Posts Tagged ‘transparency’

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Odessa Port Side shuts down

December 30, 2016

Having twice failed to privatise the Odessa Port Side plant during 2016, and with debts mounting to creditors such as Naftogaz, the decision has been taken to temporarily, or perhaps better stated indefinitely, close the plant down with effect from 30th December.

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Valery Gorbatko, the plant Director since 1986 has resigned – which for any eventual buyer or State operational reshuffle/efficiency/transparency policy for the plant is no bad thing.  Accepting that resignation promptly would be a wise move.

From now the cost to the State will be dramatically reduced to those of maintenance and salaries – minor costs in comparison to running the plant with a (currently) low global demand for product and high gas demands to produce it.

It remains an open question as to when or even if a buyer (or long term leaser) will be found for Odessa Port Side.

Some 2017 national budgetary discipline implemented before 2016 has ended?

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The new Governor of Odessa is (not going to be a media celebrity) Maxim Stepanov

December 20, 2016

A few days ago an entry appeared listing the 31 candidates to replace Misha Saakshvili as Governor of Odessa, and within which made brief observation of the most suitable (and unsuitable) applicants.

After tests, situational tasks, and interviews a winner has emerged.

Maxim Stepanov scored the most points and is now awaiting presidential appointment.

Naturally Maxim Stepanov is not Misha Saakashvili and most readers will have never even heard of him.  The international media are unlikely to be beating down his door for an interview either.

So a few lines about Mr Stepanov.

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He is 42, graduated from Donetsk State Medical University in the late 1990s and then further studied International Economics at Kyiv National Economic University, completing his studies in 2004.

He has worked in both the private and public sector.  His early public sector resume consists of roles within energy.

The last decade has been spent thus; 2003/04 – Deputy Chairman of the State Tax Authority.  2004 -08, Chairman of the National Legal Union.  2008-10 Mr Stepanov was the First Deputy Head of the Odessa Regional Administration, thereafter Viktor Yanukovych came to power and he was banished from political life and exiled in a purely civil service role as the Director of Ukraine Printing Plant – the entity charged with producing passports, driving licences et al. – where he has sat ever since.

Clearly Mr Stepanov is a man well versed in Ukrainian bureaucracy and not indifferent to the politics of Odessa having previously spent 2 years within the Odessa Regional Administration.  Thus the tedious, systematic, boring and predictable work of a governor will no doubt be well within his grasp.

It now falls to President Poroshenko to appoint him and bring him in from political exile to fill the most senior civil service role in the oblast.

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A note to readers – You are all granted a 48 hour hiatus from the daily churn of the blog as your author will be traveling.

 

 

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Privat nationalisation and political weight loss

December 19, 2016

Ukraine has eventually taken the decision to nationalise Ihor Kolomoisky’s (and others) Privat Bank.

In some ways it is a surprise that the will to do so was actually found, despite that for more than 2 years everybody and anybody with any knowledge of Privat Bank has hardly been shy in opining that it presented serious risk to the Ukrainian economy and had it not been systemically vital to the Ukrainian banking system it would otherwise have been closed.

To a man/woman, of those spoken to one to one by the blog, be they politicians, economists, diplomats or international bankers, all recognised that the Privat problem had to be addressed and that nationalising it was the better of the options available – if the will could be found to do so.

Lo it has come to pass that 100% of Privat shares are now owned by the State.

How grubby the deal struck between Ihor Kolomoisky and The State is, remains unknown.  For a man like Ihor Kolomoisky to “voluntarily”  “sell” his shares to the State in what has been a significant political and financial lever over the State for him for many years with no gains to him pushes the boundaries of belief.  With the ability to simply put the Ukrainian banking sector into melt down, there is presumably a quid pro quo no matter how small yet favourable that may be in return for the “voluntary” handing over of all shares.

So be it.

Questions will undoubtedly be asked regarding the large amount of PrivatBank loans to its owners (Mr Kolomoisky and friends), other companies with the same owners, and to those associated with the owners, that have consistently been taken out with no intention of repaying them.

What is the exact cash figure these nefarious loans amount to?  What are the chances of those loans now being serviced and eventually repaid by those that took them and who are extremely skilled at historically saddling the State with their debts?

On balance, should a reader accept that those loans will probably not be repaid, thus in assuming these non-performing loans (debts) in however many $ billion they amount to, is that still a price worth paying to insure that PrivatBank can no longer collapse the entire Ukrainian banking system?

Even if agreements have been reached to now begin to repay these loans, the question is then over what period of time (in the unlikely event they will be repaid in full and in the spirit of any agreements made)?

The question presented is therefore one of short term (debt assumption leading probable loses when loans are not repaid) verses the medium/longer term view of what price is put upon insuring the entire national banking system will not collapse due to Prvat?

Financial issues aside, there is of course politics to consider.

The last time the nationalisation of Privat was mentioned by the blog in September, the politics were “Tymoshenko orientated”.  Mrs Tymoshenko is not in favour of the nationalisation of Privat as it doesn’t really work to her advantage.

Ms Tymoshenko aside, broader questions need now be asked about how the nationalisation of Privat changes the political and/or oligarch power dynamics with a major Kolomoisky lever now surrendered.

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Mr Kolomoisky can no longer use Privat as a personal piggy bank.  How does it change his ability to buy parliamentary votes for hire and/or buy entire political parties?  Will it effect any future voting outcomes?  To mitigate, will key voting personnel previously simply bought, now start to appear in Kolomoisky business structures instead for the purpose of leverage over their vote?

In short, just how much political weight loss has been incurred by Mr Kolomoisky – if any?

Without the “ace up the sleeve” of a persistent ability to cause national banking melt down, how does that effect the Kolomoisky position when negotiating how next to screw the State?

How will the rest of the oligarchy class react?  Will they make peace with the State or solidify around a common cause yet further in screwing it over?

How will this effect a poor presidential poll rating if he is perceived to have engineered the right thing for the country, or alternatively is perceived as having used his position to weaken yet another oligarch to his own advantage?  The two are not mutually exclusive, but that is how it will be presented.

Can Mr Kolomoisky now be certain that in what appears prima facie to be a weakened position, he will now not be called to account for innumerable scams and schemes over the years?  Was a de facto arrangement made that in effect grants amnesty via a promise of non-prosecution as part of the deal?  Are there other “compensatory” arrangements reached that will filter into the system over time that will be beneficial to Mr Kolomoisky’s other interests?

The repercussions of this nationalisation financially are on balance likely to be beneficial for Ukraine and the least worst option that could have been taken.  As long as Privat is managed prudently henceforth over the medium term this act is the most sensible option available.  In the long term, it would be wise to eventually return Privat to the private sector – once its systemic and internal risks have been mitigated against.

What is far less clear are the political and oligarchy/power behind the curtain repercussions.  It may be some time before those become fully evident.

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31 candidates to replace Misha Saakashvili as Governor of Odessa. Who’s who?

December 16, 2016

Although most readers will not be particularly interested in the replacement for Misha Saakashvili as Governor of Odessa, having written an occasional  few lines on the subject as potential candidates expressed interest, a full list therefore follows now that candidate applications are closed.

Surprisingly Pavel Zhebrivskyi, the former head of the Donetsk military and civil administration is not listed.  Sadly, for his eccentricity, flamboyance, questionably effeminate nature, and pure entertainment value Garik Korogodski is also absent.

Those successfully registering their candidacy are as follows (and appear in no particular order):

Igor Romanenko, Alexandr Vashenko, Alexandr Ostapenko, Sergei Pomazan, Elizabeth Pyshko-Tsibylyak, Volodymyr Levitskyi, Artem Vaschilenko, Vladislav Grigorchyk, Gennady Chekita, Dmitry Sokolyanskyi, Roman Saromaga, Anatoli Vorohaev, Volodymyr Gavrish, Yulia Melnik, Vasily Horbal, Igor Smirnov, Alexandr Tymoshenko, Valeri Stepanov, Dmitry Spivak, Maxim Berdnik, Oksana Tomchuk, Maxim Stepanov, Alexandr Vinglovskyi, Igor Skosar, Sergei Mazur, Petro Lykyanchuk, Hanna Trifan, Yevgene Chernvonenko and Yuri Chizhmar.

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The most (in)famous among the candidates was the first to throw his hat into the ring, Yevgene Chernovenko – a member of Tymoshenko’s first government and also a former Governor.  A man that if allowed to emerge the winner will have clearly have had to strike a deal with The Bankova to do so as his loyalty to the president is not exactly robust historically.

Gennady Chekita may have no loyalty issues as far as The Bankova is concerned (he is the MP for the Malinovsky district elected under Block Poroshenko and Verkhovna Rada Economics Committee member) but it is questionable if he will to be allowed to emerge the winner as it would mean a by-election for his single mandate seat – which may not go the way of Block Poroshenko.

Another current MP in the Verkhovna Rada is Yuri Chizhmar of the Radical Party – and therefore unlikely to get the tacit nod from The Bankova to emerge as the top candidate for a region as strategic as Odessa (both geographically and by way of large, healthy, illicit money channels).

The current Mayor of Balta, Sergei Mazur is also a candidate.

Also among those holding local governance office previously are former Governor Vasliy Horbal, former Vice-Mayor Anatoly Vorohaev, a former chairman of a Regional State Administration, Volodymyr Gavrish and former City Deputy Dmitry Spivak.  Also former Deputy Governor of Luhansk Elizabeth Pyshko-Tsibylyak.   Last but by no means least from the civil service , former Odessa Deputy Governor and Deputy of the Tax Administration Maxim Stepanov.  Also former Deputy Chief of Staff Lieutenant General Ihor Romanenko is noted for his inclusion, and before leaving matters military, “Cyborg” (Donetsk Airport veteran) Alexandr Tymoshenko also appears.

There are also several candidates from the current Odessa Regional Administration, Sergei Pomazan, Yulia Melnik and Volodymyr Levitskyi.

Of the remaining names of any note (without any research) Chairman of the Ukrainian Business Support Centers (and “widows son”) Artem Vaschilenko then leaves but one.

The last name is Alexandr Ostapenko a former City Deputy and former Deputy Head of the Regional State Administration.  Of all the names, prima facie, Mr Ostapenko is perhaps the individual most easily identified as suited to the methodical, systematic, bureaucratic, boring work associated with the office of a regional governor.

Nevertheless, who ever emerges from the “competition” to replace Misha Saakashvili will be ranked first and foremost by their loyalty to the president.  Any dubious history and their ability to do the job will be of secondary importance.  There is simply no way an oblast like Odessa will be allowed to have a governor that is not loyal to the president first and foremost.

All hats are now thrown in the ring and therefore a reader may perhaps tentatively decide to rank them by way of loyalty to the president, overt party affiliation (if any), and latterly ability, for within that scoring matrix is any real competition for the post.

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When no heads are better than one? Odessa

December 11, 2016

“Two heads are better than one” is an old idiom which can occasionally be true.

“Great minds think alike” is another – although perhaps “great minds generally think alone” is more accurate.

How about “No heads are better than one”?  It is an idiom that will probably prove to be true of the management of the Tuzly Lagoons National Park in Odessa.

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A competition was recently held by the Regional State Administration Ecology Department to transparently select a head of the aforementioned national park,  The incumbent for 30 years, Ivan Rusev decided not to take part in the competition for reasons of pride (it appears).  To be fair Mr Rusev he can take pride in what he has achieved during his tenure and perhaps considers himself to know far more about the ecology of the national parks in Odessa than those that would scrutinise his necessarily submitted documents, or ask him questions.

How costly that pride will be for the ecology and management of the national parks in Odessa region remains to be seen.

For those entering he competition for the position, it was scored from a grand total of 135 points.  The winner, Vitaly Chakir managed to score a miserable 42 points – or 31.1%

So either unprepared or simply clueless was Mr Chakir that he could not basic questions such as what an ecosystem is, or which fish, if any, live in the lagoons he will now apparently manage.

Indeed, even without such very basic knowledge and with his 31.1% score, Odessa Regional Authority Ecology Department has recommended he be appointed.

Lo, a reader is left to ponder just how abysmal a candidate must be before Odessa RSA will declare them to be so, or who is behind Mr Chakir and why?   (Rumour would have it Batkivshchyna local MP Mogilnikov for access to resources in the park.)

It is perhaps only in politics where such a dismal result and complete lack of professional understanding can actually mean victory – yet this is not a political position but one of civil service.

However because it is not a political position does not mean it is not a political decision within the RSA Ecology Department that Mr Chakir would emerge the winner – and that may explain why he simply could not even be bothered to attempt to do even the most basic of preparation for examinations and interviews.

Unfortunately, when those interviews hit YouTube then questions will be rightly asked how the appointment of such a clearly sub-standard candidate can occur.  Perhaps the Odessa RSA will now be shamed into reversing this decision and holding the competition again.  Perhaps the environmentalists of Odessa will create sufficient unfavourable noise that the Ministry in Kyiv will take note – particularly when the 15th December sees the closing date for candidates to replace Mr Saakashvili as Governor and eyes will inevitably turn to Odessa once again.

(Thus far there are 3 candidates for Governor – Alexandr Ostapenko, Garik Korogodski and Vasyly Horbal.)

However, for the professional and qualified staff that will now have to work under the guidance of Mr Chakir, clearly “no heads are better than one”.

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Drama (of the political sort) at the Russian Theatre Odessa

December 6, 2016

The Russki Theatre (Russian Drama Theatre) in Odessa is a longstanding and well known historical venue.

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Since 2002 it has been managed by Alyaksandr Kopaygora.

Mr Kopaygora is nothing short of a controversial figure.

To be diplomatic, his management of the Ruski Theatre is far more in keeping with his ideology than managing a premises called Ukrainian Theatre.  To be less diplomatic and somewhat more blunt and also accurate, Mr Kopaygora was a leading ideologue in Igor Markov’s “Rodina Party” in Odessa.

Mr Markov’s party was (it is now officially defunct) robustly pro-Russia.  Indeed Mr Markov is currently living in Russia and actively playing to the Russian propaganda narrative (as a reader would expect).   Mr Markov has stated he will not return to Ukraine for as long as it pursues its “European” trajectory.  (He is also wanted.)  Among that same ideological crowd is Anatoly Wasserman (a man considered by many to be far more odious than Igor Markov).  Messrs Wasserman, Markov and Kopaygora were all leading lights in Party Rodina.

The loyalty to Ukraine is therefore more than questionably thin as far as Mr Kopaygora is concerned for far too many local constituents, and perhaps nominally exists due only to the meager (official) salary he receives from the Ukrainian taxpayer via the State.

(Indeed his anti-Ukrainian activities were reported to the Ministry of Culture in 2015.  As usual when it comes to the Ministry of Culture there was no response – which is why historical architectural buildings in Odessa continue to be bastardised and/or destroyed under the management of a Luddite/Philistine Mayor of no vision, despite the Culture Ministry’s statutory obligations toward protecting many such buildings.)

The Regional State Administration (RSA) of Odessa announced a competition for Mr Kopaygora’s role as his term drew to an end.  Competition (and “competition”) for public roles is now very much en vogue – and for many public positions a matter of law.

Odessa is renowned  for many things, among which are its “intellectual set” and “arty crowd”.  As such there are numerous individuals of suitable calibre capable of managing the Russki Theatre – albeit another was lost to abysmal Ukrainian driving and/or roads only yesterday.  (RIP Dr. Yulia Gomel, composer of symphonies, ballet, chamber and choral music – undoubtedly a loss to the city and Odessa National Music Academy.)

The day the competition winner was due to be announced, 6th December, the Regional State Administration cancelled the contest for the position.

The reason being, it finally succumbed to public pressure.  The public pressure was not aimed at Mr Kopaygora directly – but at the “competition panel”, the composition of which was stuffed with associates of Mr Kopaygora and therefore clearly compromised as far as neutrality is concerned.

Whether a well placed rumour, or a genuine leak, it also became known that law enforcement agencies were quietly taking an interest in the process.  A reader may conclude that if being busted for corruption is a likely outcome, then being busted over a trifling matter of fixing the competition result for the Russki Theatre is probably not worthwhile.  The risk/reward simply isn’t there.

Ergo, 6th December instead of announcing the “competition” result (and probable continuance in the role of Mr Kopaygora), it was announced that the competition had in fact been cancelled.

In sum, a wise decision by those within the RSA.

Clearly efforts will be made to insure the next competition panel is perceived to be far less biased (at least prima facie) and if that be so then it may come to pass that the official relationship between Mr Kopaygora and the Russki Theatre that began in 2002 will ultimately faceits final curtain.

In the meantime as the festive season approaches, the show must go on.

 

 

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Personnel clashes within the Ministry of Infrastructure – Ukraine

December 5, 2016

All is currently not well within the Ministry of Infrastructure.  The Minister, Vladimir Omeljan on a matter of principle point blank refuses to work with the winner of the “competition” to become the State Secretary of the Ministry, Andrei Galushchak.

Regular readers will be aware, there are Ukrainian competitions and there are “Ukrainian competitions” when it comes to filling political and civil service positions.  With “Ukrainian competitions” a reader armed with a little knowledge of loyalties, and/or personal understandings with “the power”, and/or history with those at the top, can normally be successfully tipped to emerge the winner of a “competition”.

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With regard to the “competition” for State Secretary of the Infrastructure Ministry, the results were as follows:  The successful Andrei Galushchak 12.14 points.  In second place with 11.18 points was (former acting Deputy Minister, Chief of Staff Dmitry Romensky, with third place occupied by Oleh Mironenko with 9.46 points.  The “competition” based upon examinations, situational taskings and interviews.

Why would a Minister state “We will not work with him” when the winning candidate came first in the “competition”?  Upon what grounds would he publicly voice such an objection?

Mr Galushchak previously has held positions as Deputy Chief of Lviv Railways and Director of Air Express (a SOE).  Does experience in rail and air management not lend itself toward the Infrastructure Ministry?

The matter of any (proven or unproven) nefariousness and graft synonymous with holding lofty positions within Ukrainian SOEs is perhaps not the issue at hand – rather it is the very close association Mr Galushchak has with Vladislav Kaskiv – who is currently seeking to prevent his extradition from Panama to Ukraine, being wanted for the theft and embezzlement of $ hundreds of millions during the time of the Yanukovych regime.

As an aside,it is perhaps perverse that Yuri Lutsenko as Prosecutor General now seeks to extradite Mr Kaskiv, when historically he could have insured his prosecution as Interior Minister in 2005 following the “Orange Revolution” – prison time for which Mr Kaskiv could still have been serving instead of stealing far greater sums under the Yanukovych system.

For those readers interested, Criminal Case Number 1-337/05 relates to Mr Kaskiv’s involvement in kidnapping, assault, protection rackets and conning UAH millions from the 2004/5 “Orange” protesters when heading a “civil organisation” called “Time” and the “Wild Division of the UNA-UNSO” – whose fund he (with others) also stole.  Despite testimony of victims etc.,  then Interior Minister Lutsenko officially suspended the turning of the wheels of justice for the case.  As there is no record the the case ever being heard or closed, presumably in a dusty box long forgotten in a court or prosecutor’s basement sits this case in suspended animation.  No doubt now Prosecutor General Lutsenko would prefer the decision of then Interior Minister Lutsenko to be long forgotten – for if he had done his job the first time instead of striking whatever grubby little deal he struck, the vastly greater criminal activities of Mr Kaskiv may never have occurred.

Whatever the case, prima facie it seems not a matter of what Mr Galushchak may or may not have historically stolen when in various senior SOE positions, but a case of (probable) guilt by (very close) association with the internationally wanted Vladislav Kaskiv (who is closely associated with MP/oligarchSergei Liovochkin) that is the cause of ministerial angst.

It remains to be seen whether the Cabinet of Ministers will heed the cry of one of their number and refuse to nominate Mr Galushchak for President Poroshenko to ultimately appoint – or indeed whether President Poroshenko would appoint Mr Galushchak upon the Cabinet’s nomination.

Should Mr Galushchak not be given the position having “won” the “competition”, then a reader may expect some form of court proceedings ahead.  In the meantime if Dmitry Romensky is not otherwise committed, as he would have been where “the smart money” placed their bets in this “competition”, it may well be that he will fill the appointment (as many expected).

A cynical reader may therefore consider there to be more than an element of stage managed political theatre to the entire event should it unfold with Mr Galushchak ultimately being unsuccessful.  The question of course – to whose benefit (if beyond a PR stunt) would it have been staged this way?

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