"George Soros: 'I didn't say that I thought Leonid Kuchma was a sincere man"
Interview with George Soros By Serhiy Rakhmanin
Zerkalo Nedeli, Kiev, Ukraine, in Russian 3 Apr 04; p 1, 3
BBC Monitoring Service, UK, in English, Apr 05, 2004

The following are excerpts from the article by Serhiy Rakhmanin, published by the Ukrainian newspaper Zerkalo Nedeli on 3 April under the title "George Soros: 'I didn't say I thought Leonid Kuchma was a sincere man'"; subheadings have been inserted editorially:

His fortune is put at between 7bn and 8bn dollars. [Passage omitted: summary of George Soros's meteoric rise in the financial world]

His funds are active in several dozen countries and distribute approximately 300-400m dollars a year. [Passage omitted: Soros has made so much money that he could not possibly spend it all on himself; he claims not to intervene in politics, but wants to see an open world society.]

MEDVEDCHUK SAID TO BE RESPONSIBLE FOR SMEAR CAMPAIGN

He really is too rich and too influential for people to ignore him. That is acknowledged even by those who loathe him. He is feared. When fighting him, people are not too fussy about the means they choose. The Ukrainian authorities have proved to be no exception. They did not welcome him in Crimea. In Kiev, they welcomed him with mayonnaise and "temnyky" [lists of officially approved topics for media coverage and the spin required].

[Rakhmanin] On the eve of your meeting with [Ukrainian President] Leonid Kuchma, you stated that your relations with him were sincere and of long standing, so that you were entitled to ask him bluntly about the "temnyky" and to count on receiving a truthful answer. Did the Ukrainian president's words to the effect that he did not know about the existence of "temnyky" strike you as being sincere?

[Soros] I didn't say I thought Leonid Kuchma was a sincere man. I only said that I knew him well. As for the "temnyky", he didn't claim that he had never heard of the existence of "temnyky". He just said: "Show me these 'temnyky'. Show me the proof." Then he stated unambiguously that he was not responsible for the "instructions" telling the media to prepare material aimed against me.

[Rakhmanin] And do you believe him?

[Soros] I believe him because I think it's the work of Medvedchuk, who wants to please Russia.

[Rakhmanin] Do you think that's the only reason driving him?

[Soros] I don't know. I don't know Mr Medvedchuk. I don't know his connections, his capabilities, his interests or his business. But I do know that he will suffer if the Ukrainian market becomes an open market because his business (as I understand it) consists of extorting money from other businessmen and offering help from the authorities in exchange.

I realize that I have been the target of provocations. But the best way to fight provocations is not to give in to them. Some people had a strong wish that I would leave Ukraine, but I had no intention of satisfying their wish.

[Rakhmanin] You've said you'll try to get some air time on the One Plus One. [private TV] channel. Has that possibility been provided for you?

[Soros] No.

[Rakhmanin] In other words, there will certainly be a meeting with Ronald Lauder [chairman and primary stockholder of Central European Media Enterprises Ltd. (CME), which currently has a 60 per cent economic interest in One Plus One] (to whom you are going to present some fresh impressions about the channel)?

[Soros] I'm going to phone him.

[Rakhmanin] During your visit to Ukraine, you have quite frequently been accompanied by Viktor Pinchuk [an influential MP, businessman and the president's son-in-law]. He has given you air time on the ICTV channel that he owns and has said he would like to take part in the programme you have initiated for setting up "law clinics". As you see it, are these actions of Mr Pinchuk's prompted exclusively by philanthropic feelings? Or is he seeking to turn you into a kind of guarantee for the security of his capital, which may be threatened if there is a change of regime?

[Soros] I think that, in this way, he wants to show his worth, so as to retain his present position regardless of who the future authorities are. I hope that he will try to do that, with the help, among other things, of the ICTV channel. I imagine he will be concerned to see that objective and considered opinions are presented on that channel (unlike the channels influenced by Medvedchuk).

KUCHMA SHOULD HAVE RESIGNED OVER GONGADZE AFFAIR

[Rakhmanin] In Kiev, you have met Kuchma, [the parliamentary speaker, Volodymyr] Lytvyn, [Prime Minister Viktor] Yanukovych, [opposition leader Yuliya] Tymoshenko, [Socialist Party leader Oleksandr] Moroz and [the Our Ukraine opposition bloc leader, Viktor] Yushchenko. Which of these do you see as being linked with Ukraine's future?

[Soros] I wouldn't like to answer that question. I support the idea of an open society, but I'm an outsider in Ukraine. I don't interfere in politics.

[Rakhmanin] Yet, three years ago, you suggested in a well-known article in the Financial Times that Leonid Kuchma should relinquish his powers as president, since you thought that his continued presence as head of state might have a negative effect on the transparency of the investigation into the "Gongadze affair" and on the objectivity of the media. At that time, didn't you think that that statement constituted an interference in Ukrainian politics? And weren't you afraid of spoiling relations with a long-time acquaintance?

[Soros] No, I didn't think that. I was expressing my view. It seemed to me that it was a matter of principle to stand aside when an investigation was taking place, and that specific personalities were then irrelevant.

[Rakhmanin] Do you regret that Kuchma didn't take your advice?

[Soros] Yes. The fact that the "Gongadze affair" has not been brought to a conclusion has very much damaged Ukraine's image in the West.

SPENDING IN UKRAINE TO REMAIN AT PREVIOUS LEVEL

[Rakhmanin] Last year saw the announcement of your intention to reduce the funding of the Soros Foundation's programmes in most of Eastern Europe, to step up the work in Latin America, Southeast Asia, Africa and the Middle East and, in effect, to wind up your activities in Russia. It was intended to maintain expenditure in the other CIS countries at its previous level. It is now rumoured, however, that George Soros wishes to increase the amount of money to be allocated to Ukraine and Moldova. Is that right, and are these plans linked to the impending elections in those two states?

[Soros] In Russia, I have halted the activities of the foundation in its present form and have reduced the amount of money I used to spend there. But we are supporting some programmes and are supporting some organizations that work with these programmes. As for Ukraine and Moldova, our activities in those states will continue on their previous scale.

[Rakhmanin] Could you specify the amount to be allocated to the funding of your programmes in Ukraine in 2004?

[Soros] The budget comprises 5m dollars. It is intended to allocate about another million to grants that will not pass through the foundation.

[Rakhmanin] In that case, how would you comment on media reports saying that roughly 7-8m dollars were spent on funding your programmes in Ukraine last year?

[Soros] That may well be. The budget provision was for 5m, but, in fact, we spent more.

[Rakhmanin] Does that mean that you will spend 8m rather than 5m dollars in Ukraine in 2004?

[Soros] It's quite possible that we may end up actually spending about 8m.

[Rakhmanin] Are you expecting any surprises from the presidential elections in Ukraine?

[Soros] The situation is too confused, and I can't claim that I understand it very well. What I can say is that, if the constitutional reform is carried out, the presidential elections may not be so very important. Ukraine today faces the same choice as Russia did several years ago. But your country now has a better chance of becoming an open society. Or, at least, of moving in that direction.

"PUTIN DOESN'T LIKE ME"

[Rakhmanin] In a Financial Times article the other day, you proposed "deleting Russia from the list of countries with a young democracy". Yet, three years ago, you said that Vladimir Putin was "capable of shaking up the country", that under him "Russia might stand on its feet" and that he had the resources with which to "restore a strong state, which is even desirable, since a weak state is a threat to freedom". Are you disillusioned with Putin? Has he gone over the top in building a strong state?

[Soros] In 2001, Russia's future was not quite clear yet. It was hard to judge the true nature of the new authorities. Russia had two paths - to become an open society or to transform itself into a corporativist state. It has chosen the second: in that country, the authorities predominate over business, and the laws of state capitalism operate. The business community knows that it must submit to the wish of the state if it wishes to stay in business.

[Rakhmanin] Soon after acquiring the majority shareholding in the Russian company Svyazinvest [Communications investment], you called that deal "the main mistake in my life". Recently you declared your intention to sell that holding, and at a substantially lower price. Don't you believe in the prospects for your business in Russia? Or are you simply being driven out of there?

[Soros] I'm in a trap. The people who will buy the shares will make an undoubted profit. But I have no other choice, since the value of the shares will keep falling. For me to sell the holding at its realistic price, the company needs to be privatized. But the state won't take any steps in that direction as long as I have any connection with it.

It's becoming increasingly obvious that Mr Putin doesn't like me and that he doesn't like the activities of our foundations, especially in Ukraine and Moldova, to say nothing of Georgia. That is the explanation for the campaign he has mounted on the occasion of my current visit.

Even so, I don't regard today's Russia as a repressive regime. Putin really is very popular. But the characteristic features of an open society are lacking in that country. There is no supremacy of the law. It is replaced by a dictatorship of the law, and there is no parliamentary opposition.

SUPPORT FOR GEORGIA

[Rakhmanin] You mention Georgia, but it [i.e. a parliamentary opposition] doesn't exist there either. At the recent forum in Davos, you made no secret of your support for [the new Georgian president,] Mikhail Saakashvili. Following the recent parliamentary elections, hasn't your attitude towards what is happening in that country changed? Don't you now have a feeling that, having gained absolute power, the new Georgian president may well become an even more authoritarian leader than [former Georgian President Eduard] Shevardnadze?

[Soros] Needless to say, when only one political force is represented in parliament, that presents a danger. Fortunately, in a civil society there are always people devoted to the ideas of democracy who will keep a close watch on the activities of the authorities.

Georgia is taking decisive steps towards an open society. I welcome the anticorruption campaign that has started in that country. And I want to support Saakashvili in that.

[Rakhmanin] Do you really believe that the special trust fund set up in Georgia with your direct participation is capable of substantially altering the situation?

[Soros] I certainly think that trying to create normal conditions for state officials is one step towards overcoming corruption. If a minister's salary is set at 1,500 dollars [a month], that makes it possible to attract a qualified specialist to the post and to require him to discharge his official duties honestly. If a traffic police inspector begins to earn 150 dollars [a month], that will help to bring about a situation in which he won't demand money from passing long-distance drivers.

[Rakhmanin] But surely one can't rule out the possibility that the traffic inspector will go on extorting money? It's just that he'll have extra income in the form of the 150 dollars from Soros.

[Soros] If an inspector wears a badge that gives his name, it will be easier to trace those who are guilty of extortion. The offenders will be dismissed, and their places will be taken by more honest people.

[Rakhmanin] As a matter of interest, do you think it possible that a similar trust fund will appear in Ukraine?

[Soros] In Georgia, a special law was passed. I think a similar law may be passed in Ukraine too... [ellipsis as published].