Romania: Coming to Terms With Corruption
By Christopher Condon
Financial Times
February 23, 2005
It is the most often cited problem facing Romania. It infects the most mundane of public services and the largest of public contracts. In distorts the economy, twists the administration of justice and contributes significantly to poverty by sapping public and private resources. It is, of course, corruption. In its quest to join the European Union, however, Romania has pledged to confront the problem. A government led by the centrist Alliance for Justice and Truth, appears to be taking that pledge seriously. It must, however, pass some important tests before it makes a substantial impact.
Since taking office in December Traian Basescu, the president, has repeatedly urged police, prosecutors, regulators and judges to remove politics from their work. "Institutions in Romania have a habit of looking to the ruling party (for direction). What I say now is: 'Look at the law and act accordingly'," he says. The president surprised his own party and delighted rights groups by appointing Monica Macovei as justice minister. Ms Macovei, formerly head of the Romanian Association for the Defence of Human Rights, has long called for anti-corruption measures and a more independent judiciary.
Now she will get a chance to implement "the reforms I was demanding when I was on the other side of the barricades". Earlier this month the government lifted the immunity from prosecution privilege that former cabinet ministers enjoyed. Concrete cases have also been launched. A former local leader for the Social Democrats, the previous ruling party, was recently detained and charged with alleged abuse of office and making false written statements.
In January police opened a more important criminal investigation against several executives at Rafo Onesti, an oil refining company. Officials say Rafo evaded Euros 480m in taxes by selling petrol off the books to black market distributors. The company has denied the charge. Calin Tariceanu, the prime minister, says he wants a team of investigators experienced in tackling corporate fraud, possibly from Britain, France or Germany, to help unravel the layers of offshore companies and complex accounting the company has constructed, in his view, to hide corruption.
According to Jonathan Scheele, head of the European Commission's delegation in Bucharest, the government's handling of Rafo will be watched closely. "This is a very important test case," he says. "It is important for the business environment, for the new government's ability to collect taxes and for fighting corruption." Dorel Sandor, a political analyst, agrees. He believes success in prosecuting Rafo and a few other high-profile cases will have enormous impact. "Basescu doesn't have to win a fight against 200 people, just 20. After that the market for corruption will be changed," he says.
Mr Tariceanu says his government will also review Euros 3.6bn worth of state contracts with three large western companies. The contracts are with Germany's EADS to build a border security system for Euros 1bn, France's Vinci in a Euros 500m motorway construction project and with the US company Bechtel for a separate Euros 2.1bn motorway project.
All three contracts were signed by the previous government, which used loopholes in the public procurement law to award the contracts without competitive tender. Mr Tariceanu has not accused any of the companies of corruption, but says the prices involved are too high. At the same time, however, diplomats are warning the new government not to turn the anti-corruption drive into a political vendetta. Then there is the other great issue - the 1989 revolution - that any Romanian government must address if it wants genuinely seeks to come clean with its citizens. Hundreds of millions of dollars in state funds, mostly under the control of security services, are believed to have vanished after the hasty execution of Nicolae Ceausescu.
But the mystery of the revolution is not only about money, it is also about the truth surrounding the downfall of Ceausescu and the murky and violent transition of power that followed. Most Romanians are convinced the full story has been covered up by political, military and intelligence officials with secrets to hide. Mr Basescu says he is willing to open up classified government files and that much will be revealed in the coming months.
"For me it is very simple: Ask the state institutions to put the truth on the table," he says. If they resist, Mr Basescu says he "will make it very difficult for them." Asked why he can be trusted to when past presidents have failed, he says "because I was not involved. I watched the revolution on television."