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Moldova NGOs Say Big Fish Avoiding Corruption Trials

Moldova only prosecuted two high-profile corruption cases in the past two years, despite scores of investitagions and arrests. Source: Damian Gadal/Flikr.

This material belongs to: Balkan Insight.

While corruption investigations are coming fast and furious in Moldova, few cases involving important people seem to end up in court, watchdogs warn. 

Anti-graft prosecutors in Moldova are under scrutiny as experts and civil society activists question the small number of high-profile cases ending up in court despite an impressive-looking number of arrests and investigations in recent years.

An anti-graft coalition of nongovernmental organizations, Moldova Curata [Clean Moldova] published a report on Friday stating that of 12 senior public servants investigated in recent months for corruption, not one has been prosecuted.

The activists also say the Anti-Graft Prosecutor’s Office has refused to give out the names of the people who had been investigated, while charges in two of the cases have already been dismissed.

Moldova is seen as one of the most corrupt countries in Europe, ranking in lowly 123rd place out of 167 countries in Transparency International’s Corruption Perception Index.

It has initiated a few large corruption investigations in the past two years, however, has jailed two politicians and has arrested scores of magistrates and law enforcement officers charged with bribery.

Moldova scored some points in 2016 and 2017 by prosecuting and sentencing two high-ranking politicians for the country’s most devastating ever bank fraud.

But, with corruption still endemic in the justice and law enforcement departments, much more must be done, experts and international organizations warn.

Massive bank heist

In 2014, a billion US dollars in international aid, equal to about 12 percent of its GDP, disappeared from three Moldovan banks.

A report by a US audit firm hired by the government to investigate the fraud said it was a coordinated effort, involving all three banks working to extract as much loan finance as possible from the banks without any obvious business rationale.

The mastermind was named as Ilan Shor, a 28-year-old businessman who was elected mayor of the town of Orhei in 2015.

As chairman of the board at one of the banks, he made it possible for the funds to be transferred to shell companies in the United Kingdom and Hong Kong, to hide the real owners and then transferred the money again to Latvian banks under the names of various foreigners.

Shor denied the charges but was sentenced in mid-2017 in a first-instance verdict to seven-and-a-half years in jail for fraud and money laundering.

However, he is still at liberty and still acting as mayor of Orhei until his appeal verdict is finalized.

In the same case, former Prime Minister Vlad Filat was sentenced in June 2016 to nine years in jail for corruption, after Shor told prosecutors in his trial that he had bribed the former PM with 250,000 US dollars in exchange for various favours.

Filat, who was impeached in 2014 for corruption, was arrested in parliament in 2015. The former Prime Minister filed a complaint at the European Court for Human Rights in August 2017, however, insisting his sentence was politically motivated.

Prosecutors continued to investigate and arrest high-profile politicians this year.

Moldova’s Liberal Party left the government coalition in May after Chisinau mayor and the Liberals’ deputy chairman, Dorin Chirtoaca, was detained on May 25 along with nine other city employees for alleged abuse of office, linked to the distribution of parking contracts in the capital.

He denied the charges and also said his arrest was politically motivated. Chirtoaca was revoked as mayor of Chisinau in July by a court order.

The Laundromat scheme:

Moldovan prosecutors have also been investigating the involvement of Moldovan banks in the Russian “Laundromat” scandal, whose scale may go far beyond even the 2014 theft of the billion US dollars.

Between 2010 and early 2014, organized criminals and corrupt politicians in Russia moved 20 billion US dollars in dirty funds through offshore companies, banks, fake loans, and proxy agents.

Fictitious companies were registered in London. One would lend a large sum of money to another, and businesses in Russia fronted by Moldovans then would guarantee the “loans”.

When the borrowing company failed to return the loan, Moldovan judges would authenticate the “debt”, allowing the Russian companies to transfer real money to a bank in Moldova. From there, the cash went to a bank in Latvia, inside the EU.

On September 20, 2015, Moldovan anti-graft prosecutors arrested 15 judges and three bailiffs on charges relating to the money-laundering scheme.

Prosecutors issued an international arrest warrant for another judge and a bailiff in the same case. One of the judges who was detained died in prison.

However, the investigation has been dragging on since the start of 2017, when prosecutors attempted to investigate suspects in Russia but were denied access to Russia and harassed by the border police at Moscow Airport.

In February 2017, Moldova’s government banned all officials from traveling to Russia in protest against the harsh treatment that its envoys had received in Moscow.

Judges had been arrested on bribery charges before the money-laundering scheme showed the depth of Moldova’s involvement.

Between 2010 and 2013, for example, Moldovan prosecutors arrested and investigated 39 judges for corruption.

However, only one has been sentenced, prompting activists to question whether the due process of law was being respected.

Purges proceed – at a low level:

Moldova’s law-enforcement sector has also been mired in corruption investigations, with scores of police arrested by anti-graft prosecutors.

In September 2016, prosecutors arrested at least 10 policemen who had demanded 550 euros in bribes from drivers in order to release their licenses.

In November that year, prosecutors arrested 28 policemen from the traffic division for requesting bribes from drivers to turn a blind eye to traffic violations.

The biggest bust involved the border police. In one raid at the Moldovan-Ukrainian frontier in September 2016, prosecutors arrested 28 employees accused of taking bribes from merchandise transporters.

A new wave of arrests followed in November when 14 customs officers and three border police were detained and accused of bribery.

While most of the corrupt law-enforcement officers have faced trial, civil society activists in Moldova, as well as European Union reports, maintain that these low-level cases do not make up for the high-profile graft cases that the country has failed to prosecute.

Three years after signing a landmark Association Agreement with the EU, Moldova has a long way to go in terms of fighting corruption, EU documents say.

“Respect for human rights and fundamental freedoms requires greater attention, in part due to weaknesses in the justice system. Perceived political interference in the judiciary and law enforcement is a systemic impediment to social and economic development,” the EU noted in its yearly report on Moldova issued in March 2017.