“The Eagle and the Trident” is the long awaited memoir of former American ambassador to Ukraine Steven Pifer. The volume of diplomatic history constitutes an insider’s account of the relationship between the United States and post-Soviet Ukraine. It is also the first comprehensive description of diplomatic relations in the period covering the years 1992 -2004.
The book was written using notes that Pifer made while in office and is already being referred to as the definitive record of the complex diplomatic relationship between the two countries. It offers multiple conclusions and practical advice on where to go next. A fellow at the Brookings think tank, Pifer is tall and speaks quickly and precisely. The former ambassador met The Odessa Review’s Editor Vladislav Davidzon for a coffee in a Starbucks in McLean, Virginia to discuss his experience of being the face of American foreign policy in Ukraine. The interview has been slightly edited with considerations of brevity and context in mind.
The Odessa Review (Vladislav Davidzon): Tell us a little bit about the genesis of the book. Is this a traditional diplomatic history? And what is it that distinguishes this account from other such accounts?
Steven Pifer (SP): From 1993-2004 I worked on Ukraine at the State Department, at the National Security Council (NSC), the Embassy in Kyiv and then again at the State Department. It was about three years after I retired from government service when I began to think back and realized that there is actually kind of an interesting diplomatic history to tell about how the U.S. engaged with Ukraine, and what worked and what didn’t work. So I went down to the Clinton Presidential Library in Little Rock, Arkansas, where it turns out 3 stories underground they have the classified NSC files. I was able to get access to my records, make some notes, which were then declassified.
OR: So you took notes on your own notes?
SP: Yeah, they wouldn’t just release my notes, so I took notes on my notes. Then the new notes were declassified. Likewise, I had access to my ambassadorial records and some other things. So then I had a pretty good written record covering that period, and I used that as the basis for the book. In those cases where there were gaps, I would interview people, or I would also reach out to people and say, “Can you look at this chapter? I was in Ukraine, you were working the issue in Washington, what things did I miss?” So I think it’s a fairly accurate history. One thing I did that was kind of fun in six of the chapters was that I had a section called “Reflections”, in which I would think back on what worked and what didn’t work. So for example, when I talked about the removal of nuclear weapons from Ukraine, looking back on it, I think the United States put too much attention on the nuclear weapons issue at the beginning, and we failed to give Kyiv confidence that there would be a relationship once the nuclear weapons were gone. Ukraine became more ready to do the deal on nuclear weapons probably in October-November 1993, in part, because Secretary of State Warren Christopher came to Kyiv and talked about other things; he talked about the economics of the relationship, Ukraine’s place in Europe. Things like that.
OR: So, the nuclear weapons issue is resolved and you come in as ambassador in January of ‘98. This is right before the elections. Right when the second democratically elected Ukrainian president shows up.
SP: A year and a half before the presidential elections, yes. So, the issues that were big when I got there in early 1998, we were still working on Ukraine to align policies on non-proliferation. Which we did in early 1998, and that opened up things. For example, when Ukraine pulled out of the Bushehr nuclear power project in Iran, that allowed us to sign a civil nuclear cooperation agreement with Ukraine, and among other things Ukraine now can buy nuclear fuel from Westinghouse. The United States government spent about 70-80 million dollars to qualify Westinghouse to provide the required fuel for Ukrainian reactors. Other issues that came up in that period. Well, we had a difficult question for Ukraine, which was less than 2 years after Kuchma had gone to Madrid and signed the Charter on a Distinctive Partnership with NATO, to his dismay he found NATO bombing Serbia. We spent a lot of time on that issue, trying to explain why NATO was doing this. And it was particularly awkward for President Kuchma, because a month after that began, he was supposed to go to Washington for a NATO-Ukraine summit, which he did, but he got some political heat at home for doing that. And then we had the presidential election in 1999. The way I would describe the presidential election was, it was not bad by post-Soviet standards, but that’s a pretty low bar, and it fell short of the expectations that we had, primarily because Ukraine talked about its European aspirations and adherence to European and democratic norms. So the dilemma for us was that we saw abuse of administrative resources, with the media being all pro-President Kuchma. We also heard stories that if you were a businessman and you contributed to an opponent of Kuchma, within a week you would be audited by the state tax administration.
OR: Literally a week? It would literally be that graceless? Three business days and the tax police would be at your door?
SP: This is what we were hearing, yeah. We raised this issue with the foreign ministry and the presidential administration, and got nowhere. And then we had a discussion with Washington saying, should we raise our concerns publicly? And there were two reasons not to do so. One, it wasn’t going to change anything. And two, the presidential administration was not going to be happy. But at the end of the day, we at the embassy and Washington concluded that we should raise our objections publicly because democracy had been such a big part of the U.S. vision for Ukraine. So we did speak out publicly. I did so in Kyiv and Deputy Secretary Talbott had a big oped interview on the issue, and we made the point. It didn’t change anything and the election was still flawed in ways. The presidential administration was not happy with the embassy for some time afterward. But I was struck by the number of times people in the embassy — they were traveling and people would tell them that they noticed that we came out and spoke out for democracy. I think it was the right call.
OR: Alright, so to transition into the chapter called “The Relationship Blossoms”, it seems that by the time you get there, you were happier with the relationship and things were going in a more productive direction. Those were very difficult early years it should be remembered. At one point IMF economists were wondering why the Ukrainians hadn’t all starved to death.
SP: The years 1995-1998 were probably the high point of U.S.-Ukraine relations. The nuclear issue was solved. Bill Clinton goes to Kyiv in May 1995 for the post-nuclear summit. And in his briefing book, which is an inch thick, he has one talking point on nuclear weapons — it just says, express gratitude. But we and the Ukrainians began talking about other things: Ukraine’s place in Europe, economic relations, U.S. assistance programs. In 1996 you have the declaration of the strategic partnership and the establishment of the Gore-Kuchma commission. So once a year the vice president’s going to meet with Kuchma, and those issues that could not be resolved at the working level got kicked up to the political level for resolution. And so you’ve got a lot of high-level contacts. Kuchma came to the United States four times in 1997 alone. You have assistance in the second half of the 1990’s so that Ukraine ranks number four in terms of assistance globally from the United States. It’s things like democracy promotion, economic reform. I’m not going to argue that we used the reform dollars wisely in every case, but there was that effort. There was also money coming to Ukraine to help Ukraine eliminate the nuclear bombers and missiles and infrastructure so that Ukraine didn’t have to pay for any of that. And then the United States is working with the G7 to help stabilize the sarcophagus over the destroyed reactor number 4 at Chernobyl and to help build a new one.
OR: America did help pay for the new sarcophagus?
SP: Yeah, the G7 bore the brunt of the expenses to build it. And the idea was, if Ukraine wants to build new power plants, they should do that on commercial terms, but in terms of dealing with the legacy of Chernobyl that there should be a major international assistance project. So you have a blossoming of relations bilaterally. Then there was the question of Ukraine’s place in Europe, which came up when Boris Tarasiuk came to Washington in the fall of 1994. He saw Deputy Secretary Talbott, and he says, “Look, we see NATO getting ready to enlarge”. Tarasiuk expected that in four years we are going to have NATO on our western border. We expect the Russians not to be happy. Where do you Americans see Ukraine in all this? And at that point in time, within the U.S. government we’re thinking in terms of a NATO enlargement track, and also NATO-Russia track…hopefully, we could persuade the Russians that NATO would not be a threat and could be a security partner.
OR: There was a moment when it looked like the Russian Federation was not as concerned about it as they are now.
SF: Exactly. Talbott told Tarasuk, he said look, Boris, I don’t have a good answer for you right now, but we need to have one. And the answer that was framed in the next couple of years was one that thickened U.S.-Ukraine ties and included asking Europeans to develop ties with Ukraine, but also institutionally we began thinking about a third track for NATO which was a NATO-Ukraine track. And so in the summer of 1997, in Madrid Kuchma and the secretary general of NATO, Javier Solana, they signed the Charter on a Distinctive Partnership which builds those links between NATO and Ukraine. And the idea there is to make Ukraine feel it’s got an anchor to the West, that it’s not being cast into a no man’s land between NATO and the European Union and Russia. So, a lot of success in those 3 years. When I got to Kyiv we had some success but we had some bumps begin to appear. The problematic election and another problem that we had was a small issue, but what could’ve been big was the business disputes. A small number of American investors who got to Ukraine had disputes. I can’t speak of every case because I’m not sure we ever had the full facts, but in most cases it appeared they were taken advantage of by Ukrainian partners or Ukrainian state institutions. And this became a big deal for Congress, because the Congress mandated for two years that the secretary of state had to certify that progress was being made to solve those cases or the Congress was going to cut assistance to Ukraine in half.
OR: And those cases were pushed through and you were successful in helping American investors?
SF: The first time we got a minimum number of cases pushed through, where we could go to the secretary of state and say go ahead and certify it. But we also said to the Ukrainians, you have to be better. In 1999, as I wrote in the book, a day before the State Department made the recommendation, I told State: do not ask the embassy for a recommendation, because our recommendation would’ve been that we hadn’t seen enough progress. And I said, we should certify Ukraine — it was the right thing to do — but the embassy’s recommendation would not have been helpful.
OR: Don’t ask me a question that you’re not going to like the answer to. So they didn’t ask?
SR: They did not ask. And again, it was the right thing to certify it, because the people who were causing the problems were not the ones who would be affected by the assistance question, and those who would lose the assistance couldn’t solve the investment disputes. And so, it was one of these things where Congress had not chosen the right tool.
OR: So what happens after that in let us say 1999? The parliamentary elections happened on your watch?
SP: That was in ‘98, so early ‘98. The parliamentary elections happen, the presidential election was in the fall of ‘99. On the parliamentary elections, we sent in a report terming them “free, fair and ugly”. We came to the conclusion that the elections were actually pretty well run. And what to us was the main evidence was there were two parties, one was, I forget the name but it was linked to [Ukrainian prime minister] Pavlo Lazarenko. They just barely crossed the 4% threshold. There was a second party, I think it was called the Agrarian Party that was very much pro-Kuchma, and it came in just below the 4%. It would not have taken a lot of work to put the Agrarian Party above 4%, and knock Lazarenko’s party below 4% and so beneath the threshold and so out of the Rada. And the fact that Lazarenko’s party won and got seats was to my mind pretty good evidence that it was a free and fair election.
OR: They did not fudge the vote count in that case.
SP: They would not have had to fudge the numbers a lot. To get the pro-Kuchma Agrarian Party in and get the Homrada party out.
OR: I have been an international election monitor in Ukraine and to say that Ukrainian electoral law is flawed would be a great understatement. The system is designed for gerrymandering votes. It is really quite bad.
SP: Whenever the foreign observers would show up, we figured you know, they’re not going to violate the rules while we’re there. But they would always have 10 or 12 domestic observers. The first thing I would do was to go talk to the domestic observers and say how long have you been here, have you seen any problems? In most cases, the local poll commissions were trying to do the right thing. I remember one case where they had mobile voting and the requirement was that the mobile voting people had to register a week or 3 days in advance. We got there and we asked to see the mobile voting list. We got the typed list and we saw 3 names handwritten at the bottom. So we asked, what’s this? And the commissioner said just a minute, and they had this handwritten protocol, they said you know, after we got the list, this guy’s wife, this guy’s son came in and said my relative is sick, they want to vote, it was after the deadline but in each case we sat down, and the commission debated this for several hours. And then we wrote out this 6-7 page handwritten protocol explaining what we did and we all signed it. So I’m thinking ok, you broke the rules, but they did it with the right intent in mind. I was actually pretty heartened by what I saw.
OR: Ok so things are really great you say between 1995-98, which you see as a high-point of America-Ukraine diplomatic relations, what happens next? Why do things get bad, why do you have a chapter called “And Then Problems Appear”.
SR: The beginning of 2000 was actually pretty optimistic, because Victor Yushchenko had been appointed prime minister, and there’s an expectation for some radical economic reform. But unfortunately, within a couple of months, Yushchenko and the presidential administration are at odds with each other. So Yushchenko is not getting political support for what he wants to do; there’s fighting back and forth, and the reform track goes off the rails…
OR: … and that process never quite got back on the rails until 2014-2015.
SP: It didn’t really take after the Orange Revolution. That was the disappointing thing. September of 2000 was my last full month in Kyiv before I returned home in October. Dan Friedt, who was the senior official at the State Department for Ukraine, came, and he spent 2 days in Ukraine, taking 6 or 7 meetings and all he was doing was saying that the Presidential Administration needs to work to support Yushchenko, and Yushchenko needs to be working with the president. They didn’t listen. The problems begin at the end of 2000 with problem number one being the disappearance and eventual murder of journalist Georgiy Gongadze.
OR: Gongadze was on your watch or right after you left?
SP: I interviewed with him about ten days before he disappeared. And he disappeared about two weeks before I left. One of the last things I did and one of the happiest things that I did before I left I was to sign a $25,000 grant from the embassy democracy commission to his media outlet, Ukrainska Pravda.
OR: That was a very good investment.
SP: It was a good investment. It’s paid off well in terms of bolstering independent media. In any case, [the next US ambassador Carlos Pascual] tried to find ways to help the Ukrainians with Gongadze, because it was a difficult issue for the United States. One was to ask the FBI for assistance. Also advised the Ukrainians to give a press conference where they should really explain what was going on. And of course Gongadze’s body was discovered in the woods and then you have the recordings come out which implicated people very close to Kuchma in his murder and disappearance. That’s a problem. In early 2001, [presidential bodyguard] Mykola Melnychenko, who was the source of these recordings, was granted political asylum in the United States. The State Department only got one day’s notice. Because asylum requests are handled in a very closed way. They don’t talk about people because they don’t want to be susceptible to political influence. In 2001, George W. Bush is president. My impression was that the Kuchma government was hoping for a win by Al Gore, because they knew Gore. Gore worked on the Gore-Kuchma commission. They then desperately tried to find ways to have face time with President Bush.
OR: That story sounds familiar [with the outcome of the Clinton-Trump election].
SP: The first big visit from a Bush official to Kyiv was when Condoleezza Rice, the national security advisor, went to Kyiv and I was with her. At the top of her list is the concern that NATO is about ready to deploy a peacekeeping force in Macedonia, at the request of Macedonia, and Ukraine is selling tanks and armored personnel carriers to Macedonia. NATO doesn’t want a lot of heavy weapons around if they’re going to Macedonia. So the number one request she has is that they please stop this. Kuchma tells her that they will. A month later, his chief of staff in writing confirms to her, “We’ll stop this”. But the arms continue to flow for another 6-7 months. So in Washington, our reaction was: “wait a minute… they said ‘yes,’ but it’s not stopped”. That killed a chance for a Bush-Kuchma meeting in the fall of 2001. This was a frustrating Ukrainian tendency. I spent some time in my first months in Kyiv in 1998 explaining to the Ukrainians, “don’t tell me “yes”, unless you can deliver”.
OR: So they were not willing or able to cease providing weapons to the Macedonians?
SP: It finally stopped in about February 2002. Early 2002 there was another parliamentary election, and the senior official Volodymyr Horbulin comes to Washington and meets with Deputy Secretary of State Armitage. He was told by Armitage “that if this election can be a good election processwise, we can turn the page and there will be an invitation for President Kuchma to come to the White House this spring”. That did not happen. The election was problematic as before. And that was probably an overreach on our part, trying to use an invite to leverage a better election process.
OR: You boxed yourself in.
SP: Yes, we got boxed in. But other times we would set the standard much lower, or at least, the ask would be much lower. And we would get no sense that there was any work in Kyiv to make things happen. The real problem in 2002 was Mr. Melnychenko. Right before the election, his lawyer came to us and said we have a recording in which Kuchma is approving the transfer of 4 Kolchuga air defense systems to Iraq. But this is a time where, under U.N. sanction, American and British fighters are flying over Iraq. And so, the first thing we said, as a command decision was that we are not going to touch this until after the election. Because there was some suspicion, are we going to get pulled into the election? But after the election we agreed. We had Mr. Melnychenko come in, hand over the recording and the recording device. Those get sent over to the FBI forensics lab. I think it was August. They come back in. The FBI people tell us there is nothing on the recording to suggest it was tampered with, and we’ve had 3 people listen to it and they all conclude this is Kuchma’s voice. So, the first thing, we consult with Congress, and there’s a lot of nervousness within State that, when Congress hears about this, they’re going to cut the assistance money off in a heartbeat. We went out to Ukraine. The Ukrainians denied it and they invited the Americans and British to send a team to Kyiv and said they would prove that this did not happen. Which is an important point for clarification. We never said the transfer happened. Because we didn’t know at that point. It was that the transfer had been authorized by Kuchma.
OR: Right, that is indeed the point.
SP: A week or two before the team went I was having lunch with Ambassador Gryshchenko and Deputy Foreign Minister Chaliy. I said it’s really hard sometimes to prove a negative, so what’s going to be important to me is does the team come back and say they got full cooperation and full transparency. And when the team came back, they said we got fantastic cooperation from the ministry of defense and the ministry of foreign affairs, but not so from the presidential administration and not so from the security service. I believe it was the security service that said they investigated this, it never happened, they prepared an 8 chapter report detailing their work. And our team said fine, give us a copy of the report. They got 3 chapters – 5 chapters were held back. Somebody else said we had a report, so our team asked, “Can we see the report?” No. Somebody else said they had a report but only offered a 2 page excerpt. I talked to one team member, who said, “I didn’t think this happened, but when I came back, I thought, maybe it had”. And that had consequences. The following month, at the NATO summit in Prague, NATO decides to express displeasure by reducing the NATO-Ukraine event down from a summit to a foreign ministers meeting. Right, and that was aimed at Kuchma. Now what I think happened, I think Kuchma said yes as on the recording, and then thought better of it, you know, within a couple of hours or a couple of days. The U.S military never found the Kolchuga system in Iraq. And had Ukrainians told us in September of 2002, “Look, you know the president sometimes gets a guy out of the office by saying yes when he doesn’t mean it”. We wish he wouldn’t have said yes in the first place, but we understood Kuchma enough to say that this wasn’t unusual. But no one said that to us.
OR: But no weapons were actually transferred, this was just nonsense. If no technology was transferred that would have changed the way we reacted to it?
SP: It wouldn’t have been a big problem. I had a conversation with Viktor Pinchuk when I was in Kyiv about 2 weeks after the team was there. And he said, “You know how Kuchma is, he says yes a lot of the time, but then he reverses himself”. And I said, “Viktor, I think that could’ve happened. Nobody on the Ukrainian side though told us that happened”.
OR: And the American side would have been more understanding of that?
SP: I think so yeah. We would’ve wished they said no in the first place, but we would have said Kuchma sometimes does that. So that was a problem – no meeting in 2002. And in 2003-2004 the focus of US policy is can we begin to do things to help shape conditions so that the election in 2004 for Kuchma’s successor is free and fair. But the relationship was in pretty difficult straits. The thing that saved the relationship, quite frankly, it was in 2003 when Kuchma agreed to send a couple of battalions of Ukrainian troops to Iraq as part of a stabilization force. In 2004, there was another NATO summit in Istanbul, and the recommendation that went to the secretary of state from the interagency group was that election preparations were going so badly in terms of process, we recommended it not be a NATO-Ukraine summit but another NATO-Ukraine ministerial meeting. Secretary Powell said no, we need Ukraine’s help in Iraq, so they kept it at the summit level. You sometimes have competing objectives, and the secretary gets paid the big bucks to make those decisions.
OR: So we’re up to the Orange Revolution.
SP: The thing that was interesting to me about the Orange Revolution was first of all, how quickly there was information out that indicated there were problems in the run-off ballot. And you had very quick reactions both in Washington and in Europe. So when the Central Electoral Commission was considering declaring Yanukovych the winner, Ambassador [John] Herbst in Kyiv is telling the Ukrainians, do not formally declare Yanukovych the winner. That will cause problems. And when they went ahead and did it anyway, the U.S. press guidance was strong but was going to be used by the spokesman. But the secretary said no, I’m going to use it. So the secretary went out and sent a pretty sharp message.
OR: The Secretary of State himself?
SP: Yeah. And an interesting development was the Europeans stepped in the leading mediation role. Javier Solana, who had been the Secretary General of NATO and who was now the high representative for European Union Foreign and Security Policy, and President Kwaśniewski of Poland, they came in with several other Europeans to mediate. The U.S government said, “We’re going step back and let the Europeans take the lead”. There were several reasons, one was Kwaśniewski and Solana had relationships with Kuchma that nobody in the U.S. government had at the time. Remember, at this time Bush had only met Kuchma once and that was a private off the record meeting.
OR: So the Poles, Kwaśniewski personally, had to intervene and be the point man?
SP: Yeah. He had a pretty well-established relationship with Kuchma as did Solana. I think another reason we let the Europeans take the lead was that, if the United States gets involved, then there was concern that the Russians were going to be nervous. The Russians were probably more comfortable with European mediators than Americans. And the third reason was that this was sort of an issue that Europe ought to be able to deal with. So it was encouraging the Europeans to step up to the plate. But there was still close coordination: daily phone calls between Beth Jones, the assistant secretary, and my successor John Tefft and their European counterparts. They’re talking to Brussels, they’re talking to Warsaw all the time. John Herbst in Kyiv is very active, and there’s a huge stream of reporting coming back out of him. When it looked like the Ministry of Interior was going to send force into Kyiv, Herbst was was the one who was calling people. He got the secretary to try to call Kuchma. Kuchma wouldn’t take the call.
OR: Why?
SP: He wasn’t available. John gets on the phone to Pinchuk and says, “We know he wouldn’t want to take the call, but if force is used, that’s going be a really bad turn in things”. Then he was called back and assured that force would not be used. At that point, the end of the Orange Revolution, I kind of stop the narrative because I step out of somebody with insider information to someone who’s watching from the outside.
OR: Your successors will write the successor volumes?
SP: Yeah, I did have a chapter on 2005 up to the present, because I thought you had to talk about it, buts it’s fairly brief. So you have the failure of the Orange Revolution in delivering real reform in Ukraine. Which is really the story of Yushchenko’s inability to work with Tymoshenko. One thing I think: Ukraine could have gotten a NATO membership action plan (MAP) in 2006. The Russians hadn’t come up on the net against it yet. What happened though was Yanukovych, who was then prime minister, as a result of the deal that was worked out in the summer of 2006. And Yanukovych goes to Brussels to meet with the European Union, stops at NATO and says, by the way, I and my government don’t want a membership action plan. And NATO’s not going to do a membership action plan when the executive branch in Kyiv is divided. In 2008, when Yushchenko wanted to try again for a MAP and got Tymoshenko to sign off on it as well as Yatsenyuk, the speaker of the parliament. At that point, the Russians were much harder up on the net against it. And the Germans and the French and others were not comfortable going forward with a MAP for Ukraine.
OR: It was too late by that point?
SP: And you know the return of Yanukovych, it was interesting to me, the Yanukovych election in 2010 was seen as a free and fair process, and the U.S government said we’re going to give this guy a chance.
OR: Yushchenko lost that election fair and square.
SP: Yushchenko lost it, and Tymoshenko. I think it’s quite remarkable she only lost by a couple of points given that she had been prime minister when the economy crashed and contracted by 18%. But very quickly you begin to see problems with Yanukovych, growing authoritarianism at home, the investigation against Tymoshenko, bad local elections, so the relationship became pretty difficult. The only time that Yanukovych saw Obama was on the margins of the nuclear security summits or the NATO-Ukraine summit, and even when they came to Washington for the 2010 nuclear security summit, people were still a little leery of him. Yanukovych got to see Obama, but he didn’t get to the White House.
OR: To zoom out from the micro details, what are the lessons and the overarching themes of your ambassadorship?
SP: Two big lessons that I took away from this after I finished the narrative and looked back at U.S.-Ukraine relations. One was that I think the U.S. government put together the right combination of carrots and sometimes sticks to achieve big foreign policy aims. So, it got the nuclear weapons out of Ukraine in the 1990’s. It got Ukraine to align its policy on nuclear and missile proliferation in 1998. It pressed Ukraine to provide troops for Iraq. But it was much less successful in getting Ukraine to pursue the domestic reforms, economic reform, anti-corruption, things like that, that would have made Ukraine move more quickly to realize what I call the American vision for Ukraine. We wrote it back in 1995, one sentence. “We want to see an independent stable democratic Ukrainian state with a robust market economy and growing links to the West. That was written for the Clinton administration, but the Bush and Obama administrations would agree with that. And then the book talks about why we were less successful pushing for reform. And part of it was we had a Ukrainian government where the bureaucratic structure often hindered things; it was hard to get things done. You had a president and a prime minister, and reform was hard to achieve if they were not on the same page. But the big issue was a failure of leadership. For reform to work, you had to have the leadership and a large portion of the elite committed to reform. Because it is going to be painful. A lot of times presidents didn’t do things even though they knew that the economic reform made sense economically, but it was going to cause political pain and they were looking at the next election. So the fact that they didn’t raise the tariffs to cover heat until 2016 meant every year there was a huge hole in the Ukrainian government budget.
OR: Up to 10% of GDP I’ve heard at some points.
SP: Yeah I’ve heard it’s anywhere from 6-10%. So I can understand why they didn’t do it, because you’re hitting every household from the richest to the poorest with a price increase. But it was necessary. But the big problem was corruption, the failure of rule law, the failure of good governance. Yanukovych was the epitome. He stole what, billions of dollars? The others, I mean Yushchenko, Kuchma and Kravchuk, they weren’t nearly as corrupt personally as Yanukovych.
OR: But they presided over such a system…
SP: They tolerated people around them who were corrupt, and those people were prepared to trade on that closeness to power. And I think that may be the problem with Poroshenko as well.
OR: You wouldn’t be the first one to say that, but you know this is a structural problem with Ukrainian politics.
SP: Yeah. I would’ve argued there was an opportunity in 2014 for President Poroshenko, who was the first president since Kravchuk in 1991 to win an election in the first round, to have a mandate, to say look, the next years are going to be pure hell, we’re going to do a lot of reform, it’s going to hurt, but we need to build on and to realize the promise of the Revolution of Dignity on the Maidan. I give him credit. They did some major reforms, but they didn’t do what they needed to do. Right now Ukraine continues to muddle through. They didn’t put the country on a path to success.
And my recommendations are two-fold. One is to be supportive of Ukraine in the conflict with Russia, and that means things like maintaining sanctions and keeping up the pressure on Russia. Because you need to get the Russian government to change its current policy, which seems to be a continuous simmering conflict in Donbas to put pressure on the government in Kyiv and undermine it. Don’t forget about Crimea. Donbas has killed 10,000, Crimea hasn’t had nearly as many deaths, but Crimea was more destructive to the European security order, because it was taking territory by force. Support NATO allies because allies that are confident will be more supportive of Ukraine. And then caution Ukraine to be realistic about what they can do with NATO and the European Union now. Do practical things, implement agreements, but you’re not going to get a NATO membership action plan in the near term.
And then the second part is talking to Ukraine in a tougher way on reform. Basically recognizing that we’re asking the Ukrainian political elite to do things they don’t want to do. So everything becomes transactional: we’ll do this assistance, but you have to do this this and this first. My worry is, if Ukraine doesn’t succeed now, if you look at Ukraine historically in 1994 when Kuchma became president, there was a burst of economic reform, and after about a year it dissipated. In 2000, Victor Yushchenko is prime minister, everyone excited there’s going to be a burst of reform and then Yushchenko and Kuchma part ways, Kuchma gets nervous about Yushchenko’s popularity, so nothing happens. Orange Revolution, here we have Yushchenko as president, Tymoshenko as the prime minister. She was the most effective minister that he had in the cabinet in 2000. One Ukrainian told me, she’s the only one in this cabinet who has any balls. But they fail to push hard reform.
OR: For the good and the bad, she may be the Golda Meir of Ukraine.
SP: But now a fourth time there’s the Maidan and a burst of expectation and hopes, and if Ukraine then just keeps muddling through, the risk I see for Ukraine is, you’re going to have people in the West, especially in Europe, say, “This country can’t be fixed. I’ve seen the movie before and I know the outcome, so why should we put time and energy into Ukraine when we know it’s not going to succeed, and we know it’s just going to cause problems with Russia?” And you’ve got people saying let’s get back to business as usual with Moscow. I’m not sure that’s a risk that the Ukrainian government understands that it faces.
OR: Extrapolating from that, it sounds like what you think the American diplomatic corps should have done more of over the last 20 years is put more pressure on the Ukrainians. Less ambassador more viceroy?
SP: Not viceroy, but we should have been more transactional early on. We should have pushed harder in the ‘90’s and early 2000’s for reform. Had we succeeded, Ukraine might well have been a more resilient state when it came to the crisis of 2014.
OR: What are your recollections of having been ambassador at this historical moment, what is it that you remember best, what struck you most?
SP: I enjoyed talking to the Ukrainian people, and the thing that was sort of frustrating to me, is the people of Ukraine deserve a lot more than they’ve received from their government over the last 25 years. Part of it was frustration because things that seemed clear to us we just couldn’t get the Ukrainian government to do. One of my colleagues who worked in the assistance field once said, “Ukraine is the hardest country in the world to help”. And I’ll give you an example in 1998 or ‘99. We were providing 7 or 8 million dollars in cash to the Ukrainian Ministry of Defense (MOD) and we said, “Use this money to buy diesel fuel, gasoline lubricants for your military so it can take part in exercises with U.S forces, including in the Sea Breeze exercises”. We could do this under the military assistance program. And we found out the State Tax Administration was taxing this. And I had to go to the MOD and the tax ministry and explain this was a real problem. If Congress hears about this, they will cut the assistance, there will be no money. We could not get them to stop it. And I kept saying, it’s not a matter of the tax administration getting a piece of the pie, there will be no pie. We only stopped this when I just cut the money off, I just said freeze the money. But we could find nobody in the presidential administration or in the cabinet of ministers who could go to the state tax administration and say “stop this” until we did that and took some other actions.
OR: Thank you very much for meeting with us and telling us about your book.
SP: Of course, this book is from an American perspective, and reflects certain frustrations on the American side with Ukraine. And I’m sure a Ukrainian book would reflect certain frustrations with us.
