Tag Archives: Russia

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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Moldova’s Foreign Policy in Disarray

In recent weeks, Moldova has been dealing with one foreign policy scandal after another. Relations with Russia, the United Kingdom, the European Union, the Council of Europe and even the International Monetary Fund (IMF) and the World Bank have all been strained to varying degrees. The contentious nature of Moldova’s domestic political competition undermines any chances for a coherent and predictable foreign policy. At the same time, the difficult geopolitical conditions in Moldova’s neighborhood, stemming from a fatigued European Union, an increasingly distant United States as well as a regionally resurgent Russia—coupled with democratic backsliding of Moldova’s own government—have been creating serious challenges for Moldovan diplomacy.

Relations with Russia in particular reached a new low after Moldova expelled five Russian diplomats on May 29, amid accusations that Moscow was recruiting fighters from Moldova’s autonomous region of Gagauzia for the Russia-backed insurgency in neighboring Ukraine (Moldova.org, June 13; Euromaidan Press, June 15). In 2014, Moldova’s Intelligence Service investigated several Gagauz officials, including the region’s former governor Mihail Formuzal, for also allegedly recruiting fighters, but no prosecutions followed as Formuzal was voted out of office and some of his purported lieutenants managed to escape to Russia (Deschide.md, July 9, 2014). Ironically, the new governor of Gagauzia, Irina Vlah, elected in March 2015, pledged even closer ties with Russia and accompanied then–newly elected Moldovan President Igor Dodon to the Kremlin on his first foreign visit (see EDM, March 31, 2015; Moldova.eu, January 20, 2017).

The spy scandal occurred during President Dodson’s attendance at the St. Petersburg International Economic Forum, where Dodon issued a blistering anti-Western tirade, criticizing Moldova’s Association Agreement with the European Union, much to the delight of Russian President Vladimir Putin. However, Putin’s gratitude was rather peculiar as he ended up ridiculing Dodon with his answer about Russian interference in foreign elections: “Ask Dodon. He knows best,” Putin quipped, and Dodon smiled (RT, June 2; Balkan Insight, June 6). Upon his return from Russia, the Moldovan head of state called a National Security Council meeting to address the spy scandal, despite two prominent members of the Council being absent. Prime Minister Pavel Filip and Parliamentary Speaker Andrian Candu—both protégés of Vlad Plahotniuc, the chairman of the ruling Democratic Party and Moldova’s de-facto leader—were abroad. This, however, did not stop Dodon from scolding the foreign minister and the intelligence chief (Publika.md, May 30; Presedinte.md, June 6). The spy scandal, though unprecedented in its scale, has not prevented business as usual in Moldovan-Russian relations: indeed, around the same time, authorities announced the renewal of Moldova’s contract with the Russian-owned and Transnistrian-based Cuciurgan Power Plant (Unimedia.info, June 7). Russia has not escalated the spy scandal and only responded in kind to the diplomatic expulsions. Hence, Dodon actually earned certain political points for his actions, with some arguing that the government’s antagonism in relations with Russia would push the EU to be more lenient regarding the ongoing democratic backsliding in Moldova.

However, Europe appears to have learned its lesson on Moldova and continues to impose strong conditionalities on Chisinau. A macro-financial assistance package of €100 million (a €60 million loan and a €40 million grant—$67 million and $45 million, respectively) is preconditioned on respect for effective democratic mechanisms, including a multi-party parliamentary system (Consilium.europa.eu, Jun 15). As such, the EU financial package is widely interpreted as political pressure for the Moldovan government to renounce its controversial plan to change the proportional electoral representation to a mixed electoral system, considered inadvisable by the Venice Commission of the Council of Europe (Reuters, June 6; Venice.coe.int, June 19). Failure to follow the advice of European experts commissioned to study the bill will likely strain relations with the Council of Europe and the European Union. Moldova’s government is engaged in a diplomatic offensive, attempting to persuade the EU of the democratic nature of the proposed electoral bill. It did not help, however, that Parliamentary Speaker Andrian Candu personally attended the plenary session of the Venice Commission that adopted a rather critical opinion of the assessed bill (Coe.int, June 16). Perhaps, feeling personally offended, Candu vented his frustration on his blog, calling the adopted opinion subjective (Candu.md, June 19).

Since Moldova’s independence from the Soviet Union, the United Kingdom has been a reliable partner. Nonetheless, bilateral relations suddenly became tense after the surprising visit by Transnistrian leader Vadim Krasnoselski to London. The Transnistrian conflict settlement process has always been a highly important and sensitive topic for Chisinau. Krasnoselski publicized his meeting at the UK Foreign Office with Nicola Pollitt, the director for Eastern Europe and Central Asia, as an official working visit (President.gospmr.org, June 16), much to the annoyance of Moldovan officials, who appeared to have been caught off guard (Newsmaker.md, June 16). The British embassy in Moldova promptly issued a statement, calling the visit a private matter, stressing that it does not set a precedent or imply any official recognition of the separatist entity (Facebook.com/BritishEmbassyChisinau, June 17). However, the damage was done and left Moldovan diplomacy scrambling for answers.

Perhaps the best reflection of the current state of Moldovan diplomacy is the compromised current condition of one of Moldova’s top diplomats—Iurie Leanca, a former minister of foreign affairs and previous prime minister, whose European People’s Party recently joined the ruling coalition. Leanca recently drew controversy by suggesting that it was the World Bank and IMF that had recommended the Moldovan government to issue its notorious guarantees for loans aimed at bailing out the three banks left bankrupt after the infamous billion dollar theft that crippled the economy in 2015 (see EDM, January 11, 2016). Both the World Bank and the IMF issued statements denying these allegations and accused Leanca of failing to follow their recommendations throughout 2014, when Leanca headed the Cabinet. The aforementioned banking fraud cut Moldova’s GDP by about 15 percent (Newmaker.md, Moldova.eu, June 16).

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Iurie Leanca (Photo: Newsmaker.md)

All these instances indicate a rather precarious state of Moldovan diplomacy. Apart from the structural challenges of divided foreign policy prerogatives between the government and the president, the sharp domestic political polarization and the deficient quality of the ruling political elite leave Moldovan diplomats with almost no good options to develop a coherent foreign policy. As long as Moldova’s foreign policy is guided by immediate political expediency rather than any sense of national interest, its diplomacy is doomed to operate in a constant state of disarray.

 

Note: The article was written for the Jamestown Foundation and can be accessed here.