THE ACTION UKRAINE REPORT - AUR
An International Newsletter, The Latest, Up-To-Date
In-Depth Ukrainian News, Analysis and Commentary
Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World
THE ACTION UKRAINE REPORT - AUR - Number 667
Mr. E. Morgan Williams, Publisher and Editor
Washington, D.C., Kyiv, Ukraine, MONDAY, FEBRUARY 27, 2006
--------INDEX OF ARTICLES--------
Clicking on the title of any article takes you directly to the article.
Return to the Index by clicking on Return to Index at the end of each article
1. POLAND'S PRESIDENT KACZYNSKI TO PAY OFFICIAL VISIT
TO UKRAINE FROM FEBRUARY 28 TO MARCH 1
Olha Volkovetska, Kyiv, Ukraine, February 14, 2006
2. POLISH AMBASSADOR: WE EXPECT NEW STIMULUS
By Jacek Kluczkowski, Polish ambassador to Ukraine
Polish Market, English-Language Economic Magazine
Warsaw, Poland, Issue 2, (114), February, 2006
3. POLISH OFFICIAL SAYS CHANCES FOR A SHARP INCREASE
IN VALUE OF POLISH-UKRAINIAN TRADE ARE GREAT
Anna Skowronska-Luczynska, Minister Counselor, Head of the
Economic and Commercial Department of the Polish Embassy in Kiev
Polish Market, English-Language Economic Magazine
Warsaw, Poland, Issue 2 (114), February, 2006
4. PROMOTING A MARKET WITH 100-MILLION PEOPLE
Polish-Ukrainian Economic Chamber
Polish Market, English-Language Economic Magazine
Warsaw, Poland, Issue 2 (114), February 2006
5. THE POLISH OUTPOST IN UKRAINE
The Polish Institute in Kiev: main aim is to promote Poland in Ukraine
INTERVIEW: With Jerzy Onuch, Director of the Polish
Institute in Kiev, Counsellor at the Polish Embassy in Ukraine:
Interviewer: Andrzej K. Kazimierski
Polish Market, English-Language Economic Magazine
Warsaw, Poland, Issue No. 2, (114) February 2006
6. CONSORTIUM TO PRESENT FEASIBILITY STUDY EXTENDING
ODESA-BRODY OIL PIPELINE TO PLOCK, POLAND ON MARCH 15
Roman Kysil, Ukrainian News Agency, Kyiv, Ukraine, Fri, Feb 24, 2006
7. SIGNING OF DOCUMENTS ON ENERGY SECURITY EXPECTED
DURING POLISH PRESIDENT'S VISIT TO UKRAINE SAYS KINAKH
Roman Kysil, Ukrainian News Agency, Kyiv, Ukraine, Sun, Feb 26, 2006
8. YOU ARE INVITED TO: UKRAINE BRIEFING
"BUSINESS ENVIRONMENT & MACROECONOMIC SCENE"
BEFORE THE PARLIAMENTARY ELECTIONS
Economics & Business Task Force, US-Ukraine Policy Dialogue
Tuesday, February 28, 2006, 3:00 p.m. to 5:00 p.m.
At The Heritage Foundation, Washington, D.C.
The Action Ukraine Report (AUR), #667, Article 8
Washington, D.C., Monday, February 27, 2006
9. UKRAINE TO DIVERSIFY FUEL SUPPLIES FOR ITS NUCLEAR
POWER PLANTS, WESTINGHOUSE & POSSIBLY FRENCH FIRMS
Itar-Tass, Moscow, Russia, Saturday, February 25, 200
10. RUSSIAN SEVERSTAL-METIZ BUYS 60% OF UKRAINIAN
METALWARE PRODUCER DNIPROMETIZ
Interfax-Ukraine, Kyiv, Ukraine, Sunday, February 26, 2006
11. CO-FOUNDER OF PAYPAL IMMIGRATED TO US FROM UKRAINE
AS A TEENAGER IN 1992, PAYPAL SOLD FOR $1.5 BILLION TO EBAY
Max Levchin, born in Kiev, likes the edge. Starting another company was
the natural thing to do for PayPal co-founder.
Dan Fost, San Francisco Chronicle Staff Writer
San Francisco, California, Sunday, February 26, 2006
12. THE ORANGE CHRONICLES DOCUMENTARY FILM FUNDRAISER
Friday, March 3rd, 7:30 p.m. The Ukrainian Institute, NY, NY
The Ukrainian Institute, New York, NY, Friday, Feb 24, 2006
13. FILM: "LIGHT FROM THE EAST"
1991.Revolution.Ukraine.The End of an Era.The Birth of a Nation
The story of an American theater troupe that witnessed the
fall of Communism while in Ukraine in August of 1991.
By E. Morgan Williams, Publisher and Editor
The Action Ukraine Report (AUR), #667, Article 13
Washington, D.C., Monday, February 27, 2006
14. ENDANGERED REVOLUTION:
Ukraine's bold push for democracy stunned the world,
but can it live up to its promise?
Article By Andrew Meier, National Geographic magazine
Washington, D.C., March 2006, Pages 32-50
15. BOOK: AN ORANGE REVOLUTION
A Personal Journey Through Ukrainian History
A captivating book about a defining moment in European history.
By E. Morgan Williams, Publisher and Editor
The Action Ukraine Report (AUR), #667, Article 15
Washington, D.C., Monday, February 27, 2006
16. U.S. WARNS BELARUS OVER VOTE
AP, Reuters, The Moscow Times, Moscow, Russia, Sun, Feb 26, 2006
17. BELARUS SAYS US CONCERN OF VIOLENCE DURING
UPCOMING PRESIDENTIAL ELECTION UNWARRANTED
Deputy U.S. Assistant Secretary of State David Kramer visiting Belarus
Associated Press, Minsk, Belarus, Sat, February 25, 2006
18. BRINGING DOWN EUROPE'S LAST EX-SOVIET DICTATOR
Presidential election in Belarus on Sunday, March 19
By Steven Lee Myers, NY Times bureau chief in Moscow
The New York Times Magazine, NY, NY, Sunday, February 26, 2006
19. ACCUSATIONS OF MISUSED MONEY ROIL RUSSIAN ORTHODOX
CHURCH IN THE UNITED STATES OF AMERICA
Former treasurer says top officials misappropriated millions of dollars to
cover personal embarrassing credit card bills, pay sexual blackmail, support
family members, gifts of cash to visiting foreign dignitaries, entertainment
By Alan Cooperman, Washington Post Staff Writer
The Washington Post, Washington, D.C.
Sunday, February 26, 2006; Page A09
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1. POLAND'S PRESIDENT KACZYNSKI TO PAY OFFICIAL VISIT
TO UKRAINE FROM FEBRUARY 28 TO MARCH 1
Olha Volkovetska, Kyiv, Ukraine, February 14, 2006
KYIV - Poland's President Lech Kaczynski will pay an official visit to
Ukraine from February 28 to March 1. Vasyl Filipchuk, the head of the
Ukrainian Foreign Affairs Ministry's press service, announced this to
journalists at a news briefing. "The President of Poland is expected to
visit Kyiv and Kharkiv," Filipchuk said.
As Ukrainian News earlier reported, Poland's Foreign Affairs Minister
Stefan Meller paid an official visit to Ukraine in early January. During a
telephone conversation in December 2005, President Viktor Yuschenko
congratulated Kaczynski on his first days as the president of Poland and
wished him success.
Yuschenko expressed the hope that Ukrainian-Polish relations would be
preserved and that all promising projects will be implemented. Yuschenko and
Kaczynski also discussed Ukrainian-Polish trade and economic cooperation,
regional politics, and joint projects in the energy industry. They also
exchanged information about the situation surrounding delivery of Russian
natural gas to Ukraine. Kaczynski was elected president in October. -30-
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2. POLISH AMBASSADOR: WE EXPECT NEW STIMULUS
By Jacek Kluczkowski, Polish ambassador to Ukraine
Polish Market, English-Language Economic Magazine
Warsaw, Poland, Issue 2, (114), February, 2006
Since the Ukrainian state emerged, relations with Poland have become very
close. Poland and Canada were the first countries to recognise Ukraine's
independence in December 1991. Relations were also good between the
former heads of states Lech Walesa and Aleksander Kwasniewski of Poland
and Leonid Kravtshuk and Leonid Kuchma of Ukraine.
Traditionally, lively contacts were developing between regions, university
schools, educational and cultural organisations. Which all proves that the
quality of our relations has not been based exclusively on events of 2004,
although the Ukrainians bid for democracy in that year met with
wholehearted support from the Polish people.
Have these hopes come true? It is known that people had great expectations.
It is unrealistic to expect that they all could come true within a year or
two. But today Ukraine is different than is was a year ago. Probably a more
objective assessment will be possible from the perspective of more years.
Surely, freedom of speech is now a fact and the oligarchs do no longer have
such direct power as before.
Present-day Ukraine is a democratic country. It pursues the road of
democracy and market economy. This is to a large extent attributed to
president Victor Jushtchenko. He is a man who has his values and ideals.
General elections will shortly be held and if Ukrainian electors will be
consistent, Ukraine's democratic progress will continue. I do not think,
however, that the situation has changed radically. Almost half of the
electorate still supports one camp and the second half the other. In certain
sense, this reflects the defeat of the democratic forces.
For since that time they have had the task of increasing the ranks of their
allies. But the result of the elections, whatever the outcome, will not be
disastrous for Ukraine and it will not affect relations with Europe and in
particular with Poland.
As member of the EU, Poland is the spokesman of Ukraine's rapprochement
with Europe. In terms of so-called European standards, Ukraine's situation
has changed last year. Ukraine has scored a big success. It has proved to
the world that it is a democratic state. Those in power do not threaten the
electoral process and freedom of speech. I do not think that the
international community expected more than what had happened.
Admittedly, the issue of Ukraine's EU membership was not placed on last
year's agenda yet. And it will probably not be placed this year either.
Ukraine's most important task is to bring itself closer to European
standards and to raise the competitiveness of its economy.
A new stimulus in Polish-Ukrainian relations is expected from the first
visit to Ukraine by president Lech Kaczynski at the end of February. The new
president seeks to activate foreign policy and attaches great importance to
personal contacts. Hence establishing a personal contact with Victor
Jushtchenko will become one of the priorities of the visit. The talks
between the presidents will also deal with Ukraine's relations with the
European Union and the coordination of tasks in energy policy.
Poland as well as the European Union are interested in energy security. Both
have been content that Ukraine and Russia reached an agreement. A situation
such as that of Russia stopping gas supplies should not happen again. It was
undreamt of till then that gas supply might simply be cut off.
Generally, such a policy is unacceptable. Deliveries of energy carriers
should not serve as instruments of political pressure. Energy security must
remain beyond politics. Now we have received a second lesson, another
proof that energy carriers have become part of politics.
It has never been so good that it could not be better, And although trade
turnover and investments are still rising we know that the growth dynamics
in recent months might have been higher if the investment climate in Ukraine
was better and if not for administrative obstacles and unfavourable
decisions affecting Poland and which can hardly be understood.
Such clashes of interests, so it seems, are unavoidable. The elimination of
reliefs in special economic zones was not aimed against Polish investors.
The move was intended to hit the grey zone, the off-share investors who
manipulated the rules to avoid en masse paying taxes.
Professor Marek Dabrowski, a Polish economist serving as advisor to the
authorities here told me that this was the only successful move in the
economic policy of the former government of Julia Timoshenko.
Alas, the baby was emptied out with the bath, and harm was done to honest
investors, including those from Poland. It is now our task to seek
compensation for losses incurred. We have succeeded in that only in part.
We are also speaking of bigger and spectacular actions such as the joint
application to UEFA on organising European football championships, plans
of extending the oil pipeline from Brody in the Ukraine to Plock, linking
the
wide gauge railway line connecting Silesia with Ukraine with Federal
Russia's railway system which - when combined with the construction of a
reloading terminal in Poland - would bring us into the Euro-Asian railway
transportation system. We are talking about all that and collaborating with
Ukrainian partners. -30-
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3. POLISH OFFICIAL SAYS CHANCES FOR A SHARP INCREASE
IN VALUE OF POLISH-UKRAINIAN TRADE ARE GREAT
Anna Skowronska-Luczynska, Minister Counselor, Head of the
Economic and Commercial Department of the Polish Embassy in Kiev
Polish Market, English-Language Economic Magazine
Warsaw, Poland, Issue No. 2 (114), February, 2006
Polish-Ukrainian economic relations have developed in accordance with
Ukraine's economic situation since the moment when the country regained
independence. In 1992 the value of Polish exports to Ukraine amounted to a
mere USD161.6 million, in 1997 reached as much as USD1,206.8 million to
slump again to USD703.1 million two years later when the Ukrainian economy
collapsed.
Since 2000 Poland has recorded a fast increase in its exports to Ukraine. In
2003 and 2004 the rate of growth in exports exceeded 130 per cent. The year
2005 was slightly worse but exports growth still reached 122.8 per cent in
January-November.
The rate of growth in imports from Ukraine has been less stable: after a
rise of 140.4 per cent in 2000, the next year saw a decline of 94.5 per
cent, followed by a sharp increase of 151.5 per cent in 2003. In
January-November 2005 Ukrainian exports to Poland reached the previous
year's level (99.7 per cent).
There are great differences in the structure of the two countries' exports.
Poland imports from Ukraine mainly raw materials and semi-finished products
designated for further industrial processing.
The main commodities include iron ores, products made of cast iron and
non-alloy steel, gas, ferroalloys, petroleum, wood and electricity. There
are no consumer goods or highly-processed goods on the list of Ukraine's
30 leading exports.
PASSENGER CARS TOP POLAND'S EXPORT TO UKRAINE
Passenger cars make up the most important commodity in Polish exports to
Ukraine (7.65 per cent of total exports in January-November 2005). Most of
the cars exported to Ukraine come from the FSO plant in the Zeran district
of Warsaw. In recent years, this car maker made a living exclusively thanks
to orders from Ukraine.
Among other exports are paper, cardboard and products made of these
materials, car parts and engines, tyres, stoves and cookers, refrigerators
and freezers, furniture and accessories, footwear, cosmetics, drugs and
various machines. In contrast to Ukraine, Poland exports to the Ukrainian
market a very diversified line of commodities.
It is noteworthy, however, that for a few years now Ukraine has been
importing more and more parts and accessories, rather than finished
products, as well as production machines and equipment.
In 2004 the value of Polish-Ukrainian trade reached over USD3,082 million.
This is not much if compared to Poland's trade with the Czech Republic for
instance. But the good news is that this value has been consistently growing
for five years now.
CHANCES FOR SHARP INCREASE IN TRADE ARE GREAT
Objectively, chances for a sharp increase in the value of Polish-Ukrainian
trade are very great. Ukraine is a large country with a population of nearly
48 million. Household incomes have been growing fast here - although by
European standards they are still very low with average wage at around
USD150 - and so is industrial demand. Poland has much to offer to Ukraine:
our commodities are of high quality and are cheaper from their Western
equivalents.
But it should be remembered that this opinion is not shared by all
Ukrainians. The reputation of Polish products was damaged by some Polish
pseudo merchants who in the past, before the imposition of visa
requirements, smuggled goods into Ukraine and sold them in inappropriate
conditions.
This is a marginal phenomenon now but the proverb says that one bad apple
spoils the whole barrel. And neither should one be under the illusion that
everything can be sold in Ukraine. Those who have been to Kiev and have seen
the local shops know one can buy everything here including luxury goods.
What's more: Ukrainians are more avid for luxury than Poles.
MANY BARRIERS TO TRADE ON THE UKRAINIAN SIDE
So we could sell here more goods and buy more. However, there are many
barriers to trade on the Ukrainian side. Licences are needed for trade in
many commodities and there are restrictions on trade. The certification
system dates back to the times of the Soviet Union and covers a wide range
of goods. Additionally, rules of trade change very often; changes are
unpredictable and implemented overnight.
The decline in the value of Polish imports from Ukraine in 2005 resulted
mainly from a reduction in iron ore and petroleum imports. After the
privatisation of iron ore conglomerates in Ukraine in mid-2004 the new
owners decided that previously signed sales contracts were no longer binding
and suddenly suspended supplies.
As a result the volume of iron ore imported by Poland in 2005 reached only
67 per cent of the ore imported in the previous year. In mid-April 2005 the
Ukrainian government imposed a ban on the export of Ukrainian oil. The move
meant the violation of contracts with refineries in southern Poland and put
them in great trouble.
UKRAINE RESTRICTIONS ON WOOD EXPORTS & MEAT IMPORTS
At the end of the year Ukraine imposed a statutory ban on the export of
precious types of wood and placed bureaucratic barriers on the export of the
remaining types of wood. And Ukrainian wood is in great demand from Polish
producers.
There are great complications concerning Polish meat exports to Ukraine,
particularly the export of pigs for slaughter. The reason is the protection
of the Ukrainian producer market and the activity of the agricultural lobby,
which has been intensifying its campaign against the alleged flooding of the
Ukrainian market with Polish meat, including smuggled meat.
Meat is more expensive in Ukraine than in Poland and the volume of
domestic production is low. All this shows that, although profitable, trade
with Ukraine is not an easy business.
Ukraine is the second largest market for Polish investment after Germany.
The value of Polish investment in Ukraine amounted to USD214.9 million on
October 1, 2005. This may seem little but one has to take into account that
Polish business is still working its way up and cannot afford large exports
of capital.
UKRAINE DOES NOT OFFER GOOD CONDITIONS FOR INVESTORS
On the other hand, Ukraine does not offer sufficiently good conditions to
foreign investors, which is reflected in its FDI statistics. In mid-2005 the
value of foreign direct investment exceeded USD9 billion. In the second half
of the year the much publicised sale of the Krivorozhstal metallurgical
conglomerate and a large bank added another USD7.2 billion to these
statistics.
The share of Polish investment is small but gives us satisfaction,
nonetheless. In the first years after Ukraine regained independence
investments were made here mainly by small and medium enterprises, which
were able to flexibly adjust to quite non-transparent conditions. There were
also exceptions from this rule, for example Kredyt Bank and Pekao SA.
In recent years more and more companies well-known on the Polish market
have been investing in Ukraine. Among Polish investors are CanPack (which
produces beverage cans in Ukraine), PZU SA, the furniture producers Forte,
Nowy Styl and Black Red White, the parquet flooring producer Barlinek, Katy
Group, Torunskie Zaklady Materialów Opatrunkowych (which holds a
40-per-cent share in the Ukrainian market for sanitary towels) and the car
seat producer Groclin.
After the Orange Revolution more and more Polish companies are going to
invest in Ukraine. For the time being, they have been examining the market
and its conditions and waiting for an improvement in the investment climate.
LIFTING ECONOMIC ZONES DAMAGED UKRAINE'S CREDIBILITY
The sudden lifting of preferential terms in Ukrainian special economic zones
considerably damaged the credibility of Ukraine as an investment location.
Around 70 Polish companies operate in such zones and many of them lost
such preferences, although under previous agreements they had been
supposed to enjoy them for many more years.
Moreover, investors have not received any compensation, despite numerous
promises. Efforts made in this respect by the Polish authorities and
diplomatic services in Kiev came to nothing (the problem concerns not only
Polish investors).
Despite all these difficulties and barriers, I regard Ukraine as a promising
investment location. Ukraine aspires to WTO and European Union membership
and this means it has to adopt a transparent and predictable economic policy
and open itself to cooperation with other countries, including foreign
investment.
Cooperation in the energy sector may play a special role in Polish-Ukrainian
economic cooperation. What we have in common is location as a transit
country and the need to diversify energy sources.
The Euroasian Corridor for the Transport of Oil Odessa-Brody-Plock-
Gdansk is a joint project to which the two countries have given serious
consideration. There are also prospects for cooperation in other segments
of the energy sector.
Ukraine is our strategic partner and this is not just a platitude. We have
much to do together in the economic sphere and can reap many benefits
from our being neighbours. -30-
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NOTE: Subheadings inserted editorially by The Action Ukraine Report.
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4. PROMOTING A MARKET WITH 100-MILLION PEOPLE
Polish-Ukrainian Economic Chamber
Polish Market, English-Language Economic Magazine
Warsaw, Poland, Issue 2 (114), February 2006
Taken together, Poland and Ukraine, approximating one hundred million
inhabitants, represent a considerable business and human potential in terms
of market opportunities as well as educated, qualified and enterprising
population. The two countries complement each other in many ways and
business prospects look good.
Poland was one of the first countries to recognise the independence of its
eastern neighbour. Economic relations began to expand between our two
countries very fast and on a large scale. Plans of big joint projects have
been drawn up, including the Odessa-Brody-Gdansk Oil Pipeline.
A major role in developing relations between the two countries has been
played by the Polish-Ukrainian Chamber of Commerce set up in 1992. It was
significant that its first chairman for many years was Andrzej Arendarski,
PhD, the president of the Polish Chamber of Commerce and it is symbolic
that it is now chaired by Jan Kulczyk PhD, Poland's most prominent
businessman.
In 2004, Andrzej Arendarski defined the main objective of the
Polish-Ukrainian Chamber of Commerce as "that of supporting Polish and
Ukrainian companies with practical knowledge about terms of conducting
business operations in the two countries.
Another and equally important aim is to promote the Polish economy and
Polish companies on the Ukrainian market by organising fairs, arranging
business missions, scientific and training seminars." The Chamber has been
pursuing these objectives consistently.
A lot has changed in Ukraine since the Orange Revolution for the better.
Many Polish entrepreneurs operating in Ukraine were caught unprepared and
had to adopt themselves fast to entirely new business realities, different
economic mentality and new rules of the game that emerged and developed
as a result of political changes.
Trade and economic co-operation with Ukraine has become easier for
international partners as of last July after Ukraine joined the Partnership
and Cooperation Agreement between Ukraine and the European Community
Associations and their member countries (UES) as well as the European
Agreement on Important International Combined Transportation Routes.
The most important thing is that President Victor Yushchenko's decree on
"Ways of rectifying the Consultative Council's proceedings on matters of
foreign investments in Ukraine" offers better solutions to any disputes
between foreign investors and local authorities.
Ukraine's National Bank on its part has also done a lot to clear any
ambiguities. The new climate in Ukraine will help to intensify its share in
the international division of labour and in the ensuing benefits. Poland and
its entrepreneurs will surely participate in that process. (j.swid.)
Polsko-Ukrainska Izba Gospodarcza
00-074 Warszawa, ul. Trebacka 4
Tel. (+48 22) 630 99 29, Fax (+48 22) 630 97 93
www.ukraina.chamber.pl
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5. THE POLISH OUTPOST IN UKRAINE
The Polish Institute in Kiev: main aim is to promote Poland in Ukraine
INTERVIEW: With Jerzy Onuch, Director of the Polish
Institute in Kiev, Counsellor at the Polish Embassy in Ukraine:
Interviewer: Andrzej K. Kazimierski
Polish Market, English-Language Economic Magazine
Warsaw, Poland, Issue No. 2, (114) February 2006
Q: What is the status and aim of the Polish Institute in Kiev?
A: The Institute is the official representative of the Polish Foreign
Ministry and its main aim has been to promote Poland in Ukraine by
disseminating knowledge of its cultural and scientific achievements.
We spread knowledge of Poland's history and its present-day life focussing
in particular on this country's achievements in the European integration
process. The Institute is also committed to developing genuinely
good-neighbourly and friendly relations with the Ukrainian people.
Q: I understand that the scale and manner of implementing these tasks is to
a large extent determined by funds at the Institute's disposal. What is the
Institute's offer?
A: The Institute has been operating for only seven years yet it has already
won a distinctive place on the cultural map of Ukraine and in particular
that of Kiev. With rather modest funds at our disposal and notwithstanding
the lack of proper premises adequate to the Institute's status and mission,
we act, in a way, as a management agent between Polish and Ukrainian men
of culture and science as well as cultural and scientific institutions.
Considering the shortage of funds, we would not be able to work effectively
without having developed a wide network of partnership contacts on both
sides of the border.
The fields of activities planned for 2006 have been defined according to
concepts and programme lines rather than traditionally defined disciplines
of the arts and science. The lines are "Classics", "Modern", "Nova" and
"Bravo" which, respectively, are of an academic, contemporary, innovative
and popular nature.
The exhibition devoted to "Crimean Sonnets" by Adam Mickiewicz at the
Khanekiv Museum in Kiev was opened recently within the "Classics" framework
line, concerts of Polish and Ukrainian contemporary music were performed in
Kharkhov, Dniepropietrovsk and Krivoy Rog within the "Modern" framework
while the "Polish Film Week" will be staged at the turn of March and April
within the "Bravo" line in Ukraine's largest commercial cinema network of
"Kinopalast" in Kiev, Donieck, Odessa, and Lvov.
The Polish Film Week will probably become an annual event in the future.
Apart from the above, numerous other cultural and scientific events are
being prepared for this year.
Q: What are the chances of expanding your activities in the future and do
you feel there is such a need?
A: The most important task in the short-time perspective is to acquire
proper premises for the Institute in Kiev. Well equipped, modern premises
would represent a showpiece of a modernising European country, facilitate
the pursuit of our own programme ideas and serve as a magnet for young.
Ukrainians, pro-European public opinion shaping circles. We would be also
able to run Polish-language courses as interest in learning Polish is great.
Q: How do you assess present-day interest in Poland, its culture, science
and traditions among Ukrainians?
A: Interest in Poland, its culture and science has been growing for years.
The Ukrainians are first of all interested in contemporary and modern Poland
during its on-going process of modernisation and as a country serving to
some extent as a model of integrating with contemporary Europe without
loosing its national traditions and character.
The Ukrainians have a great liking for Poland and look at it with some envy
that "it managed". That interest in Poland augurs very well for prospects of
co-operation and mutual benefits in many fields, but it also places upon the
Institute the duty of being a reliable and responsible partner.
Q: How much attention has been given by the Institute to West Ukrainian
territories?
A: Historically and geographically, West Ukrainian territories have been
most closely linked with Poland and as such constitute part of the country
where conditions for all-round co-operation between the two countries are
most conducive. People there know and understand Poland well.
Many Ukrainians living there visit Poland regularly and quite many are
involved in business with Poles. But for us it is eastern and central
Ukraine, that is the areas that remained long under the influence of the
Romanov and subsequently the Soviet empire that poses a challenge for
the Institute.
These parts of Ukraine are still under the influence of Euro-Asian concepts
acknowledging the special role of Russia and Moscow as carriers of a
separate civilisation paradigm. The direction of Ukraine's evolution will
depend on these highly populated, industrialised and potentially very rich
areas.
Will this process evolve toward integration with the European Union or
rather with Russia? For one, it is a very interesting challenge for us; on
the other hand we have to satisfy the growing interest in Poland and in
particularly in contemporary Poland.
Q: While heading the Institute's, have you noticed any evolution of
attitudes toward Poland and Polish people?
A: My experience here in Ukraine prompts me to look with optimism at the
development of relations between Poland and Ukraine. As I said, interest in
Poland has been growing and it depends on us alone whether we shall take
advantage of this development for the good of our nations.
Similarly as the "Orange Revolution" changed the image of Ukraine and the
stereotype of an Ukrainian in the minds of Poles (particularly among the
young ones) that positive change has also generated a friendly attitude of
Ukrainians to Poland. Poland is now perceived not only as a historic
neighbour but also as a strategic partner for to-day and tomorrow.
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6. CONSORTIUM TO PRESENT FEASIBILITY STUDY EXTENDING
ODESA-BRODY OIL PIPELINE TO PLOCK, POLAND ON MARCH 15
Roman Kysil, Ukrainian News Agency, Kyiv, Ukraine, Fri, Feb 24, 2006
KYIV - The consortium made up of SWECO PIC (Finland), ILF GmbH
(Germany), and KANTOR (Greece) will present the final version of its
preliminary feasibility studies for extension of the Odesa-Brody oil pipeline
to Plock (Poland) in Warsaw on March 15.
Cezary Lewandowski, a board member of the Ukrainian-Polish Sarmatiya
company that is in charge of implementation of the project, disclosed this to
Ukrainian News. Lewandowski said that the consortium is completing the
formalities related to presentation of the feasibility studies, which have
already been completed.
According to him, presentation of the feasibility studies will take place
with the participation of the Ukrainian and Polish economics ministers.
Lewandowski did not rule out the possibility of representatives of the
other countries that are potentially interested in the project participating in
the presentation.
According to him, invitation of representatives of such countries is the
prerogative of the Ukrainian and Polish governments.
The Sarmatiya representative also said that the consortium should start
talks with potential investors on the terms of realization of the project
after presentation of the feasibility studies. According to him,
representatives of the consortium have already held consultations with
the Polish companies PKN Orlen and Lotos, which have expressed
preliminary interest in its realization.
He also named ShevronTexaco, ConocoPhilips, and Kazakhstan's
Kazmunaygaz among the potential partners in the project.
As Ukrainian News earlier reported, presentation of the preliminary
feasibility study for the project for extension of the Odesa-Brody oil
pipeline to Plock took place at the Polish Economics Ministry on
December 20, 2005, with the participation of representatives of
Kazakhstan and Ukraine.
According to the presented document, the investment risk involved in
extending the Odesa-Brody oil pipeline to Plock is minimal.
The contract that was signed with the consortium in August 2005 provide
for preparing a business plan for the project within 12 months.
Sarmatiya insisted that the basic elements of the feasibility studies should
be ready by March 2006 in order to accelerate the start of commercial
negotiations.
According to information from the company, the preliminary feasibility
studies will include, among other things, the proposed tariff for pumping
crude oil via the Odesa-Brody-Plock route that will ensure its
competitiveness, information about the necessary investments in
construction of the Brody-Plock segment, and the possible volumes of
crude oil that could be delivered to Europe via this pipeline.
The final version of the feasibility studies will be drafted with the
participation of the investors interested in the project. The Sarmatiya
company, which was founded by Ukrainian and Polish national oil
transportation companies in 2004 to implement the Eurasian oil transport
corridor project, aims to build the pipeline with private investments by
creating a pool of investors by October 2006.
If the feasibility studies show that the project cannot be fully commercial,
Sarmatiya intends to ask the Polish government and the European
Commission to provide additional funding for the project because it will
increase the energy security of the European Union. -30-
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[return to index] [The Action Ukraine Report (AUR) Monitoring Service]
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7. SIGNING OF DOCUMENTS ON ENERGY SECURITY EXPECTED
DURING POLISH PRESIDENT'S VISIT TO UKRAINE SAYS KINAKH
Roman Kysil, Ukrainian News Agency, Kyiv, Ukraine, Sun, Feb 26, 2006
KYIV - The National Security and Defense Council's Secretary Anatolii
Kinakh is forecasting that documents on energy security will be signed
during Polish President Lech Kaczynski's visit to Ukraine that is planned
for February 28-March 1. Kinakh announced this to journalists at a press
conference after a meeting with Kaczynski in Warsaw on Tuesday.
"We are hoping that fundamental documents on a strategy for cooperation
between Poland and Ukraine in the area of energy will be signed during the
visit," Kinakh said. According to him, the documents will also involve the
project for construction of the Odesa-Brody-Plock oil pipeline.
Andrzej Urbanski, the head of the Polish president's chancellery, said at
the press conference that the issue of energy security was a priority of the
Polish president. "For Lech Kaczynski, the issues of diversification [of the
sources of energy deliveries] are fundamental," he said.
As Ukrainian News earlier reported, acting Prime Minister Yurii Yekhanurov
and Poland's Prime Minister Kazimierz Marcinkiewicz signed a declaration on
support for the extension of the Odesa-Brody oil pipeline to Plock (Poland)
on February 16.
Ukraine and Poland want to create a Eurasian oil transport corridor for
transporting Caspian crude oil to Europe on the basis of the
Odesa-Brody-Plock pipeline.
The European Union backs this project. It has allocated EUR 2 million for
preparation a feasibility study for it. Ukraine's Ukrtransnafta company and
Poland's PERN Przyjazn company created the Sarmatiya joint enterprise in
July 2004 for implementing the project. Sarmatiya is presently cooperating
with the consortium that is conducting the feasibility studies for the
project. -30-
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Send in a letter-to-the-editor today. Let us hear from you.
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8. YOU ARE INVITED TO: UKRAINE BRIEFING
"BUSINESS ENVIRONMENT & MACROECONOMIC SCENE"
BEFORE THE PARLIAMENTARY ELECTIONS
Tuesday, February 28, 2006, 3:00 p.m. to 5:00 p.m.
at The Heritage Foundation
214 Massachusetts Avenue, NE, Washington, D.C.
Sponsored by the
Economics & Business Task Force - US-Ukraine Policy Dialogue
Heritage Foundation, Rand Corp, US Chamber of Commerce, SigmaBleyzer
U.S.-Ukraine Foundation, Manager, US-Ukraine Policy Dialogue
PRESENTATIONS BY MEMBERS OF THE PANEL
[1] MICHAEL BLEYZER, President, SigmaBleyzer,
Emerging Markets Private Equity Investment Group
"Doing Business Today in Ukraine & Raising Equity Capital for Ukraine"
[2] DR. ARIEL COHEN, Sr. Research Fellow, Kathryn and Shelby
Cullom Davis Institute for International Studies, The Heritage Foundation
"The Politics Driving the Business Environment & Macroeconomic Scene"
[3] DR. EDILBERTO SEGURA, Director, Chief Economist, SigmaBleyzer
President, Advisory Board, The Bleyzer Foundation, Kyiv
Co-author, "Ukraine, Macroeconomic Situation" monthly report
"Year 2006 Numbers & Projections, Macroeconomic Scene in Ukraine"
[4] YEVGEN BURKET, Trade Representative, Trade & Economic
Mission, Embassy of Ukraine, Washington, D.C.
"U.S.-Ukraine Business Relations and the WTO Bilateral Agreement"
FOLLOWED BY DISCUSSION
MODERATOR: Morgan Williams, Chairman, Executive Committee,
Ukraine-U.S.Business Council & Director, Washington Office, SigmaBleyzer
PLEASE RSVP TO: Morgan Williams
MWilliams@SigmaBleyzer.com; Telephone, 202 437 4707
-------------------------------------------------------------------------------------------------
Members US Side, Economics & Business Task Force
US-Ukraine Policy Dialogue
Ariel Cohen: Senior Research Fellow, Heritage Foundation, Chairperson
Keith Crane: Senior Economist, RAND Corporation
Gary Litman: Vice President. European Affairs, U.S. Chamber of Commerce
E. Morgan Williams: Director, Government Affairs, Washington Office,
SigmaBleyzer Emerging Markets Private Equity Investment Group
--------------------------------------------------------------------------------------------------
Action Plan Reports: Economics & Business Task Force
U.S.-Ukraine Policy Dialogue Task Force Reports from the June 2005
working session in Washington, DC and the November 2005 working
session in Kyiv.
[1] Economics & Business Action Plan - June 2005:
LINK: http://www.usukraine.org/econ_action_plan_June05.pdf
[2] Economics & Business Action Plan - November 2005:
LINK: http://www.usukraine.org/econ_action_plan_Nov05.pdf
---------------------------------------------------------------------------------------------
US-Ukraine Policy Dialogue
Further information about the U.S.-Ukraine Policy Dialogue can
be found on the website of the U.S.-Ukraine Foundation (USUF).
LINK: http://www.usukraine.org/dialogue.shtml
---------------------------------------------------------------------------------------------
UKRAINE - MACROECONOMIC SITUATION - JANUARY 2006
To read the SigmaBleyzer "Ukraine -Macroeconomic Situation" report for
January 2006 in PDF format, including several color charts and graphics
click on the following link:
http://sigmableyzer.com/files/Ukr-Monthly_Ec_Report_01_06.pdf
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9. UKRAINE TO DIVERSIFY FUEL SUPPLIES FOR ITS NUCLEAR
POWER PLANTS, WESTINGHOUSE & POSSIBLY FRENCH FIRMS
Itar-Tass, Moscow, Russia, Saturday, February 25, 2006
DONETSK - The Ukrainian government said it would diversify fuel supplies
to the national nuclear power plants. Prime Minister Yuri Yekhanurov told a
press conference in Kharkov on Saturday, "We want to diversify fuel supplies
to Ukraine to feel better."
He said Ukraine is considering closer cooperation in this field with Russia.
"We are also working with Westinghouse of the U.S., and there are offers
from French firms," he said.
In October 2005, the Ukrainian Fuel and Energy Ministry said Westinghouse
Electric Company (U.S.) might become an alternative supplier of fuel for
Ukrainian nuclear power plants in two to three years.
The U.S. government has decided to extend the Ukrainian nuclear fuel
qualification project in order to bring American fuel in compliance with
Ukrainian standards so that it could be used by Ukrainian nuclear power
plants. Currently Russia's company TVEL is the sole supplier of fuel to all
Ukrainian nuclear power plants. -30-
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10. RUSSIAN SEVERSTAL-METIZ BUYS 60% OF UKRAINIAN
METALWARE PRODUCER DNIPROMETIZ
Interfax-Ukraine, Kyiv, Ukraine, Sunday, February 26, 2006
KYIV - Severstal-Metiz, the metalware division of Russia's Severstal
(RTS: CHMF) steel company, has bought 60% plus one share in
Ukraine's Dnipropetrovsk-based metalware plant Dniprometiz from
Ukraine's TAS Group.
The parties told reporters in Dnipropetrovsk that the transaction
was the result of a partnership deal that TAS and Severstal-Metiz signed
on February 17, 2006. The Teko-Dniprometiz holding company, which
is a member of the TAS Group, owns 27% of the Ukrainian metalware
plant.
A press release circulated at the briefing said that the main
purpose of the transaction was to develop Dniprometiz, make the best
technologies of Severstal-Metiz's Russian plants available to it and
expand the product range.
"Severstal-Metiz views the acquisition of the stake in Dniprometiz
as the next step in the implementation of its export-oriented
development strategy," the release said.
The release said there would be no wholesale management or
personnel-related changes at Dniprometiz in the immediate future.
Severstal-Metiz intends to make a detailed study of the situation
and then sit down with its partner and work out a development strategy.
The first results of that study will not emerge for three or four
months. The plant will work according to existing plans for the time
being.
The TAS Group, which brings together a number of banks, insurance
companies, metals plants and machine-building enterprises, welcomed the
partnership with Severstal-Metiz as one that is consistent with the
globalization of industry, metalware included. "For Dniprometiz this is
a chance to obtain unique production and management know-how and
boost its development," the release said.
Dniprometiz's shareholders appointed Dmitry Sergeyev, a manager at
Severstal-Metiz, as the company's general director at a February 24 EGM.
They also voted to disband the company's executive board.
The five-member supervisory board includes three Severstal-Metiz
representatives, one Teko-Dniprometiz representative and one independent
director, Olga Naumova, the general director of Severstal-Metiz, told a
press conference in Dnipropetrovsk. Naumova said the board's chairman
had not yet been elected.
She said Sergeyev had a wealth of experience at integrating
Severstal-Metiz's enterprises, notably the Volgograd metalware plant. "I
think we'll get through the transition period thanks to his experience,
our joint efforts and the help of our partners. We look at this as a
true partnership, not a merger or takeover," Naumova said.
The Dniprometiz shareholders also voted to triple the company's
charter capital to 23.426 million hryvni by issuing new shares with
existing par value of 68.08 hryvni. Naumova said this was being done
in order to raise capital for the Ukrainian plant's development.
The plant's core shareholders did not say whether they intended to
increase their stakes as the result of the share issue. The shares will be
issued in two phases - one from May 24 to June 7 and the other from
June 8-9.
Dmitry Sergeyev, Dniprometiz's new general director, told the press
conference that the company intended to discuss prices for wirebars with
the Mittal Steel Kriviy Rih steel works.
"We'll be talking to them," Sergeyev said, adding that Dniprometiz
was "not euphoric about [the] price rises." Mittal Steel Kriviy Rih has
hiked its wire rod prices on two occasions lately, the press conference
was told.
Olga Naumova said that Dniprometiz could rely on the Severstal
Group's own feed materials if the need arises. "We have our own
feedstock, and we can cushion ourselves against the risks if prices
rise," she said. Naumova also said that Severstal-Metiz planned
to export Dniprometiz's hardware.
"The enterprise fits nicely into the group's general long-range
export strategy. We think that Dniprometiz will help us to create a
full, highly efficient chain of export commodity manufacturers. In this
particular case Dniprometiz will be geared towards the Middle East,"
Naumova said.
Dniprometiz, which is a member of the Ukrmetiz association, is
Ukraine's biggest metalware producer. It raised output 15% to 252.2
million hryvni (5.05 hryvni/$1 on Feb 26) in 2005 and produced 124,826
tonnes of metalware.
Severstal-Metiz, Russia's biggest metalware producer, controls 31%
of Russia's metalware market and accounts for around half of the
country's metalware exports. It produced 825,400 tonnes of metalware in
2005, exporting 200,000 tonnes.
TAS Group, formed in 2001, includes TAS Kommertsbank,
TAS-Investbank and TAS Insurance Company. It is headed by
Serhiy Tyhypko.
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11. CO-FOUNDER OF PAYPAL IMMIGRATED TO US FROM UKRAINE
AS A TEENAGER IN 1992, PAYPAL SOLD FOR $1.5 BILLION TO EBAY
Max Levchin, born in Kiev, likes the edge. Starting another company was
the natural thing to do for PayPal co-founder.
Dan Fost, San Francisco Chronicle Staff Writer
San Francisco, California, Sunday, February 26, 2006
SAN FRANCISCO - Max Levchin, who immigrated to the United States as
a teenager from Ukraine, achieved a smashing success in 2002 when he was
just 26 years old. The company he co-founded, PayPal, was sold to eBay
for $1.5 billion.
His parents, apparently, were not satisfied. His mother told him, with what
Levchin describes as aspirations typical of Eastern European Jewish parents,
that maybe he could finally earn a doctorate degree. But for Levchin, 30,
who is one of the Internet's most renowned fraud combatants, the fire to
achieve has meant plunging back into the startup world.
He has a small firm in San Francisco, Slide, that he believes could be
bigger than PayPal, even though its business model has changed at least
three times in the past three months. In an interview in early November,
Levchin talked about Slide as a photo-sharing site; later that month, it was
more about group communications, a la Friendster; and last week, Levchin
said he is looking to change the experience of Internet browsing.
The constant change doesn't faze Levchin or his backers. PayPal, he points
out, started out providing security software for handheld devices, and it
changed direction at least six times before finding its raison d'etre. "You
can't get married to any one particular plan," he said. "That is the biggest
lesson I learned at PayPal."
The underlying principle of Slide has not changed, he insists. "I'm trying
to build something where people will go every day," he said. "Whatever
we're going to do, we're going to do it fast and furious, and if it doesn't
work, we'll try something else."
Slide (www.slide.com) enables people to either visit a Web site or download
an application to their desktop with a series of images crawling across the
screen. The images could be personal photos, the top Google News items,
or ads or other pictures selected to match your preferences.
The main idea, Levchin says, is to organize the Internet's vast array of
information into something like the tickers that stockbrokers rely on, or
the news crawl across a cable TV channel. It will make money by including
some sponsored pictures in the crawl.
In a way, it's a revival of the "push" technology that rose and fell in the
late 1990s. Levchin thinks people are fed up with having to actively search
out information and instead would like it pushed to them.
Joe Wilcox, a senior analyst with Jupiter Research, offered cautious praise.
"It's an interesting idea, and it could work, but also I'd say, stand in
line, because there are other people out there with other types of push
opportunities that are looking for the money pot, too," Wilcox said.
"Nobody's really found it yet." Yet Levchin has a pretty good track record.
"PayPal is a hell of a first act to follow," Wilcox said.
Peter Thiel, the hedge fund manager who co-founded and ran PayPal, agrees.
Levchin "is one of the very few people who is incredibly brilliant,
incredibly creative and incredibly hard-working," said Thiel, an investor in
Slide.
PayPal, Thiel said, had to deal with "Visa, eBay, government investigators,
the Russian mafia -- getting PayPal to work was not a trivial thing. You
should not underestimate the determination of the people involved."
EBay, in particular, was an early thorn in PayPal's side. EBay occasionally
sought to supplant PayPal with its own payment service, Billpoint, Levchin
said in an e-mail, "but with Billpoint being a much weaker version of our
product, their own users would complain, and they'd have to let us keep at
it. Once it became clear that we had mastered keeping fraudsters at bay, and
run a very profitable company, eBay realized that acquisition was the only
choice."
SALE WAS GOOD TO HIM
The acquisition, in 2002, was good to Levchin, although he doesn't like to
say how good. Press reports at the time said valued his stake in eBay at $36
million, but Levchin, in an e-mail, said, "To be honest, I'd rather keep
this stuff as private as possible. I did really well financially, and I
didn't sell my eBay stock early -- still have a fair bit."
Levchin has drawn on his PayPal contacts in starting Slide, including his
old college buddy, IronPort Systems co-founder Scott Bannister, and John
Malloy from Blue Run Ventures (formerly Nokia Venture Partners).
"It's the old PayPal gang together again," Levchin says. (Levchin is also a
primary investor in Yelp, a startup that provides reviews of restaurants,
nightlife and other activities, and is run by PayPal alumni Jeremy
Stoppelman and Russel Simmons.) Levchin was such a beloved figure at
PayPal, Thiel said, that "a number of people who had kids named their kids
Max."
Levchin is also highly competitive, according to his friend, James Hong, who
co-founded and runs the dating site HotOrNot.com. "Max and I started
working out when we were both living in Mountain View," Hong said.
"Everything was a contest. Could I do this many pushups? He'll have to
do that many, plus two."
When the two met in the offices of Sequoia Capital, Levchin was finished
with PayPal and wasn't working. Hong said he was miserable. "He's a very
intense guy," Hong said. "He needs to be working on something all the time."
Thiel, who is now president of Clarium Capital, a San Francisco hedge fund,
believes Levchin's drive comes from his immigrant roots. Levchin doesn't
deny it.
He was named Maximilian, he believes, after the Maxim, the first heavy-gauge
machine gun. He was born in Kiev, the capital of Ukraine, when it was under
Soviet authority. "My family was all old, Soviet-educated, very serious
physicists," he said.
His father is a writer, and his mother a mechanical engineer. His
grandmother, grandfather and uncle are all physicists. "Higher education in
the Levchin family is not a bachelor's, but a Ph.D.," he said. His parents
both have master's degrees, and his younger brother is about to earn a
doctorate in Russian literature.
His mother, Elvina Levchin, said in a phone interview from her Chicago
home that she always stressed education, even though in the Soviet system
it did not necessarily lead to wealth.
"In our family, everyone is a hard worker," she said. "We didn't have
material values to buy something. ... It was the last thing we would teach
our kids, to have something like furniture. We taught them to have good
knowledge, a good education and to work hard -- not to get something. Just
the work is something interesting for us. To study new things, to learn
something, to improve our knowledge."
Max Levchin remembers the dark side of Soviet life as well, "being Jewish in
an anti-Semitic state." One day, he recalls, "I couldn't go to school until
my dad cleaned the door. Someone had painted a Star of David on it."
His parents and grandparents always told him that as a Jew, he needed to be
valedictorian or he wouldn't get into college. In addition, "I needed to
secure my life from the prying eyes of the government," which fostered a
lifelong interest in cryptography and security. He began programming at age
11 or 12, starting with assembly language. "Every time I discovered a
higher-level language, I would go further," he said.
His mother recalls her son starting on a calculator. She tried to interest
him in computers where she worked as an engineer. "He said, 'I will start
on the computer after I finish with the calculator, and be able to do
everything I want in the calculator.' " By the following year, he began
visiting her at work and tinkering with the computer.
'A REAL BAD FEELING'
When he was 16, his family moved to Chicago. They had several reasons,
Elvina Levchin said: lingering fear of fallout from Chernobyl, problems her
husband had with the KGB and fear of her son getting drafted into the Soviet
army. "It was a real bad feeling," she said.
Max Levchin has worked hard to assimilate and speaks with only the faintest
trace of an accent. He went to the University of Illinois at
Urbana-Champaign, a computing hotbed that produced Tom Siebel, Marc
Andreessen, Ray Ozzie and many tech innovations. "It was the cheapest, best
school that my mom would let me go to, because it was close enough,"
Levchin said.
By the time he graduated with his bachelor's degree in 1997, he was already
infected with the entrepreneurial spirit. He had started one company, Secure
Pilot, which sold security software for PalmPilots. "I put it online and
said anyone who wants it can send me money for it," he said. "I had no way
to collect money, since PayPal was not invented yet."
He was getting attention for some of his other work when he moved to
California, staying on the floor of his friend Scott Bannister's apartment.
One day he happened upon a flyer on the Stanford campus promoting one
of Peter Thiel's speeches. As Levchin tells it, he was one of about seven
people in the audience, and he rescued Thiel from an obnoxious chatterbox
who had cornered him.
The two had breakfast at Hobee's in Palo Alto the next day, and Levchin
pitched some startup plans. Thiel helped him think through the concepts,
ultimately funding the forerunner to PayPal and quitting his hedge fund to
work for it. Levchin at the time was 23.
Once they got their funding, and the company (initially named Confinity)
evolved into the payment service, they realized there was one major hurdle
to success: security.
"One of things we soon discovered was a very big online fraud problem that
absolutely plagued the service," Thiel said. "The ability to fight fraud was
the key thing that made PayPal a very valuable company." But it was a long
road to get there, full of many all-nighters for Levchin. Although he seems
reluctant to talk about it, he shares a story from his days hunting hackers.
It was mid-2000, he said, and PayPal was losing $5 million to $15 million a
month to fraud. Criminals figured out that the site would flag large
transactions, so they came up with ways to automatically sign up multiple
accounts, moving small amounts of money around.
One particularly brazen person had written some programs to sign up hundreds
of accounts each day, Levchin said, signing his e-mails "Greg Stivenson."
The man Levchin called PayPal's sheriff was a 6-foot-5 ex-Marine named John
Kothanick. When he shut down several Stivenson accounts, he sent a notice to
the offender.
The man wrote back: "You think you got me? Look at this." There were
thousands more fake accounts opened that day. When Levchin got involved,
a three-way dialogue opened up. "There was a bizarre rapport," Levchin said.
"I kept trying to figure out how to stop him from signing accounts up
automatically. Every time, it would take him less and less time" to crack
the solution. He sent taunting messages: "Screw you, American bastards. I'll
be back." "All this while," Levchin said, "he's stealing millions and
millions of dollars."
SECURITY SYSTEM
According to the book "The PayPal Wars," by Eric Jackson, Levchin and
engineer David Gausebeck developed a mechanism to tell if a machine or a
person was signing up the accounts. The Gausebeck-Levchin test, now
commonplace online, presents some wiggly letters that a computer can't
read, but that a person can retype to gain access to the secure areas.
"I started on it Friday night, and spent until Monday morning, coding it
nonstop," Levchin said. "John (Kothanick) sent the guy an e-mail: 'Try to
stop this.' He never responded."
Levchin believes that the man involved was Aleksey Ivanov, part of a larger
ring of Russian hackers, who was lured to Seattle by the FBI in 2000 and was
sentenced to four years in prison in 2003. "PayPal was just a small part of
their criminal work," Levchin said. Levchin said he took the intrusions
personally. "I am the impenetrable Russian," he said. "The rules of
engagement are clear. They try to steal and I stop them."
Looking back, Levchin said he enjoyed applying his mathematical skills to
figuring out criminal behavior. But he's left that behind. "I want to do a
more fun version now," he said.
At Slide, he has 31 employees. Many of them were recruited in a way that
does not exactly make his education-minded family proud: His alma mater, the
University of Illinois Urbana-Champaign, invites him to speak, and while on
campus, he makes late-night visits to computer labs, encouraging prospects
to drop out of school.
He did the same thing when he was at PayPal. "What am I going to tell their
parents?" he said. "The last time I got kids to drop out of college, they
all bought houses for cash." Does his mother mind that he has once again
deferred higher education? She doesn't seem to. "He's an adult," Elvina
Levchin said. "He decided what he wants to do. He did it. He started his
company. I'm very happy that he is successful." -30-
-------------------------------------------------------------------------------------------------------
E-mail Dan Fost at dfost@sfchronicle.com.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/02/26/BUGHIHDT5N1.DTL&feed=rss.business
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12. THE ORANGE CHRONICLES DOCUMENTARY FILM FUNDRAISER
Friday, March 3rd, 7:30 p.m. The Ukrainian Institute, NY, NY
The Ukrainian Institute, New York, NY, Friday, Feb 24, 2006
NEW YORK - The Ukrainian Institute in New York City is delighted to
host an event to raise funds for "The Orange Chronicles" documentary
project.
Join them for a screening of the film, and meet filmmakers Damian
Kolodiy and Peter Zielyk on Friday, March 3rd at 7:30 p.m. Admission
is $20.00. A wine reception will follow.
Damian Kolodiy arrived in Kyiv on November 16, 2004, and remained for
all of Ukraine's historic Orange Revolution. From Kyiv to Donetsk to
Odessa to Lviv, The Orange Chronicles examines this watershed event
through poignant observation and personal interaction with Ukrainians on
all sides of the debate. A one-hour version of the film will be screened.
WHERE: The Ukrainian Institute, 2 East 79th Street, New York,
NY 10021, Tel: 212-288-8660
For more information on the film at www.OrangeChronicles.com.
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13. FILM: "LIGHT FROM THE EAST"
1991.Revolution.Ukraine.The End of an Era.The Birth of a Nation
The story of an American theater troupe that witnessed the
fall of Communism while in Ukraine in August of 1991.
E. Morgan Williams, Publisher and Editor
The Action Ukraine Report (AUR) #667, Article 13
Washington, D.C., Monday, February 27, 2006
WASHINGTON - In May, residents and visitors of New York City will
have the rare opportunity to view "LIGHT FROM THE EAST," the
story of an American theater troupe that witnessed the fall of Communism
while in Ukraine in August of 1991.
The film debuted at the South By Southwest film festival, Austin, Texas,
last year and will be showing for seven days only from Thursday, May 11
through Wednesday, May 17 (9 pm) at the Pioneer Theater, East 3rd street,
between Avenues A and B (closer to A) in New York City.
Tickets can be bought now and advance purchase is highly recommended.
The Pioneer Theater is only a 100 seat theater.
If the theater can sell out a week in advance it could be possible to have
a longer run for the film. It is hoped that Ukrainian and other interested
organizations in NY would promote the screening and make it an event
for their organization.
A synopsis of the film on the "Light From The East" website states:
"Summer 1991. Glasnost. Perestroika. The Soviet Union opens its doors
to the West. In New York, a troupe of young actors from the La Mama
theater in New York gather to participate in the first American/Ukrainian
cultural exchange theater project in history.
As an actress in the theater group, American filmmaker Amy Grappell
brought along a cinematographer to document this historic cultural
exchange.
The troupe begins to rehearse the play "Light From the East", a docu-
drama that explores the life and work of the nationally acclaimed Ukrainian
theater director Les Kurbas. Despite political resistance, Kurbas and his
company revolutionized the Ukrainian theater of the 1920s by introducing
world classics to the Ukrainian stage.
Kurbas' dream of internationalizing the Ukrainian theater clashed with
government ideals, leading to his assassination in one of Stalin's purges.
As the production nears, Gorbachev is kidnapped, the Kremlin is
overthrown by a military coup, and the entire USSR is plunged into volatile
uncertainty. The troupe finds itself trapped at the epicenter of a political
revolution.
Inspired by the courage of the Ukrainian people who in their fight for
independence, squelch the coup and seize their liberty, the actors remain in
Ukraine, determined to put on the show rather than leave, as encouraged by
the American Embassy.
As rehearsals progress the play ironically begins to mirror action in the
streets. Kurbas and his company struggled to make art during the revolution
that ushered in Communism; the American troupe performs the life of Kurbas
as the walls of Communism come tumbling down.
In between rehearsals, Amy and her host Natalia, conduct informal interviews
with average Ukrainians that provide meditations on freedom. Ukrainians
show Americans that the concept of freedom is complex and that after nearly
a century of repression it will take time for most to feel "free".
During the massive political change of 1991, LIGHT takes the viewer on a
philosophical inquiry into the meaning of freedom and artistic expression.
As the tour ends, Ukraine declares its national independence, and the
American troupe faces the powerful lesson that freedom comes from
within."
Review comments about the film:
"Personal, political, historical, I loved It." - Richard Linklater, director
of BEFORE SUNRISE and BEFORE SUNSET, School of Rock,
Dazed and Confused and Scanner Darkly
"Beautifully captures the spirit of the former Soviet Union and the soul
of its people." - Albert Maysles
"After the recent, quiet Revolution in Ukraine, this movie is a must see
as it uses a cultural exchange theater project for the focal point of
examining a people who despite political realities are driven by dreams
that become realities."
- Louis Black, Publisher, AUSTIN CHRONICLE
Information about purchasing tickets at the Pioneer Theatre in NYC can
be found at: http://www.twoboots.com/pioneer/light.htm. Additional
information about the film can be found at: www.lightfromtheeast.com.
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14. ENDANGERED REVOLUTION:
Ukraine's bold push for democracy stunned the world,
but can it live up to its promise?
Article By Andrew Meier, National Geographic magazine
Washington, D.C., March 2006, Pages 32-50
[EXCERPT] When Viktor Yushchenko rises each dawn to begin the
longest days of his life, he stares hard in the mirror. "The president
doesn't recognize himself," an aide in his inner circle confides. "For
him, it's impossible to square the face in the glass with the man inside."
For millions of his compatriots, however, Yushchenko's face-bloated,
pockmarked, and deeply discolored-is a fitting symbol of their
long-suffering land, scarred by the past yet surviving against all odds.
For years Yushchenko bided his time. Throughout the dark era of former
President Leonid Kuchma, Ukraine, a nation of 46 million in a land larger
than France, devolved into a fiefdom of regional clans and robber baron
oligarchs. Reformers mounted feeble assaults on the halls of power, but the
country was held captive by a criminal regime atop a foundering post-Soviet
state.
For Ukrainians who yearn to escape Russia's shadow and join the rest of
Europe and the West, Yushchenko stood as the last great hope.
Then, almost on cue, came Yushchenko's brush with death. During the tense
days leading up to the 2004 presidential election, then candidate Yushchenko
fell gravely ill and had to be spirited out of the country for emergency
treatment. Austrian doctors discovered the cause of his near-fatal sickness:
dioxin poisoning.
Yushchenko survived, but with a disfigured face that fueled outrage at the
old regime, believed by many to have ordered Yushchenko's assassination.
Instead of killing him, however, his rivals became unwitting handmaidens of
his revolution.
A declaration echoed across Ukraine in the wake of Yushchenko's ascent:
Ya stoyav na Maidani! It means "I stood on the Maidan," Independence
Square in the heart of Kyiv. It also means, I was there, I stood up for
freedom, I have a right to expect change.
During those tense wintry weeks when the old regime tried to hijack the
election and the future hung in the balance, Ukrainians young and old
flooded the capital, setting up a tent city on the Maidan and taking over
the Kreshchatyk, Kyiv's central avenue that doubles as Ukraine's main
street.
For weeks the world watched the standoff, wondering if civil war would erupt
between western Ukraine, Yushchenko's stronghold, and the country's eastern
half, home to most of Ukraine's eight million ethnic Russians. It didn't
happen. Surrounded by riot troops, the protesters stood their ground in
peace. Their only weapons were banners, T-shirts, scarves, and balloons,
all the same orange color. The Orange Revolution was born. -30-
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LINK: http://www7.nationalgeographic.com/ngm/0603/feature1/index.html
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15. BOOK: AN ORANGE REVOLUTION
A Personal Journey Through Ukrainian History
A captivating book about a defining moment in European history.
E. Morgan Williams, Publisher and Editor
The Action Ukraine Report (AUR) #667, Article 15
Washington, D.C., Monday, February 27, 2006
WASHINGTON - The new book by journalist Askold Krushelnycky
"An Orange Revolution" A Personal Journey Through Ukrainian History"
is being launched in London, UK, on Tuesday, March 14. I have received
an advance copy of the book from Askold. This is one book you do not
want to miss. Askold says he will be in London for the launching and
would like to see many of his friends, Ukrainians and the friends of
Ukraine there.
The book is being published by Harvill Secker of The Random
House Group. A press release from Harvill Secker says the following:
"In November-December 04, the world's eyes were fixed on Ukraine -
watching its people rise up and quietly overthrow the corrupt and
dishonest government.
In "An Orange Revolution," journalist Askold Krushelnycky returns
to the country of his parents' birth and charts the history of the
enormous but little known European country to explain the
significance of this revolution.
The Ukraine's industrial output, rich soil, precious fossil fuels and
engineering excellence, made it the jewel of the USSR's empire.
Despite the break up of the superpower, the Kremlin still maintained
an extraordinary hold over the country, and was loath for that to
change.
During the run up to the 2004 elections the Russian president, Vladimir
Putin, committed considerable funds to make sure his ally, Prime Minister
Viktor Yanukovych, remained in power, and casually assumed that
Ukrainians would be resigned as usual to the customary vote rigging.
This time, the blatant corruption and skullduggery forced hundreds
of thousands of ordinary people to take to the streets and demonstrate.
Decked in orange, the colour of the opposing party, the crowds called
for Viktor Yushchenko -- their leader in waiting.
Krushelnycky tells this gripping story with a journalist's detachment,
but with insider knowledge. Interviewing major players and anonymous
demonstrators alike, Krushelnycky also brings a very personal element
to the turbulent history of Ukraine, and outlines how events have directly
affected his family and friends.
In spite of threats of violence, the murder of high profile investigative
journalist and the poisoning of Viktor Yushchenko, the Ukrainian
people stood their ground and brought about lasting change.
Krushelnycky has added an epilogue to the end of the book, updating
the history further, and setting the scene for the [parliamentary] elections
in March 2006."
Journalist Krushelnycky wrote in his acknowledgment page: "During my
research for this project I have read books and articles which were
informative and thought-provoking. Among the books I found most
helpful were Orest Subtelny's outstanding "Ukraine - A History," Danylo
Yanevsky's Ukrainian-language "Chronicle of the Orange Revolution,"
and Jaroslav Koshiw's "Beheaded - The Killing of a Journalist."
Of considerable use have been an English-language Internet publication
called "Action Ukraine Report," edited by E. Morgan Williams, and the
Ukrainian and Russian-language "Ukrayinska Pravda" Internet daily
newsletter. Both provide comprehensive coverage and analysis of the
country's news and the latter has been a brave champion of Ukrainian's
fight for democracy."
Information about how to purchase the book can be found at the
following link: http://www.randomhouse.co.uk/catalog/results.htm
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CONTACT: Askold Krushelnycky, Askold.Dare@gmail.com
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16. U.S. WARNS BELARUS OVER VOTE
AP, Reuters, The Moscow Times, Moscow, Russia, Sun, Feb 26, 2006
MINSK -- A senior U.S. diplomat warned Belarus not to manipulate results
in next month's tense presidential election, in which Alexander Lukashenko
is seeking a third term.
Lukashenko's main challenger, Alexander Milinkevich, has said opposition
backers will hold demonstrations if the March 19 election is tallied
fraudulently -- and concerns are high that any such large gathering would be
swiftly and harshly put down by police and troops.
U.S. Deputy Assistant Secretary of State David Kramer called on all sides
to avoid violence, but "there is a bigger responsibility on the part of the
government -- since they are the ones with security forces, they are the
ones with guns, batons and other means, tear gas -- to avoid use of force
and to make sure that the election is free and fair."
"A fraudulent election will obviously not help relations, and those who
would engage in that kind of activity I hope will not underestimate the
resolve of the European and U.S. communities," Kramer said at a news
conference at the end of a two-day visit.
The Belarussian Foreign Ministry responded Saturday by urging
Washington to help keep the election free of violence.
"One can only express surprise at the State Department representative's
insistence on possible 'violent protest actions in Belarus during the
election campaign,'" Foreign Ministry spokesman Andrei Popov said in a
statement. "Just what is meant here is totally incomprehensible." Popov said
the United States should share any information it might have on possible
violence.
Kramer said Friday: "I'm not here pushing people to go into the streets. But
if it's what people choose to do, they have a right to do it in a peaceful
way."
In a speech to students at a military institute on Friday, Lukashenko
portrayed himself as defending the nation's youth against foreign
influences. "Our Western opponents very well understand that the most
important thing is to take ownership of the minds of the young people in
order to then manipulate them and lure them into illegal activities," he
said. "They are trying to inspire them with the idea that the most important
thing in life is their own advantage and pleasure."
Lukashenko has accused the United States and other Western countries of
backing the mass demonstrations in the former Soviet republics of Ukraine,
Georgia and Kyrgyzstan over the past two years. Those demonstrations, which
all broke out after disputed elections, drove longtime leaders from power in
Georgia and Kyrgyzstan and forced an election rerun in Ukraine that was won
by pro-West reformer Viktor Yushchenko.
European Union-funded independent television and radio broadcast programs
for Belarus will begin on Sunday, the EU executive said, as the continent's
leading human rights watchdog said what it called "isolation" of the
Belarussian people must end.
The news and current affairs broadcasts in Russian and Belarussian are
designed to provide independent news to Belarussians ahead of the election.
The Czech Republic's foreign minister and a senior official of the Council
of Europe on Thursday called on all member states of the council to support
democratic forces and civil society in Belarus.
"We encourage the member states of the Council of Europe to strengthen their
support for the further development of democratic forces and civil society
in Belarus and to break the isolation of the Belarussian people," said a
joint statement by Czech Foreign Minister Cyril Svoboda and president of the
Parliamentary Assembly of the Council of Europe, Rene Van der Linden,
adopted at the end of a conference in Prague.
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LINK: http://www.themoscowtimes.com/stories/2006/02/26/015-full.html
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17. BELARUS SAYS US CONCERN OF VIOLENCE DURING
UPCOMING PRESIDENTIAL ELECTION UNWARRANTED
Deputy U.S. Assistant Secretary of State David Kramer visiting Belarus
Associated Press, Minsk, Belarus, Sat, February 25, 2006
MINSK, Belarus - The Belarusian Foreign Ministry expressed "surprise" on
Saturday at a U.S. diplomat's call for the government and its opponents to
avoid violence over the country's upcoming residential election, saying U.S.
concerns about the use of force are unwarranted.
"It's obvious to anyone who lives in Belarus that there is no basis for
this. Everybody notices that the election campaign is going calmly, within
the framework of the law," the ministry said in a statement.
It came a day after Deputy U.S. Assistant Secretary of State David Kramer,
visiting Belarus, called on all sides in the tense nation to avoid violence
but said the government's responsibility is bigger "since they are the ones
with security forces, they are the ones with guns" and truncheons and tear
gas.
The Foreign Ministry said it was "surprised by the insistence with which the
State Department representative tried to develop the theme of possible use
of force and protests" linked to the March 19 election.
It called on the United States to "use every chance it has to dissuade
potential instigators of violence ... if of course the American side has
contact with them" - a reference to U.S. diplomats' close relations with
opponents of authoritarian President Alexander Lukashenko, whom U.S.
officials have likened to a dictator.
Lukashenko, seeking re-election after pushing through a referendum scrapping
term limits, has accused the United States and other Western countries of
backing mass demonstrations that broke out after disputed elections in the
ex-Soviet republics of Ukraine, Georgia and Kyrgyzstan over the past two
years and helped bring the opposition to power. He alleges the West aims to
provoke similar unrest in Belarus.
Lukashenko's main challenger, Alexander Milinkevich, has said opposition
backers will hold demonstrations if the vote count is considered fraudulent,
and concerns are high that any such large gathering would be swiftly and
harshly put down by police and troops. -30-
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========================================================
18. BRINGING DOWN EUROPE'S LAST EX-SOVIET DICTATOR
Presidential election in Belarus on Sunday, March 19
By Steven Lee Myers, NY Times bureau chief in Moscow
The New York Times Magazine, NY, NY, Sunday, February 26, 2006
On March 19, Aleksandr Milinkevich will not be elected the next president
of Belarus. He campaigns anyway, but with something else in mind.
Through the winter he has traveled from city to city in clattering rented
vans, meeting would-be voters in the bleak cold, gathering signatures and
speaking about the social, economic and, above all, political neuroses that
afflict this small nation at the eastern edge of a new Europe.
"I am Aleksandr Milinkevich," he recently assured a worker outside an
auto-parts factory in Borisov, a gritty industrial city northeast of the
capital, Minsk. The man seemed genuinely stunned to find this stranger
greeting him.
"It is impossible to win at the elections, because there are no elections,"
Milinkevich told me the first time I met him in a dim, three-room apartment
in Minsk in October. "Nobody counts the votes." It was my first realization
that a presidential campaign in Belarus, a former republic of the Soviet
Union, operates with a logic outside any traditional notion of democracy.
Milinkevich had just been selected, narrowly, during a congress of
democratic opposition leaders to serve as a unified candidate against the
country's authoritarian president, Aleksandr G. Lukashenko, a former
collective-farm boss who, over nearly 12 years in power, has defined
democracy to mean not the people's choice but the people's acclamation -
orchestrated by his government, including the ubiquitous security services,
and enforced by a pervasive sense of fear.
"We go into these elections not because we believe in their fairness, but
because this is a chance to go to the people, to conduct a campaign door to
door," Milinkevich explained through an interpreter. "I will not say that at
every door people will become less fearful immediately. But very many
people, when they see others who are not afraid, who dare to tell the truth,
they will start to have more courage."
For now, many people react uneasily when they encounter him, as if he
were an apparition. In the consciousness of a people saturated with state
propaganda and ideology, he appears as the shadowy leader of a
revolutionary cadre financed by big powers abroad and committed to the
overthrow of the government.
Belarus, with about 10 million people in a landlocked mass not quite the
size of Kansas, is a new nation and, even in the European mind, an obscure
one. (A Belarussian acquaintance told me recently that a border guard at
Stockholm's airport did not recognize his passport.) The country's fate has
rarely been more than an afterthought in the larger struggles of competing
European empires.
At best it is considered the western appendage of Russia, which is what it
has been historically. Its modern borders date only to the end of World War
II, and except for a brief period between World War I and the consolidation
of the Bolshevik revolution, it has known independence only since 1991,
when the demise of the Soviet Union was officially declared - in Belarus, in
fact.
With the presidential election scheduled for next month, though, Belarus is
now the battleground for a new struggle, not between empires exactly, but
over competing notions of how democracy should work in the nations that
emerged from the Soviet wreckage.
Following popular uprisings against authoritarian leaders in Georgia,
Ukraine and Kyrgyzstan, those who would like to break Lukashenko's iron
grip, from President Bush to leaders across Europe, have thrown their
support - and money - behind Milinkevich and an array of democratically
minded activists determined to wake up a populace considered too passive,
or too afraid, to challenge the state.
The activists are headed for a confrontation. Milinkevich, a 58-year-old
physics professor and the unlikeliest of revolutionaries, is campaigning not
for the presidency but for an uprising. "If our campaign is successful, then
we will get people out into the street," he told me last December in Brest,
a city of about 200,000 near the border with Poland. "This is the last
chance, the last battle. If we shall not stand out in the streets, the long
polar night will descend on Belarus."
Lukashenko is prepared for unrest. Last year he eliminated a legal provision
that allowed members of the police force and security services to disobey
what they considered an unlawful order. A new law pushed through Parliament
late last year makes organizing a public protest - or making statements that
discredit the state - punishable by three to five years in prison.
Lukashenko's interior minister recently ordered new measures to increase
security before the election. A European diplomat told me that if
Milinkevich's supporters gather in numbers in Minsk to protest an electoral
result that is already a foregone conclusion, Lukashenko will not hesitate
to disperse them forcefully. "There is no doubt Lukashenko will issue the
order," he said.
Lukashenko himself said as much in a TV interview on Jan. 27: "Any attempt
to destabilize the situation will be met with drastic action. We will wring
the necks of those who are actually doing it and those who are instigating
these acts. Embassies of certain states should be aware of this. They should
know that we know what they are up to. They will be thrown out of here
within 24 hours."
Lukashenko, first elected in 1994 as a corruption-busting reformer in the
country's last truly free election, acts as if the world were plotting to
overthrow him. It is central to his cultivation of popular support and is a
regular theme of the steady stream of propaganda on state television, which
reports extensively on nefarious American and European - even Russian -
schemes to subordinate Belarus.
Lukashenko's speech last September to the United Nations General Assembly
was a jeremiad against a unipolar world dominated by the United States and
included defenses of Slobodan Milosevic and Saddam Hussein. "If there are no
pretexts for intervention, imaginary ones are created," he said in remarks
shown repeatedly in Belarus. "To this end a very convenient banner was
chosen - democracy and human rights. And not in their original sense of the
rule of people and personal dignity, but solely and exclusively in the
interpretation of the U.S. leadership."
In a sense, Lukashenko is right. The policies of the European Union and the
United States - supporting free news media, sponsoring civic organizations
and providing assistance to the country's democratic opposition - all seek
to undermine his hold on power. With the election approaching, foreign aid
has jumped in ways reminiscent of the cold war.
In January the European Union awarded a two-year, $2.4 million contract to a
German organization, Media Consulta, to coordinate the broadcasting of news
into Belarus, hoping to break an information blockade that has left most
Belarussians isolated from, and ignorant about, even neighboring countries.
The Bush administration, which has labeled Belarus the only "outpost of
tyranny" left in Europe, spent $11.8 million last year on democracy
promotion and plans to spend $12 million in 2006. The National Endowment for
Democracy, the Congressionally financed nonprofit organization that promotes
freedom overseas, is spending $2.2 million more on 49 grants related to the
Belarus election.
For some time the United States spent this money openly in Belarus, as it
has and still does in other countries of the former Soviet Union, including
Russia. Lukashenko's government, however, has tightened controls over
organizations that received American and European funds, closing many of
them down.
When 70 Belarussians met in a Minsk movie theater in October to hold a
founding congress of an American-supported election-monitoring group called
Partnership, the police arrived and arrested them all. Three organizers were
sentenced to 15 days in jail; a fourth was fined.
The money, like the organizations themselves, has now gone underground or
abroad. In December, 50 representatives of foreign ministries and
international groups that support democracy gathered in Vilnius, the capital
of neighboring Lithuania, to try to coordinate - and divide up - millions of
dollars of aid.
Thomas C. Adams, the State Department's aid coordinator for Europe and
Eurasia, described the meeting to me as a gathering of "the Belarussian
freedom industry." In a long day of discussions and presentations, the
slickest appeal came from four young men belonging to a group calling
itself Khopits, or "enough" in Belarussian.
Using a computer and a projector, they proposed launching a secret
information war, distributing leaflets, stickers and newspapers - mostly
satirical - as well as ribbons and scarves emblazoned with the colors of the
European Union.
Khopits does not, officially, exist. In Belarus, a month after the meeting
in Vilnius, I met one of those who made the presentation, who described the
group and its work on condition I identify neither him nor the city he is
from. He is 23 and baby-faced. "It would be better if you described me as a
woman," he said. Three days before our meeting, three Khopits members
were arrested and jailed.
Khopits, according to its members and sponsors, is a network of cells with
dozens of activists in 60 cities and villages. It has no vertical structure
or leadership. On a clear, icy day, the unnamed 23-year-old and I met at a
bustling restaurant named 0.5, meaning half-liter, the size of the typical
glass of beer.
As we sat down, he disassembled his two cellphones, taking out the cards
and the batteries as a precaution against surveillance, said to be possible
even with a phone switched off. "They listen to us, 100 percent," he told me,
underscoring a fear of eavesdropping that is widely shared in Belarus.
Khopits's information war is well under way. The National Endowment for
Democracy, the Westminster Foundation for Democracy (the N.E.D.'s British
counterpart) and the Foreign Ministry of Germany are paying for it - with
cash smuggled into Belarus in small amounts in ways he asked me not to
disclose. (Representatives of Westminster and the German ministry declined
to discuss their support for Khopits; the N.E.D. asked that I not disclose
the amount of the assistance.)
It is hard to gauge how effective this furtive campaign is, but the
23-year-old activist explained that even a trickle of oppositional
information would seep into the cracks in Lukashenko's rule, weakening it,
if not by the election, then sometime later. "This country is not Cuba,
surrounded by water," he told me. "It is surrounded by civilized countries."
Unless the borders are sealed entirely, information will still get through.
"Sooner or later we will open people's eyes, and this regime will crash."
The cloak-and-dagger precautions undertaken by the Belarus opposition are
necessary because Lukashenko has rebuilt the security apparatus that existed
in Soviet times - the Komitet Gosudarstvennoi Bezopasnosti, or K.G.B. Fear
in Belarus is pervasive: fear of the police, fear of the secret service,
fear of the bureaucracy at work or school that punishes any sign of
antigovernment activity. This fear extends even beyond Belarus's borders.
While I was in Vilnius, a dozen young students gathered in front of the
Belarussian Embassy to protest the expulsion a week earlier of Tatsiana
Khoma, a fourth-year student at the Belarussian State University of
Economics. Khoma was expelled for having attended a meeting in France of
the National Unions of Students in Europe.
Among the demonstrators was a young Belarussian who introduced herself,
improbably, as Jane. After a while she confided her real name but begged me
not to disclose it or the university she attends. She was there, she said,
to try to draw public attention to Lukashenko's assault on higher education,
including limiting study-abroad programs and even trips, which now must be
approved by the Ministry of Education. But for her to speak openly would be
to risk the fate that befell Khoma. "It is difficult for us to do anything,"
she said, warily eyeing the embassy before rushing off.
Later that night I received an e-mail message from her, imploring me in the
subject line, "Please, don't mention my name." "Because of the law we have
in Belarus, we can't say anything we think about Belorussian politics," she
wrote in earnest, imperfect English. "I saw you anderstant this, but I'm a
little afrait."
That week, Milinkevich's senior campaign aides gathered in a basement office
in Vilnius. They included Milinkevich's rival as the democratic opposition
leader, Anatoly Lebedko, who narrowly lost in the opposition's congress in
October. The office - modern and sleek, with projectors and equipment for
video conferences - was unlike anything the opposition had in Minsk. (In
fact, by January, Milinkevich's campaign still did not have an official
headquarters.)
The meeting took place on the day Belarus's lower house of Parliament
adopted the amendments to the criminal code lengthening jail terms for those
convicted of fomenting protest or criticizing the government.
Lebedko, a former school director and parliamentary deputy, has been one
of Lukashenko's fiercest critics and has paid the price. In October 2004, as
protesters rallied in Minsk after the fraudulent referendum extending
Lukashenko's terms, secret service officers chased him into a pizza
restaurant and beat him so badly that he nearly died. Outside the restaurant
several elderly women on the sidewalk chanted: "Fascists! Fascists!"
Lebedko, who barely conceals his disappointment at having lost to
Milinkevich as the opposition candidate, has nevertheless become the
campaign's chief strategist. He denounced the new amendments as an
effort to instill fear and called them a sign of Lukashenko's desperation.
"Despite propaganda reminiscent of Hitler's, half the population still wants
change," he told me, citing polls, as he and the others loaded paper plates
with Chinese food provided for the meeting. "Fifteen percent say they are
willing to take to the streets. That is one and a half million people. This
is our chance."
The meeting began. The leaders of the democratic opposition of Belarus
were there to discuss politics with Terry Nelson, the national political
director of Bush-Cheney 2004. In that campaign, Nelson oversaw the
president's strategy of creating a vast get-out-the-vote network by organizing
volunteers. "We have neighbors talking to neighbors, and that's the way to
win a close race," he said at the time.
The office in Vilnius belonged to the International Republican Institute,
which is partly financed by the National Endowment for Democracy. The
institute's director for Belarus is Trygve Olson, a bearish campaign
operative from Wisconsin who previously worked in Poland and Serbia. He
went to Belarus in January 2001 and was denied a visa by April. He has
worked in Vilnius ever since.
On Belarussian state television, Olson has been singled out for organizing
seminars like these. As the narrator of one 2004 documentary put it, "We
found out that these technologies of educating provocateurs in Nazi schools
and educating the opposition leaders in Belarus are very similar."
Terry Nelson's presence in Vilnius underscored the depth of American support
for Belarus's beleaguered opposition, but that support is not limited to
Republicans. The National Democratic Institute operates from Kiev, the
Ukrainian capital, its workers having also been barred from Belarus. The two
American organizations, with a bipartisanship that is increasingly rare at
home, have divided their labors: the N.D.I. works with regional groups, the
I.R.I. with the national campaign.
Nelson listened as Lebedko, Sergei Kalyakin (leader of the Communist Party
of Belarus) and Aleksandr Dobrovolsky (a Milinkevich advisor) discussed
the results of a poll, paid for by the I.R.I., that showed the ratings of
Milinkevich and other opposition leaders all in single digits. "You need to
reach those people to reach your goals," Nelson said.
The question was - and remains - whether an American-style campaign can
work in a place like Belarus. Nelson and Olson discussed, then ruled out,
such highly refined campaign tactics as microtargeting of voters based on
databases with precision information about income and habits.
Still, they went over the categories of likely supporters - students,
small-business men and Protestants (who face restrictions on worship in an
overwhelmingly Eastern Orthodox country) - that Milinkevich had, somehow,
to reach. Kalyakin said that a majority in Belarus favored a new president,
but faced with almost daily warnings on television, feared the instability
or economic chaos that could follow.
Dobrovolsky predicted that the campaign was prepared to mass 15,000 to
25,000 young people to protest the results on March 19 - or possibly a
move to disqualify Milinkevich even before the vote. He said that gathering
50,000 could prove sufficient to inspire more people to mass. "Is that
enough?" Nelson asked. "We will see," Dobrovolsky replied.
'Only dictators fear revolutions," said Vladimir Kobets, who is essentially
a political fugitive in his own country. He is a leader of Zubr, a youth
group whose name means "bison," a symbol of the country, though not one
the government embraces. Lukashenko has instead revived those of the
Soviet era, including the green-and-red flag of the Belarus Soviet Socialist
Republic.
If people are going to protest the election results, Zubr will provide most
of the early protesters. It claims 5,000 active members and 10,000 more
"volunteers." Forty young people founded Zubr in a secret meeting in a
national park in January 2001. Its protests - often antigovernment antics
like street performances in Lukashenko masks or graffiti campaigns - have
landed dozens of the group's members in jail. According to Kobets, nearly
100 have been beaten.
Meeting Kobets was not difficult, but it required certain precautions. We
would meet in front of a green wooden house on the banks of the Svislach
River, which wends through Minsk.
The house, now a museum, is where the Russian Social Democratic Workers'
Party, a precursor of the Bolsheviks, held its illegal founding congress in
1898. From there we wandered aimlessly along the wide esplanades beside
the river in Gorky Park before heading into a cafe, presumably safe from any
unwanted listeners.
Kobets is round-faced and wears glasses. He is no longer so young. He has a
wife and two children. He has no regular job. He was arrested last August
when he met two activists from Georgia, though he was released within hours.
The Georgians, part of the Kmara youth group that has provided inspiration
and training to Zubr, were released 10 days later, after Georgia's
president, Mikheil Saakashvili, and Viktor A. Yushchenko of Ukraine
intervened personally with Lukashenko.
Kobets, like Milinkevich, doubts the possibility of having a legitimate
election, largely because Lukashenko's apparatchiks control every part of
it, most important the election commissions that will count the votes and
report what the federal election chief in October 2004 called "an elegant
victory."
That was when Lukashenko announced a snap referendum amending
constitutional term limits and allowing him to seek re-election
indefinitely.
The vote was widely denounced in Europe, and an independent exit poll
suggested that the referendum actually received the support of less than
half the voters. But it stands anyway.
Kobets, over coffee, said that Lukashenko's power was not as formidable
as it seemed. As evidence he gave the steps the government has taken to
suppress dissent: arresting protesters, expelling students from
universities, banning the distribution of independent newspapers, requiring
state workers to sign yearly contracts, which can be revoked after any sign
of disloyalty. "The problem is not Lukashenko," he said. "It is the fear."
Zubr's newest project is to organize protests on the 16th of each month. The
date commemorates the night - Sept. 16, 1999 - that Viktor Gonchar, once a
deputy prime minister and election commissioner who became a popular
opposition leader poised to challenge Lukashenko, disappeared along with a
businessman who financed the opposition.
On that night the two men went to a banya, the public bathhouse that is a
ritual part of Slavic life. They were evidently abducted and probably
murdered. The idea is to remind Belarussians of the darker episodes in
Lukashenko's rule.
On Jan. 16, several dozen young people gathered on Independence Street
in the center of Minsk, which used to be named after Francis Skaryna, a
Renaissance-era scholar and printer who is an important figure in
Belarussian identity. (Lukashenko changed the name last year.) A kind of
flash mob gathered, though unlike those stunts elsewhere the organizers
refuse to use text messages. "The K.G.B. reads them," a young woman
named Marina said.
They rely on word of mouth instead. Marina came to Minsk from Mogilev in the
east. On the way, the police stopped the minibus she and her companions were
riding in, ostensibly for a traffic violation. Two members of the group were
detained. Marina and four others bolted into the forest, she told me, where
officers searched for them with dogs. They avoided capture, hitched a ride
and made it to the protest. She refused to give her last name.
Marina passed out torn shreds of blue jeans; denim is now the color of this
revolution in the making. (It was settled on after a Zubr activist, Nikita
Sasim, waved his jeans jacket as the police broke up another 16th protest.)
After 15 minutes, the Minsk protest was over, and the crowd drifted into the
dark, snowy night.
Kobets told me that Belarus's democratic activists took their inspiration
from the unlikeliest of sources: a Kevin Costner film. "The Postman,"
adapted from a novel by David Brin in 1997 and critically panned, depicts an
apocalyptic America where the remnants of civilization live in terror of a
brutal army headed by a sadistic general. Costner's character, a drifter,
delivers a bag of old mail - information - and becomes a symbol of hope for
those hoping to restore their American democracy.
In this improbable metaphor, the postman would be Aleksandr Milinkevich.
It as midafternoon in January and minus-4 degrees Fahrenheit when
Milinkevich drove up to the Soviet-era auto factory in Borisov, one still
owned, like most everything else in Belarus, by the state. The wan winter
light was already fading as the day shift filed out. Milinkevich's campaign
workers unfolded a small table, adorned with his portraits, outside the
factory's entrance.
Going inside, of course, was out of the question, despite the weather. A few
workers sidled closer, forming around him a broken circle of overcoats and
hats - fur for the older men, knitted caps for the younger ones.
Hatless and gloveless, his bearded face reddening from the cold, Milinkevich
tried to draw out these would-be voters with the mild, inquisitive manner of
a professor, which is what he was until the state fired him in 2000 for
joining the campaign of a Lukashenko challenger. What followed was what
passes for a public discussion of politics in Belarus today.
"Many people want changes," he said, refuting what these people are told
when they watch television. "Yes," a voice in the circle agreed, "very many
people want changes." "Something has to be done about it," came a second.
In conversations like these, Milinkevich is asked about his policies, his
prescription for jobs and wages, relations with Russia and the rest of
Europe. Mostly, though, he is asked about the electoral process itself.
No one signed the petitions on the table. A portly woman on the factory
steps, smartly bundled, murmured that she would. "No, don't do it," her
companion said, tugging at the fur of her coat as she led her down the steps
and away from the candidate. "They will take down your name."
"They," like the president, went unspoken, because they, like the president,
are omnipresent and, at least in the public perception, which is what
counts, all powerful. Two cars - one red, one white - followed Milinkevich's
vans wherever they went, as they always do.
At each stop one or more of the men inside would emerge with a hand-held
video camera and record the candidate and anyone with him - sometimes only
steps away. They are - or at least they are presumed to be - officers of the
K.G.B.
"Yes, I know they are watching," Milinkevich said earlier in another town,
Zhodino, when a passer-by nodded in the direction of the stone-faced men.
In Borisov, the shift change ended, and the pool of potential voters
shuffled into the city, dispersing without having ever really assembled. A
uniformed officer of the Interior Ministry kept repeating into his
telephone: "Everything is calm."
To travel with the Milinkevich campaign is to experience an Orwellian
version of democracy. In Brest, in December, he took phone calls on a fax
machine from voters who had learned he would be at that number for one
hour that evening; they discovered this from reading fliers that had been
distributed furtively in apartment blocks.
Once, after Milinkevich met with students in front of Brest State
University, I lingered to talk with a student, who gave his name as Pavel
Dailid. Within minutes two officers arrived and demanded my documents
and those of an interpreter. "This is the usual thing for us," Dailid said
when they left after taking down our names and passport and visa numbers.
"I want to come out onto the street and say what I want." Minutes after we
parted, Dailid was stopped when he re-entered the university and threatened
with expulsion. When Milinkevich tried to deliver a gift of books to an
orphanage, a sign declared that it was closed. The director, Valentina
Kratsova, said sheepishly that a quarantine had been declared.
Milinkevich tried to meet local activists in a community center, but that,
too, was closed. They met instead in the old wooden house where he took
calls the night before. The police came and threatened to call inspectors,
saying an unsanctioned meeting was taking place and warning of violations
of the building code.
As a result of all this, Milinkevich often meets no more than a few dozen
people in an entire day. Deprived of access to the state media, unable to
assemble large crowds of supporters, he says he hopes that he can spread
a message of change almost voter by voter.
"Democracy is not only counting votes and not only the freedom of the
press," he told those who gathered in the old house. "It is what is in the
minds of people."
The meeting broke up early after the police warning. Irina Lavrovskaya, one
of Milinkevich's aides, asked everyone to leave in small groups of one or
two people - "calmly, quietly" - and to head in different directions.
In January, in Borisov, Milinkevich received some parting advice from a
worker at the auto plant. "Remember what happened to Gonchar," the man
told him. "Don't walk alone."
Milinkevich is running exactly the sort of campaign that Terry Nelson
suggested in the meeting in Vilnius - the one that the International
Republican Institute and the National Democratic Institute have supported
with their training programs.
A recent poll by the Gallup Organization/Baltic Surveys showed that three
out of four Belarussians now know of him - compared with one out of four in
September - and almost all of them have learned about Milinkevich by word
of mouth.
Trygve Olson said it was extraordinary that a little-known politician - a
bearded, soft-spoken professor who once served as a deputy mayor in Grodno
and was the president of a basketball team there - had made such inroads,
given the pressures he faces on the campaign trail and the blackout in state
media.
Of course, Lukashenko will win - with 75 percent of the vote, according to
Milinkevich. "He does not like figures below 75 percent," he said.
Lukashenko, whose information apparatus portrays him as the last defense
against chaos, might win in a free vote anyway. "What can you do?"
Lukashenko told a gathering of voters late last year. "You will elect me."
The secretary of the country's election commission, Nikolai I. Lozovik, told
me in an interview, "There is no basis for a mass protest vote in Belarus
today." He also excoriated foreign meddling. "The United States and Europe
have already rejected the policy of exporting revolution," he said. "I mean
Lenin, Trotsky. I do not understand why these countries are now exporting
democratic revolutions. What is the difference?"
Meanwhile, Milinkevich speaks of a victory over passivity and fear. "Our
victory is more important," he told a sparse audience outside a factory in
Zhodino. "We want to have a victory in people's minds. If we can manage
to achieve this victory, then we can go out into the streets. We will not go
out with guns or stones. We will go out and show how many we are."
The historic model Milinkevich has in mind, which he and others repeat
often, is Poland and Solidarity - not in 1989 when the Communist government
crumbled under its own weight, but in the dark days of 1980, when Lech
Walesa was only beginning his campaign of dissent.
"There was a powerful public protest," Milinkevich told me in January. "The
authorities could do nothing. Martial law was imposed. And that was the
beginning of the end." -30-
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http://www.nytimes.com/2006/02/26/magazine/26belarus.html?pagewanted=1&adxnnl=0&adxnnlx=1141007160-/xxeOUJT0q5Vaw9+y+o+ng
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19. ACCUSATIONS OF MISUSED MONEY ROIL RUSSIAN ORTHODOX
CHURCH IN THE UNITED STATES OF AMERICA
Former treasurer says top officials misappropriated millions of dollars to
cover personal embarrassing credit card bills, pay sexual blackmail, support
family members, gifts of cash to visiting foreign dignitaries, entertainment
By Alan Cooperman, Washington Post Staff Writer
The Washington Post, Washington, D.C.
Sunday, February 26, 2006; Page A09
WASHINGTON - Allegations of financial misconduct are rocking the Orthodox
Church in America, whose former treasurer says top officials misappropriated
millions of dollars in donations from agribusiness titan Dwayne Andreas,
U.S. military chaplains and ordinary parishioners across the country.
The highest officers of the 400,000-member denomination, an offshoot of the
Russian Orthodox Church, are accused of using the money to cover personal
credit card bills, pay sexual blackmail, support family members and make up
shortfalls in various church accounts.
The former treasurer, Deacon Eric A. Wheeler, said the greatest fear of the
church's leaders in the late 1990s was that Andreas, the retired chairman of
Archer Daniels Midland Co., would visit Moscow and discover that they had
not used his donations to renovate a church and build a conference center.
So they prepared a modern-day Potemkin village, ordering a brass plaque that
could instantly transform a Moscow law office into the "Andreas Conference
and Communications Center," he said.
The potential scandal will come to a head Wednesday when the church's
governing body of 10 bishops, the Holy Synod, is scheduled to meet behind
closed doors at its headquarters in Syosset, N.Y., to consider demands from
some bishops, priests and parishioners for an internal investigation and an
independent audit going back to 1996.
Although most of the money allegedly went astray in the 1990s, the
accusations have emerged only in recent weeks. Wheeler first detailed them
in a confidential letter to the bishops in October. Since Jan. 7, a watchdog
group called Orthodox Christians for Accountability has posted the letter,
other documents and commentary on its Web site, http://www.ocanews.org/ .
Some of the Internet postings from church members across the country are
skeptical of the former treasurer's claims. But many express frustration
that the church's leaders have not publicly responded to the allegations at
all, even to refute them.
"Naturally enough, the men involved have circled the wagons Cardinal
Law-style," the Rev. Paul Harrilchak wrote in an open letter to his
parishioners at Holy Trinity Orthodox Church in Reston.
Mark Stokoe, the Web site's editor, said that church leaders have privately
dismissed Wheeler as a "disgruntled former employee" who was fired in
1999. But he said that other insiders, including the church's former
corporate secretary, Paul Hunchak, have come forward to corroborate
parts of Wheeler's account.
"And the amazing thing about Wheeler's accusations is that they are
incredibly detailed, and he is admitting he went along with it -- he's
implicating himself," Stokoe said.
The Orthodox Church in America is part of the family of Eastern Orthodox
churches that separated from the Roman Catholic Church in the 11th century.
Although sometimes colloquially called the Russian Orthodox Church in the
United States, it has been administratively independent of Moscow since
1970.
As the scandal has reverberated through the church's 700 parishes, it has
also sown dissension among the church's bearded, black-robed prelates, the
most senior of whom has the title metropolitan.
Metropolitan Herman, the archbishop of New York and Washington who is
first among equals in the Holy Synod, has directed church officials not to
discuss the matter publicly.
Archbishop Tikhon of San Francisco has urged the synod to discipline
Archbishop Job of Chicago -- not because Job is in any way implicated in
the scandal, but because he has called for a church commission to conduct
an investigation.
"My question is very simple: Are the allegations true, or are they false?
And to this day I have no answer," Job said in a telephone interview. He
added that two bishops have privately agreed with him that an investigation
is needed, but "unfortunately they have not made that public."
In addition to serving as treasurer of the Orthodox Church in America from
1996 to 1999, Wheeler was personal secretary to its former head,
Metropolitan Theodosius, who retired in 2002.
Wheeler said that after the collapse of the Soviet Union, Theodosius asked
Andreas for $1.5 million to renovate the U.S. church's property in Moscow,
including St. Catherine's Embassy Church, and build a conference center.
Andreas, whose agricultural company was seeking to do business in Russia,
and who had forged a friendship with Mikhail Gorbachev, began sending the
money in $250,000 installments in June 1995.
Wheeler said he prepared progress reports twice a year to give to Andreas.
The reports, signed by Chancellor Robert S. Kondratick, "were quite
detailed on paper," he said in his letter to the bishops last fall.
But, in reality, St. Catherine's Church was renovated with funds raised in
Moscow, the conference center was never built, and Andreas's $250,000
checks were diverted to the metropolitan's "discretionary account," Wheeler
said.
Brian Peterson, senior vice president for corporate affairs at Archer
Daniels Midland, said that Andreas, 87, no longer gives interviews. But
Peterson confirmed that the ADM Foundation donated $1.95 million to the
Orthodox Church in America from 1993 to 1999. Tax records show that the
Andreas Foundation, a separate family charity, contributed an additional
$1.3 million.
"Up until now, we had absolutely no reason to be concerned that these funds
weren't used for their intended purpose," he said. "If there are credible
allegations, of course, we'd be quite concerned."
According to Wheeler, in 1993 the church received a $62,838 donation from
the U.S. Department of Army Chaplains to distribute Bibles in Russia, but
the Bibles were never purchased.
Meanwhile, "the budget was tapped for regular payments to cover Father
Kondratick's personal Platinum AMEX card in the amounts of approximately
$5,000 to $12,000 per month," Wheeler's letter said.
"The prevailing financial climate at the chancery was always one of
concealment. . . . Funds were needed to safeguard the church from scandal,
cover embarrassing credit card debts incurred by the Metropolitan, provide
family members who leached off their relatives with a steady stream of
assistance, pay blackmail requests and provide the means to entertain with
dinners, trips and gifts of cash the visiting foreign dignitaries and
'friends of Syosset,' " he wrote.
Wheeler declined in an interview to provide any detail on the alleged
blackmail. Through aides, Theodosius and Kondratick declined to comment
on any of the allegations, citing Metropolitan Herman's request for silence.
Wheeler said he has been questioned by the FBI about tens of thousands
of dollars in cash that he says were taken into Russia, without customs
declarations, by Orthodox priests. The longer the church's leadership
resists launching an internal investigation, he said, the more probable it
is that a federal, state or local prosecutor, or the Internal Revenue
Service, will begin an outside probe. -30-
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http://www.washingtonpost.com/wp-dyn/content/article/2006/02/25/AR2006022501266.html
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