On the Brink
Could a Billion-Dollar Heist Bring Down a European Government?
The disappearance of nearly $1 billion has set off months of street protests in Moldova, with angry demonstrators at the biggest gathering yet calling for the president’s exit.
Revolutionary protests are boiling over in yet another former Soviet republic, but this time the trigger wasn’t police beatings, as it was in Ukraine two years ago, or price hikes for electricity, as in Armenia.
No, the last straw in Moldova was the theft of a billion dollars. The disappearance of the money from three banks has sparked an economic and banking crisis, and brought more than 30,000 protesters to the central square of the capital, Chisinau. Opposition leaders are demanding the resignation of President Nicolae Timofti and early elections.
Moldovan newsmakers are calling it the theft the “heist of the century.” A secret audit report by the Manhattan-based consulting firm Kroll found suspiciously huge transactions from Banca de Economii, Banca Sociala, and Unibank. The report claimed that reclusive young millionaire Ilan Shor and his companies were behind the transactions, which led to the disappearance of a sum equivalent to 12 percent of Moldova’s GDP.
But in May, the parliament speaker, Western-leaning democrat Andrian Candu, seemed to downplay the results of the Kroll report.
“The public fury directed at the leadership is understandable: The government was aware of the transactions totaling $1 billion, which turned out to be enough to damage the currency rate and banking system,” Vladimir Soloviev, a senior analyst and editor in chief of the independent Moldovan site NewsMaker, told The Daily Beast.
Since then, thousands of protesters have been gathering in the capital, chanting “Down with the oligarchs!” and waving the flags of Moldova, Romania, and the European Union. They say they want to kick out the criminals and live in a civilized country. Organizers have set up a camp of about 90 tents and say they are determined to remain on the central square until the country’s leadership resigns. The street protest movement, which has united lawyers, journalists, and public figures, also led people to anti-government protests in March and May.
By Sunday, the protest movement reached its peak, with tens of thousands gathered before the windows of the government building. Many protesters say they support the idea of Moldova becoming a part of Romania, a country with a track record of fighting corruption. More than 190,000 of Moldova’s 3 million residents also have Romanian citizenship.
Meanwhile, the name of the millionaire Shor, one of the richest people in Moldova, has been on everyone’s lips. Along with his marriage to a Russian-born pop star, the 28-year-old tycoon is known for his investments in an airport, TV stations, and a soccer team.
In a recent interview, Shor denied any culpability in the financial scandal, saying Kroll’s investigation was biased and that such a huge sum could not be transferred over one night. “All money goes through the Bank of New York,” Shor said of the transfers. “I am not a banker, but I worked as a chairman at a bank. I can tell you that such transactions are impossible. I was chosen to be a victim, as it is traditionally done here.”
With $1 billion missing, the National Bank of Moldova, in one of Europe’s poorest countries, was forced to pour $660 million into recapitalizing the banks. That sparked inflation, and the local currency has lost 20 percent against the dollar this year. Exports and imports shrank by 15 to 22 percent between January and July, compared to the first half of 2014. The political and bank crises bubbled all summer in Moldova. Sick of the political scandals, the prime minister, Chiril Gaburici, quit the government in June.
The leader of the Liberal Party, Mihai Ghimpu, meanwhile, insists that Moldovan banks’ Western partners are also to blame for the disappearance of the money. “They are accessories of what has happened to Moldova, they have been watching money being stolen from Banca de Economii since 2011,” Ghimpu said on Radio Free Europe.
The current pro-European prime minister, Valeriu Streleț, took up the post in July. He promised Moldovans that he would fight corruption and find the disappeared $1 billion, but so far nothing has turned up. Streleț appeared before the protesters Sunday and made one more promise: to weigh their demands.
Unlike in Ukraine and Armenia, Moldovan authorities allowed the protest. The police promised to do all they could to make activists feel comfortable on the central square. “The fragile leadership is too afraid of their situation,” Soloviev told The Daily Beast. “They are sitting in meetings right now, thinking about whether they should resign or stay in office.”