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

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

AUDITORS REVEAL MAJOR FINANCIAL ABUSES, FRAUD, THEFT
AT LARGE UKRAINIAN STATE-OWNED COMPANIES
Billions in state funds and state property squandered
Numerous schemes to transfer state property into private hands

Shocking levels of corruption in the Kuchma government

Everything started with the appointment as the head of state structures of
persons who managed them not as state managers but as private owners

The results of the interdepartmental check of 26 state-owned monopoly
enterprises shocked even the inspectors. In virtually all the holdings there
were numerous instances discovered of squandering billions of state
funds and losses of state property. [article one]

"THE ACTION UKRAINE REPORT - AUR" - Number 507
Mr. E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, TUESDAY, June 28, 2005

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

1. AUDITORS REVEAL MAJOR FINANCIAL ABUSES, FRAUD, THEFT
AT LARGE UKRAINIAN STATE-OWNED COMPANIES
Billions in state funds and state property squandered
Numerous schemes to transfer state property into private hands
Shocking levels of corruption in the Kuchma government
Interview with Mykola Syvulskyy, Head Main Auditing Directorate
By Dina Parkhomchuk, Invest-Gazeta, Kiev, in Russian 21 Jun 05; p 4, 5
BBC Monitoring Service, UK, in English, Friday, Jun 24, 2005

2. LIST OF FORMER UKRAINIAN TOP OFFICIALS ACCUSED
OF HIDING FROM PROSECUTORS
BBC Monitoring Research, in English 26 Jun 05
BBC Monitoring Service, UK, in English, Sun, 26 Jun 05

3. UKRAINE FEARS THE RISE OF NEW OLIGARCHS
By Helen Fawkes, BBC News, Kiev, Ukraine
United Kingdom, Thursday, 23 June, 2005,

4. "THE ORANGE REVOLUTION MUST REMAIN A LIVING PRODUCT"
On which all of you continue to work hard each day
NATO will be lending a helping hand,
for it is our common interest to see Ukraine succeed.
Speech by Jaap De Hoop Scheffer, Secretary General, NATO
North Atlantic Treaty Organisation (NATO) public data service
Kyiv, Ukraine, Monday, June 27, 2005 9:43 AM

5. "OUR EUROPE INCLUDES UKRAINE"
OP-ED: By Yulia Tymoshenko
Special to Globe and Mail
Toronto, Ontario, Canada, Mon, June 27, 2005

6. AFTER MOSCOW BELGIUM FOREIGN MINISTER DE GUCHT
ALSO EMBRACES KIEV
Belgian paper views foreign minister's challenges in leading OSCE
Belgian newspaper De Standaard website, Groot-Bijgaarden, in Dutch 23Jun
BBC Monitoring Service, UK, in English, Saturday, Jun 25, 2005

7. NATO TO LAUNCH PROJECT TO DECOMMISSION
UKRAINIAN ROCKET FUEL, AMMUNITION
AP Worldstream, Kiev, Ukraine, Friday, Jun 24, 2005

8. PGO FINDS PLACE GONGADZE WAS MURDERED AND SEARCHES
FOR HIS HEAD IN BILA TSERKVA DISTRICT OF KYIV REGION
Ukrainian News Agency, Kyiv, Ukraine, Fri, June 24, 2005

9. UKRAINIAN GENERAL WANTED FOR JOURNALIST MURDER
HAS BEEN REPORTEDLY LOCATED IN ISRAEL
Gen Oleksiy Pukach foundl! SBU and Interior Ministry groups after him
Article by Oleksandr Korchynskyy
Segodnya, Kiev, Ukraine, in Russian 24 Jun 05, p 3
BBC Monitoring Service,UK, in English, Mon, Jun 27, 2005

10. UKRAINIAN HUMAN RIGHTS GROUP IN ODESSA RAPS USA
FOR INTERFERENCE IN UZBEK AFFAIRS
Pravda Vostoka, Tashkent, in Russian 24 Jun 05 p1
BBC Monitoring Service, UK, in English, Sat, Jun 25, 2005

11. ACT OF RECONCILIATION BETWEEN THE UKRAINIAN GREEK
CATHOLIC CHURCH AND THE POLISH ROMAN CATHOLIC CHURCH
Polish Radio 1, Warsaw, in Polish 1400 gmt 26 Jun 05
BBC Monitoring Service, UK, in English, Sun, Jun 26, 2005

12. OBITUARY: DR MIKHAIL STERN
Born in a small town near Vinnitsa amid the turmoil in Ukraine in 1918
Veteran protester against anti-Semitism in his home region in Ukraine
Felix Corley, The Independent
London, United Kingdom, Friday Jun 24, 2005

13. UKRAINIAN HALYCHYNA ARMY MEMORIAL IN LVIV
LETTER TO THE EDITOR: From: Anna Krawczuk
Sent: Sunday, June 26, 2005 7:53 AM
Published by The Action Ukraine Report #510
Washington, D.C., Tue, June 28, 2005

14. THE EFFECT OF READING THE WHITE GUARD
After James Meek moved to Kiev, where Bulgakov's The White Guard is
set, his admiration for the novel was enriched by his knowledge of the city
James Meek, The Guardian
London, United Kingdom, Sat, Jun 25, 2005

15. KIEV'S AFTERGLOW
Ukraine's capital is having its first heady
taste of post-revolutionary euphoria
By Vijai Maheshwari, Glove and Mail
Toronto, Ontario, Canada, Wednesday, June 22, 2005

16. LETTER TO U.S. SENATOR RICHARD J. DURBIN
Your comparisons to the crimes of the Nazis, Soviet Gulags and Pol Pot
Letter from Volodymyr Kurylo, Astoria, NY, Monday, June 20, 2005
===============================================================
1. AUDITORS REVEAL MAJOR FINANCIAL ABUSES, FRAUD, THEFT
AT LARGE UKRAINIAN STATE-OWNED COMPANIES
Billions in state funds and state property squandered
Shocking levels of corruption in the Kuchma government

Interview with Mykola Syvulskyy, Head Main Auditing Directorate
By Dina Parkhomchuk, Invest-Gazeta, Kiev, in Russian 21 Jun 05; p 4, 5
BBC Monitoring Service, UK, in English, Friday, Jun 24, 2005

Mykola Syvulskyy, the head of the Main Auditing Directorate, has said that
recent checks of 26 large state-owned companies revealed numerous
abuses. Syvulskyy says that a strange trend was noted, namely, that with a
rise in output, the financial state of these companies would actually
worsen.

Syvulskyy notes that many of these companies reported a small profit and
then spent huge sums on unnecessary purchases, notably in the period
leading up to the 2004 elections.

The following is the text of the interview Syvulskyy gave to Dina
Parkhomchuk entitled "State holdings were living for their own pleasure",
published in Ukrainian business weekly Invest Gazeta on 21 June. Sub-
headings have been inserted editorially:

The results of the interdepartmental check of 26 state-owned monopoly
enterprises shocked even the inspectors. In virtually all the holdings there
were numerous instances discovered of squandering billions of state funds
and losses of state property. The government instructed the Main Auditing
Directorate to continue checks in order to disclose fully the scale of what
was stolen and develop a plan to get the holdings into effective work.

[Parkhomchuk] Were two months not enough to complete the check on the
results of the activity of state holdings?

[Syvulskyy] Yes, there wasn't enough time or powers. We discovered
numerous schemes for transforming state riches into private, but in order to
sort it all out, to go right down the chain, you need time. Apart from that,
we can carry out planned checks and so-called counter-checks only with a
court decision. From the results of our work a number of criminal cases have
already been brought, and so we will continue our work together with
law-enforcement agencies.

[Parkhomchuk] The monopoly enterprises being checked relate to the elite
of the national economy - Naftohaz Ukrayiny [Oil and gas of Ukraine],
Ukrzaliznytsya [Ukrainian Railroads], Enerhoatom [Atomic energy] and
Ukrtelekom [Ukrainian telecommunications]. Were they really all wicked
wrongdoers?

[Syvulskyy] They all had similar tendencies: with an increment of production
indicators, there was a reduction in financial results. Virtually all the
monopoly enterprises that we checked bore losses last year. Thus, the
overall profit balance amounted to 2.7bn hryvnyas, while the overall losses
amounted to 2.8bn hryvnyas (a negative balance of 82m hryvnyas).

What is more, the rates of these changes is striking; the impression was
created that last year the country was preparing in advance for emergency
events, and all those parameters were laid down in a planned order.

[Parkhomchuk] So the reasons for the sharp worsening of the financial
results of the monopolies are subjective?

[Syvulskyy] Yes. The management system of all of them had schemes
installed allowing the enrichment of private persons and structures.
Everything started with the appointment as the head of state structures of
persons who managed them not as state managers but as private owners.

Therefore I want to dispel the myth of "great managers", since they became
that thanks to certain techniques that hardly show their characters in the
best light.

FIVE MAIN SWINDLING SCHEMES --------

[Parkhomchuk] Are you calling the basic schemes ones that pumped state
resources into the private sector?

[Syvulskyy] There are quite a few of them. FIRST, there is the transfer of
state property and profitable areas of activity to private structures. The
most striking are the decisions by the Transport Ministry and Ukrzaliznytsya
to transfer 13,600 pellet carrier coaches that were a profitable area of
activity for the state to two private enterprises, Lemtrans (Donetsk) and LK
Ukrtranslizinh.

At the same time, the cabinet took the decision to reduce charges for
freight haulage for operators that carry their goods by their own or rented
transport. As a result of these actions, Ukrzaliznytsya took 300m in losses,
not to mention losses of 500m hryvnyas - the cost of the coaches.

When we started sorting this out, information appeared that the coaches
were being urgently transferred to one of the founders of Ukrtranslizinh in
Donetsk. We already received the relevant instruction from the government
and we will address this question together with the prosecutor's office and
the SPF [State Property Fund].

SECOND, there is a widespread scheme of artificially bringing enterprises
to bankruptcy. It is a whole system that operated in a number of structures.

For example, liquor plants in the Ukrspirt [Ukrainian liquor] concern were
deliberately made bankrupt. We found a Kharkiv track in the "privatization"
of those plants in Kharkiv and Zhytomyr regions.

This is what they did: they concluded contracts for provision of commodity
credit (fuel and lubricants) at an interest rate of 912 annual per cent!
As a result, the enterprises' debts mounted and, owing to crushing
conditions, there appeared big costs of the enterprise itself. We
established that as a rule there was no commodity credit at all; it was not
confirmed by documents at all.

THIRD, there is the mechanism of staff selection. For example, what sort of
people were appointed as managers of those liquor plants in 2003-2004 -
teachers, microelectronics specialists. Naturally, the demands on them were
not professional, but of an entirely different nature.

The FOURTH option of transferring state funds into private hands is a scheme
to centralize deliveries of material and technical resources. For example,
all deliveries to Naftohaz Ukrayiny go via Ukrnaftahazkomplekt. And this
structure is greatly enamoured of middlemen, not wishing to work with
suppliers directly.

Thus, deliveries of bulldozers were carried out not via a Ukrainian
representative, but via middlemen, and cost Naftohaz an additional 30m
hryvnyas. And that's only one incident. Ukrzaliznytsya worked the same way,
and thanks to the work of Ukrzaliznychpostach over 52m hryvnyas were
overpaid.

The FIFTH scheme is the use of so-called joint activity. It was actively
used by Nadra Ukrayiny and Ukrhazvydobuvannya. Wells are drilled at state
expense and before the start of industrial exploitation a private investor
appears who invests only 7 per cent of the money, but manages the whole
account, receiving 70 per cent of the profit.

Apart from that, Ukrhazvydobuvannya rented out unique property, supplied the
tenants with raw materials and then brought back manufactured goods from
them (petrol, diesel). As a result, the budget lost 35m hryvnyas in excise
duty alone.

[Parkhomchuk] And who was in charge of the financial flows? There were
probably quite a few opportunities for abuse there too?

[Syvulskyy] This is a secret of the "great managers". It's not difficult to
be a great leader and decide real tasks like the reconstruction of stations
and construction of high-speed routes when you have at your disposal all the
finances of the industry, when all six railroads are operating and a single
person shares out the money.

So it is not surprising that the largest number of abuses that we revealed
were committed in the sphere of activity of the Transport Ministry and
Ukrzaliznytsya.

Losses in that system are assessed at 3bn hryvnyas. There was also a
considerable concentration of financial flows in Naftohaz Ukrayiny. It was
clarified that the net increment in profit for transit of natural gas across
Ukrainian territory in 2004 alone amounted to 9.5bn hryvnyas.

Of that, the company kept over 70 per cent for itself and gave 2.5 per cent
to Ukrtranshaz. Having such enormous resources, the company nevertheless
showed a financial result for 2004 of only 2.8m hryvnyas.

SQUANDERING OF PROFITGS BY NAFTOHAZ UKRAYINY --------

[Parkhomchuk] Has it proved possible to clarify how the greater part of the
Naftohaz funds were spent?

[Syvulskyy] We established that Naftohaz Ukrayiny indicated a minimum
profit, while all the rest went on non-rational spending that could have
been done without. There were mass motor car purchases in the company (91),
i.e. every seventh employee was provided with a car. Motor services cost 31m
hryvnyas (I remind you that the company's balance profit is 2.8m hryvnyas)
and charter air carriage - 17.8m hryvnyas.

While having a legal department and spending 1.5m hryvnyas on maintaining
it, the company paid out another 7.5m hryvnyas for legal services.
Meanwhile, the company's lawyers lost cases that seemed impossible to lose,
which also led to colossal losses. The government instructed us to get to
the bottom of it.

In addition, large sums of money were directed to the formation of a reserve
of debts that were hopeless and doubtful of recovery - 4.4bn hryvnyas. The
money went on covering the debts of the Southern Machine-building Plant, the
IUD [Industrial Union of Donbas] and Donbasenerho [Donbas electricity supply
company].

What are these - insolvent enterprises and hopeless debtors? The work of
Naftohaz was completely ineffective, but we were unable to check all the
company's areas of activity.

[Parkhomchuk] Why? Was the commission's work hindered?

[Syvulskyy] Naftohaz back from the times of Ihor Bakay [fugitive former
Naftohaz chief] built up a structure that made it impossible to carry out a
high quality check. The company's internal security service does not allow
auditors to talk directly with executives and get information from them.

This service not only delays the process, but also fulfils censorship
functions and prepares material in a certain manner. Apart from that, we
did not obtain material on export contracts regarding key material and
technical deliveries.

I personally handed to the present head of Naftohaz Ukrayiny, Oleksiy
Ivchenko, a list of 20 company employees who were blocking our work.
Unfortunately, the decision has been taken so far to sack only two of them.

STRANGE DROP IN PROFITS OF UKRAINIAN RAILROADS --------

[Parkhomchuk] And what did Ukrzaliznytsya spend its earnings on?

[Syvulskyy] It posted a sharp drop in financial indicators: in 2003 it made
a profit of 239m, while in 2004 it was only 7m hryvnyas. At the same time,
1.5bn hryvnyas went on charitable help (most of it in the second half of
last year [in the run-up to the presidential elections]).

Help was given to the Directorate for State Affairs [then headed by Bakay]
(236.5m hryvnyas), Chernihiv Regional State Administration (114m hryvnyas),
facility No 9, as far as I know presidential dachas (102m hryvnyas over two
years).

The impression is forming that the organization was so rich that it had
nothing to spend its money on, but in parallel, in 2004, credits worth 1.3bn
hryvnyas were taken and 182m hryvnyas were paid in interest on them.
Naturally, all that "charity" was illegal. So far only the leader of the
Prydneprovskyy railroad has been brought to account, although others did
the same thing.

What is more, many dubious operations were revealed. Last year, to conduct
three auditing studies, Ukrzaliznytsya paid 300m hryvnyas to a private
company. It turned out that the structure through which this enormous amount
of money was "chased" did not have a licence to carry out that activity.

As a result, the work was done by state organizations, which were paid 16
times less money, and the rest "went away" nobody knows where. Payments
for insurance also went up by 150-200 per cent last year. The Skayd,
Dneproinmed and Ehida companies received 284m hryvnyas for insuring
rolling stock at inflated rates.

[Parkhomchuk] The increase last year in "bent" spending and losses was
characteristic of almost all state holdings. Evidently, money was "pumped"
into the presidential elections?

[Syvulskyy] Had it not been 2004, one could have guessed, but comparing the
data, we see that all the companies had a single aim, and the process was
controllable. I am sure that after the final check of the railways it will
become clear that many payments were signed "at the top" by empowered
persons or a single person. Instructions were sent out to railroad
directors - payment has been made for you, reflect it in your accounts.

[Parkhomchuk] Is the picture really identical in all the holdings? The
results of Ukrtelekom's work in 2004 show a growth in the company's profit.

[Syvulskyy] No, there is a trend here as well for a fall in profitability.
The increased profit last year was obtained from money transferred by Utel.
And so, real financial indicators without this one-off factor (600m
hryvnyas) show trends of falling profitability.

We propose giving Ukrtelekom equal rights with other operators, making it an
equal market participant, while keeping the social component under control.
Incidentally, Ukrtelekom sent 25m hryvnyas in 2004 in sponsorship help to
various organizations and persons.

SHADY DEALING AT ENERHOATOM, KHLIB UKRAYINY --------

[Parkhomchuk] What is the situation at another state monopoly - Enerhoatom
[Atomic energy]?

[Syvulskyy] The trends are the same. While increasing production volumes
year on year, Enerhoatom last year ended up with losses of 41m hryvnyas.

The reason is the same as in Naftohaz: the material and technical supply
agency provided resources at inflated prices. We discovered an amazing
fact, a dubious operation that can hide the laundering of state money.

In October 2004, without the holding of a tender, the Makiyivka private
company Ukrugleprom [Ukrainian coal industry] was given an advance
payment of 64.4m hryvnyas allegedly for electro-technical goods.

But Ukrugleprom is not on the list of enterprises that can supply that
category of goods, and to crown it all, the tax administration reported that
the enterprise had not been engaged in economic activity at all in 2004. We
still have to find out where that state money went.

On top of that, an enormous reserve of dubious debts was set up (2.1bn
hryvnyas) on the year's results, whereby losses "leapt out". Were it not for
those debts, the company's profit would amount to 1.3bn hryvnyas, and 15
per cent would have gone to the budget. But that did not happen.

[Parkhomchuk] Tell us in more detail how the hidden privatization of Khlib
Ukrayiny [Ukrainian bread] took place and on what scale.

[Syvulskyy] The company's property is not subject to privatization and
cannot be leased, but nevertheless in 2001-2004 there were 19 contracts
concluded on the transfer to commercial structures of property on lease to a
total value of 55m hryvnyas. Grain is brought to the leased enterprises and
stored there rather than to state ones.

This means that the state receives nothing for storage. Apart from that, in
November 2004 the property of the Novoukrayinskyy bakery was unjustifiably
handed over on a 10-year lease; its residual value is 20.7m hryvnyas, but it
was valued by experts at only 10.5m hryvnyas. Property losses were also
established.

When auditors tried to check the financial activity of Kharkiv No1 bakery
with an authorized capital of 55m hryvnyas, they found out that the
enterprise did not exist at the address indicated, although in the state
register it is listed as functioning.

As a result of the check it turned out that in 2001 as a result of a
conciliation agreement, part of the enterprise's property was handed over by
the Khlib Ukrayiny leasing company to cover accounts payable worth over
1m hryvnyas.

As a result of this, the bakery halted its activity and the building in
Kharkiv already belongs to a private person. The losses to the state from
this deal are assessed at 4.4m hryvnyas.

RECOMMENDATIONS EMERGING FROM THE AUDITS --------

[Parkhomchuk] As a result of the checks have any conclusions been made
and recommendations given to the government?

[Syvulskyy] On Ukrzaliznytsya the question was raised that because of the
existing centralization, the railways are being underfunded, and therefore
we asked the government not to rush the decision on raising prices for
fares.

If the railways were working at a reimbursement level of 40 per cent of
their real requirements, it is simpler to raise it to 100 per cent and then
address the question of raising fares.

It is being proposed to review the status of Ukrtelekom. It is no longer a
monopoly and has only 30 per cent of the market, but nevertheless its rates
continue to be regulated by the NKRE [as published]. As a result, the
national operator found itself in unequal competition conditions.

[Parkhomchuk] Have recommendations been given on every facility?

[Syvulskyy] Yes. And relevant government instructions have already been
made and they are now working. Our report showed which systemic decisions
need to be taken first of all. For example, the problem of reserve debts.

State holdings wrote off as expenditure over 10bn hryvnyas under the guise
of forming a reserve of dubious debts. Such amounts at state enterprises
should not pass without the knowledge of the Finance Ministry. Or wages at
ministerial level for employees at loss-making companies.

For example, in Haz Ukrayiny [Ukrainian gas] the average wage is 4,600
hryvnyas! The manager of a state enterprise is a hired servant, not the
owner. According to the constitution, the owner is the cabinet, and the
management of monopoly enterprises has to agree their actions with it.

There are individual structures that we recommended to be scrapped. They
were created recently and have not yet built up enough problems to involve
law-enforcement agencies. They are Ugol Ukrayiny [Ukrainian coal] and
Ukrinterenerho.

[Parkhomchuk] As a result of the checks it was discovered that if the
holdings had not allowed unnecessary and illegal spending, the budget could
have received an extra 5bn hryvnyas. Is it possible that in this connection
the financial plans of some companies will be reviewed?

[Syvulskyy] Altogether the non-rational spending of state funds by the
monopolies amounted to about 11bn hryvnyas. According to last year's
results, the holding companies' reserve was 5bn hryvnya, and the reserve is
the same today. Therefore, within the limits of legislation and powers, with
the help of the tax people, the holdings were already given an additional
647m hryvnyas.

At the last cabinet sitting, the finance minister [Viktor Pynzenyk] said
that many financial plans needed very serious reworking and that it made
sense to take another look at them. They will be reviewed with the aim of
optimizing expenditure and investing more funds in development.

[Parkhomchuk] Has the government given an instruction to continue checking
the five basic state holdings, or is it planned to check any other state
companies?

[Syvulskyy] We have been instructed to continue checks on all holdings, and
I will be reporting to the cabinet on the five major ones separately. This
should help decide how best to raise the effectiveness of work of the
structures in question. What is more, a cabinet instruction is being drawn
up on checks at another 18 state enterprises. They include Ukravtodor
[Ukrainian motor roads], Fonton and others. -30-
===============================================================
2. LIST OF FORMER UKRAINIAN TOP OFFICIALS ACCUSED OF
HIDING FROM PROSECUTORS

BBC Monitoring Research, in English 26 Jun 05
BBC Monitoring Service, UK, in English, Sun, 26 Jun 05

In the months following Ukraine's Orange Revolution, many former top
officials were summoned for questioning over various abuses. Some of
them failed to turn up for questioning, provoking accusations of hiding from
prosecutors. In many cases, the reported reason for their failure to appear
for questioning was that they were receiving medical treatment, often in
Russia.

This gave rise to suspicions that Russia is harbouring many Ukrainian
politicians who backed Viktor Yanukovych, the defeated pro- Russian rival of
Western-minded liberal Viktor Yushchenko in the 2004 presidential elections.
Subsequently, the Ukrainian Interior Ministry asked Moscow to help track
down several former top officials.

The list includes former chairman of the Ukrainian Central Electoral
Commission Serhiy Kivalov, former Ukrainian Interior Minister Mykola
Bilokon, former Sumy regional governor Volodymyr Shcherban and former
Odessa mayor Ruslan Bodelan.

The following are details of charges facing some of Ukraine's most
prominent former top officials, as well as their reported whereabouts.

BAKAY --------
Ihor Bakay, the former head of the Ukrainian Directorate for State Affairs
under former President Leonid Kuchma, is wanted on charges of abuse of
power and involvement in crime. Bakay is widely accused of mismanaging
state property as head of the presidential directorate.

He is reported to be currently resident in Moscow, where he had a meeting
with Ukrainian Transport Minister Yevhen Chervonenko.

It has also been reported that Bakay applied for Russian citizenship and
sought to give up his Ukrainian citizenship. The Russian immigration
authorities, however, said that Bakay does not hold Russian citizenship.

BILOKON --------
Former Interior Minister Mykola Bilokon is wanted for questioning on
suspicion of abuse of office, including financial abuses committed while
building a dacha in Lviv Region. He has also been accused in the media of
orchestrating a clampdown on human rights and media freedoms.

It was reported that Mykola Bilokon is currently a resident of Moscow, where
he has frequent contacts with Russian businessman Maksim Kurochkin and
Ihor Bakay. There have also been reports that Bilokon underwent medical
treatment in Moscow, although it is not clear what he was treated for.

BODELAN -------
Ruslan Bodelan, who was ousted as Odessa mayor in April 2005, is wanted in
Ukraine on charges of abuse of power which caused losses of about 120,000
dollars. The case involves advertising space being sold to a private company
at an artificially low price. In June, a court in Odessa sanctioned
Bodelan's arrest.

Following the fiercely disputed presidential election in late 2004, Bodelan
underwent a heart operation at the Russian Defence Ministry's Vishnevskiy
hospital outside Moscow. Subsequently, he spent at least one month there
undergoing a rehabilitation course, according to his press secretary. In
late May, she said that his return to Odessa "was not on the agenda".

In April it was reported that Bodelan was undergoing in-patient treatment in
Odessa, which was said to be the reason why he failed to turn up for
questioning at Interior Ministry's directorate in Odessa Region.

SATSYUK --------
The former head of the Security Service of Ukraine (SBU), Volodymyr Satsyuk,
is wanted on charges of abuse of office, forgery and causing material damage
to the state in especially large amounts. He is also the owner of the dacha
where Viktor Yushchenko dined immediately before being taken to hospital
with poisoning which disfigured his face.

Former SBU head Ihor Smeshko told journalists on 9 June that Satsyuk had
left Ukraine. In a recent newspaper interview, however, Satsyuk denied this,
saying that he was still in Ukraine, where he is being treated in hospital
for a heart condition. Events over the past few months have had a "negative
effect" on his heart, Satsyuk said.

Current SBU head Oleksandr Turchynov said that "there is no information"
that Satsyuk had fled Ukraine. Turchynov also said that Satsyuk has not been
formally charged with involvement in Yushchenko's poisoning.

SHCHERBAN --------
The former Sumy Region governor and a close ally of former President
Leonid Kuchma, Volodymyr Shcherban, is wanted by Ukrainian prosecutors
on charges of extortion, abuse of office and vote- rigging.

There have been reports that he is hiding in Russia or Turkey, and on 4 May,
the Ukrainian Interior Ministry asked Russia for assistance in locating
Shcherban and establishing his citizenship.

A Ukrainian progovernment daily also said that Shcherban may be in the
USA, after being granted a US visa for "investing" 5m dollars in the
American economy. Shcherban's son Artem has stayed behind and is busy
selling off the family's stakes in numerous companies in Ukraine prior to
joining his parents in Miami, the paper said.

KIVALOV --------
The former chairman of Ukraine's Central Electoral Commission, Serhiy
Kivalov, was questioned over the alleged embezzlement of property at the
Odessa law academy, which he heads. There have been no reports that
Kivalov was put on a wanted list, or that he was charged with involvement in
vote-rigging during the 2004 presidential election.

In a newspaper interview by phone in May, Kivalov said he was undergoing
medical treatment for hypertension and therefore could not be questioned at
the moment. Kivalov denied that he was hiding from investigators, but
refused to disclose his whereabouts, saying he would turn up for questioning
when he is well.

Kivalov reportedly stayed in Moscow in early 2005, but in an interview, he
dismissed reports that he was seen while visiting a Moscow restaurant.

In a TV interview in May, Ukrainian Interior Minister Yuriy Lutsenko said
Kivalov had returned from Russia and was questioned in Odessa. On 9
June, Kivalov was seen attending Russia Day festivities in Kiev. -30-
===============================================================
3. UKRAINE FEARS THE RISE OF NEW OLIGARCHS

By Helen Fawkes, BBC News, Kiev, Ukraine
United Kingdom, Thursday, 23 June, 2005,

At first sight, the Bentley dealership, which joins other luxury car
showrooms displaying Porsches and BMWs, suggests that times are good
for Ukraine's super rich, yet scratch the surface and it becomes clear that
the fortunes have changed for some of them.

Following the Orange Revolution, which led to Viktor Yushchenko taking
power, it seems life has become harder for Ukraine's exclusive club of
oligarchs. Many of them had supported the blue coloured campaign of the
pro-government candidate Viktor Yanukovych. Now they have to face the
music.

"To start with they thought it was just a bad joke," says deputy prime
minister Oleg Rybachuk. "They underestimated how things would change."

SEVERED LINKS -------
It was the controversial privatizations of state enterprises in the 1990s
that led to many leading Ukrainians making vast fortunes. These groups of
business people, which are based in the industrial East and in Kiev, contain
some of the wealthiest and most influential people in the country, including
former President Leonid Kuchma and many of Ukraine's oligarchs.

During his 10-year rule, Mr Kuchma was accused of cronyism and presiding
over one of the most corrupt countries in Europe. "The old system was all
corrupted," says Mr Rybachuk. "Business and politics were interconnected.
People would just walk around with kilos of cash and they used to believe
they could do what they liked."

NEW AUCTION --------
For many of the business elite, the link to the top political office was
severed when Victor Yushchenko was elected president in December.

His government vowed to crack down on corruption and has been reviewing
many of the privatisation deals.

"We have a sense that the power of the oligarchs has been reduced, in terms
of privileged access, influence on public policy, and non transparency in
business," says the World Bank's Ukraine director Paul Bermingham.

Earlier this month, two of the country's most successful oligarchs lost one
of their most prized assets - the Ukrainian steel giant Kryvorizhstal.
Viktor Pinchuk, the son-in-law of the former president, and Ukraine's
richest man Rinat Akhmetov bought it from the state for $800m last year.
Analysts believe it could be worth up to $3bn.

Following a series of court cases, Kryvorizhstal is now owned by the
government again and is to be put up for re-auction, despite protestations
from Mr Pinchuk and Mr Akhmetov that this is illegal.

NO YUKOS HERE ---------
Some investors fear that Ukraine may follow Russia in jailing oligarch
opponents like Mikhail Khodorkovsky who headed the Yukos oil company
and was convicted on tax and fraud charges.

VICTOR PINCHUK IS NOT A HAPPY TYCOON --------
A number of officials linked to the opposition are being investigated by the
police about a variety of alleged offences. And President Yushchenko has
made loud pledges to continue to his campaign to target those who turned
Ukraine into a "criminal nation".

UNTAINTED TYCOONS --------
But not all Ukraine's tycoons are connected with the previous
administration.

Some of the current cabinet ministers, including Prime Minister Yulia
Tymoshenko, are also considered to have been oligarchs in the past.
It is not clear what they own now since a declaration of their business
interests has not been made public.

The pace of economic reform has been slow since Mr Yushchenko became
president and there is concern that some of the power of the oligarchs will
just be transferred to others. "We could see a new type of oligarch emerging
with links to the government," predicts Mr Pinchuk.

For many of those who took part in the Orange Revolution, many of them
ordinary Ukrainians living in poverty, this would be failure, since a key
demand of the protestors was for a European style economy not controlled
by oligarchs of any colour. -30-
------------------------------------------------------------------------------------------------------
http://news.bbc.co.uk/1/hi/business/4114342.stm
===============================================================
4. "THE ORANGE REVOLUTION MUST REMAIN A LIVING PRODUCT"
On which all of you continue to work hard each day
NATO will be lending a helping hand,
for it is our common interest to see Ukraine succeed.

Speech by Jaap De Hoop Scheffer, Secretary General, NATO
North Atlantic Treaty Organisation (NATO) public data service
Kyiv, Ukraine, Monday, June 27, 2005 9:43 AM

Ladies and gentlemen, Dear friends,

Last December, Ukraine captured the world's imagination. Braving sub-zero
temperatures and the very real threat of a violent response, the people of
Ukraine launched a non-violent "revolution" a revolution that sought not to
overthrow a constitutional order, but to enforce one. The so called
"radical" demand of the demonstrators who filled Independence Square was
simply that the actual winner of a democratic election should be permitted
to take office and govern.

NATO followed this process closely. At every stage, we did what we could to
help ensure a non-violent outcome to the crisis an outcome that would be
consistent with the democratically expressed will of the Ukrainian people.

As a community of shared values, we made clear to the previous Ukrainian
government that the conduct of free and fair Presidential elections would be
an important benchmark of how far Ukraine had come in her democratic
transition. We stressed that this, in turn, would determine how far Ukraine
could expect to come in realising her stated ambitions to integrate more
fully into the Euro-Atlantic community.

We made clear during the crisis our firm opposition to the use of force
against peaceful demonstrators, and our equally firm support for Ukraine's
sovereignty and territorial integrity. We also made the crisis an important
focus of our dialogue with Russia, ultimately agreeing on a joint appeal for
a peaceful, democratic re-run of the flawed election.

But however positive the international expressions of support may have
been, whether from the European Union, Poland, Lithuania, or NATO, it was
ultimately the Ukrainian people themselves who resolved the crisis, by
refusing to compromise on their values, or on their expectations for the
future.

Through their courage, the people of Ukraine reminded us that genuine
democracy is not about words, but about actions. It is not simply about
governmental institutions and constitutional structures, but also about a
vibrant civil society, a vigilant media, and other constituencies that will
hold their political leaders to account.

I was pleased to be able to attend President Yushchenko's inauguration
earlier this year. My impression on that occasion, confirmed today, was that
just being here in Kyiv one feels that this is in many ways a very different
country than it was just a short time ago. However, to make certain that
democracy is fully consolidated and firmly rooted, it will be necessary to
press ahead with crucial, often difficult reforms.

The "Orange Revolution" must not become a treasured memory of a few
courageous weeks. It must remain a living project on which all of you, both
inside and outside of government, continue to work hard each day.

To keep Ukraine on the course charted by its people in December, President
Yushchenko has set out a broad and ambitious reform agenda. At the
NATO-Ukraine Summit meeting in February he outlined for us his strategy of
pursuing full integration into the Alliance. This strategy is a bold one,
but its pursuit offers significant promise to improve the lives of the
Ukrainian people. In the short term, this will involve significant changes
in Ukrainian domestic and foreign policy, many of which are already visible.

NATO cannot drive this process. The responsibility and the substantial
burdens involved rest squarely on the shoulders of the Ukrainian
leadership. But we can help and we are helping.

In response to President Yushchenko's appeal, we have agreed to launch an
Intensified Dialogue on Ukraine's membership aspirations and the reforms
necessary to achieve them. This Dialogue will provide an opportunity for the
Ukrainian government and people to learn more about NATO's goals,
principles and missions. It will also allow us in NATO to learn more about
Ukraine's goals of reform and integration, and how we can further enhance
our assistance in support of these objectives.

The Intensified Dialogue is therefore a major step forward in our
relationship. But just as important is the decision we have also taken to
intensify our practical cooperation in five key areas:

· FIRST, we will work together to help strengthen Ukraine's democratic
institutions, in particular to help ensure democratic control of armed
forces not only within the Ministry of Defence, but throughout Ukraine's
security sector.

· SECOND. we will intensify our work on overall defence and security
sector reform for example to modernise the budget of the armed forces, and
the command structure -- in order to help Ukraine develop a modern, capable
and accountable security establishment.

· THIRD, we will enhance our political dialogue, in order to cooperate
more effectively on security issues of common interest, such as efforts to
pursue a political settlement in Moldova, or steps to improve export control
regimes and to combat terrorism.

· FOURTH, we will intensify our work on managing the social and
economic consequences of reform. This includes NATO support for the
destruction of dangerous stockpiles of Soviet-era munitions and small arms,
the largest programme of its kind anywhere in the world. It also includes
NATO support for the re-training of military personnel to be released during
the anticipated downsizing of the Ukrainian Armed Forces.

· [FIFTH] Finally, we will enhance our cooperation in the area of
public information, in order to ensure that the Ukrainian people have access
to complete, accurate information about NATO and the NATO-Ukraine
relationship.

All of these are priority reform areas for the new Ukrainian administration.
They are, of course, vital to the success of Ukraine's aspirations.

But more importantly, they are vital to the consolidation of democratic
change, and would be necessary with or without external support. They are
also areas where NATO and its member states have substantial expertise
and, in some cases, material assistance to offer. And we already have very
effective mechanisms in the framework of the NATO-Ukraine Commission
that can carry forward our joint work in these areas, now that we have the
firm political will on all sides to do so.

The final area public information is one in which I would like to ask for
your help. For several years, we found ourselves in the unusual situation of
dealing with a Ukrainian leadership that sent very mixed messages with
regard to NATO.

The Alliance is not in the propaganda business. Ukraine's Euro-Atlantic
choice is a sovereign decision for the Ukrainian people and their elected
leaders to make and not for anybody else. But we do have a common interest
in ensuring that information about what NATO does and what it stands for,
and about the very real progress we have achieved within the NATO-Ukraine
Distinctive Partnership, is available to Ukraine's citizens, so that they
can make an informed judgement about their government's policy of
integration.

I know that many people here in Ukraine still think of the Cold War when
they think of NATO. I spend a lot of time, wherever I go, asking people to
take a fresh look at the Alliance. Because it is a very different
organisation.

Today's NATO is designed to help provide security in a new world. We know
that we do not have to defend against any particular state any more. Today,
we are defending against threats we all face: terrorism, the proliferation
of weapons of mass destruction and the unpredictable consequences of
"failed states" and regional conflicts.

We are projecting stability in places it is needed and where the Allies'
interests are at stake: the Balkans, Afghanistan, training the Security
Forces of Iraq, and now supporting the African Union in Darfur. And we are
doing it with partners, because that the only way to succeed is together.

Our strategic partnership with Ukraine has been an essential part of this
transformation. And it shows how much our partnership has rewarded both
NATO and Ukraine. Thousands of Ukrainian servicemen have acquired the
experience of serving side-by-side with Allied soldiers in the Balkans. This
shared experience has permitted Ukraine to make substantial contributions
to peace support efforts throughout the world, including those outside the
NATO framework, for example in Africa and in Iraq.

Ukraine has recently agreed to provide support to NATO's anti-terrorist
naval patrols in the Mediterranean Sea, and to consider a possible
contribution to NATO's training mission in Iraq and its support to the
African Union in Darfur. We have worked together to reform the Ukrainian
military as well, making it more interoperable with NATO forces and better
able to respond to Ukraine's actual national security needs.

And finally, anyone who still believes that there is still any truth to the
old Cold War stereotypes about the Alliance should look at the extensive
partnership we have built over the past years with Russia. In the
NATO-Russia Council framework, we have launched concrete joint initiatives
on terrorism, military-to-military cooperation, theatre missile defence, and
many other areas.

Like President Yushchenko, we also see Russia as an important part of the
security architecture of the Euro-Atlantic area. Ukraine's membership
aspirations and Ukraine's and NATO's partnerships with Russia are not
mutually exclusive policies.

Ladies and gentlemen, Dear friends,

There is a new spirit of hope in the air, in Ukraine and in Ukraine's
relationships with NATO and other Euro-Atlantic and European institutions.
The courage and maturity the Ukrainian people demonstrated during the
"Orange Revolution" not only ushered in a period of profound democratic
change here in Ukraine. They also "revolutionised" the way your country is
viewed in Europe and in North America.

The future of a peaceful, prosperous, democratic Ukraine is now in your
hands. But know that as you travel the difficult road ahead, you will not be
alone. NATO will be lending a helping hand, for it is our common interest to
see Ukraine succeed. -30- [The Action Ukraine Report Monitoring Service]
===============================================================
5. "OUR EUROPE INCLUDES UKRAINE"

OP-ED: By Yulia Tymoshenko
Special to Globe and Mail
Toronto, Ontario, Canada, Mon, June 27, 2005

Long-time members of the European Union now seem to doubt its future,
but we in Ukraine look at the EU with hope and admiration. To join in the
EU's progress is the basic object of our foreign policy, for Ukraine has
discovered that nationhood is not an end but a beginning.

Indeed, European unity is indivisible: When one nation is ostracized, all
are not free. We Europeans are caught in an inescapable net, tied in a
single garment of destiny. Every aspect of our shared culture, if not the
last century of shared suffering, confirms that for us. Whatever affects one
European directly affects all indirectly.

Never again can we afford to live with the narrow notion of two Europes, of
haves and have-nots, of insiders and outsiders. Anyone who lives on the
European continent cannot - indeed, must not - be considered a stranger to
its union. Today's Pax Europa and pan-European prosperity depend on this.

Of course, some people mutter that Ukraine is not Europe. Let them come to
Kiev and speak to the people, young and old, factory worker, farmer's wife,
the lawyers and doctors and teachers who stood in the cold and snow for
weeks on end last winter to defend their freedoms.

Are they not united with those who stood alongside Charles de Gaulle in the
French Resistance? Are they not one with those who died fighting for the
Spanish Republic in the 1930s, who liberated Budapest in 1956 and ended
fascism in Spain and Portugal in the 1970s? Are they not animated by the
same spirit as Poland's Solidarity and the peaceful masses that created
Prague's Velvet Revolution in 1989? That is the true European spirit, and no
doubts can crush it.

To those who say Ukraine is too backward for EU membership, I say: Let
them, too, come to my country and see the mothers who stay late at night at
work teaching their children to use their workplace computer. Let them come
to the language classes in every village and city where young people are
readying themselves for Europe by learning French and German and English.

Those who doubt Ukraine's European vocation should understand that Europe
is not a matter of hardware and superhighways; it is the unquenchable desire
for freedom, prosperity and solidarity.

I believe that our future is as promising as Europe's past is proud, and
that our destiny lies not as a forgotten borderland on a troubled region,
but as a maker and shaper of Europe's peace and Europe's unity.
Self-determination no longer means isolation, because achieving national
independence nowadays means only to return to the world scene with a new
status.

New nations can build with their former occupiers the same kind of fruitful
relationship that France established with Germany - a relationship founded
on equality and mutual interests. That is the type of relationship that my
government seeks with Russia, and achieving it is how we can help extend
the zone of Europe's peace.

Of course, it is premature to do more than indicate the high regard with
which we view the prospect of EU membership. We know that our part in
that great edifice will not be built overnight. We know that the great works
of European unification lie not in documents and declarations but in
innovative action designed to better the lives and insure the security of
all Europeans.

Building a Ukraine worthy of EU membership will not be easy, cheap or fast.
But, like the EU itself, it will be built and it will be done. We know the
challenge is great, but the prize is worth the struggle, and Europe should
know that this is our goal.

Part of the work of renewing Ukraine is a creative battle to put an end to a
nightmarish century during which fascism and communism - ideologies born
in the heart of Europe - battled for mastery. Only a few months ago, in
cities throughout Ukraine, our children and our parents confronted armed
troops, snarling dogs, and even death. Only a few years ago, a young
journalist, Georgy Gongadze, seeking to inform the public about our old
regime's corruption, was brutalized and beheaded by that regime's thugs.

But our Orange Revolution last winter shows that Ukraine's people prevailed.
So, despite today's doubts and difficulties, I retain an abiding faith in
Europe. I refuse to accept despair as the final response to the ambiguities
and horrors of Ukraine's history. I refuse to accept the view that Ukraine
is so tragically bound to the starless midnight of communism's legacy that
we can never see the bright daybreak of peace and true European unity.

When the EU's citizens ponder Ukraine's place in Europe, they should look
both beyond and more closely at the face they see. They should look beyond
the ravaged wastelands that communism inflicted, beyond the poverty, and
beyond the social divisions through which our discarded ex-leaders sought
to prolong their misrule.

Instead, they should look closely at the face of our president, Viktor
Yushchenko, ravaged by poison during last year's election campaign, and
recall the words of the great Frenchman André Malraux, for whom "the most
beautiful faces are those that have been wounded."! -30-
------------------------------------------------------------------------------------------------------
Yulia Tymoshenko is Prime Minister of Ukraine.
------------------------------------------------------------------------------------------------------
LINK: www.theglobleandmail.com
===============================================================
6. AFTER MOSCOW BELGIUM FOREIGN MINISTER DE GUCHT
ALSO EMBRACES KIEV
Belgian paper views foreign minister's challenges in leading OSCE

Belgian newspaper De Standaard website, Groot-Bijgaarden, in Dutch 23Jun
BBC Monitoring Service, UK, in English, Saturday, Jun 25, 2005

KIEV: Six months after going down on his knees in Moscow, Foreign Minister
Karel De Gucht (Flemish Liberals and Democrats) also expressed his support
this week for the European aspirations of the new government in Ukraine -
which came about much to Moscow's displeasure.

How is all this to be reconciled? Next year Belgium heads the Organization
for Security and Cooperation in Europe (OSCE) and that would be a success.

De Gucht was given the red-carpet treatment in Kiev this week. A one-hour
reception with President Viktor Yushchenko - still the badly-affected face
of democracy in Ukraine - is not given to everybody. So what is our country
doing with the new democratic government in Ukraine? Do we support the
Ukrainian aspirations for EU membership despite the recent mood against
further enlargement of the EU?

For the present Minister De Gucht placed himself in Kiev in the group of EU
countries which wish to keep all doors open. Not completely in favour - like
the Poles or the Lithuanians - but not wholly critical of enlargement, as
bigwigs in, among other places, France, are currently intimating. "Belgium
recognizes Ukraine's European aspirations and welcomes Ukraine's European
choice," a joint declaration by De Gucht and his counterpart, Borys
Tarasyuk, states.

Minister Tarasyuk, a former ambassador in Brussels, said only last week that
he was tired of bland promises from EU countries. "I am not becoming
pessimistic about our chances of ever joining the EU," Tarasyuk says in a
conversation with De Standaard, "but I believe that there is a lack of a
conceptual approach among EU politicians. Fortunately, those leaders are now
beginning to realize that our EU candidacy is not just the wish of a couple
of bureaucrats in Kiev but our people's sincere desire."

Ukraine has taken steps towards democracy since its Orange Revolution last
autumn but still falls short in many areas, Minister De Gucht also observes.
"Their candidacy will take time," De Gucht said in Kiev. "I believe that
Ukraine's destiny lies in Europe but for that Kiev must first take all the
steps to make its integration into the EU possible. On the one hand, they
are opting for an open economy but, on the other, they are still adopting
protectionist measures for their own economy."

So where to go from here? The ball is first in Kiev's court, according to De
Gucht - become integrated into the European economy, then we'll see. Kiev is
humming as never before but, at the same time, the new government in Kiev
cannot dispel the impression that former President Leonid Kuchma's former
authoritarian regime has been replaced by a gentler regime which in
principle is in danger of taking the same path - the creation of a new
"party of power," to which everybody owes obedience.

The difference from the former government is that nobody has yet been killed
and that the squalid features of the Kuchma regime have not yet reappeared.

Next year, Belgium will be chairman of the OSCE - a loose alliance extending
from the United States to Vladivostok. In that context, Minister De Gucht
intends to build up ties of friendship everywhere. Last December he did that
in Moscow - just before the US government intimated that Russia was taking
the wrong path under Vladimir Putin.

What does Belgium intend to do with that OSCE chairmanship? "Attend to
'frozen conflicts', such as Transdniestria (a disaffected republic in
Moldova backed by Russia - De Standaard editor's note). Whether that will
succeed is doubtful but the attempt is praiseworthy.

The Kremlin in particular remains a noteworthy challenge in that OSCE
context - when OSCE observers noted last year that there had been massive
fraud in the first rounds of the elections in Ukraine, OSCE member Russia's
response was that those OSCE observers were refusing to respect the
Ukrainian people's "democratic wishes".

How De Gucht means to reconcile his affection for Russia with his moral
support for the EU aspirations of the new Ukraine - the only country with
which Russia can identify for historical and cultural reasons - is a
question which for the present still remains in the foreign minister's head.

Perhaps the order at the Foreign Ministry is, Don't stick your neck out too
far. -30- [Action Ukraine Report Monitoring Service]
===============================================================
7. NATO TO LAUNCH PROJECT TO DECOMMISSION
UKRAINIAN ROCKET FUEL, AMMUNITION

AP Worldstream, Kiev, Ukraine, Friday, Jun 24, 2005

KIEV - NATO will launch a multimillion-dollar pilot project to decommission
vast quantities of obsolete missile fuel, ammunition and small arms in
Ukraine, a NATO official said Friday.

Michel Duray, the head of NATO's office in Kiev, said that the Western
Alliance was prepared to donate some Euro 75 million (US$90 million) for the
safe disposal of more than 16,000 tons of highly toxic missile fuel, and
hundreds of thousands of tons of ammunition and small arms from Ukrainian
arsenals, some dating back to World War I. The project is scheduled to begin
in September and the selection of a private company to run the
decommissioning is underway, Duray said at a NATO-sponsored round table
in Kiev. He did not elaborate.

Meanwhile, Ukraine's representative at NATO, Gen. Volodymyr Shkidchenko,
said that the country had already received Euro 2.3 million (US$2.7 million)
for the decommissioning from a special fund, the Unian news agency reported.

"Our specialists are actively working on practical aspects of the
decommissioning project," Shkidchenko was quoted as saying.

With the collapse of the Soviet Union in 1991, Ukraine inherited the world's
third-largest nuclear arsenal and huge quantities of small arms and
ammunition.

It later renounced nuclear weapons and transferred some 1,300 nuclear
warheads back to Russia for disarming. Ukraine's last missile silo was
destroyed three years ago, but rocket fuel remains stored in several
facilities throughout the country.

Ukraine's cash-strapped military has repeatedly sought international aid to
destroy redundant ammunition and weapons since it cannot safely maintain
its dilapidated arsenals, where accidents are frequent. -30-
===============================================================
8. PGO FINDS PLACE GONGADZE WAS MURDERED AND SEARCHES
FOR HIS HEAD IN BILA TSERKVA DISTRICT OF KYIV REGION

Ukrainian News Agency, Kyiv, Ukraine, Fri, June 24, 2005

KYIV - The Prosecutor General's Office has established that journalist
Georgy Gongadze was murdered in Bila Tserkva district of Kyiv region,
and is now searching for his head there. Deputy Prosecutor General Viktor
Shokin said this in his interview with the Fakty newspaper.

"Georgy Gongadze was murdered in the woods in Bila Tserkva district.
There was an attempt to burn his body in the same place," he said.

According to Shokin, during the investigative experiment, three persons
accused of the murder showed a clearing in the woods where the crime has
happened, but they pointed out to different spots and the Deputy Prosecutor
General concluded that the murder was committed at night.

"That is why when searching for such material evidences as Georgy's belt
buckle and his head, we have to dig the ground in different places,"
Shokin said. The defendants said they buried the head at the place the
journalist was killed. Shokin refused to tell why the assassins decapitated
Gongadze, saying that it is an investigation secret.

As Ukrainian News earlier reported, Prosecutor General Sviatoslav Piskun
said his agency plans to send the Gongadze murder case to court in late
June. A local court sanctioned the arrest of two people suspected of
involvement in the killing of Gongadze on March 3. Another suspect has been
ordered not to leave town.

Moreover, a search has been launched for Oleksii Pukach, who headed the
department of external surveillance and intelligence at the time when
Gongadze was murdered. The PGO has established that Gongadze's murder
was not accidental, that his murderers were carrying out a criminal order,
and that they worked in the department headed by Pukach.

Gongadze disappeared in September 2000. His headless body was found in
the woods outside Kyiv two months later. His kidnapping triggered a
political scandal in Ukraine, which was centered on the possible involvement
of former president Leonid Kuchma, the former head of the Ukrainian
Presidential Administration Volodymyr Lytvyn (currently the speaker of the
parliament), the former head of the Security Service of Ukraine Leonid
Derkach (currently a member of the parliament), and former Interior Affairs
Minister Yurii Kravchenko (who died in March) in the murder. -30-
===============================================================
9. UKRAINIAN GENERAL WANTED FOR JOURNALIST MURDER
HAS BEEN REPORTEDLY LOCATED IN ISRAEL
Gen Oleksiy Pukach foundl! SBU and Interior Ministry groups after him

Article by Oleksandr Korchynskyy
Segodnya, Kiev, Ukraine, in Russian 24 Jun 05, p 3
BBC Monitoring Service,UK, in English, Mon, Jun 27, 2005

Gen Oleksiy Pukach, wanted on charges of murdering journalist Heorhiy
Gongadze, has been located in Israel, a Ukrainian newspaper has said. It
said that special Security Service and Interior Ministry groups rushed to
Israel as soon as they learned the news, but extradition procedures are very
complicated.

The following is the text of the article by Oleksandr Korchynskyy entitled
"Gen Oleksiy Pukach found in Israel! SBU and Interior Ministry special
groups are after him" published in the Ukrainian newspaper Segodnya on
23 June; the subheading is as published:

Segodnya learned that on Friday [17 June] sensational news came to Ukraine
that Police Gen Oleksiy Pukach, who is on the international wanted list, has
been discovered in Israel. We remind you that Pukach is sought by our
country's law-enforcement agencies on charges of direct participation in the
murder of journalist Heorhiy Gongadze. Our paper, by the way, at one time
expressed the theory that Pukach might be in hiding in Israel. And now, as
far as we know, he has been found there by Israeli special services.

According to unconfirmed reports, they are just watching, not detaining him.
Segodnya's sources reported that having received information about the stay
of Pukach in Israel, a group of several SBU [Security Service of Ukraine]
officers left for that country in haste on Saturday [18 June]. A day later,
on the Sunday, a group of Interior Ministry staff left for the same
destination (evidently they got the news later).

If it is going to be a question of the extradition of Pukach, then according
to Ukrainian legislation, the Prosecutor-General's Office [PGO] is the only
agency that can officially demand the return of the accused. However, our
sources reported yesterday that neither the Interior Ministry nor the SBU
told the PGO anything about their visits to Israel.

It is not being ruled out that in this case the recently heightened
competition between the security departments came into play; each of them
has an interest in being the first to bring President Viktor Yushchenko news
of the capture (by their own forces) of the main person accused of the
Gongadze murder, who may also talk about those who ordered the killing.

Be that as it may, it is unlikely that the Interior Ministry and SBU special
groups will come back from the Promised Land with Pukach in handcuffs.
The extradition procedure from Israel is extremely complicated, especially
if Pukach has managed to become a citizen of the country, and could drag
on for years. Although, theoretically speaking, the general could simply be
kidnapped, brought to Ukraine illegally somehow and sort of "accidentally"
discovered here (but later at a future trial juridical questions will
arise).

It is no secret that our operational service in the past "treated
themselves" to similar things. In this way, for example, according to this
paper's information, at one time one of the contract killers involved in the
shooting of people's deputy Yevhen Shcherban was brought from Russia to
Ukraine in the boot of a car. True, it is easier to do this from Russia than
from Israel, but still\ý [ellipsis as published]

In 2000 Oleksiy Pukach occupied the post of chief of the criminal search
directorate (in plain speech - the visual surveillance service, "the
visuals", "the seven") of the Ukrainian Interior Ministry. Pukach is now in
the same case with those accused of murdering Heorhiy Gongadze - police
colonels Mykola Protasov and Valeriy Kostenko. The fourth accused, who on
that fateful evening was driving the car that had taken Heorhiy away, police
officer Popovych, is out on bail.

On 16 September 2000 Pukach and the aforementioned three took the
journalist to Bila Tserkva District [Kiev Region] and killed him there. What
is more, according to the inquiry's theory, the general himself allegedly
strangled Heorhiy with his own belt. Then the killers buried the body and
went to a cafe to "mark" the event.

We also remind you that Pukach had already been detained by the PGO on
22 October 2003. At that time the court originally authorized his arrest,
but on 5 November 2003 (shortly after the dismissal of the then
prosecutor-general, [Svyatoslav] Piskun) the court replaced the detention by
a bail order, after which Pukach was not seen in Ukraine.

THREE MAIN QUESTIONS ABOUT PUKACH --------

FIRST, what importance does the capture of Pukach have for solving the
Gongadze case? If Pukach admits his part in Gongadze's murder, as the
ringleader of the group of killers, he may lead to the people who ordered
the crime, who gave him the order to sort out the journalist. Apart from
that, Pukach may say how Gongadze's body was beheaded and reburied in
Tarashcha [forest where it was found] (although it is not an established
fact that the general was in the know about this story).

And this, in turn, may lead to the people who ordered the "cassette
scandal". Meaning the people who organized the recording of conversations in
[former President Leonid] Kuchma's office on the so-called Melnychenko tapes
[allegedly recorded by former Ukrainian state guard Mykola Melnychenko], and
who later organized their publication.

SECOND, who can Pukach name as the person who ordered the killing of
Gongadze?

There are two options. The first is that Pukach will say that he got the
criminal order from former Interior Minister Yuriy Kravchenko (now deceased)
and that he does not know who gave the order to Kravchenko (so the thread
leading to the real people behind the crime will be broken, perhaps
forever). The second is that he will name the people who gave the orders to
Kravchenko. In that case, the tangle may unravel to the end.

THIRD, how likely is it that Pukach will admit his part in the killing of
Gongadze? The answer directly depends on what other proof the inquiry has
about Pukach's participation in the murder of Gongadze apart from the
evidence of the men already arrested in the case (after all, in theory the
accused could specify both themselves and Pukach).

If there is such proof, then the inquiry will probably find it not difficult
to incline Pukach to making a "frank confession". If not, then the inquiry
should not expect Pukach to make a confession of his guilt and hence not
get evidence from him about the people who ordered the crime.

[Editor's note: Israeli police yesterday denied Ukrainian media reports that
Pukach has been found in Israel, see "Israeli police deny Ukrainian media
reports that Gongadze suspect traced", TV 5 Kanal, Kiev, in Ukrainian 1700
gmt 23 Jun 05] -30- [The Action Ukraine Report Monitoring Service]
===============================================================
10. UKRAINIAN HUMAN RIGHTS GROUP IN ODESSA RAPS USA
FOR INTERFERENCE IN UZBEK AFFAIRS

Pravda Vostoka, Tashkent, in Russian 24 Jun 05 p1
BBC Monitoring Service, UK, in English, Sat, Jun 25, 2005

Statement by the Odessa Organization of International Society for Human
Rights in connection with the events in Uzbekistan:

The events that took place in the town of Andijon on 13 May are still
attracting the attention of the so-called "international community" which
was disturbed by the Uzbek authorities' lawful and adequate actions to
establish the constitutional order.

Under the pretext of care for human rights, attempts to interfere in
independent Uzbekistan's domestic affairs are still being made. The USA
shows special eagerness in this. It is trying to destabilize the situation
under the cover of the UN and an international commission [to probe the
Andijon events].

Uzbekistan is facing difficulties in the transition period, as a country
following the path of independent and democratic development. At the same
time, there are external-oriented forces in Uzbekistan which have been using
and creating difficulties for the young independent country on its way to
democracy. These forces have also been provoking the masses into slipping
into anarchy.

We live in Ukraine and we have been experiencing the everlasting
consequences of the so-called "Orange revolution", which endangered
Ukraine's independent development and the citizens' rights and freedoms.
Thus, we are well aware of the puppet and provocative nature of these
forces. Uzbekistan should not become another US base of raw materials and
outpost in Asia.

Uzbekistan's raw materials and energy reserves should serve its people. We
express our deep condolences to the families of those who died [during the
unrest] and we are confident that the Uzbek citizens' lives and rights
should not become a bargaining chip in a major geopolitical game of the USA.

The Odessa Organization of International Society for Human Rights expresses
its full support of the Uzbek people, government, president and their choice
to follow the path of independent and democratic development. The
organization also expresses confidence that the authorities are able to
overcome the crisis on their own, and that they will pay no attention to the
"clamour" fanned in the world.

[Signed] V. Denda, chairman of the organization -30-
===============================================================
11. ACT OF RECONCILIATION BETWEEN THE UKRAINIAN GREEK
CATHOLIC CHURCH AND THE POLISH ROMAN CATHOLIC CHURCH

Polish Radio 1, Warsaw, in Polish 1400 gmt 26 Jun 05
BBC Monitoring Service, UK, in English, Sun, Jun 26, 2005

WARSAW - [Presenter ] An act of reconciliation between the Ukrainian Greek
Catholic Church and the Polish Roman Catholic Church has been announced
in Lviv [western Ukraine].

Over 500 priests participated in a ceremonial liturgy, including the head of
the Greek-Catholic Church, Cardinal Lyubomyr Huzar, and the head of the
Episcopate of the Roman Catholic Church [in Poland], Archibishop Jozef
Michalik. The bishops of the two Churches made a similar call for
forgiveness and reconciliation in Warsaw on 19 June.

[Reporter] In an interview with [public] Polish Radio, the spokesman of the
Greek Catholic Church, Father Ihor (?Yatsiv), explained that the act of
reconciliation between the churchmen of the two Churches was to be an
example to the faithful.

In a joint letter from their espicopates, the Greek and Roman Catholic
Churches call for people to rise above their political views and historical
legacies, church rites and even over nationalities. We forgive, and we ask
for forgiveness - these words from the letter were also read out in Lviv.

As the head of the Greek Catholic Church, Cardinal Lyubomyr Huzar,
explained earlier, the mutual reconciliation of Poles and Ukrainians should
settle accounts with the past and start a new and better future, one that
was appropriate for Christians and neighbours. This was Anna Kuzma, for
Polish Radio, in Kiev. -30- [The Action Ukraine Report Monitoring Service]
===============================================================
12. OBITUARY: DR MIKHAIL STERN
Born in a small town near Vinnitsa amid the turmoil in Ukraine in 1918
Veteran protester against anti-Semitism in his home region in Ukraine

By Felix Corley, The Independent
London, United Kingdom, Friday Jun 24, 2005

It was a cruel irony that it was in his 'beloved' adopted city of Amsterdam,
where he worked as a sexologist and doctor after being freed from a Soviet
labour camp in 1977, that the former Jewish refusenik Mikhail Stern was to
suffer a violent death.

A trusting man, he often failed to lock his house and in late April he was
attacked by burglars, dying of his injuries nearly two months later.

A veteran protester against anti-Semitism in his home region in Ukraine,
Stern survived three years in a Soviet labour camp in the 1970s for
protesting against persecution of his two sons after they applied to
emigrate to Israel.

As numerous Jews and others seeking to emigrate from the Soviet Union were
rounded up by the KGB and imprisoned, protests by the growing dissident
movement and sympathisers abroad began to see results. After Simone de
Beauvoir and Jean-Paul Sartre agreed to attend the International Stern
Tribunal in Amsterdam in 1977 to campaign for his release, the Soviet
authorities relented, freeing him a week before the event.

The leading Jewish dissident Anatoli Shcharansky described the release as
'unprecedented', telling Western journalists in Moscow that the official
version that Stern was 'amnestied on grounds of health' could not disguise
the 'great victory' of the campaign to free him (though within minutes the
KGB arrested Shcharansky).

Grateful to the Dutch authorities " 'I love the Netherlands,' he always
declared in recognition of the help he and his sons had received from their
embassy in Moscow " Stern immediately settled in Amsterdam. He was at
last able to come out as a sexologist, a profession barely allowed to exist
in the Soviet Union. Soon after emigrating Stern and his son August
published their path-breaking book Sex in the USSR, first in French and
then, in 1980, din English.

Born into a devout Jewish family in a small town near Vinnitsa amid the
turmoil in Ukraine in 1918, Stern early on decided to be a doctor,
graduating in 1944. He had joined the Communist Party while still studying,
and would relinquish membership only in 1974, the year of his arrest.

Despite his relatively privileged background, he was dismissed from his
post at the Vinnitsa endocrinological centre in 1952 during the fabricated
'Doctors' Plot' when the dying Stalin imagined a conspiracy of mainly Jewish
doctors plotting to poison Soviet leaders. Stern would be reinstated in
1954, the year after Stalin's death.

In 1961 he led a campaign against anti-Semitism, only to be accused in the
Vinnitsa paper of killing a girl (she was in fact still alive and grateful
for the treatment he had given her). His garden was dug up as officials
hunted in vain for hidden gold and jewellery. In April 1974 he was summoned
to the Vinnitsa visa office, where he was interrogated about his sons'
application to leave for Israel.

After the family flat was searched he protested to the prosecutor-general in
Moscow. Two weeks later he was arrested and his fate was sealed. Many of
his patients were interrogated for 'evidence' that he took bribes and sold
medicines for more than they cost. He was sentenced by a Vinnitsa court that
December to eight years' hard labour on charges of swindling and bribery,
and sent to a labour camp in Kharkov.

His two sons, Viktor and August, were both allowed to leave within months
of his sentence and continued to campaign for their father's release from
abroad. August also published a transcript of the trial from a secret
recording " translated into English as The USSR versus Dr Mikhail Stern:
an 'ordinary' trial in the Soviet Union (1978) " the first time a trial of a
dissident had been documented verbatim.

The hapless prosecutor's attempts to get witnesses to stick to the KGB
script would have been funny were it not for the outcome of the trial. -30-
-------------------------------------------------------------------------------------------------------------
Mikhail Shaevich Shtern (Mikhail Stern), sexologist: born Zhmerinka, Ukraine
1918; married Ida Khiger (two sons); died Amsterdam 17 June 2005.
===============================================================
13. UKRAINIAN HALYCHYNA ARMY MEMORIAL IN LVIV

LETTER TO THE EDITOR: From: Anna Krawczuk
Sent: Sunday, June 26, 2005 7:53 AM
Published by The Action Ukraine Report #510
Washington, D.C., Tuesday, June 28, 2005

Dear E. Morgan Williams,

Congratulations on your most informative "Reports" that bring us so much
closer to the homeland of our ancestors.

It is with extreme interest that I read about the Ukrainian Halychyna Army
Memorial in Lviv in your "The Action in Ukraine Report - AUR" received
today [number 509]. You see, my late mother's brothers were not only active
participants, but one Hnat Stefaniw was a commander, while his brothers
Klym and Zenon were participants. See Encyclopedia of Ukraine - Volume V.

An only son of Gen. Hnat Stefaniw, Ignatius E Stefaniw was Lt Colonel in
the US Army, who saw two tours of duty in Vietnam. He died in 1996 and is
buried in Arlington National Cemetery. An only surviving daughter Daria
lives in New Jersey.

Thank you for the work that you are doing.

Anna Krawczuk, National Commander
Ukrainian American Veterans
PO Box 172
Holmdel, New Jersey 07733-0172
uav.nc@att.net; www.uavets.org
===============================================================
14. THE EFFECT OF READING THE WHITE GUARD
After James Meek moved to Kiev, where Bulgakov's The White Guard is
set, his admiration for the novel was enriched by his knowledge of the city

James Meek, The Guardian
London, United Kingdom, Sat, Jun 25, 2005

The effect of reading The White Guard wasn't the only reason I left my job
in Edinburgh in 1991 and moved to Kiev, but it was part of the reason. It
was a shock to discover that a modern European city, unknown to almost all
west Europeans, had been described with such love in literature, to find
that a poetic imagination as harsh and lyrical as Mikhail Bulgakov's had
faced the surreal sequence of invasions and sieges recounted in the novel,
and recounted their absurd horrors without flinching.

I first read The White Guard without having visited Kiev. I come back to the
novel 15 years later, having walked the network of streets he describes many
times, in all weathers. Many of the buildings Bulgakov talks about, such as
the opera house, have survived the 20th century unscathed. One, a monastery,
has even been rebuilt.

Since the first reading I've learned how in the Russian-speaking world
Bulgakov is both part of the literary canon, and a cult; I've seen the stage
version of the book, which was, for reasons too peculiar to fully
understand, Stalin's favourite play; and felt the fretting of independent
Ukraine over its literary heritage, when the Ukrainian capital's most famous
literary son neither wrote in Ukrainian, nor took the idea of a Ukrainian
republic seriously.

Bulgakov was a Russian, who wrote in Russian, and his love for Kiev burns in
every chapter of The White Guard . It's not a contradiction; The White Guard
portrays middle-class Kiev in 1918, accurately, as a Russian-speaking island
surrounded by a sea of rebellious Ukrainian peasantry. All that has happened
since is that the sea and the island have mingled.

Bulgakov's love for Kiev at this time of the Russian civil war is reflected
in two ways. There's a boyish love, a proud schoolboy fascination with its
workings and its lights and its cosiness under the snow, and a sorrowful
adult's love, looking down with a mixture of acceptance and bitterness at a
great city being racked by fratricidal upheaval.

The two loves are reflected in the character of the two Turbin brothers,
young Nikolka and his elder brother Alexei, a doctor and war veteran.
Fatherless, their mother having just died, they live with their sister
Elena, a maid, Anyuta, and sundry itinerant guests in a flat on a steep
cobbled street between Kiev's upper and lower old towns.

In the civil war between the collapsing Russian empire's Reds and Whites
they are White, monarchists, on the side of the executed Tsar against the
Bolshevik menace in the north. We know as the novel opens that their cause
is doomed. What we do not know is if the family is doomed too.

Revisiting The White Guard I found again an element that grated on me the
first time, even though I now know the centre of Kiev fairly well - the
unnecessary exactness and detail of Bulgakov's topographical descriptions
as his characters and military units advance, skirmish and flee through the
boulevards and courtyards of Kiev. I found something new to dislike; his
almost fetishistic obsession with the minutiae of weapons, uniforms and
military procedure.

Yet what I liked about it has changed in form rather than strength. What has
been stripped of mystery for me in Bulgakov's descriptions of Kiev, zooming
from the panoramic to the intimate like a film, has been charged instead
with my own emotional attachment to a city in which I spent two-and-a-half
strange and often happy years.

As I reread the opening pages of the novel, I was worried that I might
discover something unpleasant about Bulgakov that I'd somehow missed the
first time around - that he was an anti-semite, or a monarchist blind to the
evils of the Tsar's regime, or that his scepticism about Ukrainian culture
shaded into contempt and chauvinism, or that he was so poisoned by
disgust for the revolution as to be eaten up by class hatred.

The early signs weren't reassuring. An apparently sympathetic character
referring to "Yids"; the Turbin family, so warmly and tenderly described,
unquestioningly loyal to imperial Russia.

As the book continues, however, the worries fall away. The anti-semitism,
the sense of class war, the blindness to the corruption of Tsardom, the
anti-Ukrainian chauvinism, they're all there, but they're not Bulgakov's,
they're his characters'. The genius of the book is its merciless honesty to
all sides - and, in the world of treachery, doubt and rumour which Bulgakov
captures so perfectly, even the sides have sides.

It's common to have wicked characters of whose wickedness only the reader
is aware. More unusual is to have characters with little real wickedness,
and much virtue, but with human flaws -greed, ignorance, pride, prejudice,
disloyalty - which flare up, only to be overwhelmed by the brute force of
history. There is a powerful sense in The White Guard , foreshadowing The
Master and Margarita , of an irresistible, unearthly force about to punish a
city for its corruption, selfishness and vanities.

In The Master and Margarita , it was Satan punishing Moscow; in The White
Guard , it is the Reds punishing Kiev. Bulgakov hates it, but only small,
personal, inner acts of resistance are possible against it.

In The White Guard , the Turbins' snug Chekhovian world is smashed for no
greater sin than their ignorance of what is happening in the empire around
them; and, if they had not been ignorant, it would have been turned
upside-down anyway, along with the lives of everyone else, Jew and
Jew-hater, Ukrainian and Ukraine-basher, the foolish and the wise, swept
away in the Red torrent.

In The White Guard, perhaps, lies the secret of Bulgakov's survival, through
Stalin's purges, till his natural death in 1940. None of his novels was
published in full during his lifetime, and he was not allowed to emigrate,
yet he was not executed, or tortured, or sent to a labour camp, or accused
of some ridiculous crime against the state. Millions of people more inclined
to tolerate the regime were.

His existence in Moscow, the blessing given by Stalin to his plays being
performed, was an aberration. All the dictator wanted, it seems, was this
admission in The White Guard , from a sincere and great artist, that being
brave, loyal and bourgeois was no protection against the ruthlessness of the
revolution. -30- [The Action Ukraine Report Monitoring Service]
--------------------------------------------------------------------------------------------------
James Meek's novel The People's Act of Love will be published by
Canongate on July 7, price pounds 12.99. To order a copy for pounds
11.99, or The White Guard (Harvill pounds 10.99) for pounds 9.99, both
with free UK p&p call Guardian book service on 0870 836 0875.
===============================================================
15. KIEV'S AFTERGLOW
Ukraine's capital is having its first
heady taste of post-revolutionary euphoria

By Vijai Maheshwari, Glove and Mail
Toronto, Ontario, Canada, Wednesday, June 22, 2005

KIEV, Ukraine - It's 10 p.m. on a weeknight in June, and the 112 bar in
downtown Kiev is packed with the city's heady beau monde of young politicos,
glamour girls and go-east expats.

They've gathered to watch a soccer match between Ukraine and Greece, the
reigning European champions. When Ukraine scores the winning goal in the
82nd minute, the bar erupts into wild cheers - patrons on the wacky bar
stools, which slide up and down periodically, pump their fists in the air.

When the DJ puts on local rap band Green Jolly, whose song Razom Nas
Bahato became the anthem of last year's Orange Revolution, everyone
spontaneously holds hands and sings along to the famous lines: " Razom nas
bahato! Nas ne podolaty." (Together there are many of us! We cannot be
defeated!)

This spring and summer, Ukraine - and its capital Kiev in particular - is
having its first heady taste of post-revolutionary euphoria. Usually surly
customs guards at Kiev's newly renovated Borispol airport wave visitors past
with a smile and a "Welcome to Ukraine." Cab drivers actually apologize for
not speaking English. Pedestrians go out of their way to point strangers in
the right direction. And with visa restrictions for EU citizens lifted as of
May 1, the current tourism boom is only expected to continue.

Lovers hold hands and stroll dreamily through the city's numerous parks and
leafy courtyards, while skateboarders glide gleefully over the concrete
steps of Independence Square, where crowds camped out in orange tents for
weeks on end late last year in support of President Viktor Yushchenko.
Souvenir stands line its perimeter, selling Orange Revolution trinkets. The
uprising has been quick to market itself with DVDs, scarves and beanies.

A provincial backwater until recently, Kiev never went through the boom that
characterized Moscow in the 1990s or the surge of unruly democracy during
the Yeltsin years. Instead, it settled quickly after the fall of communism
into an oligarch-controlled lethargy, more corrupt, more dangerous, and less
Western than most other cities in former communist nations. Even the
Ukrainian language was suppressed, with most of the country's politicians
coming from Russian-speaking eastern regions after the fall of Communism.

But with the revolution now behind it, the city is buzzing with an energy
that recalls Berlin in the mid-1990s.

The Klitschko brothers, world-famous boxers, last year opened the upscale
Arena brewery and nightclub off Kreschatik, Kiev's own version of 5th
Avenue. The place is packed nightly with the city's high-octane party crowd.

In addition, Kiev boasts dozens of other nightclubs, such as Pa Ti Pa, Moda
Bar (which features the longest bar in Europe) and Club Tato, which hosts
nightly fashion shows. Eric Aigner, a German who moved to Kiev in the
mid-nineties, has also opened a string of bars and restaurants, including
Eric's Pub, a low-key affair with great beer and inexpensive food, and the
112 bar.

Kiev has personality and good looks going for it: Buildings are clean and
gorgeous in their deep reds, teals and maroons. There are parks aplenty,
wide, bright streets, an efficient Metro system and a sense of community
that is reassuring. After the aforementioned soccer victory, the streets
were full of victorious fans, peacefully waving orange flags and singing the
national anthem.

Last month, the city hosted Eurovision, Europe's cheesy yet wildly popular
pop-music contest, in a converted soccer stadium. With the Klitschko boxing
brothers as the hosts, in addition to Ruslana, the glamorous Sheeba-like pop
star who won the prize for her country last year, the city geared up for
Europe's television crews.

The road in from the airport was repaved, street lights fixed up,
English-language maps hastily printed, and hotel staff ordered to brush up
on their English and French.

With Russians betting that Ukraine will join the EU within a decade, Russian
money has, paradoxically, begun to flow back into the city.
Kiev's many cosmopolitan restaurants, including Belgian, French and Uzbek
eateries, are overflowing with locals, Muscovites and Europeans keen to
savour the energy of a dynamic city.

Like Moscow, the city also has its share of lush Central Asian restaurants,
with damask couches, hookahs, nautch dancing girls and delicious plov, a
type of rice pilaf. There are also Japanese restaurants, such as Yakitori,
which are open around the clock.

Ukrainian restaurants such as Tsarske Selo, meanwhile, serve up wicked
borsch and vareniki, dumplings stuffed with cherry and other savoury
fillings. Situated as it is in a log cabin, Tsarske Selo embodies regional
rusticity with wooden beams, waiters in traditional Ukrainian dress, wooden
bowls and motifs from Slavic folk culture decorating the walls. My favourite
eatery, though, was U Hetmana (the Ukrainian word for a Cossack chieftain),
whose historic dining room and white-suited waiters evoke a 19th-century
grandeur.

Meanwhile, fashion brands are pouring into the city in hopes of capturing a
new market early on. Energie, Miss Sixty, Puma, Versace and Dolce &
Gabbana are all over the city's boutiques, which are rapidly growing in
number.

The main shopping street is Kreshatik, which runs into Independence Square.
The city's residents, especially its women, dress far more glamorously than
most of their counterparts in the West, mixing Slavic daring - think high
heels, transparent bodices and tight tank tops - with contemporary European
brands.

Kiev's cathedrals, such as St. Sofia and St. Mikhail, and the sprawling
Pecherske Lavre monastery complex near the centre of town, mark the ancient
city as the birthplace of Orthodox Christianity. It is still possible to go
down into the monastery's caves and see the miraculously preserved remains
of holy men from centuries past.

The great bell tower, almost 100 meters high, is the tallest free-standing
tower in the former Russian empire. The golden-domed spires and lime-green
and white church walls are like little Kremlins, springing out in a burst of
onion shapes and brilliant greens and mauves.

Yet the cozy cafés and Ukrainian restaurants in the historic Podil district,
formerly the merchants' quarter, have a sophisticated, intellectual vibe
that is more Paris than Moscow. Many great Russian-language writers,
including Nikolai Gogol and Mikhail Bulgakov, were actually Ukrainians who
later made their mark in the empire. Their well-preserved homes are worth a
visit.

Soon, perhaps too soon, Kiev will become part of the well-trodden tourist
trail of the New Europe. Until that happens, the city has a newness, a sense
of discovery, and an awe at the strange twists of fate that makes it
special. -30- [The Action Ukraine Report Monitoring Service]
===============================================================
16. LETTER TO U.S. SENATOR RICHARD J. DURBIN
Your comparisons to the crimes of the Nazis, Soviet Gulags and Pol Pot

Letter from Volodymyr Kurylo
25-36 48th Street,
Astoria, NY 11103, Monday, June 20, 2005

Senator Richard J. Durbin
332 Dirksen Senate Office Building
Washington, DC 20510-1304

Dear Senator Durbin:

Your remarks about "Gitmo" and comparisons to the crimes of the Nazis,
Soviet Gulags and Pol Pot are irresponsible and outrageous. I am the son of
parents who were born & raised in Polish occupied Western Ukraine. I was
born in the U.S. and am President of the United Ukrainian American
Organizations of Greater New York. In 1939, the Soviets and Nazis signed
the Molotov-Ribbentrop Pact carving up Eastern Europe.

Ukrainians under repressive Polish occupation enjoyed somewhat more
freedom than their brothers & sisters under the Soviets. They would pay for
this modicum of freedom in 1939 when the Soviets invaded Western Ukraine.
Torture, interrogations, rape, executions defined Soviet occupation.

The Nazis eventually turned on their "ally" and invaded the Soviet Union in
June of 1941. As the Russians retreated, they implemented a scorched earth
policy which included execution of political prisoners. As a seventen year
old, my mother witnessed Russian terror and brutality. She went with her
girlfriend's father to search for her missing friend. The courtyard of the
local prison was full of mutilated bodies brought out to be identified by
relatives and friends: women with their breasts cut off, with the skin
peeled from their wrists to their fingertips, men whose throats were stuffed
with rags to muffle their screams, final farewells written in blood on the
walls of prison cells. One did not have to be in a Gulag to experience
Russian terror.

If you're not familiar with the following facts and infamous characters of
Soviet history, I urge you to become familiar with them before commenting
on GULAGs or Soviets in the future:

1932-1933 Genocidal Famine in Ukraine. Seven to ten million Ukrainians
intentionally starved to death. The architects of this genocide were
Stalin, Molotov and Lazar Kaganovych. "When OGPU failed to meet weekly
execution quotas, Stalin sent henchman Lazar Kaganovitch to destroy
Ukrainian resistance. Kaganovitch, the Soviet Eichmann, made quota,
shooting 10,000 Ukrainians weekly." (Eric Margolis "Remembering Ukraine's
Unknown Holocaust", 1998) On November 16, 1933, President Franklin
Roosevelt officially recognized the genocidal Soviet Union.

Katyn Forest Massacre - Until 1989 the Soviets denied that Stalin had
ordered the execution of some 25,700 Polish prisoners in March of 1940.
They tried to blame it on the Nazis.

July 1929 - The GULAG comes of age when "concentration camps" became
"corrective labor camps" set up by Genrikh Iagoda (Yagoda), Vyacheslav
Menzhynsky, Stanislaw Messing and headed by Lazar Kogan. Kogan's
deputies were Matvei Berman, the most ruthless exploiter of unskilled labor
in history.and Iakov Rappaport. The death rate in Iagoda's labor camps gave
prisoners a one in three chance of surving a ten-year sentence.

Nikolai Yezhov - Head of NKVD. In 1937-1938 the NKVD's own records show
that 1,444,923 persons were "convicted" of counterrevolutionary crimes, and
of these 681,692 were shot.

Lavrentii Beria - "Worse were the massacres perpetrated on Beria's orders in
the newly acquired Western Ukraine; perhaps 100,000 civilian prisoners were
shot in Lwow as the Red Army retreated".

Lev Shvartsman - typical Soviet interrogator under Beria's command. "Lev
Aronovych Shvartsman, a semiliterate promoted by Yezhov for his talent in
beating prisoners". .specialized in torturing women and then editing their
incoherent confessions, despite his lack of education, with an elegance and
grammatical correctness unrivaled in the Lubianka.

Boris Rodos - "Working in the specially equipped Moscow prison of Lefortovo
and scorning the usual truncheons, drugs, or electrodes, he trampled
prisoners with his boots or urinated into their mouths".

Aleksandr Langfang - ".made a brilliant career. A former concrete pourer,
he was known for his brutality as a 'chopper' (kolun), reducing many former
diplomats and Comintern representatives into unrecognizable pulp.

The information cited was gleaned from Donald Rayfield's "Stalin and his
Hangmen" (Random House, 2004). They represent a mere snapshot in the
voluminous & bloody Soviet photo album. Fortunately, the collapse of the
Soviet Union allowed for researchers and historians to confirm existing
information and discover additional material about Soviet brutality. I also
highly recommend Simon Sebag Montefiore's "Stalin, the Court of the Red
Tsar" (Knopf, 2003). In my research I have not discovered any similarities
between "Gitmo" and the GULAG or the policies of Stalin, Kaganovych,
Yagoda, Yezhov and Beria.

Your irresponsible statements are used in anti-American propaganda. You
are enabling the repetition of a divisive period in U.S. history. Please
read the following very carefully. It speaks for itself: "I produced the
very same vitriol Kerry repeated to the U.S. Congress almost word for word
and planted it in leftist movements throughout Europe. KGB Chairman Yuri
Andropov managed our anti-Vietnam War operation. He often bragged about
having damaged the U.S. foreign-policy concensus, poisoned domestic debate
in the U.S., and built a credibility gap between America and European public
opinion through our disinformation operations. Vietnam was, he once told
me, our most significant success." (National Review - February 26, 2004 -
Ion Mihai Pacepa - former spy chief and a General in the former Soviet
satellite of Romania).

You owe the brave men and women of our Armed Forces an apology. They
risk their lives to defend our freedoms, among them freedom of speech. One
would expect that a U.S. Senator would exercise that freedom responsibly and
that a U.S. Senator would not want to provide disinformation, material for
extremists & propagandists who want to discredit the United States and even
destroy our way of life. For the record, the Soviet, Nazi and Khmer Rouge
were not repressive regimes, they were genocidal regimes.

Sincerely,
Volodymyr Kurylo
vkurlo@aol.com

CC: Senators Clinton, Schumer, Boxer, Kennedy, Reid,
Congresswoman Carolyn Maloney -30-
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