Archive for May, 2017

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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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Nationwide sweeps and arrests across Ukraine

May 24, 2017

One thousand seven hundred SBU and police officers together with 500 prosecutors across Ukraine carried 454 searches on 24th May.

Millions in cash was seized.

A major operation relating to an on-going criminal investigation of Alexander Klimenko, (formerly in charge of revenue collection under disgraced ex-President Yanukovych) was the reason behind these events.

23 former regional heads of tax collection agencies were targeted – as of the time of writing at least 11 had been arrested and all immediately taken to Kyiv.

These arrests occurred from Luhansk to Odessa and everywhere in between.

The operation prima facie appears to be a success about which the Interior Ministry, PGO and SBU will rightly be proud.

There are however several “buts”.

Firstly it remains to be seen whether the courts will actually detain those arrested, or grant them bail and the opportunity to disappear leaving only the option of trial (and conviction) in absentia – thus denying the Ukrainian constituency their right to see those responsible for gargantuan theft physically jailed for a long time.

Perhaps much more importantly however, is that this well coordinated nationwide raid relates to events that are historical – and not contemporary.  In short it is action whilst unquestionably rightful that is taken against criminality past, and once again not contemporary and on-going criminality.

How many readers would expect the Interior Ministry, PGO, NABU and SBU to come away without large cash seizures and multiple arrests if the current leaders of State authorities (tax or otherwise) were subjected to a similarly well coordinated and executed raid across the entire nation?

There can be little doubt that the natural cynicism ingrained within Ukrainian society will soon begin to fill the social media space predicting approximate dates for similar raids 5 years hence to catch those currently in charge – perhaps with insufficient recognition of the success of these raids.

Congratulations are certainly due to Arsen Avakov and Anatolii Matios for a well coordinated and executed operation.  The more nationwide operations are carried out, the more seamless they become.  Without doubt the prosecution of those that formed an important and integral part of the “grand theft machinery” of the Yanukovych regime should be pursued and prosecuted.  Historical criminal wrongs should be subject to trial (and retribution).

However let us not pretend that investigating and perhaps righting historical wrongs (due process depending) equates to dealing with contemporary and on-going criminality within the same institutions.

Similar operations regarding contemporary criminality would send a rather different message throughout both institutions of State and also within the Ukrainian constituency.  Let us not pretend otherwise.

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Taras Kutovy resigns as Minister of Agrarian Policy & Food

May 23, 2017

23rd May witnessed the resignation of Taras Kutovy as Minister of Agrarian Policy and Food, a post he has held for 1 year and 1 month.

Mr Kutovy requested the Verkhovna Rada vote to accept his resignation – and whether they do or do not, his forced labour is obviously not an option.

His resignation comes as two Draft Bills (5535 and 5535-1) relating to creating an agricultural land market make their way through the procedures and protocols of Verkhovna Rada Committees prior to any vote.

A reader should note that whilst the Verkhovna Rada votes for changing the pensions system are just about there or thereabouts, votes for creating an agricultural land market from 1st January 2018 when the current moratorium expires – are not.  At least not yet.  Selling Ukraine’s exceptionally fertile black soil to foreigners is an emotive subject – unlike the current long term leasing arrangements.

For those interested in the differences between Draft law 5535 and 5535-1, of most significance is foreign ownership and how and when that can occur.

Draft Bill 5535 allows for foreign ownership after 2030 – a sufficiently long period for Ukrainian farmers and the oligarchy to robustly position themselves prior to any sales to external agricultural corporations.

Draft Bill 5535-1 allows for ownership only by Ukrainian citizens and/or Ukrainian registered companies with effect from the 1st January 2018 moratorium ending – but at least 51% of the shares of Ukrainian companies must be owned by Ukrainian citizens.  Ergo a minority 49% share of the Ukrainian registered company can be owned by foreigners.

In short neither Draft Bill creates an entirely free market when it comes to creating an agricultural land market in Ukraine.  Neither provide for foreign controlling interests.  (Whether either Draft Bill would suffice in satisfying IMF requirements remains to be seen.)

However, as vaunted as an economic driver as the creation of an agricultural land market is – even if entirely open to foreign ownership, there is perhaps a need to temper expectations.

Currently both foreign and domestic (many of which have significant foreign shareholders) agri-corporations lease truly vast areas of agricultural land on very long term lease agreements.  How likely is it that they would rush to buy what they already contractually lease far into the future?

Not only do the leases last far into the future, often those leases have already been paid for far into the future too.  (No doubt an insurance policy against swift and feckless policy changes under innumerable unstable Ukrainian governments past.)

That said, there remains equally vast areas of agricultural land that could be sold per Draft Bill 5535 or 5535-1.  It could however, also be leased per current practice avoiding the foreign ownership issues restrained within either Draft Bill.  Perhaps the creation of a agricultural leasing market instead of, or in parallel with a sales market would provide maximum market participation possibilities and prospects for entry?  If so, what tweaking to existing leasing statute would be required – if any?

Ergo a Klondike-esque agricultural land rush when a market is created may not be particularly Klondike-esque – whichever Draft Bill gets through the Verkhovna Rada and becomes law (if either manage to do so).

All of this brings about a return to the resignation of Mr Kutovy – and in particular the motivation for resignation after 13 months in the job, and 6 months prior to the current agricultural land sale moratorium ending.

It may be that he does not want to be the Minister if the Draft Bills crash in the Verkhovna Rada, he may not support either Bill and thus painted as the Ministry that derailed further IMF cooperation (although the NABU wiretapping requirement of the IMF is equally likely to have extreme difficulty getting through the Verkhovna Rada too).

However, a cursory glance at Mr Kutovy’s career history prior to entering politics and government outlines a successful private career in financial investment – 5 years at XXI Century Investment,  1 year with Rise, and on-going relations with Global Holdings.

Mr Kutovy within his resignation letter states “I believe that I have enough knowledge, energy and strength to do more for Ukraine, in the near future I plan to focus on attracting investment in Ukraine.”  

A cynical reader may well perceive that to be a return to the private sector with the specific intention of maximising ministry attained knowledge facilitating seamless entry for foreigners into a newly born agricultural land market – with healthy fees for such skillful assistance.  (That not withstanding the insights gleaned regarding SOE privatisations as a Cabinet member.)  Thus resigning 6 months prior to the land moratorium ending is perhaps deemed a suitable distancing in time.

Lo, a cynical reader may perceive this resignation as little more than a preparatory move purely for the benefit of Mr Kutovy rather than for the benefit of Ukraine.  That is not to say they are mutually exclusive, but nevertheless more a deliberately engineered framing and timescale designed to avoid allegations of corruption or conflicts of interest where riches await.

If viewing this resignation through that lens (as cynical as that may be), then it would suggest that Mr Kutovy sees a more than reasonable chance that of one of the Draft Bills will manage to find (by hook or by crook) sufficient votes to be forced through the Verkhovna Rada prior to 1st January 2018 – and looking at the detail within those Draft Laws, 5535-1 would perhaps have the edge when it comes to his motivation.

Naturally it also raises the questions as to who (as he runs from the Klitschko stable) will replace him – and whether this is a permanent or temporary leave of absence from top table politics for Mr Kutovy.

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Shuvalov PNG’d from Ukraine

May 22, 2017

In a dark and murky private corner of the Internet today there was a discussion regarding Timothy Ash’s tweeted prediction that Svyatoslav Vakarchuk (singer of Okean Elzy) would be the next president of Ukraine in 2019.

In that dank and dark corner of the Internet, his prediction was, to be blunt, hardly treated as either insightful (others with a far better knowledge of Ukraine have muted the idea long ago) nor particularly realistic (as others with a far better knowledge of Ukraine have also opined).

That said there are 2 years until the election.

However whilst Mr Vakarchuk is undoubtedly a popular artist (and a nice guy), a reader will not have been blind to an increasing perception among the Ukrainian constituency that much of the national media is becoming more and more aligned toward President Poroshenko.

The only two national TV stations that visibly buck that trend are NewsOne (owned by Evgen Muraev, leader of the political party Zhittya together with Vadim Rabinovych) and Inter (owned by Oppo Block financiers Sergi Liovochkin and Dmitry Firtash).

This perceived slow, and for many somewhat dubious Bankova influencing to at least create neutral if not favorable national TV stations toward the current leadership thus means that at the time of writing Mr Vararchuk would struggle to gain similar exposure to the electorate (despite his quite literal rock star status) with associated results at the ballot box.  He also presents no good option for those that run Inter and NewsOne.  (Thus a Tymoshenko platform they seem likely to become.)

With VK and OK also restricted on the social media scene, further Kremlin friendly narratives are theoretically reduced too.  By “Kremlin friendly narratives” a reader may infer anything that progresses the Kremlin objectives rather than any official position or specific active measures.

Leading Inter as head of information and therefore continuing a narrative favorable to Kremlin interests is Russian citizen Igor Shulalov.

Thus as the perception of national media influencing increases under Bankova guidance, and adding the very recent barring of VK and OK social media in Ukraine, the more cynical readers will perhaps be less than surprised to learn that after several failed attempts, Ukraine has finally made Igor Shuvalov persona non grata (PNG) for a period of 5 years.

As an entry from September 2016 made clear, Igor Shuvalov is not an “interesting person” but rather a “person of interest” – which is not the same thing at all.

“For those that know little about the workings of Ukraine behind the curtain, a few lines deserve to be dedicated to Mr Shuvalov.

Igor Shuvalov

Mr Shuvalov has long been a discreet but permanent part of the Sergei Lyovochkin political furniture.  Mr Shuvalov is also a Russian citizen and a product of his nation’s secret services – a somewhat disturbing if unsurprising fact considering Mr Lyovochkin was former-President Yanukovych’s Head of the Presidential Administration perhaps – but Mr Shuvalov has a much longer history behind the Ukrainian curtain.

Mr Shuvalov arrived upon the Ukrainian scene in (or certainly by) 1998 as a political consultant for Viktor Pinchuk, son-in-law of then President Kuchma.  Indeed then President Kuchma granted Mr Shuvalov Ukrainian citizenship during the 2002 – 2004 period Mr Shuvalov was working with Viktor Medvedchuk (who is godfather to one of President Putin’s daughters).

That Kuchma granted Ukrainian citizenship was subsequently canceled by Presidential Decree when Viktor Yushenko came to power.

Mr Shuvalov then began what became a very long association with Sergei Lyovochkin – which needless to say brought him into the close orbit of Viktor Yanukovych, Dmitry Firtash and the very elite top tier within the now extinct Party of Regions.

Given the close and long term association between Messrs Lyovochkin and Shuvalov, few will therefore be surprised to find Mr Shuvalov has been instrumental in his “political technologist” role behind the Ukrainian curtain in assisting political projects sponsored by Mr Lyovochkin that go beyond the former Party of Regions and now Opposition Block.  The fingerprints of Mr Shuvalov can indeed be found upon the formative days of the Radical Party  as well as Inter TV messaging too.

Twice since the fall and ouster of the Yanukovych regime efforts began to remove Mr Shuvalov from Ukraine.  The first effort by the temporary leadership immediately following the ouster fell between the cracks, and the second effort was scotched by Mr Lyovochkin within the SBU ranks.  (An indication of the loyalty between the two men that surpasses any common cause/belief.)”

Many will, perhaps rightly, consider Mr Shuvalov more than a “mere” agent of influence.  Many will consider him, again perhaps rightly, an officer of the Russian Secret Services (whether they argue over the badge worn being SVR or FSB)..  His 5 year PNG will no doubt be welcomed by many – however that does not prevent him continuing in his role at Inter – even if from within the Russian Federation.

The question to be answered is if he continued in that role virtually/remotely  will that present problems for the Inter channel – or not?.

Few cynical readers would be surprised if his continued involvement led to attempts to remove the broadcasting licence of Inter (prior to elections in 2019).  Indeed the cynical no doubt would not be surprised to see attempts to “externally manage” (by whatever methods) Inter’s current messaging, or that fails, simply prevent them.  (In short Mr Lyovochkin and The Bankova reach an agreement- or not).

Time, as it always does, will tell.

In the meantime, after two failed attempts to PNG Mr Shuvalov, this time on the third strike, he’s out.  (But don’t expect Inter messaging to change any time soon).

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Ukraine decriminalises drug possession?

May 20, 2017

On 20th May, the Cabinet of Ministers in Ukraine were picketed regarding the decriminalising of prohibited drug possession.

That is not to say it would legalise drug possession.  It will remain against the law to possess controlled/prohibited drugs.

What changes with any decriminalisation are the penalties and how offenders are dealt with.  Police may use their discretion to enforce drug related statute relating to possession of a controlled substance – or not.  Discretion is a matter for the individual officer dealing with the offence/offender.

One office may confiscate the prohibited substance and simply drop it down the nearest drain.  Another may confiscate it, log it into the property store at a police station for destruction without actually dealing with the offender on an official basis – perhaps stating the substance was found in the street or in a bar on the floor where ownership could not be ascertained.  Yet another may decide to complete the paperwork and take the matter to a civil court (as criminal courts would be excluded by virtue of decriminalisation) whereby fines may be the outcome for the offender – but naturally no criminal record as the offence is no longer a crime.

Thus although a certain amount of discretion should always rest with a police officer to decide what to do in any given circumstance, it follows that in order to approximate/standardise the policing response to this decriminalisation of controlled substance possession, guidelines will have to follow.

Clearly it has to be made clear which drugs are subject to possession decriminalisation?  Cannabis?  Heroin?  Cocaine?  Amphetamines?  Barbiturates?  LSD?  Micro Dots?  Are there any sub-categories within that possession remains criminal?  For example a THC limit within the cannabis?  How would an officer be able to check without expensive laboratory tests – or does it matter in small quantities?

Is there a difference between possessing amphetamine for oral consumption or for injection if an offender is caught in the act of use?

How much (in weight) equates to personal possession and therefore a civil prosecution, rather than a criminal prosecution?

Should it solely be a matter of weight of the controlled substance when deciding “personal use” and criminality – or not?

What if a decriminalised weight is so packaged as to be able to be dealt to others?  It is then a matter of mens rea – or intent.  Possession with intent to supply has not been decriminalised.  However, the criminal dealer may sell their illicit wares so packaged and the user may have little option to buy so packaged in a number of packages/wraps with no intent of purchase other than personal (now decriminalised) use.

How will a police officer know a drug dealer that carries only the decriminalised weight and leaves the bulk stashed somewhere – other than being caught in the act of selling, or timely and expensive surveillance to prove criminal supply?

How many associated drug possession searches of property not in physical control of the offender when caught will no longer carried out may result in lost prosecutions for dealing when larger quantities?  What will the guidelines say?

Will instances of driving whilst under the influence of controlled/prohibited drugs increase when possession is no longer a criminal offence?  Will such statistics be collected?  Are there statistics to compare against?

What is the Cabinet rationale for decriminalisation?

Is it to to free up police officers time to deal with other more serious criminal matters?

If so how much policing time is spent dealing with (now decriminalised) possession for personal use?

Across Ukraine in 2016, approximately 5000 people were arrested for personal use possession.  729 people were arrested for offences of possession with intent to supply, supply, and yet more serious drug trafficking offences.

As decriminalisation does not equate to legalisation, and therefore the avenue of civil prosecution still remains, will police officers actually use their discretion sufficiently to radically reduce the 5000 prosecuted for possession last year?  (An incredible low number that in no way reflects the amount of “personal use” anyway.)

When does the decriminalisation take effect, and when will relevant national policing guidelines be circulated?

Is any future Cabinet decision to decriminalise possession of controlled substances made not on the issue of policing priorities, but rather to approximate with the norms across many (but not all) European nations?

If so, what lessons have been learned from those nations (if any)?

If it be to equate with (an unevenly applied) “European normative”, will the issue of prostitution be next on the Cabinet agenda – be it decriminalised or in fact legitimised and taxed as it is across some European nations?

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Lutsenko names the next MPs to face immunity stripping votes

May 19, 2017

Prosecutor General Yuri Lutsenko has named the next 3 Verkhovna Rada MPs that he will seek, via Verkhovna Rada vote, to remove immunity from and thereafter prosecute.

They are Gennady Bobov (Art. 212, 366 para 1 of the Criminal Code of Ukraine), Evgene Deyde (aka Dade) (Art. 368 para 2 of the Criminal Code of Ukraine ) and Andrei Lozov (Article 212, 368 para 2 of the Criminal Code of Ukraine).

Those acquainted with the politician class of Odessa will recognise the name of Eygene Dade and will not be at all surprised to see that the Prosecutor General wishes to proceed against him under Art 368 para 2:

“Art 368.2 – Taking a bribe of gross amount by an official who occupies a responsible position, or by a group of persons upon their prior conspiracy, or if repeated, or accompanied with requests of a bribe, –

shall be punishable by imprisonment for a term of five to ten years with the deprivation of the right to occupy certain positions or engage in certain activities for a term up to three years and forfeiture of property.”

Mr Dade is from Reni, Odessa Oblast, the son of a wealthy and influential man.  As is the want of many such son’s of rich and influential fathers, wayward was his course.  The usual border town smuggling and rumoured sale of State property swirled around Evgene, appearances before the court and the interceding of an influential father was required.

Moving to Odessa, Mr Dade became a police investigator in the Survorov District where within, according to media at the time, he and other investigators engaged in several robberies, eventually getting caught, and appearing before Survorov court.  Jail, however, was not the outcome for Mr Dade – again a reader may presume thanks to a father’s influence.

Let not the exuberance of youth, or a wayward path colour his future or a readers perception too soon, for when EuroMaidan/The Revolution of Dignity began, Mr Dade readily headed to Kyiv to support the westward-looking Ukrainian movement (not least a reader may suspect, due to a “personal” family dislike for former-President Yanukovych).

Nevertheless some equally unkind rumours of corruption, unwarranted violence, and shop looting surrounding the Maidan “self defence” unit that Mr Dade eventually commanded also surfaced.  Mr Dade, who then went on to become part of the Kyiv-1 Battalion, also managed to be involved in the tragic events of 2nd May in Odessa too – though to what degree is subject to much speculation and little public evidence.

Whatever the case, by October 2014 Mr Dade became a parliamentarian for the People’s Front, apparently cosseted under the protective wings of both Arsen Avakov and former MP Mykola Martynenko.  Perhaps as a result Mr Dade and his former Kyiv-1 Battalion chums are also believed to be involved in several “raids” on commercial interests (Hotel Lybid for example) and other acts on behalf of Mr Martynenko.

Mr Dade was no lover of Misha Saakashvili – as a reader would expect for somebody under an Avakov-Martinenko umbrella (for neither like Misha).  That said Mr Dade has a reasonable, or at least working relationship with Odessa MP Sergei Kivalov who was also no fanboy of the then Governor.  Whomever, of course Mr Dade is somewhat malleable material for such old hands, and thus Mr Dade was active in the toppling of “team Saakashvili”.

Malleable however, does not mean naive.

Together with Irina Suslova, Mr Dade managed to gain a reputation for selling both his parliamentary vote and his parliamentary lobbying, at one time with text messages displaying such bargaining floated around the internet and within the media.

Thus it is no surprise to see Mr Dade now subject to Yuri Lutsenko’s attention for corruption and bribery.

If his immunity be removed and he eventually leave the Verkhovna Rada, he will be of little loss to the tapestry of Ukrainian politics – thus far during 2017 Mr Dade has bothered to vote 58 times from 1312 votes (which does not make him the MP that has voted the least from Odessa – Messrs Matvychuk (4 votes), and Klimov (31 votes) have managed to vote on fewer occasions).

Grim as this read may be, Mr Dade and his parliamentary fate is not the point of this entry.  Whether or not Mr Dade will be stripped of his immunity and face due process for corruption and criminality remains to be seen.

Whatever the case, criminality and corruption are not treason – and it is the absence of another MP from Odessa upon the Prosecutor General’s list for immunity stripping that continues to catch the eye.

On 23rd September 2016, PG Lutsenko announced that within the next week he would be seeking the removal of Mykola Skoryk’s immunity.

When Governor of Odessa under President Yanukovych, Mr Skoryk on 19th February 2014 is strongly believed to have arranged the beating of  about 20 journalists, national and local, from across all political biases, who were covering a small “EuroMaidan” protest outside the Oblast Administration building, when about 150 men in helmets carrying baseball bats set upon them.  Naturally there were injuries and broken equipment belonging to the various media outlets.

Mr Skoryk and the then Deputy Chairman are believed responsible – and his co-conspirator has indeed been arrested (though as usual no court progress is visible).

On 3rd March 2014 when Novorossiya was briefly en vogue, per the Glazyev tapes, Mykola Skoryk convened an extraordinary session of the Oblast Rada with the intent of separating Odessa from the control of Kyiv (and a reader is well aware of what would have followed).  Fortunately that vote failed convincingly, thus closing the political avenues for such Kremlin machinations.

Once replaced as Governor, and prior to his election on the Oppo Block list to the Verkhovna Rada, Mr Skoryk was also apparently involved in the behind the curtain events leading up to the 2nd May tragedy in Odessa (though to be fair it is unlikely he foresaw the eventual outcome).

Other Verkhovna Rada parliamentarians have officially requested Mr Skoryk be investigated.

As of the time of writing, despite the 23rd September 2016 statement of Yuri Lutsenko, no attempt has been made to strip Mykola Skoryk of his MPs immunity, despite all the above.  That PG Lutsenko would make such a statement in September 2016 would infer that he had sufficient evidence to do what prosecutors do at that time.  We are to assume that now he doesn’t?

Why then is not an allegedly corrupt and criminal Mr Dade not accompanied by fellow Odessite MP Mykola Skoryk upon this list of MPs?

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