After a number of articles about the corrupt state institutions, we discovered the Agency for Intervention and Payments in Agriculture (AIPA), which annually finances farmers disposing of a budget of more than 400 million lei.
It’s clear from the results of other investigations, that quite often there are cases when public funds of subsidization and national funding programs are illegally used by beneficiaries and officials.
Corruption in the AIPA could be publicly observed at the end of 2015, during the exchange of mutual accusations of corruption between the ex-minister of agriculture – Vasile Bumacov and ex-director of the AIPA Petru Maleru. Also 34 criminal cases which are related to the funds managed by the Agency for Intervention and Payments in Agriculture make us think about the corruption.
Maleru against Bumacov
Peter Maleru was appointed a head of AIPA in October 2010, but at the beginning of 2016 he resigned at his own request, referring to the transfer to another job. Dismissal of Maleru, however, coincided with the scandal related to the credit freeze, gave by Poland (100 million euro), part of the responsibility of which lies on the shoulders of Maleru. The agricultural subsidies were also freezed and the government owes farmers hundreds millions lei.
Maleru was accused by former Minister of Agriculture Vasile Bumacov (currently the ambassador of Moldova in Japan) and two farmers that involved AIPA in corruption schemes, collecting 20% of the amount of subsidies designed for farmers in exchange for acceptance of the case: «it has known for a long time about corruption in Agency for Intervention and Payments in Agriculture, but these cases weren’t made public, because there is an agreement between the Democratic Party and Liberal Democratic Party. All farmers know that they should give the officials from the AIPA, at least 20% of the subsidies, especially if the amount exceeds 500 thousand lei. If we count that over the last 2 years the amount of subsidies totaled more than a billion lei, it turns out that officials from the AIPA put in their pockets about 200 million lei» – said Alexander Suslari, the head of the «UniAgroProtect» in the program «Politica» released on 11.17.15.
Bumacov argues that corruption scheme had been working works since 2011. Several key officials from the National Anticorruption Center (NAC) were dismissed for taking bribes, and moved to AIPA management: «I went to a meeting of Agency for Intervention and Payments in Agriculture and asked what was going on, and they gave me to understand that I shouldn’t be interested in this. Then I realized that AIPA got the support of the General Prosecutor's Office and the National Anticorruption Center. Two influential managers of AIPA are the former employees of the NAC. I think they keep in touch with former colleagues. I spoke about this at a meeting of the Government, but there was no reaction. Then I called foreign partners that invest in funds and asked them to involve in the case, but they abstained. As a result, I was attacked from all sides», said Vasile Bumacov.
According to Bumacov, the fraud in AIPA intensified in 2014, after what the Agency for Intervention and Payments in Agriculture left the Ministry of Agriculture and Food Industry (MIFI) and became an independent agency.
Maleru also accused Bumacov of the fact of corruption: «Bumacov’s group, according to information we have, stole money from a variety of budgetary funds, including public ones, using the influence of ministerial signature. Thus, the farm equipment purchased at the store directly, in cash, is subsidized once, all the equipment during Bumacov’s management as a minister through the program 2KR was subsidized three times, the same tractor subsidized three times!»
34 criminal cases
In November 2015, the General Prosecutor's Office instituted 34 criminal cases over fraud and misuse of finances from the fund of subsidizing farmers on the identification of many offenses. Criminal proceedings were instituted under Article 8 of the Criminal Code of the Republic of Moldova. Proceedings were instituted against the falsification and the availability of documents in the AIPA, by which a new technique that has been used in fact was ordered. In addition, the volume of investments was artificially increased to increase the amount of subsidies given to AIPA.
Prosecutors established and initiated cases over abuse of power by government officials and officials of the Ministry of Agriculture and Food Industry, because they authorized decisions that promoted the use of funds of subsidizing farmers for personal purposes.
Referring to an article posted on the website anticoruptie.md, it may be noted that in the period 2010-2013 most of agricultural subsidies were received by claimants who sold or bought the farm machinery within the framework of the Japanese project 2-KR, being under the direct protection of politically exposed persons.
Anyway the preference to the claimants - participants of the project 2-KR was legally justified, even if it war contrary to one of the principles of the subsidy, which is to eliminate discriminatory measures and the choice of conditions.
Also farmers who bought agricultural machinery within the framework of 2-KR were freed from the payment of VAT for the supply of agricultural machinery. Payment by installments for them has been without the interest on amounts unpaid.
Among the favorite applicants are already famous «Caravita Co» (featured in the fraud case of the Banca de Economii), «Agro Bio Managment», «Agrement Ecology», «ABM Agroindustries», «Avva Company», «ABM Eco Technology» (whose leader - Ion Rusu is alleged godfather of the liberal democrat Vlad Filat), «ShowBiz Management», «Eco Green 3R», «Agrofermoteh», «Ecoplantera» and others.
As we wrote in the article «Moldova: a haven for money laundering», some of the companies -defendants were registered at the same time, others have the same legal address or even the same head. All these coincidences, however, didn’t become an obstacle for obtaining money from AIPA funds.
Agency for Intervention and Payments in Agriculture figured in the report of SPCSB activity in 2014 with a criminal scheme through which a Moldovan company (its name is not disclosed in the report), together with some agencies of Bulgaria and Lithuania, tried to cover the costs of import of cattle by financial resources of the Fund for Subsidizing Agricultural Producers, requesting the amount of 9.5 million lei. This exceeds the costs «de facto» (300 thousand euro). The scheme figured in 3 criminal cases over the fact of great money laundering.
AIPA, besides other government agencies, has been included in the list of agencies that were offered to engage officers from Security and Intelligence Service of Republic of Moldova to assist in the fight against fraud and corruption in public institutions.
In 2013, the Court of Accounts conducted an audit in the Ministry of Agriculture and Food Industry and Agency for Intervention and Payments in Agriculture and check 339 applications filed in 2013. Court of Accounts found numerous violations: the majority of those who received a grant in 2013 received it in previous years; lack of analysis, reflecting the impact of received subsidies; a small number of agreements of intent for the supply of products in the total number of recipients; a different calculation of the grant on similar machines; inefficient use of subsidies; supplies that were subsidized, implemented by grantees from economically independent agents (founders or general managers-relatives), they were decisive and determined the risk of artificially subsidies increase; subsidized investments made as a result of some questionable economic transactions that determined the unjustified (artificial) increase of the value of investments and the payment of subsidies; legal fees related to the subsidizing of farmers; lack of a complete list of all the documents required from the applicants and so on.
Perhaps these offences are caused by negligence at the workplace, but the officials who allowed them must be punished.
In January 2015, National Integrity Commission after a notice from National Anticorruption Center began the inspection of the possible violations of the legal regime in the income declaration and declaration of property of Peter Maleru. The National Anticorruption Center’s notification states that Maleru, in the period 2008-2014 (August) appeared as an ally at the enterprise Arabica-Lux SRL and doesn’t have this fact in the declaration of personal interests for 2013. National Integrity Commission found that the director of the AIPA doesn’t have a statement in 2013 about his wife's income (30 000 lei). Also, Maleru doesn’t indicate the income received as a district councilor of the Ialoveni (800 lei), 4 land parcels which he owns with his wife, an apartment of about 250 thousand lei, the car – Nissan Micra, seven bank accounts, a share fraction of 50% that he keeps in Arabica Lux SRL. After these results, the National Integrity Commission has suspended the inspection and brought to the attention of the General Prosecutor’s Office the need to verify the fact of display the inaccurate or incomplete information in the statement of assets and personal interests.
In 2012, according to the rating of the most highly paid officials, Peter Maleru owned an income of about 540 thousand lei, being on the 8th place in the list. However, most of the money (411 thousand euro), Maleru obtained not as a director of AIPA, but as a member of the administrative council of the company Tutun-CTC.
Peter Maleru appeared in the investigation of Rise Moldova «The offshore transactions on the lake Ghidighich», where was noted that the former head of AIPA is one of the owners of villas built on the lake Ghidighich, where he bought a house in 2014. A year later Maleru sold the house, pointing in the income declaration for 2014 the amount of about 0,5 million lei, which is five times larger than his annual revenue.