Moldovan Legislative Changes to Reinforce the State Capture

Moldova’s Socialist leader Igor Dodon won the presidential election on November 13, was duly confirmed by the Constitutional Court as president-elect on December 13, and is due to be sworn in on December 23. Moldova’s de facto ruler, billionaire Vladimir Plahotniuc, is using this six-week presidential interregnum to drive through a series of laws designed to reinforce his grip and that of his clients on state institutions (see EDM, December 14).

The reinforcement of Plahotniuc’s power does not primarily aim to contain the challenge from the outspokenly pro-Russia president Dodon. The latter’s constitutional powers are stringently circumscribed, and he has no real levers to exceed those powers in practice. Moldova’s Western partners correctly assess that Plahotniuc can easily contain the new pro-Russia president. He is controllable and deal-prone.

Plahotniuc, however, feels seriously threatened by two nascent pro-Western parties, the Solidarity Action Party (PAS) and the Dignity and Truth Party (PDA), who are not prone to compromising with him and are immune to his control. These two parties are poised to mobilize not only the electorate of former pro-Western, now-discredited parties, but also the wider protest vote that has accumulated in Moldova across ethno-linguistic divisions.

This situation explains why Plahotniuc fully backed Dodon against Maia Sandu, PAS leader and joint candidate of PAS and PDA. Plahotniuc’s decision was predictable and prescient. Dodon won by 52 percent to 48 percent thanks to Plahotniuc’s intervention, without which Sandu could have won. PAS and PDA shaped their campaign message largely against Plahotniuc, conflating him and Dodon with each other as representing the corrupt system and captured state.

The score of 48 percent achieved by two parties in their infancy, with almost no financing, no real organizations, no access to state or even local administrations, and only minimal media support, presages a strong challenge to Plahotniuc’s captured state system in the 2018 parliamentary elections (which he may trigger pre-term). Anticipating that possible watershed, and using the interregnum in the presidential office (see above), the Coordinator of the Parliamentary Majority (Plahotniuc’s unconstitutional title and role) is accumulating additional levers of powers through a rapid series of enactments.

On December 8, outgoing President Nicolae Timofti approved the nomination of Plahotniuc’s loyalist, Eduard Harunjen, as Prosecutor-General, for a seven-year term. “The struggle against corruption has thus been postponed by seven years,” according to opposition and civil society circles. As a potential consequence, Harunjen is likely to remain in office beyond 2018 even if the pro-Western opposition wins the parliamentary elections that year.

Under recent amendments to the constitution and the relevant law, the Prosecutor-General is no longer appointed by parliament, but instead is nominated by his own peers (the Higher Council of Prosecutors) and approved by the head of state. Harunjen is himself a member of the Council that nominated him; and the nominating body did not consult with civil society representatives on the nomination, as the revised law requires. Harunjen had previously been Chief Anti-Corruption Prosecutor and forms part of the team that Plahotniuc placed at the top of the Prosecutor-General’s institution in 2013. In his inaugural public statement, he threatened critical journalists with possible “civil suits” (Ziarul National, Unimedia, Infotag, December 8 – 12).

President Timofti has, for more than one year, complained privately—and, on at least one occasion, told the assembled Western ambassadors in Chisinau—that his family was being “blackmailed” by the Prosecutor-General’s Office (it is common knowledge that one of Timofti’s sons left the country after being threatened with criminal prosecution to scare his father).

The institution of the Prosecutor-General is the apex of Moldova’s “kompromat state.” This system uses real or fabricated criminal evidence to influence the behavior of state officials, politicians and businessmen by initiating or threatening criminal proceedings or, alternatively, offering to refrain from doing so, in order to enforce or induce compliant behavior. Political influence over the courts is a necessary auxiliary of this system, but control over the Prosecutor-General’s Office is essential, and some of its former members, who turned into critics, describe the Prosecutor-General’s Office as the most important lever of control over the country.

On December 14-15, Parliament’s Chairman Andrian Candu (who is Plahotniuc’s godson) invited civil society representatives and nongovernmental experts to exchange views on the pending Bill of Fiscal Amnesty. The bill enables Moldova’s citizens and firms to declare their hitherto undeclared or partially declared property of all types (businesses, real estate, vehicles, stock), or income from such properties, in return for legal immunity and exemption from taxes. The only condition is a two percent tax on the assessed value of those declared properties. The fiscal amnesty bill covers properties held in Moldova as well as offshore. The declared goal is “liberalization of capitals” and the stimulation of legal investments in an investment-starved Moldova.

This bill (pending in parliament since December 1) is widely seen as benefiting first and foremost bribe-taking officials and privileged businessmen with state contracts. The bill is also assumed to aim at repatriating funds hidden in offshore zones by Moldovan participants in the recent, massive bank thefts and laundering schemes. Critics further note that the amnesty (if enacted) would allow the corrupt individuals to remain in the system, persist in their ways and perhaps count on another amnesty in a few years’ time.

One significant political consequence would be to consolidate the incumbent clienteles that have grown in recent years with Plahotniuc’s system of centralized corruption (replacing the earlier, free-for-all corruption in Moldova). Hence the comments that the proposed “fiscal amnesty looks like a penal amnesty” (RFE/RL, December 12; Ziarul National, December 11–14; Transparency International Moldova press release, December 11).

On December 9, the parliamentary majority voted to transfer Moldova’s Intelligence and Security Service (SIS) from the head of state’s jurisdiction into that of parliament. This SIS Director shall henceforth be appointed by a simple majority of votes in parliament (upon a proposal by at least 10 deputies) for a five-year term. The Parliament shall also be able to dismiss the SIS Director by a simple majority (upon a motion by at least one third of the chamber’s deputies). Plahotniuc currently controls (“coordinates”) some 60 deputies out of the 101 in the chamber.

This new legislation changes the previous procedure, whereby the SIS Director used to be nominated by the state president. The former law, moreover, stated that the “president coordinates the activity of the SIS, subject to parliamentary control,” but the new legislation changes this to “the SIS activity is subject to parliamentary control,” thus eliminating the role of the head of state. These changes are understood as safeguards against president-elect Dodon exercising any oversight on the SIS or even accessing secret information. At the same time, however, the SIS Director’s dismissal procedure could make it difficult for a different parliamentary majority after 2018 to dismiss a director that Plahotniuc would now pick (Infotag, Unimedia, December 10, 11).

The SIS has decided (or perhaps been ordered) to miss the multi-billion dollar bank thefts and laundering schemes entirely in recent years. The new legislation changes do not seem to address this problem at all.

This is probably not the end of legislative changes designed to reinforce the incumbent authorities in the face of challenges from a pro-Russia president and the new pro-Western opposition. Earlier this year, Plahotniuc had “guaranteed” before US, European, and Romanian officials that he would keep pro-Russia forces such as Dodon away from the seats of power, thus maintaining “stability.” It was widely understood that the acceptance of Plahotniuc’s informal rule was a part of this bargain. Nevertheless he has facilitated Dodon’s rise to the presidency because PAS and PDA pose a real challenge to the existing system, whereas Dodon and his Socialists are containable with the existing methods.