Ukraine's oligarchs could have final say in political crisis

Ukraine’s crisis may not be resolved on the streets of Kiev, or in the headquarters of the government or president, but in the lavish offices and villas of billionaire oligarchs whose wealth affords them huge political power.

Whereas Russian president Vladimir Putin has forced tycoons into jail, exile or political submission, allowing only those who play by his rules to retain their fortunes, in Ukraine the super-rich still wield great influence over how – and by whom – the country is run.

There is growing evidence to suggest that Ukraine's richest men are displeased by President Viktor Yanukovich's decision to postpone an unprecedented trade deal with the European Union, and with his clumsy, contradictory efforts to clear the streets of pro-EU protesters.

The oligarchs may also be wary an emerging gang of young rivals – known as "The Family" for their ties to Yanukovich and his son – and of the danger posed by any Ukrainian shift towards Russia, where even bigger business beasts lie in wait.

Last Friday, the first hint of a break in the impasse between Yanukovich and protesters came in an unexpected decision by opposition leaders to attend crisis talks with the president. They took place within hours of Ukraine’s richest man, Rinat Akhmetov, breaking his silence over the crisis and calling on all sides to “sit at the negotiating table and take decisions that will make us proud”.

The meeting was bad-tempered and did not quell the street protests, but Akhmetov's call for compromise was seen as having influence on both Yanukovich and the opposition. The US ambassador to Kiev, Geoffrey Pyatt, welcomed "the wise advice of Rinat Akhmetov", amid reports that the billionaire had earlier held a secret meeting with visiting US assistant secretary of state Victoria Nuland.

'Everyone wants clarity'
Akhmetov also came close to openly criticising Yanukovich for the prevailing confusion over why, after years of talks, he turned against the EU deal just a week before he was due to sign it, and whether he now wanted to join a Russian-led bloc of ex-Soviet states.

“Everyone wants clarity. People started to look for answers to these questions and went out on the Maidan,” Akhmetov said, using a Ukrainian name for Kiev’s Independence Square, and praising the attitude of those demanding Yanukovich’s resignation.

“The fact that peaceful people went to peaceful protests shows that Ukraine is a free, democratic country. No one will take Ukraine from that path. And that is really great,” he said.

The billionaire also said it was "unacceptable" that riot police had beaten peaceful demonstrators; soon after, four senior officials were put under investigation over the incident. A steel and electricity magnate who is worth some €12 billion, Akhmetov has long supported Yanukovich, often inviting the president to watch matches involving his Shakhtar Donetsk football team.

Other oligarchs who have long toed the Yanukovich line are now giving public approval to protesters whom the government has characterised as destructive “extremists”, and their television stations are showing full and positive coverage of the rallies and sometimes criticise Russia’s role in events.

"On Maidan . . . I thought of my responsibility as a businessman and citizen . . . to do what I can to help facilitate a peaceful and constructive solution," said Victor Pinchuk, Ukraine's second-richest man and son-in-law of former president Leonid Kuchma. "The most important is that Ukrainian civil society has shown its strength . . . Nothing is more powerful. It gives me huge optimism for the future of our country."

Rule of law
Analysts say Ukraine's established oligarchs believe their vast business empires will ultimately benefit more from integration with the EU than with Russia, where even richer tycoons with closer ties to the Kremlin could devour them. They also want to expand beyond the murky and often dangerous world of post-Soviet business, and polish their images and protect their wealth in countries with stronger rule of law than Ukraine.

Vast property portfolios
Many already have extensive property portfolios in the west, with Akhmetov laying down about €160 million for London's most expensive penthouse at One Hyde Park, and they will have been chilled by US threats of a visa ban and asset-freeze in the event of a crackdown on protesters.

This generation of 50-something billionaires may also fear the rise of a group of younger men, grouped around Yanukovich’s son Oleksandr (40), who in just a few years have gone from obscurity in Donetsk, the president’s home town, to cabinet positions and dizzying wealth.

Other key players at the lucrative nexus of Ukrainian politics and business include Andriy Klyuyev, the hawkish head of the country's powerful security council, and a shadowy pro-Russian dealmaker called Viktor Medvedchuk, whose contacts in Moscow are impeccable: his daughter's godparents are Putin and the wife of Russia's prime minister, Dmitry Medvedev.