CWI Leadership’s Role in Ukrainian Fraud

No Innocent Explanation

In 1917 No. 24, we announced a “fusion” that took place at the Third International Conference of the IBT in 2001 with a group calling itself the “Young Revolutionary Marxists” (YRM) of Ukraine. We also published two articles in the same issue that polemicized with the Ukrainian supporters of the League for a Revolutionary Communist International (LRCI—now the League for the Fifth International [L5I]). In August 2003, we discovered that we had been duped by an elaborate scam perpetrated by members of the Ukrainian section of the Committee for a Workers International (CWI—the international organization of the Socialist Party of England and Wales, led by Peter Taaffe). Our supposed group in Kiev was a fiction, as was the LRCI’s and those of ten other organizations. It seems that the whole intricate charade was conducted to obtain money and other material support. These same crooks were apparently simultaneously attempting to obtain funds from the Libyan government.

As soon as we were certain of the facts, we posted the photographs of the perpetrators along with everything published about the affair on our web site, Our intent was simple:

“We cannot allow these gangsters to discredit Trotskyism in the former Soviet Union. Serious people can have no hesitation in exposing this kind of scam. To be victimized but remain silent is to facilitate future frauds. It is of course embarrassing to have been taken in, but we have a responsibility to do what we can to expose these crooks to the workers’ movement.”
“IBT Conned in Kiev,” 21 August 2003

The CWI has expressed similar sentiments, claiming to be “profoundly shocked” by this “shameful” activity. A 29 August 2003 CWI statement announcing the expulsion of seven individuals who had been “primarily responsible” for the scam also cynically claimed: “The CWI has been the main victim of this duplicity.” To our knowledge, the CWI has yet to post any statement about the scandal on its web site, or to publish any account in its press. When asked about this, one CWI member offered the excuse that “workers aren’t interested” in such things.

It is clear that the Taaffeites’ primary concern is to minimize the political fallout for themselves. Their email statements on the affair have added little to the information already revealed by others. Although the CWI’s history of voting for, and even joining, petty-bourgeois and bourgeois political formations (from the U.S. Green Party to the Pakistan People’s Party), demonstrates their utter disregard for the class line, their 29 August 2003 statement reveals considerable anxiety about acquiring a reputation for dubious financial dealings:

“We have a spotless banner and honest method on the issue of raising money. For instance, the right wing in the British Labour Party, together with the capitalist press in the witch-hunt against the CWI section in Britain, Militant (now the Socialist Party) in the 1970s and 1980s, accused us of raising money from all sorts of alleged dubious and ‘foreign’ sources....
“The CWI has never received any political or financial support from big business, from state organisations, from ‘foreign powers’, etc. In those cases where we have discovered that groups, individuals or sections of the CWI have acted in violation of these revolutionary principles we have not hesitated to separate ourselves from them....
“...[We] have always differentiated between raising money from the workers’ movement on clear political and solidarity grounds and seeking finance from bourgeois sources. The latter are ultimately used to corrupt, to disorientate, and to bend the workers’ organisations in the neo-colonial world to reflect the interests of the bourgeois.”

This was perhaps an oblique response to a report in our 21 August statement that:

“We recently came across an internet posting by [CWI IEC member from Kiev] Oleg Vernik and [Ukranian CWI leading member] Boris Pastukh dated 11 June 2001 announcing preparations for a ‘summer camp in Crimea for brothers from Lybia [sic], Ukraine, Russia, Byelorussia and Moldovia’ and advertising their own web site as (The Green Book was Qaddafi’s equivalent of Mao’s Red Book.)”

It would seem that at least some CWI leaders had been involved in “seeking finance from bourgeois sources.” The fact that they used their own names to do so, and posted the information on the internet, hardly confirms the CWI’s claim to have enforced a rigorous prohibition on such activity. The impression that the CWI was, or should have been, well aware of what was going on in Kiev is strengthened by the revelation in their 29 August 2003 statement that they had learned of the scam nine months earlier:

“When some of the CIS [Russian-dominated Commonwealth of Independent States] leadership did become aware, because of rumours that were circulating amongst the CIS left, and with one of the Kiev leadership breaking ranks, some nine months ago, they confronted the Kiev leadership on the veracity of the allegations that were being made. The leading group of Oleg Vernik and Boris Pastukh, faced with these allegations—which by no means revealed the full scale of their involvement with other organisations internationally at that stage—point blank denied that anything of the kind had transpired. Even the source in Kiev who leaked this information at the time then blatantly denied that he had alerted the CIS leadership to this situation.”

The CWI provides few details about this supposed investigation—they don’t say who conducted it (could it have been Russian CWI leader Ilya Budraitskis?) nor do they name the member of the Kiev leadership who initially “broke ranks” only to subsequently participate in the cover-up. Could it be because this same individual remains a member of the CWI? A serious inquiry would surely have begun by determining which groups claimed branches in Kiev, and then verifying their existence. If there were actual groups, then the rumors would obviously be false. If, on the other hand, investigation revealed that no such groups existed then the principled thing to do would have been to notify the victims of the scam, set up an internal investigation and deal severely with the perpetrators. The CWI’s story about an investigation that was terminated by claims of innocence by the suspects (whose earlier record of corrupt “GreenBook” fundraising would have come to light with a simple internet search) strains credulity.

The CWI statement concluded with a disingenuous offer to provide further information:

“We would also add that if any organisation believes they have been duped by these individuals and requires further information we would be prepared to discuss in complete confidence and supply, where possible, information which would help them to clarify their position in these events.”

On 9 September 2003 we attempted to take up this offer, and sent the CWI a letter with a series of questions related to the affair. The CWI report had indicated that the money stolen by its members in Kiev was used to fund their activity in Ukraine:

“Some of this money [from the victims of the scam], claims the Ukrainian leadership, was used to finance an office, not to further the aims of the organisations who supplied the finance but allegedly to continue with their work as the official section of the CWI in the Ukraine. In addition to this, equipment, including computers, second-hand laptops, was furnished to the Kiev and Ukrainian organisations.”

The question of the “work [of] the official section of the CWI” is an interesting one. While this lucrative, but complicated and time-consuming, scam was taking place, Ukrainian society was wracked by an intense struggle between pro- and anti-Kuchma factions of the nascent bourgeoisie. What instructions did the CWI leadership give its Ukrainian affiliate? How did they evaluate their group’s intervention in these momentous events? Had the CWI leadership actually been surprised to learn of this fraud, one of the first things they would have done would be to review the “work” of their “official section” during this critical period. In our 9 September 2003 letter we inquired:

“What activities has the section undertaken since 1999? What publications (newspapers, leaflets) has the section produced? Are there any photographs available of them, for example on demonstrations?”

The CWI refused to answer. Another question they avoided related to attempts by the group’s leaders to get money from the Libyans: “Has your organisation investigated this Libyan dimension of the matter? With what results?” This too was ignored. We also asked:

“Has your organisation yet sought to prepare accounts (with whatever precision may be possible) of incoming and outgoing money and other resources in this scam? If this has not yet been done, when will it be done? When will those accounts be made available to the wider workers’ movement which has been defrauded?”

 Again there was no reply. But one question that could not be ducked was the involvement of the CWI’s CIS cadres in the scam. In its 5 August 2003 statement the CWI explicitly claimed that neither its international leadership nor its Russian lieutenants were involved. In its 29 August statement, it further claimed that its CIS affiliate had suffered as a result of the Kiev swindle. But in the weeks that followed, information provided by a number of organizations, including the Internationalist Group, the Communist Party of Great Britain, the League for the Revolutionary Party and ourselves, conclusively proved that Ilya Budraitskis, the CWI’s leading Russian cadre, was deeply involved.

In our 9 September 2003 letter we asked:

“Can you give any information as to how far this conspiracy extended? Certainly it extended rather further than your statement admits, and was by no means confined to the Kiev branch of your organisation. It is clear that Ilya Budraitskis, perhaps the most prominent Moscow-based representative of your tendency, was an integral part of this scam. He made numerous trips to Kiev to participate in the fraud. What did other leading members of the CWI in Moscow make of these visits? How did they believe these trips were financed?
“Were the suspicions of your representative Robert Jones not aroused? What did he think Ilya Budraitskis was doing in Kiev so frequently? How did he think Ilya Budraitskis could afford those trips? Has comrade Jones visited Kiev in the last four years? How often? Did he not notice anything untoward?”

Three months later, in a 9 December 2003 letter sent to Workers Power and ourselves, the Taaffeites admitted that Budraitskis had indeed participated in the fraud. Far from being “the main victim,” as they claim, it is clear from the extremely mild sanctions taken against Budraitskis (who was merely suspended from formal membership in the group’s leading bodies for six months) that the CWI’s only real regret is that the scam ever came to light.

Budraitskis is a proven liar and a thief. If the CWI leaders were merely naive, rather than unprincipled cynics, they would have automatically expelled him when his involvement came to light. They would also have prepared a detailed and factual account that named names and attempted to “follow the money.” Instead of trying to get to the bottom of this criminal hoax, the CWI has only offered vague, self-amnestying explanations. The leniency toward Budraitskis, the refusal to seriously investigate this scandal involving senior CWI cadres, the stonewalling and the lack of cooperation with the investigations of other organizations, form a pattern for which there can be no innocent explanation.

from 1917 no. 26, 2004

Posted: 18 April 2004