1994-2000: Heyday of Leonid Kuchma
Kuchma seeks to strengthen Ukraine’s international profile, cementing relations with the West while at the same time preserving relations with Russia. But he is firm and uncompromising over Russian attempts to assert sovereignty over Crimea and the disputed island of Tuzla. His style is authoritarian, and he is ultimately accused of limiting media freedoms and establishing an oligarchical socio-economic system.
In Crimea, which enjoyed the status of an “autonomous republic” within Soviet Ukraine since being transferred from the RSFSR by Moscow in 1954, a pro-Russian politician named Yuri Meshkov is gaining prominence as an advocate of independence from Ukraine. Meshkov was elected president of Crimea in 1994 and began pushing for closer ties with post-Soviet Russia, including possibly the annexation of Crimea by the Russian Federation. He attempts such policies as issuing foreign passports to the population of Crimea and a shift to Moscow’s time zone (an hour later than Ukraine’s) for the Crimean peninsula. He appoints a deputy prime minister, who becomes de facto head of the Crimean government and does not even have Ukrainian citizenship.
In December, the “Budapest Memorandum” is signed by the governments of the US, UK, Russia and Ukraine. It provides for all sides to respect Ukraine’s sovereignty and territorial integrity, and to observe its post-Soviet borders.
In other words, three foreign states – America, Britain and Russia – are to be “guarantors” of Ukraine’s security in exchange for Kyiv’s relinquishment of its nuclear arsenal. However, the agreement commits no signatory to come to Ukraine’s assistance militarily in the event its terms are violated.
1995: Belarusian President Alexander Lukashenko visits Kyiv and proposes a “Slavic triangle” of Russia, Ukraine and Belarus, including a customs union between the three states. The Ukrainian government rejects this, and then refuses to ratify the Treaty of Friendship and Cooperation with Russia signed earlier in the year. Other disagreements with Russia include a Ukrainian refusal to recognize Sevastopol as an exclusively Russian military port. Sevastopol is already the headquarters of the Russian Black Sea Fleet dating to the Soviet period. Kuchma eventually secures agreement to an 18% Ukrainian share of the Soviet-era fleet.
In March 1995, Ukraine reasserts authority and abolishes the post of President of Crimea. The Verkhovna Rada annuls the Crimean constitution and institutes direct rule from Kyiv. Crimea’s local government announces it will hold a referendum on autonomy in June, but then relents.
The Crimean Tatars become the subject of a major Organization for Security and Cooperation in Europe (OSCE) conference wherein it is pointed out that 100,000 out of 250,000 of this ethnic minority in Crimea are living without adequate shelter or other basic living needs.
Kuchma reaches a compromise with the Verkhovna Rada over the division of powers between the president and the parliament after leftist forces oppose a bill put forward by Kuchma to increase his powers (the ‘Power Bill’). The agreement cancels President Kuchma’s plans for a referendum but implements a Law on State Power that omits both the parliament’s right to impeach the president and the latter’s right to dissolve the legislature.
Business in the 1990s: Violence and Murder
October 1995: In the Shakhtar Donetsk football stadium in the eastern city of Donetsk, a local businessman named Akhat Bragin is killed by a 5-kilo plastic-explosive bomb, triggered by a powerful radio-controlled device. Bragin, an ethnic Tatar by origin and a butcher by trade, had experienced a meteoric rise since the collapse of the USSR to become one of the most influential businessmen in the Donetsk region and owner of the Shakhtar Donetsk football team. Known among his “crew” as “Alik the Greek,” Bragin had served as mentor for politicians and business figures who would achieve prominence later, including Viktor Yanukovych and Rinat Akhmetov.
After the explosion, Bragin’s body is so completely obliterated that the only thing left to identify him is his Rolex watch. Killed with Bragin is his chief bodyguard, Viktor Dvoinikh, a former KGB colonel. Police Major Vyacheslav Synenko is sentenced to life imprisonment for the murder some ten years later. The Bragin hit marks the beginning of a series of mafia-style assassinations as the Donetsk and Dnipropetrovsk clans vie for power and control over various sectors of the Ukrainian economy.
December 1995: The protracted discussions with the Group of Seven (G7) major industrial countries over the closure of the Chernobyl nuclear power plant finally end with an agreement signed in Ottawa by Ukrainian Environment Ministery Yuri Kostenko and Canadian Deputy Prime Minister Sheila Copps. It calls for $2.3 billion in assistance to close the Chernobyl station by 2000, construct two safer nuclear power stations, and assist Ukraine in developing its energy sector.
1996: Ukraine introduces a new constitution. The IMF hails Kuchma’s reform program as bold and ambitious, and US financial aid to Ukraine is set to sharply increase. At the same time, a new era of “pragmatism” and good relations with Moscow is dawning in Ukrainian politics after a brief lull. Under Kuchma, Ukraine witnesses the introduction of its national currency (the hryvnia), reduced inflation, regulation of its national economy and the ushering-in of privatization in the economy.
July 1996: Less than two weeks after the new constitution is adopted, the Verkhovna Rada approves Kuchma nominee Pavlo Lazarenko as prime minister of Ukraine within the powers stipulated under the “Constitutional Agreement.” Lazarenko, like Kuchma, hails from the east-central city of Dnipropetrovsk. Within a week of his confirmation, Lazarenko survives an assassination attempt when a bomb explodes near his car en route from Kyiv to Boryspil Airport.
As head of government, Lazarenko reportedly controls several businesses and speculatively charges 50% of profits for his patronage. Chief among those businesses he protects is United Energy Systems of Ukraine (UESU), whose CEO is a woman in her mid-thirties named Yulia Tymoshenko, another Dnipropetrovsk native. UESU quickly transforms into a monopoly-importer of Russian natural gas to Ukraine, muscling all other gas selling companies out of the market.
Lazarenko’s tenure in office is concerned largely with countering the influence of a business grouping set up in 1995 called the Industrial Union of the Donbas (ISD) and other groups based in the eastern city of Donetsk. Yevhen Shcherban, leader of the Liberal Party of Ukraine and a Donetsk native, is widely accused of having attempted the assassination of Lazarenko in 1996. When Shcherban himself is murdered later in the year, many assume it to have been an act of revenge by Lazarenko. Similarly, Lazarenko is rumored to have plotted the murder of close Kuchma adviser Oleksandr Volkov.
July 1997: Having fallen out of favor with Kuchma, who suspects him of planning to run for president in the 1999 elections, Lazarenko resigns as prime minister.
May 1998: Lazarenko is elected to parliament from the Hromada party, an opposition group which frequently allies with the parliamentary faction of the Socialist Party of Ukraine (SPU), led by Oleksandr Moroz. The Communist Party wins by far the largest number of seats in the Verkhovna Rada, more than two and a half times the percentage claimed by the next biggest winner, the conservative party known as Rukh, the People’s Movement of Ukraine (NRU), led by Soviet-era dissident Vyacheslav Chornovil.
The Progressive Socialist Party (PSPU), led by Natalya Vitrenko, a former member of Moroz’s SPU, wins 15% of the vote. Vitrenko calls for severing Ukraine’s relations with the International Monetary Fund (IMF), bringing back nuclear weapons, shooting all businessmen in the country, and sending all unemployed Ukrainians to Yugoslavia to fight against NATO.
December 1998: Lazarenko is detained as he attempts to cross by car from France into Switzerland, and charged with money laundering. He is released on bail by posting $3 million, and returns to Ukraine.
February 1999: Lazarenko flees Ukraine on the eve of the Verkhovna Rada’s vote to strip him of his parliamentary immunity. He is arrested at JFK Airport in New York and transferred to a jail in San Francisco, where his family owns property.
March 1999: Vyacheslav Chornovil, leader of Rukh, falls victim to one of Ukraine’s already frequent auto accidents. Rukh had recently split when a younger leader of the movement, former Environment Minister Yuri Kostenko, broke away to form his own Rukh faction – the “Ukrainian People’s Movement” (UNR). Yet Rukh had remained Kuchma’s only credible right-of-center competition in presidential elections slated for autumn 1999. One explanation for Chornovil’s fatal accident is that one of the wheels “fell off” his car.
Natalya Vitrenko recedes slightly from the public eye after a hand grenade detonates at one of her presidential campaign rallies. She publicly blames Moroz for the incident, and the Socialists self-destruct in the first round of the presidential election in October 1999, leaving Communist Party chief Petro Symonenko to face Kuchma in the second round run-off.
November 1999: Kuchma defeats Symonenko easily. According to official statistics, Kuchma’s support in 1994 had come from the populous eastern parts of the republic, and in the three most heavily Ukrainian-speaking districts of the west he had garnered only three percent of the vote. In 1999, however, Kuchma’s official statisticians claim Ukrainians in the more sparsely-populated west have turned out en masse to cast ballots for him, to stem the red tide from the industrialized east.
December 1999: Kuchma nominates Viktor Yushchenko, a former Soviet state banking sector official, to be prime minister, and his nomination is approved after Kuchma’s first candidate fails confirmation. Yushchenko is controversial in Ukraine for his advocacy of Western-style austerity reforms. His government soon falls victim to infighting with his deputy prime minister, Yulia Tymoshenko, who is in charge of energy policy.
2000: Ukrainian authorities request Lazarenko’s extradition from the United States, charging him with the 1996 killing of Yevhen Shcherban and other senior state officials, as well as the assassination of the second chairman of Ukraine’s central bank – the National Bank of Ukraine (NBU) – Vadym Hetman in April 1998.