Monthly Archives: January 2018

Deconstructing Vlad Plahotniuc’s article in the Wall Street Journal

An article published in the WSJ opinion section on 27 December, 2017, signed by the head of Moldova’s ruling Democratic Party Vlad Plahotniuc proclaimed that Moldova needs the West’s help against an aggressive Russia, but a closer scrutiny of Plahotniuc’s record reveals that his anti-Russian rhetoric is nothing more than a political strategy aimed at gaining domestic legitimacy and foreign support for his increasingly anti-democratic regime. This becomes all the more clear once we put Mr. P’s WSJ statements into actual context.

Mr. P: “Moldova is dependent on Russian energy. We are seeking to diversify and hope to integrate with the European gas and electricity markets via Romania by end of next year.”

–    On 1 April 2017, following an internationally monitored procurement procedure,  Moldova’s state owned Energocom (controlled by Plahotniuc’s government) signed a one-year contract to import electricity from Ukraine. Two months later, Moldovan side (read Plahotniuc)surprised its western partners by deciding to modify the contract in favor of the Russian state owned power plant in the separatist region of Transnistria, which fails to pay for the Russian gas it uses to produce the electricity it sells to Moldova, having accrued an over 6 billion USD debt, officially accumulating on the books of the Moldovan state owned gas company. Thus, Plahotniuc is increasing Moldova’s strategic dependence on Russia, instead of reducing it by acquiring electricity from Ukraine.

–       Moreover, after the Annexation of Crimea and during the War in Donbas, in November 2014 then Deputy Prime Minister, Minister of Economy Andrian Candu, now Parliament Speaker and Plahotniuc’s closest protégé was eager to offer Russian investors concessions or have them privatize strategic Moldovan infrastructure assets such as the energy grid, national railway, state  telecom company, which only proves that, when it comes to making money, the Democratic Party and Plahotniuc totally disregard the Russian threat to Moldova and the region.                      

Mr. P: “Between 2011 and 2014, Russian-backed interest groups manipulated Moldova’s banking system to launder more than $20 billion.”

–          Plahotniuc has held enormous sway over the Moldovan justice system and banking sector. During that timeframe, he controlled a large stake in one of the banks involved in money laundering. He also controlled the prosecutor general. Needless to say, such a large scale laundering operation would not have been possible without his blessing. Similarly, Plahotniuc fails to mention the billion dollars stolen from Moldovan banks under his watch and the failure to prosecute the main fraudster – Ilan Shor, as identified in an independent Western financial forensic investigation.

–          Moreover, it was none other than the current Justice Minister Alexandru Tanase who back in 2010, as a legislator, promoted the amendment that created the necessary conditions for the $20 billion Laundromat by eliminating the 3% state tax in cases of property disputes, replacing it with a ceiling of about 1500 EUR for physical  persons and 3000 EUR for legal persons. Without this crucial amendment, the launderings of $20 billion would have cost 0.6 billion, making it a much less attractive undertaking, even without adding all the presumed bribes offered to the judges and other accomplices in this vast criminal enterprise.       

Mr. P: “Given that a significant percentage of Moldova’s population is exposed to Russian-controlled media, propaganda and the anxiety it stirs are among the biggest threats we face.”

–          Plahotniuc owns the rebroadcasting rights to the first Russian federal TV channel – Perviy Kanal – the most influential Kremlin propaganda tool. Moldova’s Broadcasting Regulator controlled by Plahotniuc offered an associate of pro-Russian president Igor Dodon a license to rebroadcast the second Russian federal channel – the nefarious NTV. For a decade now, Plahotniuc has been making a fortune off Russian TV propaganda in Moldova.

Mr. P: “We need the West to invest in an independent media market.”

–        Plahotniuc’s political and administrative machine has been harassing and obstructing independent media, including those funded by Western donors. The six months delay in issuing TV8 a license is a case in point. It is largely because of Plahotniuc’s actions that Moldova dropped four positions in the Reporters without Borders 2017 Press Freedom Index.        

Mr. P: “Unfortunately, powerful political forces, including our pro-Russia president, Igor Dodon, are sympathetic to Moscow’s narrative.”

–        Plahotniuc’s media empire played a major role in the election of pro-Russian president Igor Dodon. Dodon’s fellow Socialists, in turn, offered Plahotniuc a life vest by supporting the highly controversial introduction of the mixed electoral system that gives Plahotniuc a chance to hold onto power after the next election, as his party risked not passing the 6% threshold under the previous proportional party list system.  

Mr. P: “Moldova is a proud multiethnic state, devoted to reform and democracy.”

–         In the last two years, Moldova has been suffering from clear democratic backsliding, as reflected in the worsening of the country’s Freedom House Democracy Score. Similarly, Moldova has fallen in the Economist Intelligence Unit’s Democracy Index. Democratic Party’s ongoing attack on local public administration and intimation on mayors, aimed at forcing them to join the ruling party is particularly damaging to local democracy. After orchestrating a hostile takeover against the democratically elected Chisinau municipal administration, now the second largest city Balti is undergoing a similar scenario.  

 

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Former Transnistrian Separatist Leader Finds Refuge in Moldova Thanks to Plahotniuc.

 

 

 

 

 

           

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A Year in Review: Oligarchic Power Consolidation Defines Moldova’s Politics in 2017

Moldova witnessed clear signs of democratic backsliding in 2017, along with window-dressing reforms and paying lip service to its international and domestic commitments. Against this backdrop, the country did experience some consumption-based economic growth, which the government has identified as stability, although the opposition views it as stagnation at best. The days of Moldova being a success story of European integration are long gone. Yet, it is the billion dollars siphoned off from the banking system back in 2014 that unveiled the true nature of Moldova’s dysfunctional state. The acrimonious unraveling of the ruling coalition, which followed the banking scandal, tore down the democratic façade the pro-European ruling parties have been projecting since coming to power in 2009.

Ironically, it is the Democratic Party (PDM) that has been at the center of Moldova’s recent democratic backsliding, after benefiting the most from the demise of its main rival, the Liberal Democratic Party (PLDM). The latter ended up a scapegoat for the billion-dollar heist. PDM and its leader, oligarch Vlad Plahotniuc, has been instrumental in defusing the anti-government protests that swept the country in 2015 by having the Constitutional Court reintroduce direct presidential elections (see EDM, March 8, 2016). The subsequent presidential campaign distracted the public and the opposition for most of 2016, paving the way for Vlad Plahotniuc to embark on a power consolidation offensive that transformed PDM from a once junior coalition partner into a dominant political force. Plahotniuc meticulously cemented his power throughout 2017, despite lacking popular legitimacy and being widely reviled by the public (Moldova.org, December 14, 2017).

The Democratic Party only garnered 15.8 percent of the vote in the 2014 parliamentary elections, resulting in 19 seats in the 101-person legislature. Yet, thanks to Plahotniuc’s immense wealth and vast influence over law enforcement, since the election he managed to turn a majority of former Liberal Democrat and Communist legislators to his side, building a comfortable majority of about 60 seats. Nonetheless, despite having full control over the government and about 75 percent of the media market, in early 2017 PDM still polled below the parliamentary threshold of 6 percent (IRI.org, March 2017). To mitigate the risk of losing power, in March Plahotniuc introduced a mixed electoral system (half of the seats assigned proportionally and half under a “first past the post” arrangement). Disregarding democracy concerns and condemnations from the Council of Europe, the Organization for Security and Cooperation in Europe (OSCE), the European Union and the United States, the new Moldovan electoral system was approved on July 20, thanks, in part, to support from the Socialist faction in parliament (Venice.coe.int, June 19, 2017; Eeas.europa.eu, July 21, 2017; Md.usembassy.gov, July 24, 2017).

The new law is likely to produce a highly unrepresentative parliament, further entrenching politicians’ clientelistic behaviors and deepening state capture. The new electoral system benefits the incumbent Democratic Party but also large established parties, namely the Socialists. At the same time, it undermines the electoral chances of new political parties, such as the Action and Solidarity Party (PAS) and Dignity and Truth Party (PDA) (see EDM, July 25, 2017). Opposition parties as well as civil society groups protested against the voting changes, but to no avail. The government retaliated against civil society by promoting a bill similar to the Russian “foreign agent” legislation aimed at curbing public dissent (Open Democracy, August 22). Feeling emboldened, Plahotniuc’s regime also stepped up its harassment of opposition activists in the regions and went after local mayors who had not yet defected to the Democratic Party.

Meanwhile, Plahotniuc has been instrumental in exploiting the geopolitical tensions across Europe’s East. In order to convince the West to turn a blind eye to his power grab, Plahotniuc went to great lengths to present himself as a victim of Russian meddling in Moldova. The Chisinau government even expelled five Russian diplomats, declared Russian Deputy Prime Minister Dmitri Rogozin persona non grata and banned Russian propaganda in Moldova, with little to no reaction from Moscow. This can be partially explained by the fact that, at the same time, Plahotniuc helped the pro-Russia candidate Igor Dodon win the presidency in Moldova. Plahotniuc made sure that Moldova continues to buy electricity from the Russian state-owned, Transnistrian-based power plant, despite Ukraine having won the supply contract in an international bidding contest. Moreover, Plahotniuc owns the rebroadcasting rights for the premier Russian propaganda tool, the first federal TV channel Perviy Kanal, while the second Russian federal channel, NTV, is rebroadcast in Moldova by an associate of Dodon’s.

 

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Thus, on the one hand, Plahotniuc and his army of lobbyists routinely ask the West to help Moldova against an aggressive Russia (Wall Street Journal, December 27, 2017), while, on the other hand, Dodon complains to Vladimir Putin about Western meddling in the small country (TASS, January 4, 2018). Meanwhile, Plahotniuc and Dodon have cooperated on major decisions, such as the change of the electoral system as well as dividing up ambassadorial posts among their own supporters. And despite Dodon’s repeated suspension from office by the government last year, the two men have thus far been able to avoid any meaningful political confrontation—aside from mutual theatrical rebukes in the media—prompting numerous accusations of a Plahotniuc-Dodon political cartel (Infotag.md, November 9, 2017).

This puts the genuinely pro-EU and anti-oligarchic opposition parties in a difficult political position. Realizing their weaknesses, the Action and Solidarity Party and Dignity and the Truth Party are pooling their scarce resources, counting on the synergistic effect of a future electoral bloc (Unimedia.info, October 16, 2017). Yet, the two are still struggling to outmaneuver Plahotniuc and Dodon. In particular, the opposition seeks to change the public narrative away from geopolitical debates (whether Moldova should be pro or against Russia or the EU) and toward a more governance-oriented discussion regarding state capture, corruption, democracy and rule of law. This is likely to be the main challenge for the opposition going into the November 2018 general elections.

Next year’s parliamentary campaign could become a turning point for the country. Yet, many disillusioned Moldovans see real change as almost too good to ever materialize. This makes apathy all too common, which only works in favor of the ruling elite, content with obfuscating popular scrutiny and operating with general impunity. The past year took Moldovans back at least a decade in terms of media freedom, rule of law and political pluralism. If these trends continue, Moldova may soon come to more closely resemble Belarus and Azerbaijan and less the European Union that so many Moldovans aspire to join.

 

Constantin Grigorita 27 August 2017

Protesters and Police meet on Independent Day, 2016. Photo: Constantin Grigorita.  

 

 

Note: This article was written for the Washington based Jamestown Foundation and the original can be accessed here.