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Insight into Romanian corruption networks

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Insight into Romanian corruption networks

Insight into Romanian corruption networks
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Attila Biro is one of Romania’s most prominent whistle-blowers and heads the RISE Project’s team of investigative journalists and award-winning researchers. They have been looking into the allegedly corrupt activities of the head of the ruling Social Democratic Party (PSD), Liviu Dragnea. Euronews reporter Hans von der Brelie met Biro in the Bucharest based office of the Rise project.

Euronews:
What did you find through your research?

Attila Biro:
What we’ve seen at the RISE project is that we have one man who has immense political power, but who also controls a local corporation that grew from public money. Public money was sent to the company from public institutions controlled by him. In a way, he sent money to his own pockets.

Euronews:
We are talking about which person and which company?

Attila Biro:
We are talking about Liviu Dragnea, the most influential politician in Romania. A secret report tells us he controlled a local construction company, Tel Drum. This company grew with hundreds of millions of euros, sent from national and local budget. The local budget in Telorman, Dragnea’s birth place, was controlled by… Liviua Dragnea.

Euronews:
What is the link between the party leader and this company?

Attila Biro:
When this company was privatised, he was the one privatising it. And he privatised it with his friends. He admitted that people who own the company on paper were his friends. But one really important aspect is that until last year the ownership structure was unknown. A secret report done by a secret service in Romania told us that it was actually controlled by him (Dragnea). This is one layer. But there is a second one: For a decade he was the local county chief (in Teleorman). The budget of Teleorman was handled by him (Dragnea). A part of this budget was sent to this construction company (Tel Drum) doing all the major road construction in this county, piling up to tens and tens of million of euros… including European funds!

A really fast car for his son

Euronews:
What does he gain?

Attila Biro:
One clear exemple: the company Tel Drum paid tens and tens of thousands of euros for the luxurious car of his son. Dragnea junior got a really nice car that actually is a really fast car, paid for by the company that got money from his father.

Euronews:
Where does the wealth comes from?

Attila Biro:
We tried to investigate what his corporation owns. we tracked down 200 properties with 800 acres of land under construction. One of these construction projects we found is this one (Biro points on picture on PC screen): it is actually a former state owned farm that was bought by the company for 100,000 dollars. You might say, so what, it is the company estate, right? Wrong! On this estate here lives his son, Dragnea junior. This is one clear example of how, with money from the state, he bought another piece of land and real estate owned by the state. All the decisions were made by his friends and associates. It is like a system.

The Brazil connection

Euronews:
You have good links to crossborder investigation networks. Tell us about this Dragnea connection with Brazil.

Biro:
Yes, one of Dragnea’s strongholds to partying was a house in Brazil, Casa Grande. This house is owned by another of his friends. This house was bought with money transfered from Romania from business done with the state from public funds… So again, we have this link: public funds went to his friends and they invested in a house where he (Dragnea) was vacationing. – We do not have him red-handed with the money, but the circumstantial evidence shows us this fact: he is controlling political decisions that control decisions about money… and the money flows to the accounts of his friends or to his son.

Making friends – go hunting

Euronews:
You told me that there are close links forged by hunting.

Attila Biro:
Yes, one of the ways he befriended politicians and he grew politically were the yearly hunting parties. Each year he received all those men, local politicians, police guys, VIPs… Here you see some pictures from 2016 (Biro points at PC screen).

Euronews:
What is wrong with that?

Attila Biro:
The wrong part is about the hunting ground: he did not go there, rent and pay for the place, no. He started a NGO accumulating land and started this hunting ground there. There are really big suspicions that documents had been falsified (Biro shows us some of the documents on his PC). – Again, it is a system of getting hold of properties and not paying the right price and even breaking the law.

The Belina island case

Euronews:
One of the most recent cases is the Belina island case. Is this really a problematic case?

Attila Biro:
It is problematic because it is a system again: he has his friends, his subordinants, writing a piece of law, an executive order that send a big chunk of land into the property of the local county and then to the company of his friends. Dragnea, again, was inviting politicians and friends to the Belina island, throwing parties to befriend them and make them obedient. Seventy acres of prime land, a small island with a lake on it and a house… It is beautiful – and he was paying 2,000 euros, even less, for that estate to the state budget. For 2,000 euro you can not have your own island.

Euronews:
What’s the damage done?

Attila Biro:
It is about 20 million euros from our money, from my money, it’s actually from my taxes, that is the damage. If you go to Teleorman district you do not see a flourishing county: those tens and tens of millions of euros were misspent, that is the problem, because the EU anti-fraud body’s OLAF investigation showed that the roads and construction are poor so somebody had been stealing from the (EU) money that should have been spent for proper roads and construction. This is part of the damage. There should be better living conditions – but Teleorman still is one of poorest counties in Romania.

Euronews:
What is the main problem with corruption?

Attila Biro:
It is a case of state capture. You have the local economy and, to some degree, the national economy in the hand of one man and his group. And this political organisation has captured all the state institutions. So in the end you have one man and his small organisation controlling everything.

Euronews:
To be crystal clear, can you outline again please, the link between Dragnea and Tel Drum?

Attila Biro:
After Dragnea got into power, the company he is protecting (Tel Drum) got hold of a lot of land and property. There, in this big house, his son actually lives. Tel Drum is financed from state money and buys a formerly state-owned piece of land with a house. And the ultimate beneficiary is his son, a family member.

Euronews:
What is your evidence regarding all those alleged fraud cases?

Attila Biro:
In the cases regarding the fraud with EU money we are talking about over 20 million euros. All Romanians will have to pay for this fraudulent procurement. This was done when Dragnea was chief of the county, it is on paper, it is real. And we have to pay for it out of our pockets. What we have tracked down: Mr. Dragnea wanted to hide this damage, this fraudulent procurement. He wanted to hide that his friends were benefiting from it. He (Dragnea) signed a document, an executive order, saying: There is no problem, the state will pay for this, no harm done… – (Biro opens a file on this PC showing a signed document.) – This is a document from his (Dragnea’s) office to the tax authority, saying: You have to write off the damage done to the local budget… This is more like white collar organized crime.

Euronews:
Give us a key figure.

Attila Biro:
We have seen that from the state budget, controlled by Dragnea, money poured into the company he controlled with his friends. A secret report shows that he did actually control it (Tel Drum). We have seen almost 400 millions of euros sent from the state budge and from the local (county) budget to this company (Tel Drum) and (some of it was sent) further to his friends and eventually to the pockets of his son.

Euronews:
What is the right word to use? Is it right or wrong to say that Dragnea is a corrupt person?

Attila Biro:
He is corrupt. We have actual decisions by judges in Romania. Mr. Dragnea is sentenced for corruption, a one year suspended sentence for corruption, regarding the referendum in 2012, there is no misunderstanding. Now he is accused of several other corrupt deeds: misspending of EU funds, abuse of power, money laundering and stuff like this… – He is a corrupt politician because he was sentenced by the highest court in Romania.