ussian businessman Konstantin Grigorishin on Oct. 12 to a dispute with former business partners associated with the Social Democratic Party of Ukraine (united). Grigorishin was subsequently released, and he is now reported to be in Russia. The following is an edited excerpt from the article, based on a translation by BBC Monitoring.
Early this year, Konstantin Grigorishin and his partners controlled more Ukrainian assets than any other group apart from the Donetsk clan and the Interpipe group. Grigorishin controlled nine regional energy distribution companies, two ferroalloy plants and much of the machine-building sector. He also had interests in agriculture. This business was being gradually legalized. Grigorishin’s net assets stood at Hr 4 billion.
Six months later, Grigorishin was left with nothing but his memories of most of his businesses. The attack on his group came right after the elections. Over the summer, the management of energy assets was transferred from Grigorishin to others. Most of his managers went over to the new team. After [SDPU(u) leader] Viktor Medvedchuk was appointed head of the Presidential Administration, Grigorishin’s chances of finding support in Kyiv vanished.
Deputies who are also businessmen were deeply affected by Grigorishin’s fate. Some admit it openly; others, understanding what is behind it, talk about it with colleagues and journalists only in a whisper. The former are a minority, that includes the five deputies who suspended their membership in the pro-presidential majority. While such half-measures leave the possibility of return, it does show what politicians think of the methods applied against Grigorishin. The point is that, unlike the media or the courts, deputies need no formal proof that the leaders of the SDPU(u) were behind Grigorishin’s arrest.
Right after the arrest, Viktor Pinchuk [owner of Interpipe, a Labor Ukraine faction leader and the president’s son-in-law] came to Grigorishin’s defense. Those who watch the news on ICTV or STB [TV channels linked to Pinchuk] were left with no doubt about that. While the SDPU(u) faction had enough sense to go along with the general mood among deputies when they voted to create a temporary investigating commission, they could not keep up appearances on the channels under their control. Inter, 1+1 and TET simply seemed not to have noticed the affair.
There is no evidence that Pinchuk and Grigorishin have joint business interests, but many observers have noted a deterioration in what used to be seen as a strategic relationship between Pinchuk and Medvedchuk. The present situation seems to have forced Pinchuk to shed his illusions. His position is understandable. First, if Medvedchuk comes to power, he has no guarantees that the pistol-and-cocaine story will not be repeated with him (he will not have parliamentary immunity forever). Furthermore, Pinchuk has seen the methods Grigorishin and [businessman and SDPU(u) deputy] Hryhory Surkis have employed against their competitors over the years. Now the partners have split up, and it is clear that there are no holds barred in the battle between them. How can Pinchuk be confident that Medvedchuk, now Kuchma’s closest partner, will behave scrupulously toward the president after he steps down?
The Grigorishin affair gave members of the majority a fuller picture of their coordinator Medvedchuk. Without the majority, the president feels even less confident. Everybody understands that if Pinchuk cannot help Grigorishin extricate himself from such a flimsy case, Medvedchuk’s influence on the president is unlimited. In this situation, it is naive to imagine that the president is consciously concentrating all the negative reactions on Medvedchuk in order to drop him like a dead weight at the right moment. The president needs Medvedchuk as an effective weapon for both offence and defense.
What has Medvedchuk done for the president anyway? First, his manipulations have made an agreement between Our Ukraine and the president a virtual impossibility. In whose interest was that – the president’s or Medvedchuk’s? Second, in the process of creating a majority, everyone suspected of links with Our Ukraine has been subjected to repressive actions. It was Medvedchuk’s actions that pushed the Donetsk group, always loyal to the president, closer to Yushchenko. Third, Medvedchuk acted as a catalyst in transforming Rada Speaker Volodymyr Lytvyn from a tongue-tied functionary into a semi-independent political figure. Was that really what the president wanted when Lytvyn was elected? Fourth, it was Medvedchuk who insisted on conducting a forceful dialogue with the United States. What is behind the arrogant open letters to the U.S. ambassador from Presidential Administration clerks? The desire to defend the president, or an attempt to isolate him completely, restricting his contacts solely to Medvedchuk’s allies in the Russian presidential administration?
The truth is that Medvedchuk is playing a game of his own. In the Grigorishin affair, he is playing on Kuchma’s idiosyncratic reaction to the opposition and everything associated with it. Grigorishin is far from being a saint. But he is different from other comparably wealthy individuals in that he is absolutely helpless politically and undiscriminating in his ties. Grigorishin is effective in the economic field. He proved this while working under the protection of Petro Kyrychenko and Pavlo Lazarenko. He also proved it to the partners who offered him their services after Lazarenko fled the country.
According to Grigorishin, profits from the joint business, which formed an impressive pool after the merger, were divided equally. He says that problems began when his partners started demanding considerable additional sums for what were presented as common political needs. If the president knew how much Grigorishin contributed to the presidential election in 1999, at the request of his partners, he would have been surprised that he did not win 100 percent of the vote, and he would have wanted to know who spent the money.
An experienced carnivore in the economic sphere, Grigorishin turned out to be an herbivore in the political jungle. He was not even able to check whether the sums he contributed above the quota were actually being used for their declared purposes. All he knew was that a business has to have a political “roof,” and he lived under it for as long as he was strong enough to support it.
The conflict between Surkis and Grigorishin became quite obvious last winter. Grigorishin trusted his lawyers, but he thought that a new “roof” would not do any harm. And his choice for a new “roof” fell on Mykhailo Brodsky [leader of Yabluko, a party that failed to win any seats in the March parliamentary elections]. Then he rushed to the Communists, and later tried Our Ukraine. He failed to realize that not every political force in the country is capable of performing services that are worth paying half your profits for. This naivete cost Grigorishin dearly.
