Thursday, May 7, 2015

Romania's Ponta eyes new pact with ally ahead of election

By Radu-Sorin Marinas

BUCHAREST (Reuters) - Romania's ruling Social Democrat party (PSD) will seal a new partnership with a junior ally on Thursday, looking to secure its grip on power before a national election in 2016, party sources told Reuters.

Prime Minister Victor Ponta's government has looked vulnerable to defections ever since his surprise defeat in a presidential election in November. Two smaller political parties have already pulled support from his coalition in the aftermath.

A new deal with the National Union for the Progress of Romania (UNPR) will provide crucial support for Ponta's cabinet, giving it a functioning majority and thwarting potential attempts by the opposition to topple the cabinet in a censure motion. With 52 MPs, the UNPR is Romania's third-largest party.

The partnership could help stave off trouble for Ponta as he looks to push legislation for sweeping tax cuts through parliament and navigate potentially difficult negotiations with the International Monetary Fund over a standby aid agreement.

"Our party is likely to overwhelmingly endorse a protocol to run on joint electoral lists with UNPR in both municipal and parliament elections," a member of the PSD's executive committee, which meets on May 7 to discuss the plan, said.

"It's going to be politically beneficial for both sides," a second senior PSD member told Reuters.

A UNPR senator said he expected a plan to run on joint electoral lists with the PSD in next year's elections "will be endorsed by our PSD colleagues tomorrow".

"We aim to keep our representation of 50 seats in parliament, but more details are to be further discussed," the official said. He said about 10 percent of eligible posts, including county councillors in local elections, would be awarded to his grouping.

The UNPR is a leftist party which supports scrapping Romania's 16 percent flat income tax rate in favour of a progressive system, and holds the interior ministry portfolio in Ponta's cabinet.

The party has trebled its number of seats in parliament since a 2012 general election with defectors from other parties.

Wednesday, April 22, 2015

Crusading women blaze justice trail in post-Soviet Romania

By ALISON MUTLER
Associated Press

BUCHAREST, Romania (AP) - Prosecutor Denisa Cristodor made history last fall, launching Romania's first case against a communist-era prison guard suspected of crimes against humanity.

The 37-year-old is blazing a trail on another surprising front, as part of a vanguard of young women prosecutors and judges shaking up Romanian society by going after its sacred cows: ministers and moguls who bled the state of hundreds of millions, former prison commanders in communist-era prisons suspected of torture and murder.

Most of these women were in school when communism collapsed 25 years ago. Today they are slowly forging an independent justice system based on their belief that nobody is above the law.

Under communism, the justice system was a man's domain - which shielded fellow men in the ruling elite. That began to change with the advent of democracy and capitalism in the 1990s, when men left poorly paying state prosecutor and magistrate jobs to become lawyers or businessmen, leaving the door open for women. The result: 60 percent of Romania's prosecutors and judges today are women.

The "feminization of the justice system" is helping Romania shed its status as a swamp of corruption and patronage, said Cristian Parvulescu, deacon of the National School of Political Studies and Public Administration

"These women are stamping their own vision on Romania," said Parvulescu. "Before they were not able to do it and they are doing it in a courageous way."

The first winds of change came in 2005 after Traian Basescu was elected president on a vow to fight corruption. The following year, he appointed Laura Codruta Kovesi as Romania's first woman prosecutor general. She was only 33 at the time. Nearly a decade later, Kovesi is Romania's most powerful woman, spearheading an anti-corruption fight that fearlessly goes after some of Romania's most powerful figures.

In recent months, anti-corruption prosecutors have indicted the former finance minister over bribery allegations; charged Prime Minister Victor Ponta's brother-in-law on suspected graft; and investigated Basescu's brother, closest ally and son-in-law.

In 2014, the anti-corruption office secured a record 1,051 convictions, up from 743 the year before. Even more are expected this year. Among those convicted since January 2014 were a former prime minister, seven former ministers, a former deputy prime minister, four lawmakers, one European Parliament lawmaker, 39 mayors, 25 magistrates and two tycoons.

Basescu himself, who left office in December, is the target of an investigation led by female prosecutor Adina Petrescu on charges that he publicly threatened and tried to blackmail a senator who accused his family of wrongdoing.

Kovesi, a former professional basketball player, became a magistrate in 1995. "Twenty years ago, they said the prosecutor's office was not a place for women," she told The Associated Press. "They said we'd give up more easily ... I hope I have knocked down that belief."

Kovesi and her colleagues are regularly criticized by politicians and in the media, whose owners have been themselves been convicted of corruption. She now has security guards assigned to guard her.

"What is surprising is that corruption is present at levels and in all sectors," Kovesi said. "I saw people who were being investigated and they chose to continue corruption, to hide to use more sophisticated methods and disguise their bribes."

Cristodor's crusade began out of a belief that the horrors of the communist era must not go unpunished - no matter how far they retreat into the past.

In the past year, she has indicted the former commander of Romania's notorious Ramnicu Sarat prison and the commander of Periprava labor camp, where more than 100 died.

Alexandru Visinescu, 89, went on trial in September accused of crimes against humanity for the deaths of 12 prisoners at Ramnicu Sarat, where he was commander from 1956 to 1963. Even a quarter-century after communism, no former prison commander from that time had ever faced justice.

Ion Ficior faces the same charges for the deaths of 103 people at Periprava, which he ran from 1958 to 1963. His trial has not yet started.

Both men deny the charges and say they were following orders.

Cristodor has been compiling the cases against Visinescu and Ficior since 2013. She spoke to dozens of witnesses, traveling to the homes of those who were too sick or frail to make the journey to the prosecutor's office. And she visited Ramnicu Sarat where inmates were held in cramped, frigid cells.

"What surprised me is (former prisoners) made no material demands, the historic reparation was enough," she told The AP in her first media interview.

"It was a regime of physical and mental extermination," she said. "(Prisoners) woke up with snow on their hair because it so was cold and the water in their mugs froze. It was inhuman ... They communicated by coughing in Morse code."

Parvulescu says women like Kovesi and Cristodor have brought new respect for the law in Romania.

"Christian Orthodox countries are masculine societies where justice is the result of negotiation," he said. "Women are interested in moral values."

Former Romanian presidential candidate Udrea charged with corruption while minister

By Luiza Ilie

BUCHAREST (Reuters) - Romanian anti-corruption prosecutors said on Tuesday they had indicted former presidential candidate Elena Udrea on charges of accepting bribes and abuse of power from 2010 to 2012 while she served as regional development minister.

Seven other people were indicted alongside her in the case, including former economy minister Ion Ariton who was charged with abuse of power, the prosecutors said in a statement.

Romania is one of the European Union's most corrupt states but a crackdown on high-level corruption has earned prosecutors praise from Brussels and from foreign investors fed up with cronyism.

Udrea, a 41-year-old lawyer, is a centrist opposition lawmaker and close political ally of former president Traian Basescu. She ran for president in November but came fourth.

The prosecutors said there was evidence that while a minister, Udrea and people close to her took bribes from private firms in exchange for ensuring they would be paid on time for public works contracts.

The bribes outlined by prosecutors, some in Romania's leu currency and some in euros, add up to about 1.8 million euros ($1.9 million) at the current exchange rate.

Udrea has denied wrongdoing and repeatedly accused the country's anti-corruption prosecuting agency of bias and of having links to the secret services.

Prosecutors are also investigating her in other cases and she has been in custody since late February.

A large number of the corruption cases uncovered in recent years showed mayors, city councillors, lawmakers and ministers favoring certain companies for public works deals, and demanding a percentage of the contracts as bribes.

Prosecutors also alleged that Udrea used some of the bribes to finance the center-right party she belonged to at the time.

They also said she used 8.1 million lei ($1.95 million) of the regional development ministry's money to fund a private boxing event under the pretext of buying tourism advertising for Romania.

Ariton, now a senator, allegedly convinced ten state-owned companies to sponsor the private event for a total of 1.7 million lei ($410,000). State-owned firms are by law not allowed to sponsor private events. Ariton also denies wrongdoing.

According to World Bank figures, one in 10 businesses in Romania report being asked for bribes.

Wednesday, April 8, 2015

Romania's corruption fight puts the brakes on investment


By Matthias Williams and Luiza Ilie

BUCHAREST, April 8 (Reuters) - Romania's crackdown on corruption is having an unintended consequence: investment is slowing as many officials avoid approving projects lest they become the next target of the investigators.

Civil servants and ministers who would otherwise sign off on projects, sometimes but not always in return for bribes, have become hesitant. Even honest officials fear the deals will attract scrutiny by prosecutors and that they will join a long line of public figures to be investigated or imprisoned.

In the long term, most observers say, rooting out corruption will bring huge benefits to Romania, the European Union's second poorest country. For now though, it is delaying both private investment and the signing of contracts for firms to undertake projects for the state.

The latest casualty in the fight against graft is Finance Minister Darius Valcov, who resigned last month after being accused of taking bribes. Prosecutors later found more than 100 paintings, some by Picasso and Renoir, as well as gold bars and cash stashed away in various places including his safe. He denies wrongdoing.

The head of Romania's fiscal watchdog says the slowing of decision-making has helped to drag down capital expenditure, with net public investment spending as a share of GDP at a 7-year-old low, according to Eurostat data.

"By and large if you talk to most of the businesses I have come across they believe it (the anti-graft fight) was long overdue, some message had to be given," Ahmed Hassan, a managing partner at the consultancy Deloitte in Bucharest, told Reuters.

"The drawback of it - we have seen that in the last one year specifically, even vis-à-vis our projects - (is) decisions are just not happening. Some people are waiting, maybe it'll go away from me and someone else will do the approval."

"And that's just not good. Sometime strategic projects could be delayed because of over-nervous bureaucrats."

Business executives are reluctant to discuss openly which of their projects have been held up, fearing that publicity will lead to yet more delays.

However, Olguta Vasilescu, a prominent mayor, said local administrators are on a "signature strike".

Aristotel Cancescu, the head of the council in the central city of Brasov agrees. "At present it is a risk to work in local public administration," said Cancescu, who himself is under investigation for money-laundering and taking bribes.

"Anything can be interpreted and from what I know there is now a blockage at the county council and in many other local administrations, because people are afraid to sign anything," he said earlier this year.

A LOT OF FEAR

Corruption has cost Romania dearly in the quarter of a century since Communism fell.

Data compiled by Reuters based on statements by prosecutors shows the problem. Investigations in 2014 suggest graft may have cost the state and private companies around 1.02 billion euros ($1.1 billion). That's enough to build 200 km (120 miles) of motorway in a country with some of the worst infrastructure in Europe. For a Factbox, click on

Bribery to secure contracts appears widespread, with local officials receiving cash, cars, holidays, clothes, free dental work and even trout and whisky in exchange for favours. One former judge was accused of taking bribes worth 83,000 euros including in the form a cemetery shrine.

"The local capital has been plagued by crony capitalism," Mihai Bogza, chairman of Romania's Foreign Investors Council and of lender Bancpost, told Reuters. "That's why we are very happy about the current fight against corruption."

"This being said, the fight against corruption is coming hand-in-hand with the fact that many public employees appear to be very reluctant to take on any kind of responsibility," he added. "Such attitudes should be clearly discouraged."

According to a study by consulting firm A.T. Kearney last year, Romania had the second-biggest black economy in Europe, after its neighbour Bulgaria.

One in 10 businesses report being asked for bribes, according to 2013 World Bank figures. The stigma of corruption is partly why Romania, along with Bulgaria, is kept out of passport-free EU Schengen zone until its performance improves.

"Public capital spending continues to be very low," said Ionut Dumitru, who heads the Fiscal Council, an independent authority which monitors the state budget.

"Many spending management authorities know they have problems with their contracts and the pace of works or approvals are delayed or postponed because they fear legal problems," said Dumitru, who is also chief economist at Raiffeisen Bank Romania.

Octavian Vidu, an investment manager at the China-backed CEE Equity Partners, stopped discussions on two projects after being asked for kickbacks. A supporter of the crackdown, he says businesses traditionally close to politicians will struggle to cope, and some might eventually become ripe for acquisition.

"It's going to be a vacuum. However painful for everybody, I think that's going to bring a different level of trust for investors like us," he told Reuters. "There is a lot of fear, there is a lot of caution out there, but I'm not sure if the old habits have died yet." ($1 = 0.9210 euros) (editing by David Stamp)

Friday, April 3, 2015

FT: Romanian twins throw wrench in US-EU trade deal?

Meet the Miculas: two twin brothers, Ioan and Viorel, whose battle with EU law will be of interest to anyone following Europe’s fitful trade negotiations.

The duo’s battle to save their beer-to-biscuits food empire in northern Romania may not seem an obvious proxy for an increasingly bitter fight over the EU’s trade deals with the US and Canada. But it cuts to the heart of one of the most politically contentious issues surrounding both trade accords: the status of international investment tribunals.

The brothers, who also hold Swedish citizenship, have had a terrible start to the week.

On Monday, the EU said they would have to repay all the subsidies they received to build up their business in the poor northern Romanian county of Bihor, on the Hungarian border. Their factories, which produce brands such as Servus beer and Rony biscuits, depended on what Brussels ruled was illegal state aid. According to their lawyers, the pair had decided to invest in a region as impoverished as Bihor on the understanding that Romania would subsidise them. On that pledge hang some 9,000 jobs.

Their business model, which predated Romania’s accession to the EU, came unstuck when Bucharest decided to join the European club. Competition authorities no longer allowed this kind of state largesse. In 2005, Bucharest cut the funds to the brothers in Bihor. (Romania finally joined in 2007).

This is where things get interesting legally, and the trade aficionados will start to realise something is afoot.

As Swedish citizens, the Miculas took their case to an international tribunal and won. At the end of 2013, the International Centre for Settlement of Investment Disputes awarded a settlement of $250m from the Romanian government because of its suspension of the subsidies. It was one of the largest sums ever awarded by an international investment tribunal. To Brussels, the award of damages meant state aid was now effectively being paid “through the back door”.

Anyone following Europe’s landmark trade deal with the US will know that these international tribunals are an incendiary issue. They allow companies who feel they have been aggrieved by local legal authorities to appeal to arbitrators appointed under the terms of trade deals. To EU and US trade officials, they are an important way to protect investor rights, while opponents fear that they could undermine national and EU law. Opposition is especially strong in Germany and among Socialists in the European Parliament.

So, the involvement of a tribunal has put Brussels in a bind. On the one hand, EU trade officials have been talking up tribunals as a good thing to have in trade accords, such as that with the US and Canada. On the other hand, EU competition officials have been seeking to overturn the Micula brothers’ verdict, one of the most closely watched rulings from the ICSID.

What does this all add up to? For EU trade officials, there is no problem here. They say any tribunals included in the US deal will be designed to avoid any of the problems that cropped up in past cases. They argue the Miculas are something of an anomaly because their case is complicated by Romania’s accession to the EU. EU law has simply triumphed in clearing up a minor intra-EU glitch. In fact, many in Brussels hope future tribunals will clear up the confusion created by existing bilateral trade accords, like the one between Sweden and Romania.

Investors may well not see it the same way. The European Commission’s decision on Monday means Brussels has overridden the ICSID – and that is a highly significant development. Yes, the Micula case has peculiarities but every complex investment case is going to have peculiarities. Many will involve countries outside EU law or new members of the bloc. The Micula case is certainly a significant show of intent from the commission.

So, is that it: Brussels trumps international tribunals? Not quite. There will probably be one final chapter in this saga. The case could well go to appeal at the European Court of Justice. Lawyers say both brothers are considering an appeal. To the Miculas’ supporters, the EU is challenging perfectly sound treaties that investors should be able to trust (a Romania-Sweden trade accord and the ICSID framework itself).

The only thing we can take for granted is that the Micula brothers will only fan the debate about tribunals, not lay it to rest.

Saturday, March 28, 2015

TOL: Shaken by Court Ruling, Romanian Church Comes Roaring Back

With the public firmly on the side of teaching religion in school, the debate shifts to the rights of non-Orthodox students.
27 March 2015

Religion classes have been a normal part of the Romanian child’s school day since the advent of democracy more than 20 years ago. In a country where more than four in five people follow Orthodoxy, “religion” usually meant Orthodox teachings, and the small number of pupils who preferred not to take the classes often had no choice, as many schools offered no alternative subjects.

Under the law, children could not be required to take religion, but until last year parents who wished to remove their children from the classes had to opt out by submitting a request to the school.

That was until the Constitutional Court turned the procedure on its head. In November the court found parts of the system unconstitutional and installed an “opt-in” system instead, requiring parents to request that their children be enrolled in religion class.

The Romanian Orthodox Church was rocked by the ruling, calling it “discriminatory and humiliating,” and quickly assembled a support group of celebrities for an online campaign to explain the new law and persuade parents to keep their children in religion class.

On the other end of the ideological spectrum, groups like the Secular Humanist Association were delighted. For association president Alexandru Toma Patrascu, children are too often fed an intolerant, manipulative message instead of being taught to understand religion in its broader context.

He gives the example of religion textbooks that contain pictures of a child being hit by a car as a punishment for lying, or the admonishment not to make friends with children of other faiths.

In agreeing to hear a complaint against the religion law brought by an activist for secular causes, Emil Moise, the Constitutional Court tried to unravel the tangled legal relationship between the churches and the public schools, which in effect made religion class both mandatory and optional. The Romanian Constitution guarantees the right to study religion in public school, and the education law enshrines religion classes in the core curriculum throughout a student’s school life starting from the first year of primary school. But paradoxically, taking part in religion class was optional in what is, after all, a constitutionally secular republic.

Moise argued (pdf) that the education law violated the constitutionally guaranteed rights to freedom of thought, conscience, and religion. The court took a middle course. It found that the constitutional right of parents to raise and educate their children also grants the right to enroll their children in religion classes.

But since parents cannot be forced to expose their children to religion, the court put the onus on religious parents. From now on, not enrolling in religion class would be the default mode; parents who wish to sign up their children for such classes would have to opt in.

And opt in they did, in a big way. The Education Ministry set 6 March as the deadline for parents to decide. If the Orthodox Church and Romania’s 17 other recognized faith groups ever were seriously worried about secularists undermining their moral authority – atheists and those who profess no faith make up a negligible 0.2 percent of the population – they needn’t have been. By deadline day, 89.75 percent of parents had enrolled their children in religion class for the next school year.

With publicly subsidized religious studies firmly entrenched, the debate is swinging back to those who opt out of the classes. Secular campaigners like Moise and Patrascu, joined by some liberal believers, say the state needs to pay attention to their constitutionally guaranteed rights, as well as the rights of non-Orthodox believers to learn about their own religions in public schools.

The question of what to do for the more than 200,000 children whose parents kept them out of religion classes next year remains unresolved. Education Minister Sorin Campeanu suggested holding religion classes at the beginning or end of the school day in order not to affect the schedules of the other 10 percent.

One idea discussed by parliament’s education committee, but so far only there, is to offer civic and moral education as an alternative to religious studies. Spain introduced such classes in 2006 as part of its own long process of diluting the Catholic Church’s role in public education.

Mother and broadcast journalist Adriana Ene maintains that the value of religion classes goes beyond teaching the basics of (usually) Orthodox belief, and in this she probably speaks for the silent majority of Romanian parents.

Her two sons, 10 and 14, not only learn “why there is an icon on the classroom wall” and why the saints make good role models, she says.

“I wanted them to go to religion class, because there they learned that they can bring books and clothes for poor children. And because the religion class is like an oasis of peace and of good examples they can take with them at home or wherever they go,” she said.

Romania is far from the only European country to agonize over the role of the churches in public education.

In Spain, like Romania a society dominated by a single religion, the Catholic Church plays a far smaller role in schools than in the past. But even though schools now must offer social and civil values teaching in addition to optional Catholic religion classes, two of three students opt for Catholicism, El Pais recently reported.

Patrascu favors the system used in the Netherlands, where teaching about individual religions is offered almost exclusively outside of the public school system. Romania could adopt a more values-based system, putting more stress on the history of religion and less on the ideology of the Orthodox Church, he argues.

The Orthodox hierarchy’s panicked reaction to the November court ruling harks back to a time, only a generation ago, when religion was taboo in public life. Leading Communist officials were not allowed to be seen going to church, even for a baptism or wedding, and many churches were demolished on the order of Communist leader Nicolae Ceausescu. With the regime’s fall in 1989 came a renewal of public displays of faith. The Orthodox Church was the main beneficiary, as it regained its old position of moral authority and state benefits began to flow in, a situation that led to criticism and complaints about the wealth of the church, which is financed by the state yet pays no taxes.
Soon after the change of regimes, schools began introducing religion classes, usually led by priests until enough specialized teachers could be trained.

“Religion is important for the development of a child because it contributes to shaping his personality and it helps him to learn positive moral behavior,” said Laura Tonghioiu, a religion teacher in Bucharest.

She denies that children are manipulated by religion teachers, the argument put by Patrascu and others who say religion plays too big a role in Romanian life. Rather, they learn to be respectful, civic-minded citizens through studying moral and religious teachings. Religion does not impose, it proposes a way, she says.
For Ene, religion class imparts useful information like any other.
“Just as my children are taught Romanian, mathematics, biology, music, so in the same way they should know their religion and its moral significance. To be good, to help others, to learn about God, there is nothing wrong in this.”

Where moderate believers like Ene and secularists do find common ground is on the need to reform the way religion is taught. Although the Romanian constitution states that children from all faith groups should be able to study their own religion, this happens only on paper, Ene acknowledges, owing to the lack of specialized teachers in faiths other than Orthodoxy.

“Children who don’t want to study religion, or those of a different confession, have no alternative,” Ene said.

The predominance of Orthodox teachers led parents to complain to the Secular Humanist Association, Patrascu said.

“There were situations when parents wanted their children not to study religion, but they had to stay in the class because there were no alternatives,” he said.

Romania’s education law makes no mention of the Romanian Orthodox Church. Rather, it says schools “will ensure their constitutional right to participate in the religion class to students belonging to religions recognized by the state, regardless of their number and according to their own confession.”

But a protocol signed by the Orthodox Church and the Education Ministry in May gives the church an advisory role in the writing of textbooks for Orthodox religion classes. And the church has the final say over the teachers of such classes. They must obtain written approval, or a “blessing,” from the Orthodox hierarchy, and if the blessing is withdrawn for good reason, the teacher’s employment contract is terminated.

Patrascu says parents sometimes complain of abuses such as religion teachers taking their pupils to church during class time – with some justification, Ene agrees.

"I would take the side of parents who confront extremist religion teachers, or teachers who lack dedication,” she said. “The children should be taught religion with kindness and responsibility. … There are extraordinary teachers and those who are not so good for this job, like anywhere else.”


Lorelei Mihala is a journalist with Romanian National Television.

Romania PM picks EU funds minister as new finance minister

BUCHAREST

(Reuters) - Romania's leftist prime minister, Victor Ponta, said on Friday he had appointed the government's EU funds minister, Eugen Teodorovici, as the new finance minister.

Ponta had briefly taken over the portfolio following the resignation earlier this month of Darius Valcov, who faces accusations of corruption -- charges he has denied. Parliament voted on Wednesday to allow prosecutors to arrest him.

Teodorovici, 43, faces potentially difficult talks in April with the International Monetary Fund and the European Commission, where he will seek backing for Romania's plans for sweeping tax cuts in 2016 to 2019.

On Friday, the IMF said the planned tax cuts threatened to undermine five years of fiscal consolidation and urged the cabinet to reconsider their size and timing.

Romania has a standby 4 billion euro aid deal with the IMF and the European Commission, which is tied to its performance in implementing reforms and keeping the deficit in check. The accord expires in September.

The tax cuts were formally approved by the government on Wednesday and will be debated in parliament before a final vote that is expected by June.

Romania's talks with the IMF ended without agreement in February as Bucharest resisted calls for gas price hikes and restructuring state-run coal firms.

Including Ponta's brief stint, Teodorovici will become the sixth finance minister since Ponta took office in May 2012. The premier has jokingly referred to the position as a "kamikaze" role.

Valcov quit after prosecutors alleged he had favored a firm for a public works contract in exchange for about 2 million euros ($2.20 million). Prosecutors subsequently accused him of unlawful gains after they discovered cash, gold bars and a French Impressionist painting in his safe.

NYT: Romanian Ex-Minister Suspected of Accepting Renoir as Bribe

BUCHAREST, Romania — Prosecutors detained Romania's previous finance minister Wednesday on suspicion that he took bribes, including gold bars and a painting by French Impressionist Auguste Renoir, when he was mayor of a southern town.

Prosecutors said Darius Valcov had hidden the painting, three kilograms (6.6 pounds) of gold and stashes of cash worth $410,000 in a friend's safe from 2011.

He was detained for 24 hours.

Valcov resigned as finance minister on March 15 after prosecutors charged him with taking 2 million euros ($2.1 million) in bribes when he was mayor. He denies wrongdoing.

In another development Wednesday, a parliamentary vote ruled against lifting the immunity of a Romanian senator from the ruling party who prosecutors say is suspected of corruption.

Senators voted 79-67 in favor of lifting the immunity of Dan Sova, a former transportation minister, but fell short of the 85 votes required.

The vote was criticized by the U.S., British and Dutch embassies in Romania who said the legislature should not prevent anti-corruption probes.

Prosecutors want to arrest Sova on suspicion that as a senator he illegally earned 3.5 million lei ($870,000) as a lawyer in the privatization of several electricity companies in his constituency and destroyed computer files to cover his tracks. He denies wrongdoing.

After the vote, Sova left leadership positions he has held in the ruling Social Democratic Party.

Prosecutors in Romania have launched a series of high-level corruption investigations in the past year.

Monday, March 23, 2015

Romanian PM nominates himself as interim finance minister

By Radu-Sorin Marinas

BUCHAREST (Reuters) - Romania's prime minister nominated himself to take over the finance ministry portfolio temporarily he said on Friday, after the previous minister became the most senior sitting politician to be investigated in a corruption crackdown.

Victor Ponta would be taking over days before his government is set to approve sweeping tax cuts for 2016-2019 designed to stimulate economic growth, but which analysts have criticized as unsustainable. Ponta has insisted his government's fiscal policy would not be derailed by ongoing corruption probes.

Ponta also faces potentially difficult talks in April with the International Monetary Fund (IMF) to negotiate the terms of an ongoing standby aid deal that expires in September. Talks ended without agreement in February as Bucharest resisted calls to raise gas prices and restructure state-run coal companies.

"I will take responsibility as interim for the finance minister until March 25," Ponta said on his Twitter page. "After fiscal codes are adopted, I will submit a proposal for a new minister to the president."

Former Finance Minister Darius Valcov resigned after anti-corruption prosecutors accused him of taking kickbacks worth about 2 million euros in a previous role as a provincial mayor. Valcov, who has denied wrongdoing, cannot be arrested until parliament votes to allow prosecutors to do so.

Valcov has joined a growing list of senior figures -- from a top judge to the prime minister's father-in-law -- to be investigated for graft in an energetic crackdown by prosecutors that has won praise from Brussels.

Ponta would become the government's fifth finance minister since his government took office in May 2012, and the premier has jokingly referred to the position as a "kamikaze" role.

Three senior officials from his ruling Social Democrat Party told Reuters earlier in the day that Ponta will nominate himself.

"We couldn't yet find a successor to Valcov, not that there aren't willing takers. It's that we have yet to find a suitable person to handle this," another senior ruling party member told Reuters.

Ponta is due to meet President Klaus Iohannis, who must formally approve the appointment.

Romania, one of Europe's poorest states, has emerged from deep recession after a real estate crash to grow 2.9 percent last year while keeping its fiscal deficit under the limits agreed with the IMF and the European Commission.

Once the IMF deal expires, Ponta has said Romania could seek a new type of arrangement such as a flexible credit line, which would come with fewer conditions than the quarterly reviews the country has had to pass to keep its aid deals going since 2009.

Romania insists US-led missile system is defensive

BUCHAREST, Romania (AP) — Romanian officials insist a U.S.-led missile defense shield planned for Romania is for protecting NATO members from attacks — not a threat to Moscow.

The comments came after Russia's ambassador to Denmark, Mikhail Vanin, said warships from the Scandinavian NATO country could become targets for Russian nuclear missiles if it joins the alliance's missile defense system.

In August, Danes agreed to contribute to NATO's shield with at least one frigate with advanced radar capacity. Russia strongly opposes the missile defense system, with bases planned in the Romanian town of Deveselu and Poland.

Romanian Defense Minister Mirce Dusa said Sunday "we don't agree with such a statement ... the anti-missile system is a defense system," echoing comments made earlier by the foreign minister.

NATO also reacted, with alliance spokeswoman Oana Lungescu telling Danish daily Berlingske that NATO has told Russia its missile defense isn't directed against them.

"Denmark is a staunch NATO ally and NATO will defend all its allies against any threat," she wrote in an email, according to the newspaper. "We have made it clear that NATO's missile defense is not directed at Russia or other countries but is intended as a defense against missile threats."

Thursday, March 19, 2015

Romania opens criminal probe into ex-president over threats to senator

BUCHAREST (Reuters) - Romanian prosecutors said on Wednesday they had opened a criminal investigation into former president Traian Basescu over threats he made to a senator while still head of state.

Last year Basescu warned leftist senator Gabriela Firea on television to mind her own business and to take care of her husband, Florentin Pandele, the mayor of a small Romanian town near the capital Bucharest.

Basescu, who is from the center-right, then said Firea "might not find him at home one day if she is not careful".

Firea, then spokeswoman for leftist Prime Minister Victor Ponta's failed 2014 presidential campaign, said the comments were "clearly aimed at threatening a senator and humiliating a citizen of this country" and she filed a complaint.

Basescu, an outspoken former sea captain who served as president from 2004 to 2014, lost his immunity from prosecution after stepping down as head of state.

"In the case that started as a result of the complaint filed by Gabriela Firea ... prosecutors have proceeded with a criminal investigation on suspicion of committing blackmail," the Prosecutor General's office said in a statement.

"Traian Basescu came to the prosecutors' headquarters today to be notified of the charges and his defenders have requested a deadline to study the file."

Basescu declined all comment. He has previously called Firea a "blackmailer".

He has a track record of inflammatory comments and accusations. In 2007, in a private conversation with his wife that was recorded, Basescu called a reporter a "filthy gypsy" and was reprimanded by the national anti-discrimination office.

The case is also the latest in a series of setbacks for Basescu, whose brother is under investigation for allegedly taking a bribe to help keep an underworld boss out of jail.

His former protege and presidential candidate Elena Udrea is also under investigation for graft amid an ongoing crackdown on high-level corruption. Udrea has denied wrongdoing.

In a separate case, prosecutors are also looking at the circumstances under which one of Basescu's daughters purchased farm land.


(Reporting by Luiza Ilie; Editing by Gareth Jones)

Tuesday, March 17, 2015

Romania detains head of second-tier graft watchdog on graft charges

By Radu-Sorin Marinas

BUCHAREST, March 16 (Reuters) - Romanian prosecutors detained the head of a European Union-backed anti-corruption watchdog on Monday, suspecting him of inflating the value of real estate by 75 million euros ($79 million) in a land restitution scam.

The detention is the latest in a parade of arrests and convictions of high-ranking officials in Romania, one of the EU's most corrupt countries. Finance Minister Darius Valcov resigned on Sunday, accused of taking money in exchange for favours to a business while a provincial mayor.

Prosecutors on Monday detained the head of the National Integrity Agency (ANI), a watchdog set up after Romania joined the EU in 2007 to investigate suspiciously wealthy politicians, which won praise from Brussels but was often resented by MPs.

Unlike the main anti-corruption agency, the DNA, the ANI does not have the power to prosecute.

Prosecutors said ANI head Horia Georgescu would be detained for 24 hours, on the "reasonable suspicion" that he had abused his powers in a previous role at a government agency that restores property seized under Communism to its rightful owners.

Georgescu denied the allegations, according to a statement by his lawyer to Realitatea TV. Valcov also denied wrongdoing.

OVERVALUATION

"Specifically, in (2008-2009), the Central Commission to set property compensation ... part of the National Authority for the Restitution of Property, of which Georgescu was a member, approved evaluation reports for three dossiers ... with over-valued real estate compensation," the DNA said in a statement.

Thousands of Romanians are waiting for compensation for property seized under Communism, which fell in a bloody revolution in 1989 after four decades of dictatorship. Disputes over land ownership, the inefficiency of the judicial system and red tape have hampered efforts to return property.

Widespread corruption has long deterred business in Romania, which is joint last among EU states in Transparency International's corruption perception index. The EU has Romania's justice system under special monitoring, together with that of neighbouring Bulgaria.

Markets shrugged off Valcov's resignation on Monday and analysts said the minister's exit would not derail Romania's fiscal policy aims.

Prime Minister Victor Ponta's government, which faces a general election at the end of next year, has announced proposals for sweeping tax cuts between 2016 and 2019.

Ponta told reporters on Monday that Valcov, one of the architects of the tax proposals, would not be replaced immediately, but that a successor would be appointed after the tax proposals were sent to parliament around March 25. ($1 = 0.9458 euros) (Editing by Matthias Williams and Kevin Liffey)



EurActiv: Romanian finance minister resigns over corruption allegations

Romanian Finance Minister Darius Vâlcov resigned yesterday (15 March), after prosecutors opened a criminal investigation into suspected abuses of power in his former role as a mayor.

Vâlcov is the most senior sitting Romanian politician to resign because of corruption allegations, amid a flurry of high-level investigations and graft trials over the past two years. He has denied taking a bribe.

Romania is seen as one of the European Union's most corrupt states but its prosecutors and magistrates have won praise from Brussels for crackdowns that have seen many members of parliament face trial.

Prosecutors said on Friday they had opened a criminal investigation against Vâlcov on suspicion he favoured a company for a public works contract in exchange for about €2 million during 2010-2013 when he was a mayor.

"I spoke with Darius Vâlcov today at lunch and he handed me his resignation," left-wing Prime Minister Victor Ponta told television station Romania TV. Ponta said he had accepted the resignation but gave no further details as to why Vâlcov had quit.

Neither Vâlcov nor ministry officials were immediately available for comment.

Ponta said he would propose a replacement after Vâlcov finalised a new fiscal code in the coming days to cut taxes and presented it to the government for approval "because it is important for Romania to have this project".

Ponta and Vâlcov announced plans in February to cut all major taxes between 2016 and 2019, a move analysts said could take an unsustainable toll on the budget.

A former two-term mayor turned senator in parliament, Vâlcov took over as finance minister in December in a cabinet reshuffle following Ponta's defeat in the 2014 presidential election. He had previously been the budget minister, a portfolio that was merged with the finance ministry post in the reshuffle.

President Klaus Iohannis asked Ponta earlier on Sunday to start the process of replacing Vâlcov, saying he was "affecting the activity and credibility of the government".

The investigation is another blow to Ponta, after he was surprisingly defeated in November's presidential election. Ponta’s father-in-law and brother-in-law are under criminal investigations in separate cases.

His ruling Social Democrats have a party congress this month where his leadership may be challenged, while opposition centre-right politicians have said they aim to file a no confidence vote against him in parliament this year. The next parliamentary election is due at the end of 2016.

Saturday, March 7, 2015

NYT: Romania’s Anti-Corruption Mania

BUCHAREST, Romania — With its wide, tree-lined boulevards and Belle Époque buildings, this city was once known as Little Paris. Today, Romania’s capital feels more reminiscent of the French Revolution as it is roiled by a legal reign of terror.

In November, the leader of the center-right National Liberal Party, Klaus Iohannis, was elected president on a populist, anti-corruption platform, succeeding Traian Basescu of the more conservative Democratic Liberal Party.

Only lately had Mr. Basescu thrown his weight behind a long-running anti-corruption drive that had seemed relatively toothless. For Mr. Basescu, it was a useful political tool to attack opponents, as well as a way to appease American and European critics of Romania’s governance. But his move was belated.

With Mr. Iohannis’s victory, the anti-corruption effort went into overdrive. While executive authority rests with the prime minister, Victor Ponta, who heads the Social Democratic Party, the presidency can be a powerful bully pulpit.

Denied justice for decades, first by dictators, then by ineffectual democrats, Romanians enthusiastically backed the anti-corruption cause. After a judicial sweep that started under Mr. Basescu netted more than a thousand convictions of politicians and businessmen last year, the campaign proved a key electoral issue.

Crude populism now carries the day. The television networks relentlessly cover every perp walk. With the courts convicting at a rate of more than 90 percent, scores of politicians from all the main parties have been disgraced.

The nation is running out of prison space. Condemned by the European Court of Human Rights, Bucharest’s jails are desperately overcrowded; thejustice minister recently announced that he was seeking European funding for several new prisons. Little else looks as if it’s being built these days. Businesspeople I’ve spoken to have become wary of public-private partnerships since they view such arrangements as too easy to construe as graft.

Bribery is, in fact, endemic in Romanian life: Politics merely mirrors social norms. Everyone in politics and business is presumed guilty of something. Most Romanians admit that they care little about shortcomings of due process, whether it’s laughably thin evidence or prosecutors’ tutoring of judges in verdicts.

The rise of the prosecutorial state threatens even its own. In November, a former top prosecutor, Alina Bica, who was appointed by Mr. Ponta to head the government’s unit investigating organized crime, was herself arrestedon a charge of receiving kickbacks while in office. She had previously participated in developing Romania’s criminal code on government standards. In Mr. Basescu’s words, “Nobody is above the law.”

It’s commonplace for suspects to be pressured to name names in exchange for possible leniency. It’s also routine for family members to be arrested as additional leverage for the prosecutors. One particularly Orwellian measure is the use of “preventive arrests” to imprison certain high-level suspects accused of white-collar crimes on grounds of stopping them from committing similar alleged offenses in future.

Despite official denials, everyone knows the courts are not as politically independent as they should be. A number of those arrested, I was told, have ties to Russian financial interests — which makes them easy to portray as serving the interests of a foreign power that many Romanians regard as a threat.

Before his election in 2012, Mr. Ponta had characterized the National Anti-corruption Directorate as a modern-day version of the Communist dictator Nicolae Ceausescu’s feared secret police. But as public opinion turned in the directorate’s favor, the prime minister changed his tune.

A pro-market politician, Mr. Ponta now acts as cheerleader for the anti-corruption drive — finding it a handy tool for targeting his enemies in the media, particularly the owners of critical newspapers. Soon after Mr. Ponta clashed with Adrian Sarbu, the owner of the Mediafax Group, which publishes Romania’s leading business paper, Mr. Sarbu was arrested on charges of tax evasion, money laundering and embezzlement. He has denied the allegations.

The prosecution of Dan Adamescu, owner of the independent newspaper Romania Libera, is also troubling. Mr. Ponta accused Mr. Adamescu of embezzling from his own insurance company to help finance Mr. Basescu’s re-election campaign. Mr. Adamescu was found guilty and received a more than four-year prison sentence.

The apparent political motivation behind the Sarbu and Adamescu cases demonstrates how an effort to reduce the relationship between money and politics has served instead to ramp up score-settling and judicial overreach.

Another unintended consequence of the anti-corruption campaign is that it has fueled anti-American sentiment. Because the State Department had expressed the fear that a corrupt Romania could become the next Ukraine, with popular anger at a corrupt oligarchy leading to disorder, some Romanians now view the legion of hasty convictions as a misguided attempt to impress America.

The European Union has monitored corruption levels since Romania’s 2007 entry into the Union. While Brussels has never threatened to withhold funding, there was anxiety in Bucharest that a failure to push reform could lead to Romania’s voting rights’ being suspended.

As arbiters of good governance, neither the United States nor the European Union should remain silent over the Romanian government’s abuse of prosecutorial powers. Certainly, a less corrupt Romania would be a better European Union member and a more reliable NATO ally, but it would be a mistake to accept the sheer volume of justice, rather than its quality, as a reliable metric of success.

Romania’s anti-corruption campaign has rapidly metastasized into an illiberal crusade. The public’s insatiable appetite for justice only exacerbates the threat to the country’s democratic future.

American and European governments should congratulate Romanians on their newfound determination to eradicate graft, but now encourage a change in the government’s approach. Romania’s democratic development would be better served by a public process whereby past misdeeds were acknowledged, documented and then forgiven.

Only a comprehensive process that rewards disclosure with amnesty will allow Romanians to stop looking over their shoulders, figuratively and literally. With international media scrutiny, a truth commission would make a powerful statement that democratic Romania will vigorously punish future transgressions — but in a transparent, nonpartisan and judicious manner.

Patrick Basham is the director of the Democracy Institute, a public policy research organization based in Washington and London.

Sunday, February 22, 2015

Romania's Roma

The art of exclusion
A wall that segregated a town's Roma becomes an “art project”—which still segregates the town's Roma


Feb 20th 2015
The Economist

“THIS is a wall built to hide our poverty,” says Alex Banta (pictured), a 53-year old Roma from the northern Romanian town of Baia Mare. To its detractors, the wall is also a clever example of how governments can use ersatz urban-renewal projects to get away with discrimination. In 2011 Baia Mare erected a concrete wall around a Roma neighbourhood. Later that year, Romania's national anti-discrimination body fined the town 6,000 lei ($1,530) and ordered it to take the wall down. The mayor, Catalin Chereches, paid the fine, appealed the ruling, and lost. But last November, instead of demolishing the wall, he invited art students to paint graffiti on it, and then claimed he could no longer remove it; it was now a work of art.

The wall encloses three apartment buildings. The one in the middle has been ruled unfit for habitation; it has no heating or running water, and rubbish lies piled up to the first floor. Mr Banta lives on the third floor of this building, with his wife and 14 children. Some families have been moved to better housing conditions, he says, but only after paying bribes, which he refuses to do. The mayor argues that the wall was erected to protect Roma children from being run over by cars, but Mr Banta says this was unnecessary. The community has only one use for the wall: "When we wash our carpets in the summer, it is perfect for drying them.”

Poverty, illiteracy and discrimination are the main obstacles facing Romania's Roma, who number 621,600 out of a total population of 20m, according to official statistics. (Demographers think their real numbers are at least twice as high, as many Roma prefer not to declare their ethnicity.) In Baia Mare there are around 1,500 Roma families, says Mr Chereches, a 36-year old arts lover who likes to describe himself as an “administrator, not a politician”. In his spacious mayoral office in the centre of the old mining town, a wooden sculpture of a pig sits on the desk; paintings by local artists line the walls.

There is nothing discriminatory about the wall, he says. In his view the National Council for Combating Discrimination issues fines for “anything that has to do with Roma, Hungarians and other minorities, no matter whether you were wrong or not.” The mayor claims that the street in front of the Roma neighbourhood saw 20 victims of road-traffic accidents per year, and that the wall has put a stop to them. The town has built several housing projects to de-segregate Roma communities, as well as an education centre, complete with a kindergarten, which runs adult literacy courses. Mr Chereches says that Mr Banta's building, the one declared unsafe, is slated for renovation this spring, and that the families living there will be re-housed in non-Roma neighbourhoods.

Mr Chereches was regarded as having clean hands when he won election in 2012 with 80% of the vote. That image has been tarnished by a corruption probe launched against him in 2013 for allegedly taking bribes from firms that won public tenders. (The mayor would not comment on the corruption allegations.) He has also fallen out with the Arts and Design University in the nearby city of Cluj, whose students were enlisted for the graffiti project—unwittingly, the school says. The project was organised by a teacher who sits on the Baia Mare city council.

The arts university has since reprimanded the teacher, and erased its logo from the graffiti wall. Its deputy dean, Mara Ratiu, says the graffiti project tainted the school's image, but that she was pleased by the civil-society criticism that ensued. "From now on we will be extra vigilant in selecting partnerships with public institutions,” she says.

Istvan Szakats, who runs an NGO that helps integrate Roma families in Cluj, says the problem of the Roma wall is not one of backwardness or corruption. Baia Mare is seen as a well-managed, civilised town, he notes. The problem is "latent racism". When the town administration evicted Roma from a local shantytown, Mr Szakats expected a public outcry; instead, the mayor's popularity increased. “With the wall, it’s like this: people like it," Mr Szakats explains. "Not only in Baia Mare."

Friday, February 20, 2015

Romania anti-sleaze drive reaches elite

BBC News

The long faces emerging from the building resemble a soap opera procession of the once high and mighty.

Former government ministers, media moguls, judges, prosecutors, and even former President Traian Basescu's favourite, Elena Udrea - dubbed "the president's blonde" - are all under investigation.

Ms Udrea, a former minister of tourism and former presidential candidate, was arrested last week. She is currently an MP.

The DNA's latest targets include Social Democrat Prime Minister Victor Ponta's mother, sister and his brother-in-law Iulian Hertanu.

Eight years after joining the EU, and 13 years after the DNA was set up, Romania seems to be finally getting serious with organised crime - and winning praise from the European Commission.

EU pressure

"Romania is on the right course and needs to stick to it," said Commission First Vice-President Frans Timmermans last month, commenting on the latest EU report on Romania's battle with corruption.

"Tackling corruption remains the biggest challenge and the biggest priority."

The EU's Co-operation and Verification Mechanism was set up in 2007 to monitor judicial reform and the fight against corruption in Romania and Bulgaria. Positive reports are crucial for Romania to be allowed into the EU's open-border regime, the nations in the Schengen group.

Last year alone, 1,138 leading public figures, including top politicians, businessmen, judges and prosecutors, were convicted by the DNA, whose crackdown is being led by chief prosecutor Laura Kovesi - a rate of more than four a day (excluding holidays). So what has changed in Romania?

"In just three years, both big parties - the Orange [Democratic Liberals] and the Reds [Social Democrats] - have been defeated in elections," says analyst Alina Mungiu-Pippidi. She is president of the Romanian Academic Society, an independent policy institute.

The result is that what she calls the "trans-party mafia" that used to run the country, hand out procurement deals involving huge sums of EU money, dodge tax and buy off prosecutors and judges is in disarray.

Prosecutors at Romania's DNA are going after some big fish now

Under surveillance

Equally important, she says, is the character of Klaus Iohannis, elected Romanian president last November. As a political outsider, he is not a signatory of the secret deals between the main parties that have plagued Romanian politics for 25 years.

A typical DNA conviction was that of Monica Ridzi, 37, the former sports and youth minister. She was sentenced to five years in prison for abuse of her position, by spending $800,000 (£518,000) of state funds on youth concerts at inflated prices, using her favourite companies. The proceeds were allegedly divided between herself and her party.

The DNA relies on the secret services for wiretaps of senior figures. "Until now, the services were rather selective about who they investigated. But no longer," says Ms Mungiu-Pippidi.

Corruption in Romania

The Economist

Cleaning up
Romania’s anti-corruption agency makes welcome waves
Feb 21st 2015 | BUCHAREST | From the print edition

ROMANIANS had assumed that Elena Udrea, a former tourism minister, was too powerful for prosecutors to touch. The ex-wife of a rich businessman, she is a protégée of Traian Basescu, a former president. Yet the National Anti-corruption Directorate (DNA) has arrested her for helping to launder millions of dollars her former husband made from charging the government inflated prices for software. Her prosecution is a boost for the DNA, which is slowly convincing observers of progress in tackling corruption.

The DNA’s chief prosecutor, Laura Codruta Kovesi, a basketball star in her teens, rose through the magistracy before getting the top job in April 2013. Some feared she would be unable to protect the agency’s reputation, but in fact the pace of high-level cases has increased. In 2014 the DNA secured convictions of 1,138 people, including 24 mayors, five members of parliament, two ex-ministers and a former prime minister, Adrian Nastase. More than 90% of its indictments led to convictions.

Such good deeds have not gone unpunished. Last year, Ms Kovesi says, “every evening on television, there were attacks on my personal life.” A TV station owned by an oligarch accused her of taking bribes. (She sued for libel.) The DNA faced interference by Victor Ponta, Romania’s prime minister, who before his election in 2012 called it a successor to the reviled security police of communist days. In October 2013 the DNA’s senior anti-corruption prosecutor was replaced. And Mr Ponta’s party pressed for an amnesty that would have made it impossible for the DNA to act against high-level politicians.

Today Mr Ponta is keen on the DNA. The 42-year-old prime minister, himself a former prosecutor, proudly quotes a positive assessment the agency recently won from European Union anti-corruption monitors. The amnesty law was struck down in January, he notes, and talk of reviving it is “not serious”. Indicted MPs are forced to quit. As for Ms Kovesi, he says, “I was the one who appointed her!”

In fact, Ms Kovesi was Mr Basescu’s candidate. She won Mr Ponta’s support as part of a power-sharing deal. But Mr Ponta’s enthusiasm speaks volumes. “It shows how popular the DNA has become,” says Cristian Ghinea of CRPE, a think-tank. It is Romania’s fourth-most-trusted institution, after the church, army and security services. Insiders say Mr Ponta’s attacks were meant only to please his party. His loss of November’s presidential election to Klaus Iohannis, who ran on an anti-corruption ticket, underlines that political success lies in fighting graft, not excusing it.

The EU’s demands for regulatory compliance have opened up career opportunities for clever, honest lawyers. (Many now work for Ms Kovesi.) America is aggressively pushing anti-corruption efforts as part of its policy to contain Russian influence in eastern Europe. American officials hammered that message home during a visit by Victoria Nuland, an assistant secretary of state, to Bucharest last month.*

Romania’s corruption-fighting efforts may have been noticed in Washington and Brussels, but they have yet to make much impact on foreign investors. The country came 69th last year in the corruption index produced by Transparency International, a Berlin-based watchdog, a ranking unchanged from 2013. Mr Ponta has just been to America, wooing investors. No doubt he spent much time telling them about Ms Kovesi and the DNA.

Thursday, February 19, 2015

From basketball to law courts: Romanian prosecutor wins fans fighting graft

By Luiza Ilie

BUCHAREST, Feb 18 (Reuters) - Such has been the success of Romania's anti-corruption prosecutors that television crews are now permanently stationed outside their offices, waiting for the next politician, businessman or judge to be hauled in.

Romania's corruption-fighting agency, known by the local acronym DNA, secured a record 1,138 convictions last year, pursuing people who might once have been untouchable.

Graft has long been a deterrent to doing business in Romania, which is joint last among EU countries in Transparency International's corruption perception index and has been singled out by the European Union along with Bulgaria for special monitoring of its justice system.

But investigations into the prime minister's brother-in-law and father-in-law - himself a powerful member of the ruling party - as well as a sitting president's brother, government ministers and the head of a midsize political party have made for a steady stream of headlines.

The efforts of the DNA's more than 100 prosecutors have proved that many state contracts are handed out in exchange for favours or bribes, and about 7 percent of lawmakers elected in 2012 have been convicted or are under investigation for corruption.

Meanwhile, political pressure to drop cases touched a new peak last year as investigations reached the highest levels of politics, DNA chief Laura Kovesi told Reuters in an interview.

But if the earnest, towering 41-year-old former basketball player is worried, it doesn't show.

"If anything, prosecutors' resistance to such pressures has grown," said Kovesi, who was Romania's youngest prosecutor general and the first woman to hold the office.

"The pressure will continue for as long as we investigate such cases. But I think it is important for the political class to reach a certain maturity and understand that all prosecutors want ... is to get to the truth in criminal cases, and that we don't have any other interests."

DARK HINTS

The politicians' complaints have grown, as have the protests outside DNA headquarters. But Kovesi, whose father was also a prosecutor, has a protection detail similar to that of other officials, and says her life outside work is normal.

In January, a former presidential candidate under investigation hinted darkly that Kovesi owed her position to the influence of a senior secret service official, an accusation she dismissed as a smear.

Cristi Danilet, a judge who sits on the supreme magistrates' council, Romania's judicial regulator, said he was "scared by the extent of corruption cases because they point to a society that is sick from top to bottom".

"From the education and health sectors and all the way to the judiciary, politics and business - corruption is everywhere."

Graft exists in the judiciary partly because top prosecutors and some others are political appointees. But there have already been significant attempts to tackle the problem.

Last year, seven judges and 13 prosecutors were jailed for corruption. A judge at Romania's top court has been charged with joining an organised crime group, as well as accepting a BMW car and two dresses for his wife as bribes.

And no lesser figure than the chief prosecutor in charge of fighting organised crime is herself under investigation.

"It is definitely a conscious effort by the judiciary to solve its own problems," said Laura Stefan, a legal expert at the Expert Forum think-tank.

MAGISTRATES STILL BREAKING LAW

"The half-empty part of the glass is that the numbers are very high for a country like Romania. There remain many magistrates still breaking the law."

Romania started implementing judicial reforms as an aspiring member of the EU in 2004, when magistrates' independence was legally guaranteed for the first time.

The DNA, founded in 2002, was overhauled by narrowing its scope to focus only on high-level corruption. The first major cases went to trial under Kovesi's predecessor in 2005-2006. They resulted in a string of convictions, notably including former prime minister Adrian Nastase.

Prosecutors gradually gained expertise, and the number of cases started to rise, helped by intelligence service wire taps.

Now, the DNA enjoys something of a cult status among younger Romanians, and is trusted by twice as many people as the government. At rallies around last year's election campaign, there were shouts of "We love DNA!" and "DNA for president!".

The number of tip-offs has consequently grown, as has the number of politicians taking to the media to complain of "witch hunts".

"They say their political opponents are controlling the judiciary, or that prosecutors are controlling judges, and now that secret services are controlling prosecutors," Danilet said.

The European Commission's latest review praised Romania's judiciary, but noted that problems remained, especially in parliament, whose approval is required for a sitting MP to be investigated. Only this month, it blocked an investigation into a current senator and former economy minister.

Legal attempts to strengthen parliamentary immunity or weaken the judiciary are not uncommon, and Kovesi takes nothing for granted.

"Laws ... are constantly shifting and so there are some concerns that one legal change could confound or even block judicial reform," she said. (Editing by Matthias Williams and Kevin Liffey)

Thursday, January 29, 2015

EU Says Romanian Fight Against Crime on Track, Bulgaria Stalls

(Bloomberg) -- Romania has achieved “impressive” progress in fighting high-level corruption and organized crime, while Bulgarian policy changes stalled on political turmoil, the European Union said in a report on the bloc’s poorest states.

“Romania is on the right course and needs to stick to it. Tackling corruption remains the biggest challenge and the biggest priority,” European Commission Vice-President Frans Timmermans said in a statement. Bulgaria’s judicial reform progress “has been slow” on political uncertainty and “further steps are needed,” he said.

The two countries that joined the 28-nation bloc in 2007 are judged to be among the EU’s most corrupt along with Greece and Italy, according to Berlin-based research organization Transparency International. The Black Sea nations have had repeated warnings to fight corruption harder to ensure a fair distribution of EU aid. Romania, the bigger of the two, stands to receive 35 billion euros ($40 billion) in EU aid through 2020. Bulgaria will get about 16 billion euros.


“Responses to the well-known problems in area of corruption and organized crime have remained piecemeal and lacking in overall strategic direction,” the commission said about Bulgaria. “There are very few examples where high-level cases of corruption or organized crime have been brought to conclusion in court.”

Bulgarian Prime Minister Boyko Borissov regained power on Nov. 7 after five government changes in two years. His first government was ousted by anti-austerity protests in 2013. The Socialist administration of former premier Plamen Oresharski resigned in July following the failure of the country’s fourth-largest lender and protests against a corrupt political system.
Efforts Intensified

Bulgaria’s parliament adopted a judicial reform strategy last week, which needs “to be implemented for change to be convincingly shown,” the commission said.

Romania’s new President Klaus Iohannis pledged to continue fighting corruption and urged Parliament to lift the immunity of all lawmakers under investigation. Romania’s efforts to curb graft intensified before presidential elections last year as prosecutors probed high-profile politicians from Prime Minister Victor Ponta’s party, businessmen and a constitution court judge. The cases involved Microsoft licenses, election fraud and tax evasion.

Former Romanian Economy Minister Codrut Seres and former Communication Minister Zsolt Nagy were sentenced to prison this week for undermining state economy.

“The action taken by the key judicial and integrity institutions to address high-level corruption has maintained an impressive momentum,” the commission said about Romania. “Many legislative issues remain outstanding” and “there continues to be inconsistency in some court decisions, which raises concern.”

The commission will continue monitoring the two countries and will issue the next two reports in one year, the commission said.

To contact the reporters on this story: Slav Okov in Sofia at sokov@bloomberg.net; Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editors responsible for this story: James M. Gomez atjagomez@bloomberg.net Elizabeth Konstantinova, Andras Gergely

Romania jails ex-ministers, banker over privatisation plot

(Reuters) - Two former Romanian government ministers and a Credit Suisse banker were jailed on Tuesday for espionage and treason related to planned privatisations.

Former communications minister Zsolt Nagy was given a four-year sentence and formereconomy minister Codrut Seres was sentenced to four years and six months by the court in Romania, which has come under EU pressure to clean up its government and judiciary.

They were convicted of leaking confidential privatisation data and joining an organised crime group that prosecutors said targeted a string of planned privatisations in 2005 to 2007.

The European Commission, which has the judiciary under special monitoring, is expected to release a new assessment on Wednesday. Romania joined the European Union in 2007.

Credit Suisse investment banker Vadim Benyatov was sentenced to four years and six months for espionage, while Bulgarian Stamen Stanchev, who consulted for the bank, received five years and two months.

A spokesperson for Credit Suisse said: "We are disappointed with the verdict and will continue to support our current and former employees."

Six other people, including a Turk and a Czech citizen, received prison terms for joining an organised crime group targeting confidential data related to privatisations.

Seres and Nagy said the documents they were accused of passing on were not confidential, nor prejudicial.

Prosecutors said the organised crime group targeted, among other things, the planned privatisation of the Romanian postal service and the sale of a minority stake in oil and gas group Petrom, majority-controlled by Austria's OMV. None have yet happened and there is no current firm commitment to sell them.

Also targeted was the sale of power distributor Electrica Muntenia Sud, which has since then been bought by Italy's Enel.

The case has reached its last appeal and Tuesday's rulings are final.

AP: Romania's spy chief who backed security laws resigns

BUCHAREST, ROMANIA — The chief of Romania's Intelligence Service has resigned after criticizing the country's top court for rejecting security laws which allowed the government to collect data on people without court approval.

The Constitutional Court earlier this month rejected laws that would have allowed authorities to retain data and other personal details on people without persuading a court that the person represented a security risk. The court said the laws were unconstitutional and violated human rights.

George Maior, who directed the Intelligence Service since 2006, stepped down Tuesday, days after he criticized the court and said the laws were necessary for national security and protecting people.

Prime Minister Victor Ponta, an ally, praised Maior for reforming the service. He said his successor shouldn't be a political appointment.

Maior's resignation was accepted by President Klaus Iohannis, who will appoint a new chief.





Saturday, January 24, 2015

Romanian judge took BMW and dresses as bribes, prosecutors say

(Reuters) - A judge at Romania's highest court has been placed under investigation for abuse of power, taking bribes including a BMW car and two dresses for his wife, and setting up an organised crime group, prosecutors said on Thursday.

Judge Toni Grebla, who denies wrongdoing, is the latest in a series of top officials to be investigated for alleged corruption in Romania. They include the father-in-law of Prime Minister Victor Ponta, the brother of former President Traian Basescu and the chief prosecutor at the agency in charge of fighting organised crime.

The former communist state, which joined the European Union in 2007, has come under heavy pressure from Brussels to clean up its government and judiciary. The EU has praised anti-corruption prosecutors for their efforts to tackle high-level graft.

Grebla, 61 was appointed to the Constitutional Court in 2013 after serving as a senator since 2008. Prosecutors said in a statement he co-founded an organised crime group to forge customs documents and smuggle food to Russia after Moscow banned food imports from the European Union last year.

Grebla has also demanded and received a BMW worth 56,070 euros (42,992 pounds), 20,000 flyers for his senate election race, and two dresses worth 1,200 lei ($310) from a local businessman to intercede in his favour with public clerks, prosecutors said.

They added the judge, whose position prohibits him from having any commercial dealings, had managed an ostrich farm through intermediaries in southeastern Romania.

"What is being alleged has no connection to activity at the Constitutional Court," Grebla told reporters. "It is damaging my image, that is why it bothers me."

He said the BMW had been given to him by a businessman who was also his godson, and therefore was "in the family". He also denied running an ostrich farm.

The Constitutional Court has the final say in all legislative and state matters. Its nine judges serve nine-year terms and are appointed by the president, the senate and the lower house of parliament.

"It was a huge surprise for us, this is the first time that a Constitutional Court judge is in such a situation," chief judge Augustin Zegrean told reporters.

"We regret this situation. Anti-corruption prosecutors must see this investigation through and get to the bottom of things because I want no shadow of a doubt hanging over the Constitutional Court."

Grebla will be allowed to remain in his position for now but would be suspended if his case went to trial.

Romania Planned New Power Capacities Idle Due to Subdued Demand

By Andra Timu Jan 22, 2015

Romania doesn’t need to invest in new power capacities in the next 10 years as demand will be capped by shrinking industrial production, officials from Fondul Proprietatea SA and consulting firm AT Kearney Inc said.

The government, which plans to add two more new nuclear reactors at its Cernavoda plant and build new power plants with the help of foreign investors, should refrain from spending money on projects that boost production and focus more on increasing the efficiency of existing plants, Michael Weiss, a partner at AT Kearney, said in Bucharest today.

“Without major industry investments there is no need for extra capacities because existing ones can accommodate demand by 2025,” Weiss said during the presentation of a study on Romania’s energy system. “Investments are warranted if they aim to replace outdated existing capacities. Romania still uses lignite to stabilize the power market, which is not the best practice.”

Romania, the European Union’s second-poorest member, is trying to lure foreign investors to help upgrade its outdated energy system as it seeks to diversify and lower costs for people and companies. It benefited from a boost in renewable energy in the past years as companies such as CEZ AS and Enel SpA (ENEL) invested millions of euros in wind, solar and biomass plants with a total installed capacity of more than 4,700 megawatts.
Investment Needs

Still, the country needs at least 100 billion euros ($116 billion) in investments in oil, gas and power by 2035, according to the Energy Ministry’s latest estimates. The government turned to Chinese investors after ArcelorMittal, Enel and other companies withdrew from the 6 billion-euro project to build the reactors.

The reactors, together with a 1 billion-euro hydropower plant, expanding power and gas interconnection grids and Black Sea gas production are among Romania’s strategic objectives for reaching energy independence, according to a 2035 energy strategy that is currently up for public debate.

“An integrated nation-wide energy strategy, matching the economic strategy, is essential for the growth of the energy sector and should address issues such as the current low investor confidence and uncompetitive taxes,” said Greg Konieczny, a manager at Fondul Proprietatea.

Romania’s electricity demand will post “limited growth” in the next 10 years of between 0.2 percent to 0.7 percent as existing capacities can support the demand, AT Kearney estimated. That makes the reactor project “less commercially attractive without a major support scheme,” the study showed.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net James M. Gomez, Pawel Kozlowski

Romanian watchdog protests honoring fascist sympathizer

A Romanian anti-Semitism watchdog group condemned Romanian President Klaus Iohannis’ honoring of a man who praised fascists who murdered Jews during the Holocaust.

The Center for Monitoring and Combating Antisemitism, or MCA Romania, was responding to the admission last month of the anti-Communist political activist Octav Bjoza into the Order of the Star of Romania for his efforts within the Association of Former Political Prisoners in Romania.

Bjoza, 76, was the first of 25 people Iohannis decorated with the Star of Romania medal. The Dec. 22 ceremony was the newly elected president’s first official function after assuming office the previous day.

“It is deeply regrettable that in post-communist Romania, Mr. Bjoza chose to celebrate the ideas and beliefs of a criminal group like the Legionnaires,” MCA Romania Director Maximillian Marco Katz told JTA Thursday, referring to Romania’s pro-Nazi Iron Guard. Iohannis’ embrace of Bjoza was “a disappointing note of populism,” he added. “It sends the wrong message.”

Iron Guard members killed 125 Jews during the Bucharest pogrom of 1941 and many thousands more throughout World War II.

In 2009, Bjoza was filmed attending an event titled “Commemorating Legionnaires, Assassinated Martyrs,” where he said: “I am not a Legionnaire, it was too late to become one, but fortunately, at the age of 19 I was educated by some of them.”

He said they taught him that “the Romanian nation is hunted by traitors.” For this, he added, “I will forever carry them in my mind and in my soul.”

Following criticism over the award he received, Bjoza told the Adevarul daily that he was “not anti-Semitic” and that he “rejects extremism of any sort.”

Iohannis told Romanian media that the criticism of Bjoza was unfounded because Bjoza was never a member of the Iron Guard.

Romanian PM pessimistic about relations with Russia

BUCHAREST, Jan. 22 (Xinhua) -- Romanian Prime Minister Victor Ponta on Thursday believed that the bilateral relations with Russia are getting worse, both because of the conflict in Ukraine and the irreconcilable interests of the two countries with respect to the Republic of Moldova.

Ponta told local media that he saw no sign of improvement of the relations of Romania with Russia.

"I see them worsening," he stressed, specifying that "Romania will keep its position that same as Poland and the Baltic countries, a firm position as to what the Russian Federation is doing."

The prime minister also underscored that the interests of Romania and that of Russia in Moldova are "totally opposite" and "irreconcilable," as Romania remains committed to the territorial integrity of Moldova, while Russia supports the "separatists" in Transdniester, a mainly Russian-speaking region which split away from Moldova in 1990.

"We want Moldova to go on the pro-European route and Russia is against it," continued Ponta in an interview with Jurnalul National daily online, adding that "from the viewpoint of the relations with Russia, it will only be worse on the short- and medium-term, I do not know what will be on the long-term."

Ponta insisted, after his installation as Prime Minister in May 2012, that his country should deepen relations with Russia, however Romania had decided to freezes business relations with the latter soon after the crisis erupted in Ukraine.

Friday, January 16, 2015

Romania's new President Iohannis in court

The facts of the case are clear. Klaus Iohannis, mayor of the Transylvanian town of Sibiu from 2000 to 2014, represented the city's government at the shareholders' meetings of two firms of which the city itself is a co-owner. Romania's National Integrity Agency (ANI) saw this as an illegal conflict of interest. Iohannis sued over the ANI report and scored a victory in the trial in September 2013. The agency's assessment that the Sibiu mayor's activities were incompatible was declared null and void.

ANI then lodged an appeal with the High Court, and that trial began on Wednesday (14.01.2015). Iohannis has repeatedly stated that nothing about the case has changed in the interim, and he is therefore certain that the High Court will also decide in his favor.

However, it is ANI and not Klaus Iohannis that is the focus of public debate about real or spurious incompatibilities and conflicts of interest among Romanian politicians. The National Integrity Agency was established under pressure from the European Commission to check asset declarations by holders of public office, and possible conflicts of interest. In 2007 Romania was the first country in the European Union whose politicians came under scrutiny from an institution founded expressly for that purpose.

Fight against corruption

ANI became an important instrument in the so-called Cooperation and Verification Mechanism, introduced by the European Commission for Romania (and Bulgaria) following their accession to the EU in 2007 to tackle deficiencies in judicial reform and in the fight against corruption. Brussels formulated clear objectives in four key areas: reform of the judiciary, integrity, combating high-level corruption, and the prevention of corruption in the public sector.

And although the Commission has acknowledged that Romania has had some success in this area, the country is still being monitored by the Cooperation and Verification Mechanism seven years after joining the EU. Several ministers and a former prime minister have been found guilty of corruption, and investigations are ongoing against numerous members of parliament across the political spectrum. New President Klaus Iohannis has repeatedly emphasized that he respects the independence of the judiciary, that it is one of his highest priorities, and that he will protect it from political influence.

Protected by presidential immunity

However, ANI seems to have overstepped the mark with its accusations against Iohannis. According to a literal interpretation of Romanian law, a mayor may not sit on the board of a company involved in municipal development projects. In other words, a directly elected mayor may not participate in discussions or in the decision-making process around important projects in his city. Iohannis' case concerns his participation in the shareholders' meetings of the municipal enterprises dealing with water and sewage management, and with local markets. The question not just the mayor but also voters and experts are asking themselves is valid: Who, if not the mayor, should be the main person dealing with issues pertaining to infrastructure, water supply, sewage and waste management?

This was the view taken by the court of appeal in September 2013, when Iohannis was acquitted of incompatibility and ANI's assessment was annulled. The agency lodged an appeal, and now the High Court will make the final decision. Under Romanian law, those found guilty of incompatibility are banned from holding public office for three years. However, if Iohannis were unexpectedly found guilty, he is protected by presidential immunity and would not in fact have to step down.