Exclusive Insight: Crackdown on Corruption in Odesa

On Dec 5, Ukrainian law enforcement officers raided the premises of the Odesa City Hall to search the office of Mayor Gennadiy Trukhanov and his deputies. Investigators of the National Anti-Corruption Authority of Ukraine (NABU) in coordination with the Anti-Corruption Prosecutor’s Office seized documents in legal and financial offices of Odesa City Council.

The police also arrested Oleksandr Hranovsky (Aleksandr Granovsky) and Boris Kaufman, owners of the Vertex group, which controls the oldest hotels in Odesa (Bristol, Londonskaya, Passage), the largest cigarette distributor in Ukraine (TEDIS), and others real estate and commercial properties. This was reported by the local newspaper Dumskaya.net, which added that a third man was arrested but his identity is still unknown.

“On Dec 5, 2022, in compliance with the prosecutorial procedures of the Anti-Corruption Prosecutor’s Office, NABU investigators arrested three people suspected of creating a criminal organization that controlled Odesa City Council officials and of committing other crimes of corruption. Preliminary legal qualification according to part 1 of art. 255, part 3 of art. 369 of the Criminal Code of Ukraine,” the press release of the Anti-Corruption Prosecutor’s Office reported.

“In fact, the criminal organization controlled all significant budget expenditures in Odesa and coordinated the main issues on the agenda of City Council sessions. To carry out criminal actions, people initiated a systemic corruption process of officials and deputies of the local council, which ensured that the necessary decisions were taken by the local government.”

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Both entrepreneurs, considered by Ukrainian media to be very close to Mayor Trukhanov, notorious for his alleged corrupt practices, were taken from Odesa to Kyiv. Hranovsky had already been placed on a wanted list by NABU.

That NABU had been investigating activities of the persons in question for some time is no secret. What is surprising is the acceleration of the law enforcement system’s actions while the war with Russia continues. It appears that the war itself has necessitated the fight against corruption and powerful “business” cliques to be stepped up, and especially in a city of such strategic importance as Odesa – the sea gate of Ukrainian export.

In fact, NABU suspects Hranovsky of having organized a scheme, due to which the Odesa port facility lost Hr 93.3 million.

In addition, on October 6, 2022, the former General Prosecutor of Ukraine, Iryna Venediktova, announced that she had signed the initiation of a criminal investigation into five suspects for allegedly developing, in the period from 2016 to 2019, a criminal plan to seize of local budget funds and of municipal land for speculation. Due to their plan, six land plots with a total area of 15.9 hectares were transferred to private ownership, and Hr 131 million was illegally taken from the city budget.

Subsequently, the Anti-Corruption Prosecutor’s Office said that the mayor of Odesa and three other city council officials had been informed of the suspected crime under Part 1 of Art. 255, paragraph 2 of the art. 364 of the Criminal Code of Ukraine. In total, 16 people were considered part of a criminal organization, of which 10 were members and the rest were accomplices.

What has just occurred in Odesa is not an isolated development and appears to be part of an unfolding broader offensive to curb corruption at a time when Ukraine’s security and reputation are having to be defended to the utmost.