On 4 August 2022, the National Commission for European Integration adopted an action plan to implement the measures proposed by the European Commission in the context of the Republic of Moldova’s application for accession into the EU. Among other things, the European Commission insists on de-oligarchization measures. The Ministry of Justice, together with the President’s Office, is working on drafting the necessary regulations in this regard.

The action plan provides several directions. For example, there are plans to draft and pass a law on de-oligarchization, aimed at supporting efforts to reduce the influence of oligarchic groups in political, economic and media life. This also implies reviewing other states’ legislation and identifying good practices, including recommendations of international structures.

And this is a well—structured action plan with clearly defined deadlines and responsible people. However, a very late one. The entire analytical part — the study of good practices and international recommendations — had to be done in the period from 24 December 2020 (inauguration of President Maya Sandu) to 11 July 2021 (when the PAS party received a parliamentary majority). And from August 2021 to discuss, adopt and implement the law on de-oligarchization.

One cannot help getting the impression that the Moldovan authorities remembered the need to introduce systemic measures for de-oligarchization only thanks to the package of political conditions put forward by the European Commission in connection with the granting of the EU candidate status to the Republic of Moldova.

At the same time, the action plan does not assess the positive and negative practices of the Moldovan authorities on de-oligarchization – in the context of the 8 June 2019 Declaration of Captured State. However, it is worth looking at how this was handled in some key government agencies.

National Bank of Moldova (NBM)

In this part, we will have to start with the ‘night government’ of Pavel Filip, which was sworn in secretly around midnight on 20 January 2016. This happened against the background of a mass protest outside the parliament, where the slogan of the struggle against the captured state was one of the main messages of the Moldovan opposition. Here is what, for example, Maia Sandu wrote during the January protests on her Facebook page: “This is a protest against state capture, corruption, selective justice and restriction of access to the free press. This protest demands that a full-fledged dictatorial regime not be established.”

But neither the protests nor Council of Europe Secretary General Thorbjorn Jagland’s assertion in his August 2015 article that “Moldova is in the hands of oligarchs, and the captured state should be returned to the citizens to begin the transformation” confused Octavian Armașu. He accepted the offer to leave the private sector and head the Ministry of Finance in the Filip Government.  Apparently, Mr. Armașu coped with all the duties assigned to him by the captured state so effectively that it was his candidacy on 29 November 2018 that the Speaker of the Parliament Andrian Candu proposed for the position of governor of the National Bank of Moldova. On the same day, 54 deputies voted for the new NBM governor, of whom 33 were political defectors.

Already in the new parliament, on 16 April 2019, opposition deputies from the ACUM bloc, including Maia Sandu and Igor Grosu, signed a bill amending the mechanism for recalling the NBM governor. At that time, they had no doubt that Mr. Armașu had no place in the leadership of this key state institution.  ACUM bloc proposed then lowering the ceiling for the necessary votes to recall both the head of the NBM and the members of the Supervisory and Executive Committees of the NBM.

And it just so happened that on 6 February 2020, the bill was put on the parliamentary agenda. In the Moldovan legislature, it is very rare for the opposition to abandon its own initiatives, especially those concerning important political issues. But it was on that day that this rarest case was recorded. At the beginning of the meeting, Sergiu Litvinenco announced that he was collecting signatures of all the authors of this initiative to remove it not only from the agenda but also from the legislative process in general. Simply put, the authors themselves withdrew their own proposed simplified mechanism for removing the NBM leadership. We could assume that ACUM bloc deputies suddenly found out that their initiative was not constitutional. But no, the legal department of the Parliament gave green light to the authors, explaining the ‘absolute necessity’ of this initiative by its compliance with the constitutional rules for adopting parliamentary resolutions.  So, the reasons for ACUM deputies rejecting their own de-oligarchic measure can only be guessed.

Already during the PAS administration, on 31 March 2022, at the suggestion of the Bloc of Communists and Socialists, the parliament held a hearing of the NBM governor on the subject of reducing the state’s foreign currency reserves. As a rule, state body hearings end with the adoption of a parliamentary resolution specifying the measures to be taken as a result of the information discussed. The initiators of the hearings registered a draft resolution according to which the parliament assesses the activities of the NBM leadership as ineffective and passes a vote of no confidence. However, neither the resolution proposed by the opposition, nor any other resolution was passed as a result of Armașu’s hearings.

And that’s what catches the eye.  At least one deputy during the hearing should have remembered the Declaration of Captured State and cited it as the main argument for the need to remove Octavian Armașu from office. After all, the Declaration mentions the NBM among other state bodies over which Vlad Plahotniuc exercised ‘illegal and unconstitutional control’. But since not a single deputy remembered it, we’re still here.

At the moment, of the seven members of the Supervisory Council (this is the governing body of NBM), five were appointed by the Parliament in 2016, one (Armașu himself) – in 2018, and only one person was appointed in the post-Plahotniuc period. That is, with the knowledge and consent of the PAS party, six people appointed during the state capture continue to lead the National Bank of Moldova.

In order to remove Octavian Armașu from office, the ruling party does not need to return to its previous project, because the current parliamentary opposition is ready to support this resignation, thereby adding the missing PAS votes. But to revoke the remaining five people from the Supervisory Council PAS can do it by its own, and for this, it only needs such a proposal from the Speaker of Parliament Igor Grosu.

Information and Security Service (ISS)

At first glance, the ISS might seem to be a worthy example of de-oligarchization. On 8 June 2019, immediately after the adoption of the Declaration of Captured State, the deputies of ACUM and PSRM blocs dismissed ISS director Vasile Botnari on the grounds of ‘loss of trust’. Here it is, the perfect moment to put a man with an impeccable reputation, who has nothing to do with the Plahotniuc regime, in that position. And if you cannot find them within the structure, you look outside the system – as happened this summer with the appointment of Alexandru Musteață. However, in 2019, something went wrong.

On 24 June 2019, a group of ACUM and PSRM deputies registered a draft resolution for the appointment of Alexandre Esaulenco as the new ISS director. Among those who signed the initiative were Igor Grosu, Alexandru Slusari, and Ion Ceban. Socialist Vasile Bolea was the deputy who prepared this initiative and gave it to the other colleagues to sign (it can be seen from the author’s initials on the draft’s letterhead). The draft resolution was put on the Parliament’s agenda on the same day. Introducing the candidate, Speaker Zinaida Grecianîi noted, “this is a professional who holds the position of vice-director of the ISS.”

As part of the discussions, it is worth paying attention to Lilian Karp’s question about whether Esaulenco knew about the deportation of the seven Turkish teachers and what his role in this was. The candidate replied as follows: “At that time, I held the position of head of the main counterintelligence department which is a different operational area that was not responsible for that operation. As a chair, I have opened an investigation into this matter today, and you will be informed of its results within a reasonable time.” The deputies found everything convincing enough, and Mr. Esaulenko was elected head of the ISS.

But here’s the thing. Alexander Esaulenco was appointed vice-director of the ISS on 29 November 2018 (the same day as Armașu) at the suggestion of Vasile Botnari. The only question asked of the candidate at the time came from PLDM deputy Maria Ciobanu: “Do you think the ISS had serious motives for kidnapping seven Turkish teachers and deporting them to Turkish prisons?” Mr. Esaulenco’s answer was very clear and brief: “I want to state that no one was kidnapped. The ISS acted in a lawful manner, following legal standards, based on the ISS law.” On this optimistically safe note for the Democratic Party, 54 deputies, including 33 defectors, elected Mr. Esaulenco as deputy head of the ISS.

We emphasize that there were three months before the parliamentary elections, which means that all key positions were filled by people who proved their loyalty to the Plahotniuc regime. There is no doubt that the candidates for the leadership of the National Bank and the ISS were carefully vetted in terms of compliance with the principles of kleptocracy. On the other hand, it would be naive to assume that Armașu and Esaulenco knew nothing about the captured nature of Moldova. Fortunately, a couple of weeks before their appointment, on 4 November 2018, the European Parliament officially recognized Moldova as a captured state.

One can only guess whether ACUM bloc deputies, including current PAS deputies, checked the transcript of Esaulenco’s confident public words about the legality of ISS methods in the Turkish teachers’ case, and whether they used the filters of honesty and incorruptibility. In any case, now that Maia Sandu has signed the relevant decree, Alexandru Esaulenco represents the Republic of Moldova as ambassador to Azerbaijan.

Competition Council

It is an autonomous state body, accountable to Parliament, which enforces and ensures compliance with the laws on competition, state aid and advertising. By the time Plahotniuc fled the country, the Competition Council was led by Marcel Răducan. A former member of the Democratic Party, he served as Minister of Regional Development and as a member of parliament.

On 24 February 2021, an opposition group of PAS deputies registered a draft parliamentary resolution to conduct an external independent audit of the Competition Council. According to the authors, “the purpose of this audit is to evaluate the performance of this body in recent years and to open the way to a change in its leadership.” In the information note to the draft, the deputies stressed that the audit was one of the requirements of the European Union for unblocking the second tranche of macro-financial assistance for 2020.

Six months later, following the results of early elections, PAS won a majority in parliament. It was to be expected that the audit would begin immediately. However, instead of the announced audit, a series of interesting ‘coincidences’ followed. On 9 August 2021, Marcel Răducan sent a letter of resignation on his own will to the Speaker of Parliament. The next day, 10 August, Igor Grosu signed a decree stating that the February audit initiative of his party colleagues had become invalid. On 13 August, the Parliament accepted the resignation of the head of the Competition Council without a single question or complaint.

Did the Speaker of the Parliament have the right to ‘cancel’ the legislative initiative of his party colleagues with a stroke of his pen? Yes, Igor Grosu took advantage of the article of the regulations, according to which the draft registered in the previous convocation loses its force.

Could the PAS deputies re-register their idea of an immediate audit of this state agency? Yes, they could. Moreover, if they had been consistent in their determination to analyze the real background of the work of this institution during the time of the captured state and, in case of detection of illegal acts, punish the perpetrators, they would have been obliged, without delay, to return to their original requirement of an external audit.

However, the authorities preferred a different way — to ‘persuade’ the chief to leave on his own, apparently promising the absence of inspections in return.

And what about the requirement of the European Union to audit the Competition Council, which the PAS deputies insisted on when they were in opposition? Most likely, it is this factor that prevents this topic from being closed for good. So, on 14 July 2022, the Parliament adopts the Report of the Special Commission to study the effectiveness of rules in the petroleum products sector. As the first item, PAS deputies outlined the following task: “Parliament to consider the possibility of an external independent audit of the effectiveness of the Competition Council activity.”

Here it is appropriate to compare the attitude of PAS deputies on the same topic in times of opposition and in power. In opposition, they demanded an audit. Being in power, they ask the parliament (that is, themselves) to “consider the possibility of conducting an audit.” Meanwhile, as a rule, vague formulations about “considering the possibility” do not lead to concrete actions. If this is the case, then the previous leadership of the Competition Council from the time of the captured state can sleep peacefully.

Broadcast Council (BC)

The example of BC is interesting in terms of setting a precedent and the possibility of using it in relation to other state agencies (and maybe the current BC) in the future.

On 11 November 2021, the Parliament considered BC’s 2020 activity report. As a result of the discussions, the ruling majority passed a resolution rejecting the report and dismissing all BC members. It would seem, how is this not an example of successful de-oligarchization?

However, the approach chosen by the authorities was severely criticized by relevant non-governmental organizations and the parliamentary opposition. The dissatisfaction was caused by a series of hasty changes to the law that had not been discussed in prior consultation with civil society. Actually, the only way out that the authorities came up with to ‘get rid’ of ‘Plahotniuc’ members of the BC was to introduce a resignation clause in case the activity report was rejected. True, on the sly, a couple of BC members who had nothing to do with the activities of 2020 under review, and even less so with the period of the captured state, were also dismissed – they simply did not work there at the time.

In addition to the removal mechanism, the NGO criticism also concerns the new terms of appointment of members of BC, Supervisory and Development Council, and the general director of Teleradio-Moldova. In short, in broadcast structures, the parliamentary majority will decide everything – without contests and based on a political decision.

It seems that under the guise of de-oligarchization, the ruling party decided to establish control over the broadcast bodies. This is more than a strange interpretation of the spirit of the Declaration of Captured State, which envisioned a departure from the practice of all-party control of state agencies.

In the meantime, the ‘renewal’ of Teleradio-Moldova for ordinary citizens is embodied by Andrei Andrievschi with his ‘principles’ (Andrievschi hosted a program on TV channels of Plahotniuc’s media holding GMG), as co-author of a Sunday talk show on a public TV channel. The ways of de-oligarchization with Moldovan specificity and with Moldovan taxpayers’ money are truly inscrutable.

Court of Accounts (CA)

The analysis would be incomplete without the Court of Accounts whose leadership needs no introduction. Marian Lupu has been the president of this state agency since February 2019 (by the way, he was the only person who submitted documents for the competition to fill in this position), and Viorel Chetraru has been a deputy since December 2018. Although the people in question were not the least important in the days of kleptocracy, the Declaration of Captured State did not touch the state institution they led in any way.

What options do the authorities have to de-oligarchize this institution?

PAS deputies may initiate an external independent audit of the Court of Accounts’ financial statements. However, if they start, it would be desirable to bring the initiative to an end, unlike the Competition Council.

PAS deputies can (and in fact, should) hear a report on the activities of the Court of Accounts for 2021, and in this context ask, for example, such a question. Why did the number of recommendations of the Court of Accounts, which were not taken into account by their beneficiaries—state institutions, grow rapidly from 2019 to 2022? While in 2019, 55.9% of the recommendations of the Court of Accounts were not implemented, this year the figure rose to 98.3% (this is data from CA’s official website). The inefficiency of the mechanisms of the Court of Accounts is obvious.

The authorities could go with the Broadcast Council scenario described above. That is, to amend the law by adding a mechanism for the resignation of the leadership of the Court of Accounts in the event of parliamentary rejection of a report on its activities. Yes, this approach is on the verge of democracy. If the resignation of the members of the Broadcast Council had been criticized by the European Union, and not just by local civil society, this option would not be subject to consideration today.

Digging deeper, a precedent for a lightning-quick change in legislation was set by PAS in the case of Alexander Stoianoglo’s dismissal from the position of the prosecutor general. But here, again, the European structures failed to react, continuing to praise the Moldovan authorities for the proper implementation of the Association Agreement.

And if the case of Stoianoglo was mentioned, one of the options is this: the competent authorities can bring Viorel Chetraru to justice. After all, it was the Center for Combating Economic Crimes and Corruption headed by him, according to the former deputy of the DA Platform faction Inga Grigoriu, who was the real author of the amendment to the bill on preventing and combating money laundering in 2011. This amendment, apparently, gave way to the Laundromat. “What does this have to do with it?” a meticulous reader would ask. And despite the fact that PAS deputy Lilian Karp accused Stoianoglo of promoting this legislative amendment, this was one of the reasons for his arrest.

In the end, the authorities could have agreed with the CA leadership on voluntary resignation — according to the scheme applied in the case of the Competition Council.

Well, since at the moment, apparently, everything in this institution suits everyone, Marian Lupu, as the chairman of the Court of Accounts, was awarded the National Order “Star of Romania” by the President of Romania – “in appreciation of his exceptional contribution to the development of public audit in a European context, for his honesty and professionalism”. Maybe this award, together with the Order of the Republic awarded to Marian Lupu in 2014 “for his decisive contribution to Moldova’s main foreign policy objective – political association and economic integration with the European Union”, are the main reasons why PAS does not act in relation to the leadership of the Court of Accounts?

Conclusions and recommendations:

– Declaration of Captured State is a political document whose potential has not been fully exploited to fight kleptocrats.

– The PAS party missed the first year and a half of its government to implement an effective, transparent, legislated de-oligarchization process.

– The process of drafting a law on de-oligarchization is conditioned by the European Union political condition in the context of Moldova’s EU candidate status, rather than being an initiative of the ruling party.

– De-oligarchization measures should be systemic in nature. The application of double standards to the leadership of state agencies, depending on their loyalty or other non-transparent criteria, will cast doubt on the sincerity of the authorities’ intentions and discredit the law on de-oligarchization that is being drafted.

– The rule of law should be at the top of the list. Breaches of law, the practice of subjugating some public institutions, and the refusal of transparent contests for filling positions will return to the authors and the country like a boomerang.

– Immediate reaction of European structures or lack of it against undemocratic practices is interpreted by a part of the Moldovan society as a double standard, which leads to a decrease in the number of supporters of European integration (data of the Public Opinion Barometer show a decrease in the number of those who want to vote for accession to the European Union: 51% in October 2022 versus 65% in June 2021).

Inna Supac, Expert, Institute for Strategic Initiatives