Romania's Most Powerful Man Is Heading to Prison for Graft
(Bloomberg) -- Romania’s de facto leader was sent to prison for three-and-a-half years for corruption, shaking the Black Sea nation’s government as it clashes with the European Union over concerns it’s curbing judicial independence.
The guilty verdict against ruling-party boss Liviu Dragnea for abuse of office was upheld Monday by the Supreme Court, adding to a previous vote-rigging conviction that carried a suspended jail term. It was the third blow to his Social Democrats in two days after an unexpected defeat in Sunday’s European Parliament elections and a referendum that will block part of its efforts to overhaul the courts.
The case further focuses the spotlight on the continent’s ex-communist east, where Hungary and Poland are both locked in disputes with the EU over democratic backsliding and have been threatened with the same kind of sanctions now looming over Romania. Officials in Brussels may seek to cut development funding to members not upholding the bloc’s values.
It’s also an embarrassment, with Romania currently holding the EU’s rotating presidency. But it’s unlikely to topple the cabinet, led by Prime Minister Viorica Dancila, in the short term. She may take over the party’s leadership on an interim basis, Antena 3 TV reported. The government’s spokesman didn’t respond to repeated phone calls for a comment.
``We must swiftly find solutions to balance the party and continue governing,'' Education Minister Ecaterina Andronescu told reporters in Bucharest.
Sentence Begins
Investors looked past the announcement on a day of low market liquidity due to a U.K. bank holiday. The leu traded little-changed against the euro, holding on to this year’s 2.2 percent drop, the most among peers in the EU’s east.
The court upheld a ruling that Dragnea helped party members get public-sector jobs for which they received salaries without carrying out any actual work. According to Romanian law, he has several hours to report to police to start his sentence.
While his earlier conviction prevented him from taking the post of prime minister, he was the country’s most powerful politician. He spearheaded the tax cuts and increases in state salaries and the minimum wage that propelled the Social Democrats to power in 2016. That’s despite the party having a history of members going to jail, including former Prime Minister Adrian Nastase.
The situation is much different today. The European Parliament vote highlighted a plunge in the party’s popularity, while the fiscal largess is poised to send the budget deficit way beyond EU limits.
But it’s the judicial revamp that’s resonating most in a country that ranks among the worst in the EU for corruption and has been under a monitoring regime since it joined the bloc in 2007.
While the government says its reforms will create a more transparent legal system, plans to ease punishment for graft offenses and revisit some convictions have drawn rebukes from President Klaus Iohannis, the EU and Western allies. Hundreds of thousands of protesters have taken to the streets.
“Dragnea’s conviction is proof that justice is still independent,” the opposition Save Romania Union said in a statement. “Romania now needs to return to normal.”
Iohannis, who tried unsuccessfully to block the government’s removal of Romania’s top anti-corruption prosecutor, is leading polls as he seeks re-election this fall. He got a boost at the weekend in his battle with the ruling party as a referendum rejected elements of the judicial overhaul.
For Dragnea, the future -- beyond prison -- is unclear. He managed to shrug off his initial conviction to rule over Romanian politics from behind the scenes.
“I have thick skin and this isn’t the first time I’m on trial,” Dragnea said last week. “If the justices are unhindered, they’ll acquit me. If they don’t resist the pressure, God help us!”
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