Political scandal has been echoing through the Romanian streets for the past three weeks, implicating even the highest government officials.
The Romanian-French businessman, Adrian Costea, has been accused of money laundering, depositing Romanian funds in a group of French businesses. The scandal has escalated, spreading like wild fire and highlighting more and more corrupt practices within Romanian politics. A scandal of such magnitude has not been publicised in Romania since the collapse of Communism and could have far-reaching implications for Romania and her political image abroad.
French prosecutors met with their Romanian counterparts in Bucharest to begin the investigation into the Costea scandal on 4 May 2000. The charges against Costea were filed in France; he is accused of embezzling Romanian public funds on behalf of Romanian politicians. The fraud supposedly includes several Party for Social Democracy in Romania (PDSR) members as well as Alliance for Romania Party (ApR) member, Teodor Melescanu and the Romanian President, Emil Constantinescu. The scandal is immense and could severely damage the presidential election campaigns of the three main contenders: Melescanu, Constantinescu and Ion Iliescu.
Alongside these allegations of money laundering Adrian Costea is further connected to scandal surrounding Razvan Temeşan, the former director of the now bankrupt Romanian bank, Bancorex. As early as 1998 the French had requested the establishment of a rogatory commission to investigate Adrian Costea. However, the request "got lost along the way," (Nine O'clock, 8 May 2000) as the Romanian General Prosecutor, Mircea Cristescu was quoted as saying. Only if there were evidence of malpractice in Romania would an investigation be initiated.
Temeşan and Costea
The Temeşan file not only links Costea with a deal that breached banking laws resulting in Bancorex been hit by a loss of USD 5.7 million, but it also links him with two cases heard in 1999. On 7 June 1999 Temeşan went on trial for approving the illegal rolling of credit conventions with a value of USD 63.5 million to the benefit of a company owned by Costea, the Star Trade Company. The result was USD 14,911,000 reaching the parent company in France. (Nine O'clock, 8 May 2000).
In May 1999, Temeşan was been arrested for abuse of authority. He had authorised a USD 5.5 million commercial credit line for Agroholding, a Bucharest business. The line would enable the import of 30,000 tons of diesel oil from France with the assistance of... Adrian Costea. The income generated from the sale of the oil never arrived at Bancorex. (Nine O'clock, 8 May 2000)
Adrian Costea was arrested by the French authorities last year but was released. However, attention was drawn to the alleged corrupt practices of his companies, whereby laundered money from Romanian public services was deposited into the accounts of Romanian politicians. Naturally, those politicians who have been associated with Costea have denied any connection with him.
Adrian Nastase, the Vice president of the PDSR admits that he has known Costea since 1998, when he had helped Melescanu break away from the PDSR to form the ApR. However, Melescanu denies any links with Costea. Also, Victor Herbenciuc, a former general secretary of the Vacaroiu administration commented that he has no links with the money laundering but knows of Costea, as everyone does. (Nine O'clock, 8 May 2000)
Contradiction and confusion
Every day there is a new twist to the story, a new allegation against a politician and greater confusion over the facts. Contradictions abound between individuals and within parties. Although Melescanu rejects any connection with Adrian Costea, Mircea Ursache, exclusively declared to EvZ on 10 May that in July 1997 at the PDSR conference Costea actively supported the breakaway faction of Melescanu, Iosif Boda, Marian Enache, Viorel Salagean and Murgurel Vintila. According to Ursache, the formation of the ApR after the conference was funded by money from Costea's Romanian-based firms. Melescanu later changed his mind and admitted that Costea had provided the logistics and financial support for the Foundation of the ApR before it actually became a political party. Costea, in turn, confirmed the sponsorship. Melescanu denied any further connection with Costea.
Throughout the 1990s, Costea obtained diplomatic passports. Ion Iliescu, the former President of Romania and the current chairman of the PDSR, refuted claims that Adrian Costea had been issued a diplomatic passport on the orders of the presidential office. Iliescu stated that Costea had "never had an official status" in the presidential office (RFE, 11 May 2000).
In contradiction to this statement, Teodor Melescanu had asserted on 10 May that Costea had been issued a diplomatic passport on the orders of the presidential office. Complicating the matter is the fact that Costea was appointed as an advisor on foreign economic relations to the Iliescu administration in 1993. He was also appointed an ambassador at large by Constantinescu in 1999.
Iliescu appears to have been entangled in a web of deception, whether he was aware of it or not. During his election campaign in 1996 Iliescu utilised Costea's publishing houses in France to print campaign posters and photographs. On 13 May 2000, the Romanian customs authority (DGV) notified the Prosecutor's Office of a tax evasion case whereby millions of election campaign posters were imported into Romania without being taxed. The damages total ROL 5.3 billion in unpaid customs duties and VAT.
In light of evidence connecting Iliescu to Costea, Iliescu issued a public statement on 16 May. He affirmed that he had known Costea since 1991 and had consulted him in 1996. Costea had volunteered to print campaign materials but provided no direct financial support. Costea had also volunteered to publish two translations of Iliescu's book Romania at the Moment of Truth which was published in Romania in 1992. Iliescu claimed there was no material gain for himself and that he never granted favours to Costea.
Implications
The "Parisian Scandal" erupted into the Romanian political arena when the French magistrates announced who they wished to speak to in the French-Romanian rogation commission. Leading and respected politicians were included: Adrian Nastase, Teodor Melescanu, Viorel Herbenciuc, Mihai Ungheanu, Dan Nicolae Fruntelata, Liviu Razvan Temeşan, Mircea Cosea, Iosif Boda, Ovidiu Grasu and Dumitru Iliescu. Allegations included money laundering, tax evasion, deception, corruption and many more all strangely entangled with each other.
The politicisation of the scandal could have far-reaching implications for Romania. With local elections scheduled for June 2000 and general and presidential elections due in November many candidates are being seriously damaged. Melescanu and Iliescu have both been associated with Adrian Costea and have developed certain ambiguities in their description of relations with Costea. Both Melescanu and Iliescu alongside Constantinescu are running for the highest official political post in Romania, that of President. Constantinescu himself is not free from association with the scandal affirming the appointment of Costea as a "roving" ambassador after the collapse of the Iliescu administration in 1996. Costea has also stated that he and Constantinescu had at least one confidential meeting to discuss problems of governing. The Romanian Presidency deny any involvement with Costea other than helping to distribute the album Eternal and Fascinating Romania in France.
With the three main presidential candidates implicated in the biggest scandal to be publicly revealed in Romania for over a decade, it is difficult to predict who the Romanian public will elect as President in November. Indeed, as more and more politicians become embroiled in the scandal, it is becoming difficult to predict who will be elected in both the local and general elections.
The allegations against Adrian Costea have aroused suspicions amongst the opposition party, PDSR, who find themselves largely connected to the scandal. A statement by the PDSR suggested that the whole affair has been manufactured to discredit the party in the forthcoming elections in June and November. PDSR described the scandal as "a new and furious campaign to denigrate PDSR. Mass media is again a victim of intoxication. The incriminating materials are fabricated in Bucharest and delivered abroad so that on their return home they can bear the endorsement of the political neutrality of those abroad." (Nine O'clock, 8 May 2000)
This could be the case. The letter to the French authorities revealing Costea's possible illegal dealings did arrive from Romania and was written by an anonymous author. Also, the Presidency has previously been accused of devising a plan to prevent Ion Iliescu from running for the post of President. In its most extreme the plan allegedly declared to physically prevent Iliescu from running for the position. (See previous article). However, to manufacture a scandal of such a magnitude that connects not only opposition members but also the current President within a complex web of intrigues seems far-fetched and almost impossible.
The "Parisian Scandal" is creating an atmosphere of political confusion within Romania, and it is difficult to decide who to believe and who not to believe as contradictions abound. Ultimately, this can only undermine the legitimacy of Romanian politicians in the eyes of the nation, perhaps highlighting the emphasis on the individual politician and his own semblance of power rather than on the well-being of the political party, the government or the nation as a whole.
What began as an allegation of money laundering has escalated into the biggest political scandal Romania has seen for decades. The tentacles have reached into almost every facet of Romanian political society tightening their grip around each new victim. Within Romania there is contradiction and confusion straining political legitimacy. To the outside world Romania is portraying an image of instability and susceptibility, which could prove to be a set back in negotiations for EU membership.
However, despite the cloud of uncertainty over the future of some politicians, the scandal could be seen as a turning point in Romanian political development, marking a giant step towards transparency and transition.
Catherine Lovatt, 18 May 2000
Moving on:
