Moldova - Corruption
In late 2014 the Central Bank of Moldova discovered that three banks had given out loans worth a total of $1.5 billion, or 15 percent of the impoverished ex-Soviet state's GDP. Banca de Economii, Banca Sociala and Unibank held about a third of all bank assets in the country, including money for pension payments. The transactions apparently happened over the course of several days, just before the parliamentary elections in late November 2014. The incident negatively affected the country's banking system and led to a depreciation of the national currency. "I cannot explain how one can steal such a large amount of money from such a small country," the EU representative in Moldova Pirkka Tapiola said.
Ties within the ruling coalition were poisoned by the 15 October 2014 arrest of former Prime Minister Vlad Filat, a Liberal-Democrat, who was accused of corruption and of accepting a bribe worth some $260 million. The bribe was allegedly part of the bank fraud in which up to $1.5 billion vanished from three Moldovan banks ahead of the 2014 elections.
Former prime minister Vlad Filat was sentenced in early 2016 to a nine-year prison term after a court found him guilty of corruption and abuse of power during his 2009-2013 term as head of government. His pro-European ruling coalition had been linked to the country's most powerful oligarch, Vladimir Plahotniuc, who has long been accused of running the country through bribes and intimidation. Filat was arrested last year during a parliamentary session and later charged for his links to a bank-fraud scheme that included the disappearance from three banks of $1 billion - nearly 13 percent of the tiny country's annual GDP. Filat's successor later lost a parliamentary vote of confidence.
A series of “raider attacks” (fraudulent takeover bids) on banks and other Moldovan companies made headlines in 2011. Prosecutor General Valeriu Zubco, aligned with the Democratic Party of Moldova (PDM), refused to pursue the most prominent case with vigor. Prime Minister Filat, the head of the PLDM, attempted to secure his dismissal but was unable to do so, as Zubco was defended by parliament Speaker Marian Lupu and Deputy Speaker Vlad Plahotniuc, the two main figures in the PDM.29 This incident is merely symptomatic of the problem. The division of spoils between the parties has created a system of pseudo “checks and balances” that in fact leaves no top officials liable for misbehavior. When corruption cases do reach the courts, frequently they are viewed as selective retribution against opponents.
Journalists report that it is nearly impossible to obtain information if it could be damaging to political leaders. This covers financial disclosure data and property ownership records which are necessary for monitoring conflict of interest, bribe taking, and misappropriation of funds. The lack of meaningful disclosure, despite laws requiring it, both obstructs efforts to reign in corruption and undermines public confidence public institutions and leaders.
Organized criminal groups certainly do exist in the country, but in their most intimidating form, a private protection rackets substituting for an enfeebled state, reached their apogee in the 1990s. There is potentially an insidious role in politics when their activities intersect with legitimate business and with elected representatives. The corporate raiding scandal in 2011, the details and legal outcome of which are murky in the extreme, seems to point in this direction. Drug trafficking is a significant problem in Moldova, as three major shipment routes cross the national territory. As in many policy areas, governmental response is inadequate. International assistance efforts continue to address the challenges of trafficking in persons, for both sex and labor, and IOM data indicate some progress has been made.
In 11 fields in which Moldovans were surveyed for Transparency International’s 2010–2011 Global Corruption Barometer, in just one (religious bodies) did they rate participants on the clean side of the midpoint of a 1 to 5 scale where 5 indicates extremely corrupt and 1 not at all corrupt. The police were judged the most corrupt institution (at 4.1), closely followed by the judiciary (3.9), political parties and public officials (3.8), and then parliament, private business, and education (all at 3.7). In the same survey, 53 percent of respondents found corruption to be worsening and only 18 percent thought public policy was having any remedial effect on it.
In 2014 Moldova dropped to 103rd place in the Transparency International Corruption Perception Index (CPI), scoring 35 out of 100. Moreover, the Transparency International Global Corruption Barometer shows (GCB) that 71 percent of Moldovans think that corruption is a very serious problem and 60 percent think that the Government’s efforts to fight corruption are ineffective. At the same time, according to the GCB, 80 percent of Moldovan citizens believe that the most corrupt institution is the judiciary, followed by police (76 percent) and political parties (75 percent).
Corruption remained a major problem for the country. While the law provides criminal penalties for corruption by officials, the government did not implement these laws effectively. Government interference and corruption with the application of laws and regulations impaired the impartiality of the courts. Police corruption remained a serious problem.
Corruption reportedly took place at all levels of government, from low-level functionaries to government ministers. According to the 2012 Freedom House report on Moldova, Nations in Transit, corruption remained a systemic problem deeply embedded in the country’s public institutions. An October survey commissioned by Transparency International Moldova found that the judiciary, health-care, and education sectors were highly corrupt. While ample anticorruption legislation existed and the government adopted a new anticorruption strategy in 2011, implementation remained weak and enforcement was inconsistent. An AIE leader revealed the extent of the politicization of justice when he disclosed that the AIE’s coalition agreement had a secret annex that divided the leadership positions in judicial and police institutions among the coalition partners.
A report by the Center to Combat Economic Crimes and Corruption (CCECC) indicated that, during the first four months of 2012, persons holding public office committed 102 alleged corruption offenses. The sums allegedly extorted were higher than in previous years, ranging from 110,000 lei ($9,100) to 450,000 euros ($594,000). The CCECC pursued court cases against a wide range of officials, including a former minister of information development, the head of the State Tax Inspectorate, 22 heads of educational institutions, a judge, 57 police officers, 10 Customs Service officers, the chief of the Penitentiary Service, and 32 mayors.
None of the corruption cases involving law-enforcement officers resulted in prison sentences; in most cases, judges issued a suspended sentence and fine. Corruption allegations involving judges did not go to court due to their immunity. The CCECC was reorganized under the 2011 national anticorruption strategy into the National Anticorruption Center, an independent institution under parliamentary purview. The National Anticorruption Center sent 240 corruption cases to court during the year. The cases were initiated against a number of division and subdivision heads, high-level officials from the tax authority, and traffic police. Approximately 20 lawyers were caught facilitating corruption, and 13 persons were sentenced to prison terms. Starting October 1, the responsibility to combat economic crimes was transferred from the National Anticorruption Center to the police.
The Fraud Investigation Department (FID) in the Ministry of Internal Affairs has anticorruption responsibilities. The FID investigates serious economic crimes with major social impact, criminal schemes that lead to acts of corruption, and other corruption-related offenses. During the year the FID registered 60 new criminal corruption cases, six of which were closed. The department sent 53 cases to the prosecutors, and 45 cases were sent to court.
Moldova is making efforts to adopt European and international standards to combat corruption and organized crime. In 2007, Moldova ratified the United Nations Convention against Corruption, subsequently adopting amendments to its domestic anti-corruption legislation. In 2008, the GOM developed and enacted a series of companion laws designed to address current legislative gaps such as the Law on Preventing and Combating Corruption, the Law on Conflict of Interests and the Law on the Code of Conduct for Public Servants.
In February 2012 parliament created the National Integrity Commission--an independent body tasked with auditing the income statements and conflicts of interest of public officials. The commission has a five-year mandate and includes three members appointed by the government, one member proposed by the opposition, and one member representing civil society. On October 25, parliament approved the candidacy of the new head of the commission. Leading NGOs stated that the procedure to appoint the head of the new commission was strongly politicized and expressed doubts about the institution’s ability to promote integrity and prevent corruption, because all but one of its members had political ties. At year’s end the commission was not operational.
On 16 July 2012, searches of the residences of several customs officers serving at the Costesti-Stinca border crossing uncovered a total of 110,000 euros ($145,000) of unexplained funds and various goods illegally in the possession of two customs officers and one border police officer. Several other customs officers were under investigation for facilitating smuggling.
During the first nine months of 2012, four prosecutors were indicted for corruption and dismissed. In one case a prosecutor from Glodeni region extorted 5,000 euros ($6,600) for influencing a judge to make a favorable decision for the accused in a rape case.
Bureaucratic procedures are not always transparent and red tape often makes processing registrations, ownership, etc. unnecessarily long, costly and burdensome. Discretionary decisions by state functionaries provide room for corruption. Since 2004, The GOM has been taking steps to reduce excessive government regulation of business activity. In 2004, a so-called "guillotine law" eliminated costly and obsolete regulations and forced the publication of all business-related regulations.
Moldova's Criminal Code includes articles on public and private sector corruption, combating economic crimes, criminal responsibility of public officials, active and passive corruption and trade of influence. These additions put the legislation more in line with international, anti-bribery standards by criminalizing the act of offering a bribe. Under this definition, the act of promising, offering or giving a bribe to a public official is a crime.
According to the Moldovan Criminal Code, offering a bribe is regulated by Article 325 entitled "Active Corruption." Penalties for offering a bribe include prison terms up to 12 years and fines of up to 60,000 MDL (approximately US$5,100). The minimum penalty for offering a bribe is now imprisonment for up to five years with a fine of 20,000 MDL (approximately US$1,700) to 60,000 MDL (approximately US$5,100). If committed by two or more persons or on a large scale, the offering of a bribe is punishable with imprisonment from three to seven years with a fine of 20,000 MDL (approximately US$1,700) to 60,000 MDL (approximately US$5,100). The maximum penalty for offering a bribe in its aggravated forms, on an especially large scale, in the interest of an organized criminal group or criminal organization is punishable with imprisonment from six to twelve years with a fine from 20,000 MDL (approximately US$1,700) to 60,000 MDL (approximately US$5,100). For legal entities, the lowest fine is 40,000 MDL and the highest is 200,000 MDL (US$11,700).
Accepting a bribe is regulated by the Moldovan Criminal Code under Article 324 - "Passive Corruption." Penalties for accepting a bribe include prison terms up to 15 years, and fines of up to 60,000 MDL (approximately US$5,100), the deprivation of the right to hold certain positions or practice certain activities for two to five years.
In November 2012 as part of the Justice Sector Reform Action Plan, the Ministry of Justice drafted a series of amendments in the anticorruption area. These amendments toughen the penalties for active and passive corruption. This anticorruption package also includes a draft law on integrity testing of all justice sector officials, i.e. judges, prosecutors and police officers.
According to the survey “Corruption in Moldova: Perceptions of Businesses and Households” carried out by Transparency International Moldova in 2012, police, prosecution, customs and the judicial system are still among the most corrupt institutions in Moldova.
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