Thursday, July 28, 2005

Bureaucracy, title and the rule of law

This story illustrates four problems here, rule of law, title, powerful monied interests and a bureaucracy to give them what they want--Kyiv Weekly.

Six families with 17 members live in tents next to a former dormitory in the village of Chabany not far outside of Kyiv. These people were ousted from their rooms after they were privatized together with the KyivSilMash plant. Then the rooms were renovated and sold to new owners.

The evicted claim that they were literally driven out of their rooms. Initially there was a complete blackout in the building and then the gas and water were cut off. Unidentified people crashed the doors of the building and broke the windowpanes.

A vandal caught by former residents explained that he was hired by builders and was preparing the windows for renovation. Now, those who were evicted from their rooms cannot access them. Residents saw through the windows how the hired builders gathered their belongings and covered them up with protective sheet. The worst part of the story is that the owners of these belongings were not even admitted to take them away. In addition to that, the builders welded the door of
the main entrance shut and pass construction materials through the windows.

There's more of course and it is illustrative.

Reminds me of the problem we had here when some people in our apartment building, a new building, wanted to create a home owner's association. There was an anti- meeting out on the playground. Lots of people and lots of loud talk. One lady, wanting to make her case--suspiciously, she didn't own an apartment here; there are reasons why she would be interested and not any of them good-- took out a legal paper and read a decision of a court giving an apartment block back to the city in the face of a home owner's association. That was open and shut for her and she had a look of triumph on her face when she finished reading. (The murmur that went from one person to another was, "She's an attorney! She's an attorney!" A hush descended over the crowd...or something like that.)

I thought to myself, What a joke. If you get to the right people you can get the verdict you want. If I researched it enough, I could probably come up with a score of contradictory verdicts on the same issue. What is it, the facts were different, the law was different? No, the people who had the connections were different.

So what does this say to potential investors? Probably not much more than they already knew. The returns here are high and the risk is high too. But we have found ways to deal with the problems here so we can note it, complain about it and get to work solving problems for clients.

The thing that most people do not understand is that there was much the same sort of system during Soviet times. And there was much the same sort of system prior to Soviet times. As a matter of fact, there has been much the same sort of system in place for centuries. Not much has changed.


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