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Changes at the top imminent?

August 27, 2016

Rumour has it that there are to be changes at the top imminently (within 7 – 10 days).

There are several choices in guessing who is likely to move and/or move on when rumours of changes at the top circulate.  Such rumour has to include possibility of the eventual release of Boris Lozhkin.

It has been some months since the blog last mentioned Head of the Presidential Administration, Boris Lozhkin.  That entry highlighting the desire of Mr Lozhkin to leave his current role.

“…….the desire to get out of the Presidential Administration remains – back to business beckons.

Why he remains in post now is perhaps not due to his desire to remain, but due to a lack of desire to release him as Head of the Presidential Administration.  Candidates to replace him are few (to be charitable)…..”

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To be blunt there remains but few capable candidates to replace him that enjoy the trust of the President – and loyalty to the President seems to be an attribute far more important than that of ability to carry out the role effectively if past appointments are any indication.

The most obvious replacement is Mr Lozhkin’s current Deputy, Vitaliy Kovalchuk – but in appointing Mr Kovalchuk the President stands a significant risk of seriously irking both Prime Minister Groisman and Mayor of Kyiv, Vitaly Klitschko, neither of which are admirers of Mr Kovalchuk.  (To be frank he has very few admirers.)

Another option would be the current Ukrainian Ambassador to the USA, Valeriy Chaliy, formerly the Foreign Affairs Deputy Head of the Presidential Administration – however, Mr Chaliy was sent to Washington not only for his ability to represent Ukraine in a capital that Ukraine has to influence, but as stated when he was appointed there may have been other drivers for his appointment – “Another possibility is (and there will surely be an element of this, for it is the nature of the political animal) that Mr Chaly had thus far refused the position much preferring to have the eyes and ears of the President on a daily basis.  Simply put, it has taken this long to pressure/ease him into accepting the role.  Let’s be quite honest, few give up their seat at the top of the presidential domestic political table for a position abroad, for their daily influence dwindles over time whilst their replacement’s influence grows.

Mr Chaly is young (45) – capable and ambitious.  It may therefore be that he has been sent to Washington to “makes friends” and gain traction within “the beltway” with an eye upon future positions far greater than that held held until yesterday within the Presidential Administration.

Alternatively, because he is young, ambitious and intelligent, he may have been moved from the centre quite deliberately for more self-serving reasons within the centre of gravity, rather than for reasons of “growing” Mr Chaly’s “western” influence for future domestic political use.

A “horizontal promotion” away from decision/policy making, or a deliberate move to enhance the résumé of a prodigy?”

Another understudy of Mr Lozhkin within the Presidential Administration for a while, is the current Chairman of Kharkiv Regional State Administration Igor Rainin, certainly the least likely to make waves within or without the Presidential Administration if appointed – and possibly the easiest to replace if exiting his current role.

The very private figure of Makar Pasenyuk remains a possibility should he want to enter the political fray.  He has the trust of the President.

Mr Lozhkin however, may not yet be fully allowed to leave the Presidential conclave despite his desire to do so.  The President is not surrounded by a large number of trusted and capable people (in that order) allowing for Mr Lozhkin to simply walk out of the door.

Mr Lozhkin’s desire to return to the business world and leave presidential politics behind may yet be tempered by an appointment designed to keep him somewhat close and at presidential beck and call.  An appointment as Head of the National Investment Council could very well await him, thus allowing his return to business and overt exit from daily politics, but remaining the head of an entity created by Presidential Decree, and thus at beck and call of the President.

Further, there is also (reliable) noise stating that Dmitry Shimkiv and Alexy Fildatov are seeking exit from the Presidential Administration too – undoubtedly their desire to leave will increase should Mr Lozhkin finally be released.

(To be fair to these men, none would have chosen the roles that befell them following the events of 2014, and none would have expected or wanted to remain in those roles for long.  In some cases, more than 2 years on, the desire to return to their previous careers is entirely understandable.)

There is also the declared intention to retire with effect from 1st September of Chief Military Prosecutor Anatoli Matios whom a loyal replacement will also have to be found.  (A reader may ponder why at 47 years of age retirement is chosen – perhaps the new e-declaration requirements for public officials have something to do with it?  Perhaps he wants some time off and will enter politics at the next elections – his sister, the gifted writer Maria Matios is a Poroshenko MP.)

Perhaps there are other possible moves at the very top being pondered and that will be actioned within the next 10 days, which thus far escape the watchful eye – thus the possibilities/probabilities listed above will prove false prophecy.  There may be a surprise ahead?  (Although unlikely under a predictable manager such as President Poroshenko.)

Whatever the case, rumour of imminent change at the very top is strong – and if change is to occur it seems likely to happen prior to the return of the Verkhovna Rada and the next parliamentary session.

All of that said, whatever the changes, it will be debatable whether anything will actually change as a result.  Ineffective policy implementation, complete lack of policy in some areas, incredibly poor domestic communication, and all the other usual ailments are likely to remain.

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Appeals for the SBU to investigate former Governor Skoryk -2014 events

August 25, 2016

A few days ago Ukraine released audio intercepts of telephone calls between Sergey Glazyev, Krill Frolov and others plotting and scheming the undermining of Ukraine in 2014.

That Sergey Glazyev was a leading figure at the time is hardly a surprise.  Indeed, in an essay written in 2014 by this blog for Routledge/Taylor-Francis with the imaginative title “The Separatist Movements In Eastern Ukraine And Their Association With Russian State Structures”, Mr Glazyev was mentioned within the text of the very first page.  (The essay is unfortunately copyright to the publisher so a reader is forced to buy the weighty tome in which it appears or find it at their website.)

More than two years later, there was no revelation to be found within the released intercepts – the timing of the release perhaps having far more to do with preparatory framing prior to the G20 Summit and influencing any “sidelines/fringes” tête-à-tête that may occur.

Nevertheless the telephone intercepts whilst breaking no new ground or providing no previously unknown information have prompted a reaction in Odessa.

Without going into unnecessary detail the telephone conversations released, and the parts that specifically related to Odessa, have reminded certain parties that the pro-Kremlin elements of the political class in 2014 (and currently) have yet to be held to account for their actions in any way whatsoever – for example be it Kivalov for his titushki and anti-Maidan entities, or the actions of then Governor Mykola Skoryk – the latter being the subject of this entry.  Suffice to say that with both being parliamentarians and thus enjoying impunity and immunity, whilst generally ignored by the local constituency, and the constituency generally ignored by them, little else has happened.  Only occasionally when one or both make a statement that is perceived as a call for separatism – such as promoting the “Odessa Free Port/Porto Franco Operation” both attempted to create in 2014, and still attempt to achieve  post arrival of President Poroshenko.

That Odessa would benefit from a Porto Franco regime/Special Economic Zone status is quite likely – but there are porto franco/SEZs such as Copenhagen or Southampton etc fully under the control of the State., and then there are porto nfranco/SEZs such as those proposed by Messrs Kivalov, Skoryk and Pressman that equate to nothing less than a federal, almost autonomous region.  It is perhaps only because it is these untrustworthy individuals proposing such a scheme that it has not gained traction with a local constituency that is known for being mercantile.

Within the 2014 telephone intercepts released, Mr Glazyev laid down some ground rules to create the necessary smoke and mirrors for Kremlin support – including regional oblast building seizures and votes favourable to the Kremlin narrative.

Mykola Skoryk

Mykola Skoryk

Unsurprisingly former Governor Skoryk indeed called an extraordinary meeting of the Regional Council per the Kremlin play book with a single issue for deliberation – a “State of the Union” styled debate.  A debate entirely beyond the competency of both then Governor Skoryk or the authority of the Regional Council.  Fortunately then Governor Skoryk and the Kremlin play book failed to find a particularly willing or compliant Regional Council.

It appears that what was already known, but is now publicly available as of a few days ago “from the horses mouth” so to speak, has reinvigorated both public and political ire toward Mykola Skoryk – quite rightly.

Skoryk 1

Skoryk 2

An official appeal to the SBU to investigate former-Governor Skoryk’s actions leading up to, and of that March 2014 extraordinary meeting, has been requested – and not before time – but unfortunately it does not go far enough, for Mr Skoryk’s grievous actions against the interests of the Ukrainian State did not end with the failed outcome of that extraordinary meeting in March 2014.

As has been inferred quite heavily in several historical entries, Mr Skoryk has much more to answer for than that – his actions in the lead up to the 2nd May 2014 tragedy are not insignificant.  Those actions are no doubt under investigation now there is a renewed vigour to be found by those investigating that tragic event and the circumstances surrounding it.  Indeed there are several investigations regarding that event but there are questions looming large over their integrity and diligence (notwithstanding timeliness – or lack thereof).

Thus perhaps it would prove to be wise to include that period in any SBU investigation into the actions of former-Governor Skoryk too.

Having written all this, a reader is naturally pondering, when the Ukrainian authorities have obviously had the intercepts since the telephone conversations occurred in 2014, why has no SBU investigation into Mr Skoryk occurred before?  His actions, his affiliations, and his loyalties are all well known in Odessa – as are his business interests and those interests that he manages for others (Messrs Firtash and Lyovochkin) in the region.

It will be interesting to see whether the SBU will pick up the gauntlet officially thrown before it – and if it does, just how diligent that investigation will be.

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State Fiscal Service – A much tighter leash required?

August 24, 2016

Last week the blog had a chat with an old friend not seen in several years – The Chatham House Rule applies.

This friends also happens to be an acquaintance of Roman Nasirov the Head of the State Fiscal Service – and the man responsible for 4 (and counting) reprimands issued to Yulia Marushevska, Head of Odessa Customs – and thorn in the side of long-standing nefarious and criminal schemes therein.

There is open warfare between Ms Marushevska (representing something approaching transparency and progress) and Mr Nasirov (representing the retarded, cancerous and corrupt old system).  Their Facebook diplomacy is bitter and barbed – as their timelines unambiguously document.

Ad hoc commentary regarding this on-going battle can be found sprinkled throughout historical entries of the blog – just use the “Search” option on the “Home Page” if interested.

Anyway, the chat revealed a Roman Nasirov that is incredibly bright, was a very good  and high earning professional in the private sector, and generally a reasonable and reliable individual – that is until he was offered and accepted the role as head of the State Fiscal Service where upon the blog’s acquaintance says of Mr Nasirov that he has become an entirely different and thoroughly odious person.  The conclusion being that he has sold his soul (for a lot of money) and continues to do so.

It happens.

Mr Nasirov is not the problem, but is the current face of the problem.  Those to whom his soul was sold are the problem.  That is not to excuse Mr Nasirov of his crimes (literally) whilst doing the bidding of others.  He is entirely responsible for the choices he has made, and continues to make.

There are of course many “interests” that would like to see Ms Marushevska sacked, yet thus far Mr Nasirov has not had the courage to do so.  To be fair, in doing so the ire of the very active activists, (not to mention militants) within the civil society of Odessa would certainly result.  The US, which is very supportive of the anti-corruption efforts made by the team led by Ms Marushevska, would also be far from impressed to see those reformist gains rolled back following any sacking.  The EU would also raise a concerned eyebrow should progress be reversed.

However the SFS under Mr Nasirov’s control is naturally not entirely focused on ousting Ms Marushevska – especially as for the time being it can, and is, circumventing her.  The ports of Odessa are also not the only area in which the SFS has a particularly cancerous touch and from where fortunes can be solicited.

The issuance – or not – of VAT is a major problem for those that have to deal with the SFS seeking legitimate refund, and also a major source of corruption for those that abuse the VAT system.

A simple example of such abuse regularly occurs within agriculture.  A “farmer” harvests 5000 tonnes of grain – although nobody ever checks – so he claims to have harvested 25,000 tonnes of grain.  This grain is placed in a number of silos and exported as part of a much larger quantity.  VAT is claimed for the 25,000 tonnes of grain that was not harvested and duly refunded to the “farmer” – with the corrupt farmer and accomplice SFS officials making millions from the fraudulent VAT returns.  A very simple method from among many far more complex schemes.

For those much larger entities, particularly reliant e-VAT systems, failure to insure the SFS gets “its share” results in being targeted by the SFS as occurred in Odessa on 23rd August – prima facie running against the current agreement between Government UA and the major taxpayers in the nation.

When the declared policy of the government is to redirect the Ukrainian economy toward the drivers of IT, and agriculture, the SFS pressuring IT and agriculture would seem to be entirely counterproductive to government policy – yet that is clearly beginning to occur.

nasirov

A reader may ponder why Mr Nasirov is not sacked considering his orchestrated efforts to frustrate any form of transparency or adhere to the governmental policy line  – as sacked he most definitely should be.

Indeed he has been “called out” numerous times by business, diplomats and civil society for his lies and nefariousness both publicly and privately, so why is he still running the SFS?  The answer naturally lies behind the grubby political curtain in Kyiv.  Not only do the corrupt in Kyiv do very, very well from the continuing corrupt money channels of Odessa, but the retaining of Mr Nasirov as head of the SFS was apparently a requirement of the Will of the People Party (an Ihor Kolomoisky production) to vote in line with the slim majority of the current coalition when it matters.

A reader may wait in excited anticipation for Mr Nasirov’s e-declaration submission of assets on 1st September (when the e-system is supposedly back “on-line” having stupidly been activated before it was fit for purpose).  Most will anticipate a work of science fiction – perhaps rightly – equal only in its plausibility to the limp excuses Mr Nasirov offers when caught actively obstructing both transparency and actual government policy.

Whatever the case it seems unlikely that Mr Nasirov can yet be removed from office despite the fact that the SFS remains an entirely unreformed and a thoroughly cancerous State institution which is seemingly out of control under the leadership of Mr Nasirov.  It remains to be seen how Prime Minister Groisman will manage to “manage” a man clearly tasked with undermining reform and prolonging the old scams.

As the very disillusioned friend stated, it was that in the private sector when shaking hands with Mr Nasirov, a deal was done – now however it seems that when shaking hands with him in the public sector, it is necessary to check to see whether you still have your watch.   Power corrupts etc.

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National Agency for the Investigation & Disposal of Assets

August 22, 2016

Having written often about the National Anti-Corruption Bureau (NABU) and also the National Agency to Prevent Corruption (NAPC), there has been no mention as yet of the National Agency for the Investigation and Disposal of Assets (obtained through corruption and other crime).  That is due to the fact that the NAIDA doesn’t yet exist.

Logically however, if the NAPC is a largely preventative independent entity, and NABU is an independent investigative/prosecuting agency, questions arise regarding not only with what to do with nefariously and criminally acquired and subsequently recovered assets, but also who is to be charged with actually dealing with the disposal of those assets – transparently, legitimately and with institutional integrity.  This is the role of NAIDA – or it will be.  It’s role is not only domestic, but to interact with external actors too with regard to recovery etc.

asset_recovery

As the current methods of asset arrest and eventual disposal, to be charitable is inefficient and somewhat opaque, with $billions in misappropriated assets potentially to be subjected to arrest and disposal, notwithstanding that which already is, it would seem rather prudent to get on with creating this agency post haste.

Public selection of candidates via public applications for this agency tentatively begins in the immediate future, with the goal of an operational agency of 100 personnel by the year end.  The plan is to have a public register of what has been arrested, what has been deemed by the court necessary for disposal, what has been disposed of, how and for how much if sold/auctioned,as well as detailing what has been returned following judicial rulings – which should make it quite a popular e-register.

Perhaps bets should be placed upon whether the NAIDA register will manage to generate figures larger than the annual national budget.

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54.5% of people in Odessa……..

August 21, 2016

A friend from within the Brussels bubble sent this blog a link regarding a recent SOCIS opinion survey made in Odessa.

What caught the eye in Brussels was “In addition, according to the majority of Odessa residents, the situation is tense in the city – 54.5%.  Some 30.1% of respondents said the situation was more or less stable, 9.9% called the situation explosive and 5.5% of residents were undecided.

Eyebrows therefore raised within the EU institutions regarding the stability – or not – of Odessa based upon this quote.  After all, which policymaker these days has time to do anything more than scan a few bullet points, or at most a paragraph or two, of any document pushed under their nose?

op

Questions of methodology aside, just as important if not more so, is how exactly were the questions worded to solicit the answers given – those questions simply falling outside the time available for those struggling to find time to scan and absorb bullet points.

The exact wording of questions frames outcomes as the below satire makes clear.

Therefore how was the question worded that solicited such a response?

The question was worded thus “How do you assess the situation in….?

Those surveyed then answering Stable/Tense/Explosive/Don’t know.  Looking at the results there are no other options.

Naturally the definition of  “stable“, “tense” and “explosive” is open to personal interpretation and thus perception unless specifically defined parameters are within the possible survey answers.  In short, this blog’s understanding of “stable” may be very different to its readers etc.

Indeed there may be a multitude of reasons why somebody surveyed in Odessa may describe the situation as “tense“.

Perhaps due to the increasing militarisation of Crimea?  Maybe due to the recent “incident” as claimed by the FSB in Crimea?  Perhaps due to another significant rise in utility prices from 1st September and social friction that may result?  An expectation of a Russian offensive?  A bubbling local war between the criminal elements?  Could it be due to open political warfare between Governor, Mayor and major businessmen in Odessa?  A possible provocation on Independence Day or during the City birthday events?  Dysfunctional and/or feckless governance – central or local?  The real possibility of yet more early elections, be they national or local?  A fear of yet more subversive acts?

Any one or more of these issues may determine an answer of “tense” rather than “stable“.

That “explosive” managed less than 10% is surprising, for traditionally the people of Odessa manage to return a solid 15 – 20% survey return that is completely removed and at odds from the answers that the rest of the local constituency gives.  Indeed 15% in a survey stating that black was really white, or that the moon is just the sun at night would come as little surprise.

Again however, what are the factors that influence the less than 10% surveyed to arrive at “explosive” as an answer?  Is there a core reason, or many?  Which reason, if any, would result in the “explosive” actually exploding – and how would it manifest given the numbers attached to any specific reason?

No policymaker in Brussels has time to get answers to these questions, even if they have a mind to ask them – which is doubtful.

Perhaps worse by way of framing perception, the link sent to the blog from within Brussels only gave the results for the “How do you assess the situation in….?”  as far as Odessa was concerned.

The survey asked for two perceptions.  One for Odessa that got attention within Brussels as the results were displayed in the link, and one for Ukraine as a whole, which didn’t, as those results were absent.

The results for Ukraine as a whole were 6.3% stable, 64.2% tense, 26.1% explosive and 3.4% undecided/don’t know.

Ergo those surveyed in Odessa found the city to be far more “stable”, far less “tense” and considerably less “explosive” than Ukraine overall – yet this did not appear in what was being read by this blog’s friends in Brussels prompting the nudge about the mood and how reflective the poll truly was.

The poll maybe entirely accurate, but of course it is very subjective when considering the question and perhaps wooliness of definitions and perceptions in the answers.

The survey questions and results can be found here – and perhaps they are far more useful in understanding the local constituency priorities with regard infrastructure and institutions – notwithstanding political positioning – than they are regarding anything approaching a genuine risk assessment.

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Shawarma and the City Hall snake pit – Odessa

August 20, 2016

Vice Mayor of Odessa Oles Yanchuk is no more.  He has been removed from office by Mayor Trukhanov.

Mr Yanchuk’s crimes, both real and metaphorical, against the local constituency are numerous, and indeed for many grave.  For the past four years he has engaged in a small war with SMEs in Odessa, demolishing small trading booths, closing fast-food establishments and overseeing extortionate “fees” for entrepreneurs that according to statute include licences issued free.  Exactly what you would expect for an individual responsible for urban commerce in a city with a political class of that which Odessa unfortunately suffers.

His methods were aggressive (sometimes literally) and not confined to remaining within any food hygiene or construction permit legislation – as much seemingly occurring without as within the law.

Recently however, he went too far – several times.

shaw

(Former) Vice Mayor Yanchuk recently declared open warfare upon the much loved shawarma and its vendors, in effect attempting to make that food and fast-food outlets illegal (literally).

The assault upon SMEs/entrepreneurs – and the beloved shawrama – brought about public protests from vendors and consumers alike.

shaw 1

shaw 2

Photos courtesy of Dumskaya

Photos courtesy of Dumskaya

Indeed, it brought about the predictable satire associated with political lunacy a reader would expect from Odessa.

Further, a few days ago, he publicly objected to the changing of the street name Marshal Zhukov as required by the “decommunisation” legislation, to that of The Heavenly Hundred.  His claim was that The Heavenly Hundred had nothing to do with Odessa and therefore an alternative name for Marshal Zhukov should be found.

That the shawrama and its vendors will be saved from the idiocy of Mr Yanchuk was assured following his comments regarding the Heavenly Hundred and their alien status to Odessa, for needless to say it caused outrage, particularly among the most militant and socially active.

Mayor Trukhanov has enough problems without aggravating the militant and socially active yet more.  The Panama Papers, claims of FSB relationship, Russian passports, much decried illegal construction work, nepotism, defrauding the city budget via massive mark-ups to companies associated with himself, a public and bitter falling out with Adnan Kivan, a wily operator, and not withstanding his accepted association with serious and organised crime/mafia historically – an association that may not be as historical, but rather current to some degree – “Messrs Angert and Zhukov both of whom are now predominantly London based, have spent a lot of effort in becoming (mostly) legit.

Those such as Messrs Trukhanov and Galanternik that remained in Odessa, whilst far from legitimising all their criminal dabbling have progressed in legitimising where they can, still unable to entirely walk away.”

Needless to say Mayor Trukhanov wasted no time in ridding himself of Mr Yanchuk from the City Administration, with Mr Yanchuk’s duties will be assumed by Paul Vugelman a loyal Trukhanov ally.

Whatever the case, Mr Yanchuk chose a most bizarre way to commit political suicide many readers would agree – if he expected any response from the Mayor. which perhaps he didn’t.

This raises the question of how fire-proof and secure many within City Hall may (wrongly) believe themselves to be.  That in turn raises questions of who’s who and who looks after who, and is the City Hall snake pit entirely within the control of the notorious Mayor Trukhanov – or not?

First and foremost, the “managing” of the militant and rigorously active falls under the security remit of Vice Mayor Andrei Kotlyar – and it is questionable just how loyal/dependable Mr Kotlyar is as far as Mayor Trukhanov is concerned.  Mr Kotlyar is a Kolomoisky man and not a Trukhanov loyalist.  Thus whose interests he serves when “managing/mitigating” the militant activists is open to both question and circumstance.  In promptly removing Mr Yanchuk from office, Mayor Trukhanov insured no Kolomoisky shenanigans could occur.  To be clear, this removal was not about the activities or oratory of Mr Yanchuk, but a matter of self-preservation for the Mayor before a baying mob.

The Speaker/Secretary of City Hall, and the appointment that assumes the position of Mayor should anything happen to the incumbent is occupied by Alexander Potapsky who is a Goncharenko man.  With Mr Goncharenko being Deputy Faction Leader of Block Poroshenko within the national legislature, by extension, that makes Mr Potapsky the President’s man.

As is often the case, the keeper of all secrets/kompromat is either a lawyer or accountant – and in the case of Odessa City Hall it is Irina Popovshaya, Director of Legal – a necessary ally to all regardless of alliances, and thus a collector of dirt on everybody.

So whose man is Mayor Trukhanov?  The mafia’s man?  The Kremlin’s man?  Perhaps both?  With his history he is certainly not entirely his own man, whatever he may like to believe.

Certainly (Lamposhka) Galanternik has his man in City Hall, questioning the all-encompassing mafia label.  Deputy Mayor Shandryk, who oversees construction in the city, is Mr Galanternik’s man.  Old (and continuing) personal organised crime/mafia association between Mayor Trukhanov and Mr Galanternik clearly are not enough to prevent the requirement to insert Mr Shandryk within the Trukhanov City Hall machinery – and Mr Shandryk has caused discomfort for Mayor Trukhanov over several construction related issues/events.

Although it is possible to go on, the point has probably been made that control is not necessarily always within the grasp of Mayor Trukhanov despite appearances.  Indeed to underline that point should it be required, the fact that Oleg Brynduk is no more than the faction leader of Mayor Trukhanov’s party within City Hall, and not in a position of (official) significant influence should underscore just how many other people’s people are holding the top roles within City Hall.

Indeed it is sometimes easy to forget that Mayor Trukhanov, despite impressions, still has “interests” he has to balance within City Hall – and those “interests” personified are fairly confident in their allocated positions – often to the point of publicly ignoring Mayor Trukhanov by way of his professed policies (such as they are).  Nevertheless there are limits, few as they are, such as those crossed leading to the unavoidable sacking of Mr Yanchuk.

Indeed there have been rumours of alternative candidates to replace him if (through smoke and mirrors or criminal investigations) early mayoral elections can be forced in 2017.  Those names include Oleg Bryndyk – others being Kolomoisky’s Andrei Kotlyar, Valerie Matkovsky, Sergei Kalinchuk and Anatoly Orel.  Perhaps Michael Shmushkovich or Anatoli Urbanski despite their preference for Oblast and not City governance, could be tempted too should Mr Goncharenko decide to run his men – both have been Oblast Rada Chairman.   Maybe Mr Potapsky Mr Goncharenko’s man currently Secretary/Speaker of City Hall?

All of that said, there simply doesn’t “feel” to be any real desire to remove Mayor Trukhanov – yet.  Undoubtedly if Odessa is chosen to host Eurovision, then there will be no desire to do so until after the event anyway whilst the Ukrainian elite put on, and intensely buff, a veneer of respectability to the world peering in.  The ugliness and nefariousness of removing Mayor Trukhanov prior to that event if held in Odessa would be simply unthinkable.

Whatever the case, the events of recent days may yet guarantee the shawarma is served to thousands of hungry “Eurovisioners” next year should Odessa become the host city.

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Property rights or property wrongs

August 20, 2016

Having consistently written regarding the Odessa Port Side privatisation and its predictable failure (planned or otherwise) for all the reasons mentioned, it seems that the Ukrainian government have decided to try once again in October 2016.

This time however, circumstances will have changed somewhat.

The Kolomoisky claim (via his Nortima company) of ownership has been rebuffed by the courts, leaving only two significant issues.  Those significant issues being an alleged gas supply debt to Dmitry Firtash’s Ostchem group of companies (РГК Трейдинга to be precise) of approximately $520 million, and the original and extremely unrealistic opening bid price of $527 million.

As the Firtash debt is a matter of legal proceedings, and the courts having already dealt with the Kolomoiksy claim over the initial attempt to privatise Odessa Port Side many years ago, it leaves the matter of correcting the opening bid price within the remit of Government Ukraine.

This blog having consistently stated that the plant is worth between $300 (fair price) – $400 million (outstanding result) therefore demands that a substantial reduction in opening bid price has to occur.  An initial slashing of 30% from the original price is being discussed – and quite frankly has to happen.

What is decided upon when October arrives remains to be seen, however if there is to be any realistic chance of competitive bidding then slashing the opening bid price by 30% may not be enough.  40% may be necessary to regenerate interest from those such as Norway’s Yara Norge, US-based IBE Trade Corp, Koch Fertilizer LLC, CF Industries Holdings Inc, and Poland’s Ciech S.A who were initially eyeing the asset.

Meanwhile on 19th August Odessa Economics Court issued its judgement regarding Odessa Oil Refinery allegedly “acquired” by Sergei Kurchenko when fronting for the “Yanukovych Family” during the period that the Yanukovych regime was in power.  When “The Family” fled Ukraine, including the wanted Mr Kurchenko, Odessa Oil Refinery was arrested and placed under the “management” of Ukrtransnaftoproduct, a State Owned Enterprise closely associated with Ihor Kolomoisky’s interests.

Property-Rights

Seemingly with very little by way of documentation, the judge nevertheless ruled in favour of two Cypriot owned companies (believed to belong to Mr Kurchenko) and Russia’s VTB Bank acknowledging their claims of UAH 14 Billion – thus opening up the legal route to reclaim approximately $5.5 billion from Ukraine, and perhaps the return of the asset to Mr Kurchenko despite the somewhat lacking and questionable documentation submitted by the claimant.

Naturally strong statements are being made regarding the integrity – or more accurately blunt allegations of corruption – against the judge.  Odessa Economic Court is widely perceived to be the second-most corrupt court in Ukraine after that of Kyiv, and as there has been no significant change of judicial personnel since the “Revolution of Dignity” in 2014, there has been no significant change in the frequency or dubious/corrupt judgements handed down.

Indeed there is perhaps little solace to be found when the removal of judicial immunity finally becomes active on 30th September.  There already exists a draft law that seeks to mitigate that outcome – Ch 2, Art 59 basically provides that a judge must be forewarned of his impending arrest, thus providing ample time to disappear with ill-gotten gains.

This being one of many problematic issues within this draft law submitted by Alexie Filatov, Deputy Head of the Presidential Administration.  So retarded is this draft law that a reader may ponder whether President Poroshenko knows what poor legislation the Deputy Head of his own administration is proposing.

Perhaps he doesn’t.

If he does, the question is therefore why is this legislation likely to go forward?  Is it yet another attempt by the President to mitigate and strike deals within the Ukrainian elite whilst giving the legislative structural impression of reform progress?

If not an attempt to keep all within the elite happy (relatively), then perhaps there is no intention to allow this draft to become law whatsoever, and it is an influence operation being conducted by the Presidential Administration allowing the President publicly and loudly to veto such poor legislation in order to reaffirm (or buy back) his “reform credentials”.  Among many on-going issues, most recently those credentials have suffered both domestically and internationally from the warfare within Yuri Lutsenko’s prosecutor’s empire, and also from the e-declaration farce relating to assets of public figures/servants – a debacle that won’t be fixed for a few weeks, and the resulting “issues” that eventually come to light from this fiasco will begin to appear in a few months from now insuring the matter doesn’t fade swiftly from the headlines.

It’s all rather messy.  Property rights, or property wrongs?  Wronging property rights, or righting property wrongs?

Time, as it invariably does, will tell.

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