HAPPENING THIS WEEK

Greetings from Chişinău! Here is what’s happening this week: we feature a financial security issue, affecting the country for more than ten years, making the poor even poorer, with a ping-pong game between different actors in finding the responsible part. In weekly investigations we take a closer look at the Socialist Party’s financing from abroad, analyzing the connection with the Bahamas Operation, a scheme through which the Socialist Party was acquiring money from offshore regions or suspicious persons. On January 27, together with the whole world ZdG also commemorates the tragedy of the Holocaust, the genocide that resulted in the deaths of 6 million Jews and 11 million others killed by the Nazi regime and its collaborators during the Second World War. All of that and more in this week’s newsletter. Happy reading!  

THIS WEEK’S FEATURE

THE PEASANT’S BANKS: Created more than ten years ago, the Savings and Loan Association (S&L) registered in many villages in Moldova, left a great number of people without their lifetime savings. The state didn’t impose any restriction, as a way to increase trust in these associations, letting the associations at the administrators’ mercy. However, some of the administrators often put their interests forward, leaving people without their savings. ZdG analyzed several documents, concluding that despite being allowed to borrow no more than 1,000 euros the S&L kept concentrating big amounts of money in the hands of several so-called leaders, who in the meantime moved abroad or alienated their assets. Since 2007, the state began to regulate the activity of S&L associations, imposing certain restrictions on them. However, the measures come too late as desperate people are filing dozens of appeals trying to get their money back. The trials continue and a ping-pong game between the administrators and the debtors, as who is to assume the responsibility continues indefinitely. In the meantime, many of those who deposited their money passed away already, without having any money paid back, while those who are still alive entreat the authorities to hear them.

FROM THE EDITORS

OP-ED: After the United States’ (U.S.) Secretary of State, sanctioned Vladimir Plahotniuc, fugitive oligarch because he undermined the rule of law and severely compromised Moldova’s independence and democratic institutions, the U.S. Ambassador to Moldova, Dereck J.Hogan, declared that this was an example of the steadfast U.S. commitment to Moldova’s citizens’ fight against corruption. The Ambassador mentions that he has stressed to the Prosecutor General, the government, and the President the importance of avoiding any action that could weaken the independence of the Anti-Corruption Prosecution Office and stall momentum on these investigations. The U.S. Ambassador reiterated the importance of the current government to pursue the justice reform in a credible, transparent and inclusive way. the U.S. will continue supporting Moldova’s citizens in pursuing stronger rule of law.     
 

THE FOREIGN BRIEF

MOLDOVA’S EXPORTS: In the rolling 12 months ending November, Moldova’s exports to the European Union (E.U.) countries declined by more than three percent, while those to the Commonwealth of Independent States (C.I.S.) increased by three percent. Although the data shows a certain recovery in exports to the C.I.S. countries this is not enough to offset the drop in exports to the E.U. which remains Moldova’s main trade partner. At the same time, Moldova’s imports for November 2019, alone increased by 3.5 percent which has widened the trade deficit by more than 6 percent. An increase in trade deficit can lead to a depreciation of the national currency, growing prices which indirectly could also have an impact on inflation. 

VENICE COMMISSION: In its haste to finish revamping the Superior Council of Magistracy, the current government adopted the amendments to the Law on the Superior Council of Magistracy, sending it for promulgation without waiting for the urgent opinion of the Venice Commission. In its urgent opinion which was released in January 2020, the Commission advises the government to assure the independence of the Superior Council of Magistracy. Considering the international institutions’ opinion while reforming the Superior Council of Magistracy is crucial in reforming the justice system. 

CORRUPTION PERCEPTION INDEX: Transparency International analyzed the level of corruption in the public sector in 180 countries and territories, concluding that corruption is more pervasive in countries where big money can flow freely into electoral campaigns and where governments only listen to the voices of wealthy or well-connected individuals.  Moldova scored 32 points and ranks 120 from 180 countries. Transparency International concludes that although there were certain improvements during the ACUM-Socialist Party alliance since the new government came to power the bank fraud case was left behind

ZDG TOP INVESTIGATIONS

RECOVERING THE BILLION: The Agency for the Recovery of Criminal Assets (ARBI) within the National Anticorruption Center applied seizure on 803 goods and assets worth over €133.6 million (2.6 billion lei). However despite the results presented in ARBI’s activity report for 2019, Transparency International declared that unfortunately, the process of recovering the fraudulent money is still sluggish, with persons involved in the bank fraud still controlling their assets. 

PARTY FUNDING: At the end of 2019, the suspended head of the Anti-Corruption Prosecutor’s Office, Viorel Morari, issued an order to investigate the Socialist Party’s assets. suspecting foreign sources. The investigation showed the connection between Socialist Party recent investigation and the money laundering case involving Exclusive Media, a company, whose founder is Socialist Party deputy Corneliu Furculiță. ZdG got hold of documents from the State Tax Service and after analyzing them concluded that there is a connection between the case initiated to investigate the foreign funding of the Socialist Party and the Bahamas Operation, involving former and current deputies of the Socialist Party and also the president’s wife, Galina Dodon. 

TURKISH & AUSTRIAN INVESTORS: Metalferos, a state company dealing with metal waste signed two contracts with a large Turkish company and another company in Austria, while being involved in several criminal charges regarding mismanagement of its resources, and doing business with intermediary companies, which took over a large part of the company’s profit. Metalferos was signing fictitious contracts with Turkish, Austrian, German and Dutch companies. While investigating the company’s actions ZdG concluded that due to this scheme Metalferos incurred losses of over €10.9 million, in a period of only four years.   

MOLDOVA IN THE WORLD NEWS

GOVERNMENT’S CONCERNS: The Moldovan government, controlled by pro-Russian President Igor Dodon, is concerned about the economy, as Dodon eyes a second term in the presidential elections in November. Dumitru Minzarari writes for the James Town Foundation that the incumbent head of state has tasked the government with implementing a set of populist measures, targeting Moldova’s rural population in particular. Besides promises of one-time pension raises, other social payments and benefits, the government’s efforts seem to be directed at infrastructure projects, including road construction. Moldova’s international partners and donors have balked at these populist intentions. BalkanInsight also writes that pro-Russian authorities are looking east to Russia, Turkey, and China for new funding lines as they delay the reform commitments undertaken by Chișinău in a 2014 Association Agreement with the European Union. 

SUSPECTED ISIS FIGHTER DETAINED: Moldova’s Secret Intelligence Services detained a wanted citizen of Tajikistan allegedly affiliated with the Islamic State. He was detained at the Chișinău International Airport after presenting a fake Ukrainian passport. BalkanInsight writes that in recent years, Moldovan mercenaries mostly from the breakaway Transnistrian region, have fought in the conflict in eastern Ukraine, and on the side of the Assad government in Syria as employees of Russian private military company Wagner. 

SPOTTED THIS WEEK

O.S.C.E. VISIT: The new O.S.C.E. Special Representative for the Transnistrian Settlement Process, Ambassador Thomas Mayr-Harting, concluded his three-day working visit to Moldova. The Ambassador mapped the priorities for 2020 and called on the Sides to pursue a result-oriented approach to promote progress in the Settlement of the Transnistrian issue.  

E.U. INVESTMENTS: The European Union is investing €22.8 million to support the development of smart, inclusive and sustainable regional growth in Ungheni (center of Moldova) and Cahul (south of Moldova), creating a better quality of life and new opportunities to citizens. In total, the E.U. contribution for both Cahul and Ungheni regions reached more than €50.8 million. 

GLOBAL FORUM ON MIGRATION: Moldova participated in the Global Forum on Migration and Development to discuss development and migration. At the forum, Moldova was represented by Secretary of State, Tatiana Molcean, who spoke about the importance of maintaining the relationship with the Moldovan diaspora abroad, among other subjects. Moldova faces the worst demographic crisis, with a population that has shrunk by almost a third since 1989.