Archive for February, 2017

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The Donbas Blockade – Time for a Cabinet reshuffle?

February 27, 2017

Having been asked for a comment on the month-long and on-going blockade of the Donbas, it is perhaps worth viewing this event from a somewhat different aperture and writing a few lines using the Donbas Blockade as the lens to peer through – as smudged and unclear as that focus may prove to be, rather than looking in upon it.

Firstly it is necessary to make clear that the unofficial blockade that began with demobbed ATO soldiers and volunteer battalion veterans preventing the functioning of trade routes in and out of the occupied Donbas via major roads and rail has at its foundation several valid issues for which current and previous governments of 2014 and the Presidential Administration have only themselves to blame – and now face a very difficult task to settle some core issues in a timely manner.

Of the key issues that lie behind the blockade are facts of insufficient progress and political will.  First and foremost is the inability, or better stated unwillingness, to diversify away from reliance upon the “Republics” when it comes to fuel sources (and more broadly the glacial movement toward energy sector reform which is perceived as prolonging unnecessarily certain vested interests).

Another, and an issue rightly close to the hearts of so many manning the blockade, is the slow release and/or exchange of fellow combatants held within the “Republics” – albeit obviously it takes the “Republics” to engage in this process.

Clearly the on-going blockades are not going to be removed by using force when those in Kyiv are well aware that such a move will cause significant political damage – if not political suicide.  That notwithstanding many of those manning the blockade are war-hardened veterans who may sew far more effectively than those that would try to reap on behalf of Kyiv.

Needless to say certain  political personalities stand to gain from what is in effect something of a self-inflicted wound for President Poroshenko – certainly insofar as energy diversification from “Republic” fuel sources are concerned several years into his tenure.  The noses of many oligarchs that have been put out of joint during the past few years may also find a convenient common cause to rally behind this event to score some revengeful points too.

None of this bodes well for Prime Minister Groisman and his Cabinet with such a small (and often infrequent) majority in the Verkhovna Rada.  Thus the return of The Radical Party, led by Court Jester Oleh Lyashko to the coalition is an almost inevitable rumour and would come at some significant political cost – perhaps to all concerned if it went wrong, but certainly for some existing Cabinet members.

Early Verkhovna Rada elections remain very much a possibility, and presidential elections will see the likes of Mr Lyashko enter into (and already see Mrs Tymoshenko active in) pre-election populist electioneering.  (The same feckless and inspiration-less list of Boiko, Tymoshenko, Lyashko, Yatseniuk, Poroshenko and a few other equally sullied names will be presented to the Ukrainian voter for president in due course.)

Unfortunately this blockade, whatever the perceived rights and wrongs, has noticeable consequences for the Ukrainian economy when hundreds of thousands of jobs are connected to energy and metals in the region.  This, should the blockade go on for months, will effect the budget, balance of payments, import and export, growth generally and thus the attitude of the voting constituency (both regional and to a lesser extent nationally) toward those currently holding office in Kyiv.

How can the Energy Minister survive if those manning the blockade are to be pacified?  With who to replace?

Was the appointment of (Supreme Court Judge Boiko’s daughter) Nataliya Boiko as Deputy Minister for Energy a preparatory appointment of somebody loyal, prior to the Minister’s position perhaps necessarily being given to somebody/anybody less loyal to hold together the current coalition (or perhaps attract a new partner) yet pacify those on the blockade?

With persistent rumour that Ms Gontareva has (again) submitted her resignation as Head of the NBU, yet this time rumour stating it wmay be accepted (having now necessarily released PrivatBank from Kolomoisky (and partners) and moved it into public ownership and done a significant amount of cleansing of the Ukrainian banking system – who will fill her shoes?

I that resignation conditional upon the potential entry of Mr Lyashko and The Radical Party into positions of high office and undue political influence?

In the likely event of the blockade forcing political offered concessions by President Poroshenko toward Mr Lyasko and  The Radicals, and the less likely event and such concessions will be accepted bringing The Radicals back into the coalition (perhaps Lyashko’s price being too high or presidential horizons too close) the existing animosity between Mr Lyashko and Ms Gontareva would likely continue far more frequently and publicly.  Why would she want to continue?

Much of what passes as Ukrainian banking reform in the media is actually NBU policy as set by Ms Gontareva (and NBU Board).  Reform maybe the policy, but policy is not necessarily irreversible and consolidated reform.  Thus much of what she has accomplished could be undone – as a matter of policy under a new NBU Head.

For example, should President Poroshenko foolishly appoint somebody like Arseny Yatseniuk to the post, a move toward a much more political and oligarch friendly NBU would probably occur simply because Mr Yatseniuk will require backers for a presidential bid in 2019.  Yet refusing any interest by Mr Yatseniuk in that vacant post may (or may not) hasten early Verkhonva Rada elections if he feels they are inevitable and pulls his People’s Front from the coalition despite its undoubted political demise in doing so.

Finding somebody competent, strong-willed, not beholding to the oligarchs or a politician/political clan whims, and who will get the support of the Verkhovna Rada after presidential nomination will not be easy – particularly somebody without any political ambition themselves.  There is then the view of key funders and lenders toward any new NBU boss.  The IMF has been generally supportive of Ms Gontareva albeit it particular people and personalities the IMF cannot (officially) endorse.  It may be far more wary of any replacement.

The question then for the current government and President Poroshenko, is having simply failed to find alternative energy/fuel sources to those under the control of the “Republics” over the past 2 years – how, when matters have escalated to the point where unofficial but effective blockades by veterans are on-going and with them the possibility of bringing down – or saving – the current Verkhovna Rada (per the scenario above or similar), to swiftly heal this ostensibly self-inflicted wound?

A question not that easy to answer when timeliness matters economically, socially and politically – and against a backdrop of a widely perceived stalling of the entire reform process, what may have otherwise been more easily manageable is now potentially politically grievous.

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Gas (or not) Odessa

February 26, 2017

With the government of Ukraine having gone to very unpopular lengths to raise gas (and other utility prices) dramatically, having attempted to remove the opaque and dubious “middlemen” within the gas supply chain and also remove the oligarchical gas consumption privileges and notwithstanding the concerted efforts to put meters in for all consumers, a reader may rightly think the scope for ripping off the Ukrainian users by those with vested interests in gas has become more limited.

Ho humm!  How to create illicit revenue for vested interests when the room for schemes and scams has been reduced?

In Odessa, it appears that Odessagaz, owned by (the Odessa Don of Dons) Alexander (Angel) Angert and Igor Uchitel (no doubt with many other silent shareholders), may have found a way.

It seems that while the gas meters are busily clicking over and measuring more usage that in previous years, it is taking far longer to heat a home and cook this year.  Residents are noticing not only a recorded increase in gas usage, but that the gas flame deviates from its normal blue.

A reader, like many in Odessa, may come to the conclusion that there is far less gas in the gas – and thus more is used and UAH millions billed monthly for far lower quality/purity of gas.

Naturally such an issue should be easy to check as to whether something is being added to the gas supply to reduce the gas content yet continue to keep those meters busily racking up Odessagaz profits – except the lawful authority when it comes to checking gas supplied by Odessagaz is, it appears, Odessagaz.

If that be true, and it appears to be the case prima facie, it is perhaps time for a national Regulator with, among its powers, the authority and ability to test gas quality throughout production, transportation, delivery and consumption – and hold companies accountable.

Time to close another grubby little gas manipulation hole that appears to have been left open and seemingly exploited in Odessa.  Whether that hole be closed under the auspices of health and safety or corruption is a matter for the legislators.

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Taking fake news to fake newspapers – Odessa

February 24, 2017

Following on from yesterday’s entry and the brief mention of an incident relating to the abduction of Odessa MP Alexie Goncharenko, this entry is related – despite the title.

Firstly it is necessary to state that Mr Goncharenko is alive and well.  His abduction being part of a wider SBU operation that has been on-going for several months.

In short, there was indeed a plot to abduct Mr Goncharenko whereupon he was to be tortured, have his kneecaps shattered and also have his eyesight damaged (or lost).  Death was not the desired outcome.

Behind this plot was/is a local politician from Odessa, a Deputy of the Liman District Council, Alexander Krushnarev.

Mr Krushnarev is in fact head of the Opposition Block faction of the Liman Council and the father of the late Gennady Krushnarev who died in the tragic fire of 2nd May in Odessa. Gennady Krushnarev was a member of the pro-Kremlin “Odessa Squad” in 2014 when he died.

It may well be that Mr Krushnarev blames Mr Goncharenko for Odessa rejecting the Novorossiya calling, and perhaps by extension his son’s death.

Though generally not acknowledged, it is undoubtedly true that Mr Goncharenko and “his” politically aligned people played a significant role in defeating an attempt by former-Governor (and Opposition Block MP) Mykola Skoryk to follow the playbook of the “Republics” (as detailed in the Glazyev tapes) within the Oblast Rada.

Indeed Odessa became one of the first Oblast’s to name Russia an aggressor in a Resolution (unlike City Hall which was among the last) again in no small part due to the efforts of Mr Goncharenko and “his people” then within the Oblast Rada.

Mr Goncharenko also swiftly arrived at the tragic fire of 2nd May together with some of his Dumskaya media outlet, but no active part in events did he play (the blog was also present and saw him there).

Thus the usual business interests behind so many similar kidnapping plots are not present.  It would appear to be a mix of personal, political and ideological drivers behind the plotting of Mr Krushnarev.  Prima facie – revenge for many perceived injuries.

Yet there is more to this plot that the abduction of Alexie Goncharenko.

The SBU also intercepted 2.5 tonnes of printed material bearing an uncanny resemblance to an existing newspaper produced by one of the parliamentary parties – but with fake news packed in among genuine articles and opinion from the aforementioned party newspaper.

In short, fake news circulated by a fake newspaper.  A natural progression perhaps?

Also seized by the SBU where numerous booklets and leaflets of an anti-Semitic, and anti-Ukrainian (presumably anti-nationalist) nature judging by the titles of the seized  material – “The Servants of Evil – Ukrainian Nationalism” and the “Odessa Khatyn Bells” etc.

Clearly the intention was to attempt to raise the temperature within and/or the social discontent of society in Odessa.  How successful it would have been will now not be known – although it is extremely unlikely to have provoked anything remotely powerful enough to turn Odessa from Ukraine, or alternatively to embrace The Kremlin as an alternative or friendly entity – thus perhaps it’s intent was to politically return the City and the Oblast to the Opposition Block fold.

What is unclear is whether the two individuals known to have been involved in, and tasked with the Goncharenko abduction (and torture that was to follow) are the same two individuals that are responsible with Mr Krushnarev in the production and distribution of a fraudulent newspaper peddling fake news and material that will surely fall foul of Ukrainian legislation relating to national security, terrorism, incitement etc.

(One of the unnamed detained with Mr Krushnarev is a Russian citizen, but a reader perhaps should not give that too much weight at this stage as there are a large number of Russian citizens resident in Odessa.  More information upon both unnamed also arrested is required.)

Aside from Mr Krushmarev and the two unnamed co-conspirators and/or partners in crime, is anybody else involved?

Obvious questions relate to the where and who created the content, printed and published the material seized?

Who arranged a distribution network?

Was Mr Krushnarev the only financier, or was he a part financier of these deeds?

Who else within the Opposition Block was aware of the plot – if anybody.?

(Little happens within the Opposition Block of Odessa without the knowledge and approval (official or tacit) of Mykola Skoryk – who himself has no love for Mr Goncharenko since he officially requested Mr Skoryk be investigated for his treasonous acts as Governor.)

Would Mr Skoryk, if he was aware, entertain the abduction plot without informing those that control him – Sergei Liovochkin and Dmitry Firtash.  It seems unlikely (though not impossible) that Mr Liovochkin would entertain such an idea (even if Mr Firtash might and Mr Skoryk would).

Nevertheless, this does not seem to be an entirely “local production”.  There is more to this incident – starting with how the seized material came to exit, from its writing to publication.

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Abductions and appearances – Verkhovna Rada Ukraine

February 23, 2017

As regular readers will know among those Ukrainian politicians this blog is particularly well acquainted with, and for many years, is Alexie Goncharenko.

It appears that during the evening/night of 22 February Mr Goncharenko has disappeared and has not been seen or heard of since- the working hypothesis of both SBU and PGO is abduction with coercion rather than ransom believed to be the motivation.  Investigations are underway.

No further comment will be made at this time other than to state that if abduction for the purposes of coercion is the motive for the kidnapping, Mr Goncharenko is more likely to have his beliefs beaten further in, rather than have them beaten out of him.

Naturally hope for his safe recovery is the final comment at this time.

Meanwhile during Mr Goncharenko’s forced absence from the Verkhovna Rada, 23rd February witnessed something of a surprise appearance.

The Verkhovna Rada was unable to fulfill its obligations regarding the nomination of committee members for the external, independent evaluation of NABU.

The anticipated nomination of Robert Storch, a former Deputy Inspector General of the US Department of Justice was unexpectedly stopped when the ruling coalition dropped another candidate into the mix immediately prior to any decisions that were due.

That unexpected candidate was actually present according to accounts of the Verkhovna Rada session.

Enter Nigel Brown, a Brit and former detective of Scotland Yard pedigree who has long established himself in the often tedious but usually very lucrative world of private corporate investigations.

No matter how private those investigations may be, turning up at the Verkhovna Rada and having your candidacy dropped upon its members unexpectedly would strongly infer that some of those clients past or present are Ukrainian.

Needless to say, uproar followed, particularly among the Verkhovna Rada committee charged with the prevention and combating of corruption which had previously vetted the US candidate but had not even heard of the UK candidate.

The upshot being that no decision was made – nor could it be – due to the submission of a new candidate that has yet to be subjected to the due diligence of the aforementioned VR committee.

Little can or will be said about Mr Brown.  The blog personally knows only one individual who personally knows Nigel Brown.  No doubt both Mr Brown and the blog both regard our mutual acquaintance as beyond reproach – but also any communication with this mutually known individual being strictly private (unless otherwise stated).

However there is more than room for skepticism that a former Scotland Yard detective turned private corporate investigator would be caught unaware and forced to state he was not aware who invited him to the Verkhovna Rada and who nominated him when (perhaps pointedly) asked.

Thus it may be that the uproar was something of a surprise to Mr Brown and such flimsy statements were made upon a swift realisation that to answer such questions was not necessarily wise at that moment.  If that be so, those that did invite Mr Brown and nominated him will have to explain the reaction he received.

Alternatively he may have expected the uproar and have been briefed that his candidacy would have to be considered regardless, so just ride out the initial tempest.  That said, far more convincing answers relating to who invited and nominated him would probably have been prepared in advance – even if the boilerplate “not at liberty to say” answer was given.

Not at liberty to say” is at least a little more convincing than “I don’t know” as reported by Interfax.

Nevertheless, readers are left with an all too familiar question – Who benefits from a last minute further delay in the Verkhovna Rada fulfilling its oblations surrounding NABU?  (And was it BPP or People’s Front that orchestrated this little circus from within the coalition?)

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The UK Criminal Finances Bill

February 22, 2017

For all the many faults the UK has, when it comes to creating statute it generally does so rather well.

The 21st February witnessed yet another fairly well crafted Bill pass through The House and make its way to The Lords – The Criminal Finances Bill.

For those that click on the link above, the full text as expected, is a read that for some will become tedious due to its length rather than its content – though few will have issue with the spirit with which it was crafted no matter how wearisome that read may be.

Naturally parallels will be drawn to the US Magnitsky Act – perhaps unfairly for the UK Bill appears to be more than a UK equivalent.  There is also an issue with such framing in that it directs attention toward Russia and the kleptocrats therein and reduces the wider nature of the Bill.

If the (UK) law is to see all equal before it (and importantly all of their UK assets) then it will not only be Russians that are immediately subjected to new legal scrutiny by the UK – there are a reasonable number of Ukrainians (and others) that could and should fall foul of this new legislation.

Security Minister Ben Wallace stated: “We need to make the UK a hostile environment for those seeking to move, hide and use the proceeds of crime and corruption. In an increasingly competitive international marketplace, the UK simply cannot afford to be seen as a haven for dirty money.” – A statement that glosses over the fact that there was already a significant body of legislation that if actually proactively applied would have already given the UK such a reputation long ago – but didn’t because it wasn’t.

Indeed it can be argued fairly convincingly that corporate entities and/or law facilitates as much corruption for foreign owners as do the UK banks.  In short both UK system and UK processes have been ravaged by the unscrupulous and criminal on a large scale and in equal measure.

No matter how good the legislation, statute of this nature will rely upon its proactive enforcement to be most effective – and that would see a reasonable number of (prominent) Ukrainians rightly treated no differently to the Russians around which the media will concentrate.

Thus whilst all wait to see which Russians will feel the weight of this statute, t’will be interesting to see, once the Bill becomes law, which Ukrainians fall foul of this new legislation – and which (somehow) do not.

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White Hammer coordinator disappears – A who dunnit?

February 21, 2017

Among the small number of odious far right nationalist groups in Ukraine is the group “White Hammer”, an organisation coordinated by Vladislav Goranin.

If a reader hasn’t heard of Mr Goranin or White Hammer, well join almost the entirety of the Ukrainian constituency in that obliviousness.

According to the website of White Hammer (a link to which will deliberately not be provided, as needlessly promulgating extreme nationalist flapdoodle falls far outside the sensibilities of the blog), Mr Goranin was forcibly abducted at the junction of Vasilkovskaya and Stelmaha in Kyiv  on the night of 21st February.

White Hammer, later making public the apparent abduction stated “Most likely the work of the SBU“.

Hmm.

Extremist groups be they left or right or of a particular cause are going to appear as blips to be monitored (often no more) upon the radar by policing and intelligence agencies alike.  Such groups are by their extreme (and often paranoid) nature the most easily manipulated , open to infiltration, and are certainly not immune to the occasional agent provocateur.  Ever has it been thus and ever shall it be so

However, when it comes to the SBU deciding to forcibly abduct an almost entirely unknown coordinator of a more or less unknown nationalist movement rather than simply arrest him (on a pretext if necessary), it seems all rather unnecessary.

The SBU has unsurprisingly denied any involvement in the disappearance (or alleged abduction) of Mr Goranin, dismissing the statement of White Hammer as nothing more than spurious – “The Ukrainian Security Service did not perform and does not perform any operational or investigative action in relation to the coordinator of the “White Hammer” organisation, Vladislav Goranin.”

A statement that is unambiguous, and given the less than harmonious relationships between different extreme groups (of similar or opposed bias) Mr Goranin will probably not be short of a few adversaries that are equally like to abduct him, if not more so.

The SBU however, has publicly undertaken to investigate the disappearance of Mr Goranin – something that surely falls within the remit of the police rather than that of the SBU.

Why then has the SBU decided to investigate what is (possibly) a crime to which the police should deal?

Is it a matter of public relations after being accused of the crime to then be involved in solving it?

Is it that Mr Goranin – or White Hammer – is more than a blip of the SBU radar despite the SBU public statement?

Or is it perhaps that the circumstances of the alleged crime and the tactics employed by the apparent abductors display the traits and professionalism of those that the SBU would be interested in and who are capable of manipulation, infiltration and inserting the occasional agent provocateur with groups such as “White Hammer”?

Presumably the SBU has already dismissed this alleged incident as simply a publicity stunt by “White Hammer” to raise its otherwise almost entirely absent profile among the Ukrainian/Kyiv constituency.  How much publicity could be gained from waiting for this hammer to fall and then subsequently raised when he is found?

T’will be interesting to see how this incident concludes.

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Anti-Corruption Courts – Ukraine

February 18, 2017

About a week ago an entry appeared relating to the latest public report by the National Anti-Corruption Bureau of Ukraine (NABU).

Within the issues raised of that poorly written prose was the glaring issue of a very large number of NABU cases subject to a bottleneck within the still corrupted judicial system –  “Clearly the bottleneck, or more accurately point of due process constipation, can be attributed to the courts and judicial system.

The requirement for a specialised anti-corruption court is made not only by reason of appointing only the most unsullied of unsullied judges to such a court for reasons of integrity, but also to avoid/reduce (the probably deliberate) due process backlog.

However the functioning of the courts are not the remit of NABU – other the than busting corrupt judiciary which certainly is within its remit.”

So what is being done regarding these issues?  A dedicated anti-corruption court is an obvious requirement that has been on the political agenda (both foreign and domestic) for more than 2 years.

During those 2 years (and more) the subject has been raised during numerous private conversations with diplomats.  (Several ideas have been muted, including the placement of foreign judiciary within the ranks of any Ukrainian anti-corruption court – an idea it has to be said that the blog somewhat pooh-poohed for constitutional reasons and the undoubted appeals regarding the finding of guilt in a Ukrainian court by a judge that is not a Ukrainian citizen – at least as far as a court of first instance is concerned.)

So where is Ukraine at insofar as getting anywhere near the creation of a dedicated anti-corruption court (and appeals) system, and how and who will appoint Ukrainian judges unsullied by corruption to such a critical institution?

Who decides which judges are unsullied (or unsullied enough) to sit on the bench of an anti-corruption court (and necessarily independent appeals court chamber).  As always, who decides who decides?

It would appear that Egor Sobolev, Chairman of the Verkhovna Rada Committee on Corruption prevention and Counteraction (and one of the few MPs who seems to be morally upright when it comes to a genuine stance against corruption) together with the rather scholarly and fairly effective NGO Reanimation Package of Reforms (RPR) have arrived at a solution not dissimilar to that of Croatia and Slovakia – with the necessary Ukrainian twist regarding who decides who decides upon the judges appointed.

Draft Law 6011 is the result (though whether it will pass without significant tinkering, or remain without significant amendment once passed – if it passes at all – remains to be seen).

When it comes to who decides upon the judges selected for an independent and purely anti-corruption orientated court, and a specialised and a independent chamber within the Supreme Court to deal with anti-corruption appeals, it is expected that 33% of the assessment/selection panel will be foreigners.  (Which foreigners and from where is unclear but that is a matter that will be swiftly dealt with by longstanding foreign funders of judicial reform no doubt.)

The remaining Ukrainian members of the selection committee cannot have been part of any other judicial selection committee (or presumably by extension involved any half-arsed attempts at judicial lustration).

Only candidates selected by the committee charged with selecting anti-corruption judges can be considered for the role.  No other committees nor candidates will be allowed influence, interference or participation.

As already stated, successful judges will form an insulated anti-corruption court and also within the Supreme Court a dedicated appeals chamber will be created.  Pay and perks for successful candidates equal to the highest paid judiciary in the land.

The staffing of this new institution that will insure its administrative functioning, once the judges are selected, will not be the responsibility of those judges alone.  That staffing will also involve  the committee that selected the judges.

Importantly, indeed critically, the anti-corruption judicial entities will have its own independent and dedicated budget proscribed into law, will be situated in a separate and dedicated building, and employing a separate insulated documentation system.  In effect the anti-corruption judiciary work place will be quarantined as far as is practicable to do so, both physically and electronically, from the rest of the Ukrainian due process system.

If it all seems too good to be true, for if adopted unchanged it would mark an enormous stride forward in the anti-corruption fight, it probably is.

Nevertheless, the attempt at quarantining the selection committee free from members of other judicial selection committees (and loading it with 33% of foreigners) is a valiant attempt at keeping the undoubted political interference in committee selection to a minimum.

The physical and electronic workplace quarantining of those eventually selected is simply necessary in an environment where even if the processes and institutions become more  independent and transparent, a majority of those within the legislature and executive remain for the most part morally and ethically bankrupt.

We will now see how long it takes Draft Bill 6011 to be considered by the Verkhovna Rada.

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