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A Ukrainian army officer explains to a tourist how to operate a Kalashnikov automatic machine gun in October 2000. On the lookout for new sources of income, the former Soviet republic's impoverished military has agreed to open 15 bases and training grounds to affluent tourists. The starting price is $2,000. Photo: AP
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Bargain Basement Arms Sales

"The only thing is, that there were no advertisements published, "tank on sale" or something," explains Sergy Odarych, the outspoken editor of an opposition newspaper in Kiev. "There is a buyer who wants to buy some arms and he has partners in Ukraine."

In 1998, Odarych obtained a confidential copy of a Parliamentary report on the Ukrainian arms sell-off.

The report concluded that between 1992 and 1998, Ukraine had lost 32 billion dollars worth of military assets, a lot of it through bargain-basement arms sales and theft by military officials.

The committee's findings were buried deep in the bureaucracy, until Odarych published the report. Afterwards, the editor got an unexpected late-night visit.

Kiev, Ukraine Landmark St. Andrews Cathedral. Photo: California National Guard.

"When I was returning home one evening," said Odarych, "a man came to me, asked my name, and told me to stop issuing the newspaper and doing politics at all. Otherwise, the people who stand behind him would destroy me. And I told him I would not speak to him. And as I turned my back to go home, I heard three shots and one bullet went in my leg."

The shooting was never solved, and the follow-up investigation into the arms sell-off was cut short. The controversy may have ended there, but now new allegations about Ukraine's involvement in illegal arms sales have surfaced. And, this time, the charges come from a source inside the office of Ukraine's President.

Allegations against the Ukrainian Government

"My name is Nikolai Melnichenko. I am presently living in United States as a refugee. Prior to that I served in the security detachment of the President of Ukraine. "

Ukrainian President Kuchma Photo: AP

Major Melnichenko says that, for several years, he secretly recorded hundreds of hours of Ukrainian President Leonid Kuchma's private conversations. Recordings, he says, that reveal Ukraine's involvement in illegal arms sales.

"Some arms sales are covered up by the head of Intelligence Services or the Prime Minister," says Melnichenko. "Others are covered up by the President, and depending on the importance, everyone gets their cut of the action."

A former FBI expert reviewed some of the recordings and believes they are authentic. The US State Department has said only that it has no credible evidence of the arms sales Melnichenko has alleged, but Justice Department investigators are interested in what he has to say.

According to Melnichenko, the illegal arms trade is carried out by the government in collusion with Ukrainian mafia. He explains, "These are people who illegally have come to positions of power in Ukraine and who are robbing Ukraine for their own personal benefit. Heading this nexis of organized crime in Ukraine is Kuchma, the President."

The Ukrainian government says the Melnichenko tapes are fabricated and their release is politically motivated. It says that all of its arms deals are done legally. The problem, they say, is that legal shipments are diverted illegally by others.

Next: Illegal Diversion?

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