Yevhen MARCHUK: “Don’t expect compliments when you expose schemes”

Since Yevhen Marchuk was appointed Secretary of the National Security and Defense Council of Ukraine two years ago, every NSDC meeting has been a major political event, prompting the country’s political leadership to make important decisions and a step forward, aimed at bringing the economy out of the shadows, helping Ukraine determine its place in the world system of coordinates. Naturally, NSDC’s intrusion in the sphere of interests “on a specially large scale” causes an avalanche of criticism from the media affiliated with those interests, addressing the NSDC in general and its secretary in particular. Hopefully, this round table with Mr. Marchuk will let the reader have a first-hand idea about his position on many regard to many pointed situation.

FIVE BILLION HRYVNIAS HAS BEEN RETURNED TO UKRAINE DURING THE PAST TWO YEARS

The Day: November 10 marked the second anniversary of your appointment as NSDC Secretary. At the time your decision to accept it divided your supporters. Some believed this was a betrayal, others said it was a politically justifiable move. What actually made you say yes to the president’s offer? Have your expectations come true? Have you accomplished what you wanted?

Marchuk: Making that decision wasn’t easy. President Leonid Kuchma took a step unprecedented in our politics. Likewise, it wasn’t easy for him, although this is standard practice in Europe. Before I made the decision I spoke with the leaders of four parties that had nominated me for president. We had a long discussion. There were many questions, but eventually all agreed that the offer could be accepted. Their arguments were that I could use the post to implement a number of important points in my own campaign program, particularly in terms of combating the shadow economy. Otherwise this would have been impossible.

Over the past two years I’ve participated in solving acute problems that have had a strong impact on the state and the people, joint ventures with phony investment, for example. To put it simply, the problem boils down to a small group of smooth operators in Ukraine that have been able to take advantage of a certain unregulated character of our legislation and the ostentatious naХvetО of certain authorities, relieving the budget of some 3.5 billion hryvnias. The NSDC passed a resolution and spent a long time taking measures to do so, but the channel for unlawful money drainage was finally blocked.

Remember all the fuss over the NSDC resolution concerning the railroad? In the end the industry was returned about 1.4 billion hryvnias brazenly stolen by several business structures, behind which stood well-known figures. Or the attacks of that “telegraphic” edition on Heorhy Kyrpa, the newly appointed head of Ukrzaliznytsia (his predecessor was removed from office by an NSDC meeting), who had started to block the theft routes. In just a year he showed fantastic accomplishments, repaying all the enterprise’s debts to the budget and pension fund, increasing the wages almost two-and-a-half times, launching a number of programs, including Kyiv’s new excellent rail terminal. There was nothing miraculous here, just channeling the money stolen back into the industry.

Three and a half and one and a half totals five billion hryvnias returned to the state. I think this alone justifies my decision to accept Leonid Kuchma’s offer.

Of course, I could add to the list of economic problems we’ve coped with in the past two years. Our detailed progress reports except for a couple of strictly confidential clauses have been carried by the journal Strategic Panorama published by the NSDC office. The documents are also on our Web site, same as this year. Some mark the anniversary of the cassette scandal and we can mark the year’s anniversary of solving important problems of getting tens of billions of hryvnias out of the shadow.

But this was accomplished, wasn’t it?

We are still faced with the problems of demography, European integration, defense reform, and Ukraine’s transition to an innovative model of development. These are problems of nationwide importance.

We had to return to one problem three times, the Eurasian oil transport corridor, otherwise known as the Odesa-Brody oil pipeline. The NSDC decided to speed up construction of the Pivdenny [Southern] Terminal and Odesa-Brody pipeline last March. Naturally, diversifying energy supply sources is a most important component of Ukraine’s energy sovereignty. Yet some newspapers launched a campaign to discredit the NSDC resolutions on the problem. One political party aided by the cabinet tried to get the project completely under its control. Behind all this were personal and party interests, mainly financial ones. Only the current government started doing things the need for which has been discussed for a year and a half. The construction of the pipeline was completed and the first section of the terminal will be ready this December at a cost of $1.5 billion. To start up the pipeline, 460,000 tons of technological oil will first have to be pumped in. That costs $90 million. We can’t afford this right now, and we don’t have any oil contracts. The first vice premier has visited Brussels twice, Naftohazprom and Ukrtransnafta executives are traveling all over the world, so maybe they’ll make some kind of deal. That’s the price of pseudo-patriotic demagoguery.

THE ESSENCE OF PATRIOTISM IS SIMPLE – TELL THE TRUTH

The Day: Why do you think some media outlets are reacting so inappropriately to NSDC decisions, sometimes even distorting the facts, presenting the council’s stand as your personal position? Moreover, publications close to the Presidential Administration often openly attack you.

Marchuk: The problems we uncover and NSDC decisions subsequently implemented by presidential orders affect the personal interests of a number of smooth operators who have wound up in politics, the mass media, and other spheres. We uncover their schemes. Clearly, they will stop at nothing.

Now and then I have to make public certain NSDC decisions, so I’m their target. As you know, the council is headed by the president and it includes the prime minister, speaker (if he so agrees), president of the Ukrainian National Academy of Sciences, and others. The agenda is set by the president and the decisions are discussed and passed during NSDC sessions to be implemented as presidential edicts. In other words, we, as the highest coordinating body, make our decisions collectively. To be honest, there is competition and conflicts at the top. Some are leaked to the press, meanly the gossip-mongers that see politics at the level of primitive intrigue. Their so- called analysts usually start by saying that word has it, it is being said that, and they rely in their inferences on how long who spent in whose office.

I told the newspaper Fakty about the latest schemes to pump hundreds of billions of dollars out of the energy sector and send the money abroad. The commission I headed, set up on the president’s instructions, proved that the previous cabinet misinformed the president and parliament about the actual situation in the energy sector. No one in the government could refute a single point in our statement and the cabinet never held a meeting to consider the commission’s findings, contrary to the president’s directive. Remember the campaign certain media started against the NSDC? It involved former cabinet members. It happened when we investigated the Ukrzaliznytsia and prepared information policy issues for the council’s deliberation. We are now studying the situation with the Era Television Company, Mykolayiv Alumina Plant, and so on. You can imagine that this affects a lot of interests high up.

The Day: Don’t you think that the examples you’ve just cited reflect certain political trends that need further explaining?

Marchuk: Every time we enter the area of someone’s interests, and our trespassing results in considerable money being returned to the state, there is another portion of buckets of dirt hurled our way by the politicians concerned and affiliated media.

The Day: Mr. Marchuk, your story lacks names. Precisely who tried to steal from the state all those billions of hryvnias?

Marchuk: The problem is that Ukrainian legislation lacks traditions dating back hundreds of years, as, for example, in Germany. There are people using such legislative loopholes. Yet formally they are not among the founders of all those firms I have mentioned; they seldom have personal bank accounts; everywhere you encounter straw men. Ukraine joined the international convention to combat money laundering only last year. Back in 1992, I was the first to establish contact with Interpol and arrange for cooperation between Ukrainian and German, British, and US law enforcement authorities.

Investigating abuses, say, in the energy sector, the State Tax Administration forwarded several dozen inquiries abroad, concerning our fellow countrymen. No responses have yet been received. This is one reason. Another is that such names can be announced only by a court of law. Yes, the people should know who is pumping money out of Ukraine. Yet it is likewise important that such theft routes have been blocked. But to get to the crux of the matter, to the stage where names can be named, we must pass the judicial stage.

The Day: Can we expect another case as resonant as that of Lazarenko in the near future?

Marchuk: No, not on that scale. On a lesser scale maybe.

The Day: Now that the election is approaching, the logical question is, Where do you see the main conflict and intrigue of the election campaign?

Marchuk: The election campaign is more sporadic than previous ones. Officially it is still to begin. If the centrist forces fail to work out a mechanism in the nearest future enabling them to see April 2002 in terms of cooperation between the cabinet and parliament, Ukraine could find itself in a situation considerably more complicated than previously. At the same time, the situation among the Center and Right is becoming more and more interesting. Look at who’s fighting who. Is the Center fighting its ideological rivals? The Left? The Communists? No, they’re fighting among themselves. With the Center it’s maybe even worse; they’re fighting the national democratic forces. This is evidence that our political culture is markedly underdeveloped; we don’t understand our political mission.

The Day: By the way, what lesson did you learn from such a curious political contrivance as the Kaniv Four?

Marchuk: I think the lesson is moral rather than political. When a joint decision is made the hard way and then one of the decision-makers stages his own press conferences and bungles everything, I think it’s a matter of morals rather than politics. And then that same person turns everything upside down half a year or a year later. Let alone that my former brother-in-arms launched a dirty campaign against me, just as I was recuperating after a road accident, spending almost three months in bed with multiple fractures.

The Day: What conclusions those in power should make after the Russian Tu-154 crash?

Marchuk: It’s an extremely painful subject and a big lesson – painful because a lot of people died and Ukraine’s image suffered badly, painful for the president who found himself in a very embarrassing situation for no fault of his own, painful for the nation’s Armed Forces and the military in general.

The Day: Is it true that the deputy general prosecutor of Russia had arrest warrants for our military officers when you arrived in Sochi together with Vladimir Rushailo?

Marchuk: No, not exactly. He had no arrest warrants. When the Russian government commission landed in Sochi the military understood everything at once, especially Russian Air Defenses Commander Gorkov and the deputy prosecutor general of Russia. Now picture the situation from a purely psychological point of view. Over a hundred relatives of the dead passengers from Israel and almost fifty from Russia, all wanting to collect the bodies. And there was nothing to collect. Just the sea: only fifteen bodies were found, including two brides. And all the while the Ukrainian side was supplying disinformation, to put it mildly, saying something like this couldn’t possibly have happened because it wasn’t supposed to, in theory or practice. And then two lawmakers claimed that the Russians must have tampered with the Tu-154 onboard systems with their radar. This is said to have been more than the Russian deputy prosecutor general, as a member of the commission, could stand. When Vladimir Rushailo and I arrived in Sochi the situation normalized a little. It was an unbearable tragedy for the relatives; there they were facing the sea, knowing the bodies of their near and dear were at a depth of 2,160 meters, with 60 meters of tarry silt at the bottom, in an aggressive hydrosulfuric medium, where everything was sucked in. They saw me as a Ukrainian general representing our official stand, which they found bizarre. As soon as Rushailo and I got off the plane we were led to a model to see what had happened. Then we heard the experts, and everything was clear without computations. But when I heard reports by commanding officers of the Ukrainian Air Defense and, in turn, reported to the president, it was decided to make a statement which I would deliver in Sochi.

Many aspects of the case remain confidential; the commission is still working, yet the problem of patriotism and its absence found its bitter reflection in the Tu-154 tragedy. It was like a bloody shirt from the top officials’ regulations telling them how to behave in a situation like that. After all, patriotism means to simply tell the truth, no matter how bitter. This is always patriotic.

Apart from the fact that Ukraine lost a lot of face in the aftermath of the tragedy, the way some of our brass behaved left Ukrainian-Russian relations without a number of positive things it had taken much hard work to achieve, not to mention an extremely complicated problem facing us: Israel and compensations for the families of the passengers killed in the crash. In fact, the Russian and Israeli authorities have to be given credit for not letting the tragedy build tensions in their relations with Ukraine.

OUR PROBLEM IS CERTAIN OBSOLETE FOREIGN POLICY TECHNOLOGIES

The Day: What political course should Ukraine adopt now that the Russian-US relationship is warming? How much is there to allegations about Ukraine becoming a marginal zone or getting included in Russia’s “zone of responsibility?”

Marchuk: The new Russian administration and President Putin proposed an extraordinarily dynamic rate of development in Russian- European and Russian-US relations. They are doing fine on their end, although they had a few lapses at first. I joked once that our greatest danger would be if Russia was integrated into Europe, NATO included, ahead of us, and then inviting us to join them in Europe. Now the joke sounds different. There is a great deal of major repair to be done in our foreign policy, so we can adequately respond to the new situation.

Russia, as a world player and member of the nuclear club, talks to America using different categories. We have no such arsenal, and nuclear weapons are not the only point. We cannot use the kind of tools being used by Russia in its relations with the United States, even in matters where we could presumably also take part, like the US national missile defense system. We have long tried to exploit our transit potential and strategic location. These are really important tools, but they are quickly wearing out, melting like snow. And so the improved relations between such giant countries as Russia and the US, a positive factor, of course, make it imperative for us to modify our foreign policy strategy. We have this potential. I think that our problem lies in obsolete foreign policy concepts. We need modernized concepts of Ukrainian-Russian, Ukrainian-US, Ukrainian- NATO, and Ukrainian-EU relations. We are working on them, as instructed by President Leonid Kuchma.

The Day: Considering the latest replacements in the Border Guards command, what is the status of border protection among other national security issues, particularly with regard to the eastern frontier, illegal migration, smuggling, and so on, that the president emphasized not so long ago?

Marchuk: The next NSDC meeting in the first ten days of December will deal with border issues. There are quite a number of them. The delimitation of the eastern frontier has been practically completed. Demarcation will be complicated as the Russians are resisting in every concievable way.

This frontier remains transparent and the president’s concern is caused not only by the threat of illegal migration, which really is picking up momentum. It’s just that we must have a normal Ukrainian-Russian border designed to bar entrance and exit to criminal elements, weapons, drugs, and so on.

Another thing is that there must be no barbed wire. That territory has a complicated history and changing the frontier will be received by the populace on both sides differently. Border cooperation is very beneficial for both countries, so the frontier must be civilized, well-protected, but without creating additional problems for the people; it must help business on both sides. It has to be balanced, and we’ll find that balance. There are a number of problems relating to the Ukrainian- Moldovan and Ukrainian-Belarusian borders. They must be solved.

The Day: Do we need to rethink the format of Ukrainian-NATO cooperation? .

Marchuk: Our cooperation with NATO is intensive, in both the military and civilian spheres, we work under the Partnership for Peace and Charter programs. I would say, however, that we are not using our cooperation potential in full. There are still capabilities that remain to be put to good use.

As we know, the issue of joining or not joining NATO is off the agenda. It’s a purely domestic political issue. From the foreign policy perspective, the problem largely depends on the degree of confidence in the Ukrainian-Russian duo. From what I know about the Russians, their government, parliament, and media get most seriously united, sometimes against us, whenever they imagine the border line with NATO running somewhere close to Belgorod or Kursk. Remember the Russian Duma’s resolution on the Russian status of Sevastopol? Yet after the breakthrough in Russian-US relations with NATO the situation has become more favorable for us.

The Day: The media responded differently to your statement about the possibility of changing Ukraine’s attitude toward the collective security agreement made by certain CIS countries.

Marchuk: I will repeat exactly what I told the newspaper Nezavisimaya gazeta [Independent Gazette]. They asked me the same question and my answer was later distorted and used for speculations by another newspaper. This is what I said: “Time will tell. Ours is a non-bloc country.” I still think so. Besides, changing our attitude toward the agreement does not mean accession. Also, accession to any bloc is something to be decided by parliament, president, perhaps even by referendum. To this end, I would like to stress the ineffectiveness and harm of dogmatism, especially in politics and particularly in foreign policy.

Remember how very tense Russian-US relations became after NATO decided to expand eastward? At present, Russia might de facto become an associate NATO member ahead of Ukraine. I remember some of our ultra-patriots grabbing Leonid Kravchuk by the hand during talks with Russia, not wanting him to sign a simple document, something like a protocol assignment by the presidents of Ukraine and Russia to solve an aspect of the Russian naval presence in the Crimea. Today, the Russian and Ukrainian fleets stage a joint parade to the applause of Sevastopol residents.

BARRICADE MENTALITY AS AN OBSTACLE

The Day: The information sphere is one of the main objects of NSDC attention. The last council session, concerning information security, called forth quite a lively public response. What do you think should be the concept of the national policy with regard to the Internet? Is this country prepared to increase its presence in the World Wide Web? Also, would you please comment on two allegations already carried by some of the media, namely that (a) Yevhen Marchuk is putting the president in an embarrassing situation, making him look like an enemy of the Internet, and (b) that, on the contrary, someone is doing this to Marchuk?

Marchuk: Unfortunately, the public response was anything but lively. Perhaps it’s still to come. The Internet media did respond, alarmed by the licensing prospect. Some didn’t understand and got scared, others got angry, and still others were instructed to get angry. This is a natural election time response.

First, whoever knows what the Internet really is (and the Internet media are really just a tiny part) understands that somehow closing it is physically impossible.

Second, the problem is the opposite. We in Ukraine are dangerously lagging behind the rest of the world in terms of information technologies at the state level and development of the Ukrainian segment of the Internet. That was how the issue was formulated at the NSDC meeting.

Third, the problem of information security of our state and society was not engineered by anybody. This problem exists not only in Ukraine. It emerged under the pressure of our highly competitive international life, under the pressure of political parties and volunteer organizations, as well as under parliamentary pressure. This is one of the elements of the information policy in any country.

Fourth, problems relating to information policy and information security are so multiple, complicated, and pressing for Ukraine that the parliament, after becoming convinced that the previous government did nothing in this respect, introduced changes and amendments in the law of Ukraine On the State Informationization Program in September 2001, assigning the National Security and Defense Council to supervise its implementation.

I address this information to those claiming the NSDC sitting dealing with this important issue was “just one more CIS-style get-together” and national security problems an attempt to enforce emergency situation procedures.

I feel ashamed watching journalists that showed a good performance on the first wave of independence in the 1990s lose their face now, with some plainly degrading.

The dramatic events in the early years of independence were simultaneously the easiest to handle journalistically. The barricade mentality and the habit of dividing everybody into friends and foes are history for many serious politicians. Not so for a considerable part of our journalists; they are still loath to study complex problems that are growing, not decreasing in number in this society. As a result, we have practically no expert journalists. There are a few. Of course, those in power are also to blame. As for Marchuk allegedly placing the president in an embarrassing situation, the whole thing was engineered by a young politician, a lawmaker from a majority constituency, very fond of oil products, also said to be attached to Orthodoxy, customs confiscations, university degrees, and suchlike. He knows that we are onto his secret technologies, using impulses, research programs, and so on, that spell mind- boggling money for himself. He’s scared, so he comes up with all kinds of horror stories for President Kuchma. Who knows? Maybe the chief executive will really believe there’s a conspiracy being hatched and also get frightened. He didn’t, but the man I’m talking about is persistent.

About the state information policy and information security. The problem is this. The state informationization program bill was passed three years ago. More than UAH 200 million of budget money was allocated for it in 2001 alone, but a mere eight million was channeled into the program, the rest was scattered at various ministries and agencies that spent it on PCs and such. In other words, first they pushed through the bill, then found budget money, making it a separate expense item, and then added to the communications state committee’s authority. All the while the informationization program’s status remained zero.

Among other things, the program envisages the transition of all governmental institutions to electronic data exchange spelling a whole series of problems: electronic signature, authorization, and so on. This also has to do with the Internet, as the state will have to use it after switching over to electronic data exchange. Meanwhile 60% of all Ukrainian wire broadcasting networks have vanished into thin air. This means the wires were stolen, of course. Such networks were a major official information source for remote rural areas, particularly in an emergency.

Shouldn’t we react? We are witness to an aggressive so-called market Russification of the media. The market regulators haven’t work in the favor of Ukrainian.

The Day: Why do you think the authorities have no partners among the media that would explain the importance of such projects in a qualified way? How is it possible to portray a politician who was actually the first to open his personal Web site as an enemy of the Internet?

Marchuk: In this country official activities are covered by 2-5% of the state-run media; all the others are what we call non-governmental; they have private interests to pursue that do not always coincide with national ones. All we have today is the Ukrinform [news agency] and [official television] UT-1, both underfinanced. We aren’t likely to increase the number of government-control media, so we must at least secure an adequate performance of those we have.

YOU HAVE TO LEARN NOT ONLY TO WIELD POWER

The Day: Obviously, this issue needs deeper examination. How do you think the domestic political situation will develop? Our public consciousness is not as yet immune to the dirty public relations technologies. How do your political allies respond to them? How does the president?

Marchuk: Negatively as a rule. Property redistribution hasn’t ended yet, and the state, trying to bring some order, can’t expect compliments.

The Day: The Ukrayina Bank scandals is mentioned less and less often of late. Does this mean that its property is being redistributed?

Marchuk: This isn’t hard to explain. Remember the names figuring in the Korol Commission’s findings? There’s your answer. By the way, the parliamentary commission of inquiry never finished its investigation. And I should also point out that there is an interministerial financial security commission attached to NSDC. It was our initiative and we launched our own investigation. Our findings tally with those of the parliamentary commission in many respects. We’re still working on it.

The Day: Traditionally, our commissions of inquiry run out of fuel. Why?

Marchuk: They just do. There’s again talk in parliament about the National Bureau of Investigation.

The Day: Your comments paint a disheartening picture. Is there a possibility of any positive scenarios being played out? What should this society work on to support and develop what normal trends we do have?

Marchuk: The scenarios you have in mind have to be enacted by political forces. Therefore, whether we like it or not, we have to get back to the issue of the future parliament and its members. We can compose any kind of a positive scenario, but if parliament is torn by political ambitions, if it doesn’t cooperate with the government, this scenario will never become a reality. There are chances, of course, but the process is mostly sporadic for the time being. Efforts are being made to somehow coordinate the process, to give the future parliament a chance to form a political majority naturally.

The worst problem preventing positive dynamism is corruption, of course – corruption in official institutions. This evil is still strong in Ukraine. Punitive measures are no longer effective. Corruption is rooted not in the bad performance of law enforcement. So problem number two is fighting corruption. I see two ways to go about it. Dragging the economy out of the shadow by low taxes and instituting good pay for civil servants. No matter how much criticism went my way as prime minister, I believed then and believe now that civil servants must have higher salaries. If a civil servant is paid 120 hryvnias a month and has a couple of children but no apartment, and if he works, say, in the Customs Service, handling goods worth millions of hryvnias and realizing they are being smuggled in or out, it is hard to expect him to refuse a bribe. Now if he is paid well by the state and knows the state will give him a loan to buy an apartment, that he will eventually retire with certain guarantees, he’ll carry out his duties the way he should.

The Day: Ukraine lives in a highly competitive environment. It requires a different level of state management and a different public perception of the problems facing us. When do you think that critical mass will be accumulated to help us make a breakthrough?

Marchuk: Look at the electorate. People with an experience of 300 years of bondage, 70 years of the Soviet regime, and ten years of [democratic] transformations. It will be some time before the educational standard raises high enough and people regain what they lost: national identity, culture, and spirituality. Every year almost a million individuals step into adult life here. Ten years of independence means ten million such individuals, young people with a different mentality compared to the older generation. This is a new sector of our society; they have different world views, standards, and technologies, even if not always positive.

The Day: Do you think those in power have developed an immunity to political events like what happened this spring?

Marchuk: They must have learned something. By the way, one has to learn not only how to wield power.

The Day: And the cassette scandal?

Marchuk: The cassette scandal was one of the scenes in a pitched political battle. It gave vent to critical energy. A crisis occurs when the mutual interaction between the state and society breaks down. It didn’t happen in this case.

The Day: Is there any danger of political radicalism spreading in Ukraine?

Marchuk: There many ways to kindle the fire of radicalism, especially in a society like the one we have in Ukraine. A lot will depend on the conduct of our politicians; whether radicalism will continue to spread or remain in the niche society gives it now. However, I think that the kind of radicalism we saw as the situation aggravated last spring will not happen again. As for what happened this spring, a criminal investigation began in a case unprecedented in our history: mass violations of law and order. The case is already in court. These proceedings could be an effective means of preventing political radicalism.