Moldova Weekly: red but not quite, six years of fraud, the linguistic nerve
Moldova in brief, week #48, November 23-28.
Red but not quite
This past week Moldova stepped over the ‘psychological mark’ of 100 coronavirus cases recorded from the beginning of the pandemic (as of Saturday, the count neared 106k cases). A new record high, of 1691 cases in a day, was hit on Thursday, and on Saturday the record was broken yet again, with 1712 new infections. Also, the rates of positive tests remained extremely high throughout the week, of 45% and higher. Moreover, instead of delivering on the promise to increase the number of tests carried out daily, the Moldovan authorities seem to be doing the opposite – for example, only 2.5k primary tests were carried out on Monday, as compared to the ‘regular’ 3.5-4k.
Now that the presidential election is over, the central government appears to be waking up from a prolonged decision-making numbness. On Friday, the ‘Code Red’ public health emergency was extended nationwide. But the restrictions, imposed until January 15, barely amount to even a mild lockdown: there’s a curfew for restaurants between 10PM and 7AM, a ban on night clubs, concerts, live theater performances, and… that’s about it. At the same time, the government continues to make an exception for gatherings and parties with up to 50 participants, but they have to be ‘one-time events’ (the government is conspicuously silent about religious services). After a very long period with zero news about fines, the police announced on Wednesday they sanctioned hundreds of instances of not wearing masks and failure to isolate, among other violations of coronavirus rules.
Hospitals are about to run out of beds, especially in Chișinău, the largest hotbed in the country; so much so that new beds for Covid patients have been activated even at the Skin Diseases Hospital. Boris Gîlcă, the capital’s deputy chief health officer, says that the number of serious and severe cases is rising too.
Igor Pocanevici, WHO chief in Moldova, predicts the total count to double to 200,000 cases already by January, meaning in a month or two. According to the official, about 20% of Moldovans could receive anti-Covid vaccines through the global initiative COVAX. It’s not clear when the first batch will arrive in Moldova; “maybe in two months.” Prime Minister Ion Chicu said he already asked his Baltic counterparts if they could spare some of the vaccines to be received from the EU to share with Moldova, and that he would also ask Romania and Hungary. Romania’s Senator Viorel Badea, after meeting with Health Minister Nelu Tătaru (both members of the governing party PNL), already vowed Romania would donate Moldova a share of the 30M shots promised by the EU.
President elect Maia Sandu announced her immediate priorities for when she takes office. She wants to change the membership of the Supreme Security Council and focus the institution’s efforts towards issues like the banking fraud, the Russian Laundromat, the lease of the airport and the illegal financing of political parties. Sandu also wants a mechanism to verify the integrity of judges nominated for promotion by the Superior Council of the Magistracy and other civil servants that are appointed by the president.
As concerns the pandemic, Sandu insists that authorities should provide free treatment at home for Covid patients. She also spoke about alloting 240 beds at the Vorniceni Hospital for Covid patients. As the government readies the budget for 2021, Sandu stressed the need to raise the healthcare budget.
She also deems it necessary that small and medium businesses receive more support from the government and proposed several measures to this end: zero tax on reinvested income, state guarantees for loans, salary subsidies, salary tax exemptions for re-hiring people who lost their jobs because of the pandemic, the delay of payments to the state without penalties and so on.
The president elect is already making foreign policy moves and announced she will have meetings with her Romanian counterpart Klaus Iohannis, as well as Ukrainian President Volodymyr Zelensky. Sandu also spoke on the phone with Donald Tusk, head of the European People’s Party, with whom she agreed to make a list of Moldova’s most pressing needs so that aid could be provided as swiftly as possible.
However, Sandu said she would not ask to meet with separatist leader Vadim Krasnoselski and instead promised to dismantle smuggling routes that go through Transnistria.
Even though last week outgoing President Igor Dodon was reluctant to admit defeat and announced he would challenge the election results in court, this week he said he will relinquish the presidency to Sandu on December 24 or 25. In the meanwhile, he will promulgate all laws voted by the Parliament and will attend several international events, such as the meeting of CIS heads of states.
The informal leader of the Socialists will return as party chair after his presidential term expires, but has already attended the meeting of PSRM’s parliamentary group. Like Sandu, Dodon says the budget for 2021 must include tax stimuli for businesses, as well as social aid measures. However, he also insists on more investments in infrastructure.
The outgoing president says the Socialists will not block Maia Sandu if she wishes to form a new majority in the Parliament and appoint a new Cabinet. On the contrary, they will support her, but Dodon maintains that the best solution would be for Sandu to cooperate with current PM Ion Chicu and for PAS to work with PSRM in the Parliament.
Ilan Șor’s Platform For Moldova is seen by pundits as the Socialists’ new ally in the Parliament, after the Democrats quit the ruling coalition and left PSRM without a majority, but the Platform announced it was ready for early elections and ”to a certain degree, they are indeed necessary”.
New economic policy
Prime Minister Ion Chicu promises that his Cabinet will approve the draft 2021 Budget by December 1 the latest, so that Parliament could adopt it until the New Year. Socialist lawmakers already announced their support. Despite the crisis, the prime minister promises “massive investment in infrastructure and [...] increased social payments.” All public sector employees will get pay increases, as health care workers will get a 30% raise already from January 1.
The draft 2021 Tax and Budget Policy, another fundamental public finance document, is also about to be submitted for approval. Among the highlights are subsidized payroll taxes for employees that will hire returning migrants, and a reduced VAT rate, from 15% to 12%, for HoReCa. To the relief of farmers and carriers, the government is giving up incorporating road tax into fuel excise tax.
But other measures could, or already stirred spirits up. For instance, the government wants to introduce a 3% tax on income from personal bank savings. Some experts think this will discourage bank depositing, while others think that the population will come to accept the measure when they see that the impact is insignificant. Another proposal fraught with public discontent is the one that halves, to €100, the maximum value of online purchases that can be imported tax-free. Paradoxically, the maximum value of packages that Moldovans can receive tax-free from friends or family from abroad remains at €430.
But perhaps the most angered by the new policy are the local authorities, as the government intends to cap local taxes. According to the Local Authorities Congress (CALM) director Nicolae Furdui, the government wants local administrations to increase their revenues mainly from taxes paid by SMEs, while sparing big companies. CALM members protested in Chișinău, despite threats allegedly received from the police and SIS not to do so. The Ministry of Finance says it’s open to dialogue, while insisting that the measure is only intended to make doing business more predictable.
The linguistic nerve
With a health and economic crisis going on, this week Parliament Socialists scandalized the opposition by registering two bills that are rather dedicated to Russian-speaking voters. In particular, MPs Țîrdea, Lebedinschi and Bolea insist that Russian is the “language of interethnic communication” in Moldova and want to make it mandatory for government agents to answer in Russian to any petition received in Russian.
Another bill seeks to reduce the minimum time requirements for local content on Moldovan TV channels, and effectively soften an existing ban on propaganda programs from Russia.
Perhaps more concerning, the latter bill also seeks to make it easier to sue journalists so that they disclose their sources “in the interest of national security or public order.” Moreover, if it’s signed into law, journalists will become “accountable for the exactitude of information” obtained from anonymous sources.
Six years of fraud
This month marks six years since the Moldovan people learned about the ”theft of the billion”, the biggest banking fraud in the history of the country. Oligarch Veaceslav Platon, initially sentenced to jail for his role in the fraud and now freed at the request of Prosecutor General Stoianoglo, says the investigation is almost over and reveals some details. According to Platon, the National Bank was an accomplice to the whole scheme, Gazprombank was involved as well, and the architect of the theft was neither Andrian Candu, nor Serghei Iaralov, as previously rumored.
The Prosecutor General’s Office issued a press release ”distancing itself from the statements of the citizen Platon”. Deputy Speaker Alexandru Slusari was still unhappy and said that after Platon’s statements, people don’t understand anymore who the Prosecutor General is. Slusari called PG Stoianoglo to come to Parliament and update the MPs on the investigation into the banking fraud, but the prosecution service said this would harm the investigation.
Instead, the Parliament voted to create a commission to investigate the Russian Laundromat, a scheme that laundered over $20bn from Russia to Europe through Moldovan banks and courts. The commission will be headed by PPDA’s Inga Grigoriu. Her deputy will be PSRM’s Alexandr Suhodolski and commission secretary – PAS’s Dumitru Alaiba. Grigoriu says her commission will cooperate with the one investigating the banking fraud.
Moldasig and the name of discord
Although most lawmakers agreed on Friday to set up an inquiry commission for investigating the recent presumed hostile takeover at Moldasig, it wasn’t created after all. The ‘For Moldova’ group insisted that the commission should specifically incriminate the shady investor Veaceslav Platon. Raising further questions, the motion appeared to bear the physical signature (!) of the fugitive MP Ilan Șor, among other endorsers. Other lawmakers were not so sure that Platon, or Platon alone was behind the complex Moldasig affair, and the debate soon degenerated into an exchange of accusations, with some being accused of protecting Platon, and others of working for Șor and/or Plahotniuc. Eventually, only the Socialists, the Șor Party and ‘For Moldova’ delegated representatives to the commission, which is an insufficient number for one to be created.
The wrangle in Parliament was yet another proof that the Moldasig affair is extremely intricate and indeed fishy. To put it in a nutshell: at its inception in 2002, the insurance company Moldasig was fully publicly-owned, but in 2008 the government lost 80% to an offshore company believed to be tied to Oleg Voronin, the son of the then Moldovan president, and Vlad Plahotniuc, a loyalist of the regime. In 2012, a criminal investigation was started, but soon enough it was wrapped up as the 80% stock migrated into the hands of other owners, including Veaceslav Platon (the government disputes his ownership, though). In 2016, the ownership of 10 shareholders was suspended for violating transparency and collusion rules (Platon accused Plahotniuc of seizing control of the company), and in 2019 the government takes the company under special administration. Shortly before that, however, Moldasig offered Avia Invest a €2M short-term loan, which the company affiliated with Ilan Șor hasn’t repaid to this day.
Apparently, this wasn’t the only scheme involving Moldasig – activist Grigore Petrenco alleges that last year Ilan Șor, with a hand from government representatives, siphoned off at least €10M from the insurance company. On November 6 of this year, ruling on a debt recovery complaint, a Chișinău judge authorized a company with a 5% interest in Moldasig (Platon) to take temporary control over a 65% (!) stock, as an audit firm was authorized to take the whole company under temporary administration. The government tried to impose an administrator of its own, but he wasn’t even physically able to enter the company’s HQ. The government and some lawmakers accuse Platon of illegal moves, while Platon accuses government representatives and other lawmakers of trying to protect Plahotniuc’s and Șor’s interests.
Other news from Parliament, in one sentence
◾ A special commission was set up to develop the first Moldovan Code of Health Care and a ten-year strategy in the field, with the commission headed by ex-minister Ruxanda Glavan (‘For Moldova’).
◾ Lawmakers want to create a commission in charge of introducing an alternative voting system, either postal- or electronic-based, in order to facilitate voting abroad in particular.
◾ The majority adopted the Justice Reform Strategy in the version proposed by minister Fadei Nagacevschi, i.e. without including an external vetting mechanism as requested by the opposition.
◾ Parliament approved in first reading a bill facilitating the employment of foreign workers, which was criticized by opposition MP Dan Perciun as being a way to attract cheap labor - there’s a provision allowing employers to pay foreign workers below the minimum salary (which is already very low).
◾ Parliament adopted the so-called ‘De-offshore-ization Law’, which restricts the participation of entities registered in tax havens to PPPs, calls for privatization, public procurement and other government contracts.
More news, in one sentence
◾ The National Agency for Solving Complaints canceled the result of the municipal tender for 100 new buses and asked the City Hall to re-evaluate all the offers, as three of the four participating companies had submitted complaints.
◾ Mayor Ion Ceban says the authorities have finished cleaning the rain drainage on Albișoara street, so there should be no more floods there – a longstanding issue that has been ”solved” numerous times, only for the next heavy rainfall to prove the authorities wrong.
◾ Moldova received a first installment of €51.6 million of the €100 million anti-Covid aid promised by the EU in July, while remittances in October rose by 23.6% compared to last year, most of them coming from EU countries.
◾ The Constitutional Court ruled that it is illegal not to pay pensions to Moldovan citizens living abroad, in response to an application regarding former soldiers and police officers, who retire earlier.
◾ The Chișinău Court of Appeals rejected PAS’s complaint about Igor Dodon’s undeclared campaign newspapers, while the Supreme Justice Court rejected Igor Dodon’s request to cancel the results of the vote abroad.
◾ One of the magistrates of the Cahul Court of Appeals, Nina Velev, who was among the judges appointed to the neverending Șor trial, resigned.
◾ PG Stoianoglo asked the National Integrity Agency to verify the assets and financial statements of Chișinău deputy chief prosecutor Adrian Popenco, after an anticoruptie.md investigation revealed he was living in a villa outside the city and driving a luxurious Mercedes.
◾ Alexandr Petkov’s investigation about the scheme through which Transnistrian debt for gas is transferred to Moldovagaz, with the support of the Moldovan government’s representative on the company board, made it into Russian magazine Novaya Gazeta.
◾ Judges from the Chișinău Court, Center district, complain that the State Chancellery is forcing them out of their offices by starting repair works in the building and planning to move in other local authorities, while the judges have not even been told where their next headquarters will be.
◾ The building of the National Philharmonics Hall, whose future is uncertain after being partially destroyed in a fire, will be included in the list of monuments of national importance.
◾ In Tiraspol, jailed leader of the Communist Party Oleg Khorzhan ended his hunger strike on the 49th day, on the verge of death.
You can also find us on Telegram.