Defrauding the state budget in 5 steps: Dragnea and Vâlcov’s strategy to get rid of the EU verification nightmare

Liviu Dragnea’s big problem with Tel Drum stems from the alleged fraud of European funds. Since he took over SDP from Victor Ponta, and started preparing for the exercise of government, Liviu Dragnea and his loyalists, headed by Darius Vâlcov, have laid the theoretical basis of a system that offers them virtually unlimited access to funds – any kind of funds, not only European – without the danger of oversight by OLAF. The operationalization of this strategy began in January 2017, with the beginning of the exercise of government.

Seemingly disparate pieces of news have, in fact, a direct link with this strategy. The man who runs the plan is Darius Vâlcov, the shadow prime minister with his office in Victoria Palace, who is also a member of the Scroviştea Group, Scrovistea being its favorite headquarters, from where Liviu Dragnea de facto rules Romania.

The five big steps of the strategy are:

1. Removing major infrastructure projects from programs funded by EU funds or by the World Bank.The reason? The funds from Romania’s budget are much more non-transparent, and easier to embezzle. The Tel Drum problem came from OLAF, which looks closely at the way that European funds are spent. Examples of projects taken out from a European funds or World Bank framework that are to be accomplished in a PPP framework: the Comarnic – Braşov Highway, regional hospitals in Timişoara and Braila – Galati, South Highway, Târgu Mureş – Iaşi highway

2. Ensure the financing of these public-private partnership projects with funds from three main sources: 1. directly from the budget; 2. Money from the Sovereign Development and Investment Fund. 3. Taxes and taxes paid by companies that will extract the Black Sea gas.

3. Create an institution that, under the radar, manages these big businesses. This is the National Prognosis Commission, transformed by consecutive legislative changes into a mini-government that will manage PPPs and will have the power to expropriate. Why the National Commission for Prognosis? Because it is headed by one of the most obedient and flexible dignitaries, Ion Ghizdeanu, kept in this position by the last eight prime ministers of Romania.

4. The weakening of judiciary institutions investigating corruption and, in particular, abuse of office (that is, the crime most commonly encountered in rigged auctions). See also the performance of Adina Florea from the SCM hearings on abuse of office

5. Modifying legislation on abuse of office, with the same purpose: protecting offenders defrauding funds.

Let’s take them one by one.

1. The first step of the strategy is the transfer of large projects from European funds to the state budget through phantasmagoric public-private partnerships (PPP).Corina Creţu, the SDP supported European commissioner, claimed this three days ago: „We have money in Brussels for infrastructure projects. We have no projects. For Târgu Mureş-Iaşi, this is a priority for the European Commission. We have money for the feasibility study, we have no request for a feasibility study. ”

First, the government adopted in May, through an emergency decree, the legislation that allows PPPs to emerge. It should be said that in 28 years, Romania has not completed any project in a PPP framework, as they are extremely complicated from a legal point of view, and demanding a high degree of trust between the public authority and the private company. However, the experts’ protests were in vain: Dragnea and Vâlcov pushed for the legislation.

Following the adoption of this law, the government adopted two lists of large projects to be carried out under the PPP scheme. These are major projects of billions of euros, here are some examples.

Most could have been made through European funds, but the SDP renounced this solution that requires transparency and fairness.

What is the problem with PPPs and why do Dragnea and Vâlcov prefer them? Because the award of contracts is not done through a classical tender, and the preparation of the project has a huge dose of arbitrariness, as G4Media.ro was told by experts who carry out this type of project. If the legislation remains current, financing by international banking institutions such as the EIB or the EBRD would be in real danger, which would pave the way for agreements with Chinese companies funded by Chinese banks, for example.

2. Vâlcov worked in parallel to ensure the financing of these PPPs.He has been harboring the project of the creation of a Sovereign Development and Investment Fund, which is supposed to include all major companies in which the state is a shareholder, and to draw their profits in these projects. The FSDI Act, adopted by Parliament, was declared unconstitutional, and the government is now struggling to set it up with a suite of emergency and ordinary decrees.

However, there are some missing key signatures, including the Minister of Energy (ALDE member), because ALDE – namely Daniel Chiţoiu and Călin Popescu Tăriceanu – do not want to lose the influence they have in many of the companies now, as they are subordinated to the Ministry of Energy.

FSDI still has a major problem: in the form designed by Vâlcov and Dragnea it would include both energy-producing companies, as well as transport and distribution companies. However, according to EU rules, it is forbidden to combine production, transport and distribution activities under a single dome.

FSDI is still in the project stage and it is not clear when it will be set up and which companies will eventually be included.

The second source of funding would be the taxes and taxes paid by the companies that will exploit the Black Sea gas. The provision appears in the draft offshore law, but it also hit the opposition of the ALDE at the last debates in Parliament.

3. An important point of the strategy is the transformation of the National Prognosis Commission into the mini-government that manages PPPs.It was necessary to remove them from the government ambit just to avoid confusion with ministers who do not respond fully and quickly to order, as has often happened in the past two years.

Why the Prognosis Commission? Because it is a seemingly independent institution, validated through formal consultations with the European Commission and the IMF, and, most importantly, it is led by a character who, over the years, has proven total flexibility to the wishes of the political power.

This is Ion Ghizdeanu, who has survived all the governments and prime ministers, since Adrian Năstase to this day. He became famous in the midst of a financial crisis, when Minister Gheorghe Pogea asked him about the economic growth forecast, and he answered: „How much would you like it to be, Minister?”.

Vâlcov and Dragnea knew his total obedience and entrusted him with the formal role of managing PPPs, and he would be the one giving orders.

4 and 5. The assault on prosecutors and on the legislation was performed simultaneously.Dragnea and the circle of supporters and financiers need as few problems as possible. One of their clear targets is DNA annihilation. After managing to demote Laura Codruta Kovesi, Dragnea wants as head of the institution a certain Adina Florea, who has already announced that she has never been an independent prosecutor.

Adina Florea also spoke clearly about abandoning DNA prosecution of abuse of office cases: „From the statistical data I had at my fingertips, DNA activity was more focused on dealing with abuse of office. I believe that the object of DNA activity is not the detection and investigation of abuse of office offenses. It is to find, to investigate and to make available to the judges high and medium level corruption offenses, „Adina Florea said at the interview in front of the members of the Prosecutor’s Section of the SCM.

Florea is in fact echoing the talks launched by Liviu Dragnea and his group ever since they took over the government: passing a law that eliminates abuse of office from DNA’s ambit, and moves it at the General Prosecutor’s Office, which lacks the experience to prove such facts.

Traducerea: Ruxandra Stoicescu