US$1 bil. dis­ap­pears, much to Moldova’s cha­grin


A bil­lion U.S. dol­lars is a lot for Europe’s poor­est state of Moldova — par­tic­u­larly when it dis­ap­pears.

Anti- cor­rup­tion pros­e­cu­tors and Amer­i­can au­di­tors have been search­ing the books for clues about the mys­te­ri­ous trans­ac­tions, an em­bar­rass­ment for the ex-Soviet state on track for EU membership.

The scan­dal has even threat­ened to desta­bi­lize the bank­ing sys­tem in the coun­try of 3.5 mil­lion peo­ple.

The case of the van­ish­ing bil­lion came to light when the Cen­tral Bank of Moldova dis­cov­ered that three banks have given out loans worth a to­tal of US$1 bil­lion, or 15 per­cent of the im­pov­er­ished ex-Soviet state’s GDP.

The fi­nan­cial es­tab­lish­ments — Banca de Economii, Banca So­ciala and Uni­bank — hold about a third of all bank as­sets in the coun­try, in­clud­ing money for pen­sion pay­ments.

The trans­ac­tions ap­par­ently hap­pened over the course of sev­eral days, just be­fore the par­lia­men­tary elec­tions in late Novem­ber, in which pro-Euro­pean Union par­ties nar­rowly squeezed pro-Rus­sian rep­re­sen­ta­tives out of the ma­jor­ity.

The re­cip­i­ents of the funds have not been iden­ti­fied and now the money seems as good as gone.

“I can­not ex­plain how one can steal such a large amount of money from such a small coun­try,” the EU rep­re­sen­ta­tive in Moldova Pirkka Ta­pi­ola said re­cently.

A re­port by a par­lia­men­tary com­mit­tee that looked into the mat­ter and was leaked to the press said some of the money may have been trans­ferred to four Rus­sian banks.

The leader of the coun­try’s so­cial­ist op­po­si­tion, Igor Dodon, said he sus­pects the money has ended up in the ac­counts of var­i­ous off­shore firms “where the trace was lost.”

“The money has been al­lo­cated with the knowl­edge it would nev-

er be re­paid,” he told AFP.

‘Fa­tal im­pact’

To keep the three in­sti­tu­tions from go­ing bank­rupt and po­ten­tially crash­ing the en­tire bank­ing sys­tem, the Moldova’s cen­tral bank now man­ages them di­rectly.

The banks re­ceived a 9.4-bil­lion­leu (US$700 mil­lion) loan that was meant to be paid back on March 27. How­ever, even though the dead­line has passed, none of the res­cue funds have been re­turned.

“I am 100 per­cent sure that the sum will not be re­turned, and the dif­fer­ence will turn into public debt,” the pres­i­dent of Moldova’s League of Bankers Du­mitru Ursu told AFP.

Moldova’s debt US$1.7 bil­lion.

Ursu ac­cused the cen­tral bank of neg­li­gence, along with the coun­try’s fi­nan­cial watch­dog CNPF and its anti-cor­rup­tion pros­e­cu­tor, since “th­ese trans­ac­tions could not have gone be­low their radars.”

The cen­tral bank’s deputy gover­nor and CNPF’s pres­i­dent have


cur­rently been dis­missed over the mat­ter, but many an­a­lysts sus­pect that their lack of ac­tion over the trans­fers fol­lowed or­ders by in­flu­en­tial politi­cians who pock­eted some of the money.

Moldova’s pros­e­cu­tor gen­eral has launched a probe and two peo­ple, whose iden­ti­ties have not been dis­closed to the public, were de­tained while oth­ers had their funds frozen.

In a doc­u­ment dis­closed last month, Moldova’s devel­op­ment part­ners, in­clud­ing the World Bank, the EU and the United States, urged the gov­ern­ment to “make public the amount of state losses” from the in­ci­dent.

The gov­ern­ment then ap­pealed to U.S. au­dit firm Kroll to look into the af­fair.

“This mega-trans­fer had a fa­tal im­pact on the econ­omy and pro­voked sharp de­val­u­a­tion of the Moldovan leu,” said Alexan­dru Fala, an eco­nomic an­a­lyst for Ex­pert Grup.

The leu lost 42 per­cent of its value be­tween Nov. 1 and Feb. 18 be­fore pick­ing up in re­cent weeks.

“This sum may in the end cause the fail­ure of the state bud­get,” said Dodon of the op­po­si­tion party.

“Given the level of cor­rup­tion in the jus­tice sys­tem and the sta­tus of per­sons in­volved, to think that re­cov­er­ing the money is pos­si­ble seems naive.”


Peo­ple sell sec­ond-hand goods in Chisinau, Moldova on March 27.

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