Founded this fall, Donetsk oligarch Serhiy Taruta’s Osnova or Foundation party has already started campaigning although the next Verkhovna Rada election is two years away
Dozens of billboards with his portrait and the party’s name and slogan have popped up in Kyiv and in the southeastern oblasts of Ukraine. Information about the new party is not readily available, however, as it is still mostly just on paper. But any oligarchic project stands a good chance of meeting the threshold requirement for gaining seats in the Rada based on a solid advertising budget, as past experience has shown.
Short on ideology
The Osnova site states that the party’s ideology is based on the principles of liberal conservatism. In Ukrainian politics, however, these words typically mean very little. What kind of conservatism are we talking about? That’s not very clear. And Taruta’s rhetoric so far sounds very much like the rhetoric of Ukraine’s other populists, all of whom count on a fairly undemanding electoral base. In some ways, he resembles Serhiy Tihipko, who tried over and over again to enter politics as a “new face,” although he had been in politics since his days in the Dnipropetrovsk Oblast Komsomol Executive.
Who will join the Taruta team? Whose interests will the party promote and who will be its allies? Where will its money come from? Taruta himself is a very ambiguous figure. For a long time he was seen as an untypical Donetsk homeboy: a high-profile businessman with an intelligent demeanor without any known criminal background. He also differed from the other Donetsk politicians in his political positions. He never played up to pro-Russian parties and movements, supporting, instead, pro-Ukrainian forces that were never very popular in Donbas.
For instance, in a 2006 interview in Ukrainska Pravda, the tycoon admitted that in 2004 he had cast his ballot for Viktor Yushchenko. “My position was the European choice,” he emphasized. In that same interview he also mentioned that he liked Yulia Tymoshenko.
In 2010, Taruta, in fact, supported Tymoshenko in her bid for the presidency. “Of the two candidates running today, only Yulia Tymoshenko will be able to effectively defend business interests and overcome corruption,” he said in February 2010. “She represents political and economic stability in Ukraine and will work in the country’s interests, not the interests of some particular business clan. Besides, Ms. Tymoshenko has well-deserved authority in the eyes of leaders in Russia and Europe, which means she will always be able to work out a deal in favor of Ukrainian business. Only with President Tymoshenko will it be possible for Ukraine to see all those promising growth plans that we have outlined with our new Russian partners.”
Positive image, poor performance
And so, when Taruta was appointed Governor of Donetsk Oblast in 2014, just as the anti-Ukrainian putsch began there, Ukrainians by and large saw this as something positive. Taruta seemed to be just the right candidate with the strength to resolve the situation: a local oligarch who understood the local mentality well and was oriented towards Ukraine. But it was not to be. Taruta proved to be a weak politician and was unable to get control over the situation. The local police and SBU kept sabotaging orders from above and had little interest in defending the Oblast State Administration. Unlike Ihor Kolomoyskiy in neighboring Dnipropetrovsk Oblast, Taruta either did not dare or did not want to put together pro-Ukrainian Self-Defense squads. And so the Donbas Battalion was actually formed in Dnipro, and not in the Donbas. Meanwhile in Donetsk Oblast, the advantage went to the militants almost from the start.
After he resigned as governor, Taruta was elected to the Verkhovna Rada. Eventually, he announced the formation of his own political party. Based on information leaked in the press, it was clear from the beginning that this new party was intended to pick up the electorate of the now-defunct Party of the Regions, mostly in Ukraine’s southern and eastern oblasts. This certainly makes sense, but the problem is that there are several similar parties already busy working to win over this same electorate. The monopoly enjoyed by PR has long since collapsed. Now, voters in those regions have the Opposition Bloc or Opobloc, Vadym Rabinovych’s Za Zhyttia [For Life] Party, the forever-lurking Vidrodzhennia [Revival] founded in 2004, and Nash Krai [Our Country]. Osnova will make five in this cluster and can only hope that yet another project along the lines of the also-defunct Socialist Party doesn’t make an appearance in the run-up to the 2019 election. In this kind of situation, the chances of Osnova succeeding without forming an alliance with any of the more popular political parties are very low.
There were rumors at one point that : a local oligarch who understood the local mentality well and was oriented towards Ukraine. But it was not to be. Taruta proved to be a weak politician and was unable to get control over the situation. The local police and SBU kept sabotaging orders from above and had little interest in defending the Oblast State Administration. Unlike Ihor Taruta’s party was being supported by Rinat Akhmetov, but this is hard to confirm, one way or another, especially since relations between the two Donetsk tycoons were always strained. The chances of this being true are at most 50-50. One story is that the purpose of Osnova is to gradually siphon off Akhmetov’s folks from the Opposition Bloc, given that former Regionals split into the Akhmetov wing, which is more loyal to Poroshenko, and the Liovochkin-Firtash wing, which is completely opposed. If this is true, however, then Osnova is pretty much guaranteed a spot in the next Rada, because Akhmetov has both the money and the administrative leverage in Donetsk, Zaporizhzhia and Dnipropetrovsk Oblasts, where his businesses are located, to make sure of this.
Filling Osnova’s ranks
So far, it’s not obvious that Akhmetov is behind this new party of Taruta’s. Of those who have already confirmed that they will join Osnova, Akhmetov’s people are not especially evident. Right now, the party appears to be drawing people who are not especially known in Ukrainian politics. Indeed, judging from the party’s Facebook page, there are only three or four spokespersons other than Taruta.
In April 2017, Andriy Nikolayenko, who was governor of Kirovohrad under Viktor Yanukovych over 2013-2014, was elected as party boss. When Taruta was governor of Donetsk Oblast, Nikolayenko was his deputy, but he is mainly seen as an underling to the higher-profile Regional Serhiy Larin, who was deputy Chief-of-Staff in the Yanukovych Administration and is now in the Opposition Bloc faction. According to local journalists, Nikolayenko hired titushky to defend the Kirovohrad Oblast Administration building in February 2014, who then beat up supporters of the Euromaidan. After the collapse of the Yanukovych regime, Nikolayenko was let go, but soon found a warm seat under the new Administration.
Yaroslav Arsiriy, Nikolayenko’s deputy governor in the Kirovohrad Oblast Administration has also joined Osnova. His main function there was to oversee construction and architecture.
Another higher-profile member of Taruta’s party is Volodymyr Polochaninov, a one-time Batkivshchyna MP (2012-2014). In 2015, Ekonomichna Pravda published an investigative piece into the “Oil rigs of Boyko,” which established that Polochaninov is a business partners with one-time Naftogaz Ukrainy boss and Opposition Bloc leader Yuriy Boyko.
The leader of an obscure mini-party called Narodna Syla [People Power], Kateryna Vaidych, has also announced that she will join Osnova, and has called on her fellow party members to do the same. Interestingly, Vaidych’s deputy in Narodna Syla is Denys Sheybout, whose father, Viktor Sheybout, was first deputy director of the State Tax Service from March to December 2010, and then deputy director of the State Migration Service until April 2014. Denys Sheybout assured Ukrainian Week, however, that he was not planning to switch to Osnova and that he was not connected to the party in any way.
The PR-Russia connection
Why Serhiy Taruta decided to put his faith in people related to the Yanukovych regime is not entirely understandable. Is this the personal initiative of the oligarch himself or is it at the request of some silent investor? It’s not clear who actually is funding the party, but it seems unlikely that Taruta is putting up his own money. Although this oligarch’s worth was estimated at over US $2 billion back in 2008, he claims today that his wealth has shrunk a thousand-fold. In an interview with Hard Talk in 2015, he announced that he had preserved only 0.1% of his former wealth.
Which brings the story around to Taruta’s business interests. In 2010, 50%+2 shares of the Industrial Union of Donbas (IUD), founded by the oligarch, was bought up by Russia’s Vneshekonombank, the foreign trade bank. That means that Taruta and the bank are partners. Taruta himself holds only 24.999% of IUD, while the bank is 100% state-owned and Russian Premier Dmitry Medvedev is the chair of its supervisory board. And so, whether he intended it to be so or not, Serhiy Taruta is business partners with the Kremlin.
What kind of influence the Kremlin has over the Donetsk oligarch and his party is not entirely clear and, so far, there is no evidence. Nor is there evidence that Osnova is being financed by Russian money. Given the political histories of the party’s spokespersons, however, and the nature of Taruta’s business interests, it’s worth getting a good glimpse into its inner workings. It’s entirely possible that, under the aegis of a pro-European politician, some more agents of influence from an enemy state could find their way to seats in the Rada.
In the basement of the Capitol
On September 25, NewsOne reported on Serhiy Taruta’s event in Washington, “The highest level in the US, the Special Congressional Committee for Financial Issues [sic], will find out about the corruption at the NBU, Only thanks to the systematic work of the team that collected evidence about the corruption of the top officials at the National Bank of Ukraine, will the strongest in the world find out about this.” At the event, Taruta and Oleksandr Zavadetskiy, a one-time director of the NBU Department for Monitoring individuals connected to banks, were planning to report on the deals by-then-departed NBU Governor Valeria Hontareva had cut. The event did take place… in a tiny basement room at the Capitol where the Congress meets, with a very small audience—and NewsOne cameras.
The speakers at the event were introduced, not without some problems in pronunciation, by Connie Mack IV, a Republican member of the US House of Representatives from 2005 to 2013. Since leaving his Congressional career behind, Mack has been working as a lobbyist and consultant. Over 2015-2016, his name often came up as a lobbyist for Hungary’s Viktor Orban Administration in the US.
Former CIA director James Woolsey Jr. offered a few generalized comments about corruption. In addition to being the CIA boss in 1993-1995 under the first Clinton Administration, Woolsey held high posts under other US presidents as well and was involved in negotiations with the USSR over arms treaties in the 1980s.
Interestingly, there were no current elected American officials in attendance at the event. Moreover, there is no such creature as a “Special Congressional Committee for Financial Issues” in the US Congress. The Congress has a Financial Services Committee and the Senate has Finance Committee. Among the joint Congressional committees there is none that specializes specifically on financial issues. The Senate Finance Committee met on September 25 but the agenda included only propositions from a number of senators on how to reform the Affordable Care Act. Pretty much the only reaction to Taruta’s US event was an article by JP Carroll in the Weekly Standard under the headline, “The mother of all fake news items: How a windowless room in the basement of the Capitol was set up to look like a fake [sic] Congressional hearing.” And some angry tweets in response.