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Steelworkers help keep uneasy calm in eastern Ukraine

MARIUPOL, Ukraine – He’s a baby-faced billionaire, the son of a coal miner and Ukraine’s richest man. Now, Rinat Akhmetov may also hold the balance of power in the region’s tensest standoff since the Cold War.

Two days after Akhmetov deployed workers from his steel plant to restore order in a region torn by separatist violence, calm appeared to return to the center of this eastern city on Friday. A few steps from a recent deadly clash, people lunched on sushi as a song by Katy Perry played. Near the scorched city council building that had been held by pro-Russian militants, a group of Akhmetov’s unarmed steel workers lounged and smoked cigarettes as they kept watch.

A few blocks away at the ruins of the city police department where at least seven people died last week, retired steel worker Oleg Krivolapov welcomed Akhmetov’s intervention.

“He has his factories, his industries, a lot of money - he could do a lot,” said Krivolapov, who trusts that his former colleagues at Akhmetov’s Ilych Factory can keep the peace. “Of course, he should have done something sooner.”

The steel workers’ patrols seem to mark a turn in the conflict, but Akhmetov’s decision to use his clout may be more significant. Since the fall of his long time ally, Ukraine’s former president Viktor Yanukovych, Akhmetov has restrained himself from pulling out all the stops to try to restore order. But with his decision to put his workers on the street, he may now be saying enough is enough with the separatist movement in eastern Ukraine.

A king among men here, his empire of steel plants, factories and coal mines spreads across Donbas – as many Ukrainians refer to their nation’s industrial heartland. Akhmetov is its largest private employer and is known as the “shadow governor” for his links to local and regional politicians. His businesses also maintain their own private, well-trained security force of more than 3,000, including former elite Ukrainian commandos.

Should he go all out – a level of commitment that still remains unclear – observers believe he has the power and influence to turn the tide.

“He controls everything in that region,” said Alexander Paraschiy, head of research at Concorde Capital, a Kiev-based brokerage and analytical firm. “If Akhmetov decides to stop this separatist show, he would be able to do it in a couple of minutes.”

Ukraine’s troubled east erupted into separatist violence months ago, and tension built in this port city for weeks before an intense battle between Ukrainian forces and pro-Russian militants took place last week. That begs an important question. Why is Akhmetov choosing to act now?

There are myriad theories. Some critics, for instance, have accused him of privately backing the separatists to force concessions out of the pro-Western government in Kiev. At least one of the separatists leaders, Pavlo Gubarev, told a state-owned Russian media outlet that Akhmetov helped finance the uprisings. Though a long time supporter of Yanukovych and his Party of Regions, Akhmetov has denied those charges.

“I tell you with confidence that I didn’t and won’t give one cent” to the separatists, Akhmetov told Ukraine’s Interfax agency this week.

Yet the chaos has led the pro-Western interim government in Kiev to begin seriously considering one of Akhmetov’s key demands: that Ukraine become a more decentralized state, giving more power to the regions. Such a deal could help protect Akhmetov’s businesses and political interests in eastern Ukraine.

Critics who charge Akhmetov with tactically supporting the separatists’ uprisings say he may have become caught in his own web, his own authority and businesses suddenly threatened by the spreading might of pro-Russians in the region.

“If he is acting now, it is not because he cares about Ukraine, but because his own interests are at stake,” said Igor Lutsenko, a prominent Kiev-based activist who was kidnapped and tortured by Yanukovych’s regime in January.

Akhmetov’s early career was plagued by accusations of underworld dealings. He was believed to be a protégé of Akhat Bragin, the former president of the Shakhtar Donetsk soccer club. Bragin, who died in a 1995 bomb blast, was also an alleged organized crime boss.

Akhmetov, however, has denied any illegality, saying his empire was built on gutsy business moves, acumen and smart investments. After the collapse of the Soviet Union, he branched out into coal, and, more importantly, steel manufacturing. In 2000, he founded System Capital Management, involved in mining, metals, energy, finance, telecommunications and media.

Currently No. 92 on Forbes list of the world’s top billionaires, he commands an estimated $12.2 billion in global assets – a figure down from $15.4 billion in 2013. He resides part time in London, where he owns one of the city’s most expensive apartments at One Hyde Park, a hyper-luxury complex a stone’s throw away from Harrods.

Akhmetov has sought to distance himself from the brutality of the regime’s last days. Anders Aslund, a senior fellow at the Washington-based Peterson Institute for International Economics said Akhmetov is seen in eastern Ukraine as a patriarchal figure whom his workers call “the respected.”

“No one can stop him,” Aslund said, “He’s by far the most powerful person in Donetsk. When he comes down, he comes down like a ton of bricks.”

It remains uncertain, though, whether he is intent on asserting his full force, or simply seeking to keep the separatists in temporary check.

In this port city of nearly a half million, the barricades set up by separatists started coming down Wednesday morning, apparently after an agreement was struck by all sides.

Akhmetov spokesman, Jock Mendoza-Wilson, said 228 company employees hit the street Thursday, the same as today. They’re running 44 routes, he said, and have spread out over four additional cities, including Donetsk, though appeared to be less of a presence there.

Each partol consists of half a dozen employees with usually two police officers.

“It’s made a big difference,” Mendoza-Wilson said. “What you had last week were armed separatists and National Guard. What you have now is public order because these people are trusted.”

Mendoza-Wilson said that Akhmetov has “been in the middle of this since the beginning of this but it hasn’t been public. But now this has been a public act, people can see he’s been involved.”

Sergei Budalyn, 59, a retiree who took time out Friday to check out the shell of a bank branch where his daughter had worked until separatists torched it, called Akhmetov “our financial god.”

“Really, a lot depends on him,” Budalyn said.

But it was not as if the pro-Russians had been banished. Their flag still flew above the City Administration Building and about 100 pro-Russian activists were still gathered on its steps Friday afternoon. Many of them accused Denis Kuzmienko, their self-proclaimed and pro-Russian “people’s mayor” of betraying their cause by cutting a deal with Akhmetov.

“I think it was a mistake,” said Aleksei, a supporter of the Donetsk People’s Republic, the pro-Russian separatists organization in the region. He declined to give his last name for fear of reprisals.

With the patrols, Aleksei said, there may be less chaos, but there is still plenty of uncertainty and suspicion.

“From the position of the ordinary person’s point of view, thanks to them the city has been preserved,” Aleksei said. “But from the other side, it means Akhmetov controls everything in Mariupol.”