The capture of fugitive oligarchs – a test of strength for Moldova’s judiciary. Chișinău relies on the West, while oligarchs rely on the system they helped shape

The leader of the Democratic Party of Moldova Vladimir Plahotniuc gestures during his speech at a rally in Chisinau, Moldova, 09 June 2019.
© EPA-EFE/DUMITRU DORU   |   The leader of the Democratic Party of Moldova Vladimir Plahotniuc gestures during his speech at a rally in Chisinau, Moldova, 09 June 2019.

When it came to power, the pro-European government promised to reform the judiciary and bring to justice the oligarchs who embezzled state funds and are now hiding abroad. Vladimir Plahotniuc, Ilan Shor and fugitives from “the London group” seem to continue to enjoy protection from the system they helped build and are supporting efforts to oust the current pro-European administration. On the other hand, the authorities also rely on the support of the country’s Western partners, who seem to have understood that oligarchs are pressing for closer relations with the Russian Federation.

Moldovan oligarchs, at the center of the “battle for Moldova” between the West and Russia

At the end of last year, the pro-European government in Chișinău got a helping hand from the USA and Great Britain, which added fugitive oligarchs Ilan Shor and Vlad Plahotniuc to a list of people targeted by sanctions.

The move was of capital importance, sending out a signal to countries harboring the two fugitives – Israel and Turkey – that they should better hand over the two oligarchs and stop providing them with safe haven.

First and foremost, Plahotniuc and Shor are wanted by Chișinău authorities, which considered the two Western powers’ decision to sanction them for crimes committed in the Republic of Moldova as a success. For that matter, the spokesperson of the Moldovan Foreign Ministry, Daniel Vodă, told Veridica that the Republic of Moldova will continue its “anti-corruption diplomacy”.

“The USA and Great Britain sanctioned corrupt people and businesses associated with them which, over the years, have robbed Moldova of its resources and hindered the development of the country. We will continue talks to sanction wanted criminals by EU member states as well”, the Moldovan official said.

American and British sanctions are, by and large, also a strong signal for the justice system in the Republic of Moldova: prosecutors and courts of law should make haste to finalize the numerous investigations targeting the two, says Justice Minister Sergiu Litvinenco.

Moldovan oligarchs who fled the country are now pieces in a puzzle with broader ramifications. For the West, the real stake is maintaining the current pro-European government in power and helping Chișinău catch a few “big fish” in order to prove that the reform of the judiciary is starting to bear fruit. From Moscow’s point of view, conversely, the fugitive oligarchs are pawns used to destabilize the political situation [by means of protests and media manipulation] with a view to installing in Chișinău pro-Russian forces that would carry out destabilizing actions behind the Ukrainian frontline. Therefore, the fate of the oligarchs is also tied to the “battle for Moldova”.

The domino effect of Magnitsky sanctions targeting Moldovan oligarchs

After the USA introduced sanctions against Shor and Plahotniuc for “acts of systematic corruption and Kremlin-backed interference in Moldovan elections”, Great Britain followed suit and did the same on December 9, marking the International Anti-Corruption Day.

This also prompted a response from president Maia Sandu, who said that “the noose is tightening on Moldova’s corrupt fugitives”, and that “every asset owned by these individuals on the territory of the United Kingdom and its affiliated territories, will be frozen, while access to this country will be restricted”.  

What followed was a cascading string of events. Chișinău’s diplomatic efforts, particularly the intervention of the United States, left strong echoes in Tel-Aviv, where Ilan Shor is currently in hiding. On December 22, Moldova’s Justice Minister, Sergiu Litvinenco, said: “Ilan Shor’s bank accounts in Israel have been frozen by Tel-Aviv”.

“The decision of Israeli authorities was taken following the sanctions imposed by the USA and based on the intervention of Moldovan authorities in Israel”, Litvinenco went on to say.

Ion Guzun, the director of the Secretariat of the Independent Anti-Corruption Consultative Committee in the Republic of Moldova, an institution subordinated to the Presidency, commented on the sanctions for Veridica:

“Any sanction is actually a limitation and restriction of the oligarchs’ activity and the influence targeted by US and British sanctions. […] If the USA applies sanctions against Shor and Plahotniuc, then their activity is restricted, albeit at international level. These are further arguments for talks between Moldovan diplomats and third countries when it comes to repatriating these individuals or restricting their activity in other countries”, Ion Guzun told Veridica. 

At present, Ilan Shor is about to be sentenced in the famous “billion-dollar fraud scandal” targeting three commercial banks in the Republic of Moldova over 2012-2014. Shor is believed to be the brains behind the bank theft. A final decision of the Chișinău Court of Appeal was expected as early as December 2022, but was delayed. Chances are the sentence might be passed in January or February. Previously, on June 21, 2017, Shor was sentenced to seven and half years in prison in the court of first instance for embezzlement in the aforementioned case.

Later, however, Shor’s case, which comprised nine separate charges, dragged on, most likely also because Shor was under the political protection of oligarch Vlad Plahotniuc, which led the Republic of Moldova with an iron fist and controlled the judiciary over 2016-2019.

More recently, on December 16, 2022, Ilan Shor was dealt another heavy blow after two of his TV stations, TV 6 and Orhei TV, got their broadcasting licenses revoked. His top propaganda channels were thus silenced for “failing to provide unbiased information while reporting on national developments as well as the war in Ukraine”.

The decision also follows the revelations made by Washington Post, which described Ilan Shor as the latest tool used by the Kremlin to stir public unrest in the Republic of Moldova and topple the pro-European government in Chișinău.

“One senior Russian politician praised the [Chișinău] protest organizer, Ilan Shor, as “a worthy long-term partner” and even offered the Moldovan region led by Shor’s party a cheap Russian gas deal, according to Shor’s press service. Referred to as “the young one” by Russia’s Federal Security Service (FSB), the 35-year-old Shor is a leading figure in the Kremlin’s efforts to subvert this former Soviet republic, intelligence documents and interviews with Moldovan, Ukrainian and Western officials show”, Washington Post writes.

The kleptocratic system and the oligarchs’ connections continue to shield fugitives from the law

Although their licenses were suspended, Shor’s TV stations remained active online, on YouTube and social media, where they promote their content on a daily basis. For now, the Republic of Moldova has no regulations in place targeting online media, and one such bill has been debated for several months with a view to identifying a solution that should not pass as state censorship.

As regards the reform of the judiciary, things are far from being settled. Despite the authorities’ efforts, the reform still has a long way to go. Drawn-out court trials, peculiar decisions and people from the “old guard” continue to obstruct judicial processes and provide outlaws with the upper hand.

Ion Guzon expressed his reserve over the investigations targeting the two Moldovan tycoons. “Still, my hope is that, in light of these international restrictions, things will move faster”, the experts said.

Guzun warns that another problem consists in the fact that no progress has been reported with those investigations into attempts to usurp state power, for instance the deadlock in June 2019, when Plahotniuc’s Democratic Party refused to renounce power, although a new majority had been created in Parliament.

“We can notice that no one is held accountable for a number of controversial rulings of the Constitutional Court, even before June 2019, in particular former Court judge Mihai Poalelungi. We can see nothing happened to the deputy head of the of the Police General Inspectorate, Gheorghe Cavcaliuc, who was in charge of “political policing” while Plahotniuc was in power, or to other individuals for that matter”, the legal expert said.

Oligarchs preserve their influence also because they continue to carry out major economic operations in the Republic of Moldova.

“But already we’re talking about a larger group, because these oligarchs maintain their economic and political influence in the Republic of Moldova through proxies. This is why I have my doubts”, Ion Guzun explained.

Apart from Shor’s extradition, Chișinău will also need to find ways to get Vladimir Plahotniuc back in the country. After fleeing the Republic of Moldova in 2019, Plahotniuc tried to settle in the United States using a business visa, but was declared undesirable by Washington. The authorities suspect Plahotniuc is currently in hiding in Turkey or in the separatist region of Northern Cyprus.

“I find it hard to believe that US and British sanctions are somehow affecting Vladimir Plahotniuc, because he is currently in a country [Turkey] with which the Republic of Moldova had close relations when Plahotniuc was calling the shots in Chișinău”, Ion Guzun further said.

Justice Minister Sergiu Litvinenco says the authorities have no clear indication as to Plahotniuc’s whereabouts.

“The problem with Plahotniuc is that he hasn’t even been located yet. According to some sources, he is allegedly in Turkey, but this information has not been officially confirmed. As far as I’m aware, there are have been talks in this respect at the level of the Foreign Ministry, but I don’t know the specifics”, Minister Litvinenco told Veridica.

In recent years, Plahotniuc developed close relations with Turkey by means of all sorts of corrupt activities, from infrastructure projects (Chișinău Arena or road repairs) and purchasing ambulance cars, to repairing the Presidential Administration building in Chișinău or privatizing state-owned border control companies.

Nevertheless, the watershed moment that really cemented Erdogan-Plahotniuc relations was the only successful operation in Europe carried out by Turkish secret services to repatriate Turkish professors linked to exiled cleric Fetullah Gulen, the opponent of the current authoritarian leader in Ankara. Therefore, six teachers were extradited to Turkey in a blitz operation on September 6, 2018 conducted by Moldova’s secret intelligence, SIS, at the time under Plahotniuc’s control.

Given the relationship Plahotniuc nurtured over the years with Ankara, it’s hard to believe the Republic of Moldova will be capable to negotiate his release on its own. A firm intervention from the USA would increase the odds of an extradition, although it would not guarantee it.

Fugitives from “the London group” want to evade prosecution claiming they are victims of politicized investigations

The US and British sanctions targeting fugitives from the Republic of Moldova will definitely impact the “London group” as well, made up of controversial businessmen who moved to Great Britain, where they describe themselves as victims of political decisions.

We are talking about Veaceaslav Platon, an expert in embezzlement and money laundering in ex-Soviet space. Over the years, Platon’s name was tied to several scandals in the banking sector, although the most notorious episode remains “the Russian laundromat”, a global scheme whereby illicit money from Russia was laundered through various methods in dozens of countries.

International investigators say that over 80 billion USD was laundered all over the world, of which over 22 billion in the Republic of Moldova alone, where corrupt judges issued doubtful rulings regarding fictitious receivables among various individuals, businesses and offshore companies.

In fact, on January 12, the Chișinău Tribunal ruled that the state would remain in possession of 268 million Moldovan lei [tantamount to over 13 million EUR], which resulted from Platon selling 64% of his shares in Moldinconbank, one of the banks in Platon’s portfolio, which was involved in money laundering activities under his direction. The measure was applied to recover the prejudice incurred by the Moldovan Savings Bank (BEM), one of the three banks involved in the billion-dollar fraud case.

Apart from Platon, London is also harboring Gheorghe Cavcaliuc, who recently started to enter politics in an attempt to evade a prison sentence for aggravated graft and political policing carried out during the Plahotniuc and Dodon administrations.

Shortly after the election campaign for the July 2021 snap elections, Cavcaliuc fled to London, where is trying to pose as a political victim. At the same time, Cavcaliuc is involved in an attempt to topple the government by staging protest actions.

In addition to Platon and Cavcaliuc, another fugitive currently residing in London is Constantin Botnari. He was one of Plahotniuc’s closest acolytes, and his nickname, “money belt”, is owed to his bribery assignments while Plathotniuc was in power. After fleeing Moldova jointly with Plahotniuc, Botnari ended up in London, where he occasionally speaks in public, fashioning himself a political victim of the current government in Chișinău.

Sentencing these individuals will carry a lot of weight in terms of the signal Moldova will send to the EU regarding the reform of the judiciary, as well as in terms of public support. The current ruling party – the Action and Solidarity Party (PAS) – won the elections based on a reformist program where the rule of law and fair justice were the main deal-makers.

PAS is forced to deliver on its promises both at home and abroad if it wants to boost its approval rating and convince the EU that its benefits are commensurate to real reforms. It remains to be seen the extent to which the current government will be able to combat the kleptocracy that was deeply rooted in Moldova by corrupt politicians and magistrates for over three decades.

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