years -- and untainted by either pro-Western or pro-Russian ties. However, Yatsenyuk might not be everything he seems.

STRATFOR sources in Kiev have said Yatsenyuk is firmly in Moscow's grasp. The Kremlin reportedly identified Yatsenyuk as a wildcard in this election and moved to get him under Russian control. Moscow reportedly used Akhmetov, the powerful Ukrainian oligarch, to offer the young politician campaign funding. Akhmetov is one of the Kremlin's most loyal allies in Ukraine. He is also the country's richest man, owning assets in energy, steel, coal, banking, hotels, telecommunications, media and even soccer. Moreover, he is the financial support behind Yanukovich's Party of Regions (is this something that is known for a fact or do we need to throw in an "allegedly"? Also we might want to do a little more explaining about why the Kremlin would want to give backing to a young politician running against Yanukovich, who seems to be their Man in Kiev). ď&#x201A;ˇ What matters most to Yatsenyuk is pulling Ukraine back out of this financial and economic crisis and if he has to deal with Russia on that issue then so be it. Russia knows this. (So do they intend to use this to keep him in line? Can we use this as a springboard to discuss what a Yatsenyuk presidency would look like?)

CONCLUSION? â&#x20AC;&#x201C; do we want to do a conclusion here of just a paragraph? Rounding up the trend of Russia sweeping the Orangists out. That Russia has hold on all the leading candidates though each in their different way. (I think a concluding paragraph would be good -- I'll come up with something & send this whole shmear back to you to look over one more time after you answer my questions & we get this thing a little more solidified)