Daily Archives: June 22, 2006

AUR#716 Jun 22 Tymoshenko, Prime Minister; Poroshenko, Parliament Speaker; Ukraine VS Tunisia; Yushchneko Meets Amb Taylor, SBU: Armenian Genocide

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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       

 
       UKRAINE PARTIES BREAK DEADLOCK
                    YULIA TYMOSHENKO: PRIME MINISTER
         PETRO POROSHENKO: SPEAKER OF PARLIAMENT
                                                         
ACTION UKRAINE REPORT – AUR – Number 716
Mr. E. Morgan Williams, Publisher and Editor  
PUBLISHED FROM KYIV, UKRAINE, THURSDAY, JUNE 22, 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.  PRO-WEST PARTIES FROM COALITION TO LEAD UKRAINE
By Alan Cullison, The Wall Street Journal
New York, New York, Thursday, June 22, 2006; Page A6
2.                  UKRAINE PARTIES BREAK DEADLOCK
By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, Thursday, June 22 2006

3“OUR UKRAINE” TO NOMINATE POROSHENKO FOR SPEAKER
Ukrayinska Pravda, Kyiv, Ukraine, Wednesday, June 21, 2006

Ukrainian News Agency, Kyiv, Ukraine, Wed, June 21, 2006
5. TYCOON POROSHENKO SAYS HE WILL JUSTIFY NOMINATION
RIA Novosti, Moscow, Russia, Wed, June 21, 2006

6COACH WARNS AGAINST OVERCONFIDENCE AFTER UKRAINE
                           RECAPTURES FIGHTING SPIRIT 
Martyn Graham in Berlin, The Independent, London, UK, Wed, Jun 21, 2006

7.          COACHES STRIVE TO MOTIVATE UKRAINE, TUNISIA
Erica Bulman, Associated Press, Germany, Thursday, June 22, 2006

8. UKRAINE’S FIRST DEPUTY FOREIGN MINISTER ANTON BUTEYKO
                  HAS HEART ATTACK AND MASSIVE STOKE
                  Buteyko was Ambassador to the USA in 1998-1999
UNIAN news agency, Kiev, in Ukrainian 21 Jun 06
BBC Monitoring Service, UK, Wednesday, June 21, 2006

9PRESIDENT YUSHCHENKO MEETS US AMB WILLIAM TAYLOR

Office of the President, Kyiv, Ukraine, Wed, June 21, 2006
Ukrainian News Agency, Kyiv, Ukraine, Wed, June 21, 2006

11UKRAINE: COOPERATION STRATEGY WITH INTERNATIONAL
          FINANCIAL ORGANIZATIONS APPROVED BY CABINET
Ukrainian News Agency, Kyiv, Ukraine, Wed, June 21, 2006 (19:57)

12“THE SECURITY SERVICE OF UKRAINE? SBU CHIEF IHOR
DRIZHCHANYY HAS THE SBU SERVE THE CLANS AND MOSCOW”
   SBU Employees themselves speak of the Degradation of the Department
   Ukrainian Security Service (SBU) Sold Out To Certain Political Parties
ANALYSIS & COMMENTARY: By Vira Chorna
Ukrayina Moloda, Kiev, in Ukrainian 1 Jun 06, p 1, 7-9
BBC Monitoring Service, United Kingdom, Tue, Jun 06, 2006

13VARTKES’S LIST & THE VICTIMS OF THE ARMENIAN GENOCIDE
         Of the million or more Armenians executed by Ottoman Turks 90 years
          ago, thousands had insurance from New York Life. A slip-and-fall
        lawyer uncovered the list of policyholders and, by forcing the company
                   to pay their heirs, gave voice to the victims of genocide.
Article By Michael Bobelian, Legal Affairs magazine
The Magazine at the Intersection of Law and Life
New Haven, Connecticut, March/April, 2006
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1
.   PRO-WEST PARTIES FROM COALITION TO LEAD UKRAINE

By Alan Cullison, The Wall Street Journal
New York, New York, Thursday, June 22, 2006; Page A6

The parties behind Ukraine’s Orange Revolution agreed to a coalition
government led by pro-Western populist Yulia Tymoshenko, in a deal that is
likely to aggravate tensions with Moscow over natural-gas supplies.

Ms. Tymoshenko has promised closer integration with Europe and says she
wants to wean Ukraine from its heavy dependence on Russian natural gas,
which she says the Kremlin is using to exert its influence in her country.

She has called for renegotiating a January deal that nearly doubled steeply
discounted prices for Russian gas, Ukraine’s main energy source. Moscow has
indicated those prices could rise even further when the current agreement
runs out at the end of the month. When the last round of negotiations in
January hit an impasse, Russia reduced shipments to Ukraine, which in turn
disrupted supplies to Europe.

Ms. Tymoshenko, a telegenic leader of the Orange Revolution street protests
that overturned rigged presidential elections in 2004, showed no signs of
backing off from her pro-Western rhetoric yesterday. “We won democracy for
Ukraine,” she told Parliament. “The very creation of the coalition defines
Ukraine’s course for many years ahead and will move Ukraine into the
European community.”

Moscow has warned Ukraine against pursuing closer relations with the North
Atlantic Treaty Organization, in a tug of war with the West for influence
over the France-sized country of 47 million.

The agreement comes after nearly three months of bitter haggling that
exposed the fragility of the West-leaning coalition of former protest
leaders, businessmen and socialists who have dominated Ukraine’s government
since the Orange Revolution.

Ms. Tymoshenko served as Ukraine’s prime minister after the coalition took
power last year, but was fired by President Viktor Yushchenko in September
after he accused her of running the economy into the ground with populist
rhetoric.

Ms. Tymoshenko’s strong showing in parliamentary elections in March gave her
leverage to demand her old job back. Her party pushed Mr. Yushchenko’s bloc
to third place in the polling, making her the de facto leader of Ukraine’s
pro-Western liberals.

The pro-Russian faction in Parliament, led by former Prime Minister Viktor
Yanukovych, won the most seats but couldn’t muster a majority. Mr.
Yanukovych said he would back new elections if the Orange parties couldn’t
finalize their coalition deal by the end of the week.

Roman Bezsmertny, the lead negotiator for President Yushchenko’s Our Ukraine
bloc, said the parties in his alliance still must formally approve the deal,
after which Ms. Tymoshenko’s nomination would be submitted to Parliament for
approval. The coalition would control 243 out of 450 seats in Parliament.

While the coalition will likely be welcomed in Western capitals, some
analysts warn that Ms. Tymoshenko’s populism, combined with persistent
divisions within the government, portend disruptions for Ukraine’s economy.

While prime minister last year, Ms. Tymoshenko boosted pensions,
experimented with price controls on foodstuffs and fuel, and spooked
investment by suggesting the government was considering a massive review of
the privatizations conducted under the former president, Leonid Kuchma.

Economic growth fell to 2.6% last year from 12% in 2004. The poor economic
data were due partly to a drop in world metals prices, and erroneous
economic statistics, according to Katya Malofeyeva, analyst at Renaissance
Capital brokerage in Moscow. But Ukraine’s economy is saddled with large
debts that are a legacy of the Tymoshenko government, she said.

“It is very dangerous for a government with so little money to have people
depending on the government,” said Ms. Malofeyeva.

Changes to Ukraine’s constitution that took effect this year gave the prime
minister’s office greater powers in economic planning, and would make Ms.
Tymoshenko less accountable to the president. But in the coalition agreement
released yesterday, Ms. Tymoshenko’s partners appeared to be taking steps to
rein in her influence.

Mr. Yushchenko’s bloc gets to appoint the speaker of Parliament, and
lawmaker Mikhaylo Pozhyvanov said the party was determined to provide a
strong counterweight to her in the post.                    -30-
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Write to Alan Cullison at alan.cullison@wsj.com
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2.                    UKRAINE PARTIES BREAK DEADLOCK

By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, Thursday, June 22 2006

The three main political groups that backed Viktor Yushchenko’s presidential
bid in the Orange revolution of 2004 have agreed to end months of wrangling
and form a coalition that will bring the fiery Yulia Tymoshenko back into
government as prime minister.

The coalition agreement, due to be signed tomorrow after last-minute details
are worked out, is seen as a big concession on the part of Mr Yushchenko,
who fired Ms Tymoshenko in September after a seven-month term as prime
minister marked by cabinet infighting.

Ms Tymoshenko, viewed as a rival to Mr Yushchenko in Ukraine’s next
presidential election, in 2009, boosted her chances of returning after her
bloc mustered the largest support of pro-western camps in a March 26
parliamentary vote.

Other members of the “Orange coalition”, so called because they supported
the 2004 Orange revolution that lifted Mr Yushchenko to Ukraine’s
presidency, include the Our Ukraine bloc, loyal to Mr Yushchenko, and the
Socialist party. Together they hold 243 of parliament’s 450 seats, with
strong voter support in the central and western Ukrainian-speaking regions
where backing for western integration is high.

Hryhory Nemyria, a member of Ms Tymoshenko’s bloc, said that the main snags
in the talks included Nato integration plans and the distribution of top
posts in the government and parliament. Mr Yushchenko’s Our Ukraine backs
speedy integration into the alliance, although public support remains low.
Ms Tymoshenko wanted the Nato issue kept out of the coalition agreement.

A compromise was reached with the Socialists who do not support Nato
integration. A clause in the agreement envisaged accession to the military
alliance after a nationwide referendum, Mr Nemyria said, adding that
accession was unlikely to be before 2010.

Yevhen Kushnyarov, a member of the Moscow-leaning Regions party that has
opposed Nato membership, warned that his party represented millions of
eastern and southern Ukrainians and that their interests could not be
ignored.

Ms Tymoshenko said the coalition deal had taken so long because it would
decide “Ukraine’s course for many, many years”.
http://www.ft.com/cms/s/5d0c841c-018b-11db-af16-0000779e2340.html

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3.  “OUR UKRAINE” TO NOMINATE POROSHENKO FOR SPEAKER
 
Ukrayinska Pravda, Kyiv, Ukraine, Wednesday, June 21, 2006
 
KYIV – “Our Ukraine” is proposing to nominate Petro Poroshenko for the
position of a Speaker [of Parliament.]
On Wednesday noon, the presidium of the “People’s Union Our Ukraine”
(NSNU) had decided to propose to the council of NSNU to nominate Petro
Poroshenko, as a speaker for the party Tetiana Mokridi told Ukrayinska
Pravda.
Another solicitor, Roman Bezsmertny, declined his own nomination,
followed by the same motion from [Prime Minister] Yuriy Yekhanurov.
A meeting of the council of NSNU, which will consider the proposal of
nomination of Poroshenko and the coalition agreement, should convene on
Wednesday afternoon.                             -30-
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The English translation of this article was provided by the New Project
for Democracy. Find more at http://www.newproject.org.
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FOOTNOTE:  Around Kyiv yesterday there was great relief that it looks
like finally a coalition has been formed but also great disappointment in
the fact that Petro Poroshenko is reported to be the Speaker of the
Parliament. AUR EDITOR
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4. OUR UKRAINE: NOMINATE POROSHENKO FOR RADA SPEAKER
 
Ukrainian News Agency, Kyiv, Ukraine, Wed, June 21, 2006
KYIV – The Our Ukraine bloc intends to nominate Petro Poroshenko for
the post of parliament speaker. The press service of the Our Ukraine bloc
announced this to Ukrainian News.

The presidium of the Our Ukraine bloc decided on Wednesday to table
Poroshenko’s candidacy for consideration at a meeting of the bloc’s council.

According to the press service, the other candidates for the post, Roman
Bezsmertnyi, the head of the Our Ukraine bloc’s political council, and
acting Prime Minister Yurii Yekhanurov withdrew their candidacies.

The meeting of the council of the Our Ukraine bloc at which Poroshenko’s
candidacy and the draft agreement on formation of a parliamentary coalition
will be considered, will take place at 16:00 on Wednesday.

As Ukrainian News earlier reported, the Yulia Tymoshenko Bloc and the
Socialist Party have approved the final text of the agreement on creation of
a parliamentary coalition with the Our Ukraine bloc.

The Yulia Tymoshenko Bloc, the Our Ukraine bloc, and the Socialist Party
have announced their intention to form a parliamentary coalition on June 23.

The Socialist Party’s leader Oleksandr Moroz said on June 14 that he was
prepared to abandon his claim to the post of parliament speaker. The Yulia
Tymoshenko Bloc, the Our Ukraine bloc, and the Socialist Party discontinued
negotiations on formation of a parliamentary coalition on June 10 because of
disagreement over the post of parliament speaker.          -30-
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5.  TYCOON POROSHENKO SAYS HE WILL JUSTIFY NOMINATION

RIA Novosti, Moscow, Russia, Wed, June 21, 2006

KIEV – Petro Poroshenko said Wednesday he would justify the trust put in him
of pro-presidential bloc Our Ukraine, which nominated him earlier for the
post of parliamentary speaker.

“I will do everything possible not to let down and justify the trust in me
of the party’s council,” the businessman and former national Security
Council secretary said.

The party’s press service said earlier that two other nominees – acting
Prime Minister Yuriy Yekhanurov and the head of Our Ukraine’s political
committee, Roman Bezsmertniy – had withdrawn their candidacies.

Bezsmertniy said earlier three pro-Western groups – Our Ukraine, the bloc of
former prime minister Yulia Tymoshenko, and the Socialist Party – had
clinched a deal to form a majority coalition in Ukraine’s parliament. He
said Tymoshenko would be appointed prime minister.

But a Tymoshenko bloc spokesperson was cautious about the deal, saying it
had to be signed ahead of a Friday deadline after which President Viktor
Yushchenko could dissolve parliament and call fresh elections.

Poroshenko, one of President Viktor Yushchenko’s closest associates and
Ukraine’s richest men, owns a number of food industry enterprises and headed
the Ukrainian National Security Council in February-August 2005.

He added that Our Ukraine had recommended that the other two parties sign
the coalition agreement. “We decided [at the meeting] that we approve the
agreement on the formation of the ‘orange’ coalition and ask the deputies
elected from Our Ukraine bloc to sign the agreement,” he said.

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LINK: http://en.rian.ru/world/20060621/49855064.html
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6.  COACH WARNS AGAINST OVERCONFIDENCE AFTER UKRAINE
                           RECAPTURES FIGHTING SPIRIT 

Martyn Graham in Berlin, The Independent, London, UK, Wed, Jun 21, 2006

Ukraine must come back down to earth quickly after Monday’s 4-0 crushing of
Saudi Arabia if they are to get past Tunisia and secure a place in the
second round at their first World Cup finals, according to their coach, Oleg
Blokhin.

Helped by Andrei Shevchenko’s return to form and by four changes to their
starting line-up, the eastern Europeans bounced back from a 4-0 drubbing by
Spain that had left Blokhin incensed by their mental approach and lack of
fight.

Blokhin said his main task now would be to stop his team growing
overconfident before they face a Tunisia side who frightened the life out of
Spain on Monday and know only a win can see them through.

“This game gave us a big boost mentally,” he said. “But we have to
re-establish the mental basis for victory after this and it will be harder
to motivate the players this time because we won.”

With Spain through, Ukraine lead the running for second place and a berth in
the last 16, with three points. Saudi Arabia and Tunisia have one point each
and must win their last games to stand a chance of advancing. Ukraine play
Tunisia in Berlin on Friday while Saudi Arabia take on Spain in
Kaiserslautern.

The eastern Europeans proved on Monday that they are far from the one-man
show some have suggested. Shevchenko, a former European Footballer of the
Year, looked sharp again after a month off with injury, but it was Sergei
Rebrov and Maxim Kalinichenko who engineered the victory in midfield.

Though a bit-part player with Spartak Moscow, Kalinichenko took the Fifa man
of the match award, scored the fourth and supplied the barrage of pinpoint
crosses that were the key to victory.

“I have always said he is a great player and a great passer of the ball,”
Rebrov said of his team-mate. “He hasn’t played much for Spartak and I don’t
know why this is. But he is a good friend and a good person. Today he showed
what he can do, but he can do even better.”

Rebrov said the side could now do justice to their fans’ expectations after
they were the first European team to qualify for the finals from a group
including Denmark, Turkey and the European champions, Greece. “In
qualification we were best in the group and every-body sees Ukraine as a
strong team, but now we have to show it,” he said.

“I think after the way we played today, Tunisia will really be preparing for
us well. After losing 4-0 to Spain, I think Saudi Arabia didn’t prepare well
for us and thought we were not any good any more. We have to take this
performance to the next game … but we have shown we are capable of doing
something at the World Cup.”

Although Tunisia finally capitulated against Spain in an absorbing match on
Monday, the nature of their performance gave their coach, Roger Lemerre,
hope they can reach the last 16.

For 70 minutes the North Africans stifled Spain’s creative flair and hung on
to the lead given to them by Zied Jaziri in the eighth minute, only for Raul
and Fernando Torres to punish them for late lapses. Nevertheless, Lemerre
said their was plenty to be hopeful about as they prepare for their must-win
game with Ukraine.

“I’m not an optimist, I’m a realist,” the Frenchman said, looking towards
the match against Ukraine. “This performance gives us hope and we have to
convert that into a result against the Ukrainians. If we win, we could find
ourselves in the round of 16, but it’s going to be very tough. In a way both
sides are in the same situation.”

Lemerre could only look with envy at Spain’s substitutes’ bench, packed with
attacking flair in the form of the Real Madrid striker Raul, Arsenal’s
livewire midfielder Cesc Fabregas and Real Betis’s Joaquin. His own options
up front are limited, especially as his leading striker, Francileudo Santos,
is still recovering from a shin injury and has only a 50 per cent chance of
featuring.

“At this moment the answer is no,” Lemerre said when asked if the
Brazilian-born forward would play against Ukraine. “My squad players are
nearly as good as the ones on the pitch, but you only had to look at Spain’s
substitutes’ bench to see the difference between the sides.”    -30-
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7.     COACHES STRIVE TO MOTIVATE UKRAINE, TUNISIA

Erica Bulman, Associated Press, Germany, Thursday, June 22, 2006

GERMANY – Defense and concentration are the chief concerns of the coaches
from both Ukraine and Tunisia as they count down to their decisive group
matchup on Friday that will determine who advances to the second round of
the World Cup. Both sides have shown a leaky defense and both could use more
focus.

Ukraine coach Oleh Blokhin is looking to restore some humility to his team
following its 4-0 thrashing of Saudi Arabia on Monday. His side was
similarly beaten 4-0 by Spain only five days earlier.

The World Cup newcomers simply need to draw with the Africans to lock up
runner-up position in the group behind Spain, which is already through. Only
the top two teams advance. Tunisia must beat Ukraine to have a chance of
qualifying.

“The victory against Spain was important because it renewed our confidence,
especially with the margin being so large. But we need to re-establish our
emotional balance,” Blokhin said. “And it will be harder to motivate the
players this time because we won so easily.”

Tunisia coach Roger Lemerre said Tunisia had “suffered enormously” in
Monday’s 3-1 loss to Spain, but had taken great heart from its performance.
Tunisia drew 2-2 with Saudi Arabia and showed improvement against the
Spanish, despite the loss.

Lemerre now needs to coax a full 90 minutes out of his players. His team led
both of its previous games, but allowed late goals in each. “We have to
concentrate better, show more ability and engage them more offensively,” the
former France coach said. “Victory is imperative. There is nowhere to hide.
No more calculations to make.”

Lemerre explained the late goals by underlining that several of his players
are recovering from injury or have not played regularly for their clubs. He
said his players were worn down physically by Spain, but hoped Tunisia’s
training schedule would allow them to peak for Ukraine.

Midfielder Mehdi Nafti said adrenalin should carry them through one more
game. “Ninety minutes is nothing when you are playing for qualification to
the next round of a World Cup,” he said. “You have to grit your teeth.”

Tunisia is unlikely get a long-awaited boost from Francileudo Santos, who
missed the first two games because of a leg injury. The team was awaiting
results of another scan Tuesday but Lemerre said he was a “big doubt” for
Friday.

Lemerre said his defensive 4-5-1 formation had been tactically correct but
was disappointed some of his defenders lost concentration at crucial
moments.

Though Ukraine has recovered defender Vladyslav Vashchyuk – who missed
Ukraine’s match against Saudi Arabia due to red card received against
Spain – it still has defensive worries.

From the start, Ukraine has suffered a shortage of defenders with
international experience who can play cohesively as a unit.

In addition, defender Volodymyr Yesersky – who sat out the match against
the Saudis because of a thigh injury – is still doubtful.

Blokhin will need to decide whether to rely on quick counterattacks and aim
for a draw, or take a more aggressive tack as they did against the Saudis,
where Maxim Kalinichenko played a crucial role in three of four goals after
sitting out against Spain.

Blokhin could simply direct his team to simply prevent the Tunisians from
scoring for the early part of the match to fatigue them, making them
vulnerable to fast counterattacks, as they were against Spain.

“It’s a team that lets you think you are in control, but can undo you in two
or three passes, especially with Rebrov and Shevchenko up front,” Nafti
said. “They’re not on the same level as Spain but they have other assets,
especially their physical strength.”                   -30-
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8. UKRAINE’S FIRST DEPUTY FOREIGN MINISTER ANTON BUTEYKO
                  HAS HEART ATTACK AND MASSIVE STOKE
                  Buteyko was Ambassador to the USA in 1998-1999

UNIAN news agency, Kiev, in Ukrainian 21 Jun 06
BBC Monitoring Service, UK, Wednesday, June 21, 2006

KIEV – First Deputy Foreign Minister Anton Buteyko has been hospitalized
following a heart attack and a massive stroke,

UNIAN learnt from the Feofaniya hospital, where he was taken. Buteyko
was taken to hospital after he suffered a heart attack yesterday. Today, he
suffered a massive stroke.

UNIAN note: Buteyko was born in 1947. He has been a diplomat since 1974. In
particular, he was Ukraine’s ambassador to the USA (1998-99) and to Romania.

In September 2003 he resigned as Ukrainian ambassador to Romania in protest
against Ukraine’s accession to the Single Economic Space [led by Russia and
also involving Belarus and Kazakhstan].                -30-
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9. PRESIDENT YUSHCHENKO MEETS US AMB WILLIAM TAYLOR
 
Office of the President, Kyiv, Ukraine, Wed, June 21, 2006

KYIV – William Taylor, the newly appointed U.S. Ambassador to Ukraine,

has presented his credentials to Victor Yushchenko.
They discussed Ukrainian-U.S. relations and both expressed confidence that
our strategic cooperation would develop.
Mr. Taylor said U.S. President George Bush wanted to build closer ties with
Ukraine. He also confirmed the President’s intention to visit our country
this year.
Ukraine’s Foreign Minister Borys Tarasyuk was present at the ceremony.
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10.   US AMB BILL TAYLOR CONSIDERS HIS APPOINTMENT AS
                     REWARD FOR WORKING IN CRISIS SPOTS  
 
Ukrainian News Agency, Kyiv, Ukraine, Wed, June 21, 2006
KYIV – United States Ambassador to Ukraine William Taylor considers his
appointment to the post as his reward for working in crisis spots. Taylor
stated this at his first press conference following his appointment.

‘I think that they decided in Washington that I have already performed my
duty in difficult spots, and they sent me to a good place,’ he said.
According to him, he served in Afghanistan, Iraq, and Israel before he was
posted to Ukraine.

Asked whether the United States appointed him as ambassador to Ukraine
specifically because it considered the situation in Ukraine to be critical,
Taylor said this was not the case.

According to him, his predecessors in the post of ambassador to Ukraine
envied him for his appointment to the post when he was being sworn in.

Taylor intends to tour Ukraine for some time, visiting the eastern and
western regions of the country. However, he said that his first action would
be to travel to the south. Taylor said he needed to speak to residents of
various regions of Ukraine.

As Ukrainian News earlier reported, Taylor took office on June 21, when he
presented his credentials to President Viktor Yuschenko. Before his
appointment as ambassador to Ukraine, Taylor was the Department of

State’s coordinator for reconstruction and stabilization.     -30-
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11. UKRAINE:  COOPERATION STRATEGY WITH INTERNATIONAL
          FINANCIAL ORGANIZATIONS APPROVED BY CABINET

Ukrainian News Agency, Kyiv, Ukraine, Wed, June 21, 2006 (19:57)

KYIV – The Cabinet of Ministers has approved a cooperation strategy with
international financial organizations for 2006-2008. The Strategy was
approved by Cabinet of Ministers Resolution No. 844 issued on June 20.

The Strategy provides for a gradual transfer from projects for state support
for national budget and economic reforms to self-sustaining investment
projects enabling the introduction of effective free-market economic
management instruments, infrastructure development and enhancement of
competitive capacity of Ukrainian goods and services.

Ukraine is going to enhance its role in preparation for and implementation
of projects, in particular at their phases involving project initiation and
soliciting international technical assistance.

The Cabinet of Ministers intends to reduce to the minimum new government
loans for implementation of institutional projects, excepting those
associated with security of human lives, health protection and education.

In cooperation with the International Monetary Fund (IMF), the Cabinet of
Ministers, given that macroeconomic situation has stabilized in Ukraine,
intends to proceed to relations without credits, in particular consultations
on shaping macroeconomic policy and soliciting technical assistance for
implementing recommendations to be given on issues of this kind.

In cooperating with the International Bank for Reconstruction and
Development (IBRD), the Cabinet of Ministers is going to concentrate on the
implementation of investment projects for the development of infrastructure,
municipal economy and energy, and enhancing competitive capacity of the
private sector of the economy and upgrading information and communications
technologies.

The Cabinet of Ministers is planning to step up cooperation with the
Multilateral Investment Guarantee Agency (MIGA) by providing foreign
investors operating in Ukraine with guarantees against noncommercial risks
and creating institutional and technical conditions for creating an
investment friendly environment.

The Cabinet of Ministers wants to get more credits from the European Bank
for Reconstruction and Development (EBRD) for the development of the public
and private sectors of the economy, while crediting of small-scale and
medium-scale companies remains a priority.

The Strategy treats as priority Ukraine’s entry to the Asian and Pacific
Bank for obtaining investments for the development of transport,
telecommunications and energy and financial sectors, as well as industry and
foreign trade.

The document also provides for Ukraine’s participation in the creation of
the Baltic Sea-Black Sea-Caspian Sea Bank for Development to ensure
long-tern funding of infrastructure projects in Ukraine.

The Cabinet of Ministers has directed the Economy Ministry to proceed from
the Strategy in drawing up drafts of annual plans for cooperation with
international financial organizations.

As Ukrainian News reported before, Ukraine is a member of the IMF, IBRD,
IFC, MIGA, the International Development Association (IDA), the Black Sea
Bank for Trade and Development and the EBRD. Membership in these
organizations opens the gateway to relatively cheap low-interest credits.

According to statistics available as of May 1, 2006, over the overall period
of cooperation with international financial organizations, Ukraine secured
USD 11 billion worth of credits, including USD 4.41 billion from the IMF,
USD 4.3 billion from the IBRD, USD 470 million from the IFC, USD 97.5
million from the Black Sea Bank for Trade and Development and EUR 2.27
billion from the EBRD.

In 2005, Ukraine inked framework agreements with the European investment
Bank and the Nordic Investment Bank.                   -30-
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12.  “THE SECURITY SERVICE OF UKRAINE? SBU CHIEF IHOR
DRIZHCHANYY HAS THE SBU SERVE THE CLANS AND MOSCOW”
   SBU Employees themselves speak of the Degradation of the Department
   Ukrainian Security Service (SBU) Sold Out To Certain Political Parties

ANALYSIS & COMMENTARY: By Vira Chorna
Ukrayina Moloda, Kiev, in Ukrainian 1 Jun 06, p 1, 7-9
BBC Monitoring Service, United Kingdom, Tue, Jun 06, 2006

The Ukrainian Security Service is compromised by leadership which has sold
out to certain political parties, a newspaper has reported. The author said
that concerned officers in the Security Service [SBU] had no where to go
with their complaints but to the media, since their appeals were not being
forwarded to President Viktor Yushchenko.

In particular, career officers are allegedly disturbed by the appointment of
Ihor Drizhchanyy as chief of the SBU in late 2005, she said adding that many
recent appointments show that two opposition parties have been placing their
people in the Service to their own political benefit.

She also said that Moscow became privy to many weaknesses in the Service
when a former officer sought refuge and gave up valuable information in
return.

The following is the text of the article by Vira Chorna, entitled “The
Security Service of Ukraine? SBU Chief Ihor Drizhchanyy has the SBU serve
the clans and Moscow”, published in Ukrayina Moloda on 1 June, subheadings
appear as in the original:

It was a sunny day in December 2005. The centre of Kiev. A 600-series
Mercedes parked on Malopidvalna Street and an important man, looking no less
imposing than the car, got out. He walked 100 meters on his own to the turn
onto Volodymyrska Street, watching carefully around him. He was met near the
stone building of the Security Service of Ukraine [SBU] by another
important-looking man. They went inside… [ellipsis as published]

The gentleman from the Mercedes is Viktor Pshonka, the Deputy
Prosecutor-General of Ukraine back during the Orange Revolution (they say he
was one of the people to initiated the “strong” means of quelling the Maydan
[protests on Independence Square in Kiev at the height of the Orange
Revolution which brought current President Viktor Yushchenko to power in
2004], and former prosecutor from Donetsk Region and now – one of the
prominent members of the [opposition] Party of Regions and messenger of
[major Party of Regions figure] Rinat Akhmetov and Co.

Near the “office” he was met by Anatoliy Mudrov – the current deputy chief
of the SBU and in the past another employee of the prosecutor general’s
office. Mudrov took Pshonka to SBU chief Ihor Drizhchanyy – they were to
have a meeting. What did they talk about? We can only guess.

Of course, there is nothing criminal in the chief of a state body, even the
Security Service, meeting with an emissary of the opposition. At the same
time, the rendezvous of the SBU chief and [Party of Regions leader Viktor]
Yanukovych’s trusted man, took place in a confidential regime and was not a
one-time event.

Before Pshonka, Drizhchanyy met another Donetsk messenger [the Party of
Regions being primarily associated with politicians from Donetsk Region],
Mykola Obikhod (under [former President of Ukraine Leonid] Kuchma – the
odious deputy prosecutor-general and chief of the SBU).

There was also a secret meeting between Ihor Drizhchanyy and the leadership
of the United Social Democratic Party of Ukraine [USDPU] and the Bloc of
Volodymyr Lytvyn [former speaker of parliament] at the SBU’s “special site
number one” in Chapayivka near Kiev.

These are links in one long chain which the current leader of the SBU has
since a certain time decided to tie himself to “Blue-and-White” forces [the
Party of Regions campaign colours were blue and white as opposed to
Yushchenko’s famous orange], just in case. We will talk about this picture a
bit later.

Talk about the degradation of the SBU is not something journalists have
invented. SBU employees themselves speak of the degradation as another “de-“
in the development of the country’s main special services – after
de-communization, de-KGB-ization and de-militarization. And they not only
speak about it, they try to sound the alarm, they write reports to the
leadership of the agency, to the government and the state.

It is quite another thing that Presidential Secretariat chief Oleh Rybachuk
has very friendly relations with Ihor Drizhchanyy, and so letters from
well-known and honest officers are often ignored at Bankova Street [the
address of the secretariat] and they do not reach the president to whom they
are addressed.

What are concerned SBU employees to do? Make contact with the press. And
that is how journalists at Ukrayina Moloda became privy to a topic which is
complicated and nearly out of reach of the media.

THE MISTAKE MADE IN SEPTEMBER
We remind our reader that the 44-year old Maj-Gen of Justice, Ihor
Vasylyovych Drizhchanyy came to the SBU from the prosecutor’s offices where
he had worked since 1987. He grew to become a deputy prosecutor-general. At
Volodymyrska 33, he became deputy chief of the SBU under Ihor Smeshko.

According to one version (which he himself confirms, though not very
actively), during the heat of the Orange Revolution Drizhchanyy was the
co-author of a loud statement of a group of SBU officers in support of the
democratic expression of the popular mass of people, this appeal was typed
on his computer and then agreed with [then Presidential Chief-of-Staff
Viktor] Medvedchuk, but Ihor was not able to get to the stage on the Maydan
to read it simply because he got caught in a “traffic jam” of people not far
from the steps to the podium.

Yet, much ill has been spoken of his pre-revolutionary activity. Drizhchanyy
allegedly took direct part in following opposition figure Yuliya Tymoshenko
[subsequently prime minister before being dismissed in September 2005], and
“put pressure” on the fallen SBU general Valeriy Kravchenko who created a
scandal in Germany when he released information on attempts by the
then-leadership of the SBU to spy on the leaders of the opposition while
abroad and to pass that information to Kiev.

People also said Drizhchanyy was not against the infamous pogroms against
the opposition in Mukacheve [when the police beat the opposition during a
contested municipal election in the Western Ukrainian city]. And that
Drizhchanyy’s “patron”, the odious leader of the USDPU Viktor Medvedchuk,
was behind his transfer to the SBU. And about the largesse of money
Drizhchanyy made in a less-than-honest way.

The press service at Volodymyrska 33, unequivocally denies such talk about
its new leader, instead noting that it was under the efforts of Ihor
Drizhchanyy in fall 2004 that the SBU carried out only 12 “anti-terrorist”
searches against the [then-opposition] Pora activists instead of the 200
demanded by Bankova Street.

One should note that Ihor Drizhchanyy became the new chief of the SBU in
September 2005. Until then he quietly worked as the deputy to the
“revolutionary” chief of the SBU, Oleksandr Turchynov. Turchynov – one of
the leaders of the Yuliya Tymoshenko Bloc [YTB] wrote his letter of
resignation at the very beginning of the long, hard day when the president
[Viktor Yushchenko] cleaned the central authorities of Yuliya Tymoshenko,
her team and her government.

And Turchynov’s deputy was named with surprising speed – the head of the
presidential secretariat introduced the new chief of the SBU Ihor
Drizhchanyy in a few hours. And President Viktor Yushchenko in presenting
the leader of the special services said, “I am concerned that the fight
against corruption is being nullified today… [ellipsis as published]

You must give an answer, which would confirm to the facts (the matter
concerned accusations by the former state secretary [Oleksandr] Zinchenko
against [then secretary of the National Security and Defence Council Petro]
Poroshenko, [presidential aide Oleksandr] Tretyakov and others – author). I
demand a thorough review of every statement. An officer’s honour must speak
from your lips”.

It must now be admitted that the appointment was a mistake. Negative
predictions regarding Ihor Drizhchanyy working in the high position have
been confirmed. And in raising the question of Drizhchanyy’s responsibility
in the post of chief of the SBU one must also ask about the responsibility
of those people who recommended him for Yushchenko’s confirmation.

SBU GREG CARDINAL RADCHENKO AND “HAND OF MOSCOW”
How the SBU leadership carries out security is certainly an intriguing
question. At the same time it is also interesting: who is carrying out this
leadership? A close look shows that the SBU is not being led by its chief,
Drizhchanyy.

Though it is not pleasant to admit, after the victory of democracy on the
Maydan, the SBU slipped a bit from under state control. And the worst part
is that in this situation, state bureaucrats are not trying to steer
Volodymyrska, but rather clans and even people from abroad.

Concerning the latter, of course it is Moscow. And our home-grown clans –
yes, the same ones which tried to influence the SBU with their wide presence
within the ranks of the authorities – are now influencing the SBU while
being in the opposition. We are talking about the USDPU and the Party of
Regions.

We will talk about the mechanism of influence a below, but for now we must
say that Ihor Vasylyovych has turned out to be a weak leader. Perhaps the
reason is his weakness for the green serpent [alcohol] (and even Mykhaylo
Potebenko mentioned his dangerous high-alcohol content habits when he was
prosecutor-general and tried to “remove” his then-subordinate from the shot
glass).

Perhaps, the dependence is even more serious being attached to the human and
financial factor. Perhaps there is something to the circumstance that Ihor
Vasylyovych comes from the prosecutor’s offices and has never become one of
the SBU’s “own”…[ellipsis as published] Whatever the case, Drizhchanyy is
not the most notable figure in the current SBU.

If one could look at a schematic showing the ties within the special
services and the influence on the SBU from without, then you will see that
the biggest arrow points to Volodymyr Radchenko – the very same one who
headed the SBU under Kuchma, from 2003-2004 and who was first deputy
secretary of the NSDC from 1998-2001. After this short “intermission”, the
well-versed special services man Radchenko returned to leadership at
Volodymyrska in a new, more refined form.

Now Volodymyr Ivanovych [Radchenko] is bit by bit developing not only his
own business, but putting people in place in the SBU to his advantage and to
the advantage of his partners, in particular influencing the appointments of
deputy SBU chiefs and the leaders of regional departments. And Radchenko’s
partners and friends include not only Ukrainian tycoons, but also long-time
comrades from Moscow.

In particular, there is information that Volodymyr Ivanovych was in the same
university class with the current head of the Russian Federal Security
Service [FSB] Nikolay Patrushev, and was even his neighbour in the
dormitory. And as they say in Moscow, “friendship is getting stronger”.

In December last year, Radchenko once again flew to visit Patrushev. There
is also information that runners make regular flights to Moscow from
Kharkiv, which currently plays a special role in the SBU hierarchy – that
they agree on certain steps on managing the Ukrainian Security Services and
confirm personnel proposals and so on.

Besides other things, Volodymyr Satsyuk, the deputy chief of the SBU of 2004
and one of the participants in the “poison” dinner with Viktor Yushchenko
[the evening in September 2004, when Yushchenko had dinner with members of
the SBU leadership immediately prior to becoming seriously ill from apparent
dioxin poisoning] is living in Moscow.

He is supposedly “on the run”. And he is now one of the important
participants in the polygon over Volodymyrska 33, Drizhchanyy, Radchenko and
several Ukrainian opposition figures and influential Russian businessmen.

TURNCOAT WHO HOOKED VOLODYMYRSKA 33 IS HOOKED BY FSB
If one is to speak of the “hand of Moscow” in influencing the leadership of
the SBU, then one must bring up one other scandalous story – one linked to
former SBU Col Valentyn Kryzhanovskyy. The media wrote a lot about him last
year. In 2004, Kryzhanovskyy came to the SBU from the Defence Ministry’s
Main Investigative Directorate, the so-called “Island”.

In the SBU he was the assistant to the chief of the Directorate K – on
fighting corruption and organized crime, one of those responsible for
selling confiscated goods and arrested and unclaimed property.
Kryzhanovskyy, working in one of the investigative operations groups, says
he initiated a criminal case on the illegal compensation of VAT worth nearly
330m hryvnyas to nearly 40 companies.

When the former colonel drew closer to overly influential persons, he began
to get shunted off the matter and finally was dismissed, as Kryzhanovskyy
said in an interview with journalist Oleksandr Korchynskyy, “in line with
personnel shuffles”.

And not long after, a case was opened against him – for his allegedly
illegally aiding a close firm in acquiring a large shipment of goods for a
clearly deflated price while in charge of confiscated goods. After this the
show began, and he was called in for questioning with violations of
procedure and an order for arrest.

Kryzhanovskyy, who was especially trying to hide, was detained on the
Ukrainian-Russian border and was put into a remand centre. He left on bail
of 225,000 hryvnyas (he allegedly incurred losses to the state in this
amount), and when the persecution resumed he stated rather accusingly that
someone wanted to settle a score with him and he finally left for Russia.

He sought asylum there and got it in return for valuable information
concerning the Ukrainian Security Services, intelligence, state officials
and so on. It must be said that this was a colossal blow to the SBU. Now
Moscow has additional levers of influence on the Ukrainian Security Services
since Mr Drizhchanyy and the other boys are firmly hung on the hook of
compromising material.

THE POLITICAL GAMES OF THE SBU-MEN
Left out of the game, or more than a game?” – that was the title of Ihor
Drizhchanyy’s interview in Zerkalo Nedeli not long after being appointed
chief of the SBU (14 October 2005). The parliamentary election had only then
just begun and Ihor Vasylyovych practically took certain political
obligations upon himself in that interview.

“The role of the SBU lies in the task of defending statehood and the
constitutional regime. In this difficult process we have to be equally
distant from all political centres and all forces which possibly would
desire to influence these processes by making use of the Service. We should
be participants, we should observe the situation. And influence it in such a
way that it remains as stable as possible.

In the worst case for us, we can take upon ourselves the role of
intermediates between sides in the conflict in order to make it less severe,
less radical and to in no case allow the expression of extremism or anything
that would then harm everyone”.

And one more citation, a bit lower in the text: “The regionalization of the
electoral process is very clear. I am concerned by what is being called a
schism. It is of grave importance to get rid of the reasons behind it. And
this must be done in a positive way with results”.

What has really happened? Unfortunately, both Drizhchanyy and the SBU under
his direction have not been able “equally distance itself from all political
centres”, instead it has become a “participant” in political “games”. And it
hasn’t chosen the best side.

In one report entitled “Information on negative processes in the SBU”, one
reads that within a month of his appointment as chief of the SBU, Ihor
Drizhchanyy began to work closely with the Party of Regions in the person of
Andriy Klyuyev (who was one of the main “shadow” players in Yanukovych’s
campaign headquarters in both the 2004 [presidential] election and the
parliamentary election [in 2006]).

SBU officers who are displeased with their boss’s sympathies explain this as
his desire to provide “for his own political future”. They say Drizhchanyy
saw how the Party of Regions’ rating was growing and naturally foresaw the
success of the Donetsk people in the election and strove to obtain their
support. And so at first the intermediary between Drizhchanyy and the Party
of Regions was his long-time friends Mykola Obikhod (now a consultant to
Klyuyev on security issues), and later – Pshonka.

Ihor Drizhchanyy has now fully blocked the investigation on criminal case
number 236 opened over criminal groups in Donetsk Region stealing VAT of
nearly 1bn hryvnyas, which was used in Viktor Yanukovych’s election
campaign.

THE HAND OF DONETSK: THE HOUSE THAT RINAT BUILTt
But the real story of the Party of Regions’ direct influence on the SBU
leadership began earlier. But when the above-mentioned Volodymyr Radchenko,
then chief of the SBU, in a not-quite-transparent and as people say, not
very legitimate manner sold wealthy and practical head of the Regional,
Rinat Akhmetov, a land plot located next to Volodymyrska 33 and which
belonged to the SBU.

Akhmetov built an elite residential building on this spot of land at the
address Patorzhynskyy 14, and the Donetsk elite moved in. On the top floor
there is Rinat Akhmetov’s own splendid penthouse with a swimming pool and
other comforts of the “new Ukrainians”. Under him is Volodymyr Radchenko’s
more modest residence.

In this way, we have a double closing of one of the clans and a state power
structure: on the one hand, business and property and on the other
“geographic” (if you stand near the turn by the SBU, which exits onto
Volodymyrska, you can see that this legendary structure of grey granite
practically “leans up against” Rinat and company’s impressive building).

And there is one thing more to the mutually beneficial relations of
Radchenko and the Donetsk people. One could suppose that the members of the
Party of Regions who are not used to make empty promises, are expressing
their thanks to Volodymyr Ivanovych for stepping aside for Viktor Yanukovych
as candidate for president.

Much was then said about the scenario of electing a “Ukrainian Putin” and
that Volodymyr Radchenko could be this person for our voters, since he was
one of the favourites and possible successors to Leonid Kuchma. Possibly the
election campaign for officer Radchenko from the SBU would have been more
successful than the twice-convicted Yanukovych. But the “single candidate
[Yanukovych]” was then put forward by the Donetsk people. And they are
thanking Radchenko in the proper way, even though they lost.

Personnel decides everything. And who is putting the personnel in place and
why?

It is easiest to see the presence of two centres of influence on the SBU
coming from the opposition by looking at the personnel appointments which
are proposed to it. Let us look at a few pretty instances which are based
not only on the reports of rank-and-file officers, but in official
documentation. Let’s take a look at who has come to leadership positions in
the SBU after Drizhchanyy’s promotion.

After Vasyl Krutov and Andriy Kozhemyakin – “Turchynov’s men” – were
dismissed, people were appointed to the deputy SBU chief posts who can be
called “Radchenko’s men”. These are Valeriy Pidbolyachnyy (who was the
director of the SBU in Ternopil region), Volodymyr Pshenychnyy, Vladyslav
Korshunov (who headed the fourth SBU department) and also Anatoliy Mudrov
from the general prosecutors’ who was mentioned above.

People say that Pidbolyachnyy and Pshenychnyy allegedly give “protection” to
Mr Radchenko’s business and that the SBU chief in Rivne Region Sadovnyk is
doing the same.  As for Korshunov, within business circles he is said to
have common interests with the former head of the Kharkiv state
administration, and one of the current leaders in the Party of Regions and
leader of the Party of Regions 2006 election campaign, Yevhen Kushnaryov.

Lt-Gen Mykola Kurkin became another deputy SBU chief; before he moved to
Kiev, he was the chief of the SBU in Dnipropetrovsk Region and from 2001 to
2004 he was a “first deputy” in the SBU directorate in Kharkiv Region. He is
considered to be accountable to Radchenko as well as to the head “Regional”
in Kharkiv Region, Vasyl Salyhin and local magnate Hoshovskyy and
Yaroslavskyy and is also believed linked to the Russian Chornyy brothers.

Forty-three-year-old Maj-Gen Andriy Mukhatayev became chief of the
Department of Internal Security at the SBU; he is considered accountable to
Radchenko and Kurkin. In the spring-time, he managed to be fairly cheerful
in an interview with Zerkalo Nedeli on the topic of “cleaning the ranks” in
the SBU.

But if you dig a bit deeper into his dossier, then you will come across such
entries as this: during the presidential campaign in 2004, Mukhatayev used
his wife Olena’s friendship with Yevhen Kushnaryov’s wife to assist in
establishing friendly contacts between then leader of the SBU’s foreign
intelligence Oleh Synyanskyy with the team of presidential candidate Viktor
Yanukovych.

The official situation was actively used to obtain information in the
interests of the Yanukovych headquarters, subordinates were invited to the
foreign intelligence service for various “acts of assistance” to the “future
presidential team of Yanukovych”. In the closing days of the Orange
Revolution – on 28 December 2004, Mukhatayev received the rank of general
for such services.

After the victory of the Maydan, Mukhatayev was removed from his position of
leadership over the intelligence department of the foreign intelligence
service, but in November 2005 with the assistance of the new deputy SBU
chief Kurkin, he was appointed director of the Department of Internal
Security at the SBU.

Those of an unkind bent point out that these two gentlemen both figure in
rumours of pocketing a sum of nearly 3m hryvnyas from sales of confiscated
goods. Of course, we do not believe that people in control of the
“cleanliness” of SBU employees after the Orange Revolution themselves got
spotted by corruption working for the SBU in Kharkiv at the end of the
1990s. And further legal development on this topic did not progress (the SBU
was then led by Leonid Derkach, Kurkin’s “patron”).

Now Mr Mukhatayev – an ambitious man and one not without selfish
intentions – kept close ties to SBU Chief Drizhchanyy, whom he convinced of
his own utter loyalty. Under the pretext of “cleaning the SBU of Turchynov’s
people”, Andriy Oleksandrovych made changes to the leadership of units in
Internal Security in 21 regions to his favour. Mukhatayev’s next place of
work was the post of chief of the SBU in Kharkiv Region and he received that
appointment Monday.

Before then, Maj-Gen Anatoliy Pavlenko had been in place there – another
Radchenko “representative”. But on 29 May a presidential decree was issued
and the day before yesterday Ihor Drizhchanyy introduced Pavlenko as the new
chief of the SBU in Kiev city. Before this, the Kiev SBU department had been
run by Oleh Chornousenko – a general whom the entire service respected and
still respects, and who was responsible for Viktor Yushchenko’s security
during the intense campaigns of 2002 and 2004.

“And who “swallowed” Chornousenko?!”, rank and file SBU employees can hardly
contain themselves, “Mukhatayev!”
As we see, in this case the “Drizhchanyy-Radchenko lobby”, running against
logic, has turned out to be President Yushchenko’s “dear friends”.

Korshunov, Kurkin, Mukhatayev and his people from the internal security
directorate, Semerov and Sokolov, as well as deputy chief of the economic
department “Oversight”, are allegedly linked to the dubious Maksym
Kurochkin – they all come from the SBU in one regions – Kharkiv. With all
the contingent ties and interests.

People who spoke with Ukrayina Moloda, to put it figuratively, call the
Rinat Akhmetov the “client and producer” of their appointment and Volodymyr
Radchenko the “director”.

            THE HAND OF SOCIAL DEMOCRATES: GODFATHER OF

MEDVEDCHUK’S CHILD HEADS ANTICORRUPTION DEPARTMENT

Another pole of influence on the SBU is a bit weaker than the Party of
Regions, but just as noticeable – the good old USDPU who besides everything
else have better in’s with Moscow.

People have already spoken of the common business interests of this clan and
Mr Drizhchanyy, and this has been actively disputed. Medvedchuk and
[Hryhoriy] Surkis have contact with Radchenko and with Pidbolyachnyy and of
course with Smeshko and Satsyuk. The latter couple represents USDPU’s in
with the SBU after the USDPU marvellously failed in the 2004 and 2006
elections.

You recall that [USDPU leader] Viktor Medvedchuk closed himself up in his
ranch in Transcarpathian Region and is writing his memoirs? One proof of the
opposite is the recommendation to President Yushchenko to appoint Ivan
Anatoliyovych Herasymovych as another deputy SBU chief.

This colonel, who is from Transcarpathian Region, has close relationships
with Medvedchuk senior and his brother Serhiy and is officially the
godfather of Viktor Medvedchuk’s child and gives this “family” all kinds of
support and receives the requisite thanks. Herasymovych was appointed to the
post of deputy chief of Department K under the “Medvedchuk-Smeshko-Satsyuk”
scheme and now people say he personally controls three “players” in Odessa
Region where structures belonging to Medvedchuk a [USDPU member Nestor]
Shufrych are allegedly active.

The leader of the USDPU had a great desire to elevate his child’s godfather
to the post of deputy chief of the SBU – as chief of the Main Directorate on
fighting Corruption and Organized Crime (“K”). Now there’s a lobby! With
this kind of godfather you don’t even have to win the election!

By the way, as far as former deputy SBU chief Volodymyr Satsyuk who is
carrying out his state duties in Moscow (when he is not relaxing at
resorts), the above mentioned Mukhatayev is allegedly “searching” for him.
It is not hard to predict the results of such “searches”.

And in wrapping up the topic of personnel policy in the “renewed” SBU, it is
worth publishing some letters which were given to President Yushchenko by
former SBU employee Oleksandr Vasylyovych Horyaynov, who is now a
businessman. Illustrating the arbitrariness of the “Office” with the example
of his being persecuted by the same SBU, Horyaynov draws conclusions about
Mukhatayev, Kurkin, and Drizhchanyy and the inappropriate level of attention
being given by the leadership of the country…[ellipsis as published]

“The leadership of the SBU is openly ignoring the policies of the high
leadership of the state”

If one was to speak of the state achievements of the SBU over the past
little while, one can note the reform of the SBU. But you cannot call it a
success.

According to the cries of some experts, the developments in reform have in
fact copied the old ones developed in 1991 and 1992, and which do not meet
the modern stage of development in the Ukrainian state or the social,
political and economic processes in the world and do not take into account
the real, existing threats to Ukraine’s national security.

They say that the idea of making the special services less effective by
“reforming” it belongs to Mykola Obikhod and was supported by Ihor
Drizhchanyy at the beginning of 2005.

The project for reforming the SBU which they prepared and which envisages
separating and closing several key units, including rejecting carrying out
law enforcement functions (fighting terrorism, espionage, corruption and
organized crime and so on) and provoked deep indignation among real
professionals.

And in closing it is worth quoting confused, but honest – as an axe –
quotations from some letters of simple SBU officers addressed to the head of
state.

During the Ukrainian presidential election, the middle ranks of the
leadership of the SBU and the operative ranks, in fulfilling their oath of
allegiance to the people of Ukraine, sincerely upheld that people’s
democratic choice. These employees hopes that the supremacy of the
constitution and the laws of Ukraine would prevail in the state and that the
direction of the SBU’s work would change positively…[ellipsis as
published]

However, the appointment of Ihor Drizhchanyy has been perceived extremely
negatively by the majority of the SBU employees, who know him to be a loyal
representative of the former authorities, unprofessional and a person with a
low moral and business nature.

He does not have the experience of leadership in state bodies in general or
in organizing the law enforcement activities of the SBU in particular.
During his work in the Service, he was known for the brutal persecution of
officers who infringed on his personal business interests…[ellipsis as
published]

As chief of the SBU at the present time (speaking of the period of the
parliamentary election, when Drizhchanyy played to the Party of Regions –
author), Ihor Drizhchanyy practically paralysed the work of the SBU, which
did not carry out its functions, including objectively informing the
president of threatening internal and external social and political
processes which encroach on the constitutional order in Ukraine…[ellipsis
as published]

The leadership of the SBU is openly ignoring the policies of the higher
leadership in the country and is actively engaged in issues of its own
future employment (secret negotiations are being held with various political
forces)…[ellipsis as published]

The intentions to ruin the SBU, which are cased in slogans of “reforming”
it, will lead to the violation of the legal balance within the state, which
is expressed in weakened authorities, and an increase in tension in society.

These processes have an extremely negative influence on the body of officers
in the SBU. As a result, there is a change of orientation in patriotically
inclined officers who see no sense is prolonging their loyal service for the
good of the people of Ukraine.”                 -30-

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13. VARTKES’S LIST & THE VICTIMS OF THE ARMENIAN GENOCIDE
         Of the million or more Armenians executed by Ottoman Turks 90 years
          ago, thousands had insurance from New York Life. A slip-and-fall
        lawyer uncovered the list of policyholders and, by forcing the company
                   to pay their heirs, gave voice to the victims of genocide.

Article By Michael Bobelian, Legal Affairs magazine
The Magazine at the Intersection of Law and Life
New Haven, Connecticut, March/April, 2006

VARTKES YEGHIAYAN ENTERED THE LOS ANGELES FEDERAL
OURTHOUSE more nervous than on any other day of his career. He wore
the fraying navy suit that had seen him through many victories in the
slip-and-fall cases that he typically handled. Sixty-five, his hair white
and body plump, the lawyer Yeghiayan was 14 years into a different kind of
case, a class action lawsuit against an insurance company that had failed to
honor his clients’ policies.

To the surprise and anger of his colleagues, Yeghiayan had turned down a
substantial settlement seven months before. For reasons that don’t often
enter into the calculations of a legal dispute, Yeghiayan wanted more for
his clients than the amount the insurer had offered.

His ancestors were Armenian, and for most of his life he had heard stories
of a day in April 1915 when Ottoman soldiers rounded up Armenian families
to begin a slaughter that would last for eight years and claim at least a
million lives.

His clients, some 2,300, were heirs of the slaughter’s victims who had
purchased life insurance policies that had never been redeemed. Yeghiayan
wanted the insurer to pay his clients so that they would get the money they
were owed, but also as an act of public recognition for a genocide that most
Armenians believed had been too little noticed—and that its perpetrators had
consistently denied.

In Yeghiayan’s view, a settlement could serve both purposes only if it were
large enough to attract the world’s attention. Otherwise, he would seek the
recognition that his people deserved by trying the case in court.

That November morning in 2001, Yeghiayan was on his way to a last-minute
settlement conference before a hearing on whether his case would be
dismissed. He walked into a small room off the lawyers’ lounge near United
States District Judge Christina Snyder’s courtroom. It was filled with
lawyers from each side of the case.

The judge had given them 30 minutes to see if they could reach agreement,
but Yeghiayan didn’t need that much time. The entire group had worked out
terms that they hoped he would accept, and a lawyer slid a settlement
proposal across the table.

“I’m not going to sign,” Yeghiayan said.

THE SOUTHWESTERN CAUCASUS IS A REGION OF RUGGED
MOUNTAINS between the Black and Caspian seas, with deep valleys that
intersect like the boulevards of a
city. Mount Ararat dominates the landscape and marks the center of the
ancient Armenian civilization. In the spring, melting snow and ice flow down
the slopes to rivers like the Aras. The ground surrounding the mountain is
dark with lava and scattered with embedded stones—some beige and hard,
others red and brittle, still others glossy and black.

Armenians emerged in the Caucasus during the first millennium B.C. It is not
known whether they traveled there from Asia Minor, as the ancient Greek
historian Herodotus claimed, or were native to the land. In A.D. 301, King
Trdat III made Armenia the first Christian nation. Mythology has it that he
converted his empire from paganism in gratitude to a Christian monk, who
made the king human again after he went on a killing spree and was changed
into a wild boar.

About a century later, another monk created the Armenian alphabet, and the
combination of a written language and a state religion solidified the
Armenian culture, allowing it to resist assimilation by Arabs, Tatars, and
others who invaded Armenia over the following centuries.

By the 1800s, most Armenians lived under Ottoman rule. The few inhabiting
the Turkish capital, Constantinople (now Istanbul), were among the empire’s
wealthiest merchants and intellectual elite, while the rest worked as
farmers and artisans in regions to the capital’s south and east. The Islamic
Ottomans treated the Christian Armenians as second-class citizens, though,
and Armenian demands for equality soon shattered what had long been a
largely peaceful relationship between the peoples.

In 1894, the growing tension provoked Armenians to protest against their
Turkish rulers, and Sultan Abdul Hamid II, the head of the Ottoman Empire,
ordered mass killings of Armenians. The massacres started in the Black Sea
city of Trebizond, 650 miles east of Istanbul, and quickly spread throughout
the empire. The deadliest incidents occurred in Urfa, near the Syrian border
to the south, where soldiers burned a cathedral with 3,000 Armenians inside.

Between 100,000 and 300,000 Armenians perished in the violence from 1894 to
1896. In 1908, troubled by growing disorder in the sprawling Ottoman Empire,
a group of army officers called the Young Turks seized power from Abdul
Hamid and promoted pan-Turkism, a nationalist ideology that advocated
eliminating minorities like the Armenians. In their first year in power, the
Young Turks orchestrated the execution of between 15,000 and 25,000
Armenians.

As this new wave of violence swept the empire, a middle-class merchant named
Setrak Cheytanian watched with horror from his home in Kharput, a city in
central Turkey and a stop on the Silk Road, an ancient system of caravan
trails from China to the Mediterranean Sea. Fearing the worst for himself
and wanting to provide for his wife, parents, and two children, the
35-year-old Cheytanian bought a life insurance policy from an agent of New
York Life Insurance Company in July 1910.

For an annual premium of 155.73 French francs, the policy obligated the
company to pay Cheytanian’s named beneficiaries 3,000 francs (about $580
at the time) plus dividends upon his death or, if he outlived the policy’s
20-year term at his request.

Life for Cheytanian and other Armenians grew more precarious as World War I
approached. Concern for the Christian minority had prompted France and
Britain to support Armenian rights and, to some extent, restrain the
Ottomans from greater abuses. But in 1914, Turkey entered World War I on
Germany’s side, cutting off Armenians from their European supporters.

At the insistence of her father and her brother-in-law Cheytanian, Yegsa
Marootian and her 9-year-old daughter, Alice, left Kharput for New York City
to join Cheytanian’s brother, who had emigrated there several years before.
As they left, Cheytanian gave Yegsa his life insurance policy, figuring that
if anything happened to him, it would be easier for her to collect on the
policy in New York, where the insurer was headquartered.

VARTKES YEGHIAYAN WAS BORN IN 1936 to a wealthy family in Ethiopia
hat sheltered him excessively, even from the family’s history. His mother’s
close ties to the nation’s imperial family—her godmother was the wife of the
Emperor Haile Selassie—allowed him entry to the best schools and, at age 11,
he attended an American boarding school in Cyprus.

There he befriended many Turkish students, and he was puzzled when some of
his fellow Armenians would call the Turks “murderers.” Why they should be
called murderers remained a mystery for Yeghiayan through high school and
into college at the University of California, Berkeley, where his father
insisted that he go because, his father explained, “The future is in
America.”

Yeghiayan started as a pre-med major at Berkeley and switched to history, a
course of study that might have explained the connection between Turks and
murder, but Yeghiayan’s teachers never mentioned the topic. Other Armenian
students told him stories of their families’ hardships in Turkey, and he
pretended to know what they were talking about, offering the little he could
gather from his reading about Turkey at the library.

But it was not until 1961, when his father died and he attended the funeral
in Ethiopia with his relatives and the aging friends of his father, that
Yeghiayan began to understand his family’s—and his people’s—unspeakable
past.

In the early days of World War I, when the Ottoman military included
Armenian soldiers, an assault on Russian forces at Turkey’s eastern front
backfired, costing the Turks about 90,000 men. Humiliated and looking for a
scapegoat, the Turkish commander blamed the treachery of Armenian soldiers
for the disaster and arranged for their expulsion from the military.

At about the same time, Turkey’s leading Islamic cleric declared a jihad, or
holy struggle, against all Christians except those living in Germany and
other Turkish allies. By 1915, the Armenians were isolated, largely unarmed,
and the targets of a religious death warrant. Dr. Khachig Boghosian, a
prominent psychologist and leader of the Armenian community in Istanbul,
described in his memoirs what happened on the night of April 23:

After supper, I went to the house of my neighbor . . . and we passed the
time playing backgammon and piano. I left and came home at 1:30 a.m. and
went to bed; everything was calm, both inside and outside of the house. I
had just lain down and was on the verge of falling asleep, when the outside
doorbell rang loudly three times. My sister Esther hurriedly went
downstairs, opened the door and, after exchanging a few words, rushed
upstairs and knocked on my door, telling me that the police wanted me.

Similar scenes played out across Istanbul as 250 Armenian leaders were
arrested and sent to camps in central Turkey. The head of the Armenian
Church pleaded with the United States for help. At the request of America’s
Secretary of State William Jennings Bryan, the U.S. Ambassador to Turkey,
Henry Morgenthau, asked Turkish leaders to stop their campaign against the
Armenians.

His appeals were ignored, and the United States, then neutral in the war it
would enter two years later, could only repeat its request. The Turks began
to execute Armenian leaders across the empire, hoping to preclude any
organized resistance to the massacres that it planned to undertake soon. The
Young Turks declared that they would make Turkey for the Turks alone.

Throughout the spring and summer of 1915, Turkish death squads
systematically assembled large groups of Armenians in Erzerum, Kharput, and
other Armenian enclaves and hung or shot the adult men. Among the dead in
Kharput was the merchant Setrak Cheytanian.

The gangs then evicted women and children and forced them to march through
the desert to camps in central Turkey and, finally, to the outskirts of the
Ottoman Empire in what is now Syria. Carrying almost nothing to eat or
drink, the deportees fought over provisions during the marches.

All were vulnerable to the kidnappings, rapes, and murders that the Turks
and Kurds guarding them committed at random. Countless women were sold
as concubines. Children were pried from their mothers’ arms and given to
Turkish families. Describing the deportations, Leslie Davis, the American
consul in Kharput, wrote to his superior in Istanbul, “I do not believe it
is possible for one in a hundred to survive, perhaps one in a thousand.”

By 1923, the Turks had systematically executed between 1 million and 1.5
million Armenians and evicted 500,000 more from a homeland that they had
occupied for 2,500 years. It was one of the century’s first instances of
mass extermination, and it would become known by Armenians, and later by
much of the world, as the Armenian genocide.

Among the genocide’s survivors was Yeghiayan’s father, Boghos. None of
Boghos’s friends who later attended his funeral could tell Yeghiayan exactly
how or when, in the course of the war and the massacres, Boghos lost his
parents and four sisters in Konya, a city in southwestern Turkey. Arab
nomads found the nine-year-old Boghos and disguised the green-eyed,
flaxen-haired boy with girl’s clothing so that he could survive in their
company.

In 1919, according to his friends, he walked out of the desert and appeared
in Aleppo, a city in northern Syria where tens of thousands of Armenian
refugees were gathered after the war. Going through his father’s possessions
after the funeral, Yeghiayan found in Boghos’s wallet a photograph showing
Boghos dressed in shepherds’ robes.

Yeghiayan had never seen the photo before, because Boghos had apparently
never shown it to any member of his family. He had shared his memories of
Turkey and the massacre of Armenians only with fellow survivors.

THE WAR AND THE DISAPPEARANCE OF SO MANY ARMENIANS

hopelessly complicated the efforts of the New York Life Insurance Company
to operate in Turkey. By 1921, an attorney at the company’s offices in Istanbul
had authorized the payment of death benefits on 1,300 of the 3,600 policies
held by Armenians, but, with no one trying to collect on the other policies,
“that was the closing of the book at that point,” William Werfelman Jr., a
vice president at New York Life, explained recently. The insurer pulled out
of Turkey later in 1921.

By then, Yegsa Marootian had been living in Staten Island, N.Y., for several
years, and her family had grown to include three children in addition to her
daughter Alice. Yegsa was largely cut off from news of Turkey and her
Armenian relatives, but somehow she had gotten word by 1925 that her
brother-in-law Cheytanian was dead. She had kept the life insurance policy
that he had given her, and, with her family financially strapped, Yegsa was
eager to collect the death benefit of 3,000 francs, by that time worth about
$143 (and roughly $1,600 today).

As Cheytanian had instructed, she contacted the New York headquarters of New
York Life about redeeming the policy, and a company agent told her that she
needed a certificate of inheritance—essentially, a death certificate—to
prove that Cheytanian had died. The agent recommended that she get one
through the Armenian Church, as many other Armenian beneficiaries had done.

There is no record of Yegsa’s response to the agent or of her life over the
following 30 years, but by 1956 she had moved to Los Angeles and obtained
the certificate of inheritance. According to a letter dated in June of that
year, New York Life instructed Yegsa to come to its offices in Pasadena,
Calif., to “discuss the matter” of her brother-in-law’s insurance policy.

AFTER GRADUATING FROM BERKELEY IN 1959, Yeghiayan worked

at a law firm and
earned a degree from Lincoln Law School of San Jose, a night school, in
1965. He soon joined California Rural Legal Assistance, a nonprofit group
that represented agricultural workers and, after Ronald Reagan became
governor in 1967, gained notoriety as a thorn in Reagan’s side. But
Yeghiayan’s attention never strayed far from his Armenian heritage.

The genocide stories that he had heard from his college classmates and his
father’s friends stayed with him, and, beginning in the late 1960s, on every
April 24—the anniversary of the genocide—he tried to lead Armenians in
demonstrations at the Turkish consulate in Los Angeles. “My view was the
Turks . . . tried to exterminate us and failed,” he explained. “On April 24,
we should remind them of that failure.”

When he could not be in Los Angeles, Yeghiayan joined Armenians wherever
he was to commemorate the loss. In 1980, after serving five years as an
assistant director of international operations for the Peace Corps in
Washington, D.C., Yeghiayan set up a law practice in Glendale, Calif. He
helped Armenians immigrate to the United States and handled personal injury
cases for the local Armenian community, which is now the largest in America.

But Yeghiayan says it was not until 1987, as he approached his 51st
birthday, that he stumbled on the cause that would become his passion. While
reading Henry Morgenthau’s memoir, he came across a passage that recounted a
conversation between the former ambassador to Turkey and his frequent
interlocutor, Mehmet Talaat Pasha, the Turkish interior minister and one of
the leading Young Turks. Talaat was committed to the elimination of
Armenians from Turkey, and while the slaughter was occurring, he mentioned
to Morgenthau the substantial business that New York Life and other American
insurers had done with Armenians:

“I wish,” Talaat now said, “that you would get the American life insurance
companies to send us a complete list of their Armenian policy holders. They
are practically all dead now and have left no heirs to collect the money. It
of course all escheats to the State. The Government is the beneficiary now.
Will you do so?” This was almost too much, and I lost my temper. “You will
get no such list from me,” I said, and I got up and left him.

Morgenthau was appalled by the Turk’s greed in trying to squeeze profit from
the Armenians’ slaughter, and the story caught Yeghiayan’s attention. What
happened to these policies? Were they ever paid? If so, to whom?

He investigated, beginning with a letter to the U.S. State Department. He
was referred to the National Archives, and after further conversations he
received 600 pages of correspondence and other documents on microfiche.
As best Yeghiayan could determine, the death benefits on thousands of
unredeemed insurance policies remained unpaid.

Yeghiayan saw how he could do more for Armenians than protest in front of
the Turkish consulate every April 24. By his calculation, New York Life and
other insurance companies owed the heirs of genocide victims millions, maybe
tens of millions, of dollars in benefits. So far, the world had largely
ignored the Armenian genocide.

Insurance benefits weren’t reparations, but they would give the victims’
heirs something of value and, more important, forcing their payment could be
a way of getting people to recognize that something horrible had happened in
Turkey more than 70 years before. “I knew we had to file a lawsuit,”
Yeghiayan said. “The question was, Do we have a client?”

THROUGH THE EARLY 1970s, few Armenians spoke publicly of the massacre,
and most of the survivors were interested more in rebuilding their lives
than in
demanding justice. That seemed fine to much of the world. The Soviet Union,
which had invaded and annexed Armenia in 1920, prohibited Armenians from
discussing the genocide. The Soviets did not want to stir nationalist
sentiments that might provoke unrest, and they were eager to gain Turkey as
an ally.

In the United States, the phrase “starving Armenians,” used in the 1920s by
mothers to remind their children why they should eat their vegetables, was
quickly forgotten. The American lapse of memory resulted more from neglect
than policy, but there was little incentive to remind people of the tragedy:
The United States wanted to remain an ally of Turkey, a valuable buffer
between the Soviets and the Middle East.

In Turkey itself, the government and most Turks denied that the genocide had
occurred, a position established soon after the founding of the Republic of
Turkey in 1923 by Mustafa Kemal Ataturk, Turkey’s most successful World
War I general and the leader of a nationalist movement to rid the nation of
minorities and foreign influence.

Under Ataturk, official history held that a purely Turkish republic emerged
from a war of liberation with imperialist Europe rather than, in large part,
from a campaign to cleanse Turkey of its Armenian minority.

By describing the nation as “a new birth,” this revision of history allowed
Turks to forget the past. It permitted them to avoid the shame and other
“psychological crises generated by the legacy of the past,” explained the
historian Taner Akcam, a visiting professor at the University of Minnesota
who, in the 1970s, became one of the first Turkish academics to publicly
acknowledge the genocide.

After 1923, Turkish schools taught that thousands of Armenians died during
World War I as an unfortunate consequence of disease, famine, and war.
Other Armenians were executed or deported because they participated in
insurrections, students were told, but total deaths and deportations
numbered far less than a million, because not that many Armenians lived in
Turkey at the time. The Turkish government reinforced these teachings by
prosecuting anyone who publicly questioned them, including Akcam, who was
sentenced in 1976 to 10 years in prison, though he escaped to Germany after
a year.

Despite a half century of reticence, many Armenians believed it was
essential to prove that the defining event of their history was not fiction
and, during the 1970s, they began to speak out. In the United States they
created national advocacy organizations like the Armenian Assembly, started
in 1972, and in 1975 they persuaded the U.S. House of Representatives to
designate April 24 as a national day of remembrance for the genocide (the
Senate did not pass the resolution).

Armenian terrorists struck Turkish targets in Europe, the Middle East, and
the United States, killing dozens of Turkish diplomats. In 1981, they took
60 hostages at the Turkish consulate in Paris. These and other efforts to
gain recognition for the genocide made Turkey even more determined to block
that recognition. In the United States, the Turks exploited their strategic
value as a military counterweight to the Soviet Union.

During a 1987 House debate, Congressman James M. Leath, a Texas Democrat,
explained his opposition to legislation that characterized the events of
1915 to 1923 as genocide. “It does not have anything to do with genocide,”
he said. “It does not have anything to do with our feelings against what
happened to the Armenians. The bottom line is that . . . the president of
Turkey, the Turkish people, say if you do this, you hurt your security.” The
legislation failed to pass.

THERE IS NO RECORD OF WHAT HAPPENED after New York Life invited
Yegsa Marootian to its Pasadena offices in 1956. She may not have gone, or
she may have failed to complete some other step required to claim death
benefits
under the life insurance policy. In any event, the company never refused to
pay her. When Yegsa died in 1982, the policy was still outstanding.

Alice Asoian, Yegsa’s oldest child, inherited the policy but thought little
about it until 1989, when she noticed an advertisement in a local newspaper
seeking “insurance papers.” The ad had been placed by Yeghiayan. It had been
running for several weeks, prompting dozens of local Armenians to send him
photos of deceased relatives but no insurance policies or other evidence
that the relatives were insured.

Yeghiayan despaired of finding a client who could get his lawsuit off the
ground, but then he received a phone call from Alice. When he visited her
home in Irvine, she brought out a shoebox containing the original life
insurance policy of Setrak Cheytanian, all the premium payment stubs, and
correspondence between Yegsa and New York Life dating back to the 1920s.
Yeghiayan, it seemed, had a client.

But the reality was not so simple. In 1994, as Yeghiayan prepared the
lawsuit, Alice died, and the policy’s beneficiary changed again. This time,
it was Alice’s brother, Martin Marootian. Fortunately for Yeghiayan, Martin
took to the role of plaintiff with enthusiasm.

A retired pharmacist and gentle-spoken grandfather, Marootian, 90, was proud
to recount his family’s saga. “This is the man in question,” he said during
a recent interview, pointing to his Uncle Cheytanian wearing a fez and a
walrus moustache in a 1905 photograph. Of the 11 Armenians in the photo,
only Marootian’s mother, Yegsa, and his sister, Alice, had survived the
massacre. He stressed that he appreciated the historic opportunity that the
lawsuit represented for him and for other Armenians. “I wanted,” he said,
“to tie the genocide to our case.”

YEGHIAYAN PLANNED TO MAKE THE CASE A CLASS ACTION

LAWSUIT on behalf of every
beneficiary of every life insurance policy purchased from New York Life by a
victim of the genocide. On the basis of historical records, he estimated the
class at 2,300 people. But the case presented a monumental challenge for
Yeghiayan and his four-lawyer firm in Glendale. His wife, who helped run the
firm, was an immigration lawyer, and Yeghiayan had worked mostly on small
personal-injury cases.

Alone, they could not cover the extraordinary expenses of a lawsuit that
would surely take years or handle the thousands of documents that would be
traded between the parties. Yeghiayan knew that he needed help, and in 2000,
after he filed the case in U.S. District Court in Los Angeles, he hired two
Los Angeles-area lawyers with experience in class actions and an interest in
seeing the Armenian genocide recognized. One was Brian Kabateck, whose
grandparents had survived the genocide. The other was William Shernoff, who
had worked on lawsuits seeking reparations for the Holocaust.

The team faced serious legal obstacles almost immediately. The biggest was
the expiration of the statute of limitations, the legally prescribed time
limit for suing over the policies. “The only way I was going to get around
the statute of limitations,” acknowledged Yeghiayan, “was to say . . . there
is no statute of limitations on genocide.” He knew it was a weak argument,
and he reached out again for help, this time to California’s politically
powerful Armenian community.

With the assistance of former California Governor George Deukmejian and
state Senator Charles Poochigian, both of Armenian ancestry, Yeghiayan
persuaded the California Legislature to extend the statute of limitations.
With that obstacle to the lawsuit removed, lawyers on both sides reached a
tentative settlement for $10 million in April 2001.

Kabateck, Shernoff, and New York Life issued press releases announcing the
settlement. But when Marootian learned of the deal, he rejected it, saying
the lawyers were pressuring him to give up. Yeghiayan immediately denied
having agreed to settle and accused his colleagues of going behind his back.
Later in April, he fired Shernoff and Kabateck.

The falling out threatened to end the lawsuit, but Yeghiayan persuaded Mark
Geragos, another lawyer of Armenian descent, to join him, and Geragos talked
Yeghiayan into reconciling with Shernoff and Kabateck. No sooner was the
team back together, though, than it had to face the motion to dismiss that
New York Life had filed before the settlement fell through. Among other
points, the insurer argued that the plaintiffs could not sue in Los Angeles,
because the policies specified French or English courts as the forums for
any legal disputes.

Yeghiayan’s team responded that it would be unfair to require elderly
clients like Marootian to sue abroad, but the lawyers feared that the case
was on shaky ground. Almost every suit tied to compensation for long-ago
injustices, from the Holocaust to American slavery to South African
apartheid, had failed because of problems like a lack of evidence. Though
this suit was based on insurance contracts, only Marootian had a documented
policy.

On November 28, 2001, the day of the hearing on the motion to dismiss,
Yeghiayan entered Judge Snyder’s courtroom minutes after rejecting the
settlement offer from New York Life. He placed his litigation bag on the
wooden table facing the judge’s bench and sat down. The Marootians were in
the audience behind him, and around them sat dozens of Armenians whom
Yeghiayan had invited.

As they waited for Judge Snyder to take the bench, her clerk appeared from a
side door and announced an unexpected development. There would be no
hearing, because the judge had reached a decision on the motion to dismiss.
The clerk approached the dozen or so lawyers with copies of the judge’s
written ruling, and, almost simultaneously, they turned to the last page of
the decision. “All I wanted to see was that last sentence,” Yeghiayan
recalled. It said, “NYLIC’s motion to dismiss . . . is hereby DENIED.”

THE VICTORY FORCED NEW YORK LIFE BACK TO THE

NEGOTIATING TABLE, but the case
was not over. The company still blamed the rejection of the April 2001
settlement on Yeghiayan, and it “didn’t trust him after that,” said
Shernoff. “They would say, ‘If he agrees today, how do we know he’s not
going to turn on us tomorrow?’ “

Mediations before two retired judges and dozens of negotiating sessions
failed to bring the parties closer, and in 2003, Geragos and Kabateck asked
California Insurance Commissioner John Garamendi to get involved. Garamendi
had helped negotiate settlements between insurance companies and plaintiffs
seeking reparations for the Holocaust.

In the fall, he flew to New York City to meet with Seymour Sternberg, the
CEO of New York Life, and after two sessions they broke the deadlock. In
January 2004, New York Life agreed to pay $20 million, twice the amount
offered in 2001. Yeghiayan knew that it was enough.

Dozens of documents gathered as evidence in the lawsuit—including the first
list of the names, addresses, and occupations of many of the massacre’s
victims—were put online, providing fresh details of the slaughter. Last
October, the French insurance company AXA settled a similar lawsuit (also
Yeghiayan’s) for $17 million, prompting Aram I, a spiritual leader of the
Armenian Church outside Armenia, to praise the two settlements for “raising
awareness” of the Armenian genocide.

Hundreds of newspapers and television stations reported the settlements and
mentioned the genocide. The Turkish Daily News, published in Ankara, was one
of the newspapers that ran a story. It referred to the genocide as “the
disputed events between the Ottoman Empire and its Armenian citizens at the
beginning of the 20th century.”
———————————————————————————————-
Michael Bobelian is a lawyer and freelance journalist based in New York.
———————————————————————————————
http://www.legalaffairs.org/issues/March-April-2006/feature_bobelian_marapr06.msp

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          “Working to Secure & Enhance Ukraine’s Democratic Future”

1.  THE BLEYZER FOUNDATION, Dr. Edilberto Segura,
Chairman; Victor Gekker, Executive Director, Kyiv, Ukraine;
Washington, D.C., http://www.bleyzerfoundation.com.
   Additional supporting sponsors for the Action Ukraine Program are:
2. UKRAINIAN FEDERATION OF AMERICA (UFA), Zenia Chernyk,
Chairperson; Vera M. Andryczyk, President; Huntingdon Valley,
Pennsylvania
3. KIEV-ATLANTIC GROUP, David and Tamara Sweere, Daniel
Sweere, Kyiv and Myronivka, Ukraine, 380 44 298 7275 in Kyiv,
kau@ukrnet.net
4.  ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
5. Law firm UKRAINIAN LEGAL GROUP, Irina Paliashvili, President;
Kiev and Washington, general@rulg.com, www.rulg.com.
6. BAHRIANY FOUNDATION, INC., Dr. Anatol Lysyj, Chairman,
Minneapolis, Minnesota
7. VOLIA SOFTWARE, Software to Fit Your Business, Source your
IT work in Ukraine. Contact: Yuriy Sivitsky, Vice President, Marketing,
Kyiv, Ukraine, yuriy.sivitsky@softline.kiev.ua; Volia Software website:
http://www.volia-software.com/ or Bill Hunter, CEO Volia Software,
Houston, TX  77024; bill.hunter@volia-software.com.
8. ODUM– Association of American Youth of Ukrainian Descent,
Minnesota Chapter, Natalia Yarr, Chairperson
9. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C.,
Dr. Susanne Lotarski, President/CEO; E. Morgan Williams,
SigmaBleyzer, Chairman, Executive Committee, Board of Directors;
John Stephens, Cape Point Capital, Secretary/Treasurer
10. UKRAINIAN ORTHODOX CHURCH OF THE USA, South
Brown Brook, New Jersey, http://www.uocofusa.org
11. UKRAINIAN AMERICAN COORDINATING COUNCIL (UACC),
Ihor Gawdiak, President, Washington, D.C., New York, New York
12. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President; John Kun, Vice President/COO; Vera
Andruskiw, CPP Wash Project Director, Washington, D.C.; Markian
Bilynskyj, VP/Director of Field Operations; Marta Kolomayets, CPP
Kyiv Project Director, Kyiv, Ukraine. Web: http://www.USUkraine.org
13. WJ GROUP of Ag Companies, Kyiv, Ukraine, David Holpert, Chief
Financial Officer, Chicago, IL; http://www.wjgrain.com/en/links/index.html
14. EUGENIA SAKEVYCH DALLAS, Author, “One Woman, Five
Lives, Five Countries,” ‘Her life’s journey begins with the 1932-1933
genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
15. ALEX AND HELEN WOSKOB, College Station, Pennsylvania
16. SWIFT FOUNDATION, San Luis Obispo, California
17. TRAVEL TO UKRAINE website, http://www.TravelToUkraine.org,
A program of the U.S-Ukraine Foundation, Washington, D.C.
========================================================
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around five times a week, please send your name, country of residence,
and e-mail contact information to morganw@patriot.net. Information about
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========================================================
                        PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer
Emerging Markets Private Equity Investment Group
P.O. Box 2607, Washington, D.C. 20013, Tel: 202 437 4707
Mobile in Kyiv: 8 050 689 2874
mwilliams@SigmaBleyzer.com; www.SigmaBleyzer.com
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    Power Corrupts and Absolute Power Corrupts Absolutely. 
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