Finding a good caretaker for the legendary ostriches and other property of Viktor Yanukovych has turned out to be a tough job. It’s been five years since the Mezhyhirya, 140-hectare luxury residence of the former president has had no proper owner, and has been run by a group of people who walked into this massive gated territory on the day of his cowardly escape. They have mowed the lawns, conducted guided tours and fixed broken boilers.
For the last couple of months, the National Agency for Management of Assets Acquired Through Corrupt Means (ARMA) has been trying to find a management company for Mezhyhirya. But the ongoing competition has not exactly been a resounding success.
ARMA originally planned to announce the winner on Jan. 25. The management contract was supposed to be awarded to a very odd and obscure limited company registered in Bila Tserkva, located some 90 km from Kyiv. It was picked over the other competitor, a non-profit organization set up by the original group of volunteers running the Mezhyhirya estate.
Under pressure from civil society groups, the competition was extended until the end of February. But it might still run into a dead end because nobody is queueing for the job. The public supervisory council of ARMA thinks that commercial companies are reluctant to take part in the competition because of financial risks, fear of raidership, and an narrow business opportunities presented by the estate. It has suggested that state-owned and communal firms should also be allowed to compete.
But I think that the problem is much more complex. To a great degree, ARMA struggles to find a new caretaker because it is only trying to pass a small and weird part of the Mezhyhirya estate to the potential new team.
Moreover, the agency intends to burden the new management company with significant financial commitments from day one, but is unable to give any guarantees that the company will be able to stay in Mezhyhirya for any length of time, or that it will be able to run the estate as a single wholistic unit.
Right now, from the legal point of view, Mezhyhirya is a motley collection of four different sets of assets, and ARMA wants to find a manager for just one of them.
The first set is comprised of assets arrested as part of ongoing criminal cases related to Yanukovych and passed on to ARMA for safekeeping by the Pechersk court of Kyiv in June 2018. It’s a long, 30-page list of wardrobes, fridges, chandeliers, collectible bottles of liquor, framed pictures, sports gear and infamous toilets, dubbed “golden” for their ridiculous cost. It’s this list of assets that ARMA wants to pass on to the new manager.
The second set of assets is 135 hectares of nationalized land, which currently belongs to the Cabinet of Ministers. This is the land under the immaculate gardens and properties known as Ukraine’s “park of corruption”, a place where wedding parties come for photoshoots, kids come to ride bikes and tourists flock to ogle the former president’s riches and bad taste.
The third set of assets is corporate rights for Tantalit, the most famous company that once belonged to Yanukovych. The list of assets owned by this company includes a house with tree stumps he had once showed off to a group of loyal journalists, as well as other assets that are physically located outside of Mezhyhirya – for example, a luxurious apartment on Obolon embankment in Kyiv. Earlier this month ARMA signed a management contract with SVM-Consulting to run this property.
The exact list of Tantalit’s corporate rights has not been published and might not even be known, but this list is likely to contain shares in other companies that own sweet land plots and real estate in Pechersk, Obolon and Mezhyhirya itself. These are the assets that were discovered in 2014 through YanukovychLeaks, an investigative journalistic project that saved thousands of documents that Yanukovych attempted to drown in a lake before escape.
The fourth set of is a massive amount of assets that have not been properly inventoried and evaluated in the past five years. It includes the whole zoo with the ostriches and deer, their enclosures and food, dozens of purebred dogs living in a specialized facility. This lot also includes rare and exotic trees and shrubs, the golf course and artificial lakes and pools with ducks, bridges and fountains.
According to the conditions of the ongoing competition, the new manager will only get the first set of assets to run. That means that Yanukovych’s wooden house with its ornate, amber-encrusted chapel is a part of the deal, but the lawn outside it and access to it by land is not.
Moreover, according to the contract, evaluation of these unaccounted-for assets from the fourth category is a cost the new management company has to absorb. As is insurance for the estate. Those costs potentially go up to tens of millions hryvnias.
But after the inventory of new assets is over, it will be up for another competition to decide who runs these newly listed assets. The third competition will be opened for Tantalit’s corporate rights. In fact, ARMA might decide to break up Tantalit’s assets even further and have more competitions for parts of them, as has already happened with Yanukovych’s apartment in Obolon.
ARMA’s leaders believe that even under these conditions they have a good chance to find a new management company for Mezhyhirya, and are actually making quite a lot of effort to search for it. The staff sends out letters to businesses and associations, and revises tender conditions to make it more transparent.
The non-profit organization that currently runs Mezhyhirya is not considered by ARMA to be a serious contender for the job for several reasons. Firstly, ARMA doubts the ability of NGO’s leader Denys Tarakhkotelyk and his team to manage these assets with efficiency and profit for the state budget.
Secondly, ARMA says that the actual non-profit status of the NGO is a problem. Making money off these tainted assets for the state budget is one of the reasons for ARMA’s existence. Non-government organizations, however, can conduct commercial activities to finance their needs, but they cannot distribute a profit to the state budget or elsewhere.
But the problem is that no legal entity will be able to manage effectively, because you cannot make money off Yanukovych’s chandeliers without the surrounding park and the rare animals in the zoo, which are part of the estate’s attraction.
However difficult it might seem at the moment, the Mezhyhirya problem needs a smarter and a more complex solution, which most likely involves combining all those multiple assets. ARMA should show leadership in this process rather than bury its head in the sand.
