Weekly Roundup
July 28th, 2022
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Are Prosecutors Dismembering the Shor Party?
It sure looks like it. Just last week we discussed how the Shor Party de-facto leader Marina Tauber was allowed to leave the country and fly to Israel in spite of facing charges and a ban on her travel. This looked incompetent at best given the level of charges she was facing and even more crazy given the fact that 1) she returned and 2) she was shortly thereafter arrested and now sits in Prison 13 in isolation.
We now know that Tauber alone was not the focus of the investigation and that anti-corruption prosecutors are going after the entire structure of the Shor party with a focus on the party’s illegal financing. This week there were around 100 searches conducted across Moldova in the case, including in 17 regions of the country and 26 different towns and cities. These searches focused on local party offices and the homes and cars of local party leaders with computers and documents being seized all over the country.
Explaining the searches, the National Anti-Corruption Center said:
“It turned out that the party deliberately accepted money of dubious origin from the criminal group, which it used in its own interests to pay for protests, fees to performers and salaries to members of the formation. The money came to Moldova by transfers and in cryptocurrency, and to hide their origin, they used various channels in Dubai, Vienna and Monaco,”
Prosecutors allege that they can prove party expenditures of over 600,000 euro in the first half of 2022, during which period the party only claimed expenditures of 228,000 lei (11,600 euro). Prosecutors released video and audio recordings that show bags of cash changing hands and allege over 100,000 euros per month were spent on salaries for senior party members. Interestingly, prosecutors claim that the Shor Party paid Russian artists Morgenstern and Philip Kirkorov $260,000 for the concert that the Shor Party claimed they had nothing to do with… and which never actually took place. Prosecutors allege another 3.5 million lei paid to transport protestors to the protest designed to be held at the same time as that ill-fated concert.
At the same time, it appears these coordinated raids were not kept secret from their targets. Between July 10 and July 16th, 7 members of the Shor Party quietly left Moldova. All were scheduled to be arrested on July 21st. Prosecutors have now admitted a leak and opened a criminal case looking for the leaker.
Parties Respond to the Searches and Arrests
Prosecutors have alleged that Marina Tauber is considered "a member of an organize criminal group led by Ilan Shor" and have noted that of the 6 Shor deputies in Parliament 4 are charged in previous legal cases that are still working their way through the courts. If the cases of illegal financing are proved the entire political party faces liquidation as a legal entity.
Addressing this, the spokeswoman for the PAS Party Adriana Vlas said:
“We said it during the election campaign and we are saying it now. Organized crime groups disguised as parties, financed by money stolen from people, have no place in our politics and society. We are waiting for the results and completion of these cases,”
Meanwhile, the Socialist and Communist Parties have aligned behind Tauber and Shor saying that this is a “witch hunt” against the opposition. Both parties are leaning on statements such as “how could they put this pretty young woman (Tauber) in prison with common murderers!” and other gender based appeals.
President Sandu issued the following statement:
“We have been talking about illegal financing of parties and election campaigns for several years. It is not news that this party is sponsored illegally. Finally, the investigation of this phenomenon began, because here we are not talking about one formation. For those affected, it is easier to pretend to be a victim and look for the guilty than to explain where the money came from. I just want the investigation to proceed correctly, transparently, without raising questions. Democracy is honest parties, not criminal groups with bags of money,”
Moldovan Security and Regional Stability
As the war rages in Ukraine, reminders of how close it is keep coming for Moldova. This week Russia struck the Ukrainian seaside town of Zatoka with a barrage of missiles destroying large parts of the town. This town is a favorite seaside getaway for many Moldovans sitting only a 3 hour ride from Chisinau. Now it is unrecognizable.
Meanwhile, Moldovans are trying to understand the implications of a new law passed in Romania on national mobilization. Under the law, if national military mobilization or martial law is announced, Romanian citizens aged 20-35 will have 15 days to return to the recruitment center in their last Romanian town of residence from wherever they live in the world. This law is ambiguous as it does not address Romanian citizens who have never actually resided in the country such as many dual citizens in Moldova. More alarmingly, around 25% of Moldova’s population are dual citizens with a distinct skewing to younger demographics. If Romania invokes this law will Moldova’s army and reserves (with many dual citizens) literally have to disband and head west? The actual implications are unclear and the Moldovan government hasn’t addressed the law publicly.
Gagauzia Rumbling
Closer to home, the relationship between the Moldovan government and Gagauzia appear to be under more and more strain. Last month, the People's Assembly of Gagauzia petitioned Chisinau for 5 single mandate seats in Parliament to be allocated to the autonomous region to correspond with their 5% of Moldova’s population. The Assembly argued that moves like this would assure representation for a national minority and are consistent with EU norms (arguably true in some countries). This week the government followed the Central Election Commission CEC in rejecting this proposal saying that it would be unfair to other national minorities (Ukrainians, Bulgarians, Russians - though none of these groups have an autonomous region) and that all citizens have equal access to run for parliament on party lists.
Meanwhile, the Central Election Commission CEC has delivered to parliament a proposal for major election reforms. The CEC proposes to reform itself as the key body that overseas elections in Moldova. Right now, the CEC is made up of 9 members, one appointed by the president and 8 appointed by parliament in proportion to the parties in parliament. In the new version, there would be 7 members: 1 appointed by the president, 2 by the government (prime minister), 2 by the Superior Council of Magistrates and 2 by parliament. The Socialist and Communist opposition has decried this as a power grab that would cut out their voices in the CEC (they are not wrong). The election reform further antagonized the opposition, and Gagauzia specifically, by only proposing a single language ballot in Romanian. Finally, the reform would give the CEC the power to enable multi day voting in some areas where travel is harder and not others - at their own discretion.
None of these reforms are final but they have drawn the anger of the opposition, pushback from civil society groups, and they have increased the nervousness of Gagauzia whose own electoral reform project was rejected at the same time.
Gagauzia is politically oriented towards Russia and is very wary of the EU, primarily wary of Romania. These various data points are creating tensions between Chisinau and the Bashkhan (governor) and the People’s Assembly. But more than that, they are creating tensions within Gagauzia. Irina Vlah, the Bashkhan, has charted a pragmatic path in the past few years with a rocky but workable relationship with Chisinau. She has addressed the European Parliament in Strasbourg and has improved her Romanian language as well (much as President Sandu worked on her Russian for the last presidential election). But Vlah has forces gathering to politically outflank her with more outright pro-Russian views.
One such group is the newly founded “People's Union of Gagauzia” led by Viktor Petrov, a current member of the People’s Assembly. Mr. Petrov drew a large crowd at the founding of his “socio-political movement” and leaned hard into anti-EU and pro-Russian rhetoric. He claims to be politically independent but hosted multiple senior Socialist Party members at the launch of the movement and he previously supported Igor Dodon for president spreading conspiracy theories about "American Specialists" and Romanian secret services helping to oppose Dodon. Mr. Petrov also conveniently founded an NGO which handed out free food and supplies to the poor right at the same time as his first electoral campaign - funds that he did not report as part of the campaign.
This group is going to be important to watch going forward. The Socialist and Communists are largely a politically spent force that is currently unable to rally people even with the skyrocketing inflation and multiple crisis. Meanwhile, the Shor party may be legally disbanded in the near future. This means there is lots of space for new political forces - whether homegrown or sponsored by those who want to destabilize Moldova.
Bomb Threats Continue…
and continue… and continue. New threats have targeted Parliament, mayors offices and the airport again and again. Local low cost carrier FlyOne canceled 4 flights in 3 days citing the bomb threats as well as an unexpected strike in the UK. AirMoldova has announced that delays can be expected with this operating environment. In total, there were 43 bomb threats in 24 hours on July 26th with buildings across Moldova in Chisinau, Balti, Gagauzia and small towns being evacuated and searched by teams of sappers. The airport is evacuated almost daily now.
Prosecutors have announced that they have one suspect in Moldova and are working with foreign countries to identify people abroad who are allegedly involved. No suspects are named. A few emails that contain the threats have leaked in the past week. All are written in Russian and one claims responsibility as a group called “organization of militant national socialists Himmler-Kult.”
To date there have been no actual bombs found and local experts believe that this campaign is partly to induce fear and partly to induce complacency in the population and security services. It’s important to note that so far this year Ukraine, Russia and Serbia have also had waves of bomb threats and that so far no one has been arrested for any of them.
Economic News
In addition to the energy crisis and spiraling inflation, drought is a serious problem in Moldova. Farmers are now saying that in much of the country where there has been little rain, harvests of corn and sunflowers will only be 50% of last years yield. In some areas there has been no rain for 3 months and there will be no harvest at all as the cost of fueling the combines exceeds possible returns.
Apa Canal (Chisinau’s water authority) has encouraged businesses and residents to reduce water usage as much as possible. The Nistru river is reaching a critical level and if it falls much lower supplies to the city may have to be restricted. The Minister of Ecology speculated that there may be timed cutoffs for consumers in the near future - but that seems to have been idle speculation of the “politically foolish” sort as there is no such policy announced and it has only led to loud fights on social media over something that may not actually happen. Apa Canal has only put out recommendations - specifically asking people not to water lawns, fill pools, wash cars, etc with city water. If you want to do things like that they ask you to use your well water (something most Moldovan homes have).
Meanwhile, to address inflation parliament has approved a bill that will help ease the burden on mortgage payers in the Prima Casa program. The program, translated as “first house” provided for cheap mortgages but is tied to the national bank’s base rate. This rate has skyrocketed sending interest payments for borrowers up from 4.12% to 9.47% this year. The government will now compensate borrowers 50% of this increase from July to December 2022.
Energy Crisis
Prime Minister Gavrilita appeared on CNN this week talking to Fareed Zakaria on the regional crisis and particularly energy prices (very worth a watch). In it she discusses the very real risk that as a percent of income energy prices may literally force a large portion of the country to go cold this winter unless action is taken.
The EU is working hard to prepare themselves for winter as the block is under serious threat from a cutoff of Russian gas. Saying that Russia is "continuously using energy supplies as a weapon," the EU has agreed to a deal with a voluntary target of 15% reductions in gas usage to prepare for the winter. In the deal, if supplies reach a critical level this reduction could become mandatory. Countries not connected to the EU gas pipeline system like Ireland, Malta and Cyprus would be excempt. Exemptions can also happen if they are heavily reliant on gas for "critical industries." The EU Commissioner for Energy says that even if all exemption kick in, this reduction will be enough to support the energy system through an “average winter.” Hungary was the only EU country to oppose this voluntary deal and may not actually implement it.
“Average winter” as a metric has a lot of people cracking jokes - “global warming we need you this winter.” Darkly solving one crisis with another is the vibe in Chisinau right now.
Currently, Russian has reduced flow through the Nord Stream 1 pipeline to 20% of normal flow. The 15% reduction deal represents a major challenge for the EU. Exemptions for “critical industries” could theoretically be claimed by Germany that is highly dependent on gas for its industrial base. If this happens, countries that have not made 20 years of decisions to make themselves totally dependent on Russian gas may be asked to sacrifice to support German industry. It’s fair to say that this is a test of the EU - can countries hang together in a united block during the winter? Or will countries begin protecting themselves? This question is critical for Moldova. If the EU maintains solidarity then it is reasonable to assume Moldova will find partners to help with the winter. If countries each strike out for themselves, Moldova will have to look to Romania and a handful of closer friends for bilateral support (much as with COVID vaccines). As the PM said on CNN - prices are set to see a six-fold increase this winter which is “outside the bounds of any reasonable purchasing power for Moldovans.”
Speaking on the issue, President Sandu said:
“The problem is the price, we can't afford to buy and store. Let's see how the market develops in the coming weeks. The authorities are doing everything possible to provide the country with energy resources, but due to uncertainty there is a risk. Therefore, we should all prepare for a hard winter,”
“The citizens of Moldova must understand that the situation is difficult, and they must take all possible measures to save heat and energy, like everyone in the EU countries and countries where people have been affected by this crisis,”
To prepare for winter the government is preparing an action plan to support residents and small businesses. Additionally, parliament has fast tracked a bill on encouraging home solar power installations that slashes the time required to authorize such an installation and the paperwork requirements considerably. Additionally, the new bill provides for a mechanism whereby any household that produces excess energy will be paid by the state yearly in April.
COVID-19 News
Thought we were ending on a high note eh? Nope, it’s a bit hard to find those lately. Chisinau has entered the “Red Zone” of COVID infections and is bringing more hospitals back onto frontline duty to deal with the rise in cases. Nationally there were 5793 cases from July 18 - 24, 2433 more than the previous week. The country also saw 16 deaths compared to 8 the week before. 20 other regions in Moldova are in the “Orange Zone.” No new restrictions have been announced but the Government stresses that the second booster is now available for those who are eligible.
Monkeypox?! Well, not in Moldova. The Ministry of Health has said that they are monitoring and have testing in place to detect this new virus. So far Moldova has no cases but there are hospital treatment areas prepared in case they appear. Moldova has not announced that it has any vaccines right now. Fingers crossed this virus will pass Moldova by.
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