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November 29, 2004

The Yushchenko Mythos

Don't believe the U.S. government's fairy tale about what's happening in
Ukraine

by Justin Raimondo

According to the U.S. government, and commentators on the left as well as
the (neoconservative) right, the crisis in the Ukraine is a clear-cut case
of "democracy" versus authoritarianism, "the people" versus "the oligarchs,"
and the forces of enlightened Europhilia up against the sinister specter of
a resurgent Russia and a revivified KGB.

The only problem with this narrative is that it is unmitigated bunk.

Let's start with the central figures in this drama: the two Viktors –
Yushchenko and Yanukovich. To begin with, you'll note that the former has a
website in English, while the latter's site is only in the native Ukrainian
and Russian. Yushchenko's audience is primarily the West, while Yanukovich
is speaking to his own people. Right off the bat, the line of demarcation is
drawn.

According to the conventional wisdom, Yanukovich is a dark demonic figure, a
Soviet-type bureaucrat whose ties to Russia and the eastern power base of
the ruling elite, automatically make him the bad guy. Besides that, we are
told, Yanukovich is a man with a "criminal record," who served two jail
terms. What they don't tell you is that Yanukovich was jailed by the Soviet
regime on charges of robbery and assault. As the Los Angeles Times noted:

"A biography distributed on behalf of Yanukovich says that 'having suffered
through a very tragic and tough childhood . . . the prime minister
acknowledges regrettable youthful indiscretions, resulting in criminal
charges that were eventually overturned by a Ukrainian court.'"

On the other hand, Yushchenko's indiscretions – which are not being reported
in the Western media at all – were neither youthful nor the occasion for his
public repentance. And if a youthful Yanukovich held up a Ukrainian gas
station or knocked someone upside the head and took his wallet, Yushchenko
was a key figure in a conspiracy to defraud the West of over $600 million.

The idea that Yushchenko is some kind of outsider, whose victory will cause
the fresh winds of free-market reform to blow through the sealed chamber of
corruption that is the Ukrainian economy is another Western fairy tale that
has no basis in reality. Yushie is a key figure in the oligarchic system of
"crony capitalism" that has enriched the few at the expense of the many
since the fall of the USSR. He rose to power – as head of the Ukrainian
central bank through a good deal of the 1990s, and then as prime minister in
the thuggish Leonid Kuchma's government in 1999 – on account of the power of
the oligarchs. These "entrepreneurs" who made their fortunes on the strength
of their connections to the Communist apparatus control the commanding
heights of the Ukrainian economy, and what is happening today in the Ukraine
is a civil war involving the various oligarchic clans. As a Carnegie study
of the Ukrainian political landscape by Anders Aslund puts it:

"In Russia, the financial-industrial groups provide financing to various
parties and to the government. In Ukraine, the economic-political groups
rather tend to own political parties. Lazarenko and Timoshenko created the
parliamentary party Hromada, as a company party of the Unified Energy
Systems. Vadim Rabinovich has reportedly 'bought' the Green Party. Surkis
and Medevedchuk reportedly own the United Social Democratic Party. However,
Bakai, Pinchuk and the Franchuks support Kuchma directly and possibly his
party the National-Democratic Party. Characteristically, all these
oligarchic parties are considered centrist, that is, always prepared to make
a deal without any real ideology."

Yushchenko is a creature of this system, and his tenure at the National Bank
of the Ukraine was marked by the corruption so characteristic of the
political culture: a scandal involving falsification of the country's credit
ledger – essentially lying to the International Monetary Fund about the
quantity of Ukrainian cash reserves. As the Financial Times reports:

"Under his control, the bank was involved in a damaging row with the
International Monetary Fund over the use of IMF loans to falsify the
country's credit position - allowing some politicians, but not Mr
Yushchenko, to benefit personally. He survived the ensuing scandal."

A PricewaterhouseCoopers (PwC) audit confirmed the suspicions of IMF
officials that Western lenders have been systematically deceived by
Yushchenko's NBU:

"By giving a misleading impression of the size of Ukraine's reserves, the
NBU's reserve management practices may have allowed Ukraine to receive as
many as three disbursements under the stand-by arrangement in effect at that
time that it might not otherwise have been able to obtain. … The three
disbursements in question that would have been affected by the transactions
examined in the PwC report were based on October, November, and December
1997 figures. They total SDR 145 million (about US$200 million)."

What happened to all that money? Pavlo Lazarenko knows, and he hasn't been
shy about telling us what he knows. But is anybody listening?

According to Lazarenko – formerly prime minister, and a key figure in the
oligarchy – $613 million of the IMF's money was embezzled and then laundered
in December 1997. Like many other Soviet era bureaucrats, Lazarenko took
advantage of the extensive network of overseas secret accounts established
by the nomenklatura once the old Soviet Union started to unravel. With state
funds secreted abroad, the oligarchs bought up the remnants of the old state
industries, and divided the economic assets among themselves. Lazarenko was
the chief patron of one of Yushchenko's biggest supporters, Yuliya
Timoshenko of the United Energy Systems of the Ukraine (UESU), who made
fantastic profits at a time of economic recession. However, Ms. Timoshenko,
and her fellow oligarchs, as Alexander's Gas & Oil Connections explains,

"Could realize these profits only with the help of state support. … The
amount of money involved has been highlighted by the Lazarenko affair.
According to a report by the Financial Times, Pavlo Lazarenko, who was
Ukraine's prime minister in 1996-97, received at least $ 72 mm in bribe
money from gas importer UESU. In return, Lazarenko helped UESU to become one
of Ukraine's leading companies with an annual turnover of $10 billion."

"When Lazarenko was sacked as prime minister, his successor Valery
Pustovoitenko started a comprehensive investigation into the business of
UESU, which led to the first accusations. In December of 1998, Lazarenko was
arrested in Switzerland on charges of money laundering. He fled to the
United States, where he was again arrested and charged with the laundering
of $114 mm received as bribe money during his time in office.

"This June, while still being held in the United States, Lazarenko was
sentenced for money laundering in Switzerland. Yuliya Timoshenko, who was
president of UESU when Lazarenko was prime minister, has so far avoided
criminal prosecution. In 1997, she left the company and went into politics."

Ms. Timoshenko went on to become a deputy prime minister, in 1999, with
special authority over energy matters. Her husband, still a member of the
board of UESU, was arrested on charges of embezzlement of state property.
Ms. Timoshenko, too, was arrested, and – after much posing and posturing as
a "political prisoner" – was freed.

It is entirely appropriate that the "gas princess," as Ms. Timoshenko is
known, should become the La Passionaria of Ukraine's phony "velvet
revolution." As she leaps atop the stage at the massive rallies taking place
in the middle of Kiev, she speaks with Amazonian forcefulness and the
authority of someone used to being obeyed, as The Australian reports:

"'Form a column and come with us to the presidency,' she shouted to a crowd
on Wednesday. 'Once we arrive at the presidency, we won't leave until
Yushchenko enters it as the new Ukrainian president and occupies his post.'"

The Lazarenko-Timoshenko wing of the oligarchy is naturally grateful to
Yushie – after all, he fronted for them in bilking the IMF. Now they are
paying him back with their fulsome support. This isn't the struggle of
valiant pro-Western "democrats" versus sinister pro-Russian neo-communists:
Timoshenko's histrionics represent a falling out among thieves.

In any case, from the Gas Princess to the Boadicea of the "democracy"
movement in Ukraine is a fanciful transformation, at best, but Western
propagandists are counting on the American public's ignorance of the
Ukrainian scene to pull off one of the biggest frauds since the selling of
convicted embezzler Ahmed Chalabi as the Iraqi George Washington.

Few remember now that one of the alleged economic benefits of the "cakewalk"
war was supposed to have been a huge drop in the price of oil: Iraq would be
pumping as much and as fast as required by Washington, and the profits were
going to finance the reconstruction. Well, that didn't exactly work out, now
did it? So our grand strategists in Washington have turned to the legendary
Caspian "Silk Road" to oil riches, reviving the dream of a Trans-Caucasian
oil pipeline that will fill the gas tanks of Europe, bring down prices
rapidly – and hand over control of much of the world's hydrocarbons to U.S.
corporate interests and their allies.

Forget all this melodramatic folderol about Ukraine's "orange revolution" –
and follow the money. The mythologizing of the Ukrainian "democratic"
opposition serves certain Western economic interests, as John Laughland has
pointed out:

"Efforts are being redoubled to crank into action the various pipelines
which are supposed to transport Caspian oil to Western markets. One of these
is the Brody pipeline which runs between the Ukrainian town of that name and
the Black Sea port of Odessa (a Russian city but also in Ukraine). The Brody
pipeline was initially supposed to take US-controlled Caspian oil to Western
markets, but it has instead been pumping Russia oil, something the Americans
do not like.

"So the New World Order strategists are determined to put their man in
control of Ukraine, at the presidential election on 31st October. Huge
influence, and presumably money, is being pumped in to ensure a victory for
Victor Yushchenko. Paul Wolfowitz said in Warsaw on 5th October that Ukraine
should join NATO. Mark Brzezinski and Richard Holbrooke have rattled their
sabers over Ukraine, and Anders Aslund, the architect of Yelstin's mass
larceny, has eloquently outlined the West's strategic interest in that
country.

"These national strategic interests are, as ever, supported by the private
interests of the powerful people lobbying for this new anti-Putin policy.
They include people like David Owen and Jacob Rothschild: the former is
Yukos' representative in Britain, the latter put up much of Khodorkovsky's
original money, and sits (together with Henry Kissinger) on the board of the
Open Russia Foundation, a Yukos front. They also include Anders Aslund, one
of the signatories of the AEI's Open Letter, who works for the Carnegie
Endowment for International Peace, which is funded by Yukos, Conoco Phillips
– the strategic ally of Chevron, on whose board Condoleezza Rice sat for
many years – has recently announced a "strategic alliance" with Lukoil, the
second largest private oil company in the world, and Conoco Phillips is said
to want a controlling stake in the Russian company. Before Khodorkovsky's
arrest, indeed, it was said that he wanted to sell Yukos to an American
company."

The bottom line is that our oligarchs have allied with a faction of
Ukrainian oligarchs, who have agreed to add Ukraine to the European Union,
sabotage the free trade zone recently established between the pro-Russian
nations of the former Soviet Union, and, most important of all, join NATO.
The Yushchenko-Timoshenko forces want to align with Georgia, Uzbekistan,
Azerbaijan, and Moldova (the other nations in the GUUAM configuration of
junior league NATO aspirants) in erecting a ring of iron around Putin and
the former Soviet Union. U.S. troops are already in Georgia, Uzbekistan, and
Kyrgyzstan. How long before they are in Kiev, training "President"
Yushchenko's NATO-ized military in the use of American equipment – and
advising a spiffed-up Ukrainian military within striking distance of the
Kremlin?

After all, as Jonathan Steele points out in the Guardian, American
"advisors" have been directing and funding the entire Yushchenko operation,
just as they did in the former Yugoslavia, with money pouring in not only
from the U.S. Treasury but also from billionaire George Soros, who has his
own interests in Ukraine and the former Soviet Union. According to the
Ukrainian Center for Political and Economic Research (UCPER), a poll of the
mostly pro-Yushchenko Ukrainian NGOs reveals that foreign sponsors pick up
60 percent of the tab, including:

"'Vidrodzhenya' (Revival) sponsored by George Soros - 36.3%, 'Freedom House'
(the U.S.) - 22.7%, 'Poland-America-Ukraine Cooperation Initiative' - 22.7%,
USAID - 22.7%, National Endowment for Democracy (the U.S.) - 18.2%, the
World Bank - 13.6% (the total percentage exceeding 100%, since the
respondents often named several sponsors)."

Ms. Timoshenko, who boasts of having a fleet of six jets at her disposal, no
doubt picks up the rest.

We are being sold a bill of goods, and, upon close inspection, they turn out
to be pretty darn shoddy. Yushchenko is no more the "democratic" savior of
Ukraine than the Gas Princess is a paragon of idealism and Western-style
"free-market" reform. Like Yushie, the Robber Baroness of crony capitalism
is a symbol, not of "democracy," but of the gullibility of Western public
opinion when faced with a slick public-relations campaign – and a compliant
media that goes for attractive narratives which mesh neatly with their
ideological presumptions.

The complex web of lies that make up the Yushchenko mythos requires
extensive debunking, and one could write a good-sized book on the subject,
but a matter that needs to be cleared up at once is the story about
Yushchenko's alleged "poisoning" – presumably at the hands of the KGB. The
internet is filled with before-and-after pictures of the once-handsome
Yushie: the sight of his puffy and ravaged face, pitted with unappetizing
pustules, is not a pretty sight to see. But what is the evidence that he's
been poisoned by the pro-Yanukovich forces? There is none. As the New York
Times reported on September 29 :

"An Austrian hospital that recently treated Viktor A. Yushchenko, the
Ukrainian presidential candidate and opposition leader, said Tuesday that
accusations that he had been poisoned were baseless."

The hospital's announcement was the occasion for death threats directed at
the team of doctors involved, and the staff wisely retreated to a position
of official agnosticism on the question of what caused Yushchenko's
transformation from a prince into a toad. After all, a member of the
Ukrainian parliament who served on a commission investigating the incident,
and who had publicly dismissed the idea of Yushchenko's "poisoning," had a
land mine placed outside his home.

The "poisoning" of Yushchenko is a cock-and-bull story. As a news story in
the Globe and Mail pointed out:

"The problem for conspiracy theorists is that a variety of standard
laboratory tests should have turned up signs of such drugs in blood, hair or
tissue samples in relatively short order."

Not that they are letting a few facts get in the way. Propaganda doesn't
require facts – only a gullible public and constant repetition. If these
techniques are all-too-familiar, then they ought to be: isn't this how we
got bamboozled into the Iraqi quagmire, buying into a narrative of "heroic"
"pro-democracy" dissidents pushing back the frontiers of liberty, with the
U.S. by their side?

As the worst president ever once put it:

"There's an old saying in Tennessee – I know it's in Texas, probably in
Tennessee – that says, fool me once, shame on – shame on you. Fool me – you
can't get fooled again."

The neocons are letting the Arab quagmire simmer, hoping that the Iraqi
insurgency can be tamped down with the assistance of a Shi'ite majority
government supported by the mainstream clerics and propped up by a growing
indigenous military force acting in tandem with less-visible U.S. forces, a
plan of dubious prospects. In any event, the Ukrainian events have given
them the opportunity to move on another front while movement in the Iraqi
theater is seemingly stalled.

The campaign against Vladimir Putin as the latest incarnation of Stalin has
been going on for quite some time, its most recent crescendo having been
reached with a neocon publicity campaign on behalf of "poor little
Chechnya," as well as complaints about the uniformity of opinion in the
Russian media – this, coming from the same crowd who regularly denounce the
supposedly "antiwar" media as a "fifth column"! But fronting for the
Chechens is another kind of hypocrisy altogether. That they are willing to
bloc with Islamist terrorists allied with Osama bin Laden against Putin, and
Russia, underscores their determination in pursuit of their latest victim.
Russia is the latest front in what the more perfervid neocons call "World
War IV," and Ukraine is the first battlefield, but not likely to be the
last. John Laughland put it well:

"Chechnya borders Georgia, and Georgia, like Azerbaijan, is on the fast
track to join NATO. There are already hundreds of US troops in Georgia,
training the local forces. They are there for two reasons: first, to protect
the US-built Baku-Tbilisi-Ceyhan pipeline; secondly – and this follows from
the first – to assist Georgia in recuperating her two secessionist
territories, South Ossetia and Abkhazia. It will not do to have Russia
anywhere close to the pipeline, and she has troops in both these areas.
Pushing Russia comprehensively out of the Caucasus, and humiliating her,
requires victory for the Chechens. An independent Chechnya may also be the
prelude to the longer-term break-up of Russia herself: the CIA predicted
that oil-rich Siberia might escape Moscow's control in its report, Global
Trends 2015, published in April."

Russia, the Middle East, the Trans-Caucasus, and even China – there is no
limit to the ambition of the neocons, which surpasses the dreams of
Alexander – and the hubris of Icarus.

I might add that the true politics of the "liberal" opposition are revealed
in their response to the prospect that the eastern pro-Yanukovich portion of
the country (which is far richer, and more industrialized, than the western
region) might secede. Already the Easterners – culturally and
temperamentally close to our "red" states – are holding assemblies in major
cities calling for autonomy. The reaction from Yushchenko:

"Those who are calling for separatism are committing crimes and will
definitely receive severe punishment."

Thugs always revert to form. The prince becomes a toad – and, no, I
seriously doubt that Yushie's physical deterioration has anything to do with
a nefarious plot by Putin's KGB against his good looks. Instead, let me
suggest an alternative theory, one not contradicted by expert medical
testimony – and the account of a parliamentary inquiry – and it is this:
perhaps the Faustian deal that Yushchenko made with the U.S. government has
taken its toll, and, as in the dramatic climax of Oscar Wilde's famous tale,
"The Picture of Dorian Grey," his sins are being visited on his
once-handsome visage, ravaging it – and revealing his inner soul.

Just a theory, mind you.

NOTES IN THE MARGIN

I meant to cover another topic in this column, as I indicated in "Notes in
the Margin" last Wednesday, but the imperative of covering the Ukrainian
events overrode my previous intent – which hopefully will teach me not to
make promises in print to my readers. Sorry about that, and all I can say
now is: watch this space.