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Sukhbatar was declared head of the republic. The Chinese, Lama priests and Mongol princes who ruled the country were thrown out and rivals t the Communist regime were weeded out and secretly eliminated by Soviet and Mongolian Communists.
When the Second Party Congress of the Mongolian People's Party was held in July , Mongolian-Soviet solidarity was reiterated amid calls, for the first time, in favor of purging "oppressor class elements" from the party. At this critical stage, several key leadership changes occurred that caused momentous political developments. On February 22, , thirty-year-old revolutionary hero Sukhe Bator died of illness although Choybalsan later claimed he had been poisoned , leaving the way clear for Choybalsan's eventual accession.
Next, the Jebtsundamba Khutuktu died on May 20, , and the People's Government, which had resolved to form a republic, forbade the traditional search for the reincarnation of the defunct ruler. This move eliminated the theocratic symbol of Mongolia. At the same time, a new Soviet treaty with China on May 31, which provided for the withdrawal of Soviet troops from Mongolia , set the stage for the final step in the nominal independence of Mongolia.
The Third Party Congress of the Mongolian People's Party met in Niyslel Huree from August 4 to 24, , but it quickly became embroiled in a debate led by party chairman Dandzan, who, like Bodoo, hoped to reduce Soviet influence.
The congress culminated in the arrest and execution of the "capitalist" Dandzan. Among the achievements of the congress was purging the party of "useless elements" and renaming it the Mongolian People's Revolutionary Party. On November 25, , with the adoption of a Soviet-style state constitution by the First National Great Hural, the new national assembly, the Mongolian People's Republic was formally established.