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INSIDE: • Top stories of the week on kyivpost.ua. Page 2.
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• Popov says shady deals cost city $9 billion. Page 2. • American investor wins $9.5 million judgment. Page 6. • Government thwarts airline competition. Page 7,
April 1, 2011
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vol. 16, issue 13
Killer Kuchma? The charges against ex-President Leonid Kuchma are strange: He is not accused of murder, but with ‘exceeding his authority’ in giving orders that led to the 2000 murder of journalist Georgiy Gongadze. Why y now? What’s the end game?
B Y S V I T L A N A T UC HYN S KA A N D MA R K R ACHKEVYC H TUCHYNSKA@KYIVPOST.COM, RACHKEVYCH@KYIVPOST.COM
If the investigation into ex-President Leonid Kuchma’s alleged role in the 2000 murder of journalist Georgiy Gongadze is genuine, Ukraine is likely to be roiled for months to come with one sensational allegation after another. But will the truth emerge in the end, or will the mysteries of more than a decade only deepen? Prosecutors on March 24 charged Kuchma with “exceeding authority” in giving orders that led to Gongadze’s murder and hauled him in for questioning three times in the last Æ12
Former Ukrainian President Leonid Kuchma talks to journalists as he arrives at the General Prosecutor's Office in Kyiv on March 28. Kuchma was charged on March 24 in connection with the 2000 murder of journalist Georgiy Gongadze. He steadfastly proclaims his innocence. (Joseph Sywenkyj)
Combative Kolesnikov says Tymoshenko left Euro 2012 mess behind BY MA R K R AC H K E VYC H RACHKEVYCH@KYIVPOST.COM
Borys Kolesnikov is the hard-charging, combative face of President Viktor Yanukovych’s administration. He also has a big job to do – and quickly. Kolesnikov is deputy prime minister in charge of overhauling the nation’s outdated infrastructure ahead of next year’s Euro 2012 soccer championship, which Ukraine co-hosts with Poland.
Inside:
A multi-millionaire with business interests in confectionary and commercial real estate, he is a political heavyweight in the pro-presidential Party of Regions. The 49-year old is from Donestsk Oblast, Yanukovych’s power base. Among Kolesnikov’s close friends and partners is billionaire Rinat Akhmetov, Ukraine’s richest man. He also serves as vice president of Akhmetov’s increasingly successful Shakhtar Donetsk soccer club. Æ13
News Æ 2, 10 – 14 Opinion Æ 4, 5, 10
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Man behind tapes back in spotlight K Y IV POST STA F F
Mykola Melnychenko and his tapes are back in the spotlight again. In charging ex-President Leonid Kuchma on March 24 with abuse of power that led to the 2000 murder of Georgiy Gongadze, prosecutors said they are weighing as evidence parts of the Melnychenko tapes that relate to the slain journalist. But Melnychenko, the former Kuchma bodyguard, says he recorded
thousands of hours of conversations involving the president who ruled from 1994 to 2005. Melnychenko said he hopes prosecutors will also examine the other recordings that allegedly implicate Kuchma and other high-ranking officials plotting numerous other crimes, not only the Gongadze one. Kuchma has denied all charges of wrongdoing. “This will help cleanse Ukraine much the way lustration did in Poland and the Baltics after communism,” Æ14
Business Æ 6 – 9
Employment/Real Estate/ Lifestyle Æ 15 – 21, 24 Classifieds Æ 22, 23
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Mykola Melnychenko, ex-bodyguard for former President Leonid Kuchma
2 News
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April 1, 2011
Vol. 16, Issue 13 Copyright © 2011 by Kyiv Post The material published in the Kyiv Post may not be reproduced without the written consent of the publisher. All material in the Kyiv Post is protected by Ukrainian and international laws. The views expressed in the Kyiv Post are not necessarily the views of the publisher nor does the publisher carry any responsibility for those views. Газета “Kyiv Post” видається ТОВ “ПаблікМедіа”.
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www.kyivpost.ua: дайджест статей Украина: Украина надеется выудить деньги на новый «саркофаг» Олеся Олешко Перед руководством Украины стоит нелегкая задача – убедить международное сообщество выделить сумму, недостающую для построения новой арки над чернобыльским четвертым энергоблоком. Блок был полностью разрушен в результате бесЧернобыльская АЭС прецедентной ядерной аварии во время эксперимента в 1986 году. Наспех сколоченный над реактором саркофаг, или объект «Укрытие», уже пришел в негодность. «Общий бюджет сооружения объекта «Укрытие» составляет 1.537 млрд. евро, - говорит руководитель проекта по созданию объекта «Новый безопасный конфайнмент» (НБК) Лоурен Додд. – На данный момент нехватка составляет 600 млн. евро»...
Oleksandr Popov, head of Kyiv's city administration.
Popov: Shady deals under Chernovetsky robbed city coffers of billions of dollars
Передплатний індекс ДП Преса 40528 Надруковано ТОВ «Новий друк», 02660, Київ, вулиця Магнітогорська, 1, тел.: 559-9147 Замовлення № 11-3935 Аудиторське обслуговування ТОВ АФ “ОЛГА Аудит” З приводу розміщення реклами звертайтесь: +380 44 234-65-03. Відповідальність за зміст реклами
Мнение: Вокруг света со своим самоваром Анна Порядинская Когда я сказала коллегам, что на лыжи еду в Шамони, все понимающе закивали. Русские (собирательный образ, включающий в себя все большие и малые народности бывшего СССР) в Шамони уже давно стали персонажами фольклора. Так, в автобусе курсирующим между разными станциями, я слышала, как одна девчушка лет 17 выразительно рассказывала подружке, что вчера в булочной какая-то крашеная сучка, пыталась заплатить за багет купюрой в 500 евро. Багет стоит евро десять, а эта «кобыла в меховом воротнике» сует бумажку в пятьсот! Среди бела дня! Можно подумать, она в России! Совести нет!"...
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Losses of almost $9 billion to the city through fraud and embezzlement – that’s the accusation Kyiv city administration chief Oleksandr Popov made about Mayor Leonid Chernovetsky’s time in office in an address to the city council on March 31, a sign that the authorities may be preparing to finally oust the controversial city leader. Popov said the alleged crimes, which mostly concern sales of land and property at knock-down prices, took place between 2007 and June 2010, causing Hr 70 billion in losses. Chernovetsky was ousted from his role as head of the city administration last year, remaining in the largely ceremonial role as mayor, with propresidential Popov appointed in his place. Deputies loyal to Chernovetsky claimed ignorance, while a spokesperson for the mayor had no immediate comment. Popov and his allies had relaxed their battle for power in the city in recent months, but the latest volley against the eccentric Chernovetsky could finish him off, political analysts said, or at least help boost Popov’s
несе замовник. Mailing address: Kyiv Post, Prorizna Street 22B, Kyiv, Ukraine, 01034 Advertising tel. +380 44 234-65-03 fax +380 44 234-63-30 advertising@kyivpost.com Editorial staff tel. +380 44 234-65-00 fax +380 44 234-30-62 news@kyivpost.com Subscriptions Nataliia Protasova tel. +380 44 234-64-09 fax +380 44 234-63-30 subscribe@kyivpost.com Distribution Serhiy Kuprin tel. +380 44 234-64-09 fax +380 44 234-63-30 distribution@kyivpost.com Marketing Iuliia Panchuk tel. +380 44 234-30-40 fax +380 44 234-63-30 marketing@kyivpost.com
Leonid Chernovetsky, Kyiv's controversial mayor.
Стиль жизни: Синдром менеджера и другие болячки от работы в офисе. Александра Романовская Работу в офисе принято считать более легкой в физическом плане, чем, к примеру, труд шахтера. Сидеть в тепле, перебрасываясь шутками с соседом по рабочему месту и попивая кофе – это не вагоны разгружать. Но, в то же время, уже четыре часа неотрывного сидения за компьютером каждый день Букет офисных болезней разнообразен. могут вызвать серьезные проблемы со здоровьем, и это не только ухудшение зрения. Букет офисных болезней удивительно велик и разнообразен... Киев: Міліціонери скаржаться на алкоголь в кіосках Світлана Тучинська В столиці зростає кількість злочинів, вчинених у стані алкогольного сп'яніння. «У 2011 році в Києві особами, які перебували у стані сп'яніння, вчинено 213 злочинів, тоді як у минулому році, за аналогічний період – всього 164», - каже прес-секретар міліції Києва Володимир Поліщук. За даними міліції, також втричі побільшало злочинів, вчинених неповнолітніми в стані алкогольного сп'яніння. Міліція звинувачує у всьому доступність алкоголю та практичну відсутність контролю за його продажем... Полный текст статей и блогов можно прочитать на www.kyivpost.uа
popularity ahead of the next mayoral election, scheduled for 2012. According to Popov, city authorities under Chernovetsky gave away swathes of land in the city and in green zones. “From 2007 to June 2010, the city lost 3,500 hectares of land. When its real value was Hr 75 billion, only Hr 4 billion made it to city budget,” he said. Municipal property was also leased out and sold at undervalued prices to selected companies, he added. He also slammed city authorities for allegedly making 3,900 amendments to the city plan to allow construction in historical parts and in places where it could damage nearby buildings and historical sites. “That is why we have all those controversial constructions which people and experts are protesting against – on Honchara Street, near Teatralna subway station and in other places,” he said. And the list went on. Striking a tough-guy pose but occasionally seeming nervous, Popov painted a disastrous picture of communal property flogged for kopecks, including communal drug stores, hospitals and police stations. Not once did Popov mention Æ10
TEN MOST-READ STORIES OF THE WEEK ON
ДЕСЯТЬ САМЫХ ЧИТАЕМЫХ СТАТЕЙ НЕДЕЛИ НА
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1
What it takes to be a model in Ukraine
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Kuchma charged in Gongadze’s murder
3
Judge murdered in his own home
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Palestinian mystery deepens
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Consumer confidence slips as Ukrainian pessimism deepens
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State scares off investors in promising agricultural sector
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Ukraine works overtime to shine its tarnished image abroad
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‘Directed chaos’ part of attack on real nationalists?
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Умерла Элизабет Тейлор
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Акція протесту паралізувала центр Лондона
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Мельниченко пояснив, чому справа Кучми з'явилася зараз
7
Березовский: Кучме ничто не угрожает
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Новое землетрясение произошло в Японии
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Японская радиация докатилась до Китая
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Пенсии растут, но цены растут быстрее
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Яценюк попал в ДТП
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Тимошенко: Янукович напоминает позднего Брежнева
www.kyivpost.com
3
April 1, 2011 Advertisement
European Business Association News
,EADERS 4ALK Leaders Talk: Alla Liber, Head of the Center of the European Training
4
ODAY WE TALK TO !LLA ,IBER (EAD OF THE #ENTRE OF THE %UROPEAN 4RAINING WHO WILL SHARE WITH US INTERESTING INSIGHTS ABOUT THE WORLDlS MOST PROMISING AND DESIRED STUDY DESTINATIONS %UROPEAN EDUCATIONAL TRENDS AND PERSPECTIVES FOR 5KRAINIAN ALUMNI
!,,! ,IBER
(EAD OF THE #ENTER OF THE %UROPEAN 4RAINING
#OULD YOU GIVE A BRIEF OVERVIEW OF THE WORK OF THE #ENTER IN 5KRAINE 4HE #ENTER OF THE %UROPEAN 4RAINING PROVIDES STUDENTS AND CORPORATE CLIENTS WITH INFORMATION SUPPORT IN LONG TERM STUDY PROGRAMS AND SHORT TERM COURSES IN %UROPE AND ALL AROUND THE WORLD 4ODAY THE MAJOR ITY OF STUDENTS GO TO #ZECH 2EPUBLIC WHERE THE PRICE AND QUALITY OF EDUCATION CONVERGE !LSO THE SUMMER LANGUAGE PROGRAMS OF 'LOBAL 6ILLAGE IN -ALTA ARE GAINING HUGE POPULARITY -OREOVER CLASSIC "RITISH PRO GRAMS PARTICULARLY ELITE PRIVATE BOARDING SCHOOLS AND SUCH TRENDS AS #HINA -ALAYSIA 5NITED !RAB %MIRATES AND #ANADA ARE IN HIGH DEMAND $O YOU THINK THAT THE YEAR AHEAD WILL BE FRIENDLY TOWARDS EDUCATIONAL OPPOR TUNITIES !RE YOU BROADLY OPTIMISTIC OR PESSIMISTIC AND WHY
THEIR VISAS BUT ON THE OTHER HAND CONFINE THE TERMS OF OUR CITIZENS WHO WOULD LIKE TO STAY THERE 3O TO A CERTAIN EXTENT THE BALANCE IS THERE BUT UNFORTUNATELY WE DO NOT SEE ANY PROGRESS 4O MY MIND THIS ISSUE IS WORTH PAY ING ATTENTION TO BY OUR EXECUTIVES (AVE YOU IN YOUR PROFESSIONAL ROLE ENCOUNTERED ANY OBSTACLES OR BARRIERS THAT HAVE MADE IT DIFFICULT TO CONDUCT BUSINESS IN 5KRAINE )F SO HOW DID YOU OVERCOME THEM /F COURSE THERE HAVE BEEN A LOT OF OBSTA CLES ON MY PROFESSIONAL WAY INFORMATIONAL BARRIERS FOR INSTANCE )N ORDER TO CONDUCT BUSINESS ABROAD YOU SHOULD POSSESS RELIABLE AND COMPLETE INFORMATION ABOUT POLITICAL AND ECONOMIC SITUATION MIGRATION POLICY SOCIAL CULTURAL AND LIFE CONDITIONS OF THE COUNTRIES YOU HAVE TO COLLABORATE WITH #URRENTLY OUR PARTNERS HELP US WITH THIS MATTER 4HEY INFORM US ABOUT THE NUANCES WHICH DO NOT LAY OPEN TO THE PUBLIC BUT ARE REALLY IMPORTANT FOR SAFE AND COMFORTABLE STAY OF OUR CLIENTS ABROAD )N THE #ZECH 2EPUBLIC FOR EXAMPLE WE HAVE ESTABLISHED A BRANCH IN ORDER TO MEET ESCORT AND PROVIDE STUDENTS WITH ALL NECESSARY SER VICES THEY MIGHT NEED (OW WOULD YOUR COMPANY LIKE TO DEVELOP IN 5KRAINE IN THE FUTURE .OW IT IS REALLY DIFFICULT TO MAKE ANY FORE CASTS "UT WE HAVE GOT USED TO PLANNING OUR ACTIVITIES BECAUSE THIS IS THE FACTOR OF STABLE AND EFFECTIVE DEVELOPMENT OF EVERY COM PANY )N WE WILL EXPAND THE LONG TERM STUDY PROGRAMS IN #ANADA )T IS THE DECENT ALTERNATIVE TO #ZECH EDUCATION IN %UROPE WHERE THE UNSTABLE POLITICAL SITUATION TOUGH ENTRY AND STAY REQUIREMENTS FOR 5KRAINIANS ARE OBSERVED #ANADA IS A COUNTRY WHICH IS POLITICALLY BALANCED AND HAS A STABLE ECONOMY TODAY %DUCATION THERE IS MORE EXPENSIVE BUT MIGRATION POLICY FOR 5KRAINIANS TENDS TO BE MORE LOYAL 7E ARE ALSO PLANNING TO DEVELOP CORPORATE SERVICES BECAUSE OF GROWING INTEREST IN SHORT TERM PROGRAMS WHICH INCLUDE LAN GUAGE COURSES EXCURSIONS AND MEETINGS WITH REPRESENTATIVES OF BUSINESS COMMUNITY OF THE VISITING COUNTRY 4HE MOST PROMISING TRENDS HERE ARE -ALTA AND #HINA
#ONSIDERING THE FACT OF THE INSTABILITY AND ALTERATION OF POLITICS AND THE RESULTING ECO NOMIC SITUATION IN 5KRAINE DURING THE RECENT YEARS IT IS REALLY DIFFICULT TO MAKE A LONG CAST AHEAD &ORTUNATELY THE NEGATIVE CHANGES DO NOT INFLUENCE OUR ACTIVITIES MUCH /UR ONLY WISH WOULD BE TO IMPROVE THE DIPLO MATIC SERVICES PERFORMANCE IN BRIDGING WITH OTHER COUNTRIES )T IS REALLY IMPORTANT FOR US BECAUSE IT INFLUENCES THE OPPORTUNITY OF 5KRAINIANS TO GO ABROAD !S FOR ME ) AM )N GENERAL ) AM CONFIDENT ABOUT THE SUCCESS REALLY OPTIMISTIC ABOUT THE FOLLOWING YEAR OF DEVELOPMENT OF THE BUSINESS SECTOR &IRSTLY IN AND ) THINK THAT IT WILL BRING A LOT OF NEW AND TERMS OF GLOBALISATION AND INTERNATIONALISATION USEFUL CHANGES FOR OUR COUNTRY THE ATTENTION TO THE FOREIGN EDUCATION PROGRAMS $OES THE %5 VISA REGIME AFFECT YOUR IS INCREASING 3ECONDLY INTELLECTUALLY CURIOUS COMPANYlS OPERATIONS PEOPLE WHO WANT TO REALIZE THEIR POTENTIAL IN %5 VISA REGIME INFLUENCES OUR ACTIVITIES DIFFERENT SPHERES NOT PRESENTED IN 5KRAINE HAVE GREATLY 4ODAY THE GOVERNMENTAL AUTHORI ALWAYS EXISTED 4HIRDLY IF THERE IS NO DEMAND TIES CLAIM THE SIGNIFICANT IMPROVEMENT OF FOR SHORT TERM PROGRAMS ONE CAN ALWAYS CHOOSE THE VISA REGIME WITH %UROPE BUT TO MY LONG TERM ONES 3O THE SERVICES RANGE IS QUITE MIND IT IS FAR TOO EARLY TO MAKE JUDGEMENTS LARGE 7HAT REALLY MATTERS IS WHETHER THE WAY %UROPEAN COUNTRIES ON THE ONE HAND OPEN YOU ARE DOING BUSINESS EVENTUALLY BENEFITS BOTH SOME NEW OPPORTUNITIES FOR OBTAINING OF YOUR CLIENTS AND YOUR COMPANY
4HINGS TO KNOW Application for the master-class “Result-oriented change and development management� is open! The EBA launches a series of master-classes for companies’ management eager to advance in cutting-edge management skills. The first master-class to be conducted in April will focus on the complex approach to enhancing productivity of the company, its departments and working individuals. The enrolment for this event starts 4 April, 2011. Participation for the EBA members is free. Due to the limited group number, registration for the trainings will be done on first come first served basis. To learn more and to register, please visit www.eba.com.ua
www.eba.com.ua
*O 'PDVT The EBA takes distribution issues to the Government 5IF RVFTUJPO PG BQQMJDBUJPO PG BOUJNPOPQPMZ MFHJTMBUJPO JO EJTUSJCVUJPO XBT CSPVHIU VQ GPS EJTDVTTJPO JO UIF GSBNFXPSL PG UIF &#" $PNQFUJUJPO $PNNJUUFF $VSSFOUMZ UIJT BSFB PG DPSQPSBUF BDUJWJUZ CBEMZ MBDLT FGGFDUJWF SFHVMBUJPO 8IJMF UIF "OUJNPOPQPMZ $PNNJUUFF PG 6LSBJOF JT SFBEZ UP OFHPUJBUF UIJT BHFOEB XJUI CVTJOFTT GJOEJOH TPMVUJPO UP QSPCMFNBUJD BSFBT XJMM OFFE JOWPMWFNFOU PG MFHBM FYQFSUJTF FGGPSU BOE HPPE QVCMJD XJMM The EBA Competition Committee is now working to develop a position paper for the AMCU to clarify a range of problematic questions. 5IFTF BSF JO QBSUJDVMBS ? which industries are, planned to be or have been under scrutiny in terms of distribution investigations of the AMCU; ? what is the experience of the AMCU in distribution investigations; ? which most important issues that AMCU considers are in the distribution arrangements domain (pricing issues, territorial division of market issues, etc.); ? what law initiatives exist that regulate distribution issues. In practical terms, it means that the distribution issues are in focus of antimonopoly legislation, thus the latter becomes vital for companies to regulate their distribution arrangements effectively and in accordance with the law. Partner of Baker & McKenzie, Chair of the EBA Competition Committee oday the competition law is playing a more crucial role in the business of Ukraine and worldwide than ever before. It has diverse applications in more traditional matters like merger control, joint ventures, joint activities, and in more unique but well developing new areas like state procurement, licence schemes and distribution agreements. Hardly any industry does not involve distribution. Thus, distribution issues are very widespread. Not so many market representatives though know that Ukrainian competition law like legislation of many other ANTONINA Yaholnyk countries in the world contains a series of provisions which regulate distribution arrangements. Needless to say that compliance of such arrangement with provisions of competition law is vital to safeguard fair competition in the market. Recently the Antimonopoly Committee of Ukraine (AMC) became quite active in monitoring compliance of distribution arrangements of market players with provision of Ukrainian competition law. The first steps were taken towards companies with significant market shares since they are often the rule setters in the market and thus their conduct has mostly significant impact on competition. $POTJEFSJOH UIF GPSFHPJOH JOBEFRVBUF BXBSFOFTT CZ NBSLFU QMBZFST PG UIF NBUUFS BOE SFTVMUJOH GBJMVSF UP DPNQMZ XJUI EPNFTUJD DPNQFUJUJPO MBX SFHVMBUJPOT JO EJTUSJCV† UJPO NBZ MFBE UP TJHOJGJDBOU NPOFUBSZ BOE PUIFS TBODUJPOT CPUI GPS DPNQBOJFT BOE GPS UIFJS PXOFST BOE TPNF UJNFT FWFO GPS FNQMPZFFT *O BEEJUJPO UP IFBWZ GJOFT UIF QBSUJFT UP EJTUSJCVUJPO BSSBOHFNFOUT NBZ CF FYQPTFE UP DPVSU DMBJNT GPS EBNBHFT Thus it is vital to raise awareness of the employees, first of all people involved in sales, with competition law rules. Secondly, it is advisable to review the distribution contracts and general arrangements of the company for compliance with competition law provisions (many limitations in the distribution arrangements may be allowed if they fall under the series of exemptions provided by the competition law of Ukraine). In the first place this shall be done by businesses which have significant market share, and/or businesses, which operate under franchising rules, or contain far reaching exclusivity arrangements in distribution, etc. The issues like resale price conditions for distributor, provisions not to sell competing products etc. are often applied in distribution agreements, but not always are allowed without approval of the AMC. Separate attention shall be paid to analysis of complex joint activities (for instance joint distribution) or joint ventures (often used in industries like oil and gas, but also in many others), or other types of cooperation agreements on joint research and development initiatives, specializations between joint venture partners etc. Relatively recently AMC has issued new regulation exempting a number of such joint arrangements (including some joint distribution arrangements) from obligation to obtain prior AMC approval. It should be noted however, that any such arrangement as well as distribution systems shall be analyzed on a case by case basis, since compliance thereof with competition law rules depend on many factors (the market share of the parties, level of competition on the market, potential effect on the relevant market of proposed arrangements, etc.), therefore there can be no uniform rules for all market players. It should be noted also that the AMC is actively working on other legislative and enforcement initiatives on various competition law matters (including distribution). Hopefully such initiatives will quite soon create greater clarity on the matters, which in turn will simplify application of such rules in practice.
T
2%')/.!,.EWS EBA Dnipropetrovsk meets State Tax Administration.
T
he meeting with Deputy Chairman of STA in Dnipropetrovsk Oblast Denis Makarov and representatives of tax authorities gathered a vast business audience to discuss issues of VAT reimbursement, taxation peculiarities and the state of automatic VAT refund system implementation. According to the new procedure set forth in the Tax Code, 24 enterprises of Ukraine will receive VAT refund, 4 companies being from Dnepropetrovsk.
Kharkiv business leaders to learn more of strategic communications.
A
communications master-class in Kharkiv gathered heads of EBA member companies to provide insights into communications strategy for modern business leaders focusing on the importance of efficient communication in contemporary business environment. Master class participants became familiar with SPIN techniques and learned how to use a range of techniques to boost communication and business efficiency.
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4 Opinion
April 1, 2011
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Editorial
Outside help If President Viktor Yanukovych is serious about turning a lawless nation into a law-abiding one, he should seek legislation to create an independent prosecutor, police and special court to investigate crimes involving high-level current and former officials. All trials should be public and decided by juries in major cases. The recent criminal charges against ex-President Leonid Kuchma show why. After nearly 11 years of dormancy, cover-ups, incompetence and bowing to political interference, prosecutors suddenly and mysteriously came alive on March 24 and charged Kuchma with abusing his presidential powers in giving orders that led to the Sept. 16, 2000 murder of journalist Georgiy Gongadze. It’s a logical outcome, considering the evidence. Three Interior Ministry police officers are in prison for the crime, a fourth is in jail as a suspect and a key Kuchma ally connected to the crime – Interior Minister Yuriy Kravchenko – is dead from two gunshot wounds to the head, inflicted on March 4, 2005. From what we can see, charges could have come in 2000 if Ukraine had honest leadership at the top, as well as independent police officers, prosecutors and judges. Instead, until Kuchma left office in international shame in 2005, no progress came in solving the Gongadze murder. Kuchma likely played a big role in stifling progress and, if he did, he should be prosecuted for obstruction of justice as well as murder, if that's what the facts show. He proclaims his innocence. Kuchma ran the nation as a tyrant serving the interests of greedy and corrupt oligarchs for a decade, failing to create strong democratic institutions. Now he’s paying the price. Distrustful of the institutions he played such a large role in subverting, Kuchma has decided to go abroad and hire noted U.S. lawyer Alan Dershowitz, one of America's great legal minds. Ukrainian lawyer Ihor Fomin explained the decision to retain Dershowitz this way: “I believe that his role is very important, because we know how our justice system and our law enforcement system are working,” Fomin said. “What is happening now is far from being legal.” Exactly. And everyone, especially Kuchma, knows how untrustworthy the court system is in Ukraine. He spent a decade overseeing corrupt and politically subservient cops, prosecutors and judges. According to the tapes recorded by ex-Kuchma bodyguard Mykola Melnychenko, Kuchma allegedly ordered elections rigged, judges dismissed and journalists threatened. If the Melnychenko tapes are to be believed, Kuchma ran the nation as a fiefdom – deciding who would be allowed to steal billions, who would get prized state assets and who would go to jail. There’s a temptation to feel schadenfreude at Kuchma’s plight over the Frankenstein-like court system he perpetuated. But the truth is that no one will believe any outcome that comes from a prosecutor general, Viktor Pshonka, who admitted upon appointment last year that he saw his role as carrying out the president’s instructions. And this lack of trust is only one reason why the nation’s interest will be better served by independent prosecutors, police and judges tasked to get to the bottom of all of the great unsolved crimes, including the Gongadze murder and the validity of the Melnychenko tapes. A system of jury trials, something virtually unheard of in Ukraine, is warranted. And, perhaps, Dershowitz is not the only outsider who should be brought in. There’s a place for outside help on the prosecutor’s side, too. Another reason to call for independent inquiries is the lack of transparency, competence and due process in current investigations. Prosecutors are feverishly engaged in setting up personal encounters among key players in the Gongadze case – such as face-to-face debates between Kuchma and Melnychenko. These dramatic antics are low-brow nonsense. Prosecutors in this nation wield too much power, especially in light of their poor track record in solving crimes and long history of political subservience. A wellfunctioning law enforcement system reveals information to the public in stages throughout the case. These disclosures are crucial to showing the public, as well as the accused, that law enforcers are doing their work competently, impartially and transparently. In Ukraine, by contrast, prosecutors tell the public whatever they want, whenever they want. They engage in selective persecution and double standards, obviously bowing to political demands. Now the public is feverishly engaged in debates over the Yanukovych administration’s aims – whether it’s to exonerate Kuchma, crucify him or truly seek justice. Debates are being revived over whether the Melnychenko tapes are real or not. Competent investigations untainted by politics would settle these matters once and for all, with credible evidence and public trials that help the nation sort out who deserves to be in prison and who deserves to be vindicated. Sadly, such credible truths are not going to come from anyone playing a leading role among today’s judges, prosecutors or police.
“What a nightmare! This black cat keeps crossing the road!”
eral Gen utor ec Pros
NEWS ITEM: Former President Leonid Kuchma, who is charged in connection with journalist Georgiy Gongadze’s Sept. 16, 2000 murder, has been dodging direct contact with his former bodyguard, Mykola Melnychenko. Kuchma has been called in at least three times to the General Prosecutor’s Office, which has charged him with “exceeding his authority” in giving orders to the Interior Ministry that led to the murder of Gongadze. Three former police officers are serving prison sentences for their roles in the murder, while their former boss, ex-General Oleksiy Pukach, has been in jail awaiting trial. The interior minister at the time, Yuriy Kravchenko, died suspiciously from two gunshot wounds to the head on March 4, 2005, the day he was supposed to testify in the case. Melnychenko’s secret recordings, which allegedly caught Kuchma and top associates plotting numerous crimes including Gongadze’s disappearance, have become evidence in the case. The prosecutor has wanted to question both Kuchma and Melnychenko in the same session, but Kuchma has walked out of such encounters at least three times in the last two weeks.
“Attention everyone! Danger on the road – Tymoshenko’s coming!”
Published by Public Media LLC Jim Phillipoff, Chief Executive Officer Brian Bonner, Chief Editor Deputy Chief Editors: Katya Gorchinskaya, Roman Olearchyk Editors: Alexey Bondarev, Valeriya Kolisnyk, James Marson, Yuliya Popova Staff Writers: Tetyana Boychenko, Peter Byrne, Oksana Faryna, Natalia A. Feduschak, Oksana Grytsenko, Kateryna Grushenko, Nataliya Horban, Vlad Lavrov, Olesia Oleshko, Yura Onyshkiv, Kateryna Panova, Mark Rachkevych, Yuliya Raskevich Nataliya Solovonyuk, Maria Shamota, Irina Sandul, Svitlana Tuchynska Photographer: Joseph Sywenkyj. Photo Editors: Yaroslav Debelyi, Alex Furman Chief Designer: Vladyslav Zakharenko. Designer: Angela Palchevskaya Marketing: Iuliia Panchuk Web Project: Nikolay Polovinkin, Yuri Voronkov, Maksym Semenchuk Sales department: Yuriy Timonin, Maria Kozachenko, Elena Symonenko, Sergiy Volobayev Subscription Manager: Nataliia Protasova Newsroom Manager: Svitlana Kolesnykova, Office Manager: Anastasia Forina
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NEWS ITEM: After flying to Brussels on an expensive charter plane on March 23-25, ex-Prime Minister Yulia Tymoshenko said she was doing it for the good of other people. “I cannot guarantee 100 percent the security of those planes that I take. Because I don’t want to expose the passengers of regular flights even to a tiny risk, depending on what these people [in power] plan,” the opposition leader said on March 28, citing unnamed people “who had once buried businessmen, judges, prosecutors and lawyers” to achieve their aims. If taken seriously, then everyone might be well-advised to stay out of Tymoshenko's way, whether she's traveling by air, car or foot.
Feel strongly about an issue? Agree or disagree with editorial positions in this newspaper? The Kyiv Post welcomes letters to the editors and opinion pieces, usually 800 to 1,000 words in length. Please e-mail all correspondence to Brian Bonner, chief editor, at bonner@kyivpost.com or letters@kyivpost.com. All correspondence must include an e-mail address and contact phone number for verification.
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April 1, 2011
Leaked cables show US officials wrong about Yanukovych TA R A S K U Z I O
© Radio Free Europe/Radio Liberty The U.S. Embassy cables from Ukraine leaked recently by the website WikiLeaks prompt two observations. The first is that the embassy believed Party of Regions leader Viktor Yanukovych had changed from what he was during the 2004 election, when he sought to come to power through election fraud. The second is that U.S. officials believed that Yulia Tymoshenko was not a better option than Yanukovych in the 2010 presidential election. One cable quotes former President Leonid Kuchma as saying the 2010 election was one of “choosing between bad and very bad” -- with Tymoshenko, the then prime minister, allegedly being the latter. Both of these positions were fundamentally wrong -- especially as seen from the hindsight of Yanukovych’s first year in power. The WikiLeaks cables critical of Tymoshenko were a reflection of her own mistakes and of lobbying by U.S. political consultants working for Yanukovych and the Party of Regions since 2005. One of the main criticisms was that Tymoshenko is a “populist,” a claim that ignores widespread populism among all Ukrainian politicians. Indeed, Yanukovych was the most populist in the 2010 elections and the prize for the most populist billboard goes to former President Viktor Yushchenko, who promised to place a 20 percent tax on yachts, limousines, and villas. The U.S. Embassy bought into the accusation that Tymoshenko was beholden to Russian Prime Minister Vladimir Putin. Tymoshenko was allegedly the biggest threat to Ukraine’s sovereignty and willing to be Russia’s pawn, according to a cable quoting oligarch Dmytro Firtash. Evidence to back this conclusion was her supposed concessions on Georgia during Russia’s 2008 invasion and Moscow-friendly positions on the Holodomor and the Black Sea Fleet. In reality, Yanukovych has caved in to Russia on all three issues. During the Georgian crisis, the Party of Regions and the Communist Party supported Russia’s dismemberment of Georgia. Likewise, the Party of Regions and the Communists did not support the 2006 law on the Holodomor, and Yanukovych has adopted Russia’s position that it was a Soviet (not Ukrainian) famine. As president, he has extended the Black Sea Fleet base in Sevastopol until 2042-47. A January 2010 U.S. cable reports Yanukovych telling the U.S. ambassador that he was ready to extend the base in exchange for economic preferences from Russia.
Ukrainian protesters hold posters and shout slogans during an anti-government rally in Kyiv, Ukraine, Friday, March 25, 2011. Demonstrators demanded an end to economic repressions and impovement of business conditions in the ex-Soviet nation. (AP)
Yanukovych, the pro-Russian candidate All this led to the mistaken impression that Russia supported both Tymoshenko and Yanukovych in the 2010 election, as they were both “pro-Russian” and Moscow would be satisfied with either winning the election. Yushchenko made this argument during the campaign, calling for his supporters not to vote for either candidate in the second round of balloting. That decision probably cost Tymoshenko the election, since she ended up losing by just 3 percentage points. Yanukovych (with Putin) “has adopted domestic, national-identity, and foreign policies that are in Russia’s national interests.” Other cables claimed it made no difference whether Yanukovych or Tymoshenko were elected as both are authoritarian and would allegedly seek to build a “Putinist vertical power.” Such analysis contradicted the reality that Tymoshenko did not have the political machine, ability to blackmail deputies, or control of television stations necessary for such a project. In addition, since 2008 Tymoshenko has consistently argued for the need to move toward a full parliamentary system. The authoritarianism of the Party of Regions is well documented among Ukrainian sociologists and has been plain to see during the transformation of parliament into a rubber-stamp institution and the return to a presidential constitution. U.S. cables also buy into the argument of a “prag-
matic” wing in the Party of Regions that supposedly desires to unify Ukraine and is pro-European, even possibly willing to compromise on NATO. Such views were intensely lobbied by U.S. political consultants working for the Party of Regions. But the pragmatic wing of the Party of Regions was not evident in 2005-08 when the party voted with the Communists against legislation to join the World Trade Organization. Ukraine’s 2008 WTO membership paves the way for the signing of a free trade agreement with the European Union, a process the pragmatic wing of the Party of Regions allegedly supports. These cables also ignored the anti-NATO stances of Yanukovych and the Party of Regions, arguing that this was election rhetoric to mobilize eastern Ukrainian voters that would be ignored after the voting. Again this was wrong, as Yanukovych is the first of four post-Soviet Ukrainian presidents to not support NATO membership. U.S. cables from Ukraine also claimed that Yanukovych, if he won the 2010 election, would not be a Russian pawn and would defend Ukraine’s interests, even if only in the economic sphere. Although Yanukovych defends his economic interests from Russia, he has adopted policies that are in Russia’s national interests. Russia successfully lobbied for the four candidates who became the chairman of the Security Service of Ukraine (SBU) and ministers of education, foreign affairs, and defense. Russian citizens illegally control the Æ10
Letter to the editor
Nation becoming another Belarus politically To the Editor: I am amazed at the continual slide of Ukraine towards the same establishment of government as that of Belarus! The part that worries me is that the people do not seem to realize it or are just too numb to stand up after the last five years of failed government. Please, people of Ukraine wake up and bring your weary feet to the floor and stand up for your country and yourselves before it is too late! The government in power shows daily that it has no regards for the citizens, other than their rich backers, wellbeing, freedoms or advancement. Slowly but surely the tentacles of this machine is reaching into the national, regional and local govern-
ments and placing cronies that will follow orders from Kyiv knowing that to do otherwise would jeopardize their well being or the cash cows that they milk each week. I have lived in many countries over the years and have witnessed many things that the politicians have perpetrated on their citizens. But most of the time the people have fought back through the ballot box. Unfortuantely, the way the system is set up in Ukraine, it does not allow this. The constitution only seems to serve as a document to be used when the moment serves the people in power and is ignored when it does not agree with their direction. In civilized countries the defeated
politicians become the opposition. In Ukraine, they become prisoners! I read that the poverty level in Ukraine is set at Hr 742 per month, just below $100. I guess that if you make Hr 743, you are considered middle class! The vast differences between those with disposable income and those scraping to make a living is so vast that I don’t understand why the people are not in the streets now. I moved to Ukraine because of the people and the culture. The Ukrainian people have not changed and the native culture has not changed, but the course of the country has and that is a very scary thing indeed! Ben Powell Lugansk
Opinion 5 VOX populi WITH OKSANA MARKINA
How do you celebrate April Fools’ Day? What are the best jokes you can remember? Oleksandra Shevchenko, recreation therapist “Every year my friend calls me and says he is from the tax inspector's office and starts to make a false accusation against me. Of course I know who is calling, but he always says ‘it’s not me’ and so on. Another joke I saw once on TV: They said our Zhdanov beach would be heated so that we can swim earlier – and I believed it.” Nadezhda Tretiak, interpreter “Last year my colleagues called and informed me that someone from the staff was going abroad. I didn’t believe them.” Kyrylo Beregovsky, student “Once we planted drugs on one of my friends. Then police (also my friends) took him to the police station. He started to cry. When we said it was only a joke, everybody started laughing – except him.” Yanina, Sherbanyuk student “Usually jokes are spontaneous. The last bright joke happened to my friend. At night, somebody called her and said that her friends are at the police department and she needs to come urgently and pledge money. The girl woke up and was about to go, saying: ‘I’m sorry. I do not have money. Can you explain to me what happened with my friends, which friends?’ But then they told her it’s only a joke. My friend was shocked.” Natalia Andrievska, student “I do not celebrate this holiday, and do not consider it as a holiday at all, because I believe that it has no special attributes and does not suit our mentality.” Vox Populi is not only in print, but also online at kyivpost.com with different questions. If you have a question that you want answered, e-mail the idea to kyivpost@kyivpost.com.
6 Business
www.kyivpost.com
April 1, 2011
American wins $9.5 million claim in dispute that started in 1996 BY M A R K R AC H K E VYC H RACHKEVYCH@KYIVPOST.COM
A World Bank arbitration tribunal ordered Ukraine to pay $9.5 million in damages to an American businessman, marking a rare victory for foreign investors who have long received shabby treatment. The International Center for Settlement of Investment Disputes on March 28 gave the award to Joseph Lemire’s Gala Radio, ruling that Ukraine should pay “for denying fair and equitable treatment as required under the U.S.-Ukraine bilateral investment treaty in relation to tender applications,� the radio station said in a statement. Prevented from expanding his radio station’s frequencies since 1996, Lemire finally filed a claim against Ukraine in 2006. “This proves what’s been said in the press time and time again – that
Ukraine isn’t open for business to foreign investors,� Lemire said. “It took an independent, unbiased institution, the most respected in the world in the World Bank to say what’s been known all along.� In its final award, the tribunal found that Gala Radio had been hindered by Ukraine from developing into a full national FM network and a second AM network. “These violations pertain to arbitrary practices, influence peddling and political interventions in the awarding of radio licenses in Ukraine by the National Council since 1999 until very recently, including by way of direct intervention of the president of Ukraine in favor of certain candidates during tenders,� the Gala Radio press release said. Ukraine has 60 days to pay the fine, or 120 days to challenge the case on procedural grounds. In a statement, Ukraine’s Justice
ÆOn the move VITALIY GORDUZ was
Joseph Lemire
Ministry said the country may attempt to have the ruling annulled on procedural grounds. Lemire lamented the non-transparent way Ukraine does business with
was appointed public relations manager in Ukraine for Ernst & Young, one of the world’s so-called Big Four accounting and auditing giants. Prior to the appointment Danchenkova worked as a public relations manager for the Clever Group, a PR agency, and as press secretary and assistant to the director at the Media Law Institute. Danchenkova is a graduate of the Institute of Journalism at Kyiv National Taras Shevchenko University.
KATYA KOMAROVA has been appointed senior public relations associate at Willard, Kyiv-based communications firm which operates in other countries, including Russia and Turkey. At Willard, Komarova will work on a wide range of public relations projects on behalf of the agency’s clients. Prior to joining Willard, Komarova worked for Tetra Strategy, a strategic communications and public affairs consultancy in London, where she advised UK and international clients including AMEC and Mikhail Khodorkovsky. She has also worked for Procter & Gamble Ukraine and the American Councils for International Education in Odessa. Komarova has a master’s degree in public communication and public relations from the University of Westminster in London.
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Monetary Fund and everyone who lends or gives money to Ukraine to know what happened,� he said. Problems with Ukraine’s investment climate are not limited to radio and television broadcasting. The track record for holding fair and open public procurement tenders and selling state assets is dismal. Recently, the government doled out the lion’s share of grain export quotas to a handful of companies, including a little-known company partially owned by the state. The measures ignited the ire of foreign investors and business associations in Ukraine who pointed to corruption and insider deals. But not many investors have as much persistence as Lemire. He said that, as an individual investor, he filed the claim against Ukraine “out of principle.� Kyiv Post staff writer Mark Rachkevych can be reached at rachkevych@kyivpost. com
Send On the Move news to otm@kyivpost.com or contact Kateryna Panova and Oksana Faryna at 234-6500. It should include a photograph of the individual who has recently been appointed to a new position, a description of their duties and responsibilities, prior experience as well as education. Note: The Kyiv Post does not charge for publishing these notices or any news material.
OLGA DANCHENKOVA
appointed executive director of KP media, the Kyiv-based print media holding founded and majority owned by American Jed Sunden. The KP Media group publishes Korrespondent magazine and internet news portal, two of the nation’s most popular sources of news. Gorduz had worked at KP media from 2003 through 2006 as a financial director. At the time, the Kyiv Post was a part of KP Media but is now owned by ISTIL Group. Gorduz left KP Media in 2006 to take the same position at ALICO AIG Life Ukraine. Later, he headed the new media department at Ukrainian Media Holding, another leading print media publisher, and after that, he launched the Netwalker agency.
investors, including the way it allocates radio frequencies. Lemire’s lawyer said Ukraine spent $4.5 million in legal fees and could pay at least $1 million in additional fees to arbitrators and for legal counsel if it pursues an annulment. “It’s in Ukraine’s best interests to pay this and move on instead of dragging it out. Otherwise it’ll be a sign that Ukraine doesn’t want investors,� Lemire said. The international tribunal’s award is enforceable in more than 140 countries. Ukraine could have assets frozen if it refuses to pay. Lemire said the tribunal’s decision will benefit all Ukrainians by encouraging “reform and facilitating the country’s drive to democracy and liberty.� Although Gala Radio’s Lemire has been quiet on his matter for 10 years, he wants the world to know about it now. “I want the European Union, the World Bank, the International
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VITALIY TERTYTSYA joined OMP, a Kyiv-based law firm, as a senior associate. He will focus on servicing the firm’s clients on real estate and construction issues. Prior to joining OMP, Tertytsya worked as an associate focusing on real estate and construction issues at the Kyiv offices of Magisters and Wolf Theiss. In the past, he has also consulted on merger and acquisition transactions. Tertytsya is a graduate of Kyiv National University. He is also a certified Attorneyat-law.
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Business 7
April 1, 2011
Business Sense WITH DANYLO SPOLSKY
In every way, Poland ahead of Ukraine in capital markets A Ukraine International Airlines plane flies over Kyiv’s Independence Square. (Yaroslav Debelyi)
Nation thwarts competition, forcing air travelers to pay more to get to destinations BY S V I T L A N A T U C H YN S KA TUCHYNSKA@KYIVPOST.COM
Competition on the domestic passenger airline market is stifled and may get even more stifling, with government delays in reaching an open skies accord with the European Union. The result: higher air fares and fewer low-cost carriers for travelers. At issue is a March 11 decision, announced by Deputy Prime Minister Borys Kolesnikov, in which Ukraine pledged not to ink an open skies deal with the European Union until Ukrainians are granted visa-free travel to the 27-nation bloc. An open skies agreement would liberalize air travel and open more routes to competition, leading to cheaper tickets. Such a prospect has long been the goal of travelers, the tourism industry and foreign airlines. “Our airways are not ready for competition like that,” Kolesnikov said. However, Kolesnikov said, the government is nearing open skies deals with Russia and Israel, countries where Ukrainians can travel without visas. Ukraine may be trying to bargain tough with Brussels. But in doing so, Kyiv’s leadership is keeping top foreign passenger airlines out of the market. On the international market in Ukraine, Aerosvit and Ukraine International Airlines are the dominant Ukrainian airlines flying to foreign destinations. On the domestic side, Donbasaero and Dniproavia are leaders. Foreign passenger airlines complain that it is hard to get access to routes. In the words of John Stephenson, vice president of Wizz Air, the first low-cost airline on the Ukrainian market, “getting access to routes is the biggest issue in Ukraine.” Many travelers are disappointed. “I was hoping that when the [open sky] deal is signed, I will be able to afford flying inside the country to visit friends,” said Yuriy Kovalek, a programmer from Kharkiv. “But for now, I need to continue using trains to catch low-cost flights further to Europe. And when I get to Kyiv, the destinations offered [by low-cost] airlines are few.” Yevhen Suslov, a parliament lawmaker in the opposition Bloc of Yulia Tymoshenko, said government should pay less attention to defending airlines
owned by billionaires and more to making airfare affordable.
Kept at a distance Wizz Air, Hungary’s low-cost airline, tried in recent years to offer a broad range of domestic flights between Kyiv, Odesa, Lviv and Kharkiv. Later the flights were scaled back, leaving only the Kyiv- Simferopol route open. Wizz Air continues, however, with regular flights between Ukraine and foreign destinations. But it stands largely alone as the only major low-cost airline from abroad. If purchased at least one month in advance, a round trip flight on Wizz Air between Simferopol and Kyiv costs $130. A comparable Dniproavia flight costs almost $200. The difference between what low-cost airlines such as Wizz Air and leading Ukrainian airlines is even more striking on international routes. Flying roundtrip to Stockholm from Kyiv on Wizz Air costs a little more than $100. Flying on the same route and dates, also roundtrip, in an economy seat on Aerosvit costs $288. The expansion of foreign companies, including low-cost carriers, is also hampered by Ukrainian bureaucracy, where getting operating permission usually takes more than one year.
Market monopolies Experts say the situation amounts to a monopoly. “There is a duopoly on the market,” said Oleksandr Myronenko, an aviation expert and founder of the avianews.com website. Billionaire Igor Kolomoisky is reported to control Aerosvit, Donbasaero and Dniproavia. Through these airlines, Kolomoisky corners an estimated 48.5 percent of the market. Insiders and reports suggest that Kolomoisky also controls another airline, Windrose. If so, he holds a commanding 60 percent share of the domestic market. On international routes, Ukraine International Airlines controls 30 percent of the market and is run by a company called Capital Investment Project. It has exclusive rights for Western European routes with prices as high as $560 (Kyiv - Barcelona), $450 (KyivBerlin) and $590 (Kyiv - Paris). Aerosvit is reportedly owned by Israeli businessman Aaron Mayberg
and flies exclusively to Athens, Budapest, Prague and Warsaw. The competition isn’t much better for domestic flights, experts say. “Aerosvit offers tickets to Odessa for $267 one way. A Dniproavia ticket to Odesa for the same day costs $279. It is the same plane, same flight, same owner and the price is practically the same. So they create an illusion that there is a competition while there is not,” said Orest Bilous from Makemytrip, a budget trips planning company. Kolesnikov does not deny there is a monopoly. “Ukrainian passengers pay 22 euro for 100 kilometers (of flying) while, for instance in Germany it is twice less. The reason is monopolization of the market,” Kolesnikov said last year. However, the Antimonopoly Committee in December ruled that the monopolization law is not being violated.
Empty new terminals Ukraine has been overhauling its dilapidated airports ahead of the Euro 2012 soccer championship to be cohosted with Poland. The improvements include two new terminals at Kyiv’s Boryspil International Airport and several more in other cities. But with air travel unaffordable for many, a brand new terminal that recently opened in Kharkiv, Ukraine’s second largest city, only services 3-4 flights daily. Still, fears remain strong that an open-skies agreement would provide too much competition for the entrenched Ukrainian airlines. “European giants simply have more money and more planes,” said Oleksandr Kava, head of Political and Economical Analytical Centre. Others, however, argue there is no point in protecting uncompetitive private companies. “Ukraine International was founded 18 years ago; Aerosvit 15 years ago. During all this time they had exclusive routes and benefited from high ticket prices,” said Myronenko, the founder of the avianews.com website. “If they didn`t buy more planes and get better off during that time, they probably never will.” Kyiv Post staff writer Svitlana Tuchynska can be reached at tuchynska@kyivpost.com
It’s a tale of two completely different capital markets. Ukraine’s is heavily underdeveloped, impeded by currency controls, by concerns of transparency and corruption and by bureaucratic roadblocks. Poland’s, on the other hand, has leveraged its pension fund system to make it one of the largest asset management markets in Central and Eastern Europe and a regional financial hub. For comparison, at the end of 2010, the Warsaw Stock Exchange had 400 listed stocks including 29 foreign equity issuers, with a total market capitalization of $295 billion and stock trading volumes of $82 billion last year. Ukraine’s main bourse, the RTS Ukrainian Exchange, had 167 listed stocks, no foreign issuers, a market capitalization of $40 billion and annual trading volumes of less than $3 billion last year. The difference is further highlighted by the primary equity issuance markets – the last real share placements locally came back in 2007, whereas the Warsaw exchange played host to three initial public offerings from Ukraine in 2010 – dairy producer Milkiland, agricultural holding Agroton, and coal miner and trader Sadovaya Group. The three companies raised $165 million for business development in November-December 2010. Along with Ukraine’s largest sugar maker Astarta and largest sunflower oil producer Kernel, which debuted in Poland in 2006 and 2007, the Warsaw exchange now boasts five Ukrainian stocks. With another handful of companies eyeing Warsaw listings in 2011, the exchange plans to launch a dedicated Ukrainian stock index. So why has Poland been so successful in developing its stock market and establishing itself as a regional financial center, and why is Ukraine again on the outside looking in? Poland’s stock market success is largely predicated on its national pension system. Individuals pay 7 percent of taxable income into private open pension funds, the socalled second pillar of a pension fund system. The funds themselves are mandated and largely limited to investing in Polish-listed securities and they form Poland’s key institutional investor base. Monthly net inflows average over $600 million, which creates consistent demand for investable securities. As of November 2010, 14 Polish pension funds managed more than $70 billion in assets, with more than a third invested in stocks, according to the country’s financial regulator. The pension funds are extremely active on the primary market, absorbing an estimated 30-50 percent of newly issued stock in initial public offerings and secondary offerings.
Æ Polish pension funds manage $70 billion in assets, while Ukraine’s is heavily in the red In contrast to the Polish system, Ukraine’s state-run pension fund is heavily in the red and consistently subsidized using budget funds. The creation of a second pillar of non-state pension funds, like in Poland, is a distant and vague goal for the authorities. To rub salt in the wound, Ukraine’s stock and bond markets are also victims of currency controls that make repatriating foreign currency from Ukraine an arduous and, at times, impossible task. That said, Ukraine’s many shortcomings imply significant room for improvement and for market growth. Liberalizing currency controls and establishing the conditions for offshore capital to begin returning home are two initial steps that would help domestic capital markets develop. Most importantly, the establishment of a Polish-style multi-tier pension fund system would allow domestic earnings and savings to be captured and recycled via the pension system back into national investments. That type of reinvestment can benefit small- to mid-sized companies that have few financing alternatives to bank loans by giving them the chance to raise capital for development purposes. Being better providers of competition and innovation, smaller companies can provide an outsized percentage of growth in a dynamic economy. Pension system reform, or for that matter any reform of capital markets, will not be a simple task but it is a much-needed one for Ukraine. And as with any large-scale reform this one will require significant political will, government support, and time. Danylo Spolsky is a sales associate at Kyiv-based investment bank BG Capital, the investment arm of Bank of Georgia. He can be reached at dspolsky@bgcap.ge. More details on BG Capital can be found at www. bgcapital.ge.
8 Business
www.kyivpost.com
April 1, 2011
How to make money under the radar of the oligarchs Few Ukrainian-Americans have been as deeply involved in Ukraine’s development for as long as Natalie A. Jaresko, chief executive officer of Horizon Capital. In an interview, she talks about investing successfully in an economy dominated by billionaire oligarchs, what went wrong after the 2004 Orange Revolution, how her business survived the 2008 crisis and what lies ahead. BY B R I A N B O N N E R BONNER@KYIVPOST.COM
In an economy where the largest sectors are dominated by a few oligarchs, where can an honest investor go to make an honest hryvnia in Ukraine? Investment fund manager Natalie A. Jaresko has answered the question this way: Find opportunities in smaller, competitive sectors of the economy that billionaire oligarchs tend to bypass. For nearly 20 years, this UkrainianAmerican from Chicago has been deeply involved in Ukraine. She served as the first chief of the economic section of the U.S. Embassy in Kyiv from 1992-1995, then with the Western NIS Enterprise Fund and now she is cofounder and chief executive officer of Horizon Capital, with more than $600 million under management. In 2010, the Kyiv Post named Jaresko, 45, as one of the nation’s most influential expatriates for her business acumen and community involvement, including charitable contributions to the Chernihiv Oblast city of Baturyn. She is also on the Pechersk School International Board of Governors in Kyiv, where her two daughters attend school. She is also a member of: the Open Ukraine Foundation Board, the East Europe Foundation Advisory Council, the Kyiv City Strategy 2025 Public Council and the Selection Committee of the Pinchuk Foundation’s World Wide Studies scholarship program. Horizon scouts for investment opportunities in Ukraine, Moldova and Belarus. Their business strategy is to buy into promising but underperforming companies, turn them around and sell them after a few years or so for higher profits. In an interview with the Kyiv Post, Jaresko talked about the promising sectors in Ukraine’s economy as well as potential pitfalls. Here are edited excerpts: Kyiv Post: Looking at the tax problems of ArcelorMittal, the nation’s largest foreign investor, the recent uncompetitive sale of Ukrtelecom, the imposition of grain export quotas, the way that billions of dollars of Euro 2012 money is being spent with no-bid contracts, people have concluded that Ukraine is still ‘closed’ for business, except to insiders. Is this true at the smallto-medium business level where Horizon Capital invests? Natalie Jaresko: Over the last 15 years, our access has actually been quite good. I like being in the small-
Natalie A. Jaresko
and-medium business segment. It’s more open, more competitive. There is less interference from monied parties, less interference from regulatory bodies. There are very many competitive segments of the economy. There are sufficient growth opportunities so that multiple players can win at the same time. We invest in three segments: Financial services; consumer goods and services and business-to-business services. KP: So you are holding to the same philosophy that you outlined in a 2006 interview, when you said that the biggest sectors – oil, gas, metal and chemical – are monopolies run by oligarchs? NJ: Monopoly, oligopoly. Certainly there are large monied interests who have a great deal invested and a great deal to lose and a great ability to protect their interests. I have no problem competing on the basis of client tastes, quality of products and services, on who is more efficient in getting products on the shelves. I would rather compete in that arena than in the corridors of powers. KP: Are the oligarchs simply not interested in small and medium businesses? NJ: They have dabbled from time to time. There a few sectors that have large business interests engaged, but it’s not their primary business. KP: How did you go into the 2008 economic crisis and how did you get out of it, considering
that you invest in financial services and consumer goods, two hard-hit sectors? NJ: The hardest hit is financial services because your net asset value is in local currency. With a devaluation of 40 percent, you’ve immediately lost 40 percent of the value of that business. For a bank, its asset is money. We just happened to be managing the company in a way that gave us great opportunity and great flexibility. We, frankly speaking, had more serious issues with things that required us to change strategies altogether. If you take our bank, more challenging than devaluation, was the fact that our whole concept previously was wholesale mortgage finance [involving the precursor entity to Platinum Bank]. Wholesale mortgage finance wasn’t possible after the crisis. No. 1, you couldn’t lend retail as it became illegal in hard currency. No bank was going to be able to borrow long-term money and lend it in another currency and take risks. Mortgages ceased. We shifted to being a full retail bank and it’s now called Platinum Bank and we adjusted. KP: What other lessons have you learned about surviving crises? NJ: We’ve been through other crises before. We lived through the 1998 devaluation. We didn’t believe we should put a lot of debt on these companies and leverage them to the hilt. We were actually able to take on leverage, so we are coming out of it with new capacity and new lines coming out. I think that means a lot for us. KP: Does that mean you saw it coming? NJ: What you see coming is that currencies are very volatile. We lived through it once and we know that these markets are difficult. You need to manage your debt risk, your leverage. We relied on increased profitability and growth in the market for the longest time. We have increases in market share and new products because the market is still so young and immature in so many categories and services. KP: You exited Pro-Credit Bank in April 2009 with a profit? How is that possible? NJ: The negotiations were going on for a long time, pre-crisis. It was a small stake. We sold to the holding company. If it wasn’t a crisis, we would have made a heckuva lot more money. I expected to do much better. But the crisis did affect our returns.
One of Horizon Capital’s big winners was Shostka Cheese Factory, which the fund manager sold in 2007 for a 470 percent return. (Ukrinform)
KP: You have three funds under management: The $132 million Emerging Europe Growth Fund1 (EEGF-1), started in 2006; the $150 Western NIS Enterprise Fund and the Emerging Europe Growth Fund II (EEGF-2), with capital commitments of $370 million. How do these work? NJ: EEGF-1 closed in 2006. Then you have a five-year investment period to make your investments. You can make those faster, which we did; we were basically finished by 2008. Then it’s a 10-year fund. I am supposed to be able to sell and return the capital by the end of the 10 years, which would be 2016. Then we raised the second one
Æ Jaresko has been working in Ukraine for nearly 20 years [EEGF-2] in 2008, just before the crisis. That is truly luck, a blessing, whatever you want to call it. Because we had our second close in September 2008, just before the bottom dropped out here. So we were sitting on commitments of $390 million when the bottom dropped here. We did have one default, one investor. So our fund today is only $370 million. We spent a good year in 2009 being very careful about making sure our existing investments were doing well and/or doing better than the market and then determining whether the negotiations we were already part of were appropriate and priced properly. It was a long year, 2009, to get through. The result is in 2010 we made six new investments for $130 million. KP: OK, let’s take Emerging Europe Growth Fund-1. If I invested $1,000 how much would I have or could I expect to have returned? NJ: It’s more complicated than that. You don’t put it in at day one. You sign a document that says you will give me the $1,000 as I need it. At some point, I’ve ‘called’ most of your money, because I’ve invested the fund. In these funds, when I sell a business, I have to
immediately return your portion of the capital and profit to you. The value of that [portfolio] today is conservatively, in good shape, above cost. I think, but I don’t know. In EEGF-1, I still have seven businesses to sell. Once we sell those seven businesses, you’re going to make the returns you expected. The expectations people have is three times to five times the money they put in. KP: That’s a high return. NJ: It’s also highly risky and there are no guarantees. But the bottom line is that -- for that 2006 fund -- I still believe we will meet investors’ expectations. We had a leasing company in Russia and MTV Ukraine. We sold those two because we believed they would require a lot more investment than we had. KP: You went into MTV Ukraine and, at that time, it appeared you would go deeper into media. Then you pulled out. Is media not a good business in general? NJ: Media is a complicated business. It is an oligopoly of sorts. In that case it was television. In television there are a few holding companies here. Having one channel in a consolidated TV market is just too difficult. Advertisers like to buy on seven channels or 10 channels at the same time. You can do that with Inter and 1+1. For us, when the crisis occurred, advertising disappeared. They started to really choose very carefully what minimal advertising they were going to do and it was on the largest channel where they had the best deals. I still believe in internationally licensed channels because I think they offer high quality. But that business model of having one independent channel in a market where there are consolidated large groups, that’s not competitive. KP: What’s left to invest? NJ: We have about $200 million to invest in that [Emerging Europe Growth Fund - 2] and another three years or so do to it. KP: What’s been your best and worst investments? NJ: The biggest plus we’ve had of the businesses we’ve sold to date is Shostka, a cheese company in Sumy Oblast. It sold for 5.9 times cash-oncash return and 470 percent [internal rate of return]. What did we do with that company to get that kind of return? We changed their strategy entirely. They were exporting a commodity into one or two distributors’ hands in Russia. There was no Æ9
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Jaresko looks for gems in competitive sectors Æ8 brand. There was no distribution. We instead took them into the Ukrainian market. We didn’t create something new. There was an enormous amount of consumer loyalty to that brand because, over the Soviet period, people believed it was a highquality cheese. So we turned it into a modern brand with a logo. At the same time, we developed a distribution system and put it into the grocery stores. When the French came into to buy it, [Fromageries Bel S.A.], they were buying a facility in the middle of nowhere, up in Sumy Oblast. We took a good quality product with a good management team, improved it and put them into a more profitable area and made them into a premium product, not from a price standpoint but from a quality/value standpoint. KP: And the worst example? NJ: In the [Western NIS] Enterprise Fund, the first fund, we had a very serious corporate governance battle in a firm called Sonola, a sunflower-oil manufacturer. We ended up in arbitration in the United States. We couldn’t get the courts here to enforce the arbitration award, so we took Ukraine to international court for not honoring its treaty obligations. It dragged on for years. It was a very difficult example of what things can go wrong. We did recoup some of our money. It was a very early investment, 1996 and 1997, in much more unsophisticated times. It showed the weakness in the court system here. It showed the importance of having partners who are more willing to talk problems out rather than go to court. KP: What else are you seeing with some of your businesses? NJ: We do a lot of work on corporate governance and transparency. KP: Who are your investors? NJ: Sixty percent U.S.; 40 percent European. It’s a combination of corporate and public pension funds, university endowments…high net-worth individuals. University of Texas Investment Funds is our biggest investor.
KP: You got the Order of Princess Olha Award from ex-President Leonid Kuchma. You are believed to be close to the Yushchenkos [ex-President Viktor and ex-First Lady Kateryna] and now Ukraine has President Viktor Yanukovych. Is there a substantial difference in the investment climate, and how would you describe today’s environment? NJ: Now we have a kind of middle ground. We have a world that is not particularly investment friendly. Globally, the appetite for risk is lower today than it was pre-crisis. You have improved macroeconomics, better than in 2009. It is definitely improving. Without another dip in the global situation, the macroeconomic situation here will continue to improve. Some of the things [such as grain export quotas] that have happened in the last two years here are not friendly to investors from a regulatory standpoint. That’s worrisome. We’re in an IMF [International Monetary Fund] program. Macroeconomic stability seems to be here. There even seems to be some deregulation and even a little bit of improvement on the business environment in some areas. Another whole other level of fear is that, when you have what you call a ‘strong vertical’ [political power structure], that power can be abused. It makes some investors wary. Investor perception is slow to change and hard to improve.” Right now, this government has to make a choice about whether it really wants to improve the investment environment. It has the macroeconomic base to do so if it wishes. But you can’t have the front page news that you’re reporting and have investors with a positive perception. I think that’s what you see if you look at the level of foreign direct investment last year. It’s not what you hoped, given the macroeconomic situation. KP: Hasn’t the administration already made its choice – that Ukraine is going to be an oligopoly?
perspectives and models. It didn’t happen here after the Orange Revolution, despite discussion about it. There was a lack of new blood. I give very high ratings to maintaining a democracy, civil society and freedom of the press under the Yushchenko administration, which I would hate to see be lost because of the ‘strong vertical’ [of political power in the Yanukovych administration].
Horizon Capital's brief investment in MTV Ukraine taught fund managers the perils of entering an oligarch-dominated media market. (PHL)
NJ: You’d hope that, even if they’ve chosen in certain segments of the economy to maintain oligopolies, you’d hope that they’d make other segments of the economy more competitive and interesting. KP: Ukraine can still progress as an oligopoly? NJ: I absolutely believe that or I wouldn’t be investing here. There are so many segments of the economy that are competitive within themselves, competitive in the global economy. There are segments that are completely underdeveloped – services, tourism, information technology. They are not oligopolistic and they don’t even lend themselves to that. When and if the moratorium on land sales is eliminated, [that will be] an engine of growth. KP: What’s the greatest source of optimism with the Yanukovych administration? NJ: They like making money. They’re business people. If the markets shut down for Ukraine, it doesn’t help anything, if they can’t attract capital. KP: What went wrong with the
Yushchenko administration, with benefit of hindsight? NJ: I don’t place blame on the Yushchenko administration for everything. Everyone’s expectations were extraordinarily high – mine and everybody else’s. There was going to be disappointment no matter what happened. When the [2008 global] economic crisis hit, the combination of the unfulfilled expectations and the economic crisis hit hard. It hit the middle class almost harder than the bottom. The middle class bought into borrowing money for a car, taking out a mortgage for an apartment. Those were dollardenominated loans and they were making hryvnia. They were working in businesses first hit by the crisis – investment banks, brokerage houses. As hard as it was for the workers in metallurgy who lost their jobs, that segment didn’t have the same financial risks. They had tighter family units and were much more conservative in their spending. I wish that the government, postOrange Revolution, had reached out to young people. Georgia brought in a lot of young people with different ideas,
KP: We are coming up on the 20th year of independence. Are things turning about the way you expected? NJ: No, I wish we were much further along. I am happy about many things. I continue to believe the future is bright. There is a younger generation that has traveled, that has seen, that has experienced, that has a global world view, that has access to information technology, that is open to the world and sees themselves differently in the world. That is really crucial. I wish there were no foreign troops on the soil of the country. I wish that the investment environment was much more liberal, much more open. I wish there were more foreign investors here creating more competition and forcing all of us to step up in our approach to business. KP: So we’re talking about slow change? NJ: This isn’t slow change. These 20 years weren’t slow change. It was dark when I got here in 1992. There were no fresh vegetables in the grocery stories for four months out of the year. There were no jobs for young people. People had no access to money. There’s been a great deal of change. We have had free and fair elections multiple times in this country. KP: I hope we have them again. NJ: I believe we will. I don’t believe the people in this country will stand for anything less. We’ve made great progress. It’s just slower than you want. Kyiv Post chief editor Brian Bonner can be reached at bonner@kyivpost.com
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Gongadze case: ‘A tangled mess’ Reuters – The mystery around the 2000 murder of journalist Georgiy Gongadze has returned to haunt Ukraine’s political power circles – but who has what to gain from it? When former President Leonid Kuchma was charged last week with suspected involvement in the murder, Ukrainians cynically saw a political hand behind the move rather than the slow grind of the wheels of justice. “Why now?,” was the question on everyone’s lips. And the outcome of the case against 72-year-old Kuchma, who was president at the time of the murder, seems likely to perpetuate the mystery rather than settle it once and for all. Two main issues in particular were still unclear, wrote Mustafa Nayem of Ukrainska Pravda, the online newspaper that Gongadze founded and led. “Who specifically is behind these actions and is there a pre-written scenario for the way the situation is to develop ?”, he wrote. Gongadze, 31, who used TV talk shows and his newspaper to be critical of Kuchma, disappeared in September 2000 in Kyiv. His headless body was found later in woodland. He had been beaten and strangled. The grisly murder, post-Soviet Ukraine’s most notorious crime case,
led to street clashes between protesters and riot police and marked a turning point in Kuchma’s 10-year rule. Three Interior Ministry officers are already in prison for their part in the killing, while a fourth person, former police general Oleksiy Pukach, is awaiting trial. Late last year, the state prosecutor named Yuriy Kravchenko, interior minister at the time, as the one who had instigated and ordered the killing. In 2005, Kravchenko was found dead at home from gunshot wounds which were said to be selfinflicted. But none of this stemmed talk of a wider plot. Gongadze’s family and the opposition maintained that even more powerful figures in the Ukrainian political establishment were involved. Kuchma denies the charge that he gave illegal instructions to interior ministry officials leading to Gongadze’s death.
Sleaze, violence The Gongadze affair harks back to the sleaze and violence of the Kuchma period in which rival factions connived for power by every means – threats, bribery and political blackmail. “The Gongadze affair is an extraordi-
narily tangled mess,” Yulia Mostovaya, editor-in-chief of the authoritative weekly Dzerkalo Tyzhnya, wrote on Saturday. With the independence of the courts open to question, analysts say the case against Kuchma clearly has the backing of President Viktor Yanukovych who may have some old scores to settle with his one-time patron. Yanukovych is under fire from the opposition and the West for eroding press freedoms and backsliding on democracy. “The basic aim is to demonstrate to the West the loyalty of the Ukrainian head of state to values which are significant for the United States and the European Union,” Mostovaya wrote. Analyst Volodymyr Fesenko said the move was aimed at cutting the ground from under Yanukovich’s main rival, ex-prime minister Yulia Tymoshenko. She is being investigated for alleged misuse of state funds, a charge which she says is politically motivated. “Yanukovych wants to show that ‘selective justice’ does not exist in Ukraine,” said Fesenko.
Old Scores Though he served as Kuchma’s prime minister from 2002-2004, commentators say the 60-year-old Yanukovich has
little reason to protect Kuchma – and good reason to revel in his humiliation. Some say he has never forgiven Kuchma for refusing to break up the “Orange revolution” street protests against his election as president in late 2004. Yanukovich subsequently lost a third round of voting against “Orange revolution” leader Viktor Yushchenko and had to wait five more years before he won the presidency. Kuchma and Yanukovich belong to different political clans with distinct financial backers – Yanukovich being supported by Ukraine’s richest man, steel billionaire Rinat Akhmetov, and Kuchma by wealthy son-in-law, philanthropist Viktor Pinchuk. Some analysts say the case against Kuchma could reflect ‘turf’ rivalry between Ukraine’s powerful oligarchs, with Pinchuk possibly a target as well as Kuchma. No quick outcome to the case appears to be in sight. Analysts and media commentators on Monday speculated that at least one other high-profile political figure could be charged soon in connection with the affair. The state prosecutor said last week that the tapes, which have never been authenticated, would now be accepted as material evidence.
Popov: Stolen property will be returned, serious consequences for those ‘guilty’ Æ2 the name of Chernovetsky, long accused by critics of massive corruption involving many figures close to him. He practically disappeared from the public eye when Popov, took office in June 2010. Chernovetsky’s faction in the council, which approved almost all the decisions Popov was attacking, sat looking pale and worried. The opposition accused Popov of self-promotion. “We were speaking about most of these crimes months and years ago [when the pro-presidential Regions party backing Popov was in a coalition with Chernovetsky,] but there was no reaction from the general prosecutor or anyone else,” said Tetyana Melikhova, head of the oppositionist Yulia Tymoshenko faction.
Æ Opposition says their complaints over deals in prior years were ignored Others demanded Chernovetsky’s resignation and dissolution of the council. “After all those revelations they have no moral authority to rule the city. They have lost whatever trust of Kyivans they had,” said Vitali Klitschko, who heads his eponymous faction. There was no immediate response from Chernovetsky, but he had previously denied any fraud allegations in a post on his website. Experts are skeptical that
Chernovetsky will be dismissed just yet as the pro-presidential Party of Regions does not have a strong candidate who could win early elections in Kyiv. However, the powerful party will most likely have Popov running for mayor in 2012, when Chernovetsky might become a useful fall guy. “Arresting Chernovetsky on accusations of fraud could be a good PR stunt ahead of mayoral elections,” said political analyst Volodymyr Fesenko. “Or they might issue a warrant and let
him flee abroad.” Prosecutors claim an investigation is in progress and some court cases have already resulted in land being returned to the city. However, prosecutors declined to comment whether cases against top city officials had been opened. Popov said he is trying to get back stolen municipal property and promised consequences “for those guilty.” “They have become billionaires. It is important not to punish just scapegoats but people who managed those massive frauds. Just give us some more time to have everything in order and investigated,” Popov promised. Kyiv Post staff writer Svitlana Tuchynska can be reached at tuchynska@kyivpost.com
Kuzio: US was wrong about Yanukovych’s national aims Æ5 president’s bodyguards and the media-analytical section of the presidential administration.
Real Yanukovych U.S. cables from 2005-06 were more critical of the Party of Regions, but in 2008-10 two factors changed. First, public-relations efforts by U.S. consultants persuaded many in the West, including the U.S. Embassy, that Yanukovych had changed. This ignored his unwillingness to concede the election fraud of 2004 and his continued contention that he won that election. A December 2005 cable quotes Yanukovych as complaining that a “putsch” and “Kuchma’s machinations” had denied him the presidency. One cable analyzed the Party of Regions’ “heavily pro-Russian campaign rhetoric” in 2006, attributing this to its co-option of Communist voters. A second factor that changed the tone in the U.S. cables by 2008 was Western fatigue with the feuding Orange political leaders, Yushchenko and Tymoshenko. The pair had squandered the five years of opportunity given to them by the Orange Revolution. All four elections held on Yanukovych’s watch -- two as governor in Donetsk in 1999 and 2002 and two as prime minister and president in 2004 and 2010 -- have been criticized as unfree. U.S. cables from 2005-06 showed that senior members of the Kuchma government who were involved in abuse of office and election fraud were embedded in the Party of Regions, which is described as a “cover for Donetsk criminal circles and oligarchs.” These cables continued to be skeptical about the new face of the Party of Regions and express concern it would abuse state administrative resources, tamper with election laws and seek to close media outlets they do not control. This is precisely what Yanukovych has done in his first year in office. Taras Kuzio is an Austrian Marshall Plan Foundation visiting fellow at the Center for Trans-Atlantic Relations, School of Advanced International Studies, Johns Hopkins University. This opinion originally was published by Radio Free Europe/Radio Liberty and can be found here: http://www.rferl.org/content/commentary_us_was_wrong_on_ukraine_ yanukovych/3542980.html
Jailed Palestinian professes innocence; Israel suspects him of Hamas ties JERUSALEM (AP) — A Palestinian engineer who vanished on a Ukrainian train and mysteriously turned up in an Israeli prison made his first public comments Thursday, accusing the Jewish state of kidnapping him “for no reason” and saying he had no information about an Israeli soldier held captive in the Gaza Strip. Dirar Abu Sisi spoke as he entered an Israeli court in the central city of Petach Tikva for a brief hearing that extended his arrest until next Tuesday. His lawyer said authorities informed her that he will be indicted on unspecified charges next week. Abu Sisi’s case has been clouded in secrecy because of an Israeli gag order barring publication of most details. He disappeared in the early hours of Feb. 19 after boarding a train in the Ukrainian city of Kharkiv. His family
has accused Israel’s Mossad spy agency of abducting him. As he entered the courtroom, Abu Sisi, 42, told reporters he was just a power plant engineer in Gaza and that “Israel kidnapped me for no reason.” He also said he knew nothing about Sgt. Gilad Schalit, an Israeli soldier captured in Gaza in June 2006 by Hamas-linked militants. Germany’s Der Spiegel magazine speculated this week that Israel might have seized Abu Sisi to try to wrest information about the fate of the soldier. Militants have allowed no access to Schalit since his capture, releasing only a brief videotaped statement from him in October 2009. Abu Sisi’s Israeli lawyer, Smadar BenNatan, said Thursday that authorities informed her he will be indicted next week but gave no details on the charges.
On Wednesday, Israeli Prime Minister Benjamin Netanyahu spoke about the case for the first time, saying that Abu Sisi belongs to Hamas, the violently anti-Israel group that rules Gaza. He said Abu Sisi relayed important information but did not elaborate. Ben-Natan denies Abu Sisi is a Hamas loyalist and his Ukrainian wife alleges Israeli agents kidnapped him to sabotage a key power plant in Gaza where he worked. She has said he was in Ukraine to apply for citizenship. Fellow engineers and neighbors told The Associated Press that Abu Sisi was a Hamas supporter, based on his senior position at the Hamas-controlled power plant. He surfaced in an Israeli prison days after he disappeared in Ukraine. Israel confirmed it was holding him only a month after his disappearance.
The Gaza-based Palestinian Center for Human Rights, which sent one of its lawyers to visit Abu Sisi in jail, said he reported that he was dragged out of his sleeper car, hooded and handcuffed by Israeli agents and forced on a plane bound for Israel. On Thursday, the Palestinian ambassador to Ukraine, Mohammed Alassad, accused Israel of “piracy” in the Abu Sisi case, calling it “an international crime that must be punished.” Speaking through a translator in Kiev, Alassad said Palestinian authorities were still waiting to hear from the Ukrainian government how Dirar Abu Sisi ended up in Israel. The Ukrainian government has said it was not involved in the operation and was waiting for an official Israeli explanation.
Dirar Abu Sisi
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Assaults revive fears of racially motivated crime BY K AT YA G R U S H E N KO GRUSHENKO@KYIVPOST.COM
A group of seven Ukrainian youths attacked two foreigners, a Pakistani and an Indian, about 9 p.m. on March 24 in the heart of Kyiv near the National Tchaikovsky Conservatory. The group didn’t attempt to steal money or other valuables, giving rise to fears that the attack by the white youths was racially motivated. The incident highlights the nation’s ongoing problems with racial discrimination and racially motivated violence, much of which goes unreported because of official indifference. According to an eyewitness, police stood within 50 meters of the incident, but did not rush to respond to shouts for help. Assailants broke the nose of Pakistani Salman Ahmed, who came to Kyiv the day before for an ecology conference, and beat Indian steel businessman Zubair Chogle. The foreigners were released from a hospital on March 28. Ahmed and Chogle were a couple of meters behind their friends when they were attacked from behind. Ahmed said that he fainted after being hit and regained consciousness in a pool of his blood. “They didn’t demand anything from
us. They didn’t say anything. They were just beating us,” recalled Ahmed. “I’ve no other explanation to it, but they attacked us because we had different skin color,” he added. The victims were not able to identify their assailants. “It was dark when those guys attacked us from behind, I couldn’t see them well,” Chogle said. Shevchenkivsky district police spokeswoman Maryna Makarenko said an internal investigation is under way into whether police nearby responded properly. Racial tolerance among some Ukrainians is exacerbated by police officers and politicians. Statistics on the number of racial crimes are unreliable, since many incidents go unreported or unclassified. Heather McGill, a researcher at Amnesty International, is convinced that such incidents are underreported. “Most of the foreigners are reluctant to tell about the racial attacks. For one, they don’t always have the proper documents to stay in Ukraine and therefore don’t want to deal with the police. Secondly, they don’t think that police would solve the crime,” McGill said. McGill recalled an incident in 2007 when a black student from Zaire was
At right, demonstrators at a 2007 protest against racism and xenophobia in Kyiv. Above, Pakistani Salman Ahmed was hospitalized after being attacked by white youths on March 24. (UNIAN, courtesy)
attacked by a group of Kyiv football fans. A police patrol stopped to examine the student, but refused to help and advised him to stay at home to avoid trouble. “Most [non-white] foreigners stay at home in the evenings and avoid
dangerous places, such as Kontraktova Ploshcha, for example,” McGill said. Farooq Siddiqui, chief operating officer for the ISTIL Group, whose friends were the victims of the attack near the Conservatory, said the situation is disturbing.
“Ukraine isn’t the most attractive country to foreigners, but what will happen if we become notorious for racism also?” Siddiqui asked. Kyiv Post staff writer Katya Grushenko can be reached at grushenko@kyivpost. com
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April 1, 2011
Did Yanukovych order up charges against Kuchma? Æ1 week. They also didn’t rule out upgrading the charges to murder after the investigation is completed. Kuchma has always maintained his innocence. However, the motivation of law enforcers is hotly debated. Questions are also raised about the ability of the courts, prosecutors and police to sort out a case that has been tangled for nearly 11 years by stonewalling, political interference and cover-ups. Some believe that President Viktor Yanukovych must have given prosecutors permission to file the charges, noting widespread suspicions that Prosecutor General Viktor Pshonka is politically subservient. Those suspicions are fueled by Pshonka himself, who – after Yanukovych appointed him to the powerful post last year – described himself as a loyal member of the president’s team. If Yanukovych is, indeed, calling the shots, what ends will he seek? Some speculate that a script has already been written in which the final scene is Kuchma’s exoneration in an attempt to, once and for all, remove the cloud of suspicion that has hung over the 72-year-old former head of state. There is also speculation running the opposite way. According to this line of thinking, Yanukovych wants to punish Kuchma for at least two reasons: for not breaking up the 2004 Orange Revolution that denied Yanukovych the presidency then, and to show the West that nobody – not even an ex-president – is above the law in Ukraine. If, however, Yanukovych is behind a criminal investigation that is genuinely seeking the truth, he could unleash powerful and unpredictable political clashes in the nation that could backfire on him. For example, in charging Kuchma, prosecutors said they would consider audiotapes made by former Kuchma bodyguard Mykola Melnychenko as “material evidence.” On them, Kuchma purportedly orders subordinates to “take care of” Gongadze in the context of a discussion about how to silence the journalist whose articles and comments had irritated high-ranking members of the Kuchma administration. But Yanukovych and many other officials are reportedly also implicated in alleged crimes on the Melnychenko tapes. All deny wrongdoing. The subject of how to silence Gongadze came up more than once on the recordings and allegedly involved other senior officials, including ex-Security Service of Ukraine head Leonid Derkach, current speaker of parliament (and then Kuchma chief of staff) Volodymyr Lytvyn and ex-Interior Minister Yuriy Kravchenko. Kravchenko is purportedly heard on the Melnychenko tapes on July 3, 2000 telling Kuchma “we’re on top of it” in response to the president’s request for an update on the situation. Kravchenko, a close Kuchma ally, died from two gunshot wounds to the head on March 4, 2005, the day he was supposed to give testimony in the case. His subordinate, General Oleksiy Pukach, has been jailed for two years awaiting trial after allegedly confessing to carrying out Gongadze’s murder and reportedly implicating Kuchma and Lytvyn. In 2008, three Pukach subordinates – Mykola Protasov, Oleksandr Popovych and Valeriy Kostenko – were convicted for their roles in Gongadze’s kidnapping and murder. They are serv-
From left, former President Leonid Kravchuk, former President Leonid Kuchma and Verkhovna Rada speaker Volodymyr Lytvyn watch a football match on March 29. (Maks Levin/LB.ua)
Ex-Security Service of Ukraine chief Leonid Derkach
ing prison sentences of at least 12 years. Now, with the charges against Kuchma, former high-ranking officials are being called in for questioning as never before. On March 31, prosecutors questioned Yevhen Marchuk, a former prime minister who served as secretary of the National Security and Defense Council at the time of Gongadze’s murder. Derkach, the former SBU head, was called in for questioning. So was Viktor Medvedchuk, Kuchma’s chief of staff from 2002-2004. While 55 Ukrainian experts recently polled by think tank Democratic Initiatives believe that justice isn’t the motive behind the case against Kuchma, prosecutors also have to contend with the lapse of time. “Memories fade, witness testimonies change or become biased after reading news reports about cases,” said Bohdan Futey, a U.S. federal judge, about the perils of re-opening cases after a long period of time. The case has been repeatedly undermined by political interference, misleading and often false statements by previous general prosecutors and investigators and a lack of political will. One of the more ludicrous episodes, documented in a 2001 report to the Council of Europe, involved prosecutors’ attempts to pin the Gongadze murder on “Cyclops” and “Sailor,” two mysterious organized crime figures.
That gave Kuchma and other top officials an opportunity to declare the case solved. Not only did nobody buy the explanation, such a ridiculous claim only fueled suspicions of Kuchma’s involvement. Renewed hope in solving the case may come from the Melnychenko tapes, which could refresh people’s memories. It also could implicate many in the current political establishment for alleged crimes heard on the recordings from 1998 to 2000, including Yanukovych. According to the disputed tapes, the 1999 presidential elections were falsified, the 2001 criminal case against Tymoshenko was political, Kuchma bought votes from the Communist Party in parliament, a Donetsk lawyer was thrown in jail on a fabricated case, and Kuchma and current Prime Minister Mykola Azarov covered up massive embezzlement of state assets. Moreover, harassment of journalists – including TV channel STB – was reputedly orchestrated by top officials. Azarov has always denied wrongdoing. The tapes feature a voice resembling Kuchma’s telling Azarov to order every local tax authorities to pressure the heads of municipal governments to “give votes.” “Tell them – either you go to jail or you provide votes,” Kuchma allegedly said to Azarov, who then ran the tax administration. The former president also allegedly spoke to Interior Minister Yuriy Kravchenko on the same matter and allegedly asked him to mobilize heads of local police departments. The recordings highlight the role of Azarov who, under Kuchma, reputedly abused his position by going after businesses who were not loyal to the administration. Our Ukraine member of parliament Yuriy Hrymchak has asked the general prosecutor to investigate Azarov and Yanukovych. In one alleged conversation with then-Donetsk governor Yanukovych, Kuchma asks him to “deal” with a judge who refused to obey their instructions on a case he was hearing involving lawyer Serhiy Salov. Salov had represented Oleksandr
Moroz, the Socialist Party leader who put up a respectable challenge to Kuchma in the 1999 presidential election. Salov was given a five-year prison sentence. Kuchma allegedly was heard telling Yanukovych “you should take this judge, and hang him by the balls, let him hang for one night.” Yanukovych reputedly replies: “I understand. We will look into it.” Speaking of judges in general, Yanukovych supposedly tells Kuchma: “They are scum. The court’s chairman is not reliable. It is necessary to replace him.” On 23 March, Salov demanded that his case be added to the Gongadze murder trial. “Probably without even realizing it, the people in power let the genie out of the bottle by acknowledging the recordings as evidence,” Salov told Donetsk newspaper Komentarii. Yanukovych’s press service refused to discuss the authenticity of this conversation specifically, saying: “Most important is that justice is met and the cases are solved.” Other figures that reportedly appear on the tapes include ex-Prosecutor
Æ How will Gongadze case end? Will people trust result? General Mykhailo Potebenko, who allegedly played a role in helping to cover up Kuchma’s connection to Gongadze. According to one alleged recording, former SBU chief Derkach told Kuchma that Azarov was abusing his position as tax chief for personal enrichment. Other tapes also allegedly feature Kuchma and Azarov talking about fomer state gas monopoly chief Ihor Bakay stealing large amounts of money. Bakay could not be reached for comment.
“I told him [Bakay] – ‘Ihor, you have placed in your pocket at least $100 million. I give you two weeks, a month at most…Destroy all these documents… You did everything stupid and foolishly,’ Azarov allegedly tells Kuchma. Another alleged conversation involves Yanukovych complaining to Kuchma that payoffs to Communist Party members aren’t working out. “We burned our fingers several times. We were fooled by the communists. They take money and then do everything vice versa. Can you imagine that?” he allegedly complains to Kuchma. Another case involves immense pressure on the STB television channel that, according to the recordings, was orchestrated by Kuchma. The former head of STB and now manager of TVi channel, Mykola Kniazhytsky, said he is considering suing Kuchma if tapes are used as evidence in Gongadze case. “There was immense pressure on us [during Kuchma times] with assassination attempts, office bugging and robbing of my cabinet. Because of death threats, I had to live in [member of parliament] Roman Zvarych’s apartment to protect my life,” said Kniazhytsky. In an alleged conversation on the recordings, Kuchma also reputedly said STB president Oleksandr Sivkovych had to be “destroyed, without a doubt.” Most experts, however, agree the recordings are unlikely to be used as evidence in court. “First of all they were obtained illegally and thus, according to the law, cannot be used as evidence,” said Oleh Musiyenko, Pukach’s former lawyer. Myroslava Gongadze`s lawyer Valentyna Telychenko said the recordings were never legalized. “To have tapes legalized the general prosecutor would have to open case against Melnychenko, investigate the tapes and question Melnychenko. Then the case should have headed to court and a decision should have been made to justify or not justify Melnychenko`s actions. If Melnychenko is justified, this would legalize his tapes,” Telychenko said. Telychenko said the court is most likely to dismiss tapes as evidence, leaving only Pukach`s testimony as the sole evidence implicating Kuchma, not enough to prove his guilt, she said. Criminal defense lawyer Ihor Cherezov disagrees. Cherezov said a case can be built based on Melnychenko’s testimony. Investigators can also offer immunity from prosecution to other key witnesses in exchange for their testimony. Some Party of Regions members say Kuchma will be convicted. Some experts think that charging Kuchma with a crime involving Gongadze’s murder was a good public relations move and “killed many rabbits with one shot,” as Oleksiy Haran, a political science professor at Kyiv Mohyla Academy put it. “They demonstrated to the West that there is justice in Ukraine, distracted the media and general public from the current economic crisis, surprised some Ukrainian voters and put pressure on Victor Pinchuk [Kuchma’s billionaire son-in-law],” Haran said. “And all that by just opening a case against Kuchma.” Kyiv Post staff writers Svitlana Tuchynska and Mark Rachkevych can be reached at tuchynska@kyivpost.com and rachkevych@kyivpost.com.
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News 13
April 1, 2011
Once jailed for four months, Kolesnikov is back on top Æ1
Kolesnikov and Akhmetov supported Yanukovych’s candidacy in the fraudulent 2004 presidential elections, overturned by the Orange Revolution that vaulted ex-President Viktor Yushchenko to power. Kolesnikov, then chairman of the Donetsk Oblast legislature, spent four months in pre-trial detention on suspicion of abuse of office, extortion and making a death threat. He was released in August 2005, after law enforcement cited a lack of evidence against him. Kolesnikov suffered a heart attack late in January and recently underwent surgery. The Kyiv Post spoke with him on March 23, just a week after he was released from a hospital. He bluntly defended the muchcriticized preparations for Euro 2012, arguing that he is making right what the previous government of ex-Prime Minister Yulia Tymoshenko got wrong. The defense extended to the government’s use of non-competitive bids for lucrative orders for much of the $20 billion in taxpayer-funded projects needed to prepare for the tournament. Critics have derided the practice as tantamount to theft. Here are excerpts:
earn the right to host the 2022 Winter Olympics, then the opening and closing ceremonies will take place in the Lviv stadium. Now about the Olympic Stadium in Kyiv. I’ve already said that this was a tragic mistake to reconstruct the old stadium at this (central) location. However…besides the second tier concrete placed in 1968…nothing is left of the old stadium. Everything else including the circuit system and other infrastructure around the stadium is all brand new. We are putting in the best Western technologies, from optical windows, the sewage, as well as a new electrical system from Siemens, all of which will have enough power that the city could use it to service new business or residential buildings in the area.
Kyiv Post: Many people are criticizing the way the preparations for Euro 2012 have been held. Borys Kolesnikov: There’s an appropriate Russian proverb: “The greedy person pays twice.” We must take all these Soviet normative acts and toss them onto the street. We need to usher in new technologies. Currently our president and the appropriate ministry are working on a new concept of controlling the governance of the construction of roads in the nation. One outcome of this is that (state-owned and operated) Ukravtodor won’t be in charge of designing roadwork in the country. We’re going to work with foreign road experts, experts who can’t be bought, to whom one can’t give bribes and who can deliver on controlling the quality of roads in Ukraine. All the roads on which we’re working on now had to, sooner or later, be worked on. Roads always need to be maintained and the same goes for roads in Europe. But roads in Europe are built with better quality and nobody even thinks of stealing building materials there. If you’ve seen how roads are built in Spain or Germany, they use special materials to build the flattest of roads. I could provide if not 1,000, then 100 more detailed examples of how much better roads get built in Europe. Look, regarding the stadiums. In Lviv, this is the most modern project and it’s a brand new stadium. It will serve two Lviv soccer clubs for a very long time. In addition, we built such an infrastructure network next to the stadium that you could build another city there. And should, God willing, we
ÆDeputy prime minister from Donetsk Oblast is close to nation's richest man, Rinat Akhmetov
KP: But some critics say you’re building stuff that has nothing in common with soccer under the Euro 2012 umbrella… BK: For example…? KP: The helipad project in Kaniv… BK: This project isn’t really connected to Euro 2012.
KP: But stuff is being built there using single bidders. BK: Listen…just listen. Until this project, the previous government held bids, and also didn’t hold bids, and did stuff illegally because it did not have the legal foundation. What was the outcome of these bids? Where is the tender mafia that was headed by Anton Yatsenko? [Editor’s note: A former member of ex-prime minister Yulia Tymoshenko’s faction in parliament, Yatsenko joined the pro-presidential Regions faction in March]. Holding tenders in Ukraine doesn’t ensure that everything will be fair. KP: It at least increases chances of fairness. BK: Zero. No guarantees. Things even get worse because of tenders [in Ukraine]. Do you know what a single-bidding procedure is? Do you understand what this means at all? It’s a five-day tender. That is, you send an electronic proposal and then you can bid. An ordinary bidding process takes 45 days. Then you’ve court appeals by those who lost, which is an endless procedure. To hold bids successfully you need robust domestic competition among
bidders. That is, you need at least 10-15 construction companies submitting bids. The same goes for road builders in a competitive atmosphere. You need influential and strong professional associations like they have in the U.S. and which are more powerful than the government. Only then will you have a tender system. Theoretically, tenders get you a competitive price. Nevertheless, with or without a tender, the cost of construction also depends on the government’s expert assessment of projects. Let me give you another example: project design for the Donbas Arena [built by Akhmetov for his Shakhtar Donetsk soccer team]. Tenders were used. The initial price tag was $250 million. Everything was finalized and then signed. The final price was $420 million. Now regarding the Kaniv tourist infrastructure project, where the helicopter pad is being built. This is where Taras Shevchenko’s monument is. A helipad isn’t the only thing there. It even isn’t a helipad. This is actually an airport with 10 parking spots which will take in commercial flights from Boryspil International Airport. But this is the smallest project there.
Deputy Prime Minister Borys Kolesnikov is in charge of getting the nation ready to host Euro 2012 soccer championships, at a cost to taxpayers of $20 billion. (UNIAN)
be taken. We’ll have a new director at Boryspil airport and also new leadership at the internal ministry there. This is the subjective part. The objective part relates to what you see in many large cities around the world. Right now, you cannot drive into the arrivals area of Terminal D if you don’t have a special computer chip from the taxi service that won a tender in Boryspil. So we’re working on this problem on the organizational and technical side. We’ll have surveillance cameras installed which will monitor those who rudely approach passengers arriving. KP: Will there be special buses operating in Boryspil to transport passengers to Kyiv? BK: Absolutely, there’ll be specific buses, up to 50-70 taking passengers to Kyiv’s city center.
KP: Will the fast tram connecting Kyiv and Boryspil airport be built before Euro 2012? BK: No one promised to build it before that and it wasn’t a UEFA [Union of European Football Associations] requirement. But it’s physically impossible to build this connection before Euro 2012. Second, there will be a fast train linking Kyiv’s train station with terminal D in Boryspil.
KP: There is a huge problem regarding access to information (about Euro 2012)… BK: Yes there is a big problem. Not only with Euro 2012. But I don’t foresee any problems. Everyone authorized to work on Euro 2012 is accessible to the public. But there are some (journalists) out there who are dishonest, who manipulate facts and switch things around and say that prices in Poland aren’t rising but here they are. The National Stadium in Warsaw will seat 20,000 fewer people than the Olympic Stadium yet it costs much more to build at $635 million. Poland, unlike Ukraine, first designed projects, assessed their value back in 2008 and started the process right. But Ukraine first started to build then started project design. I looked at the figures the previous government provided us from June 2009. They had the Olympic Stadium costing Hr 3 billion to build. I asked for documentation backing all the previous government’s figures. There wasn’t any.
KP: So how do you plan to counter what many call the “taxi racket” in Boryspil that charge sky high prices for a trip to Kyiv? They are the first people tourists encounter after going through immigration and customs at the airport. BK: First off, the police don’t do anything to protect passengers from these private taxis. But action needs to
KP: I understand Poland first did assessments, and with roads. They shortened the distances of road projects in order to involve more bidders. Bids came from China, Korea, Western Europe as well as from Polish firms. And within two years they managed to cut the price of one kilometer of road by 30 percent. BK: [Handing over a bar graph made
We’ll have a brand new boat docking and bus station housed in one building so that it’ll be convenient for passengers. By next year, tourists will be able to visit Kaniv regularly on passenger boats. We also will allow all school children to have free excursions to Kaniv at least on these boats.
by Ukravtodor comparing the average price of building major roads between different countries showing that roadwork in Poland is more expensive.] First, Ukraine isn’t building that many roads specifically for Euro 2012. Secondly, they started back in 2007 and 2008 when you could’ve invited bids from around the world and we could’ve done the same which should end with us winning the right to host the 2022 Winter Olympics. Tenders take 45 days then you have the possibility of court challenges that will last 60 additional days. Right now we’re not doing normal work. We’re a fire brigade putting out fires. When speaking of Lviv (Ukraine was on the verge of losing it as host city because of inaction of stadium construction), it would’ve been an embarrassment in front of the whole world. KP: Do you call yourself a crisis manager? BK: No, I don’t refer to myself that way. I’d like to say that I’m growing tired of all this. There is no other way out though. We have to finish the preparations and that’s all. For any large event, one must start preparing five years ahead of time. Plus all the legislative hurdles, we need to simplify doing business in Ukraine to compete globally. Tenders won’t bring in bids. Everyone will be bought. The price tag for every tender which is officially held cost millions of dollars in bribes and kickbacks. Therefore, without competition no salary is high enough to hold a quality tender procedure. Plus the tax system allows for converting things into money which only fuels corruption, not prevents it. KP: I have to ask this: Are you a shareholder of any offshore companies that have received jobs for Euro 2012? BK: I not only do not have shares in offshore companies that receive Euro 2012 orders but also Ukrainian ones. I’m not interested in this business field. I’m more interested in the food processing industry. I believe that any foreign investor working in the food industry in Ukraine will achieve success. Kyiv Post staff writer Mark Rachkevych can be reached at rachkevych@kyivpost. com
14 News
Melnychenko: Tapes reveal massive theft from nation Æ1 Melnychenko told the Kyiv Post on March 28. On March 31, one sign emerged that prosecutors were doing just that. Melnychenko left the prosecutor’s office and told journalists that investigators questioned him for the first time on alleged crimes caught on tape other than the Gongadze murder. Melnychenko created an international sensation after releasing excerpts of the taped conversations involving Kuchma meetings from 1998 to 2000, when the former president was at the height of his authoritarian rule. The public release came two months after Gongadze’s muder on Sept.16, 2000. Besides the Gongadze kidnapping, the tapes allegedly implicate Kuchma and other top officials in other cases of crime and corruption, including the rigging of the 1999 presidential election, blackmail and what Melnychenko calls the theft of “billions of dollars in state property.” Many of the incidents had the ring of truth to those who heard the tapes or who knew how deeply infested with corruption Ukraine was back then. Kuchma left office in 2005, replaced by ex-President Viktor Yushchenko, who lost his re-election bid in 2010, leading to Viktor Yanukovych’s election on Feb. 7, 2010. In a country with a functioning and independent judicial system, the Melnychenko tapes may have provided law enforcers with key leads they needed to launch serious criminal investigations. In lawless Ukraine, however, the Melnychenko tapes just became another political football. Under Kuchma, the public’s attention got sidetracked over endless debates about the tapes’ authenticity and who stood behind Melnychenko. All the while, investigations into the events described on the tapes went nowhere throughout Kuchma’s tenure. Critics think it was part of a massive cover-up that included a changing cast of prosecutors, investigators and explanations. While incremental progress in solvFormer police general Oleksiy Pukach has been in jail for nearly two years awaiting trial. He is charged with participating in the kidnapping and murder of journalist Georgiy Gongadze on Sept. 16, 2000.
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April 1, 2011
ing the Gongadze murder came during Yushchenko’s five-year term, the tapes and the investigation reignited on March 24 after prosecutors charged Kuchma in the case. Officially, prosecutors accused Kuchma of “exceeding authority, which led to the death of Gongadze.” But prosecutors also didn’t rule out murder charges after the investigation is completed. Prosecutors also said, for the first time, the tapes will be used as “material evidence” in the Kuchma investigation. It is still to be seen whether the development will trigger other investigations against current and former top officials, including Yanukovych, who then governed the nation’s most populous oblast in Donetsk. Reports suggest that Yanukovych is implicated on the tapes in agreeing to Kuchma’s demands to remove a judge whose rulings could not be controlled. In an interview, Melnychenko said that Yanukovych, former National Security Council head Yevhen Marchuk, former Presidential Administration chief of staff Viktor Medvedchuk and former Prime Minister Yulia Tymoshenko are all on the tapes. “In the conversations some of them had, there are signs of criminal wrongdoing,” Melnychenko said. The former bodyguard urged Ukrainian investigators to authenticate the rest of his recordings and to probe crimes documented in them. So far, according to Melnychenko, Ukrainian prosecutors have authenticated only less than an hour of recordings that deal directly with the Gongadze case. The general prosecutor’s office declined to comment on the tapes, citing the restarted investigation. Melnychenko said the portion of recordings accepted by prosecutors as material evidence in the Gongadze case are the ones where voices resembling Kuchma and other top officials are heard discussing how to silence Gongadze. One voice resembles current parliament speaker Volodymyr Lytvyn, who was chief of staff to Kuchma in
2000. Lytvyn, like Kuchma, has always denied any wrongdoing. In the interview, Melnychenko – who spent the last few years of Kuchma’s rule hiding abroad – praised Yanukovych for finally making headway in the Gongadze case. “I think he is a patriot,” Melnychenko said. But Melnychenko also sent a sharp warning to Yanukovych. “If Yanukovych fails to bring this case to a logical conclusion, then he will be exposed as a con,” he said. Kuchma has long said Melnychenko could have been working for foreign intelligence agencies. The former presidential bodyguard himself has damaged his credibility over the years with varying accounts of his actions. Melnychenko admits that, before Gongadze’s death, he gave copies of some recordings to top officials in the hopes of gaining support for an investigation of Kuchma that would lead to his impeachment as president. This prospect, if true, leaves open the prospect that Kuchma could have been framed. Melnychenko repeated past claims that he alone masterminded and physically conducted the secret recordings of Kuchma’s office. But not all are convinced that Melnychenko acted alone. “The Melnychenko recordings are crucial to understanding what happened, but Melnychenko has never given investigators any proof that he himself made them,” said Valentyna Telychenko, a lawyer representing Gongadze’s widow. Some also claim that proving authenticity of the recordings in court will be challenging, which would force investigators to rely on other evidence. Even disregarding the tapes, the evidence pointing to possible involvement by Kuchma is considered compelling by many people. Weeks before his death, Gongadze complained that police were tailing him. Three officers are serving prison sentences for their role in kidnapping and killing Gongadze. A fourth, former police General Oleksiy Pukach, has been in jail for nearly two years awaiting trial. He allegedly confessed and reportedly gave testimony implicating Kuchma and Lytvyn, although prosecutors have not discussed that evidence publicly. Moreover, the interior minister at the time, Yuriy Kravchenko, was a close confidante of Kuchma. Kravchenko died mysteriously of two gunshot wounds to the head on March 4, 2005, the day he was supposed to give testimony in the Gongadze case. Officials say he left a note claiming to be the victim of Kuchma intrigues. Here are some excerpts of the Kyiv Post interview with Melnychenko: KP: What portion of your recordings have been tested and authenticated?
Generals hold a portrait of former Interior Minister Yuriy Kravchenko at his funeral in Kyiv on March 7, 2005. (UNIAN)
Ex-Defense Minister Yevhen Marchuk (L) and former chief of staff for ex-President Leonid Kuchma, Viktor Medvedchuk, in Kyiv on June 25, 2003. (UNIAN)
MM: “I gave about 20-30 hours of my recordings to be tested. Of this, experts studied no more than one hour: precisely the phrases which relate to the illegal orders of Kuchma in reference to Gongadze. I hope that after this, prosecutors will have the courage to investigate other episodes which are documented on the recordings. Foremost, we are talking about financial machinations from the side of high level state officials, Kuchma’s family and others. And special attention should be given to return to the state these tens of billions of dollars which Ukraine’s leaders have stolen in bandit style.” KP: Which individuals do you have in mind, specifically? MM: Foremost [Kuchma’s son-in-law, billionaire Victor] Pinchuk. (Pinchuk, contacted by the Kyiv Post, refused comment.) KP: Do you have examples of assets figuring in the recordings, which could have been criminally taken due to his or Kuchma’s actions? What was stolen? MM: Take for example ICTV television channel. KP: What about Nikopol Ferroalloy Plant? Is it mentioned in the recordings? MM: As well. There is proof. Also Mykolayiv Alumina Plant and Sumykhimprom chemical plant. KP: But Sumykhimprom is still state-owned. MM: There was an attempt. Had the tapes not been revealed, it would have been in Kuchma’s ownership. KP: Who do you consider to be
the murderer of Gongadze? MM: I would advise Leonid Danylovych [Kuchma] not to take upon himself the sins of others. I am completely convinced that had Leonid Danylovych came to the prosecutors in connection with this case, gave testimony about who directed his focus on Gongadze, who brought him his articles, if he showed at least half of the wealth of his many billions which he illegally owns, and returned it to the state, that many people would forgive him. It is my personal conviction that Volodymyr Lytvyn was preparing a change in power in Ukraine, that behind the killing stood the head of the Presidential Administration back then, Volodymyr Lytvyn. I am convinced that he did this. KP: Why do you think prosecutors are not calling him in for questioning now? MM: I think it’s only a matter of time. KP: Perhaps everyone implicated on the tapes for committing crimes should step down from politics? MM: With the help of the recordings, we can illustrate what is happening today in Ukraine. Yanukovych and the oligarchs who helped him come to power and stole from Ukraine, are sitting high atop a tree above the people. Yanukovych and the oligarchs are sitting on a branch. Yanukovych is sawing at this branch. The people are below watching. I believe Yanukovych is a patriot at heart. And if the people see what he is doing, they will catch him as he falls, they won’t let him fall into hell with the oligarchs.”
Lifestyle
One of Ukraine’s bestknown landmarks, Kyiv Pechersk Lavra, may evict some of its museums.
Æ18
April 1, 2011
Play | Food | Entertainment | Sports | Culture | Music | Movies | Art | Community Events
West takes notice of Kyiv playwright
Playwright Natalia Vorozhbit wins London audiences with contemporary stories from Ukraine. (Joseph Sywenkyj)
BY N ATA L I A A . F E D US C HAK FEDUSCHAK@KYIVPOST.COM
Ukrainian playwright Natalia Vorozhbit is the face of a new international theatrical revolution. Several years ago, Royal Shakespeare Company in London approached Vorozhbit to write a play. A native of Kyiv, she was working in Moscow then. Still a young playwright – only in her 30s – Vorozhbit had wanted to explore the Holodomor, the 1932-1933 Stalininstigated famine that killed millions of Ukrainians, based on the stories she had heard from her grandmother. The result was the play called “The Grain Store� – a sometimes humorous
and deeply dramatic struggle of how Soviet collectivization took away one Ukrainian community’s land, religion and independence. Thirsting for new ideas, Western theaters in recent years have been looking east to young playwrights like Vorozhbit for inspiration. Another theater, the London-based Royal Court, has also commissioned two plays from Vorozhbit. While Western theater and neighboring Russia are willing to experiment with new voices, Vorozhbit doesn’t foresee the same thing happening in Ukraine soon. Ukrainian theater has been stuck in a tradition of dramatic musical produc-
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tions that date back to the Soviet days. Much of today’s repertoire, whether it is Ivan Kotlyarevsky’s “Natalka Poltavka� or “Zaporozhets za Dunayem,� harks back to that era. Cultural and economic limitations imposed on Ukraine’s theatrical community mean audiences are left seeing the same plays again and again. Vorozhbit grabs her audience with contemporary issues. Her play “The Khomenko Family Chronicles� is the story of two parents who tell their bedridden son how they met and incorporates the story of Chornobyl and New York’s Twin Towers. It was performed at the Royal Court in 2007. The other, which Vorozhbit is cur-
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rently writing, will involve a plane, a London hotel and musings by a heroine. The deadline is approaching fast, she said. Ukraine cries out for more contemporary voices. “Society needs to be aroused,â€? Oleh Stephan, an actor with Lviv’s renowned Les Kurbas Theatre said. But many theatre directors “don’t want to break that tradition.â€? Western audiences apparently also lack new talent. They love the new shows, said Elyse Dodgson, the head of the international department at the Royal Court Theatre. Appearing recently at Kyiv’s “Yeâ€? bookstore, which sponsored a presentation with Dodgson and Æ19
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NATALIYA HORBAN HORBAN@KYIVPOST.COM
For many people, April Fools’ Day comes 365 times a year Before you trick someone on April 1st, think how you fool yourself daily. Getting to know your true self could be a bit more embarrassing than facing your reflection in the mirror after a late night party. We like to think we are rational people. But often we don’t even know when we are pulling our own leg. Psychologists say that illusions help us stay sane. Let’s examine a few popular mental tricks that victimize and re-victimize many of us: You think you remember precisely the times when you were ignorant or wrong. In reality, once you learn something new you tend to regard this knowledge as self-evident. When was the last time you said things like “I saw this comingâ€? or “I knew itâ€?? Probably you didn’t see anything coming, but pulled out what psychologists call a hindsight bias, or an “I-knew-itall-alongâ€? phenomenon. One study in 1991 by American scientists Martin Bolt and John Brink asked college students to predict how the U.S. Senate would vote on one nomination. Before the vote, 58 percent of the participants predicted the vote correctly. But when the students were polled again – after the results were announced – 78 percent of them said they knew it all along. You think you take equal credit for your ups and downs. In reality, you often attribute your successes to your personal qualities and excuse your failures with unfavorable circumstances. If students scored high on a test, they attribute their success to intelligence, hard work or perseverance. If they performed poorly, they would explain it by bad luck, a tough test or little timing. The phenomenon was called a selfserving bias. Even if you do admit that you screwed up, you may still think of yourself as pretty awesome -- at least better than average, right? This effect is called “illusionary superiority,â€? a tendency of people to overestimate their positive qualities. A University of Nebraska survey revealed that 68 percent in their faculty rated themselves in the top 25 percent for teaching ability, while at Stanford University 87 percent of the master’s in business administration students rated their academic performance better than average – both results are clearly mathematically impossible. You think you do everything you can to succeed. In reality, Æ21
www.kyivpost.com
April 1, 2011
Saturday - Sunday, April 2-3
(spokesman.com)
Thursday, Apr. 7
(Kyiv Post)
16 Entertainment Guide
Jazz duo Chick Corea and Gary Burton
(southwestern.edu)
With Paris already swinging in warm 20C, Kyiv is trying to catch up with the help of French Spring festival. In its eighth year, the event will present the selection of best French movies, art, literature and music in about a dozen cities across Ukraine. This week’s highlights for Kyiv include: Apr. 2 – 6, watch films featuring prominent French actress Isabelle Huppert. In “Special relationship” she plays a prostitute and in “Capacabana,” she’s obsessed with a Brazilian marketing agent. Huppert turns into a young bourgeois in “Loulou” and an aristocrat in “Madame Bovary,” but in “La ceremonie” you’ll see her as a crazy post office worker. All films will be shown in French with Ukrainian subtitles in cinema “Kyiv”, 19 Velyka Vasylkivska St., 234-7381. Tickets: Hr 50. For the full schedule, see page 16. In addition, “Kyiv” will host a photo exhibition “Isabelle Huppert. Woman in portraits” featuring some 100 pictures taken during her 30 years onscreen. Free admission. Apr. 5, French modern circus “Les Krilati” will put on a play “The Roots,” examining philosophical notions of transitions and choices in our daily lives, based on ideas of Nietzsche, Rilke and Satre. The play is not entirely sad, as you may have thought, as the characters manage to find joy in small things, despite their tough life circumstances. Theater on Lypky, 15/17 Lypska St., 253-6219. Tickets: Hr 30-50. The full schedule of events: www.ifu.com.ua
Fashion swap party Perhaps everyone has something unwanted in their wardrobe they bought on a whim. Fashion addicts came up with a fun way of getting rid of some of their clothes by swapping them. Invented in England and highly popular in Europe, dress-crossing parties have finally arrived in Ukraine. To participate take at least two pieces of clothing in fair condition, swap them for a coupon, which you’ll then use to buy another garment. Regular items cost Hr 50 and designer pieces go for Hr 100.The party is only for springsummer fashion, so leave your knitted scarves at home. For your children, there’s a special baby dress-crossing section. If you don’t want to swap, leave your clothes for charity – organizers promise to deliver them to orphanages. Saturday - Sunday, April 2-3, 15-A Lukashevicha St., 2nd floor of Europort Mall, metro Vokzalna, 10 a.m. - 8 p.m. Entrance fee: Hr 50.
Tuesday, Apr. 5
(www.alessandrosafina.ru)
French Spring festival
(kinopoisk.ru)
Legendary American jazzmen Chick Corea and Gary Burton have been altering and moving the jazz forward world for some four decades. Corea, 70, is a virtuoso jazz pianist. A member of the Miles Davis band in the ‘60s, he can be regarded as one of the pioneers of the electric jazz fusion movement. Through his career, he was nominated for 51 Grammy Award, 15 of which he won. Burton, 68, is also a Grammy-winning jazzman and probably one of the best known vibraphonists in the world, a percussion instrument similar to the marimba. These two musicians have long stopped counting the number of their albums, which has probably exceeded a hundred for both of them. Thursday, Apr. 7, 7 p.m., Palats Ukraina, 103 Velyka Vasylkivska St., 247-2303, www.jazzinkiev.com. Tickets: Hr 70-1500.
Best classical picks Friday, Apr. 1 – Ensemble Ars Amarilli will perform pieces by baroque epoch composers like Bach, Vivaldi and Rameau at 8 p.m., Cultural center Master-Klass, 34 Mazepy St., metro Arsenalna, www.masterklass.org/eng, 594-1063. Tickets: Hr 30. Sunday, Apr. 3 – American professor of guitar music David Asbury will play pieces by Dunne, O’Carolan, Duarte and Dowland at 2 p.m., Budynok aktora, 7 Yaroslaviv Val St., 2352081, www.actorhall.com.ua. Tickets: Hr 30. Tuesday, Apr. 5 – Concert “Four centuries of French music” at 7:30 p.m., the House of Organ Music, 77 Velyka Vasylkivska St., 528-3186, www.organhall.kiev.ua. Tickets: Hr 20-50.
Tuesday, Apr. 5 – Ballet “Swan Lake” by Tchaikovsky at 7 p.m., National Opera, 50 Volodymyrska St., 279-1169, www.opera. com.ua. Tickets: Hr 20-300. Wednesday, Apr. 6 – Concert of jazz band Katya Chilli at 8 p.m., Cultural center Master-Klass, 34 Mazepy St., metro Arsenalna, www.masterklass.org/eng, 594-1063. Tickets: Hr 20.
Compiled by Nataliya Horban and Alexandra Romanovskaya
Musical ‘Smike’ Students from the British International School will stage musical “Smike,” based on Charles Dickens’ novel «Nicholas Nickleby.» The story is about a young and naive gentleman Nicholas Nickleby who starts working at a private school for boys. The school’s director, Mr. Squeers, is a mean and two-faced person who keeps his students in fear. An orphan Smike suffers the most from the director and his family, and Nickleby feels responsible for Smike and other kids. The songs were originally written back in 1973 as a project for Kingston Grammar School in London by British composers Simon May and Roger Holman. The musical was also televised on BBC. Tuesday, Apr. 5, 6 p.m., Budynok vchytelya, 57 Volodymyrska St. Free admission but book your seat in advance: 400-2110.
www.kyivpost.com
April 1, 2011
Movies
Entertainment Guide 17 Live Music Russia band 'Manicure' will perform in Art Club 44 on Apr. 2. (thespot.ru)
When the world is coming to an end, nothing matters but love in 'Happy End' sci-fi. (oblikon.net)
HAPPY END Language: French with Ukrainian subtitles Sci-Fi. France (2009) Directed by Arnaud Larrieu, Jean-Marie Larrieu Starring Mathieu Amalric, Catherine Frot and Karin Viard Announcements on the radio scare the listeners with the news that the apocalypse is close. According to news reports, the bomb was dropped on Tokyo and a rocket hit Paris. But Robinson does not seem to notice a general panic. In the midst of this nightmare he is looking for a girl who became his obsession and a dream. Searching for her he could have died several times, but why should he be afraid of the general collapse if he’s in love? He travels across Europe to embrace her one last time. THE BEST OF ISABELLE HUPPERT French Spring festival highlights the works of actress Isabelle Hupert who has appeared in over 90 film and television productions since 1971. She has won Best Actress twice at the Cannes Film Festival for her performance in “Violette� (1978) and “The Piano Teacher� (2001) with the total amount of 14 films in official competition. The festival combines the very best of her old and latest movies: “Copacabana,� “Special Treatment,� “La Ceremonie,� “Loulou� and “Madame Bovary.� THE ASSASSINATED SUN Language: French with Ukrainian subtitles Drama. France (2003) Directed by Abdelkrim Bahloul Starring Charles Berling, Mehdi Dehbi and Ouassini Embarek French radio producer and poet Jean Senac, who decided to stay in Algeria
(44) 272-3134
after it gained independence from France in 1962, is under police surveillance. His poetic performances across the country attract ordinary citizens, and his program “Poetry on all fronts� becomes very popular with youth. Two students, Hamid and Belkacem, become close friends with Senac and help him in the fight for freedom. In the course of the film, which is based on the true story, Senac will be killed in the summer of 1973 right in his home. Hamid will be accused of his murder. THE SECRET Language: French with Ukrainian subtitles Drama/Romance. France (2000) Directed by Virginie Wagon Starring Anne Coesens, Michel Bompoil and Tony Todd Marie, 35, sells encyclopedias and loves her husband Francois. He wants a second child but she’s doubtful for reasons she cannot understand herself. One day at work she meets an interesting customer. Intrigued at first, Marie gradually starts falling for him. THE EXORCISM OF EMILY ROSE Language: English with English subtitles Crime/Drama/Horror. USA (2005) Directed by Scott Derrickson Starring Laura Linney, Tom Wilkinson and Shohreh Aghdashloo The film is based on real events. In 1976 a young girl dies during a session of exorcism. The priest, who conducted the ceremony, is accused of murder despite the fact that the Catholic Church initiated the session. To clear his name, the priest studies the history of the demon that killed the girl, and tries to prove in court the existence of the paranormal powers and their ability to mess with people’s life.
T
14A Artema Str., square www.restoranchik-fluger.com.ua
SHORTS ATTACK FESTIVAL If you think that love is pain, welcome to the club. Festival “Love is a Catastrophe� presents a selection of short films from all over the world. In surreal and sometimes odd onscreen stories an alien comes to Earth and finds love, while a scuba diver falls for a fish. A grandmother fights for her beloved car. Two people in love survive the end of the world. An Italian aristocrat loses her dear cat in the airport. A woman struggles with jealousy. And someone gets lost in the fields. All shorts are shown in original languages with Ukrainian subtitles. KYIV CINEMA 19 Velyka Vasylkivska St., 234-7301. Happy End: Apr. 1 at 8:50 p.m.; Apr. 3-5 at 9:10 p.m.; Apr. 6 at 9:30 p.m. The Best of Isabelle Hupert: Special Treatment: Apr. 2 at 7:30 p.m. Loulou: Apr. 3 at 7 p.m. La Ceremonie: Apr. 4 at 7 p.m. Copacabana: Apr. 5 at 7 p.m. Madame Bovary: Apr. 6 at 7 p.m. MASTERCLASS CINEMA CLUB 34 Mazepy St., 594-1063. The Secret: Apr. 5 at 7 p.m. The Exorcism of Emily Rose: Apr. 7 at 7 p.m. BUDYNOK KINO 6 Saksaganskogo St., 287-7557 The Assasinated Sun: Apr. 4 at 7 p.m. ZHOVTEN 26 Kostyantynivska St., 205-5951. Shorts Attack! Apr. 1-7
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ART CLUB 44 44B Khreshchatyk St., 279-4137, www.club44.com.ua Concerts traditionally start at 8 – 10 p.m. April 1 Selo i Lyudy, Hr 50 April 2 Manicure (Russia), Hr 70 April 3 Soiuz 44 Jam Session, free admission April 4 Illaria Folk-Rock Band April 5 Spring Jazz Nights: Andriy Arnautov vs. Serhiy Makarov, Hr 50 April 6 Anna Christoffersson & Steve Dobrogoss(Sweden), Hr 40 April 7 Arctic Monkeys & The Killers Cover Party, Hr 40 DOCKER’S ABC 15 Khreshchatyk St., 278-1717, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m. April 1 Chilibombers, Red Rocks, Hr 70 April 2 Tabula Rasa, Karnavalnaya Zhara, Hr 70 April 3 Vostochny Express, free admission April 4 Animals Session, free admission April 5 Tres Deseos Latino Party, Hr 20 April 6 Rockin’ Wolves, Hr 30 April 7 Goodlife, Hr 40 DOCKER PUB 25 Bohatyrska St., metro Heroyiv Dnipra, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m. April 1 April Fools’ Party: Bangladesh Orchestra, Antitela, Hr 70 April 2 Mad Heads XL, Chill Out, Hr 70 April 3 Foxtrot Music Band, free admission April 4 Mojo Jo Jo, free admission April 5 Karnavalnaya Zhara, free admission
April 6 The Magma, free admission April 7 Ruki v Briuki Rockabilly Party, free admission BOCHKA PYVNA ON KHMELNYTSKOHO 4B-1 Khmelnytskoho St, metro Teatralna, 390-6106, www.bochka.com.ua Concerts traditionally start at 9-10 p.m. April 1 G Sound, Beefeaters April 2 Foxtrot Music Band, Lucky Band JAZZ DO IT 76A Velyka Vasylkivska St., 289-56-06, http://jazz-doit.com.ua Concerts traditionally start at 8:30 p.m. April 1 Tatiana AreďŹ yeva April 2 Brazil Duo April 6 Elena Nikolskaya Other live music clubs: GOLDEN GATE IRISH PUB, 15, Zolotovoritska St., 235-5188, http://goldengatepubkiev.com/ TO DUBLIN IRISH PUB, 4 Raisy Okipnoi St., 569-5531, http://www.to-dublin.com. ua/ PIVNA NO.1 ON BASEYNA, 15 Baseyna St., 287-44-34, www.pivna1.com.ua DRAFT 1/2 Khoryva St., metro Kontraktova Ploshcha, 463-7330 KHLIB CLUB 12 Frunze St., www.myspace. com/xlibclub CHESHIRE CAT 9 Sklyarenko St., 428-2717 O’BRIEN’S 17A Mykhaylivska St., 279-1584 DAKOTA 14G Heroyiv Stalinhrada St., 468-7410 U KRUZHKI 12/37 Dekabrystiv St., 5626262.
Compiled by Alexandra Romanovskaya and Svitlana Kolesnykova
18 Lifestyle
www.kyivpost.com
April 1, 2011
A curator looks around the Museum of Ukrainian Folk Decorative Art’s collections, which may soon get evicted from the Kyiv Pechersk Lavra. (Joseph Sywenkyj)
Ukraine’s most famous religious shrine, the Kyiv Pechersk Lavra (top), houses five museums in its vast complex of churches. Some of their collections have no religious meaning so the Church wants them out. (Joseph Sywenkyj)
Pechersk Lavra museums under threat of eviction BY I R I N A S A N D U L SANDUL@KYIVPOST.COM
If you want to catch a glimpse of some of Kyiv’s most prominent art museums at the Kyiv Pechersk Lavra, you may have to hurry. This summer, the Russian Orthodox Church says it’s going to replace them with, among other things, a hotel for well-off pilgrims. The Museums of Ukrainian Folk Decorative Art and the Museum of Theatric, Musical and Cinematographic Art are under threat of eviction from the Lavra complex. They may need to find new locations or, in the worst-case scenario, be forced to close. The church, which will control the Lavra with the Ukrainian government’s blessing, says it is returning the territory to religious use. “What was there on the territory of Lavra first, a monastery or museums?” said Archbishop Pavel from the
Moscow Patriarchate of the Russian Orthodox Church, who heads the monastery. “What do you think? Should we let a cinema and a museum of atheism stay here?” Removing the two museums will allow for construction of a hotel, a residence for Moscow Patriarch Kirill and for monks’ cells. Three other museums, which feature some ecclesiastic collections, including a jewelry museum, will apparently stay open. Workers for the threatened museums say that new premises haven’t been found and worry that the collections might soon be just packed into boxes. Art and theatre critics agree that national state museums with no religious background will be better off outside the Lavra. What they fear is that as soon as the museums leave their present housing, the state authorities will soon forget about them.
“Ten years ago authorities evicted the Museum of Kyiv’s History from the Klovsky Palace that now is the seat of the Supreme Court of Ukraine,” said Kira Petoyeva-Leader, a professor from the theater department at Kyiv’s Karpenko-Karogo National University of Theatre, Cinema and Television. “The moving of the museum ended up with its disappearance.” Here is what you can see while there’s still time:
Museum of Ukrainian Folk Decorative Art If you ignore the usual run-down state of the museum, you’ll enjoy a fascinating and unique collection of authentic folk clothes from the turn of the 19th to 20th centuries. The museum also houses a collection of oil paintings by Ukrainian folk artist Kateryna Bilokur. When Pablo Picasso saw three of her paintings at
an exhibition in Paris, he is reputed to have said: “Such self-taught geniuses are only born once in 1,000 years. If this woman were our compatriot, we would have made the world talk about her.” Of the three paintings presented in Paris, two were stolen while crossing the border. Only one, “Kolkhoz Field,” painted in 1948-1949, is still with the museum’s collection. Another item of great interest is the collection of artist Maria Prymachenko, another famous village folk art painter and a representative of naive art. The museum is open Monday through Friday from 10 a.m. to 6 p.m. Tuesday is a day off. Tickets: Hr 20.
The Museum of Theatric, Musical and Cinematographic Art This museum has been located in the
premises of a former monks’ hospital and has been located on the territory of the Lavra since 1927. A must-see is the authentic puppet show booth that dates back to 1770. Other attention-grabbers are a coffee-maker made in the shape of a steam train and a 19th-century motionpicture projector. For lovers of Ukrainian folk music instruments, there is a hall with old banduras, Ukrainian string instruments, kozobases, bowed and percussive instruments and trembitas, the Ukrainian alpine horns made of wood. Open Monday through Friday from 10 a.m. to 5 p.m., except Tuesday. Tickets: Hr 15.
Kyiv Post staff writer Irina Sandul can be reached at sandul@kyivpost. com
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Lifestyle 19
April 1, 2011
Ukrainian woman makes history as only second female rabbi in Germany BY N ATA L I YA H OR B AN HORBAN@KYIVPOST.COM
Had Alina Treiger been a man, her story would hardly cause a stir. Born in the Ukrainian city of Poltava, she became the second female rabbi in the history of Germany on March 27 and the first one ordained since the end of the World War II. “I have not always wanted to be a rabbi, as it is not common for women,” said Treiger, 32, now the spiritual leader of a 400-member Jewish community in the towns of Oldenburg and Delmenhorst in the north of Germany. “I didn’t know what it would feel like for a woman to be in this profession. [Although there were precedents,] those women’s personalities were so different that it is hard to relate to one example.” Jewish history during World War II is one of the most tragic in human history. Millions of Jews were killed in concentration camps. Before Treiger, there was rabbi Regina Jonas. She was killed in the Auschwitz concentration camp in 1942. The Nazi atrocities threatened to exterminate European Jews, but they failed. Some 119,000 Jewish people live in Germany now. A couple of colleges have been opened recently for those who want to take up religious studies. Abraham Geiger College, which enrolls women, is one of them, and Treiger is their first female graduate. In Ukraine, she grew up in a secular home but “we were always the Treiger family and I was a Jewish kid.” When she turned 12, she started wondering about her roots and decided to study Hebrew and Jewish history. “[At that time] many Jews were rediscovering their roots and traditions and religion was one of the ways for Jewish selfidentification,” said the rabbi. “I happened to be into religion a lot, I loved studying it.” In the 2000s, Treiger and two other students were selected to get rabbinic education. “Since it was progressive Judaism this opportunity was open
Rabbi Alina Treiger sits amongst male colleagues during her ordination in the Pestalozzi strasse Synagogue in Berlin on Nov. 10, 2010. Treiger’s probation period finished on March 27. (AFP)
equally to both boys and girls,” says Treiger. In Ukraine, opinions about Treiger’s appointment vary. David Milman, rabbi’s aide in the Kyiv Choral synagogue, said that Orthodox Jews are indignant. “Let’s say you have a diamond ring. You wouldn’t use it to crack nuts, would you? It is too precious,” explained Milman. “The main career for a woman is her family. We are against women building careers. Not because we look down on them but because we value them very much.” Nevertheless, 22-year old Treiger took her chance to study in Germany on a program from the World Union for Progressive Judaism. “Learning German was the most difficult part,” she recalled. “I spoke Hebrew pretty well by that time.” Now she some-
times stumbles in an attempt to find a Russian word, though most of her community members come from postSoviet countries. Every year she goes back to Poltava to visit her mother. “Right now the older generation learns about the traditions and religion together with the youngsters,” said Treiger, drawing the parallel between situations in Germany and Ukraine. The rabbi considers reviving the Jewish community in Germany her main calling. “I want the younger generation to know what Jewish holidays and upbringing are so they would identify with traditions instead of the atrocities the older generation went through. Some people are still afraid to say they are Jewish. I want the younger generation to have no such fear,” she added.
Though her case is unique for Germany, she doesn’t encounter any resistance from Orthodox Jews there. “The Jewish community is very united in Germany. There are so many ways to practice Judaism. It is not only about wearing a black cap,” said Treiger. President of Independent Council of Jewish Woman, Eleonora Groisman, thinks that Treiger will make a difference. “Our world is changing and women are getting more and more involved,” Groisman said. “A lot of people are ready to hear a word of faith from a woman, as some aspects she understands differently from a man – in a more subtle way.” Kyiv Post staff writer Nataliya Horban can be reached at horban@kyivpost. com
Playwright steps into limelight with ‘Grain Store’ Æ15 herself, Vorozhbit said she was amazed by the depth of research the Shakespeare company undertook – including a trip to Ukraine – to guarantee the Holodomor-themed production had authenticity. “Even down to the clothing and songs,” she said. Vorozhbit can attribute part of her international success to Dodgson, whose ancestors come from Ukraine, and who has traveled the globe in search of new talent. The Royal Court is also producing the play “Pagans,” penned by Anna Yablonskaya, a young playwright who died in Moscow on Jan. 24 when a suicide bomber entered that city’s Domodedovo airport and killed 36 people. “Pagans” will be staged in London on April 7. In an interview with the Kyiv Post, Dodgson said that 15 years ago she had trouble getting British audiences to see plays written by foreigners. Now, many of the shows the theater puts on by international playwrights are sold out. Ultimately, many of the productions underscore that no matter where one lives, there is a shared human experience, she said. Yablonskaya’s experience, for instance, highlights the challenge faced by many Ukrainian playwrights. She was more widely known outside her homeland and most of her plays were staged abroad. The lack of recognition and prestige means most Ukrainians playwrights are not able to make a living off writing plays. “Being a playwright is a hobby,” Vorozhbit said. “Many just write for themselves.” Her situation is no different. Despite her international success and association with some of the world’s leading theatrical companies, Vorozhbit makes her living as the head script writer for STB, the Ukrainian television station. Her days are filled with writing stories for the station’s documentaries, as well as television shows commissioned for Russia. The more obtuse the show, the higher the audience rating, she said sadly. Kyiv Post staff writer Natalia A. Feduschak can be reached at feduschak@ kyivpost.com.
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20 Photo Story
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April 1, 2011
A sharp exhibit
Craftsman Oleksandr Tkalenko displays the sword decorated with President Viktor Yanukovych’s bust.
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President Viktor Yanukovych’s gilded bust decorates the pommel of an exquisite sword presented at the annual arms exhibition Master Sword held in Kyiv on March 23–27 (3). Famous Ukrainian sword maker Oleksandr Tkalenko (2) dressed Yanukovych in a miner’s helmet with a one-carat diamond (1) instead of a flashlight. The sword is dedicated to Antratsyt, the industrial town in Luhansk Oblast, where Tkalenko lives. The blade boasts an exquisite map of the town itself. The sabre’s price may be as high as 150,000 euros, admitted the craftsman, but he wouldn’t sell it because “it’s for exhibitions only.” Tkalenko is known for the special metal-blending techniques, which make his swords look blue (4). Among his other prominent works are the swords with a copy of Illya Repin’s famous painting “Zaporizhya Cossacks Write a Letter to the Turkish Sultan” and with a diamond-encrusted map of Ukraine. (Photos by Yaroslav Debelyi)
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Lifestyle 21
April 1, 2011
Sweet signs of learning
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Transdniester, a breakaway republic in Moldova where many residents want to be part of Russia, is a Sovietstyle communist state. But while international watchdogs decry human rights violations – from human trafficking to censorship – there are positive exceptions like this boarding school for children with impaired hearing (4,6). Located in the town of Bendery, the school was founded back in 1976 and is now home for over 100 children, some of whom are orphans (5). With 50 staff members and 40 teachers, classes are small (2). Teachers try their best to come up with creative ways of teaching, like teaching sounds using excerpts from classical literature (1,3). Female teachers apply bright lipstick to make lip-reading easier. All classes are taught in Russian, which is one of three official languages in Transdniester together with Ukrainian and Moldovan. The school curriculum is the same as in ordinary schools, so after graduation students with problematic hearing can continue their education in mainstream institutions. The state-run school also has classes for short-sighted children. – Photos by Alex Furman
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Horban: Joke may be on us April 1 Æ15 you often make sure you create circumstances to avoid responsibility in case of failure. This phenomenon was named selfhandicapping, which is creating an excuse before you even attempt to succeed. Some tips from self-handicappers include going to a party the night before the test, waiting for the last minute to study or coming late to a job interview. If you fail, it was not because you were not very smart or incompetent, but because you didn’t study well or made a human resources manager angry for having to wait for you. If you do succeed, you benefit from acing against all
odds. First discovered in 1986, research revealed that men are far more into self-handicapping than women. You think you can predict how you will feel in various situations. In reality, you are quite incompetent in forecasting your actions or feelings. If you win the lottery, your life will turn into a fairytale. If your loved one leaves you, you are destined for an emotional nosedive. As research shows, such kinds of assumptions are generally wrong. Whether an event was anticipated or dreaded, the actual experience was usually less intense and less durable than predicted.
Though we are incompetent in predicting our own feelings, we still think we know what others think. Generally, we assume other people think the way we do and, surely, that isn’t true. In the 1970s, Stanford University professor Lee Ross asked a group of university students if they would be willing to walk around their campus for 30 minutes wearing a sandwich board saying: “Eat at Joe’s.” Of those who agreed to wear it, 62 percent thought others would also agree. Of those who refused, only 33 percent thought others would agree. You think that you pay attention to the quality of arguments in a debate.
In reality, if you like the speaker, you are more prone to accept his words. Very often people don’t have enough knowledge to judge something beyond its face value so they ask themselves a simpler question: who is giving me the message? This phenomenon was observed during a classic study of persuasion done at Yale University. Researcher Carl Hovland divided students into two groups and asked them how much they agreed on a Thomas Jefferson's quote: “I hold that a little rebellion now and then is a good thing and is necessarily in a political world as storms are in the physi-
cal.” One group was told that Vladimir Lenin was the author, not Jefferson. As a result, on average the group that was told the quote came from Jefferson, the American president, rated it more favorably than the group, who thought it came from Lenin, the communist. Advertisers extensively exploit this phenomenon. Next time you see a celebrity convincing you to buy a product from a billboard or a TV screen, beware of the Yale approach to persuasion and make sure you are not being taken for a fool. Happy April 1st! Kyiv Post staff writer Nataliya Horban can be reached at horban@kyivpost.com
22 Employment
WWW KYIVPOST COM
April 1, 2011
UNICEF UKRAINE is looking for a qualified candidate to fill the position of
Early Childhood Development Officer
TERMS OF REFERENCE PURPOSE OF THE POST: Under the general guidance of the Deputy Representative, the Early Childhood Development Officer is accountable planning, implementation, monitoring and evaluation of the Early Childhood Development programme and liaison with government partners. MAJOR DUTIES AND RESPONSIBILITIES: • Ensure the availability of accurate, complete and up-to-date information required for effective Early Childhood Development component design, implementation, management, and monitoring and evaluation. • Enhance programme efficiency and effectiveness through implementation follow-on, including monitoring UNICEF inputs, local conditions and resources, flow of supply and non-supply assistance and programme status. • Review and evaluate the technical institutional and financial feasibility and constraints of the component in collaboration with the Government and other partners. Undertake field visits and surveys to monitor and evaluate implementation, identify problems and propose remedial actions. • Develop close collaboration with the Ministry of Health and other relevant ministries, various professional groups and non-governmental organizations to ensure that prevention strategies are an integral part of the services. Participate in annual and medium-term reviews to evaluate appropriateness and effectiveness of the programme. • Ensure the effective communication and networking developed and maintained through partnership and collaboration. • Team with local Government counterparts to exchange information on Early Childhood Development component implementation and status as well as movement and distribution of supplies. • Support coordination with members of the development community, including NGOs, UN and bilateral agencies in the exchange of information relating to the programme. • Ensure the appropriateness of financial, administrative and supply documentation; verify that expenditures are within allotments and that data are consistent with the programme information and database. Follow up on queries or initiate corrective action on discrepancies. QUALIFICATIONS AND COMPETENCIES REQUIRED: • EDUCATION University degree relevant to the following areas: Health, Public Health, Global/ International Health, Health Policy and Management, Health Research, Socio-medical Sciences, Health Education, Health Promotion and Disease Prevention, Social Sciences, Medicine. • WORK EXPERIENCE Minimum two years of relevant progressively professional work experience. • LANGUAGES Fluency in English, Ukrainian and Russian is required. • COMPETENCIES Knowledge of theories and practices in: • Child and Maternal health • Public Health • Health Financing
• Monitoring and Evaluation • Environmental Health • Knowledge Management
General knowledge of: • Methodology of programme/project management • Child Health and Development • Programmatic goals, visions, positions, policies and strategies in health • Knowledge of global health issues related to children and women • Gender and diversity awareness.
The deadline for submission of applications is 25 April 2011. Only short-listed candidates will be contacted. Applicants that fulfil the above requirements are requested to complete a United Nations Personal History Form (P. 11) which is available at a web-site www.unicef.org/employ and submit it together with a resume/CV and a cover letter describing your professional interests in working for UNICEF. Applications should be sent to: UNICEF Office, 1, Klovskiy Uzviz, Kyiv, Ukraine Fax No. 380-44-230-2506 E-mail: recruitment_kiev@unicef.org
Appeal of the Ukrainian Red Cross Society Dear citizens! The most powerful earthquake and tsunami of the last years took place on 11th of March 2011 in Japan have resulted in death of thousands of people and more than 400 thousand evacuated. We appeal to you and everyone, who is not indifferent to humans’ distresses and suffering, to give a hand to the victims of the disaster. Your donations will be received by the Red Cross Society of Japan and used for providing the suffered people with support and assistance. You can transfer money to the following settlement account: Code 00016797 Recipient: National Committee of the Ukrainian Red Cross Society Settlement account #26005000041577 (in hryvna) Settlement account #26004000041578 (in USD) Settlement account #26003000041579 (in euro) in PAT “Ukrsotsbank� MFO 300023 Details of the payment: “Assistance for the earthquake victims in Japan� Even the smallest donation can save a life. Let’s don’t leave the victims of the disaster alone with their misfortune. Join our charity efforts! President Usichenko I. G.
The IS LOOKING FOR A
NEWS EDITOR THE IDEAL CANDIDATE SHOULD: Have fluency in English, Ukrainian and Russian. Show good news judgment and have the ability to work quickly under deadline. Have experience in news editing. Please send CV, three writing or editing samples and an explanation of why you want to work for the Kyiv Post, one of Ukraine’s top news sources, to:
Brian Bonner, chief editor, Kyiv Post at bonner@kyivpost.com
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One of Ukraine's top news sources, has an ongoing student internship program. We have openings for students who are:
majoring in journalism or mass communications or studying to become translators
CVs and cover letters should be sent to jobs@drc-ukraine.org by 04/04/2011.
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24 Paparazzi
April 1, 2011
www.kyivpost.com
A night of glitz and glamour
Legendary Russian singer Iosif Kobzon (M) is one of the most recognizable faces in this part of the world.
Singer Ruslana
Singer Kamaliya wows the crowd by performing ‘Blizko’ from her latest album.
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The glaring brilliance and luxury of the 15th annual “Person of the Year” award ceremony attracted 4,000 guests to Palace Ukraine on March 26. Celebrities, sportsmen, politicians, businessmen and diplomats arrived to celebrate winners in 19 categories, from business to charity, in the privately sponsored event. Many famous Ukrainian and Russian singers performed during the five-hour show. Sausage businessman Andriy Raykovych from Yatran company, the winner of the Trademark nomination, received ovations. However, when Serhiy Kivalov was announced as the Lawyer of the Year, some hissed and whistled disapprovingly. The former Central Election Commission head certified the rigged 2004 presidential election results in favor of Viktor Yanukovych, which triggered the Orange Revolution and Viktor Yushchenko's ultimate triumph. Among the singing sensations were Tamara Gwartzeteli, Iosif Kobzon, Ihor Demarin, Kamaliya, Ani Lorak, Ruslana and others. Italian opera tenor Alessandro Safina gave the celebration's the finale. Story by Daryna Shevchenko Photos by Alex Furman
Dancer and TV host Hryhoriy Chapkis enjoys his walk on the red carpet.
Actor Ostap Stupka (L) talks to actress Olha Sumska (M) and her husband Viktor Borysyuk, also an actor.
Heavyweight boxing champions Wladimir (L) and Vitali Klitschko are always in demand at a party.
Deputy Chief of Presidential administration Hanna Herman (M) arrives with Serhiy Teryokhin (L), a deputy from Yulia Tymoshenko’s party.