The Girl in Kherson Ukraine


Dawdling in Europe

1991, the end of Soviet history: Michael Stanchev (co-author of this book), as deputy of Kharkiv’s city council, assessed the city’s international stature. In spite of its enormous economic and scientific arsenal of 240 industrial enterprises, 143 scientific-research institutes, and 23 higher educational institutions, he concluded that Kharkiv had no more than a provincial footprint.

The Girl in Kherson

Kherson, Ukraine - War with Russia
Kherson, Ukraine – War with Russia

Collapse of the Soviet Empire

The capital Kyiv has always been jealous of Kharkiv. Kharkiv was the “third” city, the “production line” of the Soviet Union. The city was home to such industrial giants as the Kharkiv Tractor and Aviation Plants, the Turboatom, which produced nuclear turbines, and the Kharkiv Tank Factory, home of the famous T-34 tank. In Kharkiv in 1938 a group of scientists led by Lev Landau was the first in the world to split an atomic nucleus. The Imperial University of Kharkiv was one of the four oldest universities of the Russian Empire. It gave the world three Nobel laureates – Ilya Mechnikov, Lev Landau and Simon Kuznets. Among its famous pupils were composers, writers, poets, and scientists – Mikola Lysenko, Isaak Dunaevsky, Nikolay Kostomarov, Dmitry Yavornitsky, Oles Gonchar. Novelist Leo Tolstoy, scientist Dmitri Mendeleev, the German naturalist Alexander von Humboldt, the writer Johann Wolfgang Goethe, the Scottish geologist Roderick Impey Murchison, the British preacher and Marxist philosopher John Lewis, and the French storyteller Eduard Labule all accepted honorary doctorates from the university.

When the August putsch organized by the KGB and top-level Communist Party nomenklatura began in Moscow on August 19, 1991, many Soviet Ukrainian officials in Kharkiv suggested that Ukraine immediately “surrender to Moscow”. Direct communication with Moscow was restricted, however. Only the City Council had one telex machine, donated by its twin city of Nuremberg,3 to communicate with Moscow. Through the “Nuremberg telex,” the Kharkiv leadership kept in touch with Yeltsin’s headquarters. Kharkiv’s newly elected mayor Yevhen Kushnaryov showed courage, speaking on the central square of the city in front of a rally of many thousands, and urged not to give in to provocations and support “Yeltsin’s democracy.” Three days later, the putsch was suppressed in Moscow and on August 24, the Verkhovna Rada (Supreme Council) of the UkrSSR proclaimed Ukraine’s independence.

To legalize this decision, a referendum on independence was held in Ukraine on December 1, 1991.4 At the referendum of December 1, 1991, a simple question was put on the ballot: “Do you want Ukraine to declare independence?” The turnout for the referendum for the independence of the Ukraine republic was 84.18 percent. A resounding 90.32 percent of those who voted answered “yes”; a mere 7.58 percent answered “no”. The message couldn’t have been clearer.

At the same time as the referendum, Presidential Elections were held.



President Leonid Kravchuk



Every President elected by the former Soviet Republics after the collapse of the USSR was a senior Communist Party (CPSU) official – with the exception of Belarus, which in 1994 elected Alexander Lukashenko who used to run a kolkhoz farm; he was an early example of someone who decade after decade proved unbeatable at the ballot box like neighbor Vladimir Putin after him. The other Presidents were most often the First Secretary of that Soviet republic, sometimes a member (as in Ukraine) or candidate for membership (as in Russia) of the Politburo of the Central Committee of the CPSU. In other words, all the Presidents of the newly independent states (except Lukashenko and Putin) were part of the nomenklatura. Leonid Kravchuk, who was elected President of Ukraine on December 1, 1991, was no exception.5


After the failed August putsch in Moscow, Kravchuk had resigned from the Ukrainian Communist Party, as did the rest of those who decided to stay on in Ukrainian post-Soviet politics. By the time the Presidential campaign began in Ukraine, he therefore already had the veneer of a non-partisan politician, and this is how Kravchuk presented himself to the voters. Since he was a former leader of the Ukrainian Communist Party, his candidacy was supported at the elections by his former Communist allies, though the party itself was banned at the time. The Communist Party representative at the elections, Oleksandr Tkachenko, for example, withdrew his candidacy in favor of Kravchuk. At the same time, Kravchuk was also supported by part of the National Democrats, who promoted him as the “Father of Independence” as he had retained his position as Chairman of the Verkhovna Rada, Ukraine’s unicameral parliament. As a result, Kravchuk received 61.6 percent of the vote and became the first democratically elected President of Ukraine.

A week later, on December 8, 1991, Kravchuk signed with Russian President Boris Yeltsin and President of the Supreme Soviet of Belarus Stanislav Shushkevich an agreement to dissolve the Soviet Union and create the Union of Independent States (CIS). The agreement was signed in Belovezh Forest, near Brest, Belarus, and went down in history as the “Belovezh Accords.” Two days later, the Supreme Soviets of Ukraine and Belarus ratified the agreement, and on December 12, Russia did the same.

The speed at which the former Soviet republics began to join the Belovezh Accords was staggering. On December 21, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan joined the agreement. These countries together with Belarus, Russia and Ukraine signed in Alma-Ata the Declaration on the Aims and Principles of the CIS and the Protocol to the agreement on the establishment of the CIS. On December 25, Mikhail Gorbachev, President of what was left of the USSR and its fifteen founding republics, tendered his resignation.

Now that the republics had gained political independence, they needed to work toward creating a market economy. What was Ukraine like after declaring independence at the end of 1991?

Even before the official signing of the Belovezh Accords, on September 2, 1991, the President of the Supreme Soviet of Ukraine (and future President) Leonid Kravchuk declared Ukraine’s intention to “become a direct participant in the European process and European institutions.” At that time, Ukraine ranked seventh in the world in terms of its industrial and military potential and was one of the most developed republics of the USSR. Even Ukrainian agriculture was advanced by Soviet standards. Ukraine had a good number of scientific, engineering and managerial personnel. The country had a wide network of scientific institutes and industrial enterprises and a powerful military-industrial complex (mainly concentrated in the south-eastern part of Ukraine). By early 1992, Ukraine also had 1,240 nuclear warheads, 133 RS-18 strategic missiles, 46 RS-22 strategic missiles, 564 bomber cruise missiles, and about 3,000 tactical nuclear weapons.

The full-blown crisis of the 1990s, which engulfed all former Soviet republics, particularly affected Ukraine, as the largest and most closely associated republic with Russia. The severing of economic ties, which began very deliberately and was initiated by the former Communist-party nomenklatura and the KGB, looked more like sabotage, although it was presented to the public as a “natural” result of the collapse of the USSR, the creation of a market economy, and the privatization of industrial assets. The strategy of those who failed to prevent the collapse of the Soviet empire in August 1991 was to bring former Soviet enterprises to complete bankruptcy and then, through the financial-industrial groups already under the Communist Party and KGB control, take them for next to nothing, and either keep them for themselves, or re-sell them at a profit. At the same time, no one was engaged in the real economy, reforming production and investing money. The companies that flooded Ukraine with foreign-sounding names, chief among which was the English word “invest”, usually had little relation to abroad and were used exclusively for resale.6 Former party functionaries and secret service officers became millionaires almost overnight. Party or youth Komsomol apparatchiks, secret-service officers and their agents headed the banks and firms. Independent businessmen were usually suppressed or had to “accept” someone’s powerful “protection”, usually special services or gangsters, and the latter were eventually forced to hand over their clientele to the same special services.

The administrations which came and went, from Presidential to regional, did the same thing: they shook down the state or simply plundered it, “chipping away” at its budget. Their slogans may have been different: for European integration, or for union or reunification with Russia. But these slogans were just tactical weapons for the appropriation of state property or of funds. There appeared longstanding delays in the payment of wages to industry workers, teachers, and other state employees – and state employees made up the majority of Ukraine’s work force. Inflation from 1992 to 1994 reached a thousand percent. The privatization of the Soviet state economy, especially industry, was accompanied by corruption on an industrial scale. The economic condition of the country as a whole was catastrophic.

On June 7, 1993, a strike of miners began in Donbas. On June 17, the Verkhovna Rada, at the request of the miners, scheduled a referendum of “confidence” (no confidence) for September 26. However, after consulting with the President, the Rada canceled the referendum at the last minute and scheduled early elections instead: the parliamentary elections on March 27 and the Presidential Elections on June 26, 1994.7


Kravchuk, who came to power on a wave of independence, failed to galvanize his political credo during his short months in power. Sometimes he was in favor of cooperation with European institutions, sometimes in favor cooperation with of the Commonwealth of Independent States. People used to call him the only President who managed to “run between the raindrops.” As a result, the Ukrainian people neither became part of the new Europe nor returned to the old Russia. In the 1994 election, Kravchuk, despite his close ties to Russia, presented himself as a “national” politician, had broad support in western Ukraine, and contrasted himself with Leonid Kuchma, the former Prime Minister who advocated closer ties with Russia. It was Kuchma who in July 1994 defeated Kravchuk in the second round and became President.



Budapest Agreement, 1994



Since the collapse of the USSR, Washington had been very concerned about the nuclear arsenal which Ukraine, Belarus and Kazakhstan received as a result of the liquidation of the Soviet Union. The destruction of these weapons in the young republics, which had broken away from Russia and were no longer covered by the old Soviet international agreements, became a foreign policy priority for the newly independent states. Moscow was also keen to strip its new neighbors of their “nuclear power” status. Thus, Bill Clinton, who became US President in 1993, and Boris Yeltsin in Russia made promising statements about “economic incentives” and a favorable political climate in the world for Ukraine to agree to return its missiles and warheads to Yeltsin’s Russian Federation.

Washington also resorted to political pressure. In particular, Clinton’s official visit to Kyiv to meet with President Kravchuk was canceled. But, while under pressure from the two superpowers, Belarus and Kazakhstan managed to remove nuclear weapons in 1992, Ukraine still resisted, primarily under pressure from the leaders of the Ukrainian People’s Movement represented by Vyacheslav Chornovil, who urged President Kravchuk not to relinquish them. It was Chornovil who voiced his fears about the threat posed by Russia, demanding security guarantees from the international community.

Those guarantees were given in 1994. On December 5, a Memorandum on Security Assurances in connection with Ukraine’s accession to the Nuclear Non-Proliferation Treaty was signed during a summit in Budapest. Ukraine pledged to adhere to three non-nuclear principles: not to receive, not to produce or acquire nuclear weapons.8


Later, France, Canada, and China also signed the treaty, and Ukraine, in addition to offering to mediate security talks with Russia, received an invitation from European nations and the United States to participate in the Partnership for Peace program and to begin cooperation with NATO. Nothing else seemed to threaten Ukraine’s security as its sovereignty and territorial integrity were securely assured by the international community.

In 2009, after the invasion of Georgia by Russian troops that followed in 2008, former Secretary of Ukraine’s National Security and Defense Council Volodymyr Horbulin called for a review of the Budapest Memorandum as not having met expectations and to convene an international conference to “start the process of demilitarization of the Black Sea.”


Today it is obvious how right Horbulin was and how relevant his proposal was. He wanted the conference to include not only guarantor states, but also other leading world powers, such as Germany. Evidently, after the occupation of Crimea and the unilateral denunciation of the Russian-Ukrainian agreement on the Black Sea Fleet in March 2014, Russia, one of the guarantors of the Budapest agreement, is no longer likely to attend such a conference.



President Leonid Kuchma



During the 1994 election campaign, Kuchma’s slogan “For an Alliance with Russia!” played an important role. Nostalgic for the old Soviet life, when everyone was poor but happy, Ukraine’s Slavic soul perceived Kuchma as the best candidate, with the right path for the future – “Forward to the past!” But the reality turned out to be quite different: Kuchma had no plans to return Ukraine to the old Soviet Union. It was under Kuchma that financial and industrial clans began to form and gain strength, new political parties were created such as the Party of Democratic Renaissance of Ukraine, which gradually became the People’s Democratic Party of Ukraine, supported by Kuchma.

Having gained strength from the mass privatization of state property, the new financial-industrial Ukrainian elite began “buying” their deputies. Seeing that these deputies were protecting not so much the interests of the elite as advance their own, the elite themselves began to look at the political seats that promised even greater profits than having a business. Why hope for anyone else to do your business, if you can run the state yourself and pass laws profitable to your business?

In 1995 the President signed a decree about the formation of financial and industrial groups (FIGs) “to promote structural reorganization of Ukrainian economy, speed up scientific and technological progress, increase competitiveness of Ukrainian goods.” This act provided unlimited opportunities for those FIGs, which were not only close to political power, but in fact were created by them. They were allowed to independently approve the procedure of indexation of fixed assets. The Antimonopoly Committee, with the consent of the Cabinet of Ministers, could give FIGs a legal monopoly, if the latter carried out state programs for the development of priority sectors of the Ukrainian economy. Most importantly, FIGs enjoyed financial benefits and low taxation, which allowed them to launder money on a huge scale with impunity. An important element in the creation of FIGs was the presence of a leading enterprise in the group, its own commercial bank, through which all financial transactions were carried out, united by a single technological chain.

One of the main motives behind the creation of these FIGs was to streamline lobbying activities and distribution of state funds. That is why the supervisory boards of such groups included high-ranking officials directly or through front men. In fact, all the largest FIGs in Ukraine were members of the Union of Industrialists and Entrepreneurs. As a public organization, this union had the right to make proposals during the preparation of economic laws, as well as to lobby for them in Parliament. Many of Ukraine’s leaders, such as Kuchma himself and former Prime Minister A. Kinakh, became President of the Union after they resigned. The merging of power and business became seamless.

It should be emphasized that these groups, which controlled the enterprises that produced the lion’s share of the Ukrainian GDP during the Soviet times, had no intention of investing seriously in the development of the economy of the new Ukraine. They were not interested in introducing new technologies or innovations in production, although there were plenty of such inventions available in the country. Instead, FIGs tried to reduce the costs of the enterprises they controlled, gradually forcing out the state’s share and privatizing them for next to nothing.9


We will not dwell on the characteristics of even the key players of financial and industrial groups in Ukraine, as this would require writing a separate book. We will only note that the groups have divided their spheres of influence throughout the country. The main ones are the Donetsk and Dnipropetrovsk groups. Each of them has its own parties and leaders. Donetsk traditionally supported the Regions (Rhioniv) party, led by Viktor Yanukovych, and Dnipropetrovsk supported the Fatherland (Batkivshchyna) party, led by Yulia Tymoshenko. It was they who determined the political direction in the country, periodically carrying out “orange” and “white-blue” revolutions, the main purpose of which was the redistribution of financial resources and the seizure of top government positions.






Immediately after the collapse of the USSR and the declaration of Ukraine’s independence, a large part of society, especially young people, hoped that the country would follow the path of integration into Europe. The promises of the then Ukrainian leadership provided some optimism in this regard. When President Kuchma ran for President in 1999, he made Euro-Atlanticism a platform for his candidacy, fired his Foreign Affairs Minister and offered this position to Borys Tarasyuk, Ukraine’s NATO representative and an ardent supporter of Euro-Atlanticism. His main diplomatic efforts were aimed at getting Ukraine to sign an association agreement with the EU, and getting at least some kind of reassuring signals from the EU about Ukraine’s European prospects. A committee on European integration was created in the Verkhovna Rada, and an entire cabinet-level Ministry of European Integration was formed.

As Ukraine continued its cooperation with NATO within the framework of the Partnership for Peace, the European Union was in no hurry to embrace Ukraine. Many Ukraine-EU summits were held, during which the concrete steps towards the implementation of the Maastricht and Copenhagen criteria were carefully analyzed. At all the summits, the European Commission repeated the same thing: we support the intention and desire of the Ukrainian authorities to integrate into European institutions. But in practice little happened.

At the same time, at all levels and at all meetings with EU representatives, the Ukrainian leadership separated the prospect of joining the EU from the prospect of joining NATO. In 1997, this was discussed, for example, during the talks between the Chairman of parliament, the leader of the Socialist Party, Oleksandr Moroz, and the Prime Minister of Bulgaria, Ivan Kostov. When Kostov said that Bulgaria was seeking both EU and NATO membership, Moroz replied that Ukraine was not ready to join NATO, but was ready to join the EU.

In theory, the Ukrainian leadership was ready for the EU. In reality, they were not. Ukraine would have to undertake the difficult job of adapting its legislation to European standards, to have a truly democratic country, guaranteeing freedom of speech, elected executive bodies, local self-government, independent courts, and a free press, not to mention meeting the economic criteria of the EU. Meanwhile, the country continued to experience a systemic economic crisis. As a result of the first stage of mass privatization, Ukraine’s unique technical, scientific, and industrial potential was subverted and stopped functioning. The ruling elite was in no hurry either to reform the way the state operated. Europe watched in silence and, seeing inaction of the Ukrainians, made no further promises.

Due to mismanagement at the highest levels from the mid to late 1990s, Ukraine’s GDP plummeted as hyperinflation reared its head. In August 1996, Ukraine’s nominal currency was devaluated 100,000 times and replaced by the hryvnia. Inflation and the decline in production in Ukraine far exceeded that of neighbors Russia and Belorus.

All this made the development of Ukrainian statehood more problematic and the crisis more protracted. Polarization in society intensified. The rich grew richer and the poor grew poorer. The oligarchy seized all levels of power and the parliament. The authorities became extremely sensitive to criticism. The European Union was forgotten about, and Ukraine’s European direction all the more so.



Putin’s first attempt to capture Ukraine



The country which never forgot about Ukraine was Russia. Or rather, its special services hadn’t. The most important Russian agent in Ukraine was KGB general Yevgeny Marchuk. Born in Ukraine in 1941, Marchuk graduated from the USSR Alexander Pushkin Pedagogical Institute in Kirovgrad, Russia, where he studied from 1958-1963 to teach Ukrainian and German language and literature, and where he was recruited by the KGB.10 In 1988, he was appointed Head of the KGB Department in the Poltava region. In 1990, when he was already a general, he was appointed First Deputy Head of the KGB of the UkrSSR. From June to November 1991, he was the Defense, State Security and Emergencies Minister of the UkrSSR and, during the August 1991 coup d’etat, he wholly supported the gang of eight who had started the putsch.

After it failed, Marchuk was not dismissed from his post in Ukraine as you might expect. Instead, he started to defy gravity and his influence increased. He was appointed as the first Head of the Security Service of Ukraine (SBU), Ukraine’s national successor to the USSR’s KGB. At the same time, he promoted himself to the rank of lieutenant general and, in August 1992, to the rank of colonel general. Marchuk stayed on as Head of the SBU until 1994. Shortly before leaving this post, on March 23, 1994, he elevated himself to Ukraine’s top rank, a general with four stars. In July 1994, Marchuk was appointed Deputy Prime Minister for State Security and Defense in the cabinet of Vitaliy Masol. This position had not previously existed and was specially created for the general.

His rise and rise continued. On October 31, 1994, Marchuk became First Deputy Prime Minister and chairman of the Presidential Committee on Combating Corruption and Organized Crime, and on March 6, 1995, he was appointed Acting Prime Minister of Ukraine. On June 8, 1995, he became Prime Minister and held this post until May 27, 1996, when he was dismissed “for burnishing his own political image.”


An interesting sketch about Marchuk’s appointment as Prime Minister was left for us in an interview with Roman Kupchinsky, director of the Ukrainian section of Radio Liberty, and Major Mykola Melnychenko, the security officer in President Kuchma’s protection detail who made unauthorized recordings of his boss:

“When Kuchma appointed Marchuk as Prime Minister, I was surprised at the lavish banquet the newly appointed Prime Minister threw for the so-called political elite in the state dacha in Pushcha, Kyiv. The tables were truly laden. I wondered to myself: at whose expense was this banquet arranged? I was very much surprised! I realized then that, well, maybe there is something fishy going on. Maybe you have to really thank the President when you become Prime Minister? It made a lasting impression on me.”11 Professionally speaking, Marchuk had been a remarkably unworthy statesman. From 1991 to 1994, when he was Head of the SBU, the agency failed to trace or prosecute a single case of embezzlement of state property by high-ranking officials. President Kuchma, who appointed him Prime Minister, did not like him much either.

Kuchma recalled that, “After becoming a chairman [of the State Committee for Monetary Reform], Marchuk showed a complete lack of interest in daily work and a restless passion for verbosity… At first, I attributed it to Marchuk’s desire to understand all the problems himself, as he likes to say, “with scientific precision”, to gather exhaustive information about them. But I soon began to suspect that he simply does not want to make decisions, and this fear is based on his lack of understanding economic mechanisms and his attempts to distance himself from any unpopular steps. Obviously, his long work in the KGB taught Marchuk only to collect information (and to make decisions based on it for others!), but he did not know how to implement this information in the interests of the economy. It was the summer and then the fall of 1995. For the first time, considerable arrears in pensions and wages began to accumulate, growing month by month. Production was falling. He obviously did not keep up with the situation, and inadequately reacted to the problems in industry and agriculture. Perhaps this was due to elementary incompetence? As, for example, the decision of […] Marchuk in the autumn of 1995 against the recommendations of experts of the Committee not to introduce the hryvnia.”


Of course, one cannot but ask: why appoint such an unfit person as Prime Minister in the first place? What forces were pushing former KGB General Marchuk to ever-higher offices? There are many indications that his involvement with the Moscow nomenklatura of the KGB continued all these years and we can safely assume that these forces were Marchuk’s former KGB colleagues paving the way.

In October 1996, the newspaper Den (Day) was founded in Kyiv by Yevhen Shcherban, a Ukrainian oligarch and politician of the mid-1990s, and, from 1995-1996, the richest oligarch in Donbas as the main shareholder of Ukraine’s largest conglomerate, Industrial Union of Donbas, which united hundreds of large enterprises in the Donetsk and Luhansk regions. On November 3, 1996, Shcherban was killed, a year after the previous “master of Donbas” and richest oligarch, Akhat Bragin, was killed on October 15, 1995. Both of these murders were committed by the Kushnir crime syndicate.12 Shcherban was murdered on the airfield at Donetsk airport while returning from Moscow in his own Yak-40 jet from the birthday party of Iosif Kobzon, a famous singer, businessman, and longtime KGB agent. At least ten people were involved in preparing the murder. The actual murder was carried out by two criminals, Vadim Bolotskikh (“Muscovite”) and Gennady Zangelidi (“Animal”).13 Bolotskikh and Zangelidi entered the airport by car with fake documents; they had a flight and a police uniform. When Shcherban got out of the plane, Bolotskih shot him in the back of the head, and in a panic Zangelidi started randomly shooting at other people, after which both jumped into the car and fled, then burned the car somewhere in the city’s outskirts. Apart from Shcherban, his wife, an aircraft technician, and a flight engineer, who died of his wounds in hospital, were also killed. In the firefight, Zangelidi accidentally also hit Bolotskikh

It was after this murder that another Donetsk group, and a significant part of Yevhen Shcherban’s property, ended up in the ownership of Rinat Akhmetov, who thereafter graduated to becoming the richest oligarch not only of Donbas, but of all of Ukraine. At one point, according to Bloomberg’s 2012 ranking, Akhmetov was richer than Russia’s billionaires.

The operation was planned by gangster boss Yevhen Kushnir. At some point, he was arrested in Ukraine, placed in a pre-trial detention center in Donetsk and killed in his cell under mysterious circumstances. In 2000, Russian police managed to arrest Bolotskikh and extradited him to Ukraine (Zangelidi was already dead by that time).14


The murder of Yevhen Shcherban became one of the most high-profile criminal cases in the Ukraine. Journalist Sergei Kuzin (author of Donetsk Mafia) believes that both Shcherban and Bragin were assassinated on the order of Russian criminal groups who wanted to control privatization in Donbas. In favor of this Kuzin cites the fact that Vadim Bolotskikh was involved in both murders – of Bragin and Shcherban. Former Ukrainian Prime Minister Vitaliy Masol15 said that in his opinion, it was a business associate of Akhmetov who killed Shcherban: “I, for example, believe that Shcherban was killed by Yanukovych. He got him out of his way. This is Donetsk”.16


Curiously Rinat Akhmetov, who was Bragin and Shcherban’s partner at the Industrial Union of Donbas and who benefited more than others from the murder of a competitor, gave no evidence in Shcherban’s case.

But there was another person who unexpectedly benefited from Shcherban’s murder: KGB General Marchuk. He ended up owning the Den newspaper. This was the only daily newspaper in Ukraine with its own audience. Having turned Den into an opposition newspaper, Marchuk was able to attract high quality, opinion-forming authors and replaced editor-in-chief Volodymyr Ruban with a new editor, Larisa Ivshina, Marchuk’s former press secretary, who later became his wife.

Gradually, Marchuk became a well-known and influential parliamentary political figure. In the March 1998 parliamentary elections, he was number two on the list of the Social Democratic Party of Ukraine (SDPU) and was elected to the Verkhovna Rada for the second time. From May to December 1998, he headed the parliamentary faction of the SDPU. At the same time, he decided to take part in the next Presidential Elections and become the next President of Ukraine.

Marchuk was to compete against Kuchma, the incumbent President. Another serious rival was Pavlo Lazarenko, Prime Minister of Ukraine from May 1996 to July 1997. After his resignation, he became Kuchma’s opponent and, in 1998 was elected to the Rada as leader of the Unity (Hromada) party which he had set up.

As it happened, Lazarenko never took part in the Presidential race. On February 9, 1999, the Attorney General requested that the Verkhovna Rada deprive Lazarenko of his parliamentary immunity. On February 15, Lazarenko left the country, and on February 17, 310 deputies out of 450 voted for his arrest.17 In collusion, the Attorney General’s Office and Kuchma had forced Lazarenko out of the Presidential race.

Now the only obstacle to Marchuk’s Presidency was Kuchma. Should we be surprised that in the spring of 1999, secret recordings of conversations were made in the office of the President. A participant in this operation was Kuchma’s bodyguard, Melnychenko.18 What follows below is based on his tapes, all of which he gave to Yuri Felshtinsky (co-author of this book). Felshtinsky assembled a group of experts – including former SBU wiretapping specialists – to transcribe the tapes and the spoken testimony given by the major.

It is important to remember the timing in 1999. In Moscow, Marchuk’s KGB handlers were simultaneously plotting to take over the Russian Presidency from Yeltsin by inserting their own man, Lieutenant Colonel Vladimir Putin, Marchuk’s colleague. In the event of a simultaneous victory parachuting Marchuk into the Ukrainian Presidency, the KGB would gain power not only over Russia but also over Ukraine. Evidently, this was the idea behind recruiting a member of Kuchma’s security detail in order to record conversations in the President’s office and leverage this information against Kuchma during the 1999 Presidential Election.

Melnychenko recalled that Marchuk gave him a thousand German marks.19 They met at least ten times in different secret locations, at different times, using codes and a secret cell phone, changing cars frequently or meeting at the last moment.20


It proved a good investment. The wiretap helpfully revealed that Kuchma was doing some plotting of his own. In May, the head of the Central Election Commission Mykhailo Ryabets, had a meeting with Kuchma. At this meeting, “he told Kuchma how he would not allow Marchuk to participate in the Presidential campaign”.21 Marchuk immediately called Ryabets and told him that he knew about his plan to prevent him from running.

In less than a day Kuchma found out about the leak, said Melnychenko. “Near lunchtime, Aleksandr Volkov, a well-known oligarch, came in to see Kuchma and said: ‘Leonid, I have two bits of news, one of which is very unpleasant’. He said: ‘Marchuk knows everything about what you agreed with Ryabets yesterday, how to remove him from the electoral register – he knows all about it’.” Kuchma immediately called Leonid Derkach, his Head of the SBU, and instructed him to sweep the Presidential offices for microphones. Melnychenko was only just able to escape detection when he was tipped off by chance that the SBU was about to descend on Kuchma’s office with 15 agents, and removed the recorder just in time.22


The first round of the Presidential Elections was scheduled for October 31, 1999, two months before Yeltsin resigned in Moscow and made Vladimir Putin Acting-President of the Russian Federation.

Unlike Yeltsin, however, Kuchma had no intention of resigning before the first round in Marchuk’s favor. This was despite the fact that “Marchuk had some pretty serious information that would have allowed Kuchma to be removed as President”, Melnychenko said.

Having failed to persuade Kuchma to resign before the elections, Marchuk’s Plan B was to remove Kuchma during or after the second round of 14 November, 1999. “Among other things, they planned to install a video surveillance system in Kuchma’s office and film everything that was going on “on the second day after the first round of the Presidential Election” to record conversations that would prove that Kuchma had violated the election campaign during the first round”, Melnychenko said.

But Kuchma had his own KGB connections and horse-trading ensued between the two rivals. At this time, Marchuk met with Aleksandr Volkov, a Russian member of parliament for United Russia (now led by Dmitri Medvedev). Volkov was KGB and held kompromat on Marchuk which Derkach handed on to Kuchma. This led Marchuk and Kuchma to negotiate together during the first round of the Presidential Elections about which role Marchuk would take in the government.

In the end, Marchuk cancelled the second wiretapping of Kuchma. Melnychenko stated, “He said: no, we won’t do anything, we don’t need anything anymore.” Why soon became clear. In the first round of the Presidential Elections Marchuk came fifth, gaining just over 8 percent, in a crowded field of nineteen candidates. Marchuk was not destined to become Ukraine’s first KGB President. And since that was the case, it made more sense not to throw Kuchma out, but to negotiate with him for Marchuk’s position of secretary of the National Security and Defense Council, which is what Marchuk did.

When Yeltsin resigned, Russia was delivered to the KGB through its expert manipulation of him and the national elections, whereas Ukraine escaped that fate because the democratic process had – however imperfectly – leap-frogged sinister back-room corruption.

Marchuk lacked Putin’s cunning and was increasingly marginalized. With the kompromat Marchuk had over Kuchma, he stayed in high office until he was forced to resign in 2004 as defense minister. Ostensibly this was because of explosions of old ammunition at artillery depots, but in reality, it was because President Kuchma was approaching the end of his final term in office. Marchuk tried to return to national politics at the 2006 parliamentary elections, but the moment had gone. Putin’s Ukrainian equivalent had let absolute power over Ukraine slip through the hands of the KGB. Marchuk’s party received only 0.06 percent of the vote and he left politics.


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