Moldova’s richest man Vladimir Plahotniuc already has control over most state institutions in this poor corner of Europe, and could make a grab for the presidency in March. This raises the risk of a lurch towards a more authoritarian government – and an inevitable, probably violent, backlash.
Moldova has long been an extreme example in a region where the level of state capture – the influence of government by private interests – is almost universally high. An influential World Bank study published in 2000 found that Moldova had the second highest level of state capture after Azerbaijan, surpassing even Russia and Ukraine, both of whose governments were notoriously in thrall to local oligarchs.
The impact of this in Moldova was mitigated until recently by the conflict between two rival groups of oligarchs led by Plahotniuc and former prime minister Vlad Filat. But the situation changed dramatically in October 2015, when Plahotniuc – who allegedly controls Moldova’s judiciary – succeeded in having Filat arrested, effectively winning the war of the oligarchs. “For six years all Moldova’s governments have been coalitions. While corruption was a clear problem, there were checks and balances between politicians of different parties. Now there is one monopoly power, which is new in political terms,” Nicu Popescu, senior analyst at the European Union Institute for Security Studies (EUISS), tells bne IntelliNews.
Filat was arrested in connection with the theft of $1bn from three Moldovan banks – a scandal that has dominated the political debate in the country for more than a year. Prosecutors say they have evidence linking him to the fraud, though Filat claims that the chief prosecutor, Corneliu Gurin, is acting on Plahotniuc’s orders. “The whole system in Moldova is rotten for the simple reason that it is under the control of a single person. This person is none other than Plahotniuc,” Filat told the parliament immediately before his arrest, as MPs debated whether to lift his parliamentary immunity.
Filat’s arrest was followed swiftly by the collapse of the Moldovan government, which was led by his party, the Liberal Democratic Party of Moldova (PLDM). This paved the way for a new government to be formed after several months of negotiations, this time led by the Democratic Party, which is backed by Plahotniuc.
“Using non-transparent cash flows... Plahotniuc seized the commanding heights in Moldova’s judiciary and law enforcement systems in the first stage of state capture, and has recently become the hegemon of Moldova’s political system,” wrote Vladimir Socor, senior fellow at the Jamestown Foundation, in a November 2015 report.
Plahotniuc built up most of his fortune under Communist party leader Vladimir Voronin’s presidency in 2001-2008. His business interests span energy trading, media, real estate and banking – and are littered with controversy. Documents submitted to a London court in 2012 linked him to a raider attack on Victoriabank, which he formerly chaired, and he is suspected of being involved in raids on other Moldovan banks, allegations that he has denied.
His entry to politics was relatively recent; he was a last-minute addition to the Democratic Party’s list in the November 2010 elections. After entering parliament, he was made first deputy speaker and also held positions on the parliament’s economy, budget and finance committee and the National Council for Judicial Reform.
This time Plahotniuc appears to have set his sights higher. The Democratic Party attempted to have him nominated him for prime minister, but this was forestalled by President Nicolae Timofti, who instead nominated businessman Ioan Sturza. As Sturza failed to gain support from MPs, an alternative nominee of Pavel Filip, who is widely believed to be a proxy for Plahotniuc, was elected prime minister.
Timofti had reason to be concerned. Following Plahotniuc's election in 2010, 13 ministries and state-owned companies were revealed to have transferred their accounts from state-owned Banca de Economii to Victoriabank, which he has been connected to.
However, Timofti’s power to block further moves by Plahotniuc is limited, as his presidency is due to end in March. This has provoked intense speculation as to whether Plahotnuic intends to run for the presidency himself or attempt to have another proxy elected.
Filip’s government was elected by 57 of Moldova’s 101 MPs. Assuming they remain onside, that would leave Plahotniuc with just a few more MPs to persuade to back him to get the two-thirds majority needed to elect a new president. This may not be difficult; within the last few years Plahotniuc has succeeded in building temporary or more lasting alliances with most of Moldova’s political factions. “Mr Plahotnuic is good at building political and business partnerships. He is pleasant in person, aside from his ability to use coercion or incentives, and used his persuasive skills to build the majority in parliament,” says one analyst who preferred not to be named.
He is also suspected of using his control over Moldova’s judicial system to pressure MPs into quitting the PLDM and Communist Party and vote for Filip’s government. In an interview with jurnal.md on December 15, Sturza openly accused the oligarch of blackmailing Timofti, using criminal files with information on the president’s family members to pressure him into endorsing Plahotnuic as prime minister.
Taking the presidency – either for himself or via a proxy – could give Plahotniuc a full house of Moldova’s key institutions, given his influence over the parliament, the judiciary and the media. Local media revealed in February that he had indirectly purchased two more television channels, CTC Moldova and SuperTV, to his media group.
However, should the parliament fail to vote in a new president, early elections would be called. This would result in the Democratic Party, which has been thoroughly discredited by its links to Plahotniuc, being wiped out in the polls. A new parliament would be dominated by the pro-Russian Socialist Party (PSRM) and Partidul Nostru. This puts the pressure on Plahotniuc to secure the presidency.
Meanwhile, ordinary Moldovans fear a move towards authoritarianism should he succeed. “Moldova is a small country where one person has managed to capture the state institutions. Citizens are worried that the Plahotniuc camp wants to seize the presidency, at which point the country would be completely under the rule of one person,” Natalia Otel Belan, senior programme officer at the Center for International Private Enterprise (CIPE), tells bne IntelliNews. “There are serious concerns about one oligarch having such a tremendous influence on politicians, and really being able to make the state system work in his favour. In the long or medium term Moldova could become an authoritarian system.”
Comparisons to other states captured by oligarchs are valid, observers say. “This is the second country in Europe’s east, after Georgia, to come under the informal political control of the richest local businessman, who exercises that control without accountability,” writes Socor. “But, while Bidzina Ivanishvili inherited a fully functional state... Plahotniuc is grasping at a dysfunctional state and shrinking economy in Moldova.”
There are further differences between Moldova today and other captured states, such as Yeltsin’s Russia. “In Russia, the regime and Yeltsin personally had a degree of legitimacy. This is in no way the case with Plahotnuic,” says Theodor Tudoroiu, senior lecturer in political science at the University of the West Indies. “Plahotniuc has turned himself into a symbol of hatred, rejected by everybody in Moldovan society.”
With the parliament no longer offering a counterweight – the new government was voted in at a session lasting little more than half an hour – Moldovans have been expressing their anger and frustration with the country’s political leadership on the streets.
Around 15,000 people turned out on January 24 to protest against official corruption and demand the resignation of Filip’s government, some staying out for up to seven hours despite the sub-zero temperatures. It was a demonstration that transcended party politics; supporters of the pro-EU Dignity and Truth (DA) civic platform joined adherents of the pro-Russian PSRM and Partidul Nostru. Since then, the leaders of the two camps have discussed formalising their alliance, though no concrete progress has yet been made. On social media, opponents of Plahotniuc are mobilising under the hashtag #nuPlaha.
This is a seismic shift in the Moldovan political scene, which can no longer be divided simply into pro-Russian or pro-EU blocs. Kerry Longhurst, senior researcher at the College of Europe in Natolin, said in a recent interview with bne IntelliNews that political lines had become “fuzzy”.
Moldovans are frustrated by the way the new government is viewed as pro-EU from outside the country. “Just don’t call this government 'pro-European'... The only thing that is solid about most of them is their loyalty towards Vladimir Plahotniuc, the country’s richest oligarch,” Dumitru Alaiba, a former prime ministerial adviser, wrote in an appeal to international leaders and the foreign press on his blog.
Moldova’s mass protests during the last six months have been largely peaceful. However, this could change should Plahotniuc be successful in taking the presidency. “This will be the moment when mass protests happen. I don’t know how peaceful they will be – there is a growing sense of anger among citizens,” says Belan, pointing to the attempt to storm the parliament when Filip’s government was voted in on January 20.
Activists took to the streets again on February 9, gathering outside the supreme court and delaying the re-election of the court’s chairman, Mihai Poalelungi. “We believe that Poalelungi is a tool of influence of oligarch Plahutnoic who brought the country’s justice under his control,” said DA leader Andrei Nastase, Tass reported.
Tudoroiu agrees that more protests can be expected. “If he openly controls everything in the country, society would further radicalise, and it would be very difficult for him to control what happens,” he forecasts. “Violent riots and a ‘coloured revolution’ are possible, though I am sceptical of the chances of overthrowing the government.”
A Plahotniuc presidency offers little hope for the future, as Moldova would most likely be cut off from the international donor assistance that the country so urgently needs, and plans to apply for EU membership could be off the agenda indefinitely. With the majority of the population’s interests no longer represented in the parliament, there might be little option but to take to the streets.