Built-Up Odesa Coast: Ukraine's First City Hall Trial. Why the Case Against Trukhanov's Administration Matters for the Country

According to case materials, Trukhanov systematically circumvented the ban on construction along Odesa's coastline.

Odesa's construction has come into focus for NABU, SAP and the Anti-Corruption Court. They suspect businessman Volodymyr Galanternik and top city hall officials of illegal land deals in 2016–2019, reports «BBC News Ukraine».

For the first time, law enforcement is seeking to prove that an entire city council became a place where a mafia pursued its own interests.

All the defendants deny the charges and claim the prosecution is politically motivated.

We explain what makes this anti-corruption investigation unique for Ukraine and what people in Odesa itself think about it.

The case before the Anti-Corruption Court is expected to show how the construction market in this city actually functioned, how it was divided up, and how excess profits were made.

It essentially has two dimensions: one concerns possible large-scale corruption, the other concerns urban improvement. 

No School Whatsoever

«Where were you looking when you bought the apartment? Only at the apartment?» That is how Hennadiy Trukhanov responded in 2018 to residents' dissatisfaction with dense construction. Now people recall these words with sarcasm.

Nataliya Nevinska, Mariya Mostovchuk and Oleh Nikolin looked at a detailed development plan for the block when choosing their apartments. They bought homes on Haharinske Plato Street in Arkadia, half a kilometer from the sea.

Artist Mariya Mostovchuk and lawyer Oleh Nikolin joined other residents to fight for the construction of a school and kindergarten. Court cases with the developer are ongoing.

The promised school site is now a construction pit for the Unity Towers residential complex. Developer Kamerton LLC plans to build three more 25-story buildings in the courtyard of their high-rise.

«Our children have had their kindergarten and school stolen. And we are called paid-for activists», they say.

Local residents took the matter to court. Hearings have dragged on for three years, and their children study in three shifts because the local school does not have enough places for everyone.

Olga Kvasnytska, a local deputy from Servant of the People, says Odesa lacks 35 kindergartens and nine schools.

«We are constantly dealing with fires, but we cannot build mobile fire depots because there is nowhere to put them», the deputy complains.

City authorities had to either change this or find schemes to get around certain restrictions on construction near the sea.

A resort hotel is a recreational facility, but a residential high-rise is not. As a result, hotel-type buildings with «rooms» are going up in Odesa, although functionally they are apartment buildings.

One such project, Morskaya Rezidentsiya (Sea Residence), built by contractor Budova, features in the NABU investigation.

Its residents are not tourists bringing in money, but permanent residents who need adequate urban infrastructure.

Storyline and Key Players

«First the conspirators identified parts of the city of interest for development, and then they chose the procedure and implemented the scheme. The criminal organization was confident in the success of its endeavors», SAP prosecutor Maksym Kravchenko told the court.

In total, the land involved amounts to 16 hectares. Some of the plots are located in Odesa's seaside district.

According to investigators, the organization acted in Galanternik's interests, and council deputies received money for this.

Volodymyr Galanternik has developed an aura of mystery as the «watcher» of the city. He has not given interviews or held any official positions.

In 2019, in an interview, Trukhanov confirmed that he discussed street arrangements around the Pryvoz market with Galanternik. «If Pryvoz has an owner, we also need to meet with him and decide how we will restore order», the mayor said.

In 2021, Galanternik's assistant told Forbes that her boss holds stakes of about 50% in many assets in the city. These include the Pryvoz market, the 7th Kilometer market, the City Center shopping mall, the Arkadia City resort zone and others.

These high-rises on Haharinske Plato, 4, according to investigators, are being built on land that was illegally taken from a territorial community. The high-rises are being built by Budova. NABU points to its ties to Galanternik.

According to law enforcement, the criminal organization's activities caused Odesa total damage of UAH 689 million. This is about 7% of Odesa's 2021 budget.

Municipal Property and Public Toilets

Municipal real estate is a key link in land schemes. Ukrainian law does not require tenders if municipal facilities are located on a land plot.

Investigators insist that the criminal organization they identified manipulated municipal property.

Most often, municipal enterprise property assigned to a plot of land was leased to a private company. It was supposed to maintain and improve it.

Over time, a private firm bought the property, investing money in repairs of the premises. And then it received the land under lease.

Such schemes could be carried out not only around large municipal facilities such as sanatoriums or landscaping enterprises. They even applied to public toilets. In Odesa, people joked calling it «toilet privatization».

Galanternik and Budova

According to detectives and prosecutors, the «Odesa» criminal organization included 16 people and looked like this:

• head of the organization, businessman Volodymyr Galanternik;
• Odesa Mayor Hennadiy Trukhanov;
• former chair of the standing committee on municipal property of the Odesa City Council (OCC) Vasyl Shkryabai;
• former chair of the OCC land commission and now acting deputy mayor Oleh Bryndak;
• head of the OCC legal department Inna Popovska (still holds this post);
• former acting head of the OCC municipal property department Oleksiy Spektor;
• former deputy head of the OCC municipal property department Volodymyr Radionov;
• assistant to Volodymyr Galanternik and formerly Trukhanov's consultant Alena Popova;
• owners and top managers of Budova, including its beneficiary Dmytro Dymarskyi;
• former Odesa region prosecutor Oleh Zhuchenko.

The trial is public, and the names of most suspects have already been made public, as have their testimonies in court.

Investigators insist that Galanternik and former chair of the municipal property committee Shkryabai were business partners in the Greenwood residential complex project. Each was entitled to 8%.

In the contacts of legal department head Inna Popovska, detectives found the initials V.I., as well as «lawyer Alena». They say this refers to Volodymyr Ilyich Galanternik and his assistant Alena Popova.

«Yes, I know Mr. Galanternik, but I do not follow his instructions. I have my own understanding of how to act in accordance with the law... Knowing him does not mean I am a member of the organization», Inna Popovska replied to the charges against her in court.

Popovska's mother owns a 164 sq. m apartment in the aforementioned Greenwood complex, worth about UAH 10 million. According to her daughter, her mother bought the property with money earned trading at the «7th Kilometer» market.

Investigators claim the apartment could have been given as material compensation for participation in the criminal organization.

In their view, the head of the legal department created an «illusion of legality» for city council decisions.

Alena Popova, Galanternik's assistant, allegedly gave instructions in his name to city hall officials.

Some of the defendants in the NABU and SAP case against the criminal organization received apartments in the elite Greenwood complex, whose construction, according to investigators, involved Galanternik.

Hennadiy Trukhanov insists that all decisions on the scandalous 16 hectares of land were made collectively, that is, by the entire council.

Deputy Olga Kvasnytska disagrees. In her view, specific officials were behind these decisions.

«Conditional Sea»

Hennadiy Trukhanov believes he is being accused of something that did not actually happen, since no one simply seized the land.

He believes the initiators of his prosecution are former Georgian president Mikheil Saakashvili and well-known Odesa businessman Adnan Kivan. He has a long-standing conflict with both.

Adnan Kivan owns the investment company Kadorr Group, which builds residential complexes in Odesa. He is also known as the owner of Kyiv Post.

Kivan called Trukhanov's words a lie and promised to sue him.

The mayor of Odesa explains that the land plots under the residential complexes remain city property. Each year the city receives money from tenants into the city budget.

Odesa opposition activist Mykhailo Kuzakon insists the land remains with the city community only formally: «They built a house, sold the apartments. The developer no longer needs the land. Their cycle is over. They will not pay for this land anymore».

«Arkadia has been paved over with concrete» is how Odesans sometimes describe construction along the Black Sea coast. The city's resort district has turned into dense «concrete jungles».

Kuzakon explains that the Odesa council changed the city's zoning to suit specific developers: the boundaries of historic areas, as well as the coastline and zones where high-rises were prohibited.

«They were interested in certain land plots, and they made zoning adjustments to satisfy their whims. Formally, it was legal, although cynical», says Mykhailo Kuzakon. That is how they were able to build by the sea.

Where is Galanternik?

On November 8, Olga Prosyanyuk, Volodymyr Galanternik's lawyer, posted on her Facebook page a letter from him addressed to the judges of the Anti-Corruption Court.

In it he listed two addresses: one in Israel, where he has been registered with the consulate since October 1, 2021, and another in London.

In documents submitted to NABU, Galanternik stated that he has lived in London with his family since 2019.

The Interior Ministry has placed him on an international wanted list.

Hennadiy Trukhanov denies any special cooperation with Galanternik. He says he has not communicated with him for four years.

«I have contacts with everyone who has some facilities in Odesa. Galanternik is no exception, like everyone else. Not more and not less», Hennadiy Trukhanov said in 2019.

«Locals fully understand that in connection with these investigations the question arises of whether Trukhanov will leave. If he does, who will be acting mayor. That is the maximum people hope for», says Anatoliy Boyko, head of the regional branch of the Committee of Voters of Ukraine and coordinator of Opora in Odesa region.

Hennadiy Trukhanov is acting mayor of Odesa from the Opposition Platform — For Life. He managed to pay the UAH 30.2 million bail set by the court.