Category Archives: Moldova

High-Level Corruption Threatens Moldova’s European Aspirations

Every April 7, Moldovans take stock of the progress the country has made since the youth protests of April 2009, which popularly became known as the “Twitter Revolution.” Nine years ago, this civil unrest led to the demise of Communist Party rule and ushered in a coalition of pro-European parties into power. However, hopes for a more democratic and accountable government not only failed to materialize, and many perpetrators of the brutal police crackdown in April 2009 have since been promoted to key state positions by the now ruling Democratic Party (Anticoruptie.md, April 7, 2017). This sense of impunity, coupled with poor economic conditions domestically, discourages young Moldovans from investing any hope in their country’s future. According to the latest poll by the International Republican Institute, 76 percent of respondents do not think that young people have a “good future in Moldova,” while 96 percent said “corruption is a big or very big issue” in the country (Iri.org, March 29, 2018). A recent joint report by the European External Action Service and the European Commission stated that “corruption still remains widespread, and independence of justice, law enforcement as well as national anti-corruption authorities need substantial improvement” (Europa.eu, April 5). Thus, endemic corruption and democratic backsliding not only undermine Moldova’s European aspirations, but also create fertile ground for political instability and civil unrest, this time against a nominally pro-European government.

The same European Union report on Moldova’s record of implementing the Association Agreement with the EU recalls that the change of the electoral system in July 2017 went against the recommendation of the Council of Europe’s Venice Commission and the Office for Democratic Institutions and Human Rights of the Organization for Security and Cooperation in Europe (OSCE). European democracy watchdogs have repeatedly warned Moldova not to introduce the mixed electoral system, because it is likely to exacerbate the country’s corruption problem by allowing wealthy businesspeople to influence elections in single-member districts (Venice.coe.int, March 19; see EDM, January 10). This concern is a major reason why the EU is withholding 100 million euros ($124 million) in macro-financial assistance, earmarked for Moldova last year. According to Vice Chair of the European Parliament Committee on Budgets Siegfried Muresan, EU funds would have arrived already had it not been for the controversial change to the electoral system (Europalibera.org, February 1). On a recent visit to Moldova, Muresan emphasized that at least three or four of the ten EU conditions for the first tranche (30 million euros) have not been met (Adevarul.roCotidianul.md, April 6). Indeed the EU-Moldova Memorandum of Understanding sets clear deliverables in terms of public-sector governance, the fight against corruption and money laundering, energy-sector reforms, etc., but it also demands respect for effective democratic mechanisms, including a multi-party parliamentary system and the rule of law (Europa.eu, November 23, 2017). The latter is much more difficult to achieve, and given how the investigation into the billion dollar bank fraud is going (see below), the government appears to be barely trying.

One billion dollars (12 percent of GDP) was siphoned off from three Moldovan banks prior to the 2014 parliamentary elections. “The theft of the century,” as it has come to be known, is a litmus test for the Moldovan justice system. Moldova’s National Bank hired the New York City–based investigative consultancy Kroll to conduct a financial forensic investigation. Already in its first report, presented in April 2015, Kroll identified controversial businessman Ilan Shor, who controlled the three embattled banks, as the main figure behind the fraud. The consultancy firm’s second report, from December 2017, pointed to 77 companies linked to Shor, who is identified as one of, “if not the only beneficiary” of this highly coordinated fraud (Candu.md, May 4, 2015; Bnm.md, December 21, 2017). Yet, despite being convicted by a lower court to seven and a half years in prison in June 2017, Shor appealed the ruling, and the case has been stalled (Deschide.md, April 2, 2018). Shor remains at large, and in the meantime, he became mayor of a large town, took over the leadership of a political party and is gearing up to enter the parliament. Keen observers of Moldovan politics know that this would be impossible without the protection from the head of Moldova’s ruling Democratic Party, oligarch Vlad Plahotniuc, who used Shor’s depositions to imprison Plahotniuc’s political and business rivals (former prime minister Vlad Filat, oligarch Veaceslav Platon and mogul Chiril Lucinschi) in swift closed trials. The symbiotic relationship between Vlad Plahotniuc and Ilan Shor is the embodiment of high-level corruption that makes the EU increasingly frustrated with Moldova.

Endemic corruption, exacerbated by changes to the electoral system, led to Moldova’s demotion from flawed democracy to a hybrid regime, according to the Economist Intelligence Unit’s Democracy Index (The Economist, February 4). The risks of Moldova becoming synonymous with corruption are manifold, yet two main threats stand out. First, if it continues to only pay lip service to fighting corruption, Moldova will fail to advance its European integration efforts. Second, if the highly disputed mixed electoral system indeed produces a rather unrepresentative outcome in the parliamentary elections scheduled for the end of 2018, the country could plunge into another cycle of political instability, which could be exploited by foreign actors such as Russia. With all that in mind, it is nonetheless becoming apparent that the main fault-line in the Moldovan political debate is less of an East-West divide, but rather rivalry between those defending democracy and good governance and those content with clientelism and corruption. Both the nominally pro-EU oligarch Vlad Plahotniuc and the drudgingly pro-Russian President Igor Dodon are, in fact, progenies of Communist Party leader Vladimir Voronin’s regime, which Moldova’s millennial generation rose up against in April 2009, only to grow disheartened a decade later.

 

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

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Avenues of Russian Political Intervention in Moldova

A divided national identity and pervasive Soviet legacy provide fertile ground for Russian interfer­ence in the weak and unstable Moldovan political system. Historically, Moldovan political elites have always been divided between those who support and those who oppose closer ties with Russia. Russophiles have generally had the upper hand ever since Moldova became a Russian protectorate in the early 18th century, only to have its eastern part, known as Bessarabia, incorporated into the Russian Empire in 1812. However, despite an assiduous process of assimilation and denationali­zation, a significant portion of Bessarabian elites maintained their identity and used the opportunity provided by the Russian Revolution to unite with Moldova’s kin state Romania in 1918. Nonetheless, a Soviet ultimatum forced Romania to concede Bessarabia in June 1940, only to regain it a year later. Yet the Soviet Union ultimately took control of the region in August 1944 and established the Moldovan Soviet Socialist Republic.

Despite zealous efforts to turn Moldovans into Soviet citizens, some local elites withstood the denationalization process, albeit at an extremely high personal cost, as many of those who opposed the regime were imprisoned or deported to the Soviet Far East. Against all odds, a national eman­cipation movement was still active even in the Soviet police state. Later, as Mikhail Gorbachev’s policies of perestroika and glasnost allowed some political liberty across the USSR, a national move­ment laid the groundwork for a future Moldovan state, which gained independence in December 1991.

Political Vulnerabilities of a Young Democracy

The political system of the Republic of Moldova is still undergoing a transition from a Soviet one-party police state to a pluralist democratic society. Despite having adopted a modern European-style constitution in 1994, Moldova’s democratic credentials have consistently come into question. As political scientist Lucan Way stated  “Moldova is best understood not as a struggling or unconsolidated democracy, but instead as a case of failed authoritarianism or ‘pluralism by default.’”

The two main problems of central government bodies in Moldova are their hyper-politicization and pervasive corruption. Despite two decades of discussions on the benefits of depersonalized public service, Moldova is still far from a professional technocratic government. Apart from the destructive practice of excessive politicization of government structures, political control over the judiciary and other key institutions that should remain beyond the realm of politics, such as the central bank, regulatory agencies, and law enforcement discredits the key democratic principles of separation of power and checks and balances. This state of affairs plays into Moscow’s hands because Russia has heavily invested in promoting its type of ‘sovereign democracy’ as an alternative to traditional western-style democracy.

Weak state institutions, tenuous elite networks, and polarized politics have ensured a feeble democracy. Political parties are notorious for having a short life cycle, being inextricably linked to the popularity of their founding leaders, with power most often concentrated in the hands of the party leader and/or a handful of donors. Due to a high personification of political parties, weak ideological foundations, and an overreliance on geopolitically driven electoral platforms, that are either in favor or against closer ties with Russia or the West, parties are easy targets for foreign interference and manipulation.

Unsurprisingly, parties in power and their de facto partners in the opposition tend to be treated with more leniency by Central Election Commission, a supposedly independent watchdog. The 2016 presidential campaign of Igor Dodon was a case in point. Media investigations uncovered an allegedly illegal campaign finance scheme in which money was funneled from Russia via offshore companies in the Bahamas. However, the Central Election Commission not only failed to take these allegations seriously, but one of the names mentioned as a beneficiary of these offshore funds, Socialist Party lawyer and a major contributor to the party Vadim Filipov, was appointed as a member of the Central Election Commission itself.

Note: This excerpt is part of a monograph edited by Dr. Leon Aron, Director of Russian Studies at the American Enterprise Institute in Washinton DC. The authors of the book entitled: “To Have and to Hold: Putin’s Quest for Control in the Former Soviet empire” assess the likelihood and shape of potential Russian intervention in neighboring countries, Putin’s pursuit of what he views as his historic mission to restore Russia’s regional hegemony, how he is securing his regime’s legitimacy with patriotic mobilization, and what he is doing to continue his project of destabilizing trans-Atlantic unity.

References:  

Lucan A. Way. Weak States and Pluralism: The Case of Moldova. East European Politics and Societies. Volume 17. 2003. http://www.pecob.eu/flex/cm/pages/ServeBLOB.php/L/EN/IDPagina/3402

RISE Moldova. Dodon’s money from the Bahamas. 2016. https://www.rise.md/articol/banii-lui-dodon-din-bahamas/

Ziarul National. New CEC member implicated in the Bahamas scheme to fund Dodon. 2017. https://www.ziarulnational.md/doc-noul-membru-al-cec-implicat-in-schema-cu-bani-din-bahamas-a-lui-dodon-si-avocat-al-episcopului-marchel-in-litigiul-cu-maia-sandu/

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Left to right: Leon Aron, Paul Stronski, Congressman Seth Moulton (D-MA), Agnia Grigas, Mihai Popsoi. 

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Left to right: Agnia Grigas, Michael Kofman, Mihai Popsoi, Paul Stronski, Leon Aron.  

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