By Mykola Formozov, "Mariupol Region"
Ostrov web site, Donetsk, Ukraine, in Russian, 26 Mar 04
BBC Monitoring Service,UK, in English, Apr 03, 2004

DONETSK - The supremacy of the Donetsk clan within Donetsk Region is disputed by Mariupol, a port city in the south of the region, a regional web site has said. The Mariupol side is led by Volodymyr Boyko, an MP and director-general of the city's Illich Steelworks. The Illich group now controls various assets within and outside the city, notably a chemical-metallurgical works and an ore directorate.

The "Donetsk people", on the other hand, control the city's Azovstal steelworks, a coke factory, a shipyard and a key shipbuilding plant. The economic struggle is reflected in political manoeuvring, the web site said. Although he has been regarded as a member of the Donetsk-led group in parliament, Boyko has sufficient political clout in Mariupol to bring about the defeat of the party's candidates locally, if they are running against one of his own men, the web site suggested.

The following is the text of the article signed by Mykola Formozov, posted on the Ukrainian Donetsk-based web site Ostrov on 26 March under the title "Mariupol Region"; the original subheadings have been retained:

The city on the shore of the Sea of Azov is not publishing books entitled "Mariupol is not Donetsk" [Ukrainian President Leonid Kuchma entitled his recent book "Ukraine is not Russia"] and is not setting up committees to fight for a new administrative and territorial unit, to be called Mariupol Region. At the same time, the townsfolk are convinced that it is they who feed "the whole of Donetsk Region" (this conviction is very reminiscent of the idea that "the UkrSSR [Ukrainian Soviet Socialist Republic] used to feed the whole Soviet Union", and this can easily be confirmed by statistics, if there is a wish to do so). Most of the election campaigns of recent years in Mariupol have been won by representatives of those forces that, in one way or another, depicted themselves as opponents of the "Donetsk clans" or enjoyed the support of companies opposed to Donetsk interests in the coastal town.

Mykhaylo Pozhyvanov, the last romantic

The idea of a clash between "Mariupol" and "Donetsk" first took on a note of controversy and came to the notice of the media when Mykhaylo Pozhyvanov was mayor [he is now deputy mayor of Kiev]. The city's mayor from 1994 to 1998 embarked on an open conflict with such people as Yevhen Shcherban and Volodymyr Shcherban, who had real influence in the Donbass during those years. Essentially, it was the time when the Donetsk people were making their first attempts to bring Mariupol's integrated metallurgical plants, Azovmash [Azov machinery] and the huge commercial seaport into their sphere of influence.

The expansion in business and criminal activities was just getting under way. It was the mid-1990s that saw a series of contract killings both of prominent Mariupol businessmen and of people reputed to be local "godfathers". Pozhyvanov acted as the defender of Mariupol's interests. And he had to defend himself both against the "Donetsk people" and, for example, against Pavlo Lazarenko, who was then the prime minister.

The phrase "Mariupol Region" was first heard at news conferences during the time of Pozhyvanov. But, from the mayor's answers to questions about the prospects for such an administrative unit in 1997, it was hard to understand how serious he was about it. Mr Pozhyvanov said at the time that the chiefs of both the city section of the SBU [Security Service of Ukraine] and the city directorate of the police would gladly support the idea, since it guaranteed them the rank of general. The words may have reflected his own unspoken wish to become the governor of the new unit (some of the capital's newspapers, at any rate, including Den, quickly featured the headline "Mariupol wants independence from Donetsk").

Having failed to get on with the local iron and steel barons (Pozhyvanov was later to complain that Donetsk agents had skilfully created differences between him and the plant directors) and having fallen out of favour with President Leonid Kuchma, the young mayor lost the elections in 1998. The city executive committee staff of that time say that, after Yuriy Khotlubey, the head of a directorate in the presidential administration, had been promoted as mayor, the portrait of the guarantor [of the constitution, i.e. Kuchma] in Pozhyvanov's office was removed, and its place was taken by daggers presented by naval seamen.

Two years later, on 13 June 2000, the newspaper Vecherniye Vesti published an interview with Mykhaylo Pozhyvanov entitled "People are being fired in Donetsk Region for being friendly with me". Here are a few excerpts. "It used to be said that the 'Dnipropetrovsk group' wanted 'to bring the Donbass to its knees'. But 'native' Donetsk clans and well-known energy bodies in tandem with the local underworld rule the roost there today. And everyone has succumbed to these clans." "Previously, it was, basically, only the heads of small companies that were subject to racketeers and the influence of criminals. Today even a person as strong as Volodymyr Boyko, director of the Illich Steelworks, declares that he has to put his life on the line to defend the company's interests against the underworld."

From red director to people's director

The day after the March elections of 1998, the Mariupol mayor's office was, to put it mildly, like a desert. Only ex-officials were hastily taking some papers down a side staircase, and someone from the city's electoral commission was searching for the chairman of a polling station commission, who had taken to drink (together with the ballot papers). Things sorted themselves out only after Volodymyr Boyko, director-general of Mariupol's Illich Steelworks, appeared in the building. After a series of "reprimands", signs of power reappeared in the city council, by the evening the election results were announced, and the newcomers moved into their offices. The phenomenon of Volodymyr Boyko, now an MP, a Hero of Ukraine and chairman of the board of the Illich Steelworks, is a subject for a separate item.

He was born in 1938 into the family of a worker at the Illich plant. In 1955, he entered the plant's water supply section as a plumber. Later he was employed as a construction worker at the Vetka-Glubokaya mine in Donetsk, served in the army and returned once again to Mariupol. In April 1990, he progressed as far as to be elected (at that time, there could be more than one candidate) as director-general of the Illich Steelworks.

During those years, Volodymyr Boyko was seen as being one of the "red directors". Hence his close friendship with the future president, then director [current Ukrainian President Leonid Kuchma] of [Dnipropetrovsk-based] Yuzhmash [Southern machinery, Pivdenmash in Ukrainian], and his established contacts with the captains of industry of the whole of the former [Soviet] Union. It is hard to call Boyko a party nomenklatura man, although he has always said that he recognizes only one party, the Communist Party. He took an extremely dim view of proposals for the company's name to be changed because it stemmed from the old regime ["Illich" being Lenin's patronymic], and he replaced the portrait of Lenin in his office with a portrait of Kuchma only at the beginning of 1997.

In the course of 10 years, the adjective "red" changed to "people's". In the media and in "workers' letters", Boyko is called the people's director, either quite seriously or with malice aforethought. The company he heads has also been called a people's company ever since a law on a special procedure for privatizing the Illich Steelworks open joint-stock company was passed by the Supreme Council [parliament]. The vast amount of lobbying work in parliament and the benevolence of the guarantor [of the constitution, a jocular reference to Kuchma] paid off, and, in the end, the state's holding in the open joint-stock company was redeemed by "the plant's workforce as represented by the Illich-Stal [Illich-Steel] closed joint-stock company".

The "special Illich path" then had many enemies, ranging from businessmen who wanted to get their hands on the plant to the city's mayor, Yuriy Khotlubey, who published an open letter to MPs in Holos Ukrayiny literally on the day before the vote in the Supreme Council. The gist of the message was: leave everything as it is, i.e. let the state retain its 50-per-cent holding. During this confrontation between the supporters and enemies of "people's privatization", the latter were vaguely depicted as being "from Donetsk". In one of Volodymyr Boyko's interviews with the [Mariupol] newspaper Priazovskiy Rabochiy, these enemies were identified with the Industrial Union of the Donbass [a corporation currently managed by Serhiy Taruta].

The city was handed over. But not all of it

The fight to privatize the Illich plant took place against the background of a very real "Donetsk" onslaught on the "Mariupol front". "The city was handed over" - these words of Volodymyr Boyko's became a catch phrase. The Illich director-general later explained what exactly he had meant when he said those words. But most people took them to mean the surrender of the city (from Azovstal [Azov steel] to the distillery) to those same Donetsk people - with the connivance, moreover, of the city's mayor. Four years have passed since then. Today the Illich and Donetsk spheres of influence in Mariupol are demarcated precisely.

Only recently the Illich plant absorbed, among other things, the fish cannery, the fishing port (which may ultimately, after a quite feasible reconstruction, become the plant's own port for dispatching its metallurgical output), the Feya [Fairy] clothing factory, a small ship repair yard and the town dairy. That is in Mariupol alone. But there are also, for example, the plant's 49 agricultural facilities in the Novoazovsk, Telmanove, Volnovakha, Volodarske, Pershotravneve, Starobesheve and Maryinka Districts of Donetsk Region. The chemical-metallurgical works at Donske and the Komsomolske ore directorate are also Illich preserves.

The Illich people are seeking to acquire mines and a coke chemical plant, so as to ward off a price stranglehold from the producers of the raw material for iron and steel commodities. If one lumps together the area of all the ground occupied by the Illich possessions in Donetsk Region, one may well come up with a figure that at least equals the area of Chernivtsi Region. And that is only the metropolis, but there are also the "colonies" in other regions of the country. There is, for example, the Kunsungurske deposit in Zaporizhzhya Region, the elite Ay-Danil sanatorium in Yalta in Crimea and the Umanfermmash [Uman farm machinery] (Cherkasy Region), which specializes in producing agricultural machinery.

The sphere of interest of those we are accustomed to call the "Donetsk people" in Mariupol includes the Azovstal steelworks and Markokhim [coke factory] (both controlled by SCM [System Capital Management]), the Azov ship repair yard and Azovmash (the fiefdom of the Ukrainian Industrial Transport Company). It is common knowledge that SCM and UITC are closely linked and belong to [Donetsk businessman] Rinat Akhmetov.

The Mariupol commercial seaport (still a state company) can be regarded as an Illich ally. The "Donetsk people" have a very real interest in the port, as they have in the Illich plant, but they are currently unable to give it practical effect. Incidentally, the Illich people too are, according to Volodymyr Boyko, not averse to "leasing the port".

Illich people in the rear of Party of Regions

The fight for business is inseparable from political feuding. In recent years, belonging to the Illich workforce, just like support from the plant in elections, has been a virtually 100-per-cent guarantee of success for a would-be member of a council at any level. Both in 1998 and in 2002, Mariupol Mayor Yuriy Khotlubey was backed by the Illich people (read: V S Boyko). Following the elections in March 2002, the Illich Steelworks were represented by two MPs, Volodymyr Boyko and Serhiy Matviyenkov, in the Supreme Council, by four councillors in the Donetsk Regional Council and by 33 in the Mariupol City Council.

Today the Unity group in the city council, which consists of Illich people and their sympathizers, already numbers 36. In addition, the city council has a Regions faction of councillors, admittedly smaller in number. The February by-election for one of the city councillors was instructive from the point of view of influence on the local electorate. The fight, in fact, was between an Illich candidate (the plant's deputy director-general) and a candidate from the Party of the Regions (the city's deputy mayor). The Illich people either wanted to demonstrate their strength or sought to gain a controlling interest in the city council, or, as Volodymyr Boyko recently declared, "we were checking to see whether people liked or disliked us". As a result, their candidate won over 70 per cent of the votes cast.

And that is against the background of the candidates from the Party of Regions, who have been beating everyone recently in the increasingly frequent by-elections for Donetsk Region's local councils! According to one theory, it was precisely in order to conceal such a stunning failure and to remain credible in the eyes of the regional and Kiev party leadership that the local "Regionals" and the heads of companies close to them interpreted the election results as a victory. The 400 or so votes, won in a duel with an Illich man and with Boyko's standing in Mariupol, were, they said, a good result. As for the local media, a news war is now flaring up in them once again.

All in all, it reflects the confrontation between two companies, Azovmash and the Illich Steelworks, and their heads. Oleksandr Savchuk, the president of Azovmash, could have been called the "second people's director", but he himself prefers the term "efficient". He is a kind of potential alternative to Boyko. Oleksandr Savchuk has experience of taking part in election campaigns. He came third in the 1998 mayoral elections, which, bearing in mind the range of candidates at that time, was a successful outcome. He pitches himself as an engineer rather than as an iron and steel man such as Boyko.

To judge from items in Priazovskiy Rabochiy, Savchuk does not rule out standing for the Supreme Council in the next elections. It only remains to add that Oleksandr Savchuk calls periodically on the current Ukrainian prime minister [Viktor Yanukovych, the former governor of Donetsk Region and leader of the Party of Regions].

The Mariupol media resources of the Illich party and the Party of Regions enable the news war to be waged, on a local scale, both in the newspapers and on television. It is noteworthy that, in addition to two local newspapers in the region and the MTV [Mariupol TV] television channel, the Illich people also control the publication Donetskiy Kryazh, which is registered as an all-Ukrainian newspaper and is reputed to be staunchly pro-Russian.

Where to go and with whom

Whom will the Illich Steelworks and Boyko support at the presidential elections? Volodymyr Boyko is asked that question at virtually every news conference. There is still no specific answer: "We'll make up our mind," [he says]. Mr Boyko made his way into parliament via the lists of the [pro-presidential] For a United Ukraine bloc (he was among the first five). In 2002, it was hard to explain to ordinary Illich people why the "Mariupol man" Boyko was suddenly in the same election campaign as the notorious "Donetsk people". But the director-general's standing made a difference. Local observers estimate that Boyko's name in the United Ukraine list gave the bloc between 100,000 and 200,000 votes in the south of the Donbass.

However, if one compares some events concerning the plant that occurred in 2002, the theory arises willy-nilly that "the Illich people have been dumped". For example, just before the elections, the Cabinet of Ministers, which was then headed by Anatoliy Kinakh, adopted a resolution transferring the Komsomolsk ore directorate (in Donetsk Region's Starobesheve District) to a directorate of the Illich Steelworks. But, a few months after the elections, the ore directorate's creditors were announced, with the same Donetsk roots (Danko, etc.), and the steelworks had to spend a lot of time and effort on asserting its rights. In the end, the Komsomolske ore directorate remained in the Illich camp, but the steelworks realized once again that Donetsk was not giving up its plans to "seize the people's company".

The Illich MPs' faction membership is also interesting. Until recently, both Boyko and Matviyenkov were members of the European Choice group, which merged recently [20 November 2003] with the Regions of Ukraine faction. But neither Boyko nor Matviyenkov made any written application to join the faction at that time.

In Supreme Council voting lists in one of the March editions of Holos Ukrayiny, they were shown as being members of the Regions of Ukraine faction, and the same information can be found on many web sites. But, at a news conference on 24 March, Volodymyr Boyko made the following declaration: "Neither Matviyenkov nor I have joined any faction! Find our applications. You won't find any."

It might be supposed that the Illich men are making themselves sought after, were it not for the fact that Volodymyr Boyko has been sharply critical of the Yanukovych government over the past two or three months. "So far, this government has not been doing what it ought to be doing." This is one of Boyko's most liberal comments on the Cabinet of Ministers this year. Admittedly, exceptions are made from time to time in the case of Mykola Azarov [first deputy prime minister and minister of finance], who "is the only one there who does any work".

If things continue in this vein, the Yanukovych government will be able to "eclipse" the Yushchenko cabinet (Mr Boyko complains most of all about Mr Yushchenko as an ex-premier). Against the backdrop they provide, Anatoliy Kinakh may look like an exemplary head of the Cabinet of Ministers. Boyko has already stated that he regards Leonid Kuchma as the best option for the next president.

Bearing in mind the reduced probability of a "third term" [for Kuchma], Anatoliy Kinakh, previously a colleague of Boyko's at the UUIE [Ukrainian Union of Industrialists and Entrepreneurs], may well obtain the backing of the Illich people at the approaching presidential elections, if he is nominated as a compromise candidate by the majority factions [in parliament].

At the presidential elections, no one is likely to remember the idea of a Mariupol Region. The 2006 elections or some local by-elections to the Mariupol city council are a different matter. The Mariupol confrontation with the "insatiable Donetsk people" is a politically gratifying topic.