Archive for August 20th, 2016

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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.

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(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.

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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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