"THE ACTION UKRAINE REPORT - AUR"
An International Newsletter
The Latest, Up-To-Date
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"

"THE ACTION UKRAINE REPORT - AUR" - Number 539
Mr. E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, WEDNESDAY, August 10, 2005

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

1. A GUIDE TO WHO'S WHO IN D.C.'S UKRAINE-RELATED ACTIVITIES
COMMENTARY AND ANALYSIS
By Taras Kuzio and Orest Deychakiwsky
The Ukrainian Weekly, Ukrainian National Association (UNA)
Parsippany, New Jersey, Sunday, August 7, 2005

2. TEEN LAUNCHES HER OWN INTERNATIONAL RELIEF EFFORT
Vermont teen raises money for her Ukrainian Orphanage Project in Skolje
Ulana Bihun will take the next year off from school to work on the project
By Christine Danyow, Correspondent, Burlington Free Press
Burlington, Vermont, Monday, August 8, 2005

3. TOURISTS FLOOD UKRAINE AFTER VISA RESTRICTIONS LIFTED
Agence France Presse (AFP), Kiev, Ukraine, Tue, Aug 9, 2005

4. MAJOR UKRAINE MEDICAL & PHARMACEUTICAL INDUSTRY SHOW
Exhibition 'Public Health 2005', to be held in Kyiv on Oct 18-21, 2005
U.S. Commercial Service (CS), Kiev, Ukraine, Wed, August 10, 2005

5. UKRAINIAN ARMOURED TECHNOLOGY PLANT HOPES TO SIGN
BIG CONTRACT WITH PAKISTAN THIS YEAR
Interfax-Ukraine news agency, Kiev, in Russian 9 Aug 05
BBC Monitoring Service, UK, in English, Tue, Aug 09, 2005

6. UKRAINE PRICES STEEL MILL AT $2 BILLION
The Associated Press, Kiev, Ukraine, Wed, August 10, 2005

7. UKRAINIAN TYCOON DEFENDS HIS PRIVATIZATION LEGACY
Kiev to Auction Steel Plant Bought by Akhmetov Group
Under Previous Government
By Alan Cullison, Staff Reporter, The Wall Street Journal
New York, New York, Tuesday, August 9, 2005; Page A9

8. LESSONS ON FORGING A WORLD-BEATER
Duferco, a Swiss Company, world's largest steel trading company
The Industrial Union of Donbass (ISD), one of Ukraine's ­biggest
steelmakers owns half of the trading side of Duferco's business
By Peter Marsh, Financial Times, London, UK, Tue, August 9 2005

9. UKRAINE NAMES SUSPECTS IN 2000 KILLING OF
JOURNALIST HEORHIY GONGADZE
Associated Press (AP), Kiev, Ukraine, Mon, August 8, 2005

10. LETTER TO THE PRESIDENT OF UKRAINE
Can't let the authorities enjoy uncontrollability and impunity once again.
By Myroslava Gongadze, Journalist
Serhiy Sholokh, Journalist
Washington, D.C, Friday, August 5, 2005
The Action Ukraine Report (AUR), Number 539
Washington, D.C., Wednesday, August 10, 2005

11. UKRAINIAN FUGITIVE BODYGUARD SUMMONED TO UNITED
STATES COURT IN JOURNALIST HEORHIY GONGADZE MURDER CASE
Interfax-Ukraine news agency, Kiev, in Russian, 9 Aug 05
BBC Monitoring Service, UK, in English, Tuesday, Aug 09, 2005

12. TWO GERMAN COMPANIES SAY THEIR UKRAINIAN PARTNER IS
INTIMIDATED, ASK GOVERNMENT FOR HELP – DEUTSCHE WELLE
Interfax-Ukraine, Kyiv, Ukraine, Tues, August 9, 2005

13. UKRAINIAN GRAIN TRADERS WANT TO MEET YUSCHENKO TO
DISCUSS MAJOR VAT REFUND PROBLEM
Interfax-Ukraine, Kyiv, Ukraine, Tue, August 9, 2005

14. "WHO WANTS TO BUY A PIECE IN FATHERLAND? GET IN LINE!"
PM Tymoshenko's Party putting Kuchma people into key positions
COMMENTARY AND ANALYSIS: By Ihor Zaozernyy
Ukrayinska Pravda web site, Kiev, in Ukrainian 29 Jul 05
BBC Monitoring Service, UK, in English, Tue, Aug 09, 2005

15. 'SISTER SURVIVORS OF EUROPEAN COMMUNISM'
Pennsylvania nun involved in project to honor underground religious movement
Oral history project is taking place in seven countries: Bulgaria, the
Czech Republic, Hungary, Lithuania, Romania, Slovakia and Ukraine.
By Frances Borsodi Zajac, Herald-Standard.com
Uniontown, Pennsylvania, Tuesday, August 09, 2005
==============================================================
1. A GUIDE TO WHO'S WHO IN D.C.'S UKRAINE-RELATED ACTIVITIES

COMMENTARY AND ANALYSIS
By Taras Kuzio and Orest Deychakiwsky
The Ukrainian Weekly, Ukrainian National Association (UNA)
Parsippany, New Jersey, Sunday, August 7, 2005

The United States has long been the most engaged Western country in
Ukraine; this level of involvement has only increased since Viktor
Yushchenko was elected president. Yet, little information is made public
about activities pertaining to Ukraine in Washington. Little is reported in
most Ukrainian American, American or Ukrainian media on these regular,
if not daily, developments.

This article has three purposes.

FIRST, it attempts to direct a spotlight onto the high level of activity in
Washington, and the U.S. more generally, regarding Ukraine. This article
focuses on myriad non-governmental actors who interact with the U.S.
government on Ukrainian issues, as well as provides a "Who's Who" of
U.S. government officials who work on Ukraine.

SECOND, we feel that the issues it raises - particularly the changing
nature of Ukrainian affairs in Washington - requires more open discussion,
especially as it relates to the Ukrainian American community. The
environment in Washington has evolved in the last five to 10 years. Yet,
this changing environment has largely bypassed the Ukrainian American
community.

THIRD, the election of Mr. Yushchenko and the Orange Revolution have
radically altered Western images of Ukraine for the better. Ukraine-U.S.
relations have now returned to the strategic partnership they were in the
second half of the 1990s under President Bill Clinton.

The United States will be the key Western country supporting President
Yushchenko's reform drive and desire for Ukraine's Euro-Atlantic
integration. To give one example of how rapidly the situation is changing,
next year Ukraine will obtain a Membership Action Plan (MAP) that will
provide the roadmap for Ukraine's membership in NATO later in the
decade.

Therefore, the time has arrived for Ukrainian Americans and their
organizations to reassess how they can assist and become involved in
these processes and take advantage of the new, more positive image
of Ukraine.

Washington during the Yushchenko presidency is very different from what
it was under Leonid Kravchuk in the early 1990s, when Ukraine became
an independent state. Two important changes have taken place.

FIRST today, it is well-placed individuals in government or think-tanks,
far more than Ukrainian American organizations, that have the greatest
influence.

SECOND, many non-Ukrainian individuals or organizations are today
more active and influential than many Ukrainian American organizations.

DECLINING COMMUNITY ORGANIZATIONS

The Orange Revolution witnessed a burst of activity within the Ukrainian
American community - one not seen since independence. Ukrainian
Americans acted as election observers, especially during the third round
of the presidential election, provided financial resources and held
demonstrations in numerous cities, including Washington.

This burst of activity must be seen against the backdrop of a decline in
community political activity and presence over the last decade or so. It
remains to be seen whether it can be translated into a sustained, active
and professional presence in Washington with sufficient personnel and
resources.

If one were to look at the landscape of interest in Ukraine in Washington
prior to Ukraine's independence, one would have seen a relatively small,
albeit active, universe. This universe consisted largely of the Ukrainian
American community and its friends in the U.S. Congress and the
Commission on Security and Cooperation in Europe (Helsinki Commission),
with whom various community organizations and individuals worked closely.

Because Ukraine was not a separate state entity, the attention given to
Ukraine by the State Department and other executive branch agencies was
limited.

Prior to Ukrainian independence, the U.S. Congress would pass resolutions
pertaining to human rights matters in Ukraine, including on behalf of
imprisoned Ukrainian political prisoners and Helsinki monitors, or regarding
the Millennium of Christianity in Rus'-Ukraine, which called for the
legalization of the Ukrainian Catholic and Orthodox Churches. These issues
were raised by U.S. delegations to various international meetings, much to
the displeasure of the Soviets.

There were also annual Captive Nations Week events, several large rallies -
in 1983 commemorating the 50th anniversary of the Famine-Genocide, in
1984 protesting the Russification of Ukraine, and in 1988 marking the
Millennium of Christianity.

The Ukrainian American community successfully lobbied many of these
human rights-related resolutions, was instrumental in the creation of the
important U.S. Commission on the Ukraine Famine and vocally protested
the return of Ukrainian seaman Myroslav Medvid to the Soviets.

With the active involvement of the Ukrainian American community, hearings
were held before the Helsinki Commission on the Ukrainian Helsinki
Monitoring Group, including with former dissidents who had made it to the
U.S., as well as on the Chornobyl nuclear accident. The Ukrainian American
community also supported efforts to establish a U.S. Consulate in Kyiv.

Shortly before independence, a resolution introduced by Helsinki
Commissioners Don Ritter in the House of Representatives and Dennis
DeConcini in the Senate called for the administration to recognize Ukraine's
independence. It was passed over the objections of the State Department.

Few U.S. government entities published reports on developments in Ukraine,
with the exception of the Helsinki Commission, which published documents
of the Ukrainian Helsinki Group and, later, reports on elections held in
Ukraine in 1990 and 1991, which also discussed the political context of
these elections, thereby helping to inform the State Department and other
executive branch agencies, think-tanks and NGOs about what was going on
in Ukraine.

As Ukraine was a submerged republic of the Soviet Union, there was
relatively little interest in political developments in Ukraine, which in
large part involved pressing the Soviets to cease their repression of human
rights. The media showed little interest, and it was a big deal when major
newspaper articles appeared on developments in Ukraine.

And Ukraine was largely terra incognita to think-tanks and non-governmental
organizations, other than, of course, Ukrainian American community
organizations, including the Ukrainian National Information Service (UNIS)
and the Washington Office of the Ukrainian National Association, as well as
Smoloskyp, Prolog, Americans for Human Rights in Ukraine (AHRU) and the
World Congress of Free Ukrainians, among others.

The renewal of an independent Ukrainian state set up a different dynamic
with respect to all this, with not only the U.S. government setting up or
expanding institutions to deal with this new entity, but also foreign
relations-oriented NGOs and think-tanks taking a newfound interest. This
was largely unnoticed by many Ukrainian Americans.

Indeed, the election of President Yushchenko suggests that this is an
opportune time to re-assess why the situation has dramatically changed
since the 1980s and early 1990s.

The influence of Ukrainian American organizations in Washington has been
on the decline for a number of years; but, the actual start of this decline
is difficult to pinpoint. The Ukrainian National Association (UNA) closed
its Washington Office in 1995, a move that significantly weakened the
ability of Ukrainian Americans to get their message across to policy-makers.

Indeed, the Ukrainian American community has never completely understood
nor devoted the necessary resources for a significant, professional presence
in Washington, and many efforts pertaining to Ukraine, even before
independence, were done on an ad-hoc, volunteer basis by devoted and
committed individuals.

The Ukrainian Congress Committee America (UCCA) still has an office in
Washington - UNIS. Since 2000, UCCA has held annual conferences -
together with other Ukrainian and non-Ukrainian U.S. NGOs - on Ukraine
which have brought leading Ukrainian officials to Washington.

UCCA has recently initiated the U.S.-Ukrainian Security Dialogue as a joint
project with the American Foreign Policy Council and the Congressional
Ukrainian Caucus. The UCCA has also initiated several congressional
resolutions, notably one calling for the building of a Famine monument in
Washington, and interacts with some members of Congress, particularly
members of the Congressional Ukrainian Caucus.

Surprisingly though, UCCA personnel and those of other Ukrainian American
community organizations are infrequently invited to internal U.S. government
events that deal with Ukraine. UCCA personnel also do not usually attend
think-tank events on Ukraine, which are also typically by invitation only.
Why this is the case has to do with how the U.S. government relates to
Ukrainian American organizations, a subject that is beyond the scope of
this article but nevertheless is worthy of further discussion.

The Action Ukraine Coalition, consisting of the Ukrainian American
Coordinating Council (UACC), the Ukrainian Federation of America and
the U.S.-Ukraine Foundation, has put on a few policy forums over the last
few years with both U.S. and Ukrainian officials.

The UACC was instrumental in supporting former Helsinki Commission
Chairman Sen. Ben Nighthorse Campbell's resolution on the genocidal
Famine in Ukraine, which garnered an impressive one-third of the Senate -
both Democrats and Republicans - as co-sponsors.

This action, which took place in 2003, was reminiscent of the frequent
grass-roots efforts by the Ukrainian community in the 1970s, 1980s and
early 1990s, when organizations and individuals would bombard their
representatives and senators with letters or phone calls on issues of
concern.

The Washington Group, from its establishment in 1984 until just a few years
ago, provided numerous venues for the discussion of Ukrainian political
developments. However, in the last three to four years it has focused on
cultural and social events.

Other once-active Ukrainian American organizations have simply become
inactive or have ceased to exist.

An exception to the general decline is the U.S.-Ukraine Foundation (USUF),
which - while not strictly a community membership-based organization - has
its roots in and receives support from the Ukrainian American community, as
well as far more significant support from the U.S. government for its
various programs in Ukraine.

The USUF continues to be highly active and visible in Washington. Its
personnel are regularly seen at think-tank and some closed U.S. government
events, and have meaningful contacts with both the executive and legislative
branches of the U.S. government.

The U.S.-Ukraine Foundation this year launched a highly successful policy
dialogue with Ukrainian and Western experts in four fields:
politics/governance, economics, media and foreign policy. Recently, report
language was added to both the House and Senate appropriations legislation
which cover assistance to Ukraine that indicates strong support for the
USUF, with the Senate stating its expectation that U.S. funding toward
various USUF projects will exceed that of previous years. The Senate also
urges the State Department to consider a proposal from the Ukrainian
Congress Committee of America.

Throughout much of the 1990s and less frequently since, the State Depart-
ment and National Security Council would periodically meet with invited
representatives of Ukrainian American organizations as well as individuals
from the Ukrainian American community who also worked professionally on
issues related to Ukraine. Such venues provided for an informal exchange
of ideas and an opportunity for Ukrainian Americans to weigh in on policy
toward Ukraine.

Nevertheless, Ukrainian American community organizations have provided
relatively little in the way of input into U.S. policy formulation regarding
Ukraine. And, much of the legislation devoted to Ukraine that has been
passed by Congress in the last few years was approved without much input
or active support from Ukrainian American community organizations. Maybe
Ukrainian American organizations need to learn from the activities
undertaken by Armenian and Jewish lobbyists in Washington.

A final comment should be made about an important aspect of how the U.S.
government and policy-makers perceive Ukrainian Americans. During the
Kuchma era an important group of influential Ukrainian Americans from a
wide range of émigré political orientations were "derzhavnyky" (statists,
literally meaning supporters of Ukrainian statehood regardless of its
domestic politics), which led them to defend some of the dubious policies
and practices of the Kuchma regime. Not surprisingly, these apologists
turned the U.S. government and policy-makers away from dealing with
some Ukrainian American organizations.

The most visible example was the president of the Ukrainian World Congress
(UWC), who was regularly an apologist for the Kuchma regime and a staunch
critic of American policies and legislative initiatives. These included
congressional resolutions in 2002 and 2004 that called for free and fair
elections in Ukraine, which were overwhelmingly passed by both the House
and the Senate.

This is a good example of one wing of the organized Ukrainian community
undermining the other. The UCCA's work with the Congressional Ukrainian
Caucus and organization of election observers in Ukraine was undermined by
the UWC president's hostility to congressional election resolutions and U.S.
policy to Ukraine.

But, there were other derzhavnyky from the academic, judicial and military
fields. Some, inspired by Ukrainian officials, launched spurious attacks on
individuals in Washington and elsewhere who were critical of the corrupt and
undemocratic practices of the Kuchma regime. An academic institution refused
to host panels on Kuchmagate and the murder of journalist Heorhii Gongadze.

Ukrainian sociologists from the Academy of Sciences were castigated by
Ukrainian American and Ukrainian Canadian professors at an annual Ukrainian
American academic conference in the U.S. for being too critical of domestic
developments inside Ukraine (the episode was recounted in the April 2004
issue of Suchasnist magazine). These derzhavnyky were so cross-party that
among them was an ex-Canadian-Ukrainian Trotskyist working in Ukraine
since the early 1990s.

Today, of course, they have - not surprisingly - all re-painted themselves
Orange.

UKRAINE'S DIPLOMATS

Although some Ukrainian Embassy officials did attend events on Ukraine at
think-tanks and were brave in lobbying Ukrainian diplomats to support free
and fair elections after the second round of the presidential election and
during the Orange Revolution, other Embassy actions were disappointing.

The Embassy's reputation was harmed during the 2004 election when it
officially complained to George Washington University about visiting Prof.
Kuzio's writings in The Ukrainian Weekly on the 2004 election. The
university replied that the Embassy should write to The Ukrainian Weekly
to voice its opposing opinions.

With the anticipated posting of the new ambassador, the Embassy of
Ukraine could improve its performance in this field. Embassies of countries
that are now members of NATO and the European Union played an active
role in lobbying for their countries' Euro-Atlantic integration in
Washington. The Ukrainian Embassy should follow suit.

DISINTERESTED ACADEMIA

The decline in the influence of Ukrainian American organizations in
Washington is compounded by an academic world that has not adjusted to
the emergence of independent Ukraine. "Ukrainian studies" continues to be
understood as, primarily, culture, history and diaspora studies - not
political science and the study of contemporary Ukraine. Annual prizes given
by the American Association for Ukrainian Studies never go to political
science books or articles.

Disillusionment with the Harvard Ukrainian Research Institute (HURI), in
part, has led to some Ukrainian Americans shifting their hopes to Columbia
University. During and after Ukraine's 2004 election, Columbia hosted
panels dealing with this historic event. Columbia hosts the annual
convention of the Association for the Study of Nationalities, which holds
the largest number of panels on contemporary Ukraine of any North
American conference.

It is still too early to say if Columbia's Ukrainian studies - unlike
HURI's - will include contemporary Ukraine as an important and equal area
of research and teaching. We can only hope Columbia does not follow
HURI in not giving sufficient attention to contemporary Ukraine.

ACTIVE INDIVIDUALS

Research, publication and teaching on contemporary Ukraine is being
undertaken primarily by individuals outside of HURI or Columbia, the two
locations where Ukrainian Americans have invested resources. Leading
academics working on contemporary Ukraine include Lucan Way (Temple
University), Alexander Motyl (Rutgers), Paul D'Anieri and Erik Herron
(Kansas), Stephen Shulman (South Illinois), Robert Krawchuk and Charles
Wise (Indiana) and Taras Kuzio (George Washington).

The centrality of the U.S. to contemporary Ukrainian studies can also be
seen in two other ways. First, in the large number of books published by
U.S.-based academics since 1992. Second, in the number of special issues
of U.S.-published journals that have devoted special issues to contemporary
Ukraine. In 2005 alone, Communist and Post-Communist Studies, Problems
of Post-Communism and Demokratizatsiya will publish special issues.

Dr. Kuzio's courses on contemporary Ukraine attract large numbers of
students, most of whom are not of Ukrainian American background. During
the fall 2005 semester these will include 30 undergraduates signed up for
"Transition and Democratization in Ukraine" and 18 graduate students signed
up for "NATO, EU Enlargement: Ukraine, Russia." These class sizes show the
missed opportunities that established structures, such as HURI, have lost
out on by not including courses on contemporary Ukraine.

The growing importance and influence of individuals can be seen in many
other areas in Washington. Some of the people in Washington working on a
daily basis on contemporary Ukraine in, or with, U.S. government
institutions and affiliated structures include: Gene Fishel, David Kramer,
Karen Stewart, Marcus Micheli, Dan Rosenblum, George Frowick, (State
Department); Damon Wilson (National Security Council); Jessica Kehl; Gen.
(ret.) Nicholas Krawciw (Department of Defense); Christine Lucyk, Andrew
Bihun (Commerce Department); Orest Deychakiwsky, Ron McNamara (Helsinki
Commission); Nadia Diuk, John Squier (National Endowment for Democracy);
and Bill Gleason (Foreign Service Institute).

There are many individuals in the U.S. government, including a number of
Ukrainian Americans, who work on Ukraine at the State, Defense, Commerce,
Energy, Treasury and Justice departments and other agencies, such as the
Agency for International Development (USAID) and the Office of the U.S.
Trade Representative (USTR), as well as entities that deal with trade and
economic relations with Ukraine.

Former U.S. ambassadors to Ukraine, particularly Steven Pifer and William
Green Miller, have also maintained an active interest and involvement in
Ukraine. Both are members of the USUF policy dialogue group.

Key individuals working on Ukraine in the policy-making domain in Washington
include: Stephen Larrabee, Jennifer Moroney, Keith Crane, Olga Oliker (Rand
Corporation); Anders Aslund (Carnegie Endowment); Blair Ruble (Kennan
Institute); Michael McFaul (Stanford University - Washington); Zbigniew
Brzezinski, Celeste Wallander, Richard Murphy, Ambassador Keith Smith
and Janusz Bugajski (Center for Strategic and International Studies); Bruce
Jackson (Project on Democracy); Radek Sikorski (American Enterprise
Institute); Ariel Cohen (Heritage Foundation); Jaroslaw Martyniuk
(Intermedia); and Morgan Williams (Ukraine-United States Business Council
and SigmaBleyzer). [Mr. Williams also publishes the daily Action Ukraine
Report distributed via e-mail.]

U.S. INSTITUTIONS

No other Western country approaches the level of U.S. government outreach
to academic and think-tank specialists. The U.S. government and
think-tanks - not Ukrainian American organizations - led the way in the last
few years in organizing seminars, panels and roundtables on Ukraine.

The speakers for these U.S. government and think-tank events are drawn
from the academic or think-tank world. Leading the way in giving
presentations from the academic community have been Profs. Motyl and
D'Anieri, and visiting Prof. Kuzio.

These by-invitation-only U.S. government seminars on Ukraine's upcoming
election took place in September and December 2003, March and July 2004
and June 2005. The U.S. government has also sponsored more in-depth
daylong discussions on Ukraine at Booz-Allen consultants dealing with
generation change in Ukraine.

The U.S. government also draws in academic and think-tank experts to assist
in the formulation of strategy and forecast documents on Ukraine. These are
drawn up irregularly for strategically important countries. The U.S.
government has also sponsored roundtables comparing Ukraine's Orange
Revolution to revolutions in Serbia and Georgia.

Other briefings have investigated how Ukraine is progressing since President
Yushchenko's election. Prior to President George W. Bush's visit to Europe
in February, the National Intelligence Council was briefed on Ukraine by
Profs. D'Anieri, Motyl and Kuzio.

Within the last few years, the U.S. Congress's Helsinki Commission has
held hearings and briefings on Ukraine, sponsored panels on the 2002 and
2004 elections, sponsored congressional resolutions, and issued numerous
Congressional Record statements.

The House International Relations Committee (HIRC) held a hearing on the
Ukrainian elections in 2004 as well. The committee also held a hearing on
Ukraine in July [2005] where Stephen Nix (International Republican
Institute), Ambassador Nelson Ledsky [National Democratic Institute] and
Visiting Prof. Kuzio [George Washington University] testified.

As mentioned earlier, what differentiates Washington from the 1980s and
1990s is that think-tanks now take an active interest in contemporary
Ukraine. The greatest number of panels have been organized by the
Carnegie Endowment, reflecting a high degree of interest in Ukraine by
Dr. Aslund, who heads its Russia and Eurasia Program.

Dr. Aslund is also the co-author of the Blue Ribbon Commission Report on
Ukraine produced in cooperation with the United Nations Development
Program (UNDP). Dr. Aslund and Prof. McFaul have edited a book on the
Orange Revolution that is to be published by Carnegie at the end of 2005.

The Center for Strategic International Studies (CSIS) has also been active
on Ukraine. The CSIS has had long-established working groups on Ukraine,
including those focusing on the 2002 and 2004 elections. In the 1990s the
CSIS organized the American Ukrainian Advisory Committee that included
prominent Americans and Ukrainians and held periodic meetings in
Washington and Kyiv.

The United States is also the most active Western country in the field of
supporting democracy in Ukraine. The National Endowment for Democracy
[NED] was created in the era of Ronald Reagan, and its Eurasia department
is headed by Dr. Nadia Diuk.

The International Republican Institute (IRI), whose Eurasia department is
headed by Mr. Nix, and the National Democratic Institute (NDI), whose
Eurasia department is headed by Ambassador Ledsky, are very active in
Ukraine and in Washington. In March-April, IRI hosted a talk by Foreign
Minister Borys Tarasyuk and IRI-NDI hosted a reception for President
Yushchenko, both in Washington.

Freedom House, whose most prominent Ukrainian specialist is Adrian
Karatnycky, has also played a vital role in supporting democracy in Ukraine
since the 1990s. Since 1997 Freedom House has published the excellent
annual report "Nations in Transit," which covers Ukraine and 26 other
post-Communist states.

These prominent and respected NGOs interact extensively with U.S.
policy-makers in both the executive and legislative branches.

Numerous and various American NGOs that deal with health care, energy,
agriculture, civil society, media, charitable, social and, of course,
business issues also maintain contacts and interact with U.S. policymakers
on Ukraine. Organizations that have USAID contracts in Ukraine have people
helping to manage their programs in Washington.

Also, many people such as former Peace Corps volunteers and Americans
who have lived in Ukraine, including members of religious organizations,
have become actors on the Ukraine Washington scene. Jewish American
organizations have also taken an active interest in U.S.-Ukrainian
relations.

The Ukraine-United States Business Council was first organized in 1995
when a small group of companies started meeting to form an organization.
The group hired Kempton Jenkins as the executive director/CEO (his title
was later changed to president).

Mr. Jenkins ran the Ukraine-United States Business Council until December
2004. The council, which at its peak had 35 members, did not have an active
board of directors; there were few breakfast meetings, even fewer
newsletters, and very little activity. During the Kuchma era the Ukraine-
United States Business Council was tied to PR firms that had contracts with
the Kuchma administration.

Since President Yushchenko's election the situation has changed. In February
a group of 20 key businessmen came together to revive the Ukraine-United
States Business Council. The Ukraine-United States Business Council has a
new president/CEO, Susanne Lotarski, a board of directors and an executive
committee, which had its first meeting in July.

MEDIA RESOURCES

The U.S. is also a leader in the provision of media resources. The U.S.
government-funded Radio Free Europe/Radio Liberty (RFE/RL) and Voice
of America (VOA) continue and have even expanded their broadcasting to
Ukraine.

VOA Television, which is presented by Myroslava Gongadze, Zoreslav
Baydyuk, Nataliya Leonova, Andriy Hodovanec and others, has different
programs that are transmitted live on Ukraine's Channel 5 and State
Channel 1.

The Internet has provided organizations with the ability to produce
publications dealing with Ukraine. RFE/RL publishes 16 Internet-based
publications that are free of charge. Two of these cover Ukraine
systematically - the daily Newsline and the weekly Belarus, Ukraine and
Moldova Report, while others, such as Media Matters, (Un)Civil Societies
and especially Organized Crime and Terrorism Watch (edited by Roman
Kupchinsky), provide occasional analytical pieces on Ukraine. RFE/RL in
Washington also periodically holds briefings on Ukrainian issues by visiting
Ukrainian or U.S. specialists.

As is common in the United States, the private sector often outdoes the
government. The Jamestown Foundation, which is funded by some of the
numerous private foundations found in the U.S., began publication of the
Eurasia Daily Monitor in 2004. During the 2004 election it had greater
analytical coverage of Ukraine than did RFE/RL. Three out of the five
Eurasia Daily Monitors released each week publish articles on
contemporary Ukraine.

Articles on contemporary Ukraine published in RFE/RL publications or in
Eurasia Daily Monitor provide a sizable proportion of the coverage on
contemporary Ukraine that appears in The Ukrainian Weekly and
Canadian newspapers, such as Edmonton's Ukrainian News.

These articles are also widely disseminated over Internet forums hosted
by Brama and InfoUkes, as well as by The Action Ukraine Report (Morgan
Williams) and the Ukraine List (Dominique Arel).

The Ukrainian Weekly also has a Kyiv Press Bureau (Editor Zenon Zawada
and Editorial Assistant Yana Sedova). It is noteworthy that The Weekly is
sent free of charge to all members of the U.S. Congress.

CONCLUSION

The U.S. leads the Western world in both the degree of outreach to experts
and in its high level of interest in Ukraine. Much of this activity is not
publicly reported and, therefore, Ukrainian Americans, and Ukrainians, do
not know of it. Indeed, even this partial guide cannot cover comprehensively
the magnitude and depth of "Ucrainica" in Washington.

Washington is strategically the most important Western city for Ukraine
and for its aspirations to join the WTO and NATO and, to a lesser extent,
the EU.

It is, therefore, imperative that Ukrainian Americans, while recognizing
that many other institutions and individuals are involved with Ukraine
compared with the pre-independence period, re-assess the strategic
importance of providing sufficient resources and personnel to have a
meaningful, sustained presence in Washington, which includes having
influential and committed people on the ground. -30-
--------------------------------------------------------------------------------------------------------
Taras Kuzio, Ph.D., is a visiting professor at the Elliott School of
International Affairs, George Washington University, Washington,
D.C. (tkuzio@gwu.edu).

Orest Deychakiwsky is senior staff advisor at the U.S. Helsinki
Commission, Washington, D.C. (orest.deychak@mail.house.gov).

The views expressed in this article represent Dr. Kuzio and Mr.
Deychakiwsky's private views and do not reflect those of George
Washington University or the U.S. Helsinki Commission.
--------------------------------------------------------------------------------------------------------
The Ukrainian Weekly, published by the Ukrainian National Association,
Roma Hadzewycz, Editor-in-chief, Parsippany, New Jersey. The
Ukrainian Weekly Archive: www.ukrweekly.com; staff@ukrweekly.com.
--------------------------------------------------------------------------------------------------------
The Action Ukraine Report (AUR) Monitoring Service
============================================================
2. TEEN LAUNCHES HER OWN INTERNATIONAL RELIEF EFFORT

Vermont teen raises money for her Ukrainian Orphanage Project in Skolje
Ulana Bihun will take the next year off from school to work on the project

By Christine Danyow, Correspondent, Burlington Free Press
Burlington, Vermont, Monday, August 8, 2005

RICHMOND, Vermont -- A little over a year ago, then-16-year-old Ulana
Bihun of Jericho [Vermont] was led by two little boys and a girl with matted
hair and ripped dirty clothes to a bathroom at an orphanage in Skolje,
Ukraine.

The bathroom was outside the orphanage's main house and 200 yards
away. It was a small hole with a couple of flip-down boards and a hanging
curtain. Three of these curtained holes were all that the 200 children, ages
six to 18, had to use as a bathroom, Bihun said.

"There was, of course, a strong odor, " she said, "and it seems like a long
way for the kids to walk just to go to the bathroom."

When Bihun saw the grim facilities, she knew she wanted to do something
about them. Sunday evening, the recent Mount Mansfield Union High School
graduate, now 17, held her second jazz and folk concert on the Volunteers
Green in Richmond to raise money for her Ukrainian Orphanage Project.
Bihun will take the next year off from school to work on the project.

Bihun held a smaller concert in June in which she raised a little more than
$500. With the money, Bihun hopes to build 10 toilets, sinks and showers
for the children. She's organizing most of the building project on her own.

"My parents have helped with signatures and stuff like that since I'm under
18, but, yeah, it's pretty much my own thing," Bihun said.

Mike Wetherell, a program support manager at the Institute for Sustainable
Communities, said it's not very common for teens to take on their own
international relief project. The nonprofit institute helps communities in
emerging democracies.

"It takes a lot of energy, enthusiasm and time to pick up a project on your
own," Wetherell said. "You develop a lot of skills, professional
opportunities, and community connections, too."

Bihun spent her junior year of high school in L'viv, Ukraine -- the school
her grandmother attended 65 years earlier -- under her father's Fulbright
Scholarship. There, she became very involved in Plast, the National
Scouting Organization of the Ukraine.

The organization focuses on raising young patriotic Ukrainians to become
good citizens. As one of the many of the organization's community service
activities, Bihun's group visited the orphanage a few days before Easter
last year to paint traditional eggs.

Many of the unkempt children in the orphanage were left behind from the
Chernobyl nuclear power plant disaster, Bihun said. Others were there
because their parents had AIDS and could not support them financially.

When Bihun went home to her parents after visiting the orphanage they
could tell she was disturbed. "Every time I came home my mom noticed I
wasn't up for talking for a few days," she said.

With the money and a grant Bihun hopes to get from the Williston Rotary
Club, she will return to the orphanage for a month in September to
brainstorm ideas and see if she can hire workers. She then hopes to return
in April, when winter has passed, and supervise the building project. Bihun
said she's a little nervous about how it will all work out.

"There's a lot going on there politically, and a lot to be scared of," she
said. "I know I can't raise $2,000 and just give it to them in an envelope,
because the women that run the orphanage would just take it and run. I do
have to be there watching them the whole time."

That won't deter her. Bihun hopes to continue raising money while she is
in college for other supplies the orphanage might need in the future.

To give: Anyone wishing to make a donation to the Ukrainian Orphanage
Project can contact Ulana Bihun at [802] 899-1249 or e-mail her at
ulana1234@yahoo.com. -30- [Action Ukraine Report Monitoring]
----------------------------------------------------------------------------------------------------------
LINK: http://www.burlingtonfreepress.com/
=============================================================
3. TOURISTS FLOOD UKRAINE AFTER VISA RESTRICTIONS LIFTED

Agence France Presse (AFP), Kiev, Ukraine, Tue, Aug 9, 2005

KIEV - Vito Gandolfo has come to Ukraine on business from his native
Italy dozens of times over the past decade, but only this year did his wife
finally join him. Why? She no longer needed a visa.

"She never had time to go to Rome and get a visa," Gandolfo, who lives
in Italy's southern Calabria region, told AFP recently as he strolled in
central Kiev. "If there were still visas, she would have never come."

That's just the reaction Ukraine authorities were hoping for when, anxious
to boost their national tourism sector, they abolished visa requirements for
nationals of the European Union, Canada, Japan, Switzerland and the
United States earlier this year.

After the "orange revolution" put Ukraine into international headlines for
weeks late last year, the ex-Soviet nation's new pro-Western authorities who
came to power on the back of those mass protest have sought to capitalize
on the momentum.

"These were great days and there is no longer a place left in the world that
doesn't know where Ukraine is," Viktor Yushchenko, the leader of the
peaceful demonstrations that eventually resulted in his election as
president, told cheering crowds in Kiev's Independence Square in
December. "We have filled in that gap in primary education!"

And within six months Yushchenko's administration closed another gap,
abolishing visas for the aforementioned countries as part of its efforts to
drive Ukraine toward eventual membership in the European Union.

"We have to get used to European values," said Volodymyr Malinkovich,
a political analyst in Kiev. "That's why easing of visa regimes is so
important to us... it enables the exchange of ideas and people."

Ukrainian officials say the results so far have been promising: between
April and June, the number of visiting EU nationals alone increased by 63
percent, to more than 1.6 million people.

Although a large chunk of the increase by EU nationals can be attributed to
the Eurovision song contest, which Kiev hosted in late May, local realtors
and tour operators say the larger numbers have been holding since then.

"Between May and July we have had twice the number of clients and our
profits have doubled," said Olexander Radich, owner of two small travel
agencies Comrad and Easten House in Kiev.

"It was a very good decision," said Alla Nikitchenko, manager of one of
Ukraine's biggest travel agencies, Hamalia. "Trips have become cheaper
and easier to do. Businessmen particularly appreciate not having to wait
for a visa anymore."

The visitors themselves are also thrilled. "It made it easier: cheaper and
less hassle," Ian Chipp-Smith, a Briton who decided to make his first visit
to Ukraine after having watched the "orange revolution" on television, said
recently as he strolled on Kiev's main Kreshchatik Avenue.

Chipp-Smith and his friend David Smith spent in July a dozen days in Kiev
and the western city of Lviv, which is listed as a UNESCO World Heritage
site, and the pair plan to return in winter. "The architecture is
interesting... and we just found people nice and open," Smith said.

Ukraine, a country larger than France lying in Europe's eastern fringe, has
the potential to become a major tourist attraction -- it has mountains (the
Carpathians in the west), beaches (Crimean coast on the Black Sea is
particularly popular) and history (the capital Kiev is more than 1,500 years
old).

Among the most popular tourist destinations at the moment are the cities of
Kiev and Lviv, Crimea and Odessa. The Chernobyl power plant has also
attracted a string of tourists curious to see the site of the world's worst
nuclear accident in 1986.

Ukraine also attracts religious buffs -- Russian Orthodoxy was born on the
banks of the Dnepr and Jewish organizations run trips to holy sites of a
country that was once dotted with shtetls and where the Chassidism and
Lubavitch movements were born.

People in the industry warn, however, that tourism infrastructure, including
construction of more mid-range hotels and increasing the level of service,
will have to be built up before Ukraine becomes one of the top destinations
for the world traveller. -30- [Action Ukraine Report Monitoring Service]
=============================================================
4. MAJOR UKRAINE MEDICAL & PHARMACEUTICAL INDUSTRY SHOW
Exhibition 'Public Health 2005', to be held in Kyiv on Oct 18-21, 2005

U.S. Commercial Service (CS), Kiev, Ukraine, Wed, August 10, 2005

KIEV - The U.S. Commercial Service (CS) in Kiev, Ukraine, is pleased to
announce to American companies the opportunity to promote themselves at
a major medical & pharmaceutical industry exhibition in Ukraine - by sending
their catalogs for exhibit and promotion.

Public Health 2005 will be held at the International Exhibition Center in
Kiev, Ukraine on October 18-21, 2005 and will feature a wide range of
medical equipment (including dental, clinical laboratory and optical) and
pharmaceuticals.

At this show, CS Kiev will organize the USA pavilion and Product Literature
Center (PLC). CS Kiev invites you to participate by sending your product
catalogs and price lists for display in the CS PLC, and for distribution to
interested Ukrainian companies.

The cost of company promotion in the CS Product Literature Center is USD
250 per U.S. company. Companies who would like to be included in the
official show catalog should pay additional USD 440.

U.S. companies interested to participate in the Product Literature Center
should contact CS Kiev: Olena Stephanska, CS Kiev Commercial Specialist,
e-mail: Olena.Stephanska@mail.doc.gov; tel: (380-44) 490-4054; fax: (380-44)
490-4046; U.S. Commercial Service, American Embassy Kiev, Ukraine Public
Health 2005 website link: http://www.pe.com.ua/new/exh/exhdet.php3?id=61
==============================================================
5. UKRAINIAN ARMOURED TECHNOLOGY PLANT HOPES TO SIGN BIG
CONTRACT WITH PAKISTAN THIS YEAR

Interfax-Ukraine news agency, Kiev, in Russian 9 Aug 05
BBC Monitoring Service, UK, in English, Tue, Aug 09, 2005

KHARKIV - The Kharkiv-based Malyshev plant, one of the biggest CIS
producers of armoured technology, may sign a new contract with Pakistan
on delivery of military goods by the end of the year.

The Malyshev plant's general director, Hennadiy Hrytsenko, told
Interfax-Ukraine that there are plans to conclude a number of contracts
with Pakistan, the first of which will be signed by the end of the year.

However, he said that he would not yet disclose the value of the contracts.
"The important thing is that these contracts may exceed in volume the
previous contracts," Hrytsenko said, adding that it involved a "large
multi-component programme".

Hrytsenko said that they were discussing both the possibility of new
deliveries and the modernization of machinery already in service with the
Pakistani army, as well as joint re-export of special production. He also
added that these contracts would allow "the problem of loading the
Malyshev plant's special production capacity to be resolved in principle".

The press service of the Kharkiv regional state administration told the
agency that Kharkiv Region governor Arsen Avakov today had a meeting
with a Pakistani business delegation headed by Major-General Israr
Ahmad Ghumman, which was attended by representatives of the Malyshev
plant and a number of associated businesses.

At the end of the meeting, Avakov said that Pakistan is an old and
dependable partner of the Malyshev plant. "The visit of the Pakistani
delegation may bring a good contract for Malyshev that will continue what
was begun by the prime minister," he said. "Yuliya Tymoshenko has done
a lot to fill the plant's portfolio of orders. All this will help the plant
to emerge from the difficult condition it has been in for many years and
will ensure that workers receive good wages and on time."

Pakistan is among Ukraine's biggest partners on the international arms
market. Between 1996 and 2000 alone, Ukrainian specialists carried out
orders from Pakistan worth around 800m dollars. In particular, Ukraine
delivered 320 T-80UD tanks to Pakistan under a contract worth 650m
dollars.

In 2002, Malyshev signed a 100m-dollar contract for delivery of
motor-transmission units for the project to create the new Pakistani main
battle tank Al-Khalid MBT-2000. -30- [Action Ukraine Report Monitoring]
=============================================================
6. UKRAINE PRICES STEEL MILL AT $2 BILLION

The Associated Press, Kiev, Ukraine, Wed, August 10, 2005

KIEV - The Ukrainian government on Tuesday set a $2 billion starting price
for a 93.2 percent stake in the country's most profitable steel mill, more
than doubling the price at which the mill was sold last year in a disputed
privatization deal.

The State Property Fund also said in a statement that the winning bidder
for the Kryvorizhstal steel mill would be obligated to invest $2.3 billion
between 2006 and 2013 for unspecified improvements. The mill is to be
auctioned in October. The government statement offered no further details.

Kryvorizhstal was sold last year for $800 million to a consortium controlled
by Rinat Akhmetov, the wealthiest man in Ukraine, and Viktor Pinchuk, a
son-in-law of the former president, Leonid Kuchma.

Other major steel companies, including Severstal of Russia and United
States Steel, claimed that they had made substantially higher bids than the
consortium did for the mill, of around $1.2 billion.

After a long legal battle, the new government headed by President Viktor
Yushchenko seized control of the mill in June, calling the earlier sale a
theft.

Vasili Yurchyshyn, an analyst with the Razumkov Center research group in
Kiev, said the new starting price was exaggerated, "taking into account
current political and economical instability in Ukraine." "I don't think
that any rational investor will come here and pay such money," he said.
Kryvorizhstal last year declared earnings of more than $400 million.

Pinchuk, Akhmetov and their lawyers were unavailable for comment.
Pinchuk has lodged complaints with the Supreme Court of Ukraine and
the European Court for Human Rights, both of which are pending. -30-
=============================================================
7. UKRAINIAN TYCOON DEFENDS HIS PRIVATIZATION LEGACY
Kiev to Auction Steel Plant Bought by Akhmetov Group
Under Previous Government

By Alan Cullison, Staff Reporter, The Wall Street Journal
New York, New York, Tuesday, August 9, 2005; Page A9

MILAN, Italy - When outraged Ukrainians established a new government
order after rejecting fraudulent election results last year, many called for
a wholesale purge of the oligarchs who had backed the former regime
and over the years got rich through their connections.

After a slow start, a move against the biggest beneficiaries of post-Soviet
privatizations may be in the offing: Ukraine's government this week will set
the bidding terms for a steel plant owned in part by metals-and-mining
tycoon Rinat Akhmetov, which it says he obtained in a rigged sale last year.

While the move may appease a populace impatient with the pace of change,
the government has to be careful about the message a wholesale property
grab would send to investors.

Mr. Akhmetov said in an interview from his current perch in Milan that he is
far from sure the government will get its way. "Some courts say we bought
everything absolutely legally...and there are others that say we didn't,"
said Ukraine's richest man, who is monitoring his affairs at home amid an
extended Mediterranean vacation. He and his partners are appealing the
repossession of his property to the European Court of Human Rights.

Mr. Akhmetov's sang-froid contrasts sharply with the mood in Ukraine, where
many would like to see him behind bars and divested of his property. Since
the government took power in January, it has arrested more than a thousand
people on charges mostly related to election fraud or abuse of office.

Though the first arrests seemed to only touch low- and midlevel
functionaries, in recent months the detainees have included members of
Ukraine's former business and government elite.

Any serious government anticorruption campaign, analysts say, likely would
entail close scrutiny of businesses owned by Mr. Akhmetov, whose native city
of Donetsk last year was a focal point of election fraud that skewed results
in favor of the eventual losing candidate, the Russian-backed Viktor
Yanukovych.

"It was bandit-land in the mid-1990s," said Taras Kuzio, a visiting
professor at George Washington University. "And today there are going to
be a lot of problems trying to sort out what's legal and what's not."

In a rare interview in a well-appointed hotel here, Mr. Akhmetov brushed off
rumors swirling in Ukraine that he has fled the country to avoid arrest.
Last month, prosecutors summoned Mr. Akhmetov to talk about an
attempted-murder case from 1988. He didn't let the news interrupt his
vacation with his wife and two sons in Monaco.

"We have a family tradition of coming here to relax in the summer," said Mr.
Akhmetov, looking tanned and rested after a month on Mediterranean shores.
He said he will talk to prosecutors in Ukraine "when there is something
serious to discuss."

In dealing with Mr. Akhmetov, analysts and Western diplomats say the
Ukrainian government is walking a tightrope: It must balance the demand for
justice against the danger of scaring off investors in Ukraine, a country
with 40 million people. While the economy is still expanding, analysts say
talk of a widespread shake-up in property ownership is already crimping
investment and slowing growth.

Mr. Akhmetov played down any fears for his future, or that of his many-
pronged holding company, System Capital Management, or SCM, which has
dominated eastern Ukraine with interests in more than 90 companies in the
steel, machine-building, energy, telecommunications, banking and media
sectors.

Mr. Akhmetov said he has nothing to fear from prosecutors investigating
election fraud. "I personally voted for Yanukovych, but I never told anyone
else to," he said. He gave generally high marks to President Viktor
Yushchenko, whom he described as a "well-mannered person" whom he
thinks he can work with.

Mr. Akhmetov said he also has cordial relations with Prime Minister Yulia
Tymoshenko, who has been an advocate of reversing some privatizations
under the previous government.

One of those privatization deals involved the country's largest steel plant,
Kryvorizhstal, which Mr. Akhmetov currently is fighting to hang on to. He
and a consortium of business leaders that included the former president's
brother-in-law, Viktor Pinchuk, bought the plant for $800 million (Euro 648
million) last year in an auction the Yushchenko government said was rigged.

The government sued to have the results annulled. After a series of court
battles that succeeded in annulling the sale, the government announced
this week that it will start taking bids in a new auction, with a starting
price of $2 billion.

In any case, the tycoon says the new government should let bygones be
bygones. Mr. Akhmetov said SCM amassed many of its holdings in an era
when there was little regulation of the marketplace. "We invested in the
Ukrainian economy under the rules that existed at the time," he said.
--------------------------------------------------------------------------------------------------------
Write to Alan Cullison at alan.cullison@wsj.com.
=============================================================
Send in names and e-mail addresses for the AUR distribution list.
=============================================================
8. LESSONS ON FORGING A WORLD-BEATER
Duferco, a Swiss Company, world's largest steel trading company

The Industrial Union of Donbass (ISD), one of Ukraine's ­biggest
steelmakers owns half of the trading side of Duferco's business,
and ­channels a large part of its steel output through the company,
thus giving itself a broad sales network for its products.

By Peter Marsh, Financial Times, London, UK, Tue, August 9 2005

The most common view of a multinational is that it sells products, services
or consultancy advice and tries to make its customer base as broad as
possible, but without moving away from its area of expertise. That is how a
giant business such as Procter & Gamble, which makes a huge range
of ­consumer products but does not venture into consultancy or services, has
built up an empire that sells to 180 ­countries.

KPMG and Deloitte, two of the world's biggest accountancy firms, have
moved into management consultancy. Both, however, would be reluctant to
use their financial knowledge to venture into manufacturing.

It is far from common for an international enterprise to set out to be an
expert in a specific type of business and then use its knowledge to move
into a number of new areas, spanning manufacturing, service and consultancy.

The approach adds up to that of a "multi-function" business - one with a
knowledge base that is fairly narrow but can be leveraged globally across a
range of business functions.

One company that is trying to follow this strategy is Duferco, a
"multi-function" business in the steel industry. Duferco's approach sheds
light on a novel strategy that could appeal to companies in other spheres.
For instance, it would be possible - at least in theory - for consultancy
companies that are experts in forensic science to offer kits of ­chemicals
to practitioners in the field, such as police forces. In biotechnology, a
number of companies supply medical diagnostics kits and sell their ideas
to bigger groups.

Based in the quiet lakeside town of Lugano in Switzerland, Duferco is
already the world's biggest steel trading company. It has moved in the
past few years into steel production through ownership of eight plants
in ­countries including the US, Italy, Russia, Belgium and South Africa.

Bruno Bolfo, Duferco's chairman and owner, says the company has set its
sights on going further than this and offering advisory services in steel
production and trading to companies around the world with which it has
relationships.

"I like the idea of the project manager approach in which we can bring our
expertise in steel to help solve problems for companies across a variety of
areas, from the technical aspects of manufacturing to involving disciplines
such as investment banking," says Mr Bolfo, an Italian businessman who
started Duferco in 1979 and has a reputation for being one of the shrewdest
brains in the global steel industry.

Duferco's ideas may be relatively unusual, but they are not unique. Another
model is Cargill, the giant US agribusiness company. With annual sales of
$63bn (£35bn) and more than 100,000 employees in 59 ­countries,
privately-owned Cargill is a distributor, processor, consultant and banker
in its chosen field of food and agriculture.

Another company following a "multi-function" approach - in the field of
materials and energy - is Glencore. The Swiss-based company combines
commodity trading with production operations around the world, with the
latter employing 50,000 people. Glencore also owns stakes in several
publicly quoted mining and metals companies such as the UK's Xstrata and
Century Aluminium of the US.

Many big oil companies, such as Royal Dutch Shell and BP, use variants of
the "multi-function" approach favoured by Duferco, by involvement in
"upstream" and "downstream" parts of oil processing as well as in trading.
The obvious problem with this approach is that it requires a huge knowledge
base if it is to work properly.

All this takes a long time to acquire - and Duferco has not tried to do
things in a hurry. It has taken its time devising a business structure to
cater for the variety of different ways of making money - even though all
are connected to steel.

From its origins as a pure trading company without production assets,
Duferco started pursuing its broader "multi-functional" ideas from the late
1990s.

After guessing correctly that the steel industry would rebound from a
moribund period partly because of huge demand from China and sector
consolidation that made individual steelmakers more powerful, Mr Bolfo
started recruiting production experts, financial specialists and project
engineers who could consider proposals for new steel plants in different
parts of the world.

Compared with Cargill and BP, Duferco is a lot smaller, with sales in 2004
of $5.4bn. The revenues came largely through shipping 14m tonnes of steel
to customers, split roughly 60/40 between traded steel and material made in
its own plants.

The company has 10,000 employees and 40 offices around the world, mostly
concerned with trading, with the head office in Lugano employing 200.

It has tried to create a multicultural approach to management. The
eight-member executive board includes Mr Bolfo and two other Italians, three
Belgians and two executives from the US. Other senior executives come from
Serbia, Britain, Ukraine, Argentina, Brazil and Canada.

INDUSTRIAL UNION OF DONBASS (ISD)
Duferco has two important relationships with steelmakers that illustrate
some of its ideas.

One of them is Industrial Union of Donbass (ISD), one of Ukraine's ­biggest
steelmakers. It owns half of the trading side of Duferco's business,
and ­channels a large part of its steel output through the company, thus
giving itself a broad sales network for its products.

In an extension of this relationship, ISD and Duferco teamed up last year to
take over Dunaferr, Hungary's biggest steel producer. The two companies
are also exploring a collaboration in which Duferco would acquire a stake in
two ISD steel plants in the Ukraine.

In exchange, ISD would buy into one of the Swiss ­company's mills in Italy.
In each venture, the two companies would use their different strengths to
help each other, for instance in finding supplies of raw materials or
customers.

Duferco last year also formed a partnership with Corus, the Anglo-Dutch
steelmaker. Under this agreement, Corus will sell about three-quarters of
the output of a large steelworks it runs in Teesside over the next decade to
Duferco and a consortium of three other steelmakers (from Mexico, Italy and
South Korea) that the Swiss company has identified. The agreement with
Corus also gives Duferco a role in managing the Teesside sites, using its
expertise gained from running other steel plants.

Through both of these ventures, Duferco aims to use its know-how in both
manufacturing and services to help the partners, while learning something
from them in return.

An example of how this works is that ISD is a leader in producing unfinished
"slab" steel that is sent to steel users around the world for final
processing. Slab distribution is a market that the Teesside works is
entering into, therefore it seems likely that Duferco will transfer to its
Anglo-Dutch partner ideas from its Ukrainian supplier.

Mr Bolfo is casting around for other projects where Duferco's expertise
could be relevant. The Swiss company is talking to investors and steel
specialists in the Middle East about acting as the lead manager in projects
that could take slab steel - perhaps from Duferco's own steel sites or those
with which it has relationships - and bring it to plants in the region for
final rolling operations to turn the steel into products such as sheet for
packaging or industrial processing.

Part of Duferco's job, if such projects take off, would be to take a role in
arranging finance for the $100m-$200m that such plants would cost, while
also ­advising on management or even running operations itself. It would
also inject some capital. Mr Bolfo explains his approach as "somewhat
similar to that of an investment bank".

"Rather than using only our own money to acquire 100 per cent of assets,
we intend to use our name, finance capabilities, project skills, plant
management and deal structuring capabilities to organise ventures where
we contribute our experience and cash. In these projects, we would be
combining a number of ­functions, involving investment banking, venture
capital, consultancy and orthodox business management."

Mr Bolfo says he has a number of projects under discussion, some of
which could reach fruition in the next year or so. "A key part of what we do
is bringing business disciplines together in a novel way that you don't
often see in our ­industry."

THE ART OF SELLING ONE PRODUCT IN TWO MARKETS
From a base in Markdorf, a quiet town in southern Germany, an unusual
technology company has established itself as the dominant player in an
important niche of the US decorating industry, writes Peter Marsh. The
strategy of the privately owned Wagner shows how a fairly small company can
take a set of engineering ideas, turn them into products and sell them to a
broad group of customers, spanning both consumers and industrial users.

Over the past 20 years, Wagner has built itself into the biggest supplier of
spray guns for painting in the US - a country in which many European
companies have found it very difficult to do well, particularly in consumer
products.

While such guns are viewed in Europe as a tool for professional
painters, in the US they are widely used by people in their own homes to
paint interiors and outside surfaces such as fences. Wagner is thought to
account for roughly 85 per cent of the $150m-a-year market (in factory
prices) in the US for these products.

It has done this by capitalising on knowledge built up over several decades
in Europe in the field of professional applications for paint guns. Thorsten
Koch, chief executive of Wagner, calls his company a "category champion": it
has taken ideas for one group of customers in industry and used them to meet
the needs of consumers as well.

While the approach seems sensible enough, it is seen surprisingly
infrequently across manufacturing companies. In many cases, companies
consider the approach they need for selling similar products to consumers
and industry users are quite different and are reluctant to espouse both.

That is why the commonest strategy in the drugs industry is for companies to
concentrate on either prescription-only products or over-the-counter
medications bought by ordinary people, but not on both types of medicine.

In industrial equipment, companies such as Atlas Copco of Sweden have built
up enviable reputations for making cutting machinery but would not think of
trying to sell the same hardware to a mass market of householders.

Even in the area of hand-held power tools - equipment similar conceptually
to the paint gun - the idea of selling similar products to both consumers
and professional users is not universally held. Bosch of Germany and Black
& Decker of the US are companies that do sell to both.

But Makita of Japan - which with these two companies is one of the three
largest makers of power tools globally - has resisted the "category
champion" approach. It insists on selling only to professional users,
arguing that if it tried to make products suited to DIY aficionados, its
reputation in the eyes of industry customers would be harmed: they would
think Makita had gone "downmarket" by espousing "lower-tech" ideas.

Of Wagner's Euro 349m ($431.5m) sales last year, 52 per cent came from the
US. Nearly two-thirds of Wagner's US revenues derive from consumer paint
guns - a product that Wagner invented in the early 1980s - with the
remainder coming from different brands of painting systems sold to industry.

Crucial to this strength in the US is Wagner's obsession with the technology
of paint guns - which it sells in about 3,000 varieties and at retail prices
of between $50 and, for large industrial systems, $2m.

The company has a 170-strong development team, comprising one-tenth of its
worldwide employees, split between its main administration and production
centres in Germany, the US, Switzerland and Italy and a small plant in the
Czech Republic.

"We build pumps that work to a high performance - operating at up to 500
times atmospheric pressure - and we put a lot of effort into developing
components such as special nozzles and tubing that not only make the
products work effectively but hard to copy," says Mr Koch.

Wagner's efforts in developing new technical ideas, backed by heavy use
of ­patents, are one reason why the company has relatively few rivals in
both the consumer and industrial sections of its market. It has therefore
avoided some of the strong competitive pressures facing companies in the
related business of hand-held power tools, such as electric drills.

Another key ingredient to Wagner's progress - at least in the US - is heavy
use of advertising. It spends $20m-$25m a year in this area in the US,
mostly on television advertising to consumers.

"The outlay is two to three times as much as you'd expect from a company of
this size," says Dean Buresh, chief executive of Marketing Drive, a US
advertising agency that organises Wagner's US campaigns. He says that this
level of advertising can pay off only if it is associated with a good
product.

One potential problem for Wagner is that its category champion strategy
could go awry if its base of professional customers are put off buying the
products through the association with consumer items - just the association
that Makita, for instance, is keen to avoid.

Wagner recognises this as an issue and tries to address it by using a series
of different brands to sell to the different groups of industrial users and
consumers. As long as this juggling act carries on, the company believes its
success can continue.

FIVE KEY FACTORS FOR MULTI-FUNCTIONALISM
[1] Develop a range of skills by employing key people with specific
knowledge in areas such as project management or investment.
[2] Employ top people of different nationalities and encourage them to
exchange ideas freely.
[3] Pay attention to the production side - a role in which it is often
difficult to gain expertise except through operational experience - by
owning manufacturing assets around the world.
[4] Pay close attention to opportunities in emerging economies such as
eastern Europe and China.
[5] Staying private may be wise - multi-functional businesses are hard
to sell to most investors, who are used to the defined operations of
conventional companies. -30-
=============================================================
9. UKRAINE NAMES SUSPECTS IN 2000 KILLING OF
JOURNALIST HEORHIY GONGADZE

Associated Press (AP), Kiev, Ukraine, Mon, August 8, 2005

KIEV - Prosecutors said Monday they had identified the three police
officers they say were responsible for the beheading of a crusading
journalist nearly five years ago.

The Prosecutor General's office said in a statement that Valeriy Kostenko,
Mykola Protasov and Oleksandr Popovych allegedly abducted and killed
journalist Heorhiy Gongadze. A fourth suspect, Oleksiy Pukach, is being
sought on an international warrant.

Under Ukrainian law, the evidence will be forwarded to the court only after
the three suspects and Gongadze's mother and widow have read all the
files about the case.

Prosecutors have said they would begin identifying who ordered Gongadze's
death after the investigation into his killers is concluded. The three men
couldn't immediately be located for comment and it was unclear whether they
had lawyers.

The September 2000 kidnapping and killing of Gongadze, who wrote for an
Internet site about high-level corruption, sparked mass protests against
then-President Leonid Kuchma and prompted allegations that he master-
minded the killing.

Ukraine's top security agency earlier this month announced it had begun
analyzing secret recordings that reportedly link Kuchma with Gongadze's
death. Investigators also have questioned Kuchma though he has denied
having any connection to the killing.

Earlier this year, former Interior Minister Yuriy Kravchenko, who was
considered a key witness by prosecutors, committed suicide just hours
before he was to be questioned.

Since becoming president, Viktor Yushchenko has pledged to bring to
justice not only Gongadze's killers, but also those who masterminded the
murder.

Gongadze's body remains in a Kiev morgue and will be buried only after
another post mortem examination requested by his mother and by
prosecutors is completed. -30-
=============================================================
10. LETTER TO THE PRESIDENT OF UKRAINE
Can't let the authorities enjoy uncontrollability and impunity once again.

By Myroslava Gongadze, Journalist
Serhiy Sholokh, Journalist
Washington, D.C, Friday, August 5, 2005
The Action Ukraine Report (AUR), Number 539
Washington, D.C., Wednesday, August 10, 2005

President Victor Yushchenko:

Once the President of Ukraine Leonid Kuchma used to refuse to answer
direct, uncomfortable questions by Georgy Gongadze. He personally and
his entourage accused Georgy of writing commissioned articles and
cooperation with the opposition. Georgy in his turn believed that he was
simply doing honestly his job as a journalist - defending the public right
and need to Know.

For this purpose he created "Ukrainska Pravda" and chose Don Quixote, a
symbol of struggle for ideals and justice, as its emblem. However, precisely
because the inconvenient journalist, according to the words of the then head
of state, "was throwing dirt at the President in the Internet", the
President of Ukraine Leonid Kuchma ordered his subordinates to "take care"
of Georgy Gongadze.

After the death of Georgy, Serhiy Leshchenko, a young journalist convinced
in the public right to Know, poses similarly uncomfortable questions to the
President of Ukraine Viktor Yushchenko. And now the new, democratically
elected President accuses Serhiy of corruption and killing.

But the time has changed, and now we have a different Ukraine, which we
struggled for with our own power of will, tears and blood. It was not only
the family of Viktor Andriyovych Yushchenko who "paid for what we call a
step of freedom, emotions of independence".

Every Ukrainian family paid their price. And this is precisely why we can't
let the authorities enjoy uncontrollability and impunity once again.

The President has to be responsible for his every word both when he
promises to punish those who ordered to kill and those who killed the
journalist Georgy Gongadze, and when he, unable to hold back his
emotions, calls another journalist Serhiy Leshchenko a killer.

On behalf of the family of Georgy Gongadze, I must state that we are still
waiting for your promise to be fulfilled, but our tears in this waiting have
dried up. Now our patience is gradually running out.

To be an "inconvenient journalist" is a big courage and a great
responsibility. But this is also the highest title that a journalist can
earn. Serhiy Leshchenko has proven it with his work in the last four years
that he is not only an "inconvenient" but also an "untamed" journalist.

If after Georgy's death there was only one inconvenient journalist born in
Ukraine, then Georgy's death could be considered not wasted. Fortunately,
a nation has risen in Ukraine, which dethrones unworthy presidents and is
ready to defend its right to Know.

It is time for the authorities to understand that the freedom of speech and
the responsibility of power holders for their actions and words to the
people is the main component of democracy. And the head of state as well
as other officials must realize that being in a high public office
presupposes that your every breath may become a public concern. -30-
=============================================================
11. UKRAINIAN FUGITIVE BODYGUARD SUMMONED TO UNITED
STATES COURT IN JOURNALIST HEORHIY GONGADZE MURDER CASE

Interfax-Ukraine news agency, Kiev, in Russian, 9 Aug 05
BBC Monitoring Service, UK, in English, Tuesday, Aug 09, 2005

KIEV - A US court has summoned the former Ukrainian presidential guard,
Mykola Melnychenko, for questioning on the murder of journalist Heorhiy
Gongadze, the press service of the Ukrainian Prosecutor-General's Office
said today.

On 27 July a sitting on this case was postponed for 24 September because
Melnychenko changed his defence lawyer, who did not have time to
familiarize himself with the case, the press service said. "Under US
legislation Melnychenko could be prosecuted if he does not turn up in
court," the Prosecutor-General's Office said.

Ukrainian Prosecutor-General Svyatoslav Piskun during his US visit reached
an agreement with the US Department of Justice on questioning Melnychenko
and obtaining the recordings he made in the office of former Ukrainian
President Leonid Kuchma. Melnychenko was summoned to court under this
agreement.

[In 2000, Melnychenko released wiretapped recordings on which a voice
similar to Kuchma's is heard ordering to "deal" with Gongadze, an
investigative journalist who was later found beheaded in woods outside
Kiev.] -30- [The Action Ukraine Report Monitoring Service]
=============================================================
12. TWO GERMAN COMPANIES SAY THEIR UKRAINIAN PARTNER IS
INTIMIDATED, ASK GOVERNMENT FOR HELP – DEUTSCHE WELLE

Interfax-Ukraine, Kyiv, Ukraine, Tues, August 9, 2005

KYIV - Representatives of two German companies Jungheinrich and
Dufelsdorf Handelsgesellshaft producing agricultural and other equipments
have appealed to the Ukrainian leadership, saying their Ukrainian partner –
Kyivtractordetal – is intimidated.

They threaten to leave the Ukrainian market, which may serve a negative
signal to German business circles, the Ukrainian service of Deutsche Welle
reported. They call upon Ukrainian authorities to avert instability at the
Kyiv-based enterprise.

Employees of the Ukrainian producer accuse courts and the Public
Prosecutor's General Office of assisting elimination of the enterprise to
have its land for construction of a prestigious housing complex.
Particularly, the plant's director was detained, Deutsche Welle informs.

Now the German businessmen doubt over the execution of its commitments
to other European partners because every ready-made mechanism has
Ukrainian parts.

Adolf Dufelsdorf, the CEO of Dufelsdorf Handelsgesellshaft, said it is
absolutely unclear what is going on for those used to work in another legal
framework. He said they had been much more optimistic previously but
now see how long Ukraine needs to cover on the way to Europe. -30-
=============================================================
13. UKRAINIAN GRAIN TRADERS WANT TO MEET YUSCHENKO TO
DISCUSS MAJOR VAT REFUND PROBLEM

Interfax-Ukraine, Kyiv, Ukraine, Tue, August 9, 2005

KYIV - The Ukrainian Grain Association (UGA) is seeking a meeting with
Ukrainian President Viktor Yuschenko to settle the problem of VAT refunds to
grain exporters, in particular, repayment of around UAH 750 million worth of
a debt.

UGA sent a letter to this effect to the president last Friday, August 5, UGA
President Volodymyr Klymenko said at a press conference in Kyiv on Tuesday.
"The presidential order has not been executed yet. UAH 750 million remains a
debt. It's not clear how to work this year. The point at issue is UAH 100
per tonne," Klymenko said.

In his words, the Finance Ministry and the State Tax Administration of
Ukraine ignore the government's instructions as to holding a meeting with
grain traders to settle this problem.

In addition, Klymenko criticized government resolution No. 295 dated July 29
on measures to stabilize grain prices and ensure grain production without
losses. The resolution provides considerable privileges to State JSC Khlib
Ukrainy and the State Material Reserve Committee's companies. In particular,
VAT should be refunded to them within three days, while private grain
traders cannot have their reimbursement back for months and even years.

"If there is no meeting with the president, we'll lobby the lifting of a
zero export rate as of July 1, 2006," Klymenko said. In his words, this will
deliver market operators from numerous checks by tax and law-enforcement
officers although the purchase price of grain may decrease by the sum of
VAT. Today a tonne of fourth-grade wheat costs around UAH 480 now,
according to UGA. -30- [Action Ukraine Report Monitoring Service]
=============================================================
14. "WHO WANTS TO BUY A PIECE IN FATHERLAND? GET IN LINE!"
PM Tymoshenko's Party putting Kuchma people into key positions

COMMENTARY AND ANALYSIS: By Ihor Zaozernyy
Ukrayinska Pravda web site, Kiev, in Ukrainian 29 Jul 05
BBC Monitoring Service, UK, in English, Tue, Aug 09, 2005

Senior functionaries of Ukrainian Prime Minister Yuliya Tymoshenko's
Fatherland party are putting businessmen linked to the former regime of
Leonid Kuchma into key party positions in the regions and ousting
long-standing members, a Ukrainian web site has said. It said that these
functionaries are even setting prices for seats in regional councils,
including Kiev city council.

This is either a well thought out policy ahead of the 2006 parliamentary
election approved by Tymoshenko herself or the functionaries keep
Tymoshenko uninformed, as she is too busy to deal with party affairs,
it concluded.

The following is the text of the article by Ihor Zaozernyy, entitled "Who
wants to buy a place in Fatherland? Get in line!", posted on the Ukrayinska
Pravda web site on 29 July; subheadings have been inserted editorially:

Figuratively speaking, if [Crimean power broker Leonid] Hrach's people have
flown into Crimea, those "Kruks", as in Vyacheslav Kruk, have made camp in
Odessa. The son of the elder (MP) Kruk and the owner of several sugar
refineries, a reinforced concrete constructions plant, a construction
company and the Into Sana medical company.

There is nothing surprising in this; if the father is an MP or the
president, then as a rule the son is a successful businessman and
vice-versa. The youngest Kruk was the former deputy of Odessa mayor
[Ruslan] Bodelan.

And there is nothing surprising in this either; that Kruk is a businessman
and Bodelan is being searched for. What is surprising is something else -
that the younger Kruk has been "pulled in" to be the head of the Odessa city
party organization of Fatherland [the party headed by Prime Minister Yuliya
Tymoshenko]. The very same Vyacheslav Kruk whom Odessa residents
themselves did not even accept as a regular party member. But he was
pushed in brutally and cynically.

And while breaking all democratic norms. By the way, the Fatherland
organization in Odessa region headed by Anatoliy Tsybulchyk was against
Kruk. What is Mr Kruk to do?

THE KINGMAKERS ARE IN KIEV
That's right. He goes to Kiev to the executive political council, which from
the beginning was planned to be a purely technical-executive body, but which
has today, under the leadership of Yaroslav Fedorchuk, taken upon itself all
the party's issues on personnel and organization.

The secretariat has been able to protect Ms Tymoshenko from information
from the regions and in this way has gained complete control over them. The
secretariat also carries out severe purges in the hinterlands before every
election. They get rid of those who are insubordinate or perhaps too
informed. After the election they again kick out those who are "too smart",
while taking the opportunity to sweep up financial abuse.

The arguments (were there only arguments?) used by Vyacheslav Kruk to his
advantage remain a secret behind seven seals. Kruk flew in to Odessa with a
party card in his hand. Besides that, he had a letter of recommendation with
the stamp of the political council for the position of...[ellipsis as
published] acting head of the Odessa city party organization.

At that time, the city party organization, which numbered about 2,000 real
members, was headed by Zhanna Bolyanska. And, of course, such a turn of
events did not provoke any special enthusiasm on the part of those people
who had refused to accept Kruk into their ranks.

Along with Kruk, representatives of the same executive secretariat, Messrs
Radovets and Bondarenko, arrived in Odessa as troopers. The goal was a
worthy one - to help in organizing the party conference on the local level.
The "help" came in the form of using spurious methods to gather false
information which could then be used to cast doubt on the legitimacy of
district conferences which had nominated delegates.

Nevertheless, Odessans held their city conference and confirmed the
authority of leader Zhanna Bolyanska. Then the bureau of the regional party
organization declared the conference legitimate. The Kiev troopers did not
daydream, the leaders of the regional conference were immediately called
on the "carpet" to Kiev.

It is not known what kind of conversation was had with the Kiev bosses. We
only know that the leader of Fatherland in Odessa region returned with views
diametrically opposed [to those he had previously]. Comrades in the party
say Mr Kochetov was also "broken". And one must say the legitimate head of
the city organization, Zhanna Bolyanska, was also broken somewhat. Unable
to withstand the pressure, she signed a letter resigning from the position.

But rank and file "Fatherlanders" did not give in and held the second stage
of the conference. At the first stage it was decided to not close the
conference, but to prepare for the second stage. Heorhiy Partskhaladze, a
well-know businessman in Odessa, was elected head of the city organization.

TENACIOUS VYACHESLAV KRUK
But Mr Kruk did not give up either. With the help of the executive
secretariat, a resolution by the regional bureau on the legitimacy of party
processes in the city was organized (those not broken in the capital were
squeezed out in Odessa).

There is more. The executive secretariat of the political council (that is,
Yaroslav Fedorchuk,) charged a working group with getting to the bottom of
things in Odessa. And who do you think was to lead this group? That's right,
Comrade Kruk. Together with Comrade Baymurativ, whom Odessans remember
for being the deputy of the renowned "accountant" Serhiy Kivalov [the head
of the Central Electoral Commission during the 2004 presidential election]
at the Odessa Academy of Law and the Sea Party.

Fatherlanders from Odessa, furious but not broken, charged to Kiev to meet
Yuliya Tymoshenko, but met the same leaders of the executive council. And
encountered civil democracy. They were heard out, treated to tea and then
told: "Ok, let's allow some representatives of the 'protesters' into the
working group and we'll 'take steps' ".

And they "took". Instantly. The businessmen Kruk and Radkivskyy (one of
Kruk's and Bodelan's partners in joint business matters and one of those who
[allegedly] spuriously privatized much of the Odessa shoreline), carried out
"mass recruiting" of the Fatherland party using employees at their own
companies and, as sharp tongues in Odessa say, they [the employees] were
told "Fatherland or death!" (that is, getting fired from work). People
filled out requests and wondered, is that really how things work in this
party, which is famed for advocating civil rights and freedoms?!

And next came the clowns and the circus. "Newly-baked" party troops were
brought into district conferences in ambulances. Do not worry, dear readers.
It is simply that one of Kruk's enterprises is a medical company. People
voted under the leadership of "musical directors", nice ones, but firm.
Something like how people are controlled at talk shows.

And what happened to those uppity party members? And great number of
them were thrown out for not showing up at conferences they did not know
about and for the consequent "loss of ties with the party". Those left
wanted to look at the party cards of the neophytes. The answer was standard,
either "they had not had time to fill it out" or "people were not yet in the
party, but were so enthralled by its ideas, that they were already with us".

CHEATING TO WIN
The height of this act of democracy was the notorious carousel, when one
group of people was taken from conference to conference. Doesn't that sound
like the falsification of the presidential election [when the same persons
voted many times]? So, people from the Bodelan-Yanukovych team, shared
something with Fatherland, experience, if not money.

Now Kruk is head of the Odessa city party organization. There are people
ready to confirm that he said there would not be free seats in the party
list. A seat in the top five in the city party will cost 300,000 dollars,
seats a bit lower 150,000...[ellipsis as published]

Who needs enemies with good people like these?

For many the new election campaign is about to get under way. And for
some it already has. There are quite a lot of "uncles" from the former
pro-authority parties, who had fairly "warm and full" posts in their
organizations and got so close to the authorities that they cannot even
imagine themselves without them and want to get back in.

To do this, they need to force out those people who confirmed their right to
posts in deed and with severe colds and bronchitis from standing on
Independence Square [during the Orange Revolution]. You find yourself
asking who is behind all this?

YAROSLAV FEDORDCHUK TAKES CONTROL
From talking to people in Fatherland from Odessa, Dnipropetrovsk, Lviv and
Kiev, one clearly sees the figure of Yaroslav Fedorchuk - the deputy head of
the party and leader of the party's political council.

Once the first secretary of the Communist Party of Ukraine in Dolyna and the
top communist of Ivano-Frankivsk, he left a legacy in the Ivano-Frankivsk
Region of not only being a "great builder", but of suffocating the least
appearance of individual thought, "bourgeoisie nationalism", and "small
entrepreneurship psychology".

Using the situation in which the leaders of the party are busy with serious
work in the government, Fedorchuk has begun to use communist methods in
his personnel policies under the Stalinesque slogans "People decide
everything!". But the people are your own, obedient and manageable. The
disobedient are kicked out, the obedient warmed, "he who is not with us, is
against us" and so on.

[Famous nineteenth century Ukrainian poet] Taras Shevchenko has a verse:
"There are no enemies like good people...[ellipsis as published]" One gets
the impression that a "good person" like Fedorchuk could tear down and bury
Fatherland as it is. Odessa is a good example (but unfortunately, not the
last).

Fatherland deserved and suffered for victory. First of all thanks to the
charisma and character and courage of Yuliya Tymoshenko and thanks to
those people who went, are going and willing to go to the end with her. It
is those very people who are now so easily being kicked out of the party by
the executive secretariat.

Party numbers are constantly growing. But the problem is that you need a lot
of effort to keep ranks from filling with businessmen of dubious reputation,
people tainted by their ties with the criminal world, or those who are
indifferent as to which flag they support or which god they pray to.
Everything possible must be done so that the slogan "Fatherland is not for
sale!" rings true no matter what the first word means [the party or the
country].

SIMILAR CASES
Sad to overflowing...[ellipsis as published] After the victory in the Orange
Revolution and the leader of Fatherland becoming prime minister, interest in
the party has grown manifold. In Kherson, Yuriy Odarchenko, a city council
deputy, businessman and director of a large enterprise, showed great
interest in Fatherland's regional organization.

Before this, Mr Odarchenko had not been invisible in the unseemly activities
of the previous regime. However, the ways by which he came to power in
Kherson are just exactly like the ways Kruk came to power in Odessa like two
drops of water. He also came to Kiev and received a mandate to "rule" in the
Kherson regional party organization.

Arnold Radovets, whom we've mentioned above, came to support Odarchenko,
and under pressure, the current head of the Kherson regional Fatherland
party organization, Mr Hunyako, wrote a letter of resignation.

They immediately held a council meeting at which Odarchenko was accepted
into the party. Mr Bohdaniv was also immediately accepted. Bohdaniv is a
figure more than well known in Kherson. But before he headed the USDPU city
organization. The newly-baked party members Odarchenko and Bohdaniv are
co-opted to the regional bureau and Odarchenko was immediately elected head
of the Kherson regional party organization.

And Bohdaniv, a tried and true United Social Democratic Party of Ukraine
[USDPU] man - now a "Fatherlander", becomes deputy head. After this, the
new functionaries initiate the closure of the council of businessmen in
Fatherland, which had given uncommon help to the Kherson regional party
organization.

This resulted in a mass exodus of people from the party, who in principle
did not agree with such methods of work. Radovets had executed the task of
the political council secretariat perfectly!

HINT OF THE USDPU
So maybe [USDPU leader Viktor] Medvedchuk was right when he said one
could not rule out a bloc between the USDPU and Yuliya Tymoshenko's party
Fatherland. Maybe this plan is already under way? It's just too bad that
rank and file fighters in the party do not know anything about it.

The same situation is seen in Dnipropetrovsk. Hennadiy Hlyadchyshyn, a well
known businessman and owner of the Azhur elite stores, a gaming house and
shareholder in a number of industrial enterprises, became head of the
Dnipropetrovsk regional party organization and his "big friend", Yevhen
Vitiutin, who is the very recent past was an ardent member of the Party of
Regions [led by Viktor Yanukovych], got to head Fatherland in
Dniprodzerzhynsk city. So, everything's fine here, too.

Several months ago, the deputy head of Fatherland, Fedorchuk, brought MP
Anatoliy Seminoha by the hand to be acting head of the Kiev city party
organization. He was a new member accepted the day before by the political
council. Taking his candidacy to the bureau, he was later unanimously
elected to be acting head of the city party organization.

The new city leader, Seminoha began by unilaterally running the city party
organization. Tossing aside the founding documents, in a purely businesslike
manner he brought the city organization onto businesslike rails and proposed
introducing the positions of...[ellipsis as published] city district
organization managers.

Getting rebuffed for introducing positions outside the scope [of party
documents], Seminoha recommended his own people as deputy leaders in
all the city's districts, people who would manage financial (read election)
matters. These people have already been confirmed in some districts.

For example, former policeman Kalko was appointed "deputy-manager" in
the Desna district of the capital. He has a mass of rather deplorable deeds
following him. People began to write masses of letters quitting the party,
not wanting to have anything to do with all of this.

As one city organization activist related in secret, not long ago, Seminoha
stated that anyone who wanted to become a member of the Fatherland party
list in Kiev had to contribute 5,000 [unspecified currency] every month for
"party matters" and tenders for the quota of people worthy to make party
list would be held among the "contributors". How's that for a classic
party-business approach?!

KIEV FOR SALE
And in the words of one informed party member, it became known that there
are strict tariffs, for example, for a deputy seat in a Kiev district
council. Getting a spot in a district council costs 70,000 dollars! We have
not yet been able to learn how much a city council seat costs. Maybe they
haven't figured it out yet. But there is no doubt that party businessman
Seminoha will calculate this position soon.

It looks like the Kiev city organization of Fatherland will soon become an
LLC, JSC or, more believable a the Fatherland Closed Joint-Stock Company.

Not long ago, a group of elderly people were handing out flyers to everyone
passing by protestors in front of the cabinet building. The content of the
flyer boiled down to this: the protestors were agent provocateurs and hired
by oligarchs who did not have anything to do with Fatherland. It said they
were using the money of Kuchma company to compromise the leading
political force and its "unbreakable leader".

In one television show, Yuliya Tymoshenko rejected her fellow party
members, saying "we know our people in Fatherland quite well".

Such statements by the leader stirred up the people who made the decision
to hold a new protest outside the Cabinet of Ministers building, but to
gather 1,000 people from all over Ukraine this time instead of 200. People
still believe that Tymoshenko will draw the right conclusions, hear their
statements and bring order to the leadership of the party.

Perhaps she gets her information on party matters exclusively from
Fedorchuk? That almost sounds like an excuse. One thing is clear - neither
Tymoshenko nor [political party comrade and Security Services of Ukraine
head Oleksandr] Turchynov have time for their party. And one cannot rule out
that she does not have anything against the party turning into a business
club in which the highest places are reserved for those who can pay for
them.

But then what makes this party any different from the USDPU?

Maybe it is advantageous for the prime minister to have a party of
businessmen. Then she can control them better through her influence on their
business opportunities. One also wonders what people who came to Kiev
before the new appointments were offered. What was it that they could not
refuse? Money? Connections in the regions? How moral is this for the party
of the revolutionary prime minister?

What is Tymoshenko goal for her fellow party members? Money, money
and more money?

Most Fatherlanders understand that after the party came into power after
being in the opposition, it was inevitable that its ranks would begin to be
filled with people from the old pro-Kuchma organizations. There is nothing
surprising in this.

But great disapproval and amazement comes from the fact that the new party
members immediately get the highest posts in cities and regions. It appears
that some kind of structure is at work in the top of Fatherland which is
trading seats, party cards and places on election lists.

Is the party in trouble? Money weighs a lot, of course, but it cannot solve
everything. A marred image of the party cannot be corrected by any amount
of capital from new "party bosses". The presidential campaign of Viktor
Yanukovych is the best example of this.

It is clear Tymoshenko has something to think about. There is still time to
fix mistakes. -30- [Action Ukraine Report Monitoring Service]
=============================================================
15. 'SISTER SURVIVORS OF EUROPEAN COMMUNISM'
Pennsylvania nun involved in project to honor underground religious movement

Oral history project is taking place in seven countries: Bulgaria, the
Czech Republic, Hungary, Lithuania, Romania, Slovakia and Ukraine.

By Frances Borsodi Zajac, Herald-Standard.com
Uniontown, Pennsylvania, Tuesday, August 09, 2005

UNIONTOWN - Always hiding from the KGB, publicly denying who they
were, attending liturgies that were held in secret, the religious who lived
in Central and Eastern Europe under communist rule took great risks to
practice their faith. But their courage and determination are being seen as
an inspiration today.

"The admirable thing is that they were committed to taking vocations, even
when religious life was not allowed,'' said Sister Barbara Jean Mihalchick,
a member of the Sisters of St. Basil the Great at Mount St. Macrina in
Uniontown.

Mihalchick is now helping to spread the message of these religious who
remained faithful to their vows in an underground movement that lasted
under communist rule from 1945 to 1990. Mihalchick has been named to
the resource council of a project called Sister Survivors of European
Communism.

The project is collecting oral histories, photographs and related documents
of these sisters, their religious orders and congregations. They are being
stored with the Catholic Theological Union in Chicago.

The resource council members are publicizing the project and seeking funds
to provide necessary equipment and translators. The project is taking place
in seven countries: Bulgaria, the Czech Republic, Hungary, Lithuania,
Romania, Slovakia and Ukraine.

Sisters Margaret Nacke and Sister Mary Savoie of the Sisters of St. Joseph
of Concordia, Kan., are directors of the project. They were sent to Europe
in 1990 to help sisters who were coming out of the communist system. After
they had been there a few summers listening to the stories of the sisters
who suffered under communism, they felt inspired by their stories.

Later, after meeting a Holocaust survivor, Nacke and Savoie felt compelled
to gather the sisters' stories in an oral history project, which is now in
its third year.

Mihalchick, of the Archeparchy of Pittsburgh of the Byzantine Ruthenian
Church, is the only member from the Eastern Catholic Church involved in this
endeavor. Mihalchick worked extensively in Eastern Europe throughout the
1990s as a member of the General Administration of the Sisters of the Order
of St. Basil the Great.

Under communism, the order's members in Slovakia, Hungary, Ukraine and
Romania were forced to abandon their normal community lives and ministries
and to live and work as seculars. But they continued to keep their vows and
practice their faith.

"I traveled to Eastern Europe 35 times from 1990 to 2004,'' said Mihalchick.
"I have a lot of experience dealing with sisters after coming out of
communism and hearing their stories.''

As assistant general superior, Mihalchick sometimes had to speak up for the
sisters as they would try to regain buildings that had been taken from them
under communism. She remembered the first time she visited Ukraine alone
in order to speak on behalf of the sisters as they went after their
buildings.

"It worked. I sat there looking solemn and official and they sat looking
solemn and official,'' Mihalchick said, noting her visit was just a step -
but an important one - in the process to reclaim these buildings.

The oral histories deal predominantly with the lives of the sisters during
the communist regime. They tell stories of being forced to leave their
communities and find work in a secular world, often in factories or on
collective farms.

Mihalchick recalled one incident in which the nuns of various orders were
gathered into a single monastery and told they had to leave there to find
whatever work they could. And they were not allowed to wear their habits.
Having no other outfits, they made clothes out of the curtains.

One community of sisters who feared they would soon be forced out of their
building hid sacred vessels and vestments in a hole in a wall.

"A few days later, the communists came with their big truck and hauled the
sisters away,'' said Mihalchick. "In 1993, this was one of the buildings
they got back. One sister said, 'This is where we hid things,' and
everything was still there.''

Despite the communists, religious life continued. The nuns risked arrest and
imprisonment, but women would quietly tell others about the existence of
their orders. Vows were taken in secret. Sisters wore their habits for their
ceremonies and then had to take them off.

For their own protection, they knew only a small circle of other sisters and
many times knew only their first names. Religious articles were hidden.
Liturgies were celebrated in underground locations with a lookout and an
escape route if the KGB arrived.

In an interview for the oral history, Sister Marta, one of the nuns,
described how in 1988 a KGB officer came to see her as she was working
her secular job at a kindergarten.

"When he came in, I was having a feeling he knew me inside out for years.
He knew where I worked, as there were many rooms in the building and he
without anybody's help came straight to me. He told me all the information I
had given to him. He asked me what my name was and I said H--. He said,
'Why don't you say you are a nun?' I said, 'Because I am not.'

And then he told me everything: 'Your name is Sister Marta, you gave your
monastic vows then and there.' He knew everything about me; he knew when
I gave my monastic vows, who our Mother Superior was, etc. He knew
everything but he did not have a chance to use it before and because of the
fact we were leaving, he started interrogating me.

That interrogation was a very long one. That case with the KGB officer
alarmed the kindergarten workers because they already knew that the police
were coming to me. They had different versions concerning who I am and why
they were coming.''

Mihalchick told of one group of sisters who had permission to keep the Holy
Eucharist in their home, hidden in a wardrobe. The KGB arrived and one of
the sisters hid the Eucharist in her bosom. Faced with being strip-searched,
she pretended to be sick and was allowed to go outside where she took the
Eucharist out and placed the container in the top of her boot.

When she was searched, the container fell out of her boot. The KGB asked
why the container had a cross on it. The Sisters replied that everything in
their house had a cross on it.

"They had to learn strength,'' said Mihalchick. "It took spiritual strength
to do what was right against such opposition.'' Mihalchick said thousands
of sisters were in Europe during the communist regime. And since the
communist fall, they have continued their work.

As an example, Mihalchick said, "In Romania, within a short time of the fall
of communism, there were 55 orders of Catholic religious. That represented
those who returned there and new orders who reorganized a number of new
vocations.''

Project officials are considering creating a book from the oral histories of
these sisters, and the collection will be available online. Next summer,
Mihalchick, Nacke and Savoie will direct a retreat for Sisters at St.
Meinrad Abbey in Concordia, Kan., based on the faith stories being
gathered.

For further information on the project, contact Mihalchick at Mount St.
Macrina Retreat Center, 510 W. Main St., P.O. Box 878, Uniontown, PA
15401 or phone 724-438-7149. To make a donation to the project, send
contributions to Sisters of St. Joseph, 602 20th St., Belleville, KS 66932.
-----------------------------------------------------------------------------------------------------
PHOTO: This photo shows one of the Eastern European sisters working in
a factory during the communist regime. The nun was part of an underground
movement that lasted from 1945 to 1990 and is now the subject of an oral
history project. LINK: http://www.heraldstandard.com/
------------------------------------------------------------------------------------------------------
NOTE: I am pleased to see that my home state, the great state of Kansas,
is deeply involved in this very interesting historical project through
Catholic organizations in Concordia and Belleville, Kansas. Editor
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