US-Ukraine Business Council

"THE ACTION UKRAINE REPORT"
An International Newsletter
In-Depth Ukrainian News, Analysis, and Commentary

"The Art of Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World"

"TRAGEDY IN RUSSIA"

"Deeper, longer-lasting reconciliation between Russia and Chechnya requires
not the Russian imposition of another puppet government on Chechnya but a
more profound search for a way in which the two can live side by side in
peace. This must involve negotiation with moderate Chechens -- even
moderate Chechen separatists -- and the creation of a truly representative
Chechen government. If, that is, it is not too late already.

"The world may speak out against the awful loss of innocent life in Russia
at the hands of terrorists, but will feel less sorry for a Kremlin that
can't get it own house in order. After the last few weeks, Russia appears
to be a terrorist problem -- not part of the solution against terrorists."
[article five]

"THE ACTION UKRAINE REPORT" Year 04, Number 156
The Action Ukraine Coalition (AUC), Washington, D.C.
Ukrainian Federation of America (UFA), Huntingdon Valley, PA
morganw@patriot.net, ArtUkraine.com@starpower.net (ARTUIS)
Washington, D.C.; Kyiv, Ukraine, TUESDAY, Sept 7, 2004

-----INDEX OF ARTICLES-----
"Major International News Headlines and Articles"

1. UKRAINIANS COMMEMORATE RUSSIAN HOSTAGE VICTIMS
Bring flowers, condolences, icons and, most touchingly, toys
BBC Monitoring Service, UK, Mon, September 6, 2004

2. UKRAINE TO COMMEMORATE VICTIMS OF NORTH OSSETIAN
TERRORIST ATTACK WITH A MINUTE OF SILENCE ON SEP 7
Viacheslav Zhaivoronok, Ukrainian News, Kyiv, Ukraine, Mon, Sep 6, 2004

3. "TRAGEDY IN RUSSIA"
Russia's abominable behavior has helped spark but does not excuse
EDITORIAL, The Washington Post
Washington, D.C., Saturday, September 4, 2004; Page A30

4. "RUSSIA ADMITS IT LIED TO ITS PEOPLE ON CRISIS"
Public Was Misled On Scale of Siege
By Susan B. Glasser and Peter Finn, Washington Post Foreign Service
The Washington Post, Monday, September 6, 2004; Page A01

5. "RUSSIA--THE WEAKEST LINK"
COMMENTARY By Peter Lavelle
UPI, Moscow, Russia, Sun, September 5, 2004

6. YUSHCHENKO HAS PRESENTED HIS CONDOLENCES
TO THE FAMILIES OF THE VICTIMS IN NORTH OSSETIA
Politicians and diplomats failed to do their duties
"Press Service of Viktor Yushchenko," Kyiv, Ukraine, Fri, Sep 3, 2004

7. KUCHMA DIRECTS CABINET TO SEND HUMANITARIAN AID
TO RUSSIA FOLLOWING TERRORIST ATTACK IN NORTH OSSETIA
Viacheslav Zhaivoronok, Ukrainian News, Kyiv, Ukraine, Mon Sep 6, 2004

8. YANUKOVYCH CONDEMNS ACT OF TERRORISM IN RUSSIA
Liudmyla Martynova, Ukrainian News, Kyiv, Ukraine, Sat, Sep 4, 2004

9. "UKRAINE INVESTIGATOR 'SACKED FOR SHOWING
FRAUD LINK TO ELECTION'"
Illegal payments, money laundering
Ihor Bakai, Ukraine's state oil and gas company, reported involved
Askold Krushelnycky and Ivan Lozowy
The Independent, London, United Kingdom, Tue, Sep 07, 2004

10. OSCE URGES UKRAINE TO ENSURE DEMOCRATIC
ELECTORAL PROCESS FOR THE PRESIDENTIAL ELECTION
U.S. Deputy Assistant Sec of State John Tefft also in Kyiv
AP Worldstream, Kiev, Ukraine, Mon, Sep 06, 2004

11. "CALIFORNIA MAN TO MONITOR UKRAINE VOTING"
By Jim Welte, IJ reporter, Marin Independent Journal
Marin County, Novato, CA, Mon, Sep 6, 2004

12. "UKRAINE'S OCTOBER VOTE"
OP-ED, By D. Jeffrey Hirschberg
The Washington Times, Washington, D.C., Monday, Sep 6, 2004

13. ROMANIA TO SUE UKRAINE OVER BLACK SEA RIGHTS
REUTERS, Bucharest, Romania, Fri, Sep 3, 2004

14. UKRAINE: 1854 CRIMEAN WAR HEROES SALUTED
Royal Mail marks 150th anniversary with six new stamps
By Rob Beeson, Gibbons Stamp Monthly
Ringwood, Hampshire, UK, September 2004

15. "BUBKA HOPING TO SCALE HEIGHTS--LIKE DAD"
Son of Sergei Bubka, Olympic Champion Pole Vaulter from Ukraine
By Ben Walker, AP National Writer, New York, NY, Sun, Sep 6, 2004

16 MISSION TO DELIVER LIFE-SAVING SCANNER TO UKRAINE
Bassenthwaite Rotary Club providing assistance to Ukraine for three years
West Cumberland Times & Star, Workington, Great Britain, UK
Thursday, 2 September 2004
=======================================================
ACTION UKRAINE REPORT-04, No.156 ARTICLE NUMBER ONE
=======================================================
1. UKRAINIANS COMMEMORATE RUSSIAN HOSTAGE VICTIMS
Bring flowers, condolences, icons and, most touchingly, toys

BBC Monitoring Service, UK, September 6, 2004

KIEV - [Presenter] Flowers, condolences and, most touchingly, toys have
been brought to the walls of the Russian embassy by Kiev residents. Sitting
in front of their TV sets, Ukrainians took the disaster as their own,
keeping the link with the tragedy-ridden faraway Ossetian town [of Beslan]
in their hearts and minds. Notes, sweets and icons are also being brought
here.

The flow of Ukrainians commemorating terrorist victims has not lessened,
the Russian embassy says. Everything is in mourning here - the Russian flag
and even bunches of flowers have black ribbons on them.

The book of condolences has notes by diplomats from many countries -
Belarus, Palestine, Georgia and Bulgaria. Ukrainian members of parliament
have also come to express their condolences. Several minutes ago, Ukrainian
Foreign Minister Kostyantyn Hryshchenko wrote his words of support in the
book.

[Hryshchenko] The death of hundreds of people in the Russian city of Beslan
echoed with excruciating pain in the hearts of millions of Ukrainians.
Issues of fighting terrorism will be the highlight of the [forthcoming]
meeting of CIS heads of state in Astana. [0300-0450 Video shows presents
and flowers brought to the Russian embassy; Hryshchenko speaking.](END)
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ACTION UKRAINE REPORT-04, No.156 ARTICLE NUMBER TWO
=========================================================
2. UKRAINE TO COMMEMORATE VICTIMS OF NORTH OSSETIAN
TERRORIST ATTACK WITH A MINUTE OF SILENCE ON SEP 7

Viacheslav Zhaivoronok, Ukrainian News, Kyiv, Ukraine, Sep 6, 2004

KYIV - On September 7, Ukraine will devote a minute of silence to
commemorate those who were killed in the terrorist attack in North Ossetia.

Presidential press service informed Ukrainian News of the presidential
directive entitled "On Commemorating Those Who Tragically Perished in
Beslan town of the Russian Federation."

In the wake of the tragic events in Beslan that resulted in a heavy death
toll, the directive sets 12:00 on September 7 as the time when Ukraine will
devote a minute of silence in commemoration of the victims during which the
work at all state bodies of power, local government organs, enterprises,
institutions and organizations, except for enterprises where technological
process cannot be interrupted, as well as the movement of public and
private transport in all population centers will be stopped at a special
sound signal.

As Ukrainian News earlier reported, on Wednesday morning of September
1, 30 or over militants took many children, their parents and teachers
hostage at school No. 1 in Beslan, North Ossetia, Russia.

According to Russian mass media, human death toll in that terrorist attack
reached 335 on Sunday, September 5. Presently, 435 people including 190
children remain in hospitals. (END)
=======================================================
ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER THREE
The Action Ukraine Coalition, "Working to Secure Ukraine's Future"
=======================================================
3. "TRAGEDY IN RUSSIA"
Russia's abominable behavior has helped spark but does not excuse

EDITORIAL, The Washington Post
Washington, D.C., Saturday, September 4, 2004; Page A30

"I do not believe I am exaggerating in affirming that the empire of Russia
is a country whose inhabitants are the most miserable on earth, because they
suffer at one and the same time the evils of barbarism and of civilization."
-- The Marquis de Custine, "Letters From Russia," 1839

MORE THAN 160 years after the Marquis de Custine wrote those words, his
infamous observations of Russian culture were as relevant as ever this week
as the world became acquainted with the full horror of events in southern
Russia. Since masked gunmen stormed into a school in the town of Beslan on
Wednesday, the first day of the Russian school year, barbarism has been in
evidence, along with the worst fruits of "civilization": automatic weapons,
bombs, grenades, suicide belts and attack helicopters. The gunmen, described
as "inhuman" by those who survived, held hundreds of children and their
parents hostage for two days without allowing them food or water, and they
shot at those who tried to escape.

Russian authorities then stormed the school yesterday without any plan. The
result was chaos on an almost apocalyptic scale: Bloody children, piles of
corpses, officials providing false or contradictory information, wild
rumors, terror and panic.

It is important, in the wake of these events, that the U.S. government
reiterate its sympathy for the Russians and offer to help track down and
identify the terrorists who planned and carried out this attack. There can
be no excuse, no justification, no rationalization for the barbarity of
seizing a school and turning children into victims. Every parent feels the
anguish of the parents of Beslan.

It remains true, as we have said before, that the Russian government should
seek a political settlement in Chechnya, where civilians also have been the
chief victims for much of the past decade. Russian President Vladimir Putin
declared that the Chechen war was "over" long ago. But the underlying causes
of that war have never been dealt with, and the war itself has had a
devastating effect on Chechen society.

Deeper, longer-lasting reconciliation between Russia and Chechnya requires
not the Russian imposition of another puppet government on Chechnya but a
more profound search for a way in which the two can live side by side in
peace. This must involve negotiation with moderate Chechens -- even moderate
Chechen separatists -- and the creation of a truly representative Chechen
government. If, that is, it is not too late already.

Russia's abominable behavior has helped spark but does not excuse Chechen
terrorists and their partners in crime. Chechen terrorism makes less likely
but no less essential a solution to Chechnya's misery. (END)
=======================================================
ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER FOUR
The Action Ukraine Coalition, "Working to Secure Ukraine's Future"
=======================================================
4. "RUSSIA ADMITS IT LIED TO ITS PEOPLE ON CRISIS"
Public Was Misled On Scale of Siege

By Susan B. Glasser and Peter Finn, Washington Post Foreign Service
The Washington Post, Monday, September 6, 2004; Page A01

MOSCOW, Sept. 5 -- The Russian government admitted Sunday that it
lied to its people about the scale of the hostage crisis that ended with
more than 300 children, parents and teachers dead in southern Russia,
making an extraordinary admission through state television after days of
intense criticism from citizens.

As the bereaved families of Beslan began to lay their loved ones to rest
Sunday, the Kremlin-controlled Rossiya network aired gripping, gruesome
footage it had withheld from the public for days and said government
officials had deliberately deceived the world about the number of hostages
inside School No. 1.

"At such moments," anchor Sergei Brilyov declared, "society needs the
truth."

The admission of an effort to minimize the magnitude of a hostage crisis
that ensnared about 1,200 people, most of them children, marked a sharp
turnabout for the government of President Vladimir Putin. In previous crises
with mass fatalities, such as the sinking of the nuclear submarine Kursk in
2000 and the 2002 siege of a Moscow theater, officials covered up key
facts as well, but afterward never acknowledged doing so.

"It doesn't suit our president," a Kremlin political consultant, Gleb
Pavlovsky, said on the broadcast. "Lies, which really acted in the
terrorists' favor, did not suit him at all. Lies were weakening us and
making the terrorists more violent."

The broadcast included no apology and referred only to the most blatant
misstatement by officials, the claim that only 354 hostages were inside the
school. It did not acknowledge that the hostage-takers had demanded an end
to the war in Chechnya or that the government continues to give conflicting
information about whether any of the guerrillas remain at large, who they
were and how many were killed.

Nor did it mention that many residents of Beslan have been outraged that
the government now appears to be understating the death toll, which stood
officially at 338 Sunday night, although nearly 200 people are still
unaccounted for.

As for the hostage-takers, Deputy Prosecutor General Sergei Fridinsky said
authoritatively on Saturday there were 26 of them, and all had been killed.
On Sunday, he said there were 32 -- 30 of them dead -- and bragged about
the capture of one "member of the gang" who was to be charged in court on
Monday.

Putin made no public comment Sunday on the deadliest terrorist attack of his
presidency, and no senior member of his government has commented publicly
since the siege began at 9 a.m. Wednesday. A day after the president vowed
in a televised address to take unspecified new security measures in response
to the killing of "defenseless children," the Kremlin was silent on what
those steps would be.

Sergei Markov, a political analyst with close ties to the Kremlin, said the
deadly outcome of the school standoff had left Putin at a loss as to how to
respond beyond the former KGB colonel's instinct to strengthen police
powers and centralize control over government institutions. "They don't
know what to do," he said. "Vladimir Putin didn't explain in detail what
will be happening."

Speaking before the Sunday night broadcast of the state television news
program "Vesti," Markov said it had been clear that the government had
engaged in a clumsy coverup. "Everybody understands they are lying," he
said. "Everybody can do the math and know there were more than 1,000
people inside the school."

The Kremlin sought to distance Putin from the deceptions through Sunday's
broadcast, in which the anchor chided "generals and the military and
civilians" for failing to act "until the president gives them ideas of what
to do." Pavlovsky, the political consultant, said Putin had given Russia's
political system "a no-confidence vote" for its handling of the crisis.

Such statements could never be aired unless the Kremlin directly ordered
them, according to political analysts here. Criticism of the president is
never broadcast on state television, the continuing war in Chechnya is
almost never mentioned, and even mild questioning of government policy
is not allowed without approval from the Kremlin.

"Nothing happens on Rossiya television without the permission of the
Kremlin," commentator Andrei Piontkovsky said.
"------------------------------------------------"
NOTE: To read the rest of the article click on this link:
http://www.washingtonpost.com/wp-dyn/articles/A64187-2004Sep5.html
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ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER FIVE
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5. "RUSSIA--THE WEAKEST LINK"

COMMENTARY By Peter Lavelle
UPI, Moscow, Russia, Sun, September 5, 2004

MOSCOW, Russia ----- The rescue operation that ended the hostage
crisis in the southern republic of North Ossetia once again exposed the
weaknesses of Russia's security services and provided further evidence that
the Kremlin is the weakest link in the war against international terrorism.

The crisis, which started on Wednesday in the small city of Beslan, always
lacked clarity -- the reported number of hostage takers and hostages often
changed. Hours before the rescue operation started Friday, the Kremlin
denied that force would be applied to free a large number of children. Even
watching live television footage of the rescue operation, it was difficult
to determine how the hostage crisis ended.

Russian media outlets have reported that the roof of the school gymnasium,
where anywhere from 350 to over 1,000 hostages were held, partially
collapsed after a bomb apparently went off in the school. Moments later,
dozens of young children -- barely clothed, bloodied and dehydrated -- were
seen running from the school. For the next few hours explosions could be
heard and hundreds of shots were fired, while parents and other Beslan
residents charged the school looking for their children. The images of
heavily armed soldiers surrounding the school with civilians in tow in
possession of hand guns bordered on the bizarre.

A day later authorities revealed that well over 600 hostage victims have
been hospitalized and the body count is estimated at 350, primarily
children. There were eight initial deaths at the start of the hostage
crisis.

The reported number of hostage takers has varied from 17 to 40. Some
reports claim a number of militants were killed, possibly five, during the
rescue operation. Russia media say many of them were nationals from a
number of Arab countries. Still others report that some guerrillas escaped
wearing civilian clothing as the first children fled the building. Russian
television showed footage of civilians beating a person who they claimed
was an escaped hostage taker.

Virtually nothing about this tragedy can be reported on with certainty --
even the loss of life is difficult to determine. The lack of clarity is a
reflection of what is wrong with Russian security forces.

While it is obvious the authorities had an interest in withholding sensitive
information that could have compromised the security of the hostages and
plans for their rescue, the lack of details also sheds light on problems
with the Kremlin's approach to fighting terrorism.

Russian President Vladimir Putin surely is pleased that the hostage crisis
is over, but again the human loss staggers the imagination -- virtually
every one held captive was injured or killed. He must be asking himself
how -- over two weeks -- extremists could have downed two passenger
airliners, a suicide bomber could have struck against a Moscow subway
station, and a band of guerrillas could have seized a school and held
captive over 1,000 people, and held his presidency hostage for three
days. Clearly, Putin's security forces are failing him.

Putin has publicly stated that he knows the security forces are not
providing him with reliable information. During a trip to Chechnya after the
assassination of Kremlin favorite Akhmad Kadyrov on May 9 and following
a visit to Ingushetia because of a terrorist raid in June, Putin was
reportedly shocked about how he was misinformed by what are called the
"siloviki," or "people of power" -- better known as former Soviet security
heavyweights. The hostage crisis in Beslan was another example of trusted
and loyal supporters failing him.

There is no reason to believe the incompetence and corruption of the
security forces is designed to injure Putin. What does hurt Putin is their
ineffectiveness and use of the state as rent-seekers. He indirectly admitted
to as much in his address to the nation on Saturday.

To date, Putin has vigorously supported and promoted his former colleagues
in what had been the KGB and other ex-Soviet security agencies. They have
been instrumental in bringing to heel the country's super-rich, called the
"oligarchs," and tightening control over the electronic media. However, they
have failed in their primary duty -- to protect Russia's citizens and make
their boss look good.

In the wake of this most recent hostage crisis, it is hoped that Putin will
take pause. He came to office with a simple agenda -- law and order. The
key plank of that agenda was to wipe out Chechen extremism and violence.
After almost five years, Putin can confidently claim that Russia is more
prosperous, more respected in the world, and determined to be major
international energy broker.

However, recent events highlight what has not changed in Russia: It is not
safer. Russia is in for more terrorist attacks and possibly more hostage
situations as the political and human crisis continues in Chechnya. In the
face of that threat, it is clear the Kremlin is not prepared.

There is no doubt Russia is a target of international terrorism,
particularly militant Islamist fundamentalism. However, it is also clear
that it's a target due to its antiquated security establishment motivated by
the wrong incentives and myopic understanding of those attacking the
country and other parts of the world.

The Kremlin demands the West help it to quell Chechen militancy, but
consistently holds back on fighting international terrorism if the primary
focus isn't Chechnya. By pursuing this approach, the Kremlin shoots itself
in the foot and sacrifices its civilian population to unnecessary violence
and grief.

Russia has proven itself to be the weakest link in the "war against
terrorism." The Kremlin is willing to partner with the United States when
international militants threaten it -- the invasion of Afghanistan is the
best example and agreeing to American bases in Central Asia is another.
To date, Russia has been a free rider seeking international security for
low political cost, which allows the Kremlin's security establishment to
maintain the status quo at home. This arrangement has failed Russia
domestically; the tragic loss of hundreds of children in Beslan is a
testament to the problem.

Putin needs a new team of security advisers to fight Russia's "war on
terrorism" -- a war Russia can't claim to be winning. Putin also needs to
prove he is in charge of his "siloviki," and not the other way around. If he
can't, Russia will continue to be a victim of its own making and negligence.

The world may speak out against the awful loss of innocent life in Russia
at the hands of terrorists, but will feel less sorry for a Kremlin that
can't get it own house in order. After the last few weeks, Russia appears
to be a terrorist problem -- not part of the solution against terrorists.
=======================================================
ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER SIX
A leading news source for thousands around the world
=======================================================
6. VIKTOR YUSHCHENKO HAS PRESENTED HIS CONDOLENCES
TO THE FAMILIES OF THE VICTIMS IN NORTH OSSETIA
Politicians and diplomats failed to do their duties

"Press Service of Viktor Yushchenko," Kyiv, Ukraine, Fri, Sep 3, 2004

KYIV - Victor Yushchenko has presented his condolences to all the families
of those killed and wounded during the storm of the school 1 in Beslan. He
has stated, "we are grieving deeply over this tragedy with the Russians and
praying to God that the victims of this terrible tragedy will make a
complete recovery as soon as possible." "It goes without saying this is a
real tragedy," Yushchenko has stressed.

Yushchenko has commented on his viewpoint on storming the school at
the journalists' request. Unfortunately, he has not been provided complete
information about the details of releasing the hostages. "However,
politicians and diplomats failed to do their duties,'" Yushchenko
thinks."Soldiers, 'riot squads' and force are not probably the best means
under such circumstances."

The candidate for the Presidency of Ukraine has condemned the terrorists'
actions and declared that any form of terror cannot be justified. (END)
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LINK: http://www.yuschenko.com.ua/eng/print/1108/
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ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER SEVEN
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=======================================================
7. KUCHMA DIRECTS CABINET TO SEND HUMANITARIAN AID
TO RUSSIA FOLLOWING TERRORIST ATTACK IN NORTH OSSETIA

Viacheslav Zhaivoronok, Ukrainian News, Kyiv, Ukraine, Mon Sep 6, 2004

President Leonid Kuchma has directed the Cabinet of Ministers within a week
to send humanitarian aid to Russia following the terrorist attack in North
Ossetia.

Presidential press service informed Ukrainian News of the directive entitled
"On Providing Humanitarian Aid to the Russian Federation."

The president made this instruction in accordance with Article 10 of the Law
of Ukraine "On Humanitarian Aid" in connection with the tragic events in
Beslan, North Ossetia, that resulted in a heavy death toll. (END)
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ACTION UKRAINE REPORT-04, No. 156: ARTICLE NUMBER EIGHT
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=======================================================
8. YANUKOVYCH CONDEMNS ACT OF TERORISM IN RUSSIA

Liudmyla Martynova, Ukrainian News, Kyiv, Ukraine, Sep 4, 2004

KYIV - Presidency candidate and Prime Minister Viktor Yanukovych
expressed harsh criticism of the act of terrorism in the North Ossetia. He
made this statement to journalists.

"We have an unprecedented case, and its assessment is extreme negative that
humanity may have," Yanukovych said. He noted that the recent events in the
world evidence that terrorism is not a separate case, but a system, and all
countries of the world must unite to fight it.

Yanukovych noted that after his two-day trip to Iraq he had especially keen
feeling of happiness to live in a peaceful country. (END)
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ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER NINE
Ukrainian Information Website: http://www.ArtUkraine.com
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9. "UKRAINE INVESTIGATOR 'SACKED FOR SHOWING
FRAUD LINK TO ELECTION'"
Illegal payment, money laundering
Ihor Bakai, Ukraine's state oil and gas company, reported involved

Askold Krushelnycky and Ivan Lozowy
The Independent, London, United Kingdom, Tue, Sep 07, 2004

LONDON - A UKRAINIAN law enforcement official claims he was fired
because his investigations into a multi-million pound fraud and money
laundering scheme showed the money had been used to fund the election
campaign of the country's president.

Oleksiy Donskiy held the rank of captain in the investigation branch of the
Ukrainian Prosecutor's department in Kiev. The job combines the role of
detective and lawyer to gather evidence for prosecutions.

He contacted The Independent after the newspaper printed a series of
articles showing that the Ukrainian General Prosecutor's office sat on
evidence which linked the 2000 murder of journalist Heorhiy Gongadze to
President Leonid Kuchma's administration.

Leaked documents showed members of the secret police followed Gongadze,
who was campaigning against government corruption, and may have been
involved in his abduction. Opposition political parties and some senior law
enforcement officials believe the General Prosecutor, Henadiy Vasilyev, who
was appointed by Mr Kuchma, was put in place to control the murder
investigation.

Mr Donskiy said that in 2000 he was looking into allegations that Ukraine's
state oil and gas company, Naftohaz Ukrayiny, had illegally siphoned off
pounds 20m.

The allegation was one of many connected to the company, whose chief, Ihor
Bakai, owed his position to Mr Kuchma. Naftohaz was accused of fraudulently
making millions of pounds by stealing Russian gas transiting through
Ukrainian pipelines or selling on the Russian gas paid for by the Ukrainian
state budget.

Mr Donskiy traced payments made by Naftohaz to accounts in the US,
Belgium, Latvia and Israel, and he believed he had uncovered a network of
illegal payments and money laundering run by Ukrainian officials.

The money was sent to foreign accounts via a Ukrainian bank, Ukrhazbank,
on behalf of companies registered in the names of people whose passports
had been stolen, who were homeless, or who claimed they knew nothing of
the accounts registered in their names.

Mr Donskiy ordered a search of the Ukrhazbank's premises and documents
and uncovered evidence that three foreign bank accounts involved in
channelling funds were controlled by Mr Bakai. He also believed much of
the money ended up in Mr Kuchma's 1999 campaign funds for re-election
as president.

Mr Donskiy was warned by some of his superiors to stay away from the case
and documents seized from the bank were ordered returned. Thereafter, Mr
Donskiy secretly copied documents relating to his investigations.

Mr Donskiy believes that after he persisted in his investigation Mr Bakai
pressed the General Prosecutor's office to eliminate his post. He was told
he could have a low-ranking job or he could resign. Mr Donskiy refused and
was fired. His appeal against dismissal is being dealt with by a Kiev court.

Mr Donskiy, 26, has passed over the documents in the fraud case to a
parliamentary committee on corruption. He said: "When I first began working
for the Prosecutor's department I was idealistic. But then I began to
realise that our superiors were interested in gathering information that
could be used for their own political ends."

He said that investigators are routinely tasked with impossibly large case
loads so that they can be criticised or fired for falling behind in work if
they continue with cases that are inconvenient to corrupt officials. He said
real efforts are made to solve ordinary murders but those with political
connotations, such as the Gongadze killing, are seldom resolved.

Mr Donskiy said Mr Vasilyev has introduced a policy of sacking anyone who
questions the legitimacy of instructions from the top. Mr Donskiy added that
some of his former colleagues have warned him that his life may be at risk.
He said: "I'm not doing this to be a hero but I want to make public what I
know. We are approaching a situation where the General Prosecutor's office
is becoming an instrument under the control of our mafia and corrupt
officials."

Hryhoriy Omelchenko, a member of the parliamentary committee on fighting
corruption and organised crime, said: "Huge sums of money were appropriated
by a small bunch of bandits at the highest echelons of the state."

He believes that if an opposition candidate wins the next presidential
elections, those officials, including possibly Mr Kuchma, could face
prosecution. Mr Omelchenko said he had taken precautions to try to prevent
Mr Donskiy "ending up as another of the many corpses in cases involving
high-placed financial misdoings". (END)
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[LINK: http://news.independent.co.uk/europe/story.jsp?story=558998]
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ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER TEN
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10. OSCE URGES UKRAINE TO ENSURE DEMOCRATIC
ELECTORAL PROCESS FOR THE PRESIDENTIAL ELECTION
U.S. Deputy Assistant Sec of State John Tefft also in Kyiv

AP Worldstream, Kiev, Ukraine, Mon, Sep 06, 2004

KIEV - A top OSCE official on Monday urged Ukraine to ensure a
democratic electoral process in the presidential vote that many see as a
crucial test for the country more than a decade after it gained independence
in the Soviet collapse.

"This election is crucial for the democratic development of Ukraine," said
Ambassador Geert Ahrens, head of the observation mission that the
Organization for Security and Cooperation in Europe has established in
Kiev to monitor the Oct. 31 vote.

"All participants involved in the election, including the authorities,
political parties, media and civil society, are responsible to ensure a
democratic electoral process in which the voters can have confidence,"
said Ahrens.

More than 650 OSCE observers will monitor the election process to assess
compliance with OSCE commitments, other international standards, as well
as national legislation, Ahrens said.

On Oct. 31, powerful Prime Minister Viktor Yanukovych, who has incumbent
Leonid Kuchma's backing, is expected to face a strong challenge from key
opposition leader Viktor Yushchenko.

Also Monday, visiting U.S. Deputy Assistant Secretary of State John Tefft
stressed, after his meeting with parliament speaker Volodymyr Lytvyn, the
importance to the world of a "free and democratic Ukraine."

Tefft's was the latest in a series of visits by senior U.S. officials before
the Oct. 31 presidential vote amid claims by international human rights
groups and local activists of numerous campaign violations, including heavy
media bias in favor of Prime Minister Viktor Yanukovych, a top presidential
candidate.

Kuchma's critics at home and abroad say that democracy has suffered during
his decade in office, and accuse his administration of using its power to
influence the outcome of elections. (END)
=======================================================
ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER ELEVEN
Forward The Action Ukraine Report to all your associates in Ukraine
=======================================================
11. "CALIFORNIA MAN TO MONITOR UKRAINE VOTING"

By Jim Welte, IJ reporter, Marin Independent Journal
Marin County, Novato, CA, Mon, Sep 6, 2004

SAN RAFAEL, California - In late November, San Rafael's Douglas
Long plans to open a Farmers Insurance agency out of a home office.

Between Thursday and then, all bets are off, he says, as the Bahia Way
resident will spend the next month or two serving as an elections monitor in
Ukraine, one of the most politically unstable parts of the world. As one of
five Americans chosen by the U.S. State Department to work for the
Organization for Security and Cooperation in Europe [OSCE] in Ukraine,
Long said the next two months could be turbulent.

"It's going to be a dirty election, " he said. "Not necessarily major
corruption, but half the country wants the focus to be Russian and the other
half wants it to be European, and there's really nothing in between." "The
stakes are pretty high," he continued.

Then again, he said, local officials could decide to send election monitors
home before the Oct. 31 presidential elections even occur, as has happened
in the past when Long has flown to foreign countries as an elections
monitor. "The political winds change sometimes and the powers that be say
that they don't need monitoring, so who knows," he said.

Long, a former teacher at San Francisco State University, happened upon his
work as an elections monitor in 1997, when the Dayton Peace Accords were
signed, ending the war in Bosnia-Herzegovina. The United Nations sought 500
volunteers to serve as elections monitors, and because they needed so many
people to serve, they required no prior experience to do so. Long, a
lifelong devotee to human rights issues, jumped at the chance.

"At 2 a.m. one night, I got a call from the U.N. asking me if I wanted to go
to Bosnia, so I did it," he said. "After that, I had kind of joined a club
that gave me the qualifications to do it again." The work has also taken
him to East Timor for a referendum on that country's independence in 2001,
which Long said was not a pretty sight. "That was really the most violent
election I've ever encountered," he said.

Long said he looked forward to the trip because he loved the work, but was
also anxious to start his new career on his return. (END)
----------------------------------------------------------------------------
Contact Jim Welte via e-mail at jwelte@marinij.com;
=======================================================
ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER TWELVE
Forward The Action Ukraine Report to all your associates in Ukraine
=======================================================
12. "UKRAINE'S OCTOBER VOTE"

OP-ED, By D. Jeffrey Hirschberg
The Washington Times, Washington, D.C., Monday, Sep 6, 2004

Amid the partisan fanfare at the party conventions and quickening
pace of the U.S. presidential race, it's easy to forget that America
isn't the only nation embroiled in a feverish political campaign
leading to a much-anticipated autumn election. But in Ukraine, where
voters will elect a new president on Oct. 31, a crucial element is
missing: free, fair and comprehensive media coverage. President
Leonid Kuchma and his followers are doing everything they can to
prevent open discussion of the country's future.

Mr. Kuchma, in power since 1994, is barred from running for a third
five-year term. Not that he'd stand a chance: His approval rating
has slipped below 5 percent, and his legacy is likely to be the
pervasive corruption, cronyism and cynicism that permeate government
and business in Ukraine. To be fair, Mr. Kuchma deserves some credit
for strengthening post-Soviet sovereignty in Ukraine, a nation of 50
million in the heart of Eastern Europe; for improving the economy;
contributing military troops and other support to the U.S.-led war
against terrorism; and allowing enough democracy to at least let
this election take place.

But even dictators hold elections. Free nations hold free elections,
which entail unfettered scrutiny by an independent ? and yes, often
unruly - media. Throughout Mr. Kuchma's tenure and now in the
campaign, Ukrainian authorities have systematically intimidated,
stymied and stifled freedom of speech. In July, Freedom House
reported that "Ukraine's news media suffers under an elaborate
system of control that keeps opposition political groups and other
critics off the airwaves and out of print. The situation has only
worsened as election day approaches."

Ukraine's three top television networks are slavishly promoting
Prime Minister Viktor Yanukovych, the preferred presidential
candidate of the Kuchma camp, and either ignoring or attacking
Viktor Yushchenko, an economist and former prime minister who has
polished democratic credentials, and, according to polls, would win
if the election were held today. Meanwhile, cable networks that
feature Kanal 5, a station that leans toward the opposition but
whose coverage has been more balanced, are being taken off the air
through goonish tactics ranging from harassment by tax authorities
to late-night vandalism of equipment.

Among Mr. Kuchma's media targets are the popular Ukrainian-language
programs of the U.S.-funded Radio Free Europe/Radio Liberty
(RFE/RL). In February, with scant warning, RFE/RL's programs were
yanked from the commercial Dovira FM radio network in Ukraine.
Within days, Dovira - whose new owner is a supporter of Mr. Kuchma -
was rewarded with licenses for four additional FM stations. When
another Kiev radio station, Radio Kontinent, began to carry RFE/RL's
programs, authorities found a pretense to shut it down and confiscate
its equipment just three days later. Serhiy Sholokh, Radio Kontinent's
owner, fled the country and took refuge in the United States.

As a member of the Broadcasting Board of Governors, the U.S. federal
agency that oversees all U.S. non-military international broadcasting
(including RFE/RL), I traveled to Ukraine in April and again in June to
urge Ukrainian officials to put RFE/RL back on the air. I emphasized
that RFE/RL's brand of accurate and objective news and analysis
information is particularly important during the election campaign. I
received firm assurances from top officials that a "signal" would be
given to radio executives that it was acceptable to carry RFE/RL
programs.Kiev Mayor Oleksandr Omelchenko indicated that
RFE/RL programs would be on a city-owned FM station by July 1.

Weeks later and well into the presidential campaign, RFE/RL cannot
be heard in Kiev, the capital, and other major cities except on
shortwave frequencies - an inadequate means of distribution.
Managers of local stations say that they fear retaliation against
their stations if they air RFE/RL programs, as happened to Radio
Kontinent, or worse, given the history of violence against Ukrainian
journalists who don't toe Mr. Kuchma's line.

Mr. Kuchma's latest assault on free media does a disservice to his
country's goals of joining NATO and the European Union. And the
world is watching. In July, the U.S. Senate unanimously passed a
resolution urging the Ukrainian government not to interfere with the
right of the people to choose their leaders. "The October elections,"
states the resolution, "will be vital in determining Ukraine's course
for years to come."

The Ukrainian people should select their new president based on a
fair airing of the issues that face their country. In the United
States, we accept the notion that information is the sine qua non of
democracy. Mr. Kuchma's Ukraine does not. (END)
----------------------------------------------------------------------
D. Jeffrey Hirschberg is a member of the Broadcasting Board of
Governors and a partner in Kalorama Partners, a Washington
consulting firm.
---------------------------------------------------------------------
http://washingtontimes.com/op-ed/20040905-102719-6082r.htm
---------------------------------------------------------------------
NOTE: Ukraine's president Leonid Kuchma was not barred from
running for a third term as president as stated in paragraph two above.
The Constitutional Court found that, since the current constitution was
adopted after President Kuchma was in office, the stipulation of a two
term limit for him was not effective. Therefore, Kuchma could have
run for a third-term. (EDITOR)
========================================================
ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER THIRTEEN
Forward The Action Ukraine Report to all your associates in Ukraine
========================================================
13. ROMANIA TO SUE UKRAINE OVER BLACK SEA RIGHTS

REUTERS, Bucharest, Romania, Fri, Sep 3, 2004

BUCHAREST - Romania will take Ukraine to the International Court of
Justice to resolve a dispute over areas of the Black Sea potentially rich in
oil and gas, a government official said on Friday. The case involves how
the two countries should share out fishing and exploration rights in the
northern part of the sea which borders Ukraine's and Romania's own waters.

1997 treaty stipulated they would negotiate an agreement within two years,
but Bucharest says Kiev is being inflexible and dragging its feet in
discussions. "We will sue Ukraine in the Hague, possibly by the end of the
month," said the official, who declined to be named. He said a new round
of talks with Kiev was set for next week.

The official also said Romania had decided not to sue Ukraine over the
separate issue of a shipping canal it is building in the ecologically
sensitive Danube delta. Romanian authorities, as well as the European
Union and environmental organisations, fear the Bastroe canal will harm
the delta's unique ecosystem, a UNESCO world heritage site.

Romania had said last week it planned to take Ukraine to the International
Court over the canal. But the official said that the court required both
sides in environmental disputes to file a case together and Ukraine would
never agree to this. Ukraine says the Bastroe waterway will help develop
an impoverished region. (END)
========================================================
ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER FOURTEEN
========================================================
14. UKRAINE: 1854 CRIMEAN WAR HEROES SALUTED
Royal Mail marks 150th anniversary with six new stamps

By Rob Beeson, Gibbons Stamp Monthly
Ringwood, Hampshire, UK, September 2004

LONDON - Six new stamps are to be issued on 12th October by
Royal Mail to salute some of the heroes who fought in the Crimean
War after Britain joined the fray 150 years ago.

The stamps feature the portraits of six undecorated soldiers who had
their photographs taken by order of Queen Victoria. Stamp designer
Ian Chivers discovered the portraits in a book entitled Crimean
Heroes whilst researching the subject.

The stamps feature the following six individuals:

2nd - Second class inland letter rate
Private McNamara, 5th Dragoon Guards
Horseback charge at the Battle of Balaclava

1st - First class inland letter rate
Piper Muir, 42nd Regiment of Foot
Amphibious raid on Kerch and Yenikale

40p – European basic rate up to 20gm
Sgt Major Edwards, Scots Fusilier Guards
Gallant action at the Battle of Inkerman

57p – European airmail rate up to 40gm
Sgt Powell, 1st Regiment of Foot Guards
Fought at the Battles of Alma and Inkerman

68p - Airmail basic letter rate 10gm -20gm
Sgt Major Poole, Sappers and Miners
In Front Line at the Battle of Inkerman

£1.12 - Airmail rate up to 40gm rest of the world
Sgt Glasgow, Royal Artillery
Gun Battery, besieged Sevastopol

In addition to the stamps, a Presentation Pack, First Day Cover and
six Postcards will also be made available.

Did you know? The Crimean War was arguably the first conflict where
the public and government in London were kept informed with the very
latest news from the battlefield. The introduction of the electric telegraph
meant that the reporting of events was quicker than ever before.
-------------------------------------------------------------------------
http://www.gibbonsstampmonthly.com/story.asp?storycode=1572&preview=1
========================================================
ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER FIFTEEN
=======================================================
15. "BUBKA HOPING TO SCALE HEIGHTS--LIKE DAD"
Son of Sergei Bubka, Olympic Champion Pole Vaulter from Ukraine

By Ben Walker, AP National Writer, New York, NY, Sun, Sep 5, 2004

NEW YORK - He's got the same name as his famous father. He's also
got a lot of athletic ability. Only this Sergei Bubka is hoping to raise
himself up with a tennis racket, rather than a fiberglass pole.

Son of the 1988 Olympic champion and world record holder in the pole
vault, Bubka made his U.S. Open debut Sunday in the junior event. He lost
in singles to Scott Oudsema of Kalamazoo, Mich., 4-6, 6-3, 6-2, and will
play doubles on Monday. "Everything was working in the first set," Bubka
said. "The second set, I got a little more defensive. I think that carried
through for the rest of the match." Chances are, he'll hear from dad about
that.

"He gives me mental tips," the 17-year-old Bubka said. "That's where he
helps the most. He'll talk about doing everything to perfection, about
always doing your best."

Born in the Ukraine, Bubka and his family live in Monte Carlo. His
40-year-old father has seen him only once this year, at a tournament in
Italy. "He's very supportive, but he lets me do my own thing," the son said.
"He doesn't want to get in my way." Occasionally, they hit tennis balls
together. Dad took up the sport after retiring following his sixth world
title in the pole vault. "He plays for fun. He's all right — for an
amateur," young Bubka said with a smile.

Bubka reached the semifinals of the 2003 Wimbledon junior event, and
has also twice played juniors at the Australian Open . This was his first
visit to New York — "it's pretty big" — and he's already looking forward
to playing at Flushing Meadows next year.

Bubka's father dominated pole vaulting for more than a decade. His indoor
record of 20 feet, 2 inches, set in 1993, still stands; his outdoor mark of
20 feet, 1 3/4 inches, done in 1994, also remains the record. There never
was much chance that his son would scale those heights.

"I tried it once when I was young, after I had started playing tennis,"
Bubka said. "It was pretty tough. I made it over the bar. But it wasn't very
high. The pole didn't even bend." (END)
========================================================
ACTION UKRAINE REPORT-04, No.156: ARTICLE NUMBER SIXTEEN
========================================================
16. MISSION TO DELIVER LIFE-SAVING SCANNER TO UKRAINE
Bassenthwaite Rotary Club providing assistance to Ukraine for three years

West Cumberland Times & Star, Workington, Great Britain, UK
Thursday, 2 September 2004

BASSENTHWAITE- Brighan man, Brian Earley, is on a mission taking
a CT scanner to the Ukraine.

The CT scanner, which is beyond the financial means of the Uzhgorod
general hospital in western Ukraine, will be delivered with compliments of
the Bassenthwaite Rotary Club, which has been providing humanitarian
aid to the Ukraine for three years.

The club became involved through a scheme organised by Rotary Clubs
around Birstall in Yorkshire. It has concentrated on sourcing and delivering
good quality hospital and care equipment to hospital in Uzhgorod where
planning and distribution is co-ordinated by the local Ukrainian club.

Bassenthwaite Rotary president, Phil Davies, said conditions in western
Ukraine were poor and hospitals had little serviceable, modern equipment. A
CT scanner, which cost over £400,000, was totally beyond their means, he
said.

The Bassenthwaite Rotarians obtained a used scanner from Arrowe Park
Hospital in the Wirral. Two Ukrainian doctors and a hospital engineer came
to Britain for the decommissioning and gained the experience of the scanner.

Rotarian Mr Earley from Brigham was a driver in 2002, 2003 and a 2004
convoy in June. He set off on a two-truck convoy last week to deliver the
scanner and other aid items. “I hadn’t planned to do another trip so soon
but I’m really keen to see this important equipment safely to its
destination,” he said. The round trip is about 5,000km, and will take over
a week.

All the club’s charitable funds are raised from people and businesses in the
West Cumbria district, with assistance from local NHS supporters.

The club is often to be found at Cockermouth car boot sales, raising funds
for the Berezhniy Orphanage, near Uzhgorod. Anyone wishing to know more
can contact Brian Earley on 01900 828380. (END)
-----------------------------------------------------------------------
LINK: http://www.timesandstar.co.uk/news/viewarticle.asp?id=132198
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True then, true today, true always.
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