Archive for May, 2017

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Tymoshenko’s “take or pay” gas disaster seemingly righted in Stockholm

May 31, 2017

Over the past few years every reader will be aware Ukraine and Russia have been at war.  War not only in eastern Ukraine where people still die on a daily basis, but also diplomatically, socially, culturally, and economically.

A small part of that war has been the claims and counterclaims between Gazprom and Naftogaz in the legal arbitration machinery of Stockholm relating to the 2009 scandalous/ruinous/disastrous 10 year gas deal negotiated and signed by former Prime Minister Yulia Tymoshenko and Russia in 2009.

Affairs are not yet over in Stockholm.  Several judgments are in whilst others, such as those relating to transit, are yet to be delivered.

Perhaps most importantly for Ukraine, it appears the arbiters threw out entirely the claims relating to the “take or pay” clause under which Gazprom was claiming $47 billion (plus $35 billion in interest.)  This is by far the vast majority of Gazprom claims against Naftogaz.

Further the re-export ban on Gazprom supplied gas was also lifted in its entirety.

The headlines will be, perhaps rightly, filled with figures in the $ billions that Naftogaz Ukraine is no longer liable for due to the stupidity of Yulia Tymsohenko when Prime Minister.   It lifts a long and dark shadow from Ukrainian gas supply for the future, giving Kyiv more leverage to simply discard any such clauses if muted, should thee nation ever decide to consume Russian gas again (perhaps with the cynically added proviso that Yulia Tymoshenko is allowed nowhere near any future negotiations).

As already stated there are yet further rulings to come – which Ukrainian may or may not win, but are certainly more manageable in $ numbers than those cast asunder by the Stockholm rulings of 31st May should it lose.  If it were to win, it may actually be in a position whereby it is owed albeit however questionable it is that payment would be forthcoming.

However, what will be under-reported, is what really matters to Ukraine looking forward is not only money.

What really matters for the future are the nation’s statutory domestic and European 3rd Package obligations – and the ability to meet them.  In short a European modeled, functioning gas market within the framework of closely approximated principles and regulation.  Something somewhat hobbled by the Tymoshenko gas deal that was not due to conclude until 2019. and something that Gazprom/The Kremlin will certainly be severely irked by.

A reader may now ponder what, if any statement Yulia Tymoshenko will make as a result of the ruling handed down.

Whatever the case, money aside, Ukraine has now to insure it meets its domestic and European obligations regarding its gas market.  There is now one less excuse.

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Wearily the EU-UA Association Agreement progresses toward ratification

May 30, 2017

30th May witnessed the Senate in The Netherlands finally provide the last positive vote required in a long and weary ratification journey of the EU-Ukraine Association Agreement.

It now remains for the King of The Netherlands to apply his signature to the statute and the subsequent publication in the official Netherlands media.

Thereafter the Netherlands duly submits its ratified (and the last of the EU Member States) instrument to the European Council.

Following that, the EU also makes official publication of the fully ratified status of the Agreement in the official EU media outlets, and on the first day of the second month after that publication the EU-Ukraine Association Agreement finally comes into full and binding effect.

Only activation of the “get out clause” within the text by either party will cast this Agreement asunder.

Bravo!

It remains to be seen just how swiftly The Netherlands will be in concluding its domestic bureaucratic necessities and deposit the final ratified instrument.

The EU however, is likely to be rather swift thereafter in completing its own bureaucratic requirements in order to make the first day of the second month from publication one that is sooner rather than later – presumably 1st September or 1st October will be the date when ratified Association Agreement obligations fully take effect.

Something of an albeit wearisome win for all concerned – unless a reader happens to be a holder of vested interests in Ukraine or a feckless Verkhovna Rada parliamentarian, as there is much Ukraine obligates itself to do, some of which has quite distinct timetables.

Those ratified obligations and timetables will be rather irritating for the most populist of politicians as delaying much needed (if painful and temporarily unpopular) reform, legislative and regulatory approximations et al, would mean defaulting on the ratified obligations that so many of them actually voted for at a time when Ukraine was in a far worse position, and far less able, than it is at the time of writing.

They may very well cause the current authorities difficulties too.

Scheduled elections are but 2 years away.

Renegotiating this Agreement is so difficult as to be (almost) impossible, and universal goodwill by way of timetable extensions will be quite difficult to come by.

In short whoever wins future elections has the choice of implementing the Association Agreement as obliged, or instigating the “exit clause” should goodwill toward more flexible timetables be absent – as it often will be.

The last time a Ukrainian politician tried to exit the Association Agreement (before it even began) it was a catalyst for mass protests, eventually people died, the entire regime collapsed and self-exile followed.  The Rubicon was irreversibly crossed.

A Ukrainian politician enacting the “exit clause” at the time of writing is entirely unthinkable – particularly with the very capable level of self-organisation within Ukrainian society and notwithstanding a now war-forged population.

No Ukrainian politician with a chance of leading the nation would want to be doing so and be faced with the prospect of the Europeans instigating the “exit clause”.

There will naturally be much political fanfare once another major European event comes into full legal force.

With elections but 2 years away President Poroshenko will want to be associated as the man that brought Visa-free and the Association Agreement into being – despite both having been long negotiated prior to his election.   To be fair he has done his bit as far as both EU orientated events are concerned, and politics is often about timing.  Somebody has to be in charge and sign negotiated agreements when they get over the final and official finish lines, even if they had little or no input into the negotiations themselves.

However as 11th June and the implementation of Visa-free is perhaps more symbolic than anything else in manifestation, the 1st September/1st October, when a reader can reasonably expect the Association Agreement to finally take full effect, is far more structural.  In fact it is all structure and process reliant on legislation, regulation and implementation.

How swiftly the political shine wears off of the day to day slog in meeting Ukrainian obligations under the Association Agreement will be as interesting to observe as the political populist electioneering that will have be contained within ratified Ukrainian obligations.

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Shuffling behind the Bessarabian curtain?

May 29, 2017

Igor Kononenko.  That is a name that featured regularly in blog entries until January.

The last entry mentioning him related to his entering into battle, and apparently emerging victorious, with Alexander “Angel” Angert (Odessa’s Don of Dons) over the future ownership of Odessa CHP plant.

Subsequent to that apparent December 2016 victory over Mr Angert, in January 2017, Igor Kononenko, a man known to be President Proshenko’s parliamentary “leg breaker”, managed to mysteriously imbibe a very unhealthy quantity of mercury.  Coincidence perhaps.

Albeit behind the curtain Mr Kononenko did not disappear, a seemingly (and perhaps necessarily) slow recovery has resulted in a much lower media profile for Mr Kononenko thus far this year.

That however may be about to change if the current shuffling behind the curtain is any indication.

Going back to the last parliamentary elections, the political party Nash Krai was created – and to be blunt it was created with Bankova/Presidential Administration assistance.  It is a party of mainly ex-Party of Regions politicians then specifically designed to split the Opposition Block (remnant of Party of Regions) constituency vote.  A classic divide and conquer.  And it worked.

Despite this technical party requiring to appear independent, thus formally headed by Alexander Feldman, Yuri Granaturov, Anton Cisse/Kisse, Anatoli Mazarchuk and Sergei Kaltsev it was an authorities project.

Longstanding MP Anton Kisse/Cisse has oft appeared within the prose of this blog, being the unofficial Tsar of the southwest of Odessa Oblast and leader of the Bulgarian diaspora (since the mysterious and permanent disappearance of Theodore Karazhekov, the first Bulgarian diaspora leader in the 1990’s when Mr Kisse/Cisse decided he wanted to head the organisation).

The blog has regularly, and deliberately quite bluntly, strongly hinted at what can be described as his less than robust support for Ukraine in comparison to his attachment to a “Bessarabian” rebirth.  That his business (and “business”) would suffer from a detachment from Kyiv is perhaps the significant factor in his participation in a technical political party associated with the current occupants of the Bankova and Presidential Administration – and the reason his occasional stoking of ethnic fires is carefully managed.

Up until know it has been strongly rumoured that the Bankova/Presidential Administration liaison/point man/coercer responsible for “influencing” Nash Krai was Vitaly Kovalchuk (Deputy Head of the Presidential Administration).

That role at some point over the past week or two has seemingly been surrendered by Mr Kovalchuk and the new incumbent is Igor Kononenko.  (No doubt Mr Kolvalchuk’s “skills” will be employed elsewhere – a Radical Party gravitating toward Rinat Akhmetov perhaps.)

Having already stated in numerous historical entries that Mr Kononenko is viewed as the President’s “leg-breaker” within the Verkhovna Rada, a reader might expect his “influencing” within Nash Krai would be somewhat “aggressive” upon taking on this new role – particularly toward those within the Nash Krai ranks that are perhaps not quite as patriotic as they might and/or should be.

Thus it comes as no surprise that apparently a criminal case against Anton Kisse/Cisse has been opened, coincidentally (or probably not) shortly after Mr Kononenko assumed the role of Nash Krai curator.

The rumour mill seems undecided as to what, exactly, that criminal case is – only that there be a case opened.  On checking the NABU website at the time of writing there appears to be nothing – so perhaps it is not corruption related but rather purely criminal and thus is being investigated by more manipulable agencies than NABU.

Naturally Mr Kisse/Cisse holds parliamentary immunity (and impunity), but if Mr Kononenko is genuinely going after him then sufficient votes will be found to remove that immunity.  Clearly Mr Kononenko would seemingly prefer a more loyal, subordinate and patriotic MP.

Quite who could stand and beat Mr Kisse/Cisse in southwestern Odessa is unclear – so perhaps putting Mr Kisse/Cisse in a position where he cannot stand is a prerequisite.

If rumour be true, how his constituents and the ethnic Bulgar community would react will be interesting.  Will it become combustible (Mr Kisse/Cisse is no stranger to controlling “sporty young men with a tendency toward (paid for) violence) or will it be a case of the “Tsar is dead – Long live the Tsar” when he is replaced?

For the record, his rival BPP electoral candidate at the last election is widely believed to be an agricultural VAT corruptioneer – among other suggestions of nefariousness.  Thus, no differently than Mayor Trukhanov where BPP also had no good candidate to run, grubby deals had to be made considering the circumstances at the time and the strategic (and criminal) importance of Odessa.

Whatever the case, if Mr Kononenko is intent on ridding Nash Krai of its less loyal members and replacing them with “more suitable” candidates, Mr Kisse/Cisse will not be the last to see the attentions of Igor Kononenko.  The intended tighter leash over Nash Krai as a voting block both nationally and particularly locally will be forthcoming, particularly should “big names” fall asunder.

It is perhaps the local governance, where Nash Krai does very well in numerous locations across the country, that a reader should ultimately look – for in these days of decentralisation there is much to gain by controlling those that control local budgets and reap the rewards of regional inward investment.

Thus, whilst rumour would have eyes watching Anton Kisse/Cisse as a Nash Krai sacrificial lamb upon the alter of Mr Kononenko – as always follow the money!

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Avoiding awkward and unpredictable public auctions – Odessa

May 28, 2017

Odessa City Hall owns a lot of historical buildings in the city centre.

Criminally orientated local city governments past have however managed to refrain from blatantly flogging off these historic buildings via opaque methods on a large scale.

No longer.

The current Odessa City Hall governance, under the leadership (or perhaps management) of Mayor Trukhanov, a man whose organised criminality is no secret, is now selling off prime historical publicly owned buildings in the city centre – and doing so whilst avoiding those awkward, unpredictable public auctions.

Naturally the claim by City Hall, no doubt with some merit, is that the maintenance of these properties is an expensive undertaking and that such costs can be both saved and passed on to new owners whilst also putting funds into the City coffers.

Well fair enough if that be the policy and there are no significant public objections – on the proviso that any new owner is lawfully obliged to maintain the architectural integrity of the buildings they purchase and/or the overall architectural ambiance of the immediate vicinity of their new acquisitions in the historical city centre.

However, it is the manner in which these sales are made that catches the eye – namely the willful avoidance of unnecessary publicity and public auction of public property.

The City Hall scheme is not only apparent, it is in fact blatant.  It is the most blatantly dubious/nefarious property scheme since the most obvious and impressive fraud conducted under Mayor Trukhanov’s tenure was rudely waved in the face of the local tax-paying constituency.

The current nefarious scheme works thus – Prime historical property owned by the City/people and managed by City Hall is leased to (often offshore, but not exclusively) companies for a period of 7 – 10 years at the decision of City Hall.  In short it determines who gets to lease what – as expected for a city administration.

For those readers now considering the possibilities for corruption in leasing allocation – hold that thought.

As part of the lease, within the clauses can be found the right to first refusal when it comes to any future purchase during the validity of the lease.

Within weeks of leases being signed, City Hall then makes the decision to sell these leased prime location historical premises.

The new tenants eagerly invoke the first refusal right to buy clause, happily meeting the often low valuations of City Hall.  Indeed the new owners are undoubtedly “very grateful” and “willing to show their appreciation” to those that facilitated such acquisitions.

In short, City Hall chooses the property, those who it leases too, and ergo who it will sell these properties too while avoiding any unnecessary publicity, and critically any public auction requirements – all under the veil of saving public funds.

Taking the last six weeks as a petri dish, Grecheskaya 40 was leased to Jacksonville LLC on 11th April.  A mere two weeks later the decision to sell was made and Jacksonville LLC bought the premises – no public auction and no public discussion.  Jacksonville LLC only two days ago leased neighbouring Grecheskaya 20 – clearly there will soon be a decision to sell that too – and guess who will buy it?

Also in the last six weeks Potoki House on Primorsky Boulevard was leased by Invest Development LLC, 1 Chernomorka, recently leased by Cano Trade, will be placed for sale imminently by City Hall.  Having leased Varna 27, Transkomstroy LLC are about to benefit from a decision to sell that premises too.  How fortunate for Transkomstroy that a previous lease at Varna 27/1 was recently put up for sale and bought by them.  Another beneficiary in the past six weeks is Kirillov AV who no sooner leased Propsect Freedom 95 than were presented the opportunity to buy when a decision to sell was made – again without public auction unpredictability and transparency.  Langeron 1/1 leased so recently the ink must still be wet will now also be sold – no doubt to the “lucky” restaurateur that leased it.

Widening the time frame aperture simply lengthens the list of property leased and then almost immediately put up for sale and subsequently sold to the very recent tenants.

Clearly it is a dubious scheme denying public auction and transparency at best, if a reader were to take a charitable view.

For those that fully recognise Mayor Trukhanov and numerous highly placed City Hall officials for what they are then naturally there will be no charity when viewing such a blatantly nefarious scam.

Prima facie (any backhanders aside) this is entirely legal – as the best criminal conspiracies always are.

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Ukraine begins a NatSec policy push-back against The Kremlin?

May 27, 2017

Interesting (and many will claim long overdue) events are occurring with regard to the tesserae that make up the mosaic of Ukrainian national security push-back against Kremlin active measures.

They will be viewed by many, quite genuinely (perhaps more so from without rather than within the Ukrainian domestic constituency), as troublesome through lenses (universal freedoms and domestic politics etc) other than national security.

Rightly policy cannot be viewed through a single lens – it is the role of government to decide the view through which lens takes priority – at least as far as the official narrative is concerned (regardless of any other beneficial or counterproductive overlap).

The trade off between national security and freedoms (and domestic political repercussions), which rub against each other continually in many nations, will be subjected to scrutiny – intensified in Ukraine despite, or because of, the on-going physical and bloody war of exhaustion in eastern Ukraine and the equally hostile and continuous diplomatic, economic, social, cultural and cyberspace offensives against infrastructure and psychological operations (notwithstanding the occasional reflexive control operation for good measure).

Ukraine has long since banned many Russia TV stations and radio stations from broadcasting across the nation.

Broadcasting in the Ukrainian language have seen quotas introduced via statute for both national and local media (as does France for example).  Almost all broadcasters comply with existing statute – there is no reason to believe that almost all will not comply with future statute.

There are some notable national exceptions such as Inter (for obvious reasons) and, perhaps also TCN.

However, over the past 10 days Ukraine has moved to ban, and in doing so at the very least place hurdles in the way of accessing, Russian dominated (and security services associated) social media websites VK (VKontakte) and Odnoklassniki, as well as Mail.RU, Yandex, Kaspersky and 1C.

Many will view this as an attempt to de-Russify the Ukrainian Internet space – not necessarily for national security reasons claimed – but they are nonetheless unable to entirely dismiss that official narrative as it is well known that the Russian security services have unhealthy relationships with such software.

A list of at least 20 websites with distinctly anti-Ukrainian content has now been forwarded to the NSDC with a request to ban access to them in Ukraine.

A reader can make arguments for not restricting them – Let’s turn to the European Court of Human Rights as see what they have to say – “… tolerance and respect for the equal dignity of all human beings constitute the foundations of a democratic, pluralistic society. That being so, as a matter of principle it may be considered necessary in certain democratic societies to sanction or even prevent all forms of expression which spread, incite, promote or justify hatred based on intolerance…”

However with a weighty caveat, the ECfHR goes on to say, ”the Court is also careful to make a distinction in its findings between, on the one hand, genuine and serious incitement to extremism and, on the other hand, the right of individuals (including journalists and politicians) to express their views freely and to “offend, shock or disturb” others. – (Chamber judgment Erbakan v. Turkey, no. 59405/00, § 56, 6.07.2006)

Or a reader can make equally reasonable arguments for blocking them, for there are limits to tolerance – “Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them. – In this formulation, I do not imply, for instance, that we should always suppress the utterance of intolerant philosophies; as long as we can counter them by rational argument and keep them in check by public opinion, suppression would certainly be most unwise. But we should claim the right to suppress them if necessary even by force; for it may easily turn out that they are not prepared to meet us on the level of rational argument, but begin by denouncing all argument; they may forbid their followers to listen to rational argument, because it is deceptive, and teach them to answer arguments by the use of their fists or pistols. We should therefore claim, in the name of tolerance, the right not to tolerate the intolerant. We should claim that any movement preaching intolerance places itself outside the law, and we should consider incitement to intolerance and persecution as criminal, in the same way as we should consider incitement to murder, or to kidnapping, or to the revival of the slave trade, as criminal.” – Sir Karl Popper

Thus the banning of certain websites is perhaps a logical progression of the official (rather than other and/or additional) rationale behind banning VK and Odnoklassniki social media is that of national security and hostile Russian societal penetration.  How could access to distinctly anti-Ukrainian websites continue to be acceptable and not appear to be a half-arsed policy after the social media bans?

If the listed websites are to be banned, a reader can be fairly sure that such a policy will become something akin to “wack-a-mole” with websites no sooner being banned than new ones appearing.

It is perhaps far more difficult to deal with, and “wrap up/roll up” virtual networks than physical ones.

It is also unclear just how effective Kremlin on-line attempts to warp the Ukrainian constituency thinking has been.  Naturally it is impossible to refute every Kremlin lie, manipulation, half-truth and otherwise subversive prose relating to Ukraine and/or its leadership that is emitted.  That is equally true of attempting to ban such efforts.  Of course the biggest and boldest of lies and bizarre framings must necessarily be rebuffed and debunked, but in doing so the content (and context) also requires robust and continuing framing as part of an on-going assault upon Ukraine with as much vigour and attention to detail as that afforded to the debunking.

Ergo the effectiveness of the newly launched on-line policy will be somewhat subjective when those that continue to gain access to that which is banned do so for the same questionable reasons they did before, whilst other benign souls that were never a national security risk simply move to alternatives.  Indeed how policy success will be measured remains unclear with regard to national security outcomes 3 years and counting into an on-going war.  Better late than never?  Or better never late?

The Verkhovna Rada legislature has within its number those that have over the past week raised the possibility – to be clear only a possibility – via Draft Bills 4128 (providing statute to facilitate congregational moves from Moscow to Kyiv patriarchate – which is already occurring de facto) and 4511 (which for far too many oversteps the boundaries of State and Church secularisation despite known Russian security service infiltration) of eventually passing legislation that would directly confront the influence and reach of the Moscow Patriarchate of the Russian Orthodox Church in Ukraine (albeit wrapped in wording to avoid such obvious intent).

As Visa-free travel with the Schengen nations of the European Union commences with effect from 11th June, calls are now mounting within the Verkhovna Rada to introduce a Visa regime with Russia – naturally for reasons of at the very least controlling continued infiltration and criminality from a very hostile northern neighbour.

Detractors will naturally cite large numbers of Ukrainians that, with almost guaranteed reciprocity, would require Visas for Russia.  Bureaucratic casualties in an on-going war on many fronts.

Whether the introduction of Visas for Russians (perhaps going someway, indirectly, to meeting the designs of Draft Bill 4511) and facilitating statute (Draft Bill 4128) for patriarchate loyalty swaps become a legal reality remains to be seen, but a reader may ponder quite rightly whether these proposals would actually provide a far greater national security gain than policy that prima facie seeks to free Ukrainian Internet space from Russian influence 3 years into a war and that may well be past its peak influence operational effectiveness.

If influence operation effectiveness past its peak some years ago in Ukraine, do not the physical networks become more of a national security priority?

Peering through other lenses, those of domestic politics and universal freedoms, naturally provides a different view of events – so it remains to be seen whether tackling the physical infiltration networks will be viewed in a similar way to that of the virtual when consideration should be given to domestic political timetables.

Nevertheless the tesserae are there to be seen even if not yet placed (ill-fitting or not) into the UKrainian national security mosaic..

The question is what the mosaic presents to a reader when viewed – and for those that prefer black and white imagery, it would be wise to recall R v Turnball.

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NABU Auditors – Again

May 26, 2017

Several entries in February, March and April have appeared regarding shenanigans surrounding the on-going (and overdue) appointments of the external Auditors for the anti-corruption body NABU.

All 3 entries relate to the appointment of the Verkhovna Rada candidate, and not that of President or Cabinet.

Needless to say a feckless Verkhovna Rada has still to nominate a candidate behind which a minimum 226 votes will gather.  Presidential nominee is also in-waiting.

However, the Cabinet of Ministers on 26th May unanimously backed one of twelve nominees as its NABU auditor.  The Cabinet of Ministers NABU Auditor will be Mikhail Boromensky.

Professor Boromensky is a member of the National Academy of Legal Sciences of Ukraine and a lawyer – not to mention somewhat known in the public realm too.  Perhaps somewhat reassuringly, as unanimous votes often raise a cynical eyebrow, is that his nomination was supported by GRECO Ukraine, the OSCE, and the Ukrainian Helsinki Human Rights NGO – three trusted organisations within the nation – three fairly well trusted organisations within the nation, perhaps more so than the candidate and certainly more o than the Cabinet of Ministers..

It now falls to the Presidential Administration and the Verkhovna Rada to nominate, prima facie, equally morally upright candidates so that the overdue statutorily required NABU audit can at the very least begin this year – if the woolly statute can be clarified sufficiently enough to decide what falls within and without the scope of the audit.

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Oppo Block banned from local governance in Chernivtsi

May 25, 2017

Oppo Block aka Opposition Block, the political party that is effectively the remnants of the Party of Regions (at least for those who did not find alternative political homes) upon whose party colours and parliamentary support former President Yanukovych pillaged the nation, has been banned by the Chernivtsi City Council.

That is not to say it has been banned from political activity in Chernivtsi, but on 25th May the city council debated, amended, and ultimately passed a motion to lustrate Chernivtsi City Hall of all former Party of Regions and Communist Party politicians.

The trigger for the move was the appointment of former Party Regions member Yaroslav Kurshniryk as Director of the Department of Housing by former Communist Party member Mayor Alexie Kaspruk – of whom it is alleged both are so crooked that they could not lay straight in bed.

Further the ban apparently extends to those who were assistants to former Communist and Party of Regions politicians.

Naturally there will be legal appeals, and legitimate issues of democracy no doubt raised – for all were elected to the Chernivtsi City Council – despite any horsetrading and/or dubious appointments to strategic positions once elected  (not withstanding the Mayor who was directly elected into that specific  office) which are clearly the bone of contention that brought about these events.

Regardless of whether, or rather when, this local lustration initiative is overturned, it will be interesting to see whether other city council’s follow suit in order to make and/or score political points (regardless of the legalities or friction with the democratic normative that will ultimately overcome such decisions).

Nevertheless, it will be an event that will undoubtedly bring a wry smile to many across the nation while it lasts.

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