Exclusive: Court of Auditors’ checks of PSD’s use of public subsidies halted by Dragnea acolyte. A step by step account

Sources from within the Romanian Court of Auditors have informed G4media.ro that in 2018 a Court of Auditors’ department notified the PSD that it would start an audit on the party’s use of state subsidies. However, the Court’s President, Mihai Busuioc, considered to be close to Liviu Dragnea – the former PSD leader – made the audit vanish into thin air.

According to these sources, in order to achieve this goal, Busuioc operated the following move: in June 2019, he formally transferred the control competence of the department that initiated the audit to another department, considered obedient, thereby cancelling the protocol concluded with the Romanian Permanent Electoral Authority (AEP) on the exercise of joint audits.

On the other hand, in a correspondence addressed to G4Media.ro, the Court of Auditors argues that the institution did not begin an audit of political parties’ use of subsidies in 2018 In the answer signed by Mihail Cătălin Toderaşcu, head of service, the Court of Auditors argues that the AEP protocol was canceled after the Government amended the electoral law in May 2019, eliminating therewith inter alia, the Court of Accounts’ obligation to carry out controls and audits of subsidies granted to political parties at the same time as the Permanent Electoral Authority.

In its reply to G4Media.ro , the Court of Auditors announced that on August 26, 2019, it will carry an audit of the subsidies granted to parties from the state budget „within the framework of the financial audit mission to be carried out at the Permanent Electoral Authority – a public institution through whose budget grants from the state budget to these political organizations are awarded”.

We would like to remind our readers that AEP Vice-President Marian Muhuleţ has declared that in January 2019, the Authority suspended its audit of PSD’s use of the money it received from subsidies to political parties in 2017 following an address of the Court of Accounts asking for this control to be done in August 2019.

What G4Media.ro Court of Accounts sources claim

In 2018, Department II of the Court of Accounts, led by Dan Firtescu, notified PSD that it would start auditing the use of the state subsidy. Directorate II has always checked the subsidy received by the parties, as the Ministry of Finance, which allocates the money, holds the auditing competence.

Sources from the Court of Auditors argue that the president of the institution, Mihai Busuioc, would have convened director Alexandru Costache, who managed party audits, and criticized and threatened him with getting fired in relation to an eventual PSD audit.

Subsequently, the Permanent Electoral Authority announced that it also commenced checks for a joint audit. The documents are alleged to have been assigned to Directorate II, and Busuioc is said to have asked Firtescu to reply to AEP that the audit would only be performed in the autumn of 2019.

Firtescu is said to have refused because the audit had already started and was planned for 2018. Things got further complicated by the issue of the criminal case filed against Mircea Draghici, PSD treasurer, accused of using the subsidy money to acquire a limousine that was actually used by his wife.

As a consequence, the Court of Accounts President is said to have asked Peter Lakatos, Head of Department VIII, to defer the audit. Subsequently, Busuioc is reported to have introduced in the plenary of the Court a motion for delaying the PSD audit, motion counted among many other items on the agenda.

Then, in June 2019, on Busuioc’s initiative, the Head of the Court of Auditors passed the verification of parties from Department III to Department VIII. The reasoning would have been that Department VIII had the AEP verification competence. In addition, Busuoic simultaneously denounced the AEP protocol, which had been running smoothly since 2012.

According to the law, the Court of Auditors checks how the parties spend the subsidy, and AEP checks if it has been correctly established, according to the percentages obtained by the parties after the elections.

The Court of Auditors’ Version: Why it denounced the AEP protocol

In a reply to G4Media.ro the Court argues that the AEP protocol was denounced because the electoral law has changed. Thus, at the date of the conclusion of the APA Protocol in 2012, the law provided for „the exercise by the Court of Auditors of audits over subsidies granted by the State Budget to political parties simultaneously with the Permanent Electoral Authority.”

The Court of Auditors states that the Government changed the electoral law on May 8 through an Emergency Decree amending article 35 of the electoral law (334/2006) „in order to eliminate the obligation of the Court of Accounts to carry out the control of subsidies granted to political parties, simultaneously with the Permanent Electoral Authority. ”

The Court of Auditors states in its reply that Emergency Decree draft no. 29/2019 was initiated and elaborated by the Permanent Electoral Authority. „Essentially, the amendments and additions to normative acts incident to the specific tasks of the two institutions (the Court of Accounts and the Permanent Electoral Authority) created a well-defined regulatory framework, so that the application of the Collaboration Protocol concluded with the Permanent Electoral Authority is no longer justified, „the Court of Auditors says in its response to G4Media.ro.

The Court contends that this was the context in which the Court of Auditors decided, by resolution 251 of 6 June 2019, by unanimity of votes, to terminate the validity of the Protocol concluded with the EPA.

The Court of Auditors states that it will continue to exercise its control powers.

„The control over the subsidies granted from the state budget to the political parties is to be carried out, starting with 26.08.2019, within the framework of the financial audit mission that will be carried out at the Permanent Electoral Authority – a public institution through the budget of which the subsidies from the state budget to these political parties, „the Court of Auditors said.

According to the response to G4Media.ro, the expiry of the protocol „does not affect or invalidate the Court of Auditors’ checks on state budget subsidies to political parties”.

Why did Busuioc pass the authority of control from Directorate II to Directorate VIII?

The Court of Auditors argues that the Court plenary has transferred the Verification Competence from Directorate II to Directorate VIII „for a coherent and effective unitary control to ensure compliance with specific control / audit procedures and to provide full information on substantiation and use public funds granted to political parties „.

The Court also states in its response to G4Media.ro that during the year 2018, „the Romanian Court of Auditors has not started any control over the political parties.”

Context

On 24 April 2019 DNA announced that Daniel Barbu (former head of the Permanent Electoral Authority, who had run on the ALDE lists for the European Parliament) was prosecuted in the Mircea Drăghici case.

The former PSD treasurer during Liviu Dragnea’s presidential tenure is accused of using party funds for personal ends, buying a house and a luxury car for his wife.

Prosecutors accuse Barbu that, while being AEP President he violated the law on checking the attribution of subsidies to political parties.

More specifically, DNA claims that Daniel Barbu halted an audit of the party after the party’s treasurer had specifically requested it. In addition, prosecutors argue that Barbu did not do the annual checks required by the law on compliance with legal provisions on income (including those stemming from public funds, subsidies) and expenditures.

The DNA communiqué does not specify the name of the party and the treasurer but refers to a case in which the PSD treasurer Mircea Drăghici is prosecuted.

In a press release DNA reports that „although he had learned from AEP employees about „some irregularities with regard to the use of subsidies, „he disagreed with the request made by one of the institution’s employees to resume suspended checks present in its purview, preferring to resign as chairman of the AEP on 27.02.2019 „.

In October 2018, Newsweek.ro revealed exclusively that money received as state subsidy was not spent for lawful purposes, but for the benefit of Liviu Dragnea’s close collaborators.

The first on the list would be Mircea Drăghici, one of the initiators of the amendment, a lawmaker sent to court for acts of corruption.

The largest subsidies in the EU

Subsidies received by the parties increased substantially as a result of the change in the electoral law in 2018.

The Permanent Electoral Authority announced on Tuesday that, in June of this year, it provided subsidies to political parties worth a total of 28,752,259.34 lei.

PSD received 16,361,358.62 lei, the National Liberal Party – 7,496,157.59 lei, and the Union Save Romania – 2,204,416.31 lei. The Party of the Alliance of Liberals and Democrats received in June 1,629,367.68 lei, the People’s Movement Party – 1,060,959.14 lei, and the National Union for the Progress of Romania – 43,754.14 lei.

Agerpres reports that recently, the Expert Forum (EFOR) drew attention to the fact that Romania pays political parties one of the largest subsidies in the European Union, this amounting to EUR 37 million in 2018, and claims that clearer rules are needed for ensuring money spending transparency .

According to a press release issued by AGERPRES on Friday, the Expert Forum states that the legislation that was amended in 2018 has led to 20 fold an increase of party funding over the last 10 years, well above the rate of inflation or GDP growth.

EFOR argues that, in theory, the maximum amount could reach the 400 million lei.

Traducerea: Ruxandra Stoicescu