Moldova’s President of Smoke and Mirrors

Igor Dodon pretends to be at odds with Moldova’s pro-European leaders, but they are allies where it really matters.

Presidents Igor Dodon of Moldova and Vladimir Putin of Russia deliver a joint news conference at the Kremlin in Moscow, January 17, 2017 (Presidential Press and Information Office)

Moldova’s new president is no friend of liberal democracy. Igor Dodon, who came to power in December, enjoys basking in the glow of Vladimir Putin and his entourage.

In the 2014 elections, Dodon posed as a statesman negotiating with the Russian president on behalf of Moldovan guest workers. He has sided with the Orthodox Church against EU-inspired anti-discrimination laws. He rejected his country’s association agreement with the bloc that came with a free trade deal. Last year, he said in an interview he intended to run Moldova like Putin. And, predictably, his first official trip as president took him to Moscow, where Dodon again promoted the idea that Moldova should move closer to Russia, not Europe.

Dodon cannot run his country like Putin. As Moldova’s first directly-elected president, he has more popular legitimacy than his predecessors. But his role is still pretty limited within the country’s parliamentary system.

The president does have the right to call a referendum, which may be dangerous. But there is a pro-European majority in parliament and Moldova has a government that, in contrast to the president, has declared itself in favor of European integration. Dodon himself has admitted that the president cannot withdraw Moldova from the association agreement.

So, all is fine? Well, not quite.

Between East and West

To understand the real dangers of Dodon’s presidency, one has to understand the conflicts and the circumstances that gave rise to his campaign: the two lines along which this country is divided.

The best-known is the geopolitical split. Moldova has for a long time stood between West and East, Romania and Russia, European liberalism and Orthodox conservatism.

The choice between the two is not as obvious to many Moldovans as Europeans might think. The Soviet Union, while oppressing Moldova’s Romanian heritage, was also a modernizing force, developing the country’s schools, health care, buying its agricultural produce and building industries based on cheap energy. All this with the brutal dictatorship of Nicolae Ceaușescu across the Prut River.

This heritage kept Moldova in Russia’s orbit after the Cold War.

There are also strong economic and energy links: 95 percent of Moldova’s gas and half of its electricity comes from Russia or sources controlled by Russia. And there is a sizable Russian-speaking minority. Many live in the separatist Transnistria and are supported by Russian “peacekeepers” there.

Fluid concept

This all made geopolitics a defining feature of the last election. As in the past, a pro-Russian and a pro-European (or pro-Romanian) bloc competed.

But geopolitics is a fluid concept. The Party of Moldovan Communists, to which Dodon used to be belong, has won elections both on pro-EU and pro-Russian platforms — while being led by the same person!

In 2009, when the Communists were voted out of power, it was the defection of a Communist politician and his entourage that tipped the scales in favor of a pro-European government.

In 2012, when the survival this pro-EU majority was threatened by its inability to elect a head of state, again, Communist defectors helped. Their leader was Igor Dodon.

After helping prop up a pro-European government, Dodon turned his new political project, the Socialist Party, into Moldova’s new pro-Russian political machine — with ample support from Moscow.

Yet it was not a geopolitical argument that helped his party to its first nationwide victory. The Socialists’ program in 2014 focused on the position of Moldovan guest workers and stable markets for Moldovan agricultural goods.

It did not do the trick. The party, while winning the election, fell short of an absolute majority even together with the Communists.

It was not until the following year, when Moldova’s other political divide came to the forefront, that the Socialists really broke through.

This is the divide between crooks and reformers.

The heist of the century

In 2014, 18 billion Moldovan leu (about $1 billion) was taken out of the country through three of its five biggest banks in the form of non-performing loans. The money disappeared through tax havens to unknown accounts, most of it right before the country’s parliamentary election.

Six months later, a leaked report by the Kroll auditing company linked the heist to Ilan Shor, a young businessman.

The money stolen from the banks, which now had to be replaced with public funds to save the financial system from collapsing, was enormous: one and a half times what the government spent on education in 2013 and almost a third of all government expenditures that year.

Tens of thousands of people protested in Chișinău, the capital, demanding the resignation of everyone implicated in the theft.

And everyone did seem to be implicated.

While most of the theft happened overnight, it took years of preparation and used a system that, according to the Organized Crime and Corruption Reporting Project, an association of investigative journalists, had been used to launder Russian money for years. Only this time, the money was Moldovan taxpayers’,

All this happened before the eyes of the central bank, the prosecution, the financial supervisory authorities and the government. Numerous governments. Governments that for years had received money from the EU to develop Moldova’s institutions and which spectacularly failed when they were needed.

Moldova’s leaders made no attempts to investigate the scandal either. The only major figure who has been convicted is Vlad Filat, prime minister from 2009 to 2013, while Ilan Shor, the main suspect, was elected mayor of the picturesque small town of Orhei a month after the scandal broke. He is now under house arrest, but those expecting a conviction should not hold their breath.

Appalled

The political upheaval that followed the scandal left Moldovans appalled with their political elite.

And by association, it left them appalled with EU integration that promised prosperity, justice and strong institutions and delivered the opposite.

As a consequence, pro-Russian political forces, like Dodon’s, benefited. They pointed out the rottenness of the country’s pro-European elite and promised to return power to the people.

Dodon’s first legislative proposal as president was to cancel the law that converted the emergency loan the three banks received into public debt.

Plahotniuc’s fortune

The scandal also benefited Filat’s business and political rival, Vladimir Plahotniuc. He is the man calling the shots in Moldova today.

Plahotniuc’s fortunes are not linked to any government in particular. Rather, governments are linked to him. He was identified by investigative journalists as the man who effectively controls Victoriabank, one of Moldova’s largest private lenders. He also has a media empire that often takes aim at his enemies.

Before 2009, Plahotniuc was seen as close to the Communist Party. Since 2009, he has been behind the Democratic Party, which helped form a pro-EU coalition government that year, then took control of the prosecution and now controls most seats in parliament.

Formerly operating from the shadows, Plahotniuc put himself forward as a candidate for prime minister last year.

The president (Dodon’s predecessor), fearing riots, refused to appoint him. However, he agreed to swear in one of Plahotniuc’s allies, Pavel Filip — in total secrecy, at night.

But Plahotniuc, Moldova’s supreme leader in all but name, may very well head the government soon. He recently started a charm offensive in foreign media and was elected the head of his political party in December.

Whether there is still a president who would deny his appointment is questionable.

Brothers in arms

Plahotniuc’s Democrats and Dodon’s Socialists are nominally opponents. One is pro-EU, the other is pro-Russia.

In the presidential campaign of 2016, the Democrats withdrew their candidate at the last minute to support Maia Sandu, a foreign-educated former education minister who promised to clean up Moldova’s corrupt politics.

Sandu rejected Plahotniuc’s embrace and with good reason. The Democrats refused to support her when she was a candidate for prime minister after the banking scandal, precisely due to her appeal to reform. In the presidential campaign, Plahotniuc’s support did nothing to help Sandu; it eroded her credibility.

Moldovan geopolitics may be a fluid concept, but business interests are solid. Sandu’s vision of a Moldova free of corruption, with strong institutions and governed by the rule of law could not be reconciled with Plahotniuc’s.

But Dodon’s vision could. The two men have done business before: In 2008, when Dodon oversaw privatizations as economy minister that benefited Plahotniuc, and in 2013, when Dodon received a cheap loan from one of Plathoniuc’s banks.

And did I mention Dodon was a guest at the wedding party of none other than Ilan Shor, the main suspect in the bank heist?

Hiding behind geopolitics

In the debate that really matters, Dodon and Plahotniuc are on the same side. They are both part of a political system that helps them and that they are keen to preserve. Including, most importantly, the illusion that whatever happens in Moldova is first and foremost a geopolitical game. A game where interests trump laws; a game played by the rules preferred by the likes of Vladimir Putin and Donald Trump.

It isn’t. For the critical mass of Moldovan citizens, politics is not about reunification with Romania, military or economic alliances. It is about the rule of law, honest politics and legal safety. European integration has been — and should be — about setting good examples. Tolerating a nominally pro-EU but actually corrupt government weakens the EU’s position.

Russia’s soft power lies in the corruption that it exports and that it can turn against former beneficiaries when necessary. Dodon’s election is indeed a warning that Moldova is turning away from the EU, but not the way many think. If the EU loses Moldova, it will be first to corruption and then to Russia.

It is a normative, not a geopolitical contest the EU must win.

And right now, it’s losing.

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