CI VIEW: Odessa – Criminal money seen behind deadly riot and other separatist action, sources


ODESSA (CI Ukraine) – Criminal money, or business with interest in organized crime, is now seen as a driving  force behind the riots and deaths in Odessa and elsewhere, Ukrainian and Western sources said.

[Capitol Intelligence films the Odessa riot and massacre as sole foreign journalist with CI Glass on May 2, 2014]

Today (May 2, 2014) in Odessa, a planned soccer match between the Kharkiv’s Metalist football team in eastern Ukraine and Odessa’s Chornomorets shattered the southern port city renowned for its multi-ethnic peace between Ukrainians, Russian ethnics and Jews, leading to more than 40 dead and hundreds injured.

The violence started abruptly in the town center between political activists hiding between soccer fans and degenerated into a full-scale armed riot leading to the seizure of Odessa’s Professional Union building by pro-Russian anti-Maidan political forces.

Ukrainian Deputy Foreign Minister Danylo Lubkivsky told this news service that Ukraine needs to confront those controlling “criminal money” in Ukraine, a term often used to refer to money controlled by the country’s powerful oligarchs.

[ Ukraine Deputy Foreign Minister Danylo Lubkivsky speaks to Capitol Intelligence using CI Glass in Kiev]

A NATO source working in Ukraine (and previously in Afghanistan) said he had intelligence that the unrest in eastern cities such as Donetsk and Slovyansk and now a southern city such as Odessa is being orchestrated by a five oligarchs in effort to boost their power with the new central government and acquire assets on the cheap.

“It is all a play for power and by destabilizing the regions, they show Kiev that whatever government is elected need to deal with them to have peace and get things done,” the source said.

In fact, this is the number one complaint of all Ukrainians — whether Ukrainian, Russian ethnic or Jewish —  that criminal organized crime gangs have a stranglehold on all aspects of the economy and that most skilled Ukrainians have left to seek work in the EU, US/Canada, and even Russia.

Capitol Intel has seen first hand that much of the unrest comes from internal sources.  On Friday (May 2, 2014), Odessa, police and Ukrainian military did not intervene until hours after the riots began and claimed numerous lives.

In fact, Ukrainian police could be seen in freshly ironed uniforms, smoking cigarettes and viewing the violence as passive onlookers.

The border between mainland Ukraine and Crimea was calm accept for a kilometer long-lines of trucks attempting to bring in supplies to peninsula.   The Russian border guards acted politely and were unarmed.

To all accounts, Odessa remains the key to Ukraine success as a viable country.  Goneh Siboni, an Israeli medical student here and former military medic, went into the violent situation with other Israeli medical students to treat the injured.

Siboni said that Odessa would be an economic paradise with its port, tourism and industry but all one sees is “evidence of money laundering.”

Even foreigners, such Italian Stefano Osler who owns the Wildix VOIP group in Odessa, are afraid to talk about their businesses for fear of angering local “businessmen.”

Andrew Bain, an American media business owner in Kiev, said the most effective way to bring stability to the country is bringing foreign direct investment into the country.

Another CEO said that taking over existing Ukrainian businesses, especially using the funds from the European Bank for Reconstruction and Development (EBRD), the US Overseas Private Investment Corporation (OPIC), and the World Bank’s  International Finance Corporation (IFC) would be the most effective way of pushing out “criminal money” and allow Ukraine to recover economically.

Ukraine, the bread basket of Europe and cross-road country between Poland, Slovakia, Russia and Belarussia, can easily be the next European economic miracle on the lines of Poland, Odessa Bristol Hotel General Manager Jan-Willem Roenhorst said.

The Stamford, Connecticut-based Starwood Hotel and Resorts Worldwide (NYSE: HOT) took over the management of historic Bristol Hotel on March 1, 2014 and has been able to bring all staff and procurement procedures into US compliance standards, Roenhorst said.

“You can do business in Ukraine on western standards and succeed,” he said.  “Ukraine today is what Poland was 25 years ago.”

The Bristol Hotel is owned by Vertex United which is controlled by local businessmen Alexander Granovsky and Boris Kaufman.  Vertex also operates the Odessa International Airport and Kiev International Airport.  Vertex also owns the country’s wholesale tobacco market through Megapolis-Ukraine.

Not only does Odessa have historic Jewish roots but a large of presence of businesses from the United Arab Emirates, in particularly from the Emirate of Sharjah. Sharjah low-cost airline Air Arabia has flights between Odessa and Sharjah.

Sharjah is the base for privately-held Gulftainer Group of Companies which is the seventh largest port operator in the world and has signed a contract to operate the Ust-Luga port near St. Petersburg.

A Ukrainian official close to likely next president of Ukraine, the billionaire chocolate magnate Petro Poroschenko  said a company like Gulftainer would be an ideal candidate to takeover operations at the Port of Odessa.

“Gulftainer is perfect.  They have experience, money and they have no connections to our oligarchs,” the source said.

The EBRD annual meeting in Warsaw in mid-May and Polish companies and investment banks and lawyers based in Warsaw are expected to lead the way in a new deal flow to the country.

By PK Semler in Odessa, Ukraine.  For more information please call +1-202-549-3399 or email:

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