Weekly Roundup Part 2 - Sanctions and Shor
October 27, 2022
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Author’s Note: This week there are 2 stories driving the news in Moldova. In order to better organize the Weekly Roundup, and too dive deeply enough into each set of stories to provide the necessary context, we’ve broken the article into 2 parts released at the same time.
Both articles should arrive in your inbox at the same time.
US Treasury Sanctions Plahotniuc and Shor
On October 26th, the US Treasury announced Global Magnitsky sanctions against fugitive Moldovan oligarchs and Kremlin agents saying:
[the] “Government of the Russian Federation’s (GoR) persistent malign influence campaigns and systemic corruption in Moldova by imposing sanctions on nine individuals and 12 entities. The individuals and entities sanctioned today include oligarchs widely recognized for capturing and corrupting Moldova’s political and economic institutions and those acting as instruments of Russia’s global influence campaign, which seeks to manipulate the United States and its allies and partners, including Moldova and Ukraine.”
Read the entire press release here
The sanctions were announced in Chisinau by US Ambassador Logsdon as well as rolled out on the Treasury website in press releases
These sanctions particularly name Vladimir Plahotniuc, Ilan Shor and his wife Sara Shor both in terms of facilitating large scale corruption in Moldova and for attempting to capture the state and interfere in elections. The other individuals sanctioned include Russian Oligarch Igor Chaika who is said to have worked with Kremlin spokesman Dimitri Pskov and a variety of Russian agents (also sanctioned) to funnel money and resources first to Plahotniuc’s Democratic Party, then to Igor Dodon’s Socialist Party, and now to the Shor Party which was itself sanctioned as a criminal entity. Illegal financing was directed from Russia to these political entities at various times with the goal of defeating President Sandu and the PAS Party, creating political instability in Moldova and bringing pro-Kremlin forces to power to return Moldova to Russia’s “sphere of influence.”
The press release also mentions Mayor Ion Ceban’s new National Alternative Movement (MAN) Part saying:
“Recognizing the loss of popular support for Moldova’s old pro-Russia political elite, Gudilin’s [sanctioned Russian political operative] team offered support to an opposition political group, the National Alternative Movement (NAM). These influence efforts are closely coordinated with Moscow’s use of energy as a political weapon against the Moldovan government.”
Mayor Ceban and his party were not put under sanctions themselves, but the mentioning of his party as a new beneficiary of Russian illicit finance and support of Russian agents is significant.
Responding to the sanctions, Ilan Shor called them a “big win” noting that he doesn’t plan on going to America and they signal that the Moldovan government is afraid of him. Mayor Ceban meanwhile has threatened to sue government officials and media who write about MAN being mentioned in the sanctions for “spreading lies.”
What does this mean?
Global Magnitsky sanctions bar these individuals from entering the United States and US persons or companies from doing business with them. The press release directly specifies Vladimir Plahotniuc as being in Turkish Cyprus and Ilan Shor and his wife as being in Israel, perhaps intending to put pressure on these countries regarding their “guests.” Traditionally the United States is a leader in applying Global Magnitsky sanctions against figures responsible for major corruption and undermining of democracy around the world. Canada, the UK and (to a lesser extent) the EU all also have sanctions tools of this kind and it will be interesting to see if they follow suit.
Sanctioning the oligarchs, as well as the Shor Party is significant because it empowers the US Treasury to restrict their illicit money flows using the outsized power of the US financial system and dollar denominated global trade.
One interesting omission is Vyacheslav Platon who was not included in the announced sanctions in spite of generally bring considered to be in the same group as Shor and Plahotniuc.
Moldovan Government Reaction
Senior figures in the Moldovan government quickly responded to the sanctions praising the US Government effort and calling on local law enforcement to follow their lead. President Sandu took aim at the Moldovan judiciary saying:
“I hope that the conclusions of the Office of Foreign Assets Control of the US Treasury (OFAC) and the actions of the US government will serve as an example for the Moldovan justice system, which sabotaged and obstructed criminal prosecution, trial, prosecution for corruption and recovery of money from Plahotniuc, Shor and other corrupt officials,”
Minister of Justice Litvinenko stated that they will return to the question of whether or not the Shor party can be liquidated as a criminal entity not a true political party. He noted that this is an issue that will have to be legally analyzed further.
Meanwhile, Prime Minister Gavrilita took aim at Ion Ceban specifically when talking about use of illegal finance in elections and noting his MAN party being tied to the same Russian agents and Shor and others saying:
“This is help that steals the votes of citizens. These are Igor Dodon and the National Alternative Movement,” she also noted that "corruption is treason."
While this support from the United States against malign outside influence in Moldova is a major win for PAS, it is unclear if it will have any immediate effects on the behaviors of these actors who are mostly hiding in 3rd countries already. Meanwhile, the Shor protests continued last weekend before the sanctions were announced and are scheduled to continue this weekend as well.
Government Arrests Shor Party Activists
On October 20th, six days before the announcement of US sanctions, Anti Corruption Prosecutor Veronika Dragalin announced searches and arrests against Shor Party members and activists in multiple locations around Moldova. Law enforcement tracked party members leaving locations in Chisinau and transporting bags of money to regional offices of the party and then raided these locations. In total, 20 black bags of cash prosecutors said totaled 3.5 million lei ($180,000) were found. Each bag was labeled with a region where it was to be delivered. Prosecutors believe this reflects 1 week of funding for the party and protest activities around the country. In total, 17 persons were placed under house arrest and 5 confined in Prison Number 13.
In response to the arrests and accusations Shor, speaking from Israel, fully admitted to the crimes he is financing and his party is conducting. He said that this is money he distributes to protestors and claims that people want to protest but simply need money for food and transport. He further claimed that there was actually 5.5 million lei ($284,000) and accused the authorities of stealing some of it. He said this was a crime because it is the “people’s money.” Given that his fortune is based on the one billion dollars he stole from the Moldovan people, he is not wrong.
Shor went on to threaten the authorities saying:
“If the regional leaders of the SOR party are not released within three days, then we will come to your home, to work, where you rest, and you will have nightmares not in a dream, but in reality,”
Anti Corruption Prosecutor Veronika Dragalin spoke about the operation saying:
"We do not examine the people who are in the street, who may have accepted 400 lei to come to the protest. We look at it through the prism of the activity of a political party. A political party can only be financed in certain ways, and the sources of financing must be declared,"
She also noted that 2.5 million lei was found in one location, other bags intercepted on the road and some was not caught but made it to distribution points. Bags seized in transit have not been opened pending forensic examination. So the 3.5 million lei figure is an estimate of what was seized but not a final figure.
Dragolin also announced that the case against Ilan Shor is finally coming to a close with the multi-year trial to conclude soon. She said that if Israel is unwilling to extradite him then prosecutors will focus on seizing illegally obtained assets in Moldova.
Shor Party Protests Continue
On Sunday, ahead of the Shor Party’s scheduled protest police announced that they had information of planned provocations saying:
"The police have received information that representatives of the party that is organizing the gathering today are looking for young people over 18 years of age who weigh at least 80 kg to participate in clashes with law enforcement agencies, and who will later receive money for this"
Before the protests, the police detained a group of “athletic young men” who had come into Chisinau from Balti. They were said to be behaving suspiciously and when asked could not explain why they had all come to the city that day.
Protestors marched to the Prosecutor General’s office after being blocked by police in the National Square because of the presence of an agricultural fair there. These confrontations resulted in minor clashes. Once at the Prosecutor General’s Office, protestors set up tents. Marina Tauber, the leader of the Shor Party in Moldova had been released from house arrest by a judge against the objections of prosecutors right before the protest. She and other Shor Party leaders gave speeches and had the crowd vote on the creation of a “People’s Government” a “People’s Tribunal” and a, militant sounding organization called “People’s Shield.”
Police claim around 3500 people protested, perhaps reflecting the interruption in party payments. Lending credibility to this theory, multiple young men protested on Monday against the Shor Party saying that they hadn’t been paid for the protest the day before. Meanwhile, on October 25th following an appeal by prosecutors Marina Tauber was placed back under house arrest.
Analysis of the Evolving Situation
The sanctions announced this week mark the first real sign of international support backing Moldova against both Russian malign influence channeled via local political cutouts and in support of bringing Moldova’s fugitive oligarchs to justice. When Plahotniuc first fled Moldova he went to his house in Miami before then Secretary Mike Pompeo announced him as “persona non-grata” in the United States. Now, his exile in Turkish Cyprus and Shor’s hideout in Israel are further restricted by broad financial sanctions. Sanctions like this make the world much smaller for these men.
Further, the direct targeting of the Shor Party and the warning shot against Ion Ceban’s MAN Party seem targeted at reducing the amount of corrupt money that can be channeled by oligarchs or the Kremlin into destabilizing Moldova.
This strategy of “going after the money” was further bolstered by Anti Corruption Prosecutor Veronica Dragolin’s raids and arrests this week targeting circulating illicit cash in Moldova itself. Dragolin, a dual US-Moldovan citizen, was previously the Assistant US Attorney targeting Public Corruption in the Central District of California. He approach of focusing on money flows and criminal infrastructure differs markedly from the symbolic arrests (and quick releases) usually employed by Moldovan law enforcement.
Finally, while we see new methods and mechanisms being brought to bare against corruption and political destabilization, we are seeing the Shor Party’s rhetoric getting increasingly dangerous. Ilan Shor openly admits to crimes by denying that the government or constitution could bind his support for “the people.” He threatens prosecutors and law enforcement openly. And calls for “people’s tribunals” echo revolutionary rhetoric without even pretending to have a democratic focus on winning elections. The Shor Party seems to be betting that the crunch of energy prices and potential rolling blackouts will be enough to overcome people’s distaste for the corrupt leader and unite the opposition in the streets against the government - even against the state. The clock is ticking as law enforcement, geopolitical economic forces, Russian agents, corrupt politicians and an ever more unpredictable war all exhort pressure on Moldova as winter approaches.
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https://www.washingtonpost.com/world/2022/10/28/russia-fsb-moldova-manipulation/
One problem with a tour of duty in the Peace Corps is that it gives you another part of the world to be worried about on a visceral level.