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Action Ukraine Report

"THE ACTION UKRAINE REPORT - AUR"
An International Newsletter
The Latest, Up-To-Date
In-Depth Ukrainian News, Analysis, and Commentary

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

"THE ACTION UKRAINE REPORT - AUR" - Number 554
E. Morgan Williams, Publisher and Editor
Published in Kyiv, Ukraine, FRIDAY, September 9, 2005

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

1. UKRAINIAN PRESIDENT ANNOUNCES TOP-LEVEL DISMISSALS
TV 5 Kanal, Kiev, in Ukrainian 0940 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

2. UKRAINIAN PRESIDENT EXPLAINS REASONS FOR RESHUFFLE
TV 5 Kanal, Kiev, in Ukrainian 0955 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

3. UKRAINE PRESIDENT SUSPENDS AIDE TRETYAKOV AND PLANS
TO SACK CUSTOMS CHIEF WHO FACES CORRUPTION CHARGE
TV 5 Kanal, Kiev, in Ukrainian 1000 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

4. UKRAINIAN LEADER SPEAKS WITH RUSSIAN, POLISH PRESIDENTS
UNIAN news agency, Kiev, in Ukrainian 1224 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

5. RUSSIAN PRESIDENT PUTIN CAUTIONS AGAINST ALARM OR
OVERDRAMATIZING THE POLITICAL CRISIS IN UKRAINE
REUTERS, Berlin, Germany, Thu, Sep 8, 2005

6. PROFILE OF UKRAINIAN ACTING PREMIER YURIY YEKHANUROV
BBC Monitoring research in English 8 Sep 05
BBC Monitoring Service. United Kingdom, Thu, Sep 08, 2005

7. U.S. PLAYS DOWN UKRAINIAN POLITICAL TURMOIL SAYS IT'S
A PROCESS OF BUILDING A STRONGER DEMOCRACY
Agence France Presse (AFP) Washington, DC, Thu, Sep 8, 2004

8. U.S. SAYS UKRAINE POLITICAL CRISIS NOT UNUSUAL BUT IT IS VITAL
PRES YUSHCHENKO SPEED UP THE PACE OF REFORMS
By Mark John, Reuters, Brussels, Belgium, Thu, Sep 8, 2005

9. UKRAINE'S ORANGE REVOLUTION STARTS TO GO PEAR-SHAPED
President sacks Government for failing to root out
corruption and economic mismanagement
By Jeremy Page in Moscow
Times On-Line, London, UK, Friday, Sep 9, 2005

10. MOSCOW: GLEB PAVLOVSKY AND BORIS NEMTSOV ON UKRAINE
Yushchenko deliberately provoked political crisis to consolidate power
Interfax-Russia, Moscow, Russia, Thu, Sep 8, 2005

11. UKRAINE'S PRESIDENT FIRES CABINET
Prime Minister, Who Led Crowds During Revolt, Dismissed in Political Battle
By Peter Finn, Washington Post Foreign Service, Moscow
The Washington Post, Wash, D.C., Friday, Sep 9, 2005; Page A20

12. SENIOR RUSSIAN MPs COMMENT ON POLITICAL CRISIS IN UKRAINE
TASS news agency, Moscow, in Russian 1126 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

13. RUSSIAN AMBASSADOR TO UKRAINE BELIEVES DECISION BY
UKRAINE'S PRESIDENT TO SACK THE GOVERNMENT WAS RIGHT
Interfax news agency, Moscow, in Russian 1007 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

14. RUSSIAN RADIO: UKRAINIAN CRISIS HAS TOTALLY DEVALUED THE
LEADERS OF THE ORANGE REVOLUTION IN THE EYES OF SOCIETY
Radio Mayak, Moscow, in Russian 1100 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

15. ELECTION CAMPAIGNING KICKS OFF IN UKRAINE
They have sacrificed the image of the Orange Revolution
ANALYSIS: Alexei Makarkin, deputy general director
Center of Political Technologies, Moscow
RIA Novosti, Moscow, Russia, Sep 8, 2005

16. RUSSIAN LOWER HOUSE MPs SAY THEY SAW UKRAINIAN
CRISIS COMING, NOT A SURPRISE TO THEM
One team of crooks was replaced by another team of crooks
Ren TV, Moscow, in Russian 1530 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

17. "WITHOUT ORANGE"
EDITORIAL: Zerkalo Nedeli, Kiev, Sep 3, 2005
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

18. YUSHCHENKO'S POPULARITY SLIDES IN UKRAINE
Mara D. Bellaby, Associated Press, Kiev, Ukraine, Wed, Sep 7, 2005

19. UKRAINIAN DEPUTY PRIME MINISTER MYKOLA TOMENKO BLASTS
"OLIGARCHIC GOVERNMENT" IN PRESIDENT'S TEAM
TV 5 Kanal, Kiev, in Ukrainian 0640 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

20. DIVISION OPENS IN UKRAINIAN LEADERSHIP:
WILL YUSHCHENKO FALL IN?
By Taras Kuzio, Eurasia Daily Monitor, Volume 2, Issue 166,
Jamestown Foundation, Washington, D.C., Thu, September 8, 2005
=============================================================
1. UKRAINIAN PRESIDENT ANNOUNCES TOP-LEVEL DISMISSALS

TV 5 Kanal, Kiev, in Ukrainian 0940 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

Ukrainian President Viktor Yushchenko has told a news conference that he has
sacked the government and the secretary of the National Security and Defence
Council, Petro Poroshenko.

He accused top members of his team of infighting and waging public-relations
campaigns against each other instead of focusing on their work for the
benefit of ordinary Ukrainians.

Yushchenko said he still respected his comrades, but had to resort to tough
action in the interests of his country. He also criticized the government's
economic policy for populism and privatization blunders.

The following is the text of Yushchenko's statement at a news conference
excerpts from which were carried by Ukrainian television TV 5 Kanal on 8
September; subheadings inserted editorially:

[Yushchenko, report starting in the middle of his sentence] A government
that would work day in and day out for the state's and its people's
interests, a government that would work as a team, let me repeat, honestly,
transparently and professionally.

To achieve this, I hired the people who lived through dozens of rallies and
meetings with the community, who joined me in Independence Square in Kiev
[during the presidential campaign of 2004], the people who helped to
overthrow the old corrupt authorities and gave us a chance to build a free
Ukraine.

These were devoted people, without whom, I believe, our success in the
autumn 2004 would not have been possible.

Let me repeat that, nine months ago, I proposed to parliament the candidacy
of Yuliya Volodymyrivna Tymoshenko for the post of prime minister, appointed
Petro Oleksiyovych as National Security and Defence Council secretary,
appointed Oleksandr Oleksiyovych Zinchenko as secretary of the presidential
administration - [corrects himself] state secretary.

These people ran my [presidential] election campaign. Some joined me in
2002, some a few months before the end of the campaign or during the
campaign. To me, they are extraordinary individuals, they are my friends.
And to be honest, it will be difficult for me to talk about many of the
things I am going to talk about later.

But I realize that this conversation is long overdue, as this is not a
matter of relations among the cabinet, the national security service
[presumably meaning the National Security and Defence Council] and
the state secretary. We are just watching the country deteriorating, while
the processes that were the revolution's main goal are winding up.

INFIGHTING
I was aware of certain disagreements - some buried deeply, others on the
surface - among these people. I believed that these were nuances and
episodes that anyone can run into. Especially, when it involved such great,
interesting and extraordinary people. I believe that every extraordinary
person has problems.

I viewed such problems as a temporary thing. I hoped that if everyone had
committed themselves to hard work, they simply would not have had time for
internal intrigues, infighting or holding PR or anti-PR campaigns among
certain political forces that formed a coalition. Such were my hopes.

Moreover, I would like to say that my colleagues were granted the most
expanded powers based on the Ukrainian constitution. I believe that the
power that the national security secretary, the state secretary and the
prime minister wielded was larger than any one of the top officials had ever
had before, ranging from building a structure and forming an apparatus to
coordinating functions and decision-making procedures.

I do not recall any party being unhappy after the fundamental functions of
this or that institution had been agreed on and all the basic documents had
been signed.

But eventually I was becoming a witness, first, of disagreements among these
institutions which turned into serious topical conflicts and internal
intrigues, which affected the fundamentals of state policy. Eventually I
became a witness of the situation when on a daily basis I had to intervene
in a conflict between the national security council and the cabinet, between
the state secretary and the national security council, between the cabinet
and the Supreme Council [parliament]. In other words, these conflicts have
become the government's daily agenda.

I believed that my friends who enjoyed such unique backing from the people
and such unprecedented powers - [changes tack]. I believed that these, let
me stress, talented people could have used these resources to the benefit of
their work. I also believed that these people, being top state officials,
realized their full responsibility. I thought they should have heard each
other and should have reached accord.

This was their duty. The president should not baby-sit for them and make
them maintain relations.

To be honest, I was eager to do this, because I understood this was a matter
of national importance, even though I did not want to spend that much time
on as I did not see much constructive approach. But such was the reality.

"ZERO" TRUST, TEAM SPIRIT LOST
Let me repeat, the rifts continued, the wars were getting worse, just like
among two Ukrainians and three hetmans [Ukrainian proverb meaning that
people cannot agree on anything]. It became obvious that the election
campaign was in progress. One wanted to take Kiev, another wanted the same,
the third wanted to take Lviv, the fourth wanted to reshuffle political
forces and to invite some other partners to an election coalition and began
recruiting people.

To cut the long story short, I witnessed zero trust among my partners at
meetings that I chaired. As soon as the meetings ended, the parties
proceeded in different ways, agreed on conducting a different policy. And
Ukraine then entered scandals.

The latest scandal was at the Nikopol ferroalloys plant. I remember how I
finished my last Friday - resulted in a unique court ruling which was
difficult for us to achieve. This was a unique, honest decision. The court,
because of the intrigues behind the scenes, which were evolving not only
inside the country but also abroad - which is especially painful - led the
case to a conflict when people went out to the square.

For all that, we have a well-justified and deeply correct court decision.
But the finale of the story had nothing to do with attempts to hand the
company from a gang over to the state. But it appeared that it was handed
over from one gang to another. Therefore, the people had the right to
protest. [sighs] I am sure that at some point my colleagues simply lost the
team spirit and faith.

I am saying this with bitterness again because these people remain my
friends regardless of the circumstances. I will value them but I have to say
this. The Ukrainian president has been a peacemaker among these institutions
for eight months. I almost did not say this in public, as I thought it was
my karma that I had to bear.

ECONOMY STAGNATING
Meanwhile, Ukraine was losing momentum, including economic pace. I think
members of my team listened to the president but did not hear him. And today
I have to cut the Gordian knot, however difficult it may be. In the name of
Ukraine. On 24 August, on Independence Day, I promised my colleagues and
state officials in Independence Square that nobody had an indulgence.

We have witnessed many new faces appearing in the authorities but,
paradoxically, the face of the authorities has not changed. The country is
being accused of corruption once again. The country is again being accused
of lack of publicity in economic processes, and privatization processes are
no exception.

We are witnessing a situation where areas which could be democratized
significantly are returning to their yesterday's condition. Look at the
actions of the tax agency and the customs agency. We are witnessing growing
populism and lumpenization of the budget. From dawn to dusk, we hear
light-weighted sweet promises, which, I am sure, will be increasingly more
difficult to implement with every coming day.

The decisions which have been made this year, both economic and social, can
be made only once in a lifetime. There will be no second try without
economic change.

But we have witnessed a situation in which not a single social package has
been proposed for 2006, neither regarding the social burden, nor social
reform, nor education, nor medicine. We are prolonging the stagnation which
has been observed in this field for another 12 months. Friends, I cannot
accept this. [long pause]

TOO MUCH FOCUS ON PUBLICITY
I am sure that the cause of this has been a lack of understanding of the
significance of state interests, inability to work exclusively for the
citizen and for the state as the top priority, the top preference for any
state official. The executive, instead, concentrated on PR activities,
either promoting itself or a certain political force or a political stance.

I am confident that this must be stopped. I simply see that certain
officials have plunged so deeply into PR that they have no time for
productive talk and they cannot imagine life without cameras any longer,
although I have always advocated and will keep advocating publicity in the
work of the authorities, be it the National Security and Defence Council or
the Cabinet of Ministers. But, friends, this is done once the work is
accomplished.

We should not draw this country into dangerous promises and into dangerous
populism. I am convinced, dear friends, that a year ago I ran for president
not to see key state institutions struggling to find understanding and
failing to find accord and mutual trust.

That is not what I sought as I have been walking for a year with a face that
is not mine and I have suffered a very painful poisoning - for me and anyone
else. I did not [suffer] for this. I am convinced that it was not for this
that millions of people stood in squares. I cannot pretend that nothing is
happening.

I have to tell my compatriots today that I must take radical steps to change
the leadership of the government, the National Security and Defence Council
and the presidential secretariat.

I repeat - from now on I want to see the top state institutions being part
of the system of a united team and working to ensure jobs for people, better
wages, better school, better medicine so that people might feel that the
authorities are working in concord and harmony and the state is in a state
of peace and stability.

That is why I am signing decrees on the dismissal of the government and the
dismissal of the secretary of the National Security Council. On the basis of
resignation tendered by [Oleksandr] Zinchenko [as state secretary] several
days ago, I appointed Oleh Borysovych Rybachuk as state secretary of
Ukraine. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
2. UKRAINIAN PRESIDENT EXPLAINS REASONS FOR RESHUFFLE

TV 5 Kanal, Kiev, in Ukrainian 0955 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

Ukrainian President Viktor Yushchenko has said he did his best to broker an
agreement to iron out serious differences within his team, but failed to
avert the top-level reshuffle today.

Answering questions at a news conference today, where he announced the
dismissals of the cabinet and Security Council supremo Petro Poroshenko,
Yushchenko said a compromise involving just several resignations had been
reached yesterday, but the deal apparently fell through overnight.

He said he was deeply disappointed by his team's inability to work together.
However, he stressed that he still considered all the sacked officials as
his friends. Yushchenko said he would still like them to form an election
coalition.

He upbraided former State Secretary Oleksandr Zinchenko and former
Deputy Prime Minister Mykola Tomenko for making unfounded accusations.

He also criticized some of his former associates for their failure to
separate power from business. The following is the text of the
questions-and-answers session that followed Yushchenko's announcement
of the cabinet's dismissal, carried by Ukrainian television TV 5 Kanal on 8
September; subheadings inserted editorially:

EFFORTS TO RESCUE TEAM FAILED
[Yushchenko] You know, I spent the last three days and three nights trying
to ensure that the disintegrating team united again. The only outstanding
issue, the issue I was fighting for all the time, was the issue of trust.
The team's degradation was obvious.

Separate blocs that emerged within the team began playing their own games
behind closed doors, which was rather unpleasant. This involved digging out
compromising material, making photos, blackmail and so forth and so on.

In reality, the team's unity, unfortunately, has become an extremely acute
problem. Interpersonal conflicts have grown into conflicts between teams and
begun affecting state affairs. Yesterday, I spent all day and night trying
to produce the best possible answer - if the team spirit does exist, we
should remain together. Such an agreement was reached. Unfortunately,
things changed overnight. But it was not I who changed them.

[Correspondent] What agreement was that?

[Yushchenko] We agreed that our reaction to the accusations [of corruption
levelled at National Security and Defence Council Secretary Petro
Poroshenko, first presidential aide Oleksandr Tretyakov and Our Ukraine
faction head Mykola Martynenko by former State Secretary Oleksandr Zinchenko
at a news conference on 5 September], which I believe were too strong but
groundless and to which I had to react politically - [changes tack].

I told my colleagues I would go for sacking key figures, as those
accusations, which sound more like PR statements, prompted me to react
politically. I had to do this. Realizing the outcome of all this,
understanding the grounds for all this, because we only see the consequences
on the surface, for three days in a row I had been having a deep and honest
conversation with those who produced all these incidents.

My only goal was to see them offering a hand to each other, thus cementing a
more moderate version of settling the issue - dismissing the individuals
responsible for combating corruption in this country, for instance, the
secretary of the National Security and Defence Council of Ukraine, possibly
one or two cabinet officials who obviously failed to deliver on the topics
that were mandatory this year, although I did plan to do these things based
on the results of performance over the last nine months. [Indistinct passage
with correspondents asking various questions simultaneously]

NEW ACTING PREMIER
[Yushchenko] Today I will task Yuriy Ivanovych Yekhanurov [governor of
Dnipropetrovsk Region and former first deputy prime minister in Yushchenko's
cabinet in 1999-2001] with forming a new cabinet.

[Correspondent] What can you say to people who are extremely disappointed
now over what is going on in Ukraine, you personally and the break-up of the
team?

[Yushchenko] I believe that what is going on now is a reflection of the
process that is under way now. I believe this is not a political crisis, but
a crisis of relations among certain political figures.

CORRUPTION ROW
[Correspondent] Viktor Andriyovych, just a few words on a new team, please.
Do you think it is possible to form a new team in Ukraine which would not be
prone to corrupt schemes?

[Yushchenko] You know, I would like neither journalists nor politicians to
play with things that are fundamental for any government. When we talk about
corruption, for instance, or about a person who has lived through Maydan
[Independence Square, heart of Orange Revolution] alongside of me and in
whom I have great trust, who is supposed to fight corruption in his office
at the state secretariat [hints at Zinchenko] - [changes tack]

And he accuses somebody of corruption, failing to present facts or without
holding a single meeting, in other words, failing to make sure that a case
is forwarded to court - [changes tack]. All this requires close attention.

Why? Because the young team is attacked by the things that Maydan made
us fight against. In other words, Maydan's ideals were being tested.

Friends, if this turns out to be true - [changes tack]. I formed a
commission the day before yesterday which will go through all the facts
available and establish whether he is corrupt or not. I do believe that this
is not going to happen. But this issue was raised within the team for the
sole purpose of radically destroying and changing the team. I just cannot
keep watching this. For me, these are instances of improper behaviour.

When we talk of power and business - [changes tack]. Friends, I want to say
time and again there is no provision that only poor people should work for
the government. Excuse me. But there is a provision according to which an
individual who was in business should not use his position to promote his
business.

Nothing more, nothing less. He should not mix up his government-related
functions and his business interests, run on his behalf by his son or wife.
If such facts are known, I would like to ask those who deal with such
things, please, we have to talk openly about this.

But for people who are 31-39 years old, who came to politics believing that
they would work for people's good for many, many years, but were dubbed
"corruptionist" without any grounds, this is a personal tragedy, believe me.

And after the last three days that I lived through holding discussions and
polemics with these people from both sides - [changes tack]. To be honest,
I do not want this to happen in my life again.

FUTURE OF SACKED OFFICIALS
[Correspondent] And the last question. Are the people you sacked today
going to stay in the progovernment team? What fate awaits Poroshenko and
Tymoshenko? This is a question about the opposition.

[Yushchenko] I would like them to stay in the progovernment team. This
question still needs to be studied. I think many of them have no quick or
direct answers. I would like to say one thing - if they are capable of
working together, if they can prove they can change their behavoiur, my
assessment of these people's role remains unchanged.

These people are important to Ukraine's recent history. I respect their
stances, but I put forward a single condition - an ability to work as a
team. I don't want intrigues between two or three people to lead to the
emergence of state problems.

ELECTION ALLIANCE PROSPECTS
[Question] Does the ability to work [as a team] mean a single election bloc?

[Yushchenko] Yes, among other things. Among other things. But I would say
that another format would not be ruled out - a coalition of forces. We
should simply talk of a joint electoral platform - either in a single bloc
or in a united coalition of three-four blocs. This would not change the
essence. One thing is the most important - a demand that I would never give
up.

There should be nothing but teamwork between the heads of these institutions
and the very institutions. Nothing but teamwork. Without private intrigues.
I want the state authorities separated from the conflicts that have been
brewing for nine months between certain people whom I respect. They remain
my friends. They remain people that I respect.

But, friends, Ukraine's interests above all.

[Question] What about Turchynov and Tretyakov?

[Yushchenko] About Tretyakov. Today I will sign a decree on his suspension
from his post for the duration of investigation.

[Question] Turchynov?

[Yushchenko] I will hold consultations regarding Turchynov.

SLAIN JOURNALIST CASE
[Question, several people speaking at the same time] Skomarovskyy [sacked
customs chief]?

[Yushchenko] In this case the purpose was different. I am convinced of one
thing - if the team represented today by the government, the National
Security and Defence Council and the presidential secretariat is weak in
formulating state strategy and carrying out state police, simply if it does
not accelerate Ukraine's pace, this is a fateful weakening, a fundamental
one.

I stress once again that the basis of relations that we have seen in the
last eight months - let's be frank - has begun to disappoint you and I and
the 48m [Ukrainians]. We need to stop this disappointment. We need to make
sure that Maydan's ideals are not called into question.

When this is done from inside the team, when Mykola Tomenko makes the
comment that I withhold something in the [slain journalist Heorhiy] Gongadze
case - [changes tack]

Perhaps in five months we achieved more in the Gongadze case than in all
previous four years. We know the people facing accusations of murder, but we
don't know who ordered the murder. We understand that now an answer to the
first question, who killed, has been made easier because people have emerged
who trust me and the authorities and who testified in writing.

But to find an answer to the question as to who ordered [the murder] is far
more difficult. But I am sure that there will be an answer. Simply, more
time is needed to examine the situation. In other words -

[Presidential press secretary Iryna Herashchenko] Let's draw a line there -

[Yushchenko] Friends, Ira, let's think -

[Herashchenko] Tomorrow noon.

[Yushchenko] On topical issues, let's meet tomorrow.

[Herashchenko] At twelve [0900 gmt] at the press centre. And let's have a
live relay.

[Yushchenko] All right. See you tomorrow. -30-
=============================================================
3. UKRAINE PRESIDENT SUSPENDS AIDE TRETYAKOV AND PLANS TO
SACK CUSTOMS CHIEF WHO FACES CORRUPTION CHARGE

TV 5 Kanal, Kiev, in Ukrainian 1000 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

Ukrainian President Viktor Yushchenko has said he is going to suspend his
first aide Oleksandr Tretyakov, one of the officials in the centre of
corruption allegations that have triggered the dismissal of the entire upper
echelon of the Ukrainian administration.

He also said he is going to sack customs chief Volodymyr Skomarovskyy,
who is facing a corruption investigation.

Speaking at a press conference earlier today carried by all major Ukrainian
TV channels, the president announced the dismissal of the entire Cabinet of
Ministers and of the secretary of the National Security and Defence Council.
=============================================================
4. UKRAINIAN LEADER SPEAKS WITH RUSSIAN, POLISH PRESIDENTS

UNIAN news agency, Kiev, in Ukrainian 1224 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

KIEV - Ukrainian President Viktor Yushchenko has spoken with Russian
President Vladimir Putin and Polish President Aleksander Kwasniewski by
phone. Yushchenko's press service said that the presidents discussed the
political situation in their countries, and Yushchenko told his counterparts
about his reasons for dismissing the cabinet.

The presidents agreed that the dismissal of the cabinet is an internal
affair for Ukraine and said that they understood his reasons, because the
head of state is responsible for stability in the country and effective work
of all branches of power. The presidents said that bilateral relations
remain unchanged, friendly and strategic.

Putin said in particular that he sees the situation in Ukraine as an
understandable process for achieving effective cooperation between
different power branches and optimizing the situation.

Yushchenko and Putin also discussed the work of the Yushchenko-Putin
commission and the documents which need to be passed in the near future.
They also discussed Putin's upcoming visit to Ukraine, which is planned for
this autumn. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
5. RUSSIAN PRESIDENT PUTIN CAUTIONS AGAINST ALARM OR
OVERDRAMATIZING THE POLITICAL CRISIS IN UKRAINE

REUTERS, Berlin, Germany, Thu, Sep 8, 2005

BERLIN - Russian President Vladimir Putin cautioned against overdramatizing
the political crisis in Ukraine on Thursday, saying he was convinced its
people and leaders would find a way to stabilize the country.

Putin said he had spoken by telephone to Ukrainian President Viktor
Yushchenko, who sacked his government on Thursday as the team that led the
"Orange Revolution" less than a year ago broke amid infighting and
accusations of corruption.

"I am convinced that the Ukrainian people and leadership will find a way to
stabilize the situation in the country. Russia will support the
stabilization of the country in every way," Putin told a news conference
after a meeting with German Chancellor Gerhard Schroeder.

The 2004 Ukrainian uprising caused grave concern in Russia, and officials
have accused the West of exploiting pro-democracy sentiment to undermine
Moscow's influence in its own background, the Commonwealth of Independent
States (CIS).

Putin, who has rejected this view in recent comments, said Ukraine was
under the control of the president. "I would say that I would not
overdramatize current events in Ukraine," Putin said.

"There's nothing so unusual in the president dismissing the government,
especially in connection with the forthcoming battle for parliamentary
elections," he said, adding that Ukraine was in a "complicated" stage in its
development. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
6. PROFILE OF UKRAINIAN ACTING PREMIER YURIY YEKHANUROV

BBC Monitoring research in English 8 Sep 05
BBC Monitoring Service. United Kingdom, Thu, Sep 08, 2005

President Viktor Yushchenko appointed Dnipropetrovsk Region governor
Yuriy Yekhanurov as caretaker prime minister on 8 September 2005.
Yuriy Yekhanurov is one of the most experienced Ukrainian politicians.

In the mid-1990s Yekhanurov managed the start of Ukraine's privatization
campaign as head of the State Property Fund. He was deputy chief of
Yushchenko's two election campaigns - the parliamentary one in 2002 and
the triumphal presidential election campaign last year.

Yuriy Yekhanurov, an ethnic Buryat, was born in August 1948 in a village in
Russia's north-eastern Yakutia Republic. Yekhanurov went to a secondary
school in Yakutia, but later moved to Ukraine. In 1967 he graduated from a
construction school in Kiev, and in 1973 from the local Institute of
People's Economy (now the Economic University).

In 1974, at the age of 26, he became director of a construction materials
factory in Kiev. Yekhanurov climbed the career ladder in the construction
industry up to the post of deputy chairman of Kiev's main construction
directorate in 1988.

As Ukraine gained independence in 1991, Yekhanurov moved to the Cabinet of
Ministers, where he headed an economic department. In 1992-93 he served a
brief stint as deputy head of the Kiev city administration's economic reform
department, then returned to the Cabinet of Ministers as deputy economics
minister.

In 1994-97 Yekhanurov steered the early stage of Ukraine's privatization as
chairman of the State Property Fund. He joined the People's Democratic
Party (PDP) - the then "party of power"- in 1996. In February 1997 he was
appointed economics minister in the cabinet of Prime Minister Pavlo
Lazarenko.

In July 1997, when Lazarenko's cabinet resigned, Yekhanurov took the post of
head of the state committee for enterprise. He was elected to parliament in
March 1998 from a single-seat constituency in Zhytomyr Region, where his
mother lives.

Yekhanurov joined Yushchenko's team in December 1999 as first deputy prime
minister and has been with this team ever since. Yekhanurov left the PDP in
2000. When Yushchenko's cabinet was dismissed in May 2001, the then
President Leonid Kuchma employed Yekhanurov as first deputy head of his
administration.

But he left the administration in November 2001 to become deputy chief of
the election headquarters of Yushchenko's newly formed Our Ukraine
opposition bloc. Yekhanurov was elected to parliament in March 2002 from
Our Ukraine's list. In the legislature he has chaired the committee for
industry and business.

Yushchenko appointed Yekhanurov deputy chief of his election headquarters
for a second time in summer 2004, this time for the presidential polls,
which Yushchenko won. In March 2005 he was elected head of the central
executive committee of Yushchenko's governing Our Ukraine People's Union
party.

On 1 April 2005 Yushchenko appointed Yekhanurov governor of Dnipropetrovsk
Region in place of Serhiy Kasyanov, dismissed amid accusations of combining
his post with business and of having backed Yushchenko's rival Viktor
Yanukovych in the presidential elections.

Yekhanurov is one of the few members of Yushchenko's team who supports
Ukraine's membership of the Single Economic Space with Russia. He also
welcomes the participation of Russian capital in Ukraine's privatization.

Being one of the leading members of Yushchenko's Our Ukraine People's
Union party, Yekhanurov supports plans to create a bloc of pro-democracy
forces on the party's basis for the 2006 parliamentary polls. He has been
one of the most caustic critics of the smaller nationalist parties who
refused to merge with Our Ukraine People's Party earlier this year.

Yekhanurov does not appear to have big stakes in any business. He is
married, with one son. -30- [Action Ukraine Report Monitoring]
=============================================================
7. U.S. PLAYS DOWN UKRAINIAN POLITICAL TURMOIL SAYS IT'S
A PROCESS OF BUILDING A STRONGER DEMOCRACY

Agence France Presse (AFP) Washington, DC, Thu Sep 8, 2004

WASHINGTON - The United States played down the political turmoil in
Ukraine and said President Viktor Yushchenko's move to dismiss his
government was part of a process of building a stronger democracy.

State Department spokesman Sean McCormack said Washington was
keeping a close eye on events in Ukraine after Yushchenko sacked the
cabinet Thursday in a bid to quash a deepening corruption scandal.

"Young democracies sometimes have changes in government. But as long
as those changes are made in a constitutional manner, in a peaceful manner,
that's all part of the democratic political process," McCormack said.

"I think that we have great confidence that the people of Ukraine will come
through these various changes in this process stronger. It's a process of
building a stronger democracy."

McCormack said the next government was a matter for the Ukrainian people
and their elected leaders to decide. "This is part of the democratic
process. It's not always neat," he said. -30-
=============================================================
Send in names and e-mail addresses for the AUR distribution list.
=============================================================
8. U.S. SAYS UKRAINE POLITICAL CRISIS NOT UNUSUAL BUT IT IS VITAL
PRES YUSHCHENKO SPEED UP THE PACE OF REFORMS

By Mark John, Reuters, Brussels, Belgium, Thu, Sep 8, 2005

BRUSSELS - The United States played down a political crisis in Ukraine that
prompted President Viktor Yushchenko to sack his government on Thursday
but said it was vital he speed up the pace of reforms.

U.S. State Department official Kurt Volker said Kiev should not expect an
invitation to deepen its ties with NATO until it showed more proof of
democratic and military reforms since the "Orange Revolution" of late last
year.

But he said Yushchenko's move to sack his government amid infighting and
accusations of corruption was not unusual. "In democratic countries this
happens a lot," Volker, a senior official responsible for Europe and Eurasia
in the U.S. State Department, told a news briefing in Brussels.

"They will name a new government, they'll have elections next year and I
think we just have to keep our eyes focused on the long term and not look at
short-term adjustments," he said.

Yushchenko has pledged to stamp out the corruption that was rife under his
predecessor, Leonid Kuchma, and said the decision to sack his government
was a bid to untie the "Gordian knot" holding back his efforts.

Volker was reserved on Yushchenko's reform record since the pro-Western
uprising that overturned a rigged presidential election, saying there had
been "ups and downs" in a process crucial to Kiev's goal of joining NATO
and the European Union.

NATO FAST TRACK?
Earlier this year, NATO offered Ukraine fast-track talks toward membership
and Kiev was confident it would be offered a "membership action plan" -- the
final key step toward NATO accession -- by the end of 2006.

"Let's not rule it out, but at the same time I think it is probably more
likely to be further down the road, when we've seen more concrete progress
on reform in Ukraine," he said. It was too early to say whether Ukraine
could achieve its goal of joining NATO in 2008, Volker said.

He was also cautious on the ambitions of three Balkans nations -- Albania,
Croatia and Macedonia -- to join NATO.

They have been lobbying to receive invitations in 2006 to join, but Volker
said the United States believed it was too early to consider further
enlargement of the alliance, which took on seven former communist states
in 2004.

"We don't think it is ripe to enlarge NATO this year or next year. We don't
think that the candidates that are interested in that are ready for that,"
he said, adding he doubted there was consensus within NATO to take in
new members in the near term.

His comments came amid a public backlash in the European Union against
further enlargement after the bloc took in 10 mainly east European new
members last year. -30- [Action Ukraine Report Monitoring Service]
==============================================================
9. UKRAINE'S ORANGE REVOLUTION STARTS TO GO PEAR-SHAPED
President sacks Government for failing to root out
corruption and economic mismanagement

By Jeremy Page in Moscow
Times On-Line, London, UK, Friday, Sep 9, 2005

PRESIDENT YUSHCHENKO of Ukraine sacked his entire Government
yesterday as infighting and allegations of corruption tore apart the team
that led the Orange Revolution last year.

Mr Yushchenko dismissed the Cabinet of Yuliya Tymoshenko, his charismatic
Prime Minister, severing the partnership that brought hundreds of thousands
of peaceful protesters on to the streets of Kiev last November. He also
accepted the resignation of Petro Poroshenko, a key sponsor of the Orange
Revolution, as head of the National Defence and Security Council in the
climax of a fierce power struggle within the administration. "

These people remain my friends. It is very difficult but today I must cut
this Gordian knot," said Mr Yushchenko, looking sombre but calm after
wielding the knife. I do not want any more the intrigues between two or
three people that were determining state policy." His emphatic move came
less than a week after Oleksandr Zinchenko, the architect of the Orange
Revolution, resigned as his chief of staff, accusing the Administration of
being even more corrupt than its predecessor.

It was a dramatic attempt by the President to reassure an increasingly
disillusioned public that he would stick to his pledges to root out the
corruption and economic mismanagement that plagued Ukraine under
Leonid Kuchma, the previous President.

"We are witnessing a paradox," Mr Yushchenko said. "Many new faces have
come to power, but the face of power has not changed."

His actions raised fears that the feisty Mrs Tymoshenko, arguably the most
inspirational figure in the Orange Revolution, would join the opposition or
call her supporters out on to the streets again.

She is due to make a statement on television today that could determine
whether Ukraine continues along its path towards integration with the West
or descends again into civil unrest. "She will speak to the people of
Ukraine," Vitaly Tchepinoga, her spokesman, told The Times.

Mrs Tymoshenko's glamorous looks and fiery rhetoric inspired many of the
protesters who helped to overturn a rigged presidential election last
November and sweep Mr Yushchenko to power. But her popularity has waned
because of her Government's poor record and she is widely despised in
Russian-speaking eastern Ukraine because of her anti-Russian views and
links to big business.

Mr Yushchenko appointed Yury Yekhanurov, the Governor of the western region
of Dnipropetrovsk, as acting Prime Minister and asked him to form a new
Cabinet. Mr Yekhanurov, 57, served as Mr Yushchenko's deputy when he was
Prime Minister in 2000 and is considered a loyal and reform-minded
technocrat who can better balance Ukraine's relations with the West and
Russia.

In his first public remarks after learning of his appointment, Mr Yekhanurov
said: "I have one goal, to ensure stability. That's why my task right now is
to form a government."

The crisis prompted calls for stability both from Western governments, which
backed Mr Yushchenko during the revolution, and from Russia, which supported
his opponent.

President Putin of Russia said that he had spoken to Mr Yushchenko by
telephone to offer his support. It was a clear indication of Moscow's
dislike for Mrs Tymoshenko. She is still wanted in Russia on charges - which
she says are politically motivated - of bribing Russian Defence Ministry
officials when she was head of Ukraine's gas monopoly in the 1990s. Mr Putin
said: "Ukraine is going through a complicated stage of its development."

Analysts blamed the crisis on a power struggle between Mrs Tymoshenko,
nicknamed the Gas Princess in the 1990s, and Mr Poroshenko, a confectionery
and media tycoon dubbed the Chocolate King.

The three joined forces last year to oppose Mr Kuchma's chosen successor,
the Prime Minister Viktor Yanukovych, who wanted to forge closer ties with
Russia. But after the revolution Mr Poroshenko was disappointed not to have
been appointed Prime Minister and built up a rival power base that clashed
regularly and publicly with Mrs Tymoshenko.

That rivalry was at the heart of a series of public disputes that have
marred Mr Yushchenko's presidency, notably over energy policy and the
reprivatisation of assets sold in rigged auctions in the 1990s.

Nikolai Tomenko, a Deputy Prime Minister who also resigned yesterday, said
that there were in effect two governments in Ukraine, one run by Mrs
Tymoshenko and the other by Mr Poroshenko. "I do not want to share
responsibility with those who have created a system of corruption," Mr
Tomenko said.

The infighting boiled over last weekend when Mr Zinchenko, who co-ordinated
Mr Yushchenko's election campaign, resigned and accused Mr Poroshenko
and another top presidential aide, of corruption.

Sources close to Mr Yushchenko said that he had tried to get Mr Poroshenko
to resign along with some members of Mrs Tymoshenko's team to maintain the
balance of power between the two factions. But Mrs Tymoshenko had refused.

"He was left with no choice. In some ways, this house cleaning should have
been done a lot earlier," one source close to Mr Yushchenko said. "The issue
now is how the public reacts."

Analysts say that plans for Mr Yushchenko and Mrs Tymoshenko to join forces
to fight the election are no longer realistic.

AMBER FUTURE
November 2004 Official count gives presidential election victory to Viktor
Yanukovych, the Prime Minister. With reports of vote-rigging, opposition
candidate Viktor Yushchenko begins a campaign of street protest. Supreme
Court annuls the poll result

December 2004 Yushchenko wins the poll count after a rerun of the election

January 2005 Yanukovych's challenge is rejected by the Supreme Court and
Yushchenko is sworn in as President

February 2005 Yuliya Tymoshenko, the President's nominee for Prime
Minister, is approved by parliament

March 2005 Yushchenko says suspected killers of the journalist Georgy
Gongadze, a critic of the previous administration, are in custody and
accuses the former authorities of a cover-up

April 2005 Tymoshenko cancels her first official visit to Moscow. Tension
heightens between Moscow and Kiev

September 2005 Oleksandr Zinchenko resigns as Yushchenko's chief of staff
and accuses officials of corruption. The President dismisses the Government
---------------------------------------------------------------------------------------------------------------
LINK: http://www.timesonline.co.uk/article/0,,3-1771928,00.html
=============================================================
10. MOSCOW: GLEB PAVLOVSKY AND BORIS NEMTSOV ON UKRAINE
Yushchenko deliberately provoked political crisis to consolidate power

Interfax-Russia, Moscow, Russia, Thu, Sep 8, 2005

MOSCOW - The political crisis in Ukraine has reached its climax over the
past several days, and President Viktor Yushchenko dismissed the Cabinet
on Thursday.

Political analyst Gleb Pavlovsky and Ukrainian presidential adviser and
former Russian Deputy Prime Minister Boris Nemtsov expressed their
opinions on the current situation in interviews with Interfax.

Gleb Pavlovsky, president of the Effective Politics Foundation, said he
believes Ukrainian President Viktor Yushchenko provoked the political
crisis himself in order to consolidate power in his hands.

"I have said many times over the past six months that a crisis in that team
was not only inevitable, but was necessary for Yushchenko to consolidate
power around himself," Pavlovsky said. "Yushchenko in a way provoked this
crisis himself and its mechanism was launched deliberately," he said.

Pavlovsky described Yushchenko's decision to sack the Cabinet as "an
attempt to take over the populist slogans of the orange revolution." "After
all, a revolution should have one father," he said. "Now Yushchenko will
form a more homogenous team."

He described Dnipropetrovsk regional administration chief Yury Yekhanurov,
who has been instructed to form a new government, as "a moderate member
of Yushchenko's team, an economically competent and politically sober man."

"If Yekhanurov ultimately becomes premier, his Cabinet is likely to be
technocratic and engaged in economics, rather than preparing for the
parliamentary elections, while Yushchenko will leave politics to himself,"
he said.

Asked whether former Prime Minister Yulia Tymoshenko will be able to boost
her personal political credibility following her dismissal, Pavlovsky said
this will depend on the steps taken by the new government and the president.

"Of course, Tymoshenko will try to preserve her halo as a corruption
fighter, but this will depend on the quality of Yushchenko's play and how
efficient the new government proves to be," he said.

Ukrainian presidential adviser and former Russian Deputy Prime Minister
Boris Nemtsov told Interfax that it is possible to overcome the systemic
crisis in Ukraine only through the consolidation of the power elite around
President Yushchenko.

"As I see it, the only way to ride out of the current systemic crisis in
Ukraine is the consolidation of the power elite around Yushchenko. I believe
this can be achieved," Nemtsov said. Ukraine has seen "a systemic
socioeconomic and political crisis" over the past several months, he said.

For the first time in the last five years, the Ukrainian economy is
experiencing an industrial decline, which reached 2.5% in July. "Against the
fantastic results of last year, when growth was 12%, this is especially
depressing," Nemtsov said. <

Moreover, the economic slump is accompanied by growing prices for fuel and
food and the reduction of jobs and investments in the economy, Nemtsov said.

"In my view, this is a result of an extremely unprofessional and sometimes
simply erroneous government policy, which has formed an extremely hostile
investment climate in the country through the redistribution of property,
and [ex-State Secretary] Oleksandr Zinchenko's resignation has also added
serious political problems to the picture," he said.

"Mutual charges of corruption [between Zinchenko and former National
Security and Defense Council Secretary Petro Poroshenko] harm not only the
country's leadership, but Ukraine as a whole," he said.

Asked to describe the disagreements between Yushchenko and Tymoshenko,
Nemtsov replied: "The disagreements between them are profoundly ideological
in their nature. President Yushchenko is a consistent advocate of European
integration and a democratic path of development for Ukraine, while [former]
Premier Tymoshenko, as a leftwing, populist politician, stands for a unique
path for the country's development."

Nemtsov said he welcomes Yushchenko's decision to dismiss the Tymoshenko
Cabinet. "I welcome and support this decision, because I believe the Cabinet
is to blame for the socioeconomic crisis in that country and should bear
responsibility for this," Nemtsov said.

Nemtsov said he personally knows Yekhanurov very well. "Yekhanurov is a
very professional and competent specialist," he said.

He also has a good opinion about Oleh Rybachuk, whom the president
appointed as state secretary on Wednesday. "This is Yushchenko's closest
associate, a highly-educated, cool, and smooth-tempered man," he said.

As for Tymoshenko, Nemtsov suggested that she is likely to lead the
opposition in the parliamentary elections set for March 2006. Nemtsov
noted that the circumstances are quite favorable for Tymoshenko.

"She is a very popular politician and the people have not yet realized that
this government [was] leading Ukraine into a crisis." It is important now to
explain to the Ukrainian people that the sacked government had "driven the
country into a very serious socioeconomic and political crisis," he said.

Russia's reaction to developments in the neighboring country are also
important, Nemtsov said. "It would be extremely undesirable for us to start
some kind of game in Tymoshenko's support," he said. -30-
=============================================================
11. UKRAINE'S PRESIDENT FIRES CABINET
Prime Minister, Who Led Crowds During Revolt, Dismissed in Political Battle

By Peter Finn, Washington Post Foreign Service, Moscow
The Washington Post, Wash, D.C., Friday, Sep 9, 2005; Page A20

MOSCOW, Sept. 8 -- Ukrainian President Viktor Yushchenko fired his prime
minister and entire cabinet Thursday after a simmering power struggle among
leaders of last year's Orange Revolution erupted into very public infighting
about alleged corruption in the government's top ranks.

The president appointed Yuriy Yekhanurov, a former economics minister and
regional governor, as acting prime minister, replacing the firebrand Yulia
Tymoshenko, and addressed the nation in an effort to calm the worst
political crisis of his young term.

The mass dismissal signaled the end of the broad coalition that led a
popular revolt after fraudulent presidential elections last November and
brought Yushchenko to power.

Ukraine is the largest of three former Soviet republics in which a
democratic opposition has taken power in this way. Western governments
have been watching it closely for evidence of whether the new leadership
can maintain unity and address endemic economic and social problems
inherited from the communist era.

On Thursday, Yushchenko addressed the nation after a last-ditch effort to
restore unity between the Tymoshenko government and his own presidential
administration.

"I knew that there were definite conflicts between those people," Yushchenko
said in his televised address. "I hoped that if each of them immersed
himself in work, there would not be enough time for mutual intrigues." But
he concluded that the government "lost the team spirit and faith."

The dismissal was triggered by a series of resignations by top officials who
charged that some of the most powerful people around Yushchenko were
using their positions to enrich themselves and reneging on one of the most
important promises of last December's revolt, the eradication of endemic
graft.

On Saturday, Oleksandr Zinchenko, Yushchenko's chief of staff, accused by
name Petro Poroshenko, head of the Defense and Security Council, and
Olexander Tretyakov, a senior presidential adviser, of "cynically carrying
out their plan to use government posts to their own ends."

"Corruption is now even worse than before," said Zinchenko, announcing his
resignation on television in a live nationwide broadcast.

As Zinchenko, a chief architect of the revolt, spoke, Poroshenko, a
confectionary and media magnate who was a key financier of the Orange
Revolution, stood scowling at the back of the room. Poroshenko moved to the
podium when Zinchenko finished to angrily deny the accusations before
reporters who were mesmerized by the verbal shootout.

"During my time in government, I did not become one penny richer or gain
one share," said Poroshenko, whose candy factories have earned him the
nickname Chocolate King in Ukraine. "I ask for one concrete fact that
proves the accusations here today."

Zinchenko's resignation was followed Thursday morning by the departure of
Deputy Prime Minister Mykola Tomenko. "I don't want to carry responsibility
for people who have created a system of corruption," Tomenko said. "Today
the president does not know what's going on in the country." Poroshenko also
resigned Thursday before Yushchenko dismissed the government.

Political analysts said the crisis stemmed in large part from the political
enmity between Poroshenko and the now dismissed prime minister,
Tymoshenko, who is one of the country's most charismatic leaders. Last year,
she galvanized huge crowds on Kiev's Independence Square, the epicenter
of the mass demonstrations that brought Yushchenko to power.

Poroshenko also aspired to the prime ministership. Igor Koliushko, head of
the Center of Political and Legal Reform in Kiev, said in an interview that
he used the security council chaired by the president to form "an
alternative government" that was in constant conflict with Tymoshenko's
cabinet.

"They tried constantly to change the decisions of the constitutional
government," Koliushko said. "The split reached such a pitch that they
couldn't possibly be together anymore."

Whatever the truth of the allegations of corruption, the public airing of
such accusations was designed to force other divisions to a climax, analysts
said. Disagreement over how to investigate alleged corruption in past
privatizations of state industries is a central issue.

Yuschenko's camp favors a relatively limited look, while Tymoshenko's wants
a deep probe.

Svitlana Kononchuk, head of political programs at the Ukrainian Center for
Independent Political Research, said Yushchenko must accept some blame
for the crisis.

"The war between Tymoshenko and Poroshenko has lasted for seven months,"
Kononchuk said. "Yushchenko gave a lot of freedom to his partners. He
assumed that these people were professionals, efficient, and they understood
the importance of the situation which Ukraine found itself in. Yushchenko
hasn't become a politician yet. He imagined himself a symbol, not a
manager."

Yushchenko, however, said Thursday that "the president cannot be a nanny for
them."

A spokesman for Tymoshenko refused to comment on the cabinet's dismissal,
but a Ukrainian news agency, quoting unnamed government sources, said that
the prime minister felt betrayed and was likely to seek a return to office
after the next election.

After that vote, the prime minister and cabinet will be chosen by parliament
rather than the president, as they currently are. The powers of the prime
minister will also increase at the expense of the president.

The crisis is likely to deepen public disillusionment with the government's
failure to deliver quickly on some of the basic promises of the Orange
Revolution, particularly rapid economic improvement. An opinion poll
conducted last month found that 53 percent of respondents believed Ukraine
was on the wrong path, up from 30 percent in April.

Yushchenko was also tarnished by recent accusations that his 19-year-old son
was leading a lifestyle far beyond his apparent means. A Ukrainian Web site
reported that Andriy Yushchenko, a student, was driving a high-end BMW, had
a luxury $30,000 cell phone and lavished cash on restaurants and other
locations around the capital. To the fury of many people in Ukraine, he also
registered as trademarks the symbols of the Orange Revolution. -30-
=============================================================
12. SENIOR RUSSIAN MPs COMMENT ON POLITICAL CRISIS IN UKRAINE

TASS news agency, Moscow, in Russian 1126 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

MOSCOW - Russia should contribute to the efforts to stabilize the situation
in Ukraine and settle the political crisis in that country. This is how
State Duma deputies today commented on the reshuffle in the Ukrainian
leadership.

Konstantin Kosachev, head of the State Duma International Affairs Committee,
has pointed out that the Russian side is ready to help Ukraine, in
particular to help it form a new team for President Viktor Yushchenko. In
his opinion, this will "have a positive effect on the progress of bilateral
relations" in the future.

Kosachev described the dismissal of the Ukrainian government as "a logical
phenomenon", the true cause of which were mistakes made by the Yuliya
Tymoshenko-led government in the process of implementing the economic
policy. "Also, it has been confirmed that the Yushchenko team is not a
single team but a group of people who do not have a constructive programme,"
Kosachev said.

At the same time, he warned the opponents of the current Ukrainian
authorities against "gloating". "Ukraine is our next-door neighbour, and the
situation in Russia largely depends on the situation there," the committee
head said.

State Duma deputy speaker Vladimir Pekhtin also believes that the dismissal
of the government led by Yuliya Tymoshenko is a logical outcome of the
events that have been taking place in the country in the past few months.
"All this shows that the authorities are weak and that the `orange
revolution' does not benefit either the state or the people," he said in an
interview with ITAR-TASS.

Dmitriy Rogozin, leader of the Motherland faction in the State Duma does not
see anything terrible in the government reshuffle in Kiev. He said he
personally knew acting Prime Minister Yuriy Yekhanurov who had been
appointed to this post by Yushchenko. "I hope he has come to stay in earnest
and for a long time because he is not a nationalist," Rogozin said.

At the same time, first deputy speaker Lyubov Sliska believes that former
Prime Minister Yuliya Tymoshenko herself was behind the dismissal of the
government. "This is a perfectly arranged and thought-out political move,"
she told journalists today.

Tymoshenko is not one of those politicians who give up easily and go. "I can
assure you that she will come back to stay in earnest and for a long time,"
Sliska said in explanation of her point of view.

The deputy is convinced that Tymoshenko's plans envisage winning a majority
during the next parliamentary election to the Supreme Council on the wave of
"the fight against corruption" and then making use of constitutional reform
to seize full power in Kiev.

"Tymoshenko is now indignant and humiliated, and she has a real chance of
winning the election on the grounds of fighting corruption," the first
deputy speaker believes. -30- [Action Ukraine Report Monitoring Service]
=============================================================
Send in a letter-to-the-editor today. Let us hear from you.
=============================================================
13. RUSSIAN AMBASSADOR TO UKRAINE BELIEVES DECISION BY
UKRAINE'S PRESIDENT TO SACK THE GOVERNMENT WAS RIGHT

Interfax news agency, Moscow, in Russian 1007 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

MOSCOW - The Russian ambassador to Ukraine, Viktor Chernomyrdin,
believes the latest decision by Ukraine's President Viktor Yushchenko
[to sack the government] was absolutely right.

"Under the circumstances, the president of Ukraine's action was absolutely
right," Chernomyrdin told Interfax over the phone on Thursday [8 September],
commenting on the Ukrainian government's dismissal.

"Yushchenko showed courage and concern for his country, not individuals,"
the ambassador stressed. "In a situation where the presidential team could
not do its work, the head of state should not have made any other decision,"
Chernomyrdin believes. -30- [The Action Ukraine Report Monitoring]
=============================================================
14.RUSSIAN RADIO: UKRAINIAN CRISIS HAS TOTALLY DEVALUED THE
LEADERS OF THE ORANGE REVOLUTION IN THE EYES OF SOCIETY

Radio Mayak, Moscow, in Russian 1100 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

MOSCOW - [Presenter] Ukraine's political crisis has totally devalued the
leaders of the orange revolution in the eyes of society. This is the opinion
of political analysts who are watching the events in Kiev. Those who
presented a united front on Maydan in the winter have now become the
worst of enemies, and promises of new revolutions are being heard.

A struggle for power is raging again with renewed vigour. Nikolay Osipov
comments on the causes and consequences of what is going on in Ukraine.

[Correspondent] Ukraine seems to be pining for fresh revolutions.
Politicians are squabbling over power again and they are fighting again.
Ministers have resigned, Yushchenko is looking for people who share his
views, whereas the people of Ukraine are wondering who is right and who is
wrong.

There are too many players in the field: Yushchenko's former ally Tymoshenko
who has been accused of corruption, Petro Poroshenko who had to resign,
and the former vice premier, Mykola Tomenko, who is threatening to stage
a new orange revolution. [Passage omitted: voice clip of Tomenko]

[Correspondent,] It is hardly likely that Ukraine is ready for more
revolutions. In the past on Maydan it was possible to feel some kind of
unity, but now everyone is for themselves. The director of the Institute for
CIS countries, Konstantin Zatulin, says it is more likely that we are
witnessing the funeral of the orange ideas because the new powers have
turned out to be no better than the old authorities.

[Zatulin] In fact, what is happening now sounds like the death knell for the
supposed innocence of the new authorities over the former ones. This is
disillusioning many supporters of the orange revolution, and this is a
serious chance for the opposition in the forthcoming parliamentary election.

[Correspondent] Indeed, there is hope for the opposition now, and the
opposition has to use its chance at the parliamentary election. Amendments
to the constitution that are to come into force limit the president's remit.
If there is a strong desire, Yushchenko could be a mere figurehead, like the
Queen of England.

In fact right now his team has abandoned him. Up to now his team showed a
unity of spirit but acted in whatever way they fancied, MP Stepan Havrysh
has told us. [Passage omitted: voice clip of MP]

[Correspondent] The situation is further complicated by the fact that,
unlike the time on Maydan, when there were two opposing camps - those of
Yanukovich and Yushchenko - right now Ukraine may split into several parts,
and every politician will be pulling the duvet towards himself: Yushchenko
in order to retain power, Tomenko for the sake of a new revolution,
Poroshenko in order to clean up his image and rid himself of corruption
allegations, and Tymoshenko will perhaps more than any of them be trying to
prove that it is she who is the main bearer of the ideas of Maydan and who
holds those ideas most sacred.

How can we expect people not to get confused when trying to chose whom to
follow amid this plethora of honest and incorruptible candidates for the
leadership of independent Ukraine? -30-
=============================================================
15. ELECTION CAMPAIGNING KICKS OFF IN UKRAINE
They have sacrificed the image of the Orange Revolution

ANALYSIS: Alexei Makarkin, deputy general director
Center of Political Technologies, Moscow
RIA Novosti, Moscow, Russia, Sep 8, 2005

MOSCOW - The dismissal of the Tymoshenko government means the start
of an election campaign in Ukraine.

After Yugoslav President Slobodan Milosevic was ousted, the late premier
Djindjic became a consistent opponent of new President Kostunica. The only
difference is that disagreements in Central Europe are largely related to
ideological matters.

Djindjic was a classic pro-western liberal, while Kostunica was a national
democrat. The issues of infighting and property division were also important
there, but still secondary. In Ukraine, these are the most essential
matters.

Yushchenko and Tymoshenko differ little on principal issues. But even their
differences (for example, Tymoshenko's populism), seem more like PR
moves geared toward forthcoming elections.

Now Tymoshenko will be seeking the role of chief opposition leader, focusing
on anti-oligarchic and anti-corruption rhetoric. But Tymoshenko's positions
have been considerably weakened by the forced resignation of Petro
Poroshenko, her team's main engine. Tymoshenko and her political allies,
especially former Secretary of State Oleksandr Zinchenko, have made a
venturous move.

They have sacrificed the image of the Orange Revolution, which has now
faded due to the corruption scandal, in which Poroshenko is embroiled, to
maximally weaken the positions of their opponents before the official launch
of electoral campaigning. Tymoshenko expects to win and regain her post
after the elections (moreover, the role of the head of the government will
rise significantly after the political reform is carried out in the
country).

But a retake on the revolution is unlikely because new turmoil will deprive
Ukraine of even illusive chances to get integrated into the West. Even the
young people who camped out on Freedom Square in Kiev in support of
Yushchenko during the Orange Revolution are unlikely to follow the leaders
who have quarreled among themselves.

For this reason, the electoral campaign is unlikely to come off extreme.
Ukrainians who have grown tired of scandals might even support some third
force, for example, the speaker of the Ukrainian parliament and former
President Leonid Kuchma's chief of staff Vladimir Litvin, who could find
support in the country's pro-Russian central and eastern regions. -30-
=============================================================
16. RUSSIAN LOWER HOUSE MPs SAY THEY SAW UKRAINIAN
CRISIS COMING, NOT A SURPRISE TO THEM
One team of crooks was replaced by another team of crooks.

Ren TV, Moscow, in Russian 1530 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

[Presenter] The Russian political elite was watching the Orange Revolution
suspiciously and sceptically and our politicians' comments today could have
been expected. Most of them say the government crisis in Ukraine has not
been a surprise to them. They forecast it in December last year.

This is not surprising if one remembers Russia's official support of
[Ukrainian President Viktor] Yushchenko's opponent, [former Ukrainian Prime
Minister Viktor] Yanukovych.

[Andrey Kokoshin, captioned as chairman of the State Duma committee for
CIS affairs and relations with compatriots] The matter is that the people,
who
came to power during the Orange Revolution, had been changing the rules of
the game, violating the law, pushing through various court verdicts [in the
course of the revolution]. And it happened that after the new coalition came
to power many of the revolution activists followed the same rules formulated
and used during the Orange Revolution.

[Gennadiy Zyuganov, leader of the Russian Federation Communist Party] As
for Tymoshenko, it's my personal opinion that she was the most energetic
activist of the Orange Revolution. But her work is interfered with. Her
cautious attempts to take the fatty lumps of meat away from the fat cats
failed. Yushchenko's inner circle interfered immediately and made attempts
to get back what they had grabbed recently. That's the main reason of their
[Ukrainians'] crisis.

[Vladimir Zhirinovskiy, leader of the Russian Liberal Democratic Party,
deputy speaker of the State Duma] I expected that and forecast that. Any
revolution would destroy those who had started it. Yushchenko should not
have thought that after he brought down the [former Ukrainian President
Leonid] Kuchma regime it would be replaced by honest and talented people.
One team of crooks was replaced by another team of crooks.

[RBK TV on the same day at 1400 gmt aired comments by State Duma deputy
Viktor Alksnis who said: "As soon as they [members of Yushchenko's team]
faced the question what to do now, after they had defeated Kuchma, they had
to face conflicts. These conflicts were irreconcilable because these people
have different ideologies, different views of Ukraine's future.

All these contradictions generated the conflicts we are witnessing today. I
think these developments are in our [Russia's] interests. And Russia could
play a subtle political game of its own in this situation."]
=============================================================
17. "WITHOUT ORANGE"

EDITORIAL: Zerkalo Nedeli, Kiev, Sep 3, 2005
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

President Viktor Yushchenko is the main lawbreaker in Ukraine, as he has
been constantly violating the constitution in appointing officials, an
influential weekly has said in an editorial article.

According to the editorial, Prime Minister Yuliya Tymoshenko's policies are
populist because she is incapable of coming up with strategies.

The editorial accused Tymoshenko of ignoring laws and common sense in
her reprivatization campaign.

Following is the text of the unsigned article published under the headline
"Without orange" in the Ukrainian newspaper Zerkalo Nedeli on 3
September; subheadings have been inserted editorially:

SELECTIVE LAW ABIDANCE
It is often said that one should not see just black and white in the
positions taken by conflicting parties in power. Well, this may be the case,
only that there is no orange to be seen either.

The conflict over the Nikopol Ferroalloys Plant has been just another,
although pretty illustrative, peak of confrontation among different centres
of influence at the height of power in Ukraine. Above all, it shows things
perceived by Tymoshenko, Yushchenko or [National Security and Defence
Council secretary Petro] Poroshenko as a formality and circumstances
under which such things are perceived so.

For one, Ms Tymoshenko is struggling to return a share in the Nikopol
Ferroalloys Plant to the state in order to put it up for auction again and
fill the state budget. This is a good goal.

The problem is that the prime minister is going to spend, in her habitual
manner, the money to come into the budget on "fish" for the people rather
than on "fishing rods" for them. Apropos, many people have a pretty lasting
impression that Tymoshenko's populism is due not so much to her campaign
goals as to her inability to formulate strategic approaches in building
Ukraine's national economy.

Moreover, in her ambition finally to settle the issue of reprivatization of
50 per cent plus one share, she is ready to disregard legal provisions which
must be observed in any civilized procedure to return such a plant into
state ownership. Obviously, the prime minister believes that one may ignore
legal trivialities for the sake of greater things.

As regards Mr Yushchenko, he guards the law. He was entirely just in
scolding the government for its haste and pressuring in the matter of
transfer of the Nikopol Ferroalloys Plant's shares. It is a different thing
that the president himself is the worst violator of the constitution and
laws in the state. He has signed over 30 personnel appointments without
the prime minister's recommendation.

As for his numerous "royal" directives, they have long since gone beyond
the limits of presidential powers as defined by the fundamental law
[constitution]. In addition, the president describes the things happening at
the Nikopol Ferroalloys Plant as confrontation between Pryvat [group
associated with tycoon Ihor Kolomoyskyy] and Interpipe [controlled by
former President Leonid Kuchma's son-in-law Viktor Pinchuk].

In this context the president makes it clear and unambiguous that it is
impossible for the government to side with one of the business groups
involved in this confrontation, one "generated by the old authorities".

Well, the president may have the right to treat the matter in this way,
provided he has taken to task business officials generated by the new
authorities, namely those who want Viktor Pinchuk's TV channels STB and
Novyy Kanal handed over to them for operation in reward for their support to
Pinchuk's positions on Nikopol, plus remuneration for their pains taken...
[ellipsis as published]

Tymoshenko's actions definitely gave reason for [Pinchuk's ally] Inna
Bohoslovska, [people's deputies] Viktor Musiyaka and Yuriy Karmazin to
bring forward the issue of the government violating the law. Their
statements (fiery, competent or vulgar) were broadcast by the three channels
of Viktor Pinchuk.

Yet form does not change essence. As regards essence, it consists in the
fact that present-day castigators and champions of the law were always too
busy with other things when Pinchuk, during Leonid Kuchma's presidency, was
building up his business empire ignoring all moral and ethical convention,
laws and rules of competition.

Thus we have every reason today to say with certainty that selective
observation of laws is not only normal practice but also a tool both for the
incumbent authorities and representatives of the opposition.

REPRIVATIZATION: OPTIONS AND TRENDS
Yet the system of on-call laws is not the last problem that came into focus
amid the fight for the Nikopol Ferroalloys Plant. There is another one: the
team in power has formed at least three trends each having different views
on how to rectify injustices committed in property privatization in previous
years.

The trends took shape on their own, as groups of interests, following the
authorities' failure to come up with a clear-cut transparent decision on
what should be done with property dished out for a song to the state [as
published, should be: by the state]. Arguments about the length of black
lists have somehow been forgotten and the process of "creeping
reprivatization" has set in.

It means that some unclear criteria are used to earmark plants as subject
to reprivatization and the state starts efforts to return them to the State
Property Fund.

The word "state" is not quite precise in this situation, although. As a
rule, the process starts at the initiative of the prime minister.

Kryvorizhstal [steelworks] may be an exception: its reprivatization was
initiated by the president as well. Thus, based on criteria known to her
alone, Tymoshenko earmarks the sacrificial plant and switches on her
mechanism for restoration of justice.

Let it be repeated that her goal is to fill the budget. Ms Tymoshenko's
implacable attitude towards the new riches of the Kuchma period is being
quite aptly employed by members of the president's entourage offering a
protective "roof" to "innocent victims".

In particular, Ihor Kolomoyskyy and [populist politician and Tymoshenko's
ally] Mykhaylo Brodskyy have announced this quite clearly.

Thus a trend of commercial "roofing" has emerged alongside that of
aggressive reprivatization. The third trend, defenders of state interests,
seems to be a pretty curious one. This is the fairway of [State Property
Fund head] Valentyna Semenyuk and a number of her fellow Socialists.
She supports reprivatization, speaking nonetheless against holding repeat
tenders.

In declaring the official point of view, Semenyuk says that the shares of
profit-making plants returned to the state should work for the budget
because hens laying golden eggs should not be cut for meat. Some people
will accept this point of view; others will be against it saying that
private owners always manage more effectively than the state.

Still others will ask themselves the following questions. On whose ticket
will the present directors of Kryvorizhstal, Azot [chemical plant] in
Severodonetsk or Illich [steelworks] run for parliament in the next
election? Which people's deputies' firms are now getting contracts to sell
Kryvorizhstal products gaining 50 dollars per tonne while the steelworks is
under control of the State Property Fund?

Which party is getting support from those funds? Maydan [Independence
Square, the heart of the Orange Revolution] wanted justice, respect for the
law and transparent authorities.

The logic of the state development is to amnesty shadowy capital, combat
against corruption in courts and offices, create an investment-friendly
environment and an articulate development strategy.

There is no black and white, if you remember. It is grey that prevails.
=============================================================
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=============================================================
18. YUSHCHENKO'S POPULARITY SLIDES IN UKRAINE

Mara D. Bellaby, Associated Press, Kiev, Ukraine, Wed, Sep 7, 2005

KIEV, Ukraine - Maria Onishchuk rushed to Kiev's Independence Square
last fall to stand shoulder to shoulder with tens of thousands, waving
orange flags and chanting "YU-SHCHEN-KO!"

Nine months later, she's back. But now, the 60-year-old grandmother is
standing under the red flag of Ukraine's Socialist Party,
demonstrating against the man she helped usher into the presidency.

Disappointment is catching up with President Viktor Yushchenko, whose
7-month-old government is being battered by corruption allegations,
political infighting and economic problems.

"We thought life would get better ... but it turns out the Orange
Revolution was just a fairy tale," Onishchuk said at a protest this week.

Prices are rising, and the economy is slowing. Yushchenko's chief of
staff quit, warning that a corrupt circle of advisers surrounds the
president. The head of the powerful Security and Defense Council
resigned Thursday for the same reason.

"Ukrainians gave Yushchenko a giant credit of faith, but now they want
results," said Andriy Bichenko, an analyst at Ukraine's Razumkov think
tank.

The center's latest poll, conducted a month ago, found that for the
first time since the Orange Revolution, the percentage of Ukrainians
who think the country is headed in the wrong direction exceeds those
who think it is in good shape.

Forty-three percent said Ukraine is on the wrong path, a jump from 23
percent in April. About 32 percent felt the country is doing well,
down sharply from 54 percent last spring. The poll of 2,011 people had
an error margin of about two percentage points.

The poll was conducted before the latest corruption allegations
against Yushchenko's administration, which was swept to power largely
on his promise to root out the corruption that thrived under his
predecessor, Leonid Kuchma.

Yushchenko also promised to create a million jobs a year, raise living
standards and put Ukraine's 48 million people on equal footing with
their powerful neighbor, Russia.

Even supporters say he overreached.

"No government in the world could deliver on all the expectations.
Some were really irrational," said Inna Pidluska, a political analyst
at the Europe Foundation. "People wanted a different life, wanted to
be happy, wanted a dramatic change from what they were used to ...
how could anyone do that?"

Prime Minister Yulia Tymoshenko, responsible for the government's
day-to-day business, decided on a populist course of raising monthly
pensions, paying off salary arrears and boosting other spending.

But as the government bumps up its spending, the economy is slowing.
The official projection now says the economy will grow by about 6
percent this year, half the gain of 2004.

Analysts think Yushchenko is likely to opt for more short-term
spending programs to appease voters because he needs to do well in
March parliamentary elections. Constitutional changes will hand many
of his powers to lawmakers.

But another populist budget could derail economic reforms being
demanded by foreign investors. Parliamentary Speaker Volodymyr Lytvyn
warned that Ukraine can't afford another year of such a "social budget."

Ukrainians are gloomy over the rising cost of food, utilities and
fuel. The government's decision to strengthen the currency, the
hryvna, against the dollar ate away at the buying power of its salary
and pension increases.

"Even salo is becoming unaffordable," complained Onishchuk, referring
to the seasoned lard that Ukrainians consider a staple. The price for
a pound has jumped from 72 cents to $2.55, she said.

Yushchenko hasn't commented on the corruption allegations, or about
his fall in popularity, but his supporters predict he will weather the
unhappiness.

"After elections, people compare the president with their ideal and it
always results in disappointment," said Boris Bespaliy, a lawmaker in
the president's Our Ukraine party. "During elections, people compare
the person with his competitors and so they are more objective."

Another colleague, Mykola Pozhivanov, said Ukrainians weren't giving
Yushchenko enough time. Change for the better is "a long process," he
said.

For all the disappointment, Ukrainians still like Yushchenko
significantly more than Kuchma, whose approval rating was around 10
percent. Yushchenko's ratings vary, but most polls say more than 50
percent of Ukrainians approve of at least some of his moves - close to
the 52 percent who voted him into office.

"I'm not a romantic, I understand it takes time," said Oleh Skripka,
lead singer of the popular band Vopli Vidoplyasova, which performed on
Independence Square during the Orange Revolution protests.

This year, Skripka turned down a request for a repeat performance for
the parliamentary vote.

"I do want to help the new government ... but (it) needs to get back
in touch with the people who really took it to heart, who suffered for
its success," Skripka said. -30- [Action Ukraine Report Monitoring]
=============================================================
19. UKRAINIAN DEPUTY PRIME MINISTER MYKOLA TOMENKO BLASTS
"OLIGARCHIC GOVERNMENT" IN PRESIDENT'S TEAM

TV 5 Kanal, Kiev, in Ukrainian 0640 gmt 8 Sep 05
BBC Monitoring Service, UK, in English, Thu, Sep 08, 2005

Ukrainian Deputy Prime Minister Mykola Tomenko has accused National
Security and Defence Council Secretary Poroshenko of setting up an
"oligarchic government" inside President Viktor Yushchenko's team.

Answering questions at a news conference where he announced his
resignation, Tomenko said he could not accept the proposal from presidential
aides to defuse the corruption scandal by having several high-profile
resignations in both camps - the Yuliya Tymoshenko government and
"in the oligarchic component of the Orange Revolution".

He said Prime Minister Yuliya Tymoshenko was still hoping for a peaceful
solution to the crisis. Speaking of his own plans, Tomenko said he would be
involved in organizing "the second stage of the Orange Revolution".

The following is an excerpt from Tomenko's news conference carried live by
Ukrainian television TV 5 Kanal on 8 September. The relay started when the
news conference was already in progress; subheadings inserted editorially:

[Tomenko] I would not mind being on a list headed by Yuliya Tymoshenko and
forming such a Cabinet of Ministers that I would not be ashamed of and that
I would not have to resign from.

NO COMPROMISE WITH "ORANGE REVOLUTION OLIGARCHS"
[Question] Mr Tomenko, has the president reacted to the resignation letter
you submitted yesterday? I understand that you signed it yesterday. That's
the first question. The second one is, do you know what happened at the
presidential administration [secretariat] behind closed doors yesterday and
whether personnel issues were addressed there? What do you expect from
the president's statement today? Whose names do you think will be named
as those heading for exit?

[Tomenko] If nothing has changed after the talks yesterday and overnight,
then, unfortunately, the principle that I talked about will be implemented -
that some people were stealing but others are resigning. An option was
proposed where several people would go from both the Tymoshenko
government and the oligarchic government of Poroshenko, and this way
the scenario proposed by experts working with the president would offer
an opportunity to say that the president has reconciled everyone and
took the optimum decision.

I find this approach flawed because neither I nor [Security Service of
Ukraine chief] Oleksandr Turchynov was involved in corruption or wrote the
names of their appointees on pieces on paper with instructions as to which
posts they should occupy. Therefore, if I am to resign along with Poroshenko
and [first presidential aide Oleksandr] Tretyakov or [State Customs Service
head Volodymyr] Skomarovskyy in order to balance things, I regard this as
political cynicism.

That is why when I was taking my personal decision, I decided to take it
independently although we held a protracted discussion on what action we
should take and the prime minister's stance was as follows - that even today
she would try to persuade the president to find such mechanisms and
solutions that would not destabilize the situation.

To her, a whole series of resignations means a serious destabilization of
the situation in this country, and she believes that there is still a chance
to convince the president to take such personnel decisions that would
defuse the situation and would convince our citizens that the authorities
are capable of acting adequately.

But while this process is still in progress, and yet another meeting is
being held today, I think that for me to wait for the consequences of this
negotiating process - [changes tack] I know the demands being made to
Tymoshenko.

After I heard our fraternal oligarchic component of the Orange Revolution
speak about proposing a list of people who should never be on the list
[presumably the list of an election bloc of Yushchenko and Tymoshenko],
starting from [former State Secretary Oleksandr] Zinchenko, Tomenko,
Petrenko [just a common name], and so on, I think they have already
overstepped the line beyond which one can talk of or seek agreements.

I see nothing terrible about Petro Oleksiyovych [Poroshenko] topping the
[election] list of the Our Ukraine People's Union as a serious and
influential person in this country. Yuliya Tymoshenko will head a list.
[Speaker Volodymyr] Lytvyn will head a list. The Ukrainian people will make
their choice and will help the president resolve this stalemate where he
does not know who should run the country.

CORRUPTION IN PRESIDENT'S INNER CIRCLE
[Question] What about the president's reaction?

[Tomenko] I think you will hear the president's reaction at 1030 [0730 gmt].

[Question] What is Mykola Tomenko going to do in the future? What is he
going to focus on? Will this be exclusively the parliamentary election?

[Tomenko] Naturally, this will be political work because it is obvious to
me, and I find it my problem, that I have failed to turn the new Ukrainian
administration into an administration that would work for the people and
that we fought for.

One thing I would like to say is that I am a bit tired of opposition
rhetoric by my colleagues because 90 per cent of the people who were in
Viktor Yushchenko's team had spent a good two or one-and-a-half years in
the opposition, and this is probably not long enough. They should have
come a bit earlier, like I did, to realize that the essence of power is not
about making money, is not about property transfers, is not about promoting
certain people to some posts.

So when these people, who for various reasons found themselves in the
opposition and joined our camp, talk of Maydan [Independence Square in
Kiev, the heart of the Orange Revolution] calling on them to do something, I
believe they have no moral right to talk about this, because if they had
been there on their own and called on people to come to Maydan, no-one
would have shown up.

GRAFT IN KIEV CITY ADMINISTRATION
[Question] Have lost your trust in the Kiev city authorities?

[Tomenko] I seems that I [words indistinct]. My political work will be as
follows. At the present time there are enough civic institutions and
political forces who would like the situation to change and who would like a
civilized, second stage of the Orange Revolution during the parliamentary
and local elections campaign to bar from power people willing to take
advantage of power and to lead to power those who wish to work for the
benefit of the Ukrainian people.

Therefore, to make things look appropriate, you can put it this way - that I
will be engaged in organizing the second stage of the Orange Revolution in
Ukraine.

[Question] What's your comment on the Kiev administration?

[Tomenko] It seems I have had no trust in it lately because the Kiev city
administration is an example of business and politics not being separated.
If you look at the overwhelming majority of deputy heads of the Kiev city
administration, you will see a classical example of a state official, who
has come from the housing business, still running this business by investing
in it from the state budget. Another businessman who has come to a deputy
mayor's post from the construction business has set up his own firm while
working in his post.

Thus, we see unique civilized corruption in Kiev. Each deputy [mayor] is
responsible for some lucrative segment of the market, and they are the only
people to go to if you have to settle some issues.

If you look at how subventions and the state budget are distributed, how
land and real estate are distributed in Kiev, you will see that there in the
Kiev city administration - in contrast to the president's inner circle where
there is less democracy and where only a few people are in charge, dividing
up things - there are at least five or seven people who have carved up areas
of influence on the Kiev market.

When we talk of millionaires or billionaires, if nothing has changed in
Kiev, I have no doubts that next year the Polish magazine [Wprost] that
finds and rates out wealthy people will publish the name of some Kiev
deputy mayor. They are not poor.

I think that Petro Oleksiyovych [Poroshenko] should soon expect competition
from some officials of the Kiev city administration for places in the top
100 wealthiest people in Europe.

[Passage omitted: Tomenko answers a question about the National Olympic
Committee head, complains about excessive use of Orange Revolution
symbols by people who had nothing to do with the revolution.]
=============================================================
20. DIVISION OPENS IN UKRAINIAN LEADERSHIP:
WILL YUSHCHENKO FALL IN?

By Taras Kuzio, Eurasia Daily Monitor, Volume 2, Issue 166,
Jamestown Foundation, Washington, D.C., Thu, September 8, 2005

It was no secret that the alliance that brought Viktor Yushchenko to power
in Ukraine had its disagreements. The alliance, forged in the second round
of the 2004 presidential elections, consisted of an eclectic group that
ranged from socialists through liberal businessmen, moderate conservatives,
and populists.

The main axis has always run between National Security and Defense Council
(NRBO) Secretary Petro Poroshenko and Prime Minister Yulia Tymoshenko. The
two camps mainly disagreed on the direction of reform, pitting Poroshenko's
market economic views against Tymoshenko's state-capitalist orientation (see
EDM, July 13). This division has now been eclipsed by one that is
potentially more damaging to Yushchenko, particularly as he prepares to
visit the United States to attend the annual opening session of the UN
General Assembly.

On September 5, Oleksandr Zinchenko held a devastating press conference
after tendering his resignation as head of the presidential secretariat
(Times, September 5 and 6).

Zinchenko had been an important member of the Yushchenko team. Until 2003 he
was a senior figure in the pro-Leonid Kuchma Social Democratic Party-United
(SDPUo) headed by Viktor Medvedchuk. Zinchenko was also first deputy
parliamentary speaker. Then he defected to Yushchenko's Our Ukraine after
the SDPUo was implicated in violent election fraud in the Mukachevo mayoral
elections (see EDM, May 6). In a clever strategic move, Yushchenko appointed
Zinchenko as the head of his presidential campaign.

Zinchenko used his press conference to accuse key members of the Yushchenko
alliance, including Poroshenko, of corruption (5tv.com.ua/video/143/0/793;
Ukrayinska pravda, September 5). Two factors explain Zinchenko's broadside.

FIRST, the presidential secretariat has been criticized for being "totally
ineffective" in terms of controlling the implementation of presidential and
government decrees (Ukrayinska pravda, September 9). When Zinchenko began
to cooperate with Pora leader Vladyslav Kaskiv to improve the effectiveness
of the presidential secretariat, Poroshenko claimed that Zinchenko intended
to head the Pora political party for the 2006 parliamentary (Ukrayinska
pravda, September 2; www.pora.org.ua).

Justice Minister Roman Zvarych had blocked Pora's attempts to create a
political party, but the courts ruled that the Ministry should register the
Pora party and backdate the registration to before March 2005 so that it can
contest the 2006 election.

Zvarych is a close ally of Poroshenko, who actively defended Zvarych during
the scandal surrounding the minister's fraudulent academic credentials (see
EDM, May 4). Zinchenko loudly criticized Poroshenko's behind-the-scenes
maneuvering and accused Poroshenko of turning the NRBO into an "all-strong
and powerful new NKVD" (Ukrayinska pravda, September 5).

Prior to his resignation Zinchenko had called upon Yushchenko to "halt
Poroshenko." During his press conference Zinchenko demanded Poroshenko's
resignation and accused him of turning the Council into a conduit to promote
cadres loyal to himself. Zinchenko also alleged that Poroshenko sought to
control the judiciary and prosecutor's office. In fact, Ukrainian media have
dubbed Deputy Prosecutor Viktor Shokin as "Poro-Shokin."

SECOND, sources close to Zinchenko have told Jamestown that a key factor
propelling Zinchenko into action was the fear that Poroshenko and his allies
would attempt to remove Prime Minister Tymoshenko. Poroshenko is known to
covet the prime minister's job and was visibly unhappy at being denied this
position in the new government. Zinchenko apparently feared that removing
Tymoshenko would badly split the Yushchenko camp and decided to act
(Ukrayinska pravda, September 5).

Besides Poroshenko, Zinchenko also targeted Yushchenko adviser Oleksandr
Tretyakov and the head of the Our Ukraine parliamentary faction, Mykola
Martynenko. All three were, he claimed, "cynically undertaking their plans
to utilize themselves being in power for their own aims" (Ukrayinska pravda,
September 5). Zinchenko accused all three of corrupt dealings and claimed
that they had ignored Yushchenko's election promise to separate business
from politics. As evidence, Zinchenko cited Tretyakov's revival of corrupt
Kuchma-era practices in the energy and telecommunications sectors.
Tretyakov is also disliked for limiting access to Yushchenko.

Martynenko is a wealthy businessman from western Ukraine (EDM, June 22).
When Kuchma was president Martynenko controlled the Interport-Kovel Free
Economic Zone (FEZ) in Volyn oblast. Before Yushchenko shut them down, the
zones could import lucrative goods such as cigarettes, alcohol, coffee, and
meat duty-free.

Martynenko has a cozy deal with Minister for Emergency Situations Davyd
Zhvannia for supplying nuclear fuel, a sector as corrupt as any in the
energy field. Martynenko also heads the parliamentary committee on Fuel
Energy, Nuclear Policy, and Nuclear Security.

Martynenko and Zhvannia backed Our Ukraine in the 2002 parliamentary
election and became parliamentary deputies. They both belonged to the
Razom business group, which unites politically unaffiliated businessmen
and is the most influential group within the Our Ukraine bloc. Tymoshenko,
like Zinchenko, has described Martynenko and Zhvannia as oligarchs and
believes them to be corrupt.

The 2005 annual list of the 100 wealthiest people in Central and Eastern
Europe, compiled by the Polish journal Wprost, includes seven Ukrainian
businessmen. Besides six oligarchs, the list also includes Poroshenko,
who ranks 95th with an estimated fortune of $350 million.

Continued association with questionable businessmen such as Poroshenko
could ultimately spell the end of the Yushchenko coalition. A Razumkov
Center poll found that the number of Ukrainians who believed that business
was being truly separated from politics had declined from 51% in April to
34% in August (Zerkalo Tyzhnia/Nedeli, August 27). If this trend is
permitted to continue due to Yushchenko's inaction, then the Ukrainian
public could come to see him as little different from those in power in
the Kuchma era. -30- [Action Ukraine Report Monitoring Service]
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