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Romania’s Corruption Problem Singled Out |
 On
October 25, the European Expansion Commissioner, Mr. Olli Rehn,
presented the European Union’s monitoring report for Romania and
Bulgaria regarding their EU accession undertakings, before the European
Parliament. The report focusing on Romania was comprised mainly of
technical data concerning the monitoring of the country’s compliance
with its commitments under the EU Accession Treaty.
While the report indicated that Romania made significant progress in the
reform of its legal and competition system, shortcomings in Romania’s
justice reforms, customs and border enhancements, environmental
protection and, most especially, the fight against corruption, were
significant enough to cause Mr. Rehn’s report to preserve the EU’s
safeguard clause, which allows the European Union to put back Romania’s
accession until 2008. The fate of the safeguard clause will be decided
during the spring of 2006, when a new report regarding the progress of
Romania will be published. |
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“A Cause for Serious Concern” |
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Despite the apparent commitment of the EU towards Romania’s accession,
as set forth in the Accession Treaty, Romania’s corruption problem,
especially as it relates to the corruption of high-level officials, was
singled out in Mr. Rehn’s report for particular scrutiny. In a pointed
attack on the subject, Mr. Rehn noted that “the failure to obtain even a
single significant conviction for high-level corruption in recent years,
despite commonly available information on its scale, is a cause for
serious concern." He called upon Romania to implement “urgent and
forceful action” to demonstrate the country’s ability to “combat
corruption effectively and to set in motion an irreversible decline in
the levels of corruption.” |
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Similar Assessments by the NGOs |
Echoing EU criticisms, Transparency International, which acts as the
world’s barometer in discerning the perception of official corruption in
a state, recently published its 2005 report on the perception of public
corruption in Romania. According to the report, Romania is among 60
countries where corruption is perceived at “a general level” and which
received a score (in Transparency International’s “Corruption Perception
Index” -- or CPI) equal to or less than 3.0, on a scale of 0 (very
corrupt) to 10 (not corrupt). Romania obtained a CPI of 3.0 points,
exceeding last year’s score by only one decimal point, but still below
the average of 5.04 for new EU members, and below other EU candidates,
such as Bulgaria (with a CPI of 4.0) and, surprisingly, Turkey (with a
CPI of 3.5). In fact, Romania’s slow year-on-year progress, and its
continued low score (on a par with countries like Armenia and Rwanda),
made Transparency International’s experts conclude that Romania’s
anticorruption reforms are both slow and ineffective: “Romania is still
confronted by major problems regarding the implementation of legislation
and the administrative ability to implement public anticorruption
policies.” In a press statement, the Ministry of Justice noted that the
Transparency International Report ranked Romania 85th in the perception
of corruption index, demonstrating that it was necessary to accelerate
the implementation of anticorruption legislation and carefully monitor
the process in order to “improve both actual anticorruption activities
and how they are perceived.”
Adding to the calls for change, Freedom House, Inc., the U.S.-based NGO,
recently drafted its “Assessment Report for the Anticorruption Policy of
the Romanian Government” which was commissioned by the Romanian Ministry
of Justice. In its report, Freedom House acknowledged that the past few
years had brought about “an impressive arsenal of legal instruments of
transparency, accountability and anticorruption in Romania,” but that
many such initiatives “still have to prove their usefulness.” Indeed,
Freedom House went out of its way to list recent bright spots in the
country’s anticorruption campaign, including the enactment of the
“Freedom of Information Act” and the decision to make transparent the
public declarations of assets and conflicts of interests of dignitaries
and civil servants. It also lauded the authorities for their creation
and strengthening of the National Anticorruption Prosecutor’s Office (NAPO),
which “resulted in an agency which is better organized and has superior
resources to the rest of the prosecution offices, but still has to prove
its political independence and effectiveness.” Other bright spots were
not so much intended, as imposed, such as the December 2004 elections,
which, according to the report, had created a more “pluralistic”
political situation offering “a better environment to curb corruption.” |
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Legislative Action, but Few Concrete Results |
 The
feeling that Romania has done much in the field of anticorruption
legislation while achieving so few practical results is not without
justification. In their respective reports, both Freedom House and
Transparency International identified several areas which impeded
Romania’s progress on the ground:• Insufficient use of administrative
means to combat corruption and the over-reliance on prosecution in a
judicial environment of low effectiveness. In other words, the current
alternatives seem to be between prosecution (highly expensive on a
nation-wide scale) and the free practice of corruption.
• The poor link between control and prosecution of alleged
corruption, the poor quality of the management of information and the
weak coordination in the general implementation of the strategy. The
secret services and control bodies seem to contribute insignificantly to
the prosecution policy of NAPO.
• Lack of political independence, impartiality and effectiveness of
prosecutors, especially in an environment where little was done to grant
autonomy to the individual prosecutor and the investigation is strictly
controlled hierarchically. Until the last elections, NAPO treated most
of the top-level alleged corruption officials as untouchables.
• Insufficient implementation of current anticorruption legislation
and lack of monitoring mechanisms; and frequent violations or lackluster
enforcement of legislation already enacted, especially legislation
dealing with the transparency of the decision-making process.
• The institution that monitors and controls “conflicts of
interests,” incompatibilities and wealth control was not established
although the period for its implementation has already expired.
• Lack of progress on implementing and further developing
“whistle-blowers’” protections. |
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Some Improvement on the Part of the
Authorities |
Responding to this consistent problem, the Romanian authorities have
made some progress in the fight against corruption. In March of this
year, the authorities submitted an anticorruption plan for 2005-2007,
containing strict deadlines for adopting anticorruption laws and for
promoting the efficiency and transparency of the judiciary. Under the
plan, the government has committed itself, amongst other things, to
draft new legislation on the granting of state contracts and the
allocation of state procurement, as well as ensure the independence of
prosecutors. The existing legislation on funding political parties will
be reviewed by December, while the general anticorruption framework will
be streamlined, with fewer offices fighting along more clearly-defined
lines. The 2005-2007 anticorruption plan is generally considered to be
an improvement over plans adopted in previous years, with more of a
focus on priorities and a clearer definition of remedial measures to be
enacted prior to accession. The Romanian government has agreed to report
its progress under the 2005-2007 Plan to the European Commission
semi-annually.
 Progress
was also recorded at the institutional level. NAPO’s investigative
powers were expanded, allowing its prosecutors to investigate deputies
and senators. Meanwhile, the new National Anticorruption Department was
established to handle major cases of corruption. Another positive change
was the establishment of the General Anticorruption Division within the
Ministry of Administration and Internal Affairs.
Recently, Prime Minister, Calin Popescu Tariceanu announced the creation
of a new police department to fight corruption among Interior Ministry
employees. The new department, which will be led by a prosecutor, was
designed in collaboration with British and Spanish experts. Tariceanu
later said he was confident that his Cabinet's measures to introduce
more transparency in public contracts and make the judiciary more
efficient would succeed in reducing corruption. He said there was
already progress in stopping high-level corruption because none of his
Cabinet ministers had been entangled in corruption scandals.
With respect to fiscal matters, the Romanian authorities enacted the new
Law No. 241/2005, regarding the prevention of fiscal evasion. The Law
was designed to criminalize ‘financial crimes’ by, amongst other things,
applying jail terms to an entire category of ‘fiscal evasion’ which had
heretofore been punishable solely by fines. |
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Further Improvement Required |
Despite the Prime Minister’s optimism on his government’s performance,
or the recent rash of new legislation, it appears as if much work needs
to be done. A general anticorruption legislative framework remains
incomplete, and several provisions initiated by the Minister of Justice
are still in the drafting stage (such as an expansion of the
applicability of “conflicts of interests” and the establishment of the
National Agency for Integrity). Despite the recommendations of the
European Commission formulated as of 2004, the delay regarding the
establishment of the National Agency for Integrity remains the principal
reason why too much evidence is still necessary to launch an
investigation into the wealth of public officials suspected of illegal
activities.
A case in point in terms of what needs to be done is NAPO. In a recent
article printed in Romania’s press, Daniel Morar, the young prosecutor
who was appointed chief of NAPO in August, has indicated that he is not
satisfied with the Office’s current activities: "We found numerous files
treating small corruption cases, which are suffocating our specialists.
Meanwhile, the 40 cases of big corruption mentioned by the former
management last year are only five … I have noticed a restraint at my
prosecutors when public persons are to be investigated," he said
recently. Moreover, according to Mr. Morar, only 20 of the 83
prosecutors in NAPA are qualified for their positions. He also revealed
that NAPA suffers from a lack of cooperation from supporting agencies,
such as the Romanian Secret Service: “Only 20 per cent of the
information they provide is valuable. In many cases, they offered us
information which has been already published in the newspapers."
Morar appears determined to reopen some of the most controversial
corruption cases in recent years. He has already ordered the review of
the file involving Hildegard Puwak, European accession minister between
2000 and 2003. Puwak and her husband were accused by the media of the
embezzlement of over Euro 150,000 of EU-financed funds, but the
prosecutors at the time decided against bringing them to trial. Among
others investigated but not yet brought to trial are former Prime
Minister Adrian Nastase, former Transportation Minister Miron Mitrea,
and Bucharest District Mayor Marian Vanghelie.
According to political analyst Cristian Parvulescu, president of the Pro
Democratia Association, Morar has a tough job ahead of him. "The only
chance for the National Anticorruption Prosecutor's Office to be
independent will be the prosecutors' passion for their work," Parvulescu
believes. Morar, however, is undaunted. He has even called for his
office's scope to be expanded to include parliamentarians, whose cases
presently are handled by the General Prosecutor's Office. |
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Conclusion |
 Romania’s
track record on corruption has been decidedly lackluster. On the one
hand, the past few years have seen a flurry of legislative initiative
followed by grand statements of optimism for the future. On the other
hand, legislative initiative has been accompanied, almost uniformly, by
bureaucratic inefficiency, political hesitation, organization ambiguity
and legislative insufficiency. While exceptions of enthusiastic
enforcement are there, such as Daniel Morar’s stewardship of NAPO,
efforts such as these are lonely and often sisyphean efforts in an
environment of inertia. Although Romania’s current government should be
lauded for wishing to combat corruption, it has not as yet convinced the
EU, the media, or its own public, that it is at all seriously committed
to doing so. |
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Editors Note: It is our policy not to mention our clients by name in
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to the best of our knowledge and belief at press time. Specific advice
should be sought from us, however, before investment or other decisions
are made.
Copyright 2005 Rubin Meyer Doru & Trandafir, societate civila de avocati.
All rights reserved. No part of The Romanian Digest™ may be reproduced,
reused or redistributed in any form without prior written permission
from the publisher.
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