ODESA, Ukraine — Ukraine’s third-largest city, with a population of more than 1 million residents, was largely developed in the 19th century and, despite war and 70 years of communism, Odesa has retained the grandeur of its imperial origins.
But there is a far less savory side to the Black Sea port.
The city is run by a clique of businessmen with shady pasts and connections, with unchecked powers and, it appears, the blessing of President Petro Poroshenko and other Kyiv powerbrokers to do as they please. The Presidential Administration did not respond to requests for comment.
One of them, local heavyweight Vladimir Galanternik, is seen in the posh Azuma and Babel Fish restaurants. There, influential politicians and businesspeople queue to get his blessing, Pavlo Polamarchuk, a leader of the Democratic Alliance party’s Odesa branch, and other sources told the Kyiv Post.
Galanternik lives in London but regularly visits Odesa. His wife and London-based designer Natasha Zinko posted pictures of herself on Instagram at Azuma on Nov. 5, 2013 and May 28, 2018.
Yuriy Shumakher, a member of Odesa Mayor Hennady Trukhanov’s faction on the Odesa City Council, told the Kyiv Post he had met Galanternik at Azuma several weeks ago and discussed football with him.
Galanternik is believed to be a business partner of Trukhanov and businessman Alexander Angert. An Italian police dossier from 1998 identifies Trukhanov and Angert as members of a mafia gang. It was published by the Organized Crime and Corruption Reporting Project, a Kyiv Post partner, in 2016.
Local anti-corruption activists say Angert, the alleged ringleader, along with Galanternik and Trukhanov have turned Odesa into their private fiefdom, awarding the most lucrative land and municipal contracts to their own companies.
Trukhanov could not be reached for comment. The mayor’s press office, when asked for comment, e-mailed this statement: “We do not deem it necessary to comment on statements that may reflect their authors’ subjective opinion, or (comment on) rumors and speculation.”
Galanternik and Angert did not respond to requests for comment.
“Starting from late 2014 to early 2015, a single financial group started to dominate over everyone else — Trukhanov and Galanternik subjugated all of the other financial groups in Odesa,” said Vitaly Ustymenko, head of the Odesa branch of the AutoMaidan civil society group.
Poroshenko’s role
Sasha Borovik, an ally of ex-Georgian President and ex-Odesa Oblast Governor Mikheil Saakashvili, lost to Trukhanov in the 2015 mayoral campaign. Borovik said that Trukhanov, Angert and Galanternik “control the port, infrastructure, commerce and the City Hall, influence a big part of the local media and also control the Odesa street through local fight clubs and have the local elections commissions in their pocket.”
“It was hard to compete against this backdrop,” Borovik told the Kyiv Post. “The president initially promised fair elections, political support and justice to all violators, but at the critical moment he and his team betrayed me and my campaign — they gave no support and took Trukhanov’s side.”
Passersby walk in front of Odesa’s famous Potemkin stairs and the passenger terminal of the city’s seaport. Analysts say that the potential of Odesa’s port is underdeveloped – due to high port tariffs it cannot compete with other ports while vested corrupt interests damage its business potential. (Volodymyr Petrov)
Read more: Truhanov remains under investigation in several corruption cases in Ukraine
Robbing Odesa’s future
Civic activists say that Odesa’s pervasive corruption and mafia-style leadership are robbing the city’s future.
A big slice of Ukraine’s economy goes through its ports, as exports or imports, and investigative journalists have pegged customs service corruption nationwide at $4.8 billion a year to the entire nation. The Odesa port’s freight turnover amounted to 24 million tons in 2017, or 18 percent of the total turnover in Ukrainian ports.
Ukraine’s port tariffs, including Odesa’s, are two to three times above those at comparable ports in the region, according to the VoxUkraine think tank.
Moreover, prime land near the Black Sea shore, if traded without transparency or according to free-market principles, robs citizens of taxes and affordable housing and commercial development.
“We have a mafia running us,” Inna Kravchuk, head of the Council of Odesa Businesspeople, told the Kyiv Post. “Until it’s gone, it won’t be easy to do business. It’s truly Ukraine’s Sicily… They don’t understand the value of the city and its architectural legacy. Odesa has become a (gigantic) kiosk.”
Kravchuk and People’s Movement of Ukraine party activist Mykhailo Kuzakon said the city’s architectural legacy and natural landscapes are at risk of ruin amid the brazen profiteering from shopping malls and real estate projects linked to the trio.
There are plenty of signs of decay amid the beauty to underscore the activists’ case — a dilapidated airport, rundown buildings and poor infrastructure.
Moreover, an unhealthy business climate — besides high port tariffs — is also impeding Odesa’s tourist and economic potential, the activists argued.
Odesa Oblast ranks in the middle among Ukraine’s regions in terms of the attractiveness of business climate, according to the Institute for Economic Research and Policy Consulting. The ranking measures taxes, bureaucracy and legislation. Its investment potential is vastly under-used — the oblast got just 0.07 points out of 1.
Influential businessman Vladimir Galanternik often holds meetings at Odesa’s Babel Fish restaurant, according to local activists. His wife’s firm Abrakadabra designed the restaurant’s site. (Volodymyr Petrov)
Read more: Angert, Galanternik, Trukhanov accused of investing ill-gotten gains abroad
See related stories here, here and here.
Italian investigation
According to the Italian police dossier, Trukhanov and Angert were among the leaders of an Odesa mafia gang headed by Leonid Minin in the 1990s. At that time, Trukhanov owned some security firms.
The dossier reads that the group “carries out, particularly in (Odesa), several and constant criminal activities such as extortion, arms trafficking, the planning of murders of politicians and individuals linked to opposite groups.”
Minin was sentenced to two years in jail in Italy in 2000 for drug possession and later charged with arms trafficking and convicted of illegal possession of diamonds.
Trukhanov told the Slidstvo.info investigative show he had been acquainted with Minin and Angert.
“Alexander Angert is my friend, and I’ve never been ashamed of our friendship,” Trukhanov said. “We got acquainted when he headed a major business in Odesa. The group that he founded was guarded by our security firm, like many others.”
Background
Angert, who goes by the nickname “Angel,” was born in Odesa in 1955, and had Israeli, Venezuelan and Soviet citizenship, according to the dossier. He used to live in London and now lives in Turkey, OCCRP reported in April.
In the 1980s, in the Soviet era, Angert was sentenced to 15 years in jail for raping and murdering a woman, and for robbery, Alla Korystovska, who worked as a police investigator at the time, told OCCRP in 2016.
Angert’s other partner, Galanternik, is 48 years old, according to Elle UK’s 2016 interview with Natasha Zinko.
In the early 1990s Galanternik was a small businessman who traded electric equipment, getting the nickname of Lampochka (Light Bulb), Alexander Sibirtsev, an Odesa-based investigative journalist, told the Novoye Vremya magazine. In 2003, Galanternik co-founded Sotskombank, which was liquidated in 2011.
“As far as Galanternik is concerned, that’s a businessman who is actively doing business in Odesa. Why do we have such close relations with him?” Trukhanov said in a March interview with the Levy Bereg news site. “…There are people doing business in Odesa who also do something for the city: hold concerts, attract people, decorate playgrounds.”
Trukhanov, born in Odesa in 1965, became head of then-President Viktor Yanukovych’s Party of Regions’ faction on the Odesa City Council in 2010. He became mayor of the city in 2014 and re-elected in 2015.
Trukhanov has Russian citizenship, which was confirmed by the site of Russia’s Federal Tax Service, although he denies this.
The gang is also linked to Russian oil magnate Alexander Zhukov, according to the dossier. In 2011, he was detained in Italy on suspicion of trading illegal weapons. An Italian court acquitted him of smuggling because it was outside of Italy’s jurisdiction.
Angert, Angert’s daughter Anya, Galanternik, and Trukahnov’s common-law wife and daughter, Tetyana Koltunova and Kateryna Trukhanova, have all bought luxury apartments in London, according to an April investigation by OCCRP.
Read more: Russian passport should disqualify Trukhanov as mayor
Municipal contracts
Trukhanov’s associates currently own a thriving business empire in Odesa that includes companies that win municipal contracts and are awarded most of the prime land for construction.
These include construction companies Sofor, Rostdorstroy, Ekop-Pivden, Panteon-Yug, Kyivshlyakhbud, Dnestrprudvod, Vorontsovski Vezhi, Inteko-Yug, PIK Story and SKVO, as well as Odesa Regional Insurance Company.
According to the Justice Ministry’s official register, these companies are currently co-owned or headed by Yuriy Shumakher, a member of Trukhanov’s faction; Alexander Zhukov, a business partner of Shumakher and father of Russian billionaire oligarch Roman Abramovich’s ex-wife, Dasha Zhukova; Maryna Lozovenko, an Odesa city council member from Trukhanov’s faction, as well as Trukhanov’s business partners — Andriy Ivancho, Dmytro Bugeda, Mykola Bugeda and Mykola Danilyuk.
Trukhanov’s daughter Kateryna used to be the CEO of SKVO.
According to two leaks of information on offshore firms — the Panama and Paradise Papers — some of these companies used to be co-owned directly by Trukhanov. Shumakher confirmed to the Kyiv Post that he used to co-own one of the companies’ parent firms Corderoy Trading Limited with Trukhanov.
In 2016, the British Virgin Islands’ Financial Investigation Agency asked Mossack Fonseca, a share registrar, about documents from Corderoy Trading Limited as part of a money laundering investigation, according to documents published by Slidsvto.info.
Companies linked to the Trukhanov-Angert-Galanternik group regularly win municipal contracts to repair roads, schools and hospitals, Arkady Topov from Odesa’s Anti-Corruption Office civic group told the Kyiv Post.
Rostdorstroy has consistently received the biggest municipal contracts for road repairs in Odesa, while Lozovenko’s PIK Stroy also gets such contracts, he said.
Topov argued that municipal tenders are often rigged or manipulated, either by stipulating their terms so vaguely or making their conditions so strict that only Trukhanov-linked companies are able to take part. Shumakher denied the accusations.
Businessman Vladimir Galanternik’s wife Natasha Zinko poses in a dress themed on French queen Marie Antoinette in Hyde Park, London, on May 15, 2016. Zinko’s Instagram exposes the couple’s lavish lifestyle. (Zinko’s Instagram)
High-end real estate
Since 2014 Odesa City Council, dominated by Trukhanov’s faction, has distributed the city’s most valuable land to companies allegedly connected with Trukhanov, Galanternik and Angert. The alleged ties to the businessmen are difficult to trace because Galanternik and Angert own very few firms directly and use placeholders to own assets on their behalf, anti-corruption activists say.
“When we were fighting to defend the city (from Russian-backed separatists) in 2014, and when the war on the eastern front began, Odesa City Council was taking a lot of decisions in favor of Galanternik,” Ustymenko said.
Shumakher denied the accusations that the land had been allocated unfairly.
But when one takes a look at the companies that regularly win city contracts, a web of links between them start to appear — with Angert, Galanternik and Trukhanov at its nexus. For instance, Arkadia City, a real estate developer for the Arkadia seaside district, is headed by Valentyna Sokolova, an aide to Vidrodzhennya (Revival) faction lawmaker Oleksandr Presman — a political ally of Trukhanov. Oleg Degtyarev, who co-owns Arkadia City, also co-heads Law Firm, which controls the UK-registered hotel and accommodation company Leratex Limited — the director of which is Galanternik’s daughter Maria. Law Firm also manages the UK-registered fashion company Abrakadabra Creations, co-owned by Galanternik’s wife Zinko. Arkadia City did not respond to a request for comment.
Another of Odesa’s predominant property developers, Budova, is formally owned by little-known Odesa residents Oleh Glushankov, Dmytro Dimarsky and Boris Rodin. According to Odesa-based journalist and civic activist Mykhailo Meizersky, Polamarchuk, Ustymenko and numerous other sources in Odesa, the firm is actually owned by Angert, Galanternik and Trukhanov. Budova declined to comment.
Zevs, a security firm that provides services to Trukhanov, is registered at the same address as Budova — 93 Bolshaya Arnautskaya.
Budova’s co-owner Dimarsky owns UVGP-Sistema, which was previously co-owned by Yuriy Bugeda, a business partner of Trukhanov.
Meanwhile, Starosennaya Ploshchad in Odesa is being developed by a firm called Advancement. Andriy Babko, the CEO of Advancement, also heads American Group Invest, owned by Radion Lefteryov. Lefteryov was a co-founder of Sotskombank with Galanternik and Presman, the political ally of Trukhanov.
Real estate on Starosennaya Ploshchad was illegally rented without a tender by the city authorities to Advancement in 2016 and then illegally sold to the firm, according to investigative journalist Grigory Kozma. The buildings had already been destroyed by the time they were fictitiously privatized, he said.
Yuriy Shumakher, a member of Odesa City Council from Mayor Hennady Trukhanov’s faction. (Courtesy)
Privoz market
Local activists also link Odesa’s Privoz market to the Angert-Galanternik-Trukhanov group.
Oleksiy Spektor, a subordinate of Trukhanov who has been charged in a National Anti-Corruption Bureau of Ukraine case against the mayor, used to be the CEO of Privoz.
Privoz is controlled by Kelmos Enterprise, which also owns Dara Group, headed by Eduard Samotkal.
A source who spoke on condition of anonymity for fear of reprisals said that Samotkal is known as one of “Galanternik’s directors.” Samotkal and Galanternik used to co-own Privoz, the source said. Representatives of Privoz declined to comment for this story. In 2012, prosecutors opened a case into the illegal privatization of parts of Privoz, but closed it in 2014, according to an investigation by the Slidstvo.info investigative show. In 2013, the Odesa city authorities sold Privoz, which has an area of four hectares, for Hr 40 million — much less than the value of the prime building land on which it is located.
Galanternik’s aim “is to build as much as possible and commercialize as much as possible, and get maximum profits for his group,” Ustymenko said.
Other investigative journalism about Odesa’s misrule
To read more about alleged organized crime in Odesa, read these stories and documents:
Ukrainian organized crime (an Italian police dossier compiled in 1998)
The Odesa mafia’s secret flats in London
Paradise Papers: Ukraine crime gang hid proceeds in luxury London flats
Panama Papers yield smoking gun on Odesa mayor’s Russian passport
Odesa mayor hides construction business offshore
