Debunking the Western Spin re "Democrat" Yuschenko: Just Follow the Money Into the Ukraine

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 Tymoshenko, 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 is 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 Azerbaidjan, 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 Portrait 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.


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