The following article, first published as a statement on our website, is available in Proletarian Revolution No. 69 (Winter 2004).

CWI Group Guilty of Ukraine Fraud

September 4, 2003

The international far left and the workers’ movement have been the victims of a vicious and underhanded political and financial scam. The League for the Revolutionary Party (LRP-U.S.) and the Communist Organization for the Fourth International (COFI), among at least 12 and probably many more (over 20) organizations around the world, have been conned by a criminal conspiracy rooted in Ukraine.

Like the supposed Ukrainian affiliates of these other groups, the Revolutionary Workers Organization of Ukraine (RWO), which was politically and organizationally identified with us, was a complete fabrication. The political agreement it claimed with us was a lie. Money in the form of subsidies was stolen. While not a lot by American standards, in our case the funds nevertheless came from the pockets of workers who are far from wealthy. COFI, after four years of what we had thought of as political dialogue and joint work under the illusion that the “RWO” was real, had welcomed this outfit as a fraternal organization in March of this year. Since the “RWO” has always been a non-existent organization, in truth it never was nor is now a fraternal section of COFI. We have already made this fact public by a statement on our website and by an insert into previously undistributed copies of the latest issue of Proletarian Revolution magazine.

We believe that we have an obligation to further expose and detail the operations of elements who have devoted themselves to preying upon the international working class and numbers of far left organizations.

Given the beginning resurgence of the international working-class struggle, COFI has experienced a rising interest around the world in the revolutionary communist alternative which we have fought for over the last thirty years. We have been involved in serious and promising discussions with groups and individuals in a growing number of countries. Within this context, achieving an affiliate in Ukraine and the expectation of one in Russia was of outstanding importance to us. The lands which once gave rise to the October Revolution have, of course, a particular significance for Bolshevik-Leninists. So the fact that this “achievement” turned out to be a fraud was a major blow. All authentic communists believe that the socialist revolution (the establishment of workers’ states) can only be successful if it is led by the fully conscious proletariat. Therefore, like Trotsky, we must “Say What Is.” We have no wish to sugar-coat the fact that we were scammed by a gang of criminals.

The fraud was bizarre. We know of nothing like it in the past. Of course, the Bolsheviks were duped by a Czarist secret police agent, Roman Malinovsky, for many years. He was head of their Duma contingent and was long defended by Lenin after other comrades argued his guilt. The Bolshevik-Leninists during the 1930’s mistakenly harbored the Stalinist agent who killed Sedov, Trotsky’s son. Trotsky’s followers in France during the same pre-WWII period were infiltrated by a financial scam artist. However, the present affair was quite different in that one whole group perpetrated this prolonged charade against a large variety of rival organizations.

The widespread character of the scam helps us understand the nature of the fraud and to appreciate the fact that it has been a serious blow to the working class of the world and to the name of Marxism. It may have been inspired by financial, governmental and/or political objectives. Whatever its motives, its consequence has been to amplify the massive mistrust that workers in the former Soviet Union and internationally have for revolutionary communism as a result of Stalinism.

We were fooled in large part because of our strength as well as our weakness. We are revolutionary optimists. We know well the depth of cynicism and fatalism that almost universally pervades the international far left today and how they have crippled so many attempts to achieve a Marxist understanding. As a result of bitter lessons, we had learned to be politically very careful. We made absolutely no political concessions. However, because of our optimistic outlook, we wanted to believe in the “RWO” and failed to act appropriately when we were faced with organizational warning signs. The most important lesson we can learn is not to give up on optimism but to temper it with far greater caution in the future. We will return to this question when we detail the operational error we made in dealing with the “RWO.”

Our Work with the “RWO”

We first encountered the “RWO” in 1999, when they sent us a long perspectives document which came close to matching our own views in many ways. We conducted an extensive and politically detailed correspondence with them on major political questions over several years. We had intricate exchanges with them on immediate tactical situations and the working out of political lines for leaflets and demonstrations concerning the class struggle in Ukraine. In 2000, we issued a joint statement with the “RWO” criticizing Oleg Sheyin, the leftist Russian leader of the Interregional Association of Workers’ Unions “Zashchita Truda” (“Defense of Labor”) and a representative in Russia’s State Duma, over his nationalist capitulations to the Russian imperialist war against Chechnya.

In April 2001, two LRP comrades traveled to Kiev to meet with the “RWO” for over a week. Extensive discussions were held in meetings with about a dozen people, including the group’s supposed leader, one Viktor Voronov (Oleksandr Zvorskyy). At the same time, we met and discussed with other alleged leaders, including one named Yakov. As well, we were introduced at that time to Viktor’s friend Zakhar, a purported member of the International Bolshevik Tendency’s (IBT) affiliated group. The “comrades” showed us “RWO” documents discussing views very compatible with our own. Later they produced a sizeable issue of a magazine they published which definitely expressed our political perspective.

In March 2003, three LRP comrades and a German KOVI-BRD comrade met for about 10 days at a COFI Conference in Warsaw with Yakov, Viktor and Igor, who was represented as the leader of the “RWO” in Moscow. By the end of the conference, we thought that we knew the individuals and their politics well, and we agreed to be part of the same international tendency. Our statement on this agreement, approved by the “RWO,” was published on our web site and in Proletarian Revolution No. 67. It included a denunciation of the opportunism of the Ukrainian section of the Committee for a Workers International (CWI), descendants of the British-based “Militant Tendency” led today by Peter Taafe, for their opportunism over Chechnya.

How We Learned About the Fraud

Beginning several years ago, a few reports circulated on the internet to the effect that the relatively large number of far-left groups in Ukraine were fraudulent and were set up to get money from Western organizations. The one “Trotskyite” group that was said to be real was the CWI section. However, since the sources seemed to be Stalinists and other unsavory elements, we did not accept the allegations. They seemed to be echoes of the old crap about “Trotskyite wreckers.”

However, in late July of this year there began a new wave of exchanges on the internet indicating more concretely and authoritatively that there was a monstrous international scam at work. It was alleged that a large number of groups in the West had been contacted by seemingly like-minded groups in Ukraine who sought affiliation. It was claimed that the purpose was to get money, allegedly to finance the CWI section. The CWI international tendency then publicly acknowledged the seriousness of the charges and suspended its Ukrainian section. They asserted that the suspension would last until they completed a more thorough investigation. Allegations from other sources were also made about the extent of international CWI involvement, suggesting that its representative in the former Soviet countries might have been involved in the fraud. Assertions about the involvement of a Russian CWI leader have also appeared on the internet and have also been sent to us, the IBT and other groups. We have seen no conclusive proof on this score so far, but we regard with suspicion the CWI’s reported claims that only their Kiev group participated in the scam.

Accompanying the material on the internet was a photo of the ringleader of the plot, one Oleg (Oleh) Vernik. Vernik was the acknowledged leader of Workers Resistance, the Ukrainian CWI section, and also the head in Ukraine of the “Zashchita” trade union federation, linked to Sheyin. It was clear to us that the person in the photo was the same man we had met as “Yakov” of the “RWO.”

Additional evidence appeared in a statement by a British left group, the Socialist Party of Great Britain (SPGB), which described a meeting in Kiev of a dozen or so people who acted as if they were in political agreement with the British visitors and held discussions in their presence for a long period. Nevertheless, the SPGB had recently been convinced by reliable sources that the group was fictitious and that the Ukrainian CWI was involved. This report mirrored our own experiences. Because of this report together with the photo of Vernik, by early August we were almost positive that we had been scammed by the whole “RWO.”

On August 13, we wrote a short note to the “RWO,” saying that we had seen the Vernik picture and asking if they had any defense. “Viktor” replied, blaming the affair purely on Vernik. He said that they hadn’t really known Vernik very well: even though he was a leader of the organization, he hadn’t been a founding member. The letter said that he had mental problems and that it was likely that he was being pressured by government police agents. “Viktor” plaintively declared the group’s innocence and sought to make us feel guilty for our stance. However, there were glaring inconsistencies in the letter. They included the fact that in Warsaw, “Yakov” had mentioned that he was one of the founding members. The letter claimed that Vernik had been absent from the “RWO” for three months, yet it was “Yakov” who had been corresponding with us on e-mail, not “Viktor,” in recent weeks. This letter further convinced us that the scam included the entire “RWO,” not just Vernik.

We were then contacted by Cde. Bill Logan of the International Bolshevik Tendency (IBT), who had also been in contact with Workers Power of Britain (WP), the leading section of the League for the Fifth International (LFI). WP and the IBT knew from photographs that leading members of both their Ukrainian organizations were the same people and therefore that their “sections” were frauds. They also knew that these crooks were in the leadership of the CWI section in Ukraine. We were shown the photos, which proved absolutely that “Viktor” and the other leaders of the “RWO” were also members of the LFI and IBT “affiliates” as well as in the CWI section.

Despite the fact that we have fundamental political differences with the IBT (and all the other scammed groups), we and the IBT established a collaborative relationship to further investigate the fraud. We agreed with the IBT’s proposal to draft a joint statement exposing the scam, to be discussed and signed by as many groups as possible. We both recognized that it was an elementary moral and political duty to contact and warn as many far-left groups as could likely be victims, despite our political hostility to each other and to them. Of course, all the affected groups are free to, and should, issue their own statements as well as the joint statement.

We knew that among the defrauded groups there would likely be a few so mired in cringing organizational sectarianism that they would reject a joint statement warning the working class and radical public and would effectively refuse to cooperate in investigating the scope of the fraud. Yet a number of other groups in addition to the IBT and us have engaged in discussions and cooperative work. News & Letters and the New Unionist Party (NUP) in the U.S. have been among the groups that have been fully cooperative. The proposed joint statement has now been drafted and is being circulated. At this point, in addition to the SPGB, the IBT and ourselves, WP/LFI, Alliance for Workers’ Liberty of Britain (AWL) and the Internationalist Group (IG) have issued statements, and more are expected.

Past Suspicions and Suspicious Incidents

Shortly after our initial contact with the “RWO,” we began to wonder why there were so many far left groups in Ukraine – as opposed, say, to Russia. The “RWO” answered that many of the groups originated out of a handful of young comrades who had come across Trotsky’s The Revolution Betrayed and were taken with its magnificent insights. They soon diverged in many directions. Nevertheless, the existence of so many groups caused us to have a low level of suspicion about the “RWO.” And even though we had dismissed the Stalinist charges about “Trotskyites” on the internet, these added to our mild suspicion.

Further, over the years there were a few incidents which caused us to momentarily heighten those suspicions. In 2000, we came across a report from an ultra-left Italian group citing a letter from its new friends in Ukraine, a letter which used wording very similar to one we had months previously received from the “RWO.” Upon questioning, the “RWO” told us that a comrade who had been in charge of communications for them had split and formed the ultra-left group. He had used the same formal words in his letters that he had used in the past. Indeed, “Sergey,” who had been in charge of corresponding with us, had previously disappeared from our view, and the correspondence had mainly been taken over by “Viktor.”

Two years later, we saw reports of activities by Ukrainian supporters in the News & Letters newspaper which contained similar language to that which appeared in a report sent to us by “RWO,” in a section devoted to tasks performed at a demonstration and not in political evaluations. This time the “RWO” told us that “Yosif,” a leading comrade, had translated the report for the News & Letters person, his close friend, since the friend’s English was very faulty. Yosif used similar verbiage to that which he had used in the report to us.

The answer seemed credible to us. Shortly thereafter, similar but still not the same words were found in the New Unionist paper, organ of the NUP, and in the British Healyite Workers International Press. The “RWO” replied that those elements must have gotten the words from the News & Letters leader. Everybody on the left there knows everybody else, we were told. And most groups had next to no English speakers, so linguistic favors were common.

These incidents should have caused us to take steps beyond questioning the “RWO.” But we failed to act. It was hard to imagine that people who had written a voluminous political perspectives document filled with politics so close to ours would have faked comparatively trivial reports. Our meetings with them showed that they had knowledgeable political agreement with our views. For people alleged to be involved with the CWI, we knew that they had written trenchant polemics, from our “shared” point of view, against the politics of the CWI. And they appeared to be serious and dedicated comrades.

At that time they had never asked for money. We knew how bad things were in Ukraine; $80 a month was a good working-class wage in most of the country outside of Kiev. Even though “Yakov,” who was a university teacher and “Viktor,” who was involved with computers, seemed quite a bit better off, we assumed that they were financing the “RWO.” It was we who offered financial assistance, primarily to buy a computer and to publish their magazine. When we met them in Warsaw this past March, we paid their travel and our joint lodging expenses. For the first time, we were asked for some money: we were told that “Igor from Moscow” had been robbed by customs officers of some money when departing Russia, so we reimbursed him, with some cash. Without being asked, we agreed to give them a small stipend toward renting a cheap office in Kiev. And we did so for a few months.

Motivation for the Fraud

The larger motivation behind the fraud remained mysterious. For what earthly reason could such an elaborate and intricate charade involving multiple groups and at least a dozen crooks could be carried out? The amounts of money transmitted were evidently small in Western terms, although greater for impoverished Ukrainians and perhaps adding up to something substantial given the number of international groups involved – but still hardly worth the four years of elaborate work that the scammers had put in to secure it. This August we were able to locate and correspond with a Ukrainian socialist whom we had worked with years ago; he informed us that Vernik was not to be trusted in money matters.

Nevertheless, it is likely that theft was not the only motivation for these criminals. We have received an unverified report from Ukraine which points to a police link. The fact that funds were stolen certainly does not rule out intervention by the Ukrainian police; the Ukrainian state is particularly corrupt at all levels. On the other hand, the operation was carried out by highly intelligent people who, from our experience and all other reports, had great familiarity with the politics and activities of the international groups they were supposedly affiliated to. That is rarely true for agents of governments with far more sophisticated secret police operations. Moreover, it would be highly likely that police agents would try to garner as much information as possible about the work of the various Western groups, in order to trade with Western spy agencies, but the conspirators made little effort to learn of such activities or plans.

All in all, as of now we have no concrete evidence of secret police activity in the scam. However, experience tells us that given the duration and extent of the operation, it is likely that even if the Ukrainian state was not responsible for the affair it would have known about it and at least tolerated it.

The scammers’ knowledge of the international left was so complete that they evidently did not seek ties with groups who had sufficient resources and a penchant for fully controlling affiliates, like the British Cliffites or the Spartacists. Moreover, some international groups were allowed to send representatives to Kiev for extended periods of time. But after our initial visit, we offered to return on several occasions but were told that at those times, secret police crackdowns were particularly intense and that it was too dangerous for us to come to Ukraine.

Certainly the CWI section was involved. We are not in a position to determine by ourselves how far beyond their Ukrainian section that involvement reached. Other groups and individuals who appear to be in a better position to find out this information are beginning to make their conclusions public and we should be able to evaluate them as they surface. In late August the CWI reportedly issued the result of its investigation, denying any involvement by their international or Moscow organizations. It condemned the scam and announced the expulsion of Vernik, Zvorskyy, Zakhar and three other members of their Ukraine group.

We do not know whether the scam was launched as a wild but “loyal” attempt to financially and politically benefit the CWI section in Ukraine. Reports indicate that they still claim political loyalty to the CWI. The other possible alternative is that they were just using the CWI as a base of operations and were simply crooks, cops or both. We know from other sources as well as our own discussions that Vernik had conducted serious work on tracing Trotsky’s Ukrainian roots. “Igor” requested a copy of Abram Leon’s book on the Jewish Question from us and was quite evidently interested in the Marxist understanding of the national question. “Yakov,” “Viktor” and “Igor” all provided important and seemingly truthful information to us on the scope of the workers’ upheavals in the USSR during the period of Stalinism’s collapse. As a whole, their political interest and knowledge leads us to think that they were political as well as personal criminals as opposed to simple crooks.

If so, bearing in mind their willingness to attack the CWI in pursuit of the scam, their political and personal beliefs contained nothing in the way of conscience. Some of the lesser participants might have been simply gulled, but not the leadership. That is, we think that there is a good chance that Vernik was a psychopath, along with possibly others of the leaders. If so, he represents a very particular and continuing danger to the workers’ movement in Ukraine and internationally. There is far from enough concrete information available to form a conclusive opinion on this score, but we would be remiss if we did not point out this added danger to our class.

Lessons of Our Work

In all our work with the “RWO,” we made no concessions and committed no errors on the political or programmatic level. But in re-evaluating our work, we have concluded that we made a serious error in not informing News & Letters and other groups of the similar verbiage in the reports described above – especially after the similarity was repeated. As it turns out, we could have discovered the whole scam well before we established fraternal relations with them. We have recently learned from Cde. Peter Hudis of News & Letters that their “friend” in Ukraine had a good knowledge of English. Had we known that, it would have exposed the “RWO”’s lying defense. We did not act upon our suspicions and wrongly accepted the “RWO” statements of defense without additional investigation.

As described above, we found it hard to that believe such a bizarre conspiracy could be at work. Most importantly, we profoundly wanted to believe the “RWO” because of our revolutionary optimism. Our very political existence is rooted in the class struggle and the fight to re-create the international revolutionary party of the proletariat. For authentic Trotskyists, the vanguard party is the party of the most conscious and advanced sections of the working class; those who understand capitalism and the Marxist methods by which it must be overthrown. Marxist consciousness cannot be anything but optimistic. Nevertheless, in light of this experience we will have to adopt a more vigilant outlook in the future. We will have to use much greater caution when faced with hard decisions while still retaining our fundamental optimism.

In thereby helping the “RWO” to scam COFI and the LRP, our strengths became our weaknesses. There is an analogy: Trotsky pointed out the strength of intense party loyalty maintained by the Bolshevik ranks. It came from their heroic revolutionary days under Lenin’s leadership. Tragically, that positive quality later became a strong factor in the backing for the Communist Party under Stalin’s leadership, in opposition to the expelled Trotskyists. In a similar way, the Kiev crooks used our optimism and our internationalism against us.

We know that such an unprecedented and filthy charade could only have arisen in the thick atmosphere of cynicism which dominates the reformist-centrist groups around the world today. It is quite likely, that this crew thought that robbery of foreign workers was only a small step beyond the norm in their circles. We also know that as word of the scandal spreads, it will add to that cynicism and fatalism. However, hiding the fraud will only make it worse. We will do everything in our power to tell the truth and fundamentally to rely upon the coming revolutionary upsurge of the world proletariat to sweep away scum like the present conspirators as well as the ordinary cynical reformists and centrists who unconsciously give them sustenance.

There has already been a fair amount of chortling by those whose political lives are spent on the internet, with nothing better to do than to sneer at “Trotskyism” and “sects.” We also note the maniacal glee displayed by the Spartacists’ Workers Vanguard (August 29). The fact that the credibility of Trotskyism, to which the Spartacists pay lip service, has been severely damaged is less important to them than the opportunity to drool over the fact that the scam was directed against the IBT, the LRP/COFI and the IG.

“Trotskyism” has been given another black eye, especially but not only in the former Soviet Union. The forces of counterrevolution have won a victory. However, of far greater importance is the fact that the massive struggle of the proletariat around the world is now reviving. This inevitable explosion of working-class struggle will lay the basis for the re-creation of the authentic Fourth International and the coming eradication of this utterly corrupt society, including its criminal spawn who infect the workers’ movement today.