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US shuts down the «laundromat»: Implications for fugitive Moldovan oligarchs and Kremlin’s plans in Moldova

The US Department of the Treasury has imposed sanctions against fugitive Moldovan oligarchs and politicians Vladimir Plahotniuc and Ilan Shor. Their assets will be frozen. Plahotniuc, the former leader of the Democratic Party of Moldova, is among the beneficiaries of the “Russian Laundromat”, the largest scheme of money laundering in the CIS that involved Russian, Moldovan, and Baltic banks and was not exposed until 2014. Using this setup, criminal groups siphoned off over $20 billion from Russia through Moldovan government agencies controlled by Plahotniuc. He and Shor were also complicit in the “billion-dollar heist”, when three Moldovan banks came $1 billion short (although the amount is now said to be bigger). Plahotniuc and Shor fled Moldova but still have a say in the country's domestic policy, playing into the Kremlin's hands. The Shor Party holds rallies in Chisinau, demanding the resignation of the current government, preterm elections, and singing a gas supply agreement with Russia. The Insider spoke to other Moldovan politicians to find out the implications of the new US sanctions against Plahotniuc and Shor for Moldova’s political landscape.

Stella Jantuan, political scientist, Member of the Moldovan Parliament

Civil society has been demanding the introduction of sanctions against Plahotniuc, Shor, and other corrupt politicians for years. The sanctions will make it easier for the Moldovan justice system to do its job. The bank accounts of Plahotniuc, Shor, and their associates will be blocked, making it possible to trace cash flows and curb the financing of Plahotniuc's people in Moldova.

Understanding the role both of them continue to play in Moldovan politics requires some background knowledge. Plahotniuc built a system enabling him to take control over all the institutes of state power. He had the entire country under his heel and did whatever he wanted.

It was a 1990s-style scheme, with a straw man in the ministry and the mafia's “supervisors” as his deputies. All money flows from the Russian state budget and grants issued to Moldova were controlled by this syndicate and siphoned off to the offshore accounts of several individuals with Plahotniuc as the end beneficiary. Through this scam, immense amounts of money were laundered, and Shor owned the banks that did it.

Plahotniuc had to flee but the scheme and the people are still in place. The president and the government are faced with a big challenge because purging the public sector of Plahotniuc's agents will be very hard. Under the current law, you can’t fire state officials and the prime minister's deputy – who are the “supervisors”.

When the law was enacted, the idea was that prime ministers and the government were replaceable, but the “supervisors” had to remain in place, protected by the law. We are currently amending the legislation to bring it back to normal, but economic schemes are persistent. Unrooting Plahotniuc’s people from them is a challenge, partly because we are yet to reform the justice system. This complicates the purification of governance institutes. Corruption cases submitted by the prosecutor’s office for hearing simply fall apart in courts. Despite being abroad, Plahotniuc still influences the process through his associates. He also has a sway over the Party of Socialists, with some of its members on his payroll. They would receive a monthly allowance for loyalty and taking care of Plahotniuc's affairs domestically.

Oazu Nantoi, Member of the Moldovan Parliament representing the Party of Action and Solidarity

“Lenin is dead but his cause lives on.” Plahotniuc and Shor have bolted, but their contacts and connections in Moldova are still in place. Plahotniuc has left behind a decaying public sector and still has a lot of influence, including in the underworld. Today we are witnessing a scenario that involves Gazprom, members of the criminal world, Plahotniuc, and Shor, all looking to trigger a social and economic crisis in Moldova and destabilize its political situation – in other words, waging a hybrid war. Shor, who is complicit in the “billion-dollar-heist” and was convicted in 2017 by a first-instance court, escaped through Transnistria with Plahotniuc. They are now trying to ramp up public protests.

In mid-October, the National Anti-Corruption Center and the police detained several couriers carrying bags of cash with instructions to deliver them to specific districts. Marginalized social groups are willing to participate in these pseudo-rallies for petty cash.

It is a performance directed by the Kremlin, which aims to destabilize Moldova politically, remove its current leaders, and install a puppet government doing Moscow’s bidding. Shor also has a private interest because he is having a hard time as an internationally wanted criminal without access to his criminal proceeds. If our justice system eventually passes a sentence, Ilan Shor will decide against lying low in Israel and will go to Russia instead.

Russia is in the midst of a violent conflict with the democratic world, and the US sanctions are a distinctive enough gesture of political support.

Hiking gas prices, anticipated electricity tariff growth, and inflation in Moldova are triggering social depression, but there are politicians, including a few Socialists, who rode the populist wave last spring, saying: “Maia Sandu ought to go to Moscow, wash Putin’s feet and drink the water, and bring us cheap gas.”

Political instigators are trying to inflate this attitude, presenting it as popular indignation, but all they have to offer is the slogan: “Away with Maia Sandu!” Today, Moldovan company Energocom has signed a contract with Bulgaria on bilateral cooperation in energy carrier supplies. The government is making an unprecedented effort to diversify our natural gas sources, not so much because we are hoping to procure cheap gas but rather to let Gazprom know that its attempts of blackmailing Moldova will not result in our collapse. It will be expensive and painful, but gas will continue to flow.

Anna Titova

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