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A tangled web – The Ukrainian MIC

November 28, 2016

There are many (in)famous Ukrainian politicians, “businessmen” and recognised organised criminals historically associated with gun running and the defence industry/MIC of Ukraine.

In entries past, the names of Semyon Mogilevich, Leonid Minin, Sergei Mikhailov, Leonid Wulf, Alexander Zhukov, Vadim Rabinovych, Leonid Lebedev, Mark Garber, Kuzma Medanich, Andrey Vazhnik, and Anatoliy Fedorenko, are to name but a few “headliners”.

Since those gun running 1990s/2000 decades have passed, in recent years the Ukrainian military and MIC have been forced to undergo radical changes and retooling – nothing spurs such action as a confined yet nevertheless hot war with Russia in the eastern regions.  Also, no longer do trains loaded with armaments sat on rail sidings at Odessa Port go without more than a few photographs and a questions by both public and media alike.

That is not to say that whilst the hollowed out military is by no means hollow anymore, that the endemic corruption that enabled the gun running of the 1990s/00s has been systemically and comprehensively addressed.  Indeed now large lumps of GDP are heading to the military and MIC, and will continue to do so for years to come,  the eyes of the “rent seekers” so attuned to guzzling from the teat of State subsidies and embezzlement of State funds will naturally seek opportunities therein.

So too, it has to be said, will the Kremlin seek to infiltrate further such MIC structures.

Putting the military to one side, the Ukrainian MIC which is still predominantly State rather than private in its composition, will at some point surely be subjected to some form of scrutiny when it comes to the abilities and loyalties of those working within.  With more than 100 State MIC subsidiaries operating under the State Ukrboronprom umbrella there are a lot of managers with access to information that “others” may find “useful” and some skill sets that are clearly not optimal for their roles.

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Ukrboronprom is currently headed by Roman Romanov (a former car dealer who led the presidential election campaign for Petro Poroshenko in Kharkiv).  Beneath him spreads a large organagram of managers across the one hundred plus SOE subsidiaries.  Whether Mr Romanov has been either tasked or is even able to assess the professional competency and patriotic leanings of the management of those companies which collectively form the Ukrainian MIC is unknown.  A “single sweep” would be far from effective if that is all that results anyway.

Among the management of such subsidiaries certain names catch the eye being from Odessa – for example, Alexander Volkov.

Mr Volkov is currently acting head of Promoboroneksport – a subsidiary that has been busy with BMPs in Jordan and MiG 24V helicopters to Uganda throughout 2016.  All appears to have contractually gone well, and thus it seems very likely that Mr Volkov will become the substantive head of Promoborneksport.

Mr Volkov is best known is Odessa as being the long standing regional party chairman of the Social Democratic Party of Ukraine (united) – or SDPU(u) – and his work at the ports and roads industry.

The SDPU(u) is a party long and closely associated with the nationally loathed Viktor Medvedchuk (Godfather to one of President Putin’s children).

Promoboroneksport is a subsidiary of Ukrspetsexport, which is in turn a subsidiary of Ukrboronprom.

Ukrspetsexport is also headed by a native of Odessa, Pavel Barbul.

Mr Barbul is better understood by his father’s associations.

Alexie Barbul has long been associated with roadworks.  He once headed the roads department at Odessa City Hall, thus not only making him a close acquaintance of Mayor Turkhanov (who is well acquainted with several names listed at the beginning of this entry) but he is also with the company “Growth” (winner of many Odessa tenders) associated with Mayor Trukhanov, the aforementioned Alexander Zhukov, and Odessa’s most (in)famous mafia Don, Alexander (Angel) Angert.  The involvement in road infrastructure also meant that Alexie Barbul was well acquainted with Mr Volkov, who now heads a subsidiary subservient to that Pavel Barbul now controls.

Thus looking at recent, current and future appointments within a clearly tangles web, a reader may come to one of two conclusions – though neither are in fact mutually exclusive.

The first, with names such as Medvedchuk, Trukhanov, Zhukov, Angert nestling behind Messrs Volkov and Barbul, is that the Ukrainian MIC is subtly (or not so subtly) “zoned” – with the Odessa controlled “zone” being that of export, whether or not that export actually leaves from Odessa is irrelevant – this is to do with regional structures of power/influence, and probable sources of hierarchy in rent seeking and embezzlement arrangements.  (A look at the “Kharkiv names” would suggest that the “Kharkiv zone” will be far more production orientated – the same rules applying).

The second conclusion a reader may reach, considering the curriculum vitaes of many of the old names and their associations with organised crime, gun running historically, and with many a very questionable definition of “patriotism”, is that more of the same old schemes may well blight the international headlines in the years hence to the detriment of Ukraine.

A reader may also decide to keep a watchful eye upon the centres of R&D that fall within current university specialised departments.  Would any be surprised to see such centers, boffin brains and facilities included, somehow removed from the university and entirely (yet quietly) privatised, or subjected to a PPP arrangement where the private, rather than the public, in any partnership would seize control and almost all profit – with the Ukrainian taxpayer assuming all investment costs and/or loses?

How clear the horizon for such State-Private initiatives such as UaRpa at the forefront of military tech R&D?  Whose “zone” will it fall into, and when?

A reader may ponder given the direct involvement of several sovereign nations, notwithstanding NATO, in the development of the Ukrainian military and MIC whether they too are viewing managerial appointments within the MIC with the same cynicism as displayed within this entry – or not.  And if not, why not?  They have been active in Ukraine now long enough to spot a bad seed germinating, and currently still have the leverage to nip such dubious, yet increasingly obvious internal structuring in the bud.

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