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One hat in the ring for Governor of Odessa?

November 12, 2016

When Misha Saakashvili unsurprisingly quit as Governor of Odessa on 7th November, something that had been evident since June and thus a long time coming, whilst others immediately wrote post mortem regarding his tenure, the blog preferred to look forward and not back.

The obvious question was who would replace Misha Saakashvili?

Which hats would be tossed in the ring that despite the transparent process (not public process) would have President Poroshenko’s approval (as coincidentally under the new process Governor’s of Kharkiv and Mykolaevskaya Oblasts went to Poroshenko people and there is no reason to believe those coincidences would not continue in a strategically and nefarious money channel like Odessa)?

As stated, “Alexie Goncharenko is an obvious candidate, but he doesn’t want the role.  He is quite happy acting as President Poroshenko’s Deputy Faction leader in the Verkhovna Rada.  When speaking to him it is quite apparent he is clearly enjoying the role and would not seek the Governor position by choice – at least not now.

However, if President Poroshenko tells him he wants him to become Governor (and thus he will win the process) it is likely he would (begrudgingly) accept.

There are however other locals who are BPP affiliated and who would be happy to throw their hat into the Governor of Odessa ring and go through the transparent (not public) process – to probably emerge the winner (if coincidences are to continue).

Both Messrs Alexander Potapsky and Misha Shmuchkovych fit the BPP candidacy bill and are considered loyal.

Both of these candidates are deemed to be “Goncharenko people”.  Mr Potapsky is the current Speaker of City Hall (and becomes acting Mayor if Mr Turkhanov is long term sick – or worse) and Mr Shmuchkovych was acting Oblast Rada Chairman following Alexie Goncharenko’s departure from that role when he entered the Verkhovna Rada.

For the record, the current Oblast Rada Chairman, Anatoli Urbansky is also deemed to be a “Goncahernko man”.”

As no candidate from any other party than the president’s seems likely to be allowed to govern such an important region there were few other obvious choices – unless they came from without and yet had loyalty to, and the trust of, President Poroshenko.  As such other names were highlighted and dismissed under this caveat.

The entry concluded “unless and until those throwing their hat into the ring have done so and a major surprise is among that number.”

Now cometh the first (and perhaps only) surprise capable of keeping Alexie Goncharenko in Kyiv where he (currently) wants to be and out of the Governor’s chair in Odessa (where he currently would prefer not to be) if Mr Goncharenko is unable to advocate for one of “his people” successfully before President Poroshenko.

It appears that Yevhen Chervonenko has let it be known that should President Poroshenko (transparent process aside) be amenable, he would take on the role of Governor of Odessa.

Those outside of Ukraine and the FSU/post Communist States will probably not have heard of Mr Chervonenko – and thus it is perhaps worth writing a few preparatory lines should he manage gain the necessary presidential blessing to succeed Misha Saakashvili.

These lines are not meant to be the basis of comparisons between the two men – readers of this blog are far to erudite to put their faith and hopes in a singular politician.  It is institutions, process, structure that ultimately build sustainable and consolidated governance.  Practical and systemic central policy implementation as an Oblast Governor is as important as the local initiatives that fall within their limited powers.

Suffice to say in any comparison, they are very different in their personalities, temperament and methods of governance.

So what can be said about Mr Chervonenko?

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He is perhaps best known nationally as something of a “petrol head” and a sporting champion of the rally car genre – a sport he took very seriously and did very well at – retiring from competition only a few years ago.

Interesting as that is, a reader wants to know about his political and business history (which for most Ukrainian public figures emerging from the Soviet collapse is inseparable).  Nobody reads this blog for commentary on sport.

He was a stalwart backer of former President Yushchenko.  When the USSR collapsed, he swiftly became, and remains, one of Ukraine’s biggest freight operators/logistics empire owners.

Back in the day he also set up a drinks company called Orlan – which popular folklore would have a reader believe actually sold Ukrainian beer in far more aesthetically pleasing Polish bottles.  That same folklore would have a reader believe there was also a fair bit of smuggling via his logistics empire, beginning with red caviar but swiftly expanding into other merchandise.  There are also tales regarding “AgroInvest”, embezzlement, and some questionable activities relating to a “security firm” under his control during the Yushchenko epoch.

None of this, being folklore has much, if any, hard evidence to back it up.  Nevertheless folklore is not the same thing as myth.

Much more recently, only a few years ago in fact, several criminal cases were opened regarding nefarious activities, large scale fraud and theft regarding the Dnistra PSP project (Criminal cases 4201411000000309, 12014100000001192 and 12013100150000333 refer) in which Mr Chervonenko and long-time associates Aftanaziva Zenko and Igor Sirota feature.  The opaque manner in which those cases were closed per usual within the Ukrainian justice system, does little to decide whether there was a lack of evidence, guilt or innocence.  If rumour is to be believed then the prosecutors were (handsomely) bought off.

Anyway, as an Our Ukraine MP and whilst circling within and being part of the innermost Yushchenko orbit, Mr Chervonenko came to rub shoulders with other potential financial backers preparing for a Yushenko bid for president.  Those people included Petro Poroshenko, Mykola Martyenko, David Zhvania, Kislinsky, Rzhavsky etc – all rather (in)famous.  Some of those names decided to back Viktor Yushchenko whilst others decided against.  Clearly Me Chervonenko was very much with Mr Yushchenko.

The outcome following the inauguration of Viktor Yushchenko as President of Ukraine, was that Mr Chervonenko became the Transport Minister in the Prime Minister Tymoshenko’s government as part of the “presidential quota” of ministers, and remained very much part of the Yushchenko inner circle.

Thus Mr Chervonenko and President Poroshenko have known each other for decades – and both will be quite aware of how each other operates.  Mr Chervonenko has thrown his hat into the Odessa Governor candidate ring – the presidential response is unknown, but will obviously become apparent when a new Governor is eventually installed.

Bringing a reader to the present day, Mr Chervonenko still enjoys easy access to parliamentarians.  His logistics empire is best known for the A2B Direct brand.  He is also forward looking, launching an Uber-esque system for logistics/hauliers with some serious partners – Alpha Bank Ukraine, Kyivstar, Vostok Bank, Unison Insurance, WOG petrol stations and AsMAP.  This system is set to expand into Belarus (where Mr Chervonenko has a 51% stake in a joint venture with the Belorussian Government via SOE Gomeloblavtotrans) and beyond.

Having “retired” from rallying, albeit he will still rally, and having a business empire that can probably run itself without his personal input, is it possible for him to put these distractions to one side and become an effective, (probably business biased – not necessarily a bad thing in a particularly mercantile oblast like Odessa) Governor?

Prima facie he appears to be without any truly robust and unbreakable ties to the existing elite of Odessa.  Politically, Our Ukraine to which he belonged is long since a dead party from which perhaps former Mayor Gurvitz was the only “Orange” to make a significant impact in Odessa.

When looking at possible conflicts of interest, with a 30 year major logistics empire to his name, are there any really significant contracts within Odessa that would or could compromise him?

Clearly he has no personal need to steal from the regional budget – he is already rich.  Thus should he do so then it would be because he chose to do so rather than had to.  A reader may be inclined – or not – to set aside the smuggling folklore (and probable tax avoidance associated by extension) with a laissez faire attitude toward acts of the 1990’s/2000’s where almost no business or political angels were born – yet the fairly recent Dnistra PSP tale is certainly a cautionary one.

None of this currently matters much as it remains to be seen whether he will be blessed/cursed with the Presidential nod to succeed in the transparent selection process for the vacant role of Governor, emerging as the next overseer of the region.

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Nevertheless, his somewhat surprising interest in provincial governance has now been declared.  A hat has been thrown into the ring and Mr Chervonenko’s interest has to be taken seriously.

(Thus far of the names mentioned with regard to the vacancy, Misha Shmuchkovych would seem the best candidate.)

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