Tuesday, July 11, 2006: Pridnestrovskaya Moldavskaya Respublika – Terra Incognita

by Ştefan Cândea and Sorin Ozon, RCJI

The year: 2005. A small pre-documentation in Geneva among the most important international agencies for weapons traffic monitoring. The subject: Transnistria – manufacturing and traffic of weapons. The usual answer we get from experts is “how do you spell the name of that country?”
For the most of them, the Transnistrian republic is on the map in that place with lions, an unknown and mysterious place, where Mister Black is acting up. Everyone living in that part of the world is Mister Black – the model for the weapons trafficker, for the smuggler, and for the raket. For those who know something, Transnistria is Europe’s black hole. And that’s it. The articles to follow we’ll shed some light on some details about this last Sovietic republic, only 170 kilometers away from Romania and the future Eastern border of the European Union. We’ve looked into finding out who is maintaining the present “situation” in PMR, who is financially benefiting out of it, and to detail on the production and traffic of weapons. Nonetheless, we wanted to find out who was affected by what ever was happening there. What you are going to read is a journalistic investigation on the only “theoretically inexistent” country in Europe.

Reservoir Dogs

We have begun our investigation on Transnistria in Vaduz, Liechtenstein. We wanted to find out who was behind the companies EIM Consulting and Rumney Trust, which had taken over one of the strategic industrial objectives in PMR. The metallurgic unit from Râbniţa (MMZ), an industrial mammoth with 4,000 employees, accused many times of manufacturing weapons and of money laundry in Western countries. Besides clarifying the shareholders structure behind the unknown companies which own MMZ, we have also started to riddle out the economical interests that keep working the few strategic objectives, as well as the separatist republic. In Vaduz we discovered the name of the 5 persons who own EIM Consulting and Rumney Trust. They are obviously cover persons. This is how the journalistic investigation on Transnistria has begun. The project lasted for 6 months and it involved journalists from Romania, Moldova, Ukraine, and Russia. The project also meant a two weeks undercover trip in the separatist republic and in the region. At the end of the investigation, behind the cover Vaduz company, we have found connections to several groups of businessmen from the Ukraine and Russia, groups also having connections to organized crime and Sovietic secret service. We tried to back up with documents all connections with other important economical objectives and with the local political elite, all hidden by some cover companies from Switzerland, Cyprus and other fiscal paradises. We discovered that the groups to be mentioned on were interconnected and basically controlled everything in the area, and no business, legal or illicit, was developed without them knowing about it or being part of it. It is a complex criminal group which made its own country. Moreover, this country has at its disposal dozens of tons of Sovietic weapons, several weapon production units, and tens of thousands of men in military and paramilitary structures. According to former Transnistrian politicians, one man out of five owns weapons illegally in that area. The different actors fight one another and make justice on their own from time to time. Then victims come up. They are homicide cases with unknown perpetrators, because international authorities have no access in Transnistria.

Meet Mr. Black !

While traveling through the little kingdom of Liechtenstein, one can’t help but noticing resemblances between this rich paradise of unknown companies and the separatist republic. Even if one considers only the very obvious differences between the two countries, there still remains a common point: they are both hope oases, covers for organized crime groups from all countries, but so very different at the same time when it comes to looking after their citizens. A country where luxury is everywhere to see, on one hand, and an extremely poor country on the other hand; a country which doesn’t involve in any wars and a piece of land where the sound and sight of guns are ordinary; a country that makes money for the community, as compared to a farm that makes rich very few of its people.
From the quiet little streets of Vaduz, we got into a Sovietic republic frozen in time. The symbols of president Smirnov and Sheriff, controlled by his family, are everywhere, right after you pass the first border customs with Moldova. Luxury is replaced by poverty. Safety and comfort are replaced by permanent anxiety. We arrived to Tiraspol on the pretext of traveling to Odessa. Transnistria is not a region favorable to journalists, as several journalists were arrested or detained by the security because they were there without having any credentials. To get credentials as a journalist, you would have to address a detailed description of your intentions to the local intelligence service – MGB – a direct descendent of KGB. As a foreign journalist, you can get a MGB officer to supervise your work. This is the reason why an official international journalistic investigation in Transnistria can not be taken into consideration. We decided to enter the separatist republic every day, using different access border units and different pretexts, and we were to leave the country every evening.

History. On October 12, 1924, on the present day territory of Transnistria, the Soviet Union founded the Socialist Sovietic Republic of Moldova (RASSM). The purpose was to add later on Basarabia to the newly founded country on the left side of the Nistru. The capital of RASSM was Tiraspol. In 1940, the USSR added Basarabia to the republic, and the Sovietic Socialist Republic of Moldova was born. Between 1941 and 1944, Basarabia became part of Romania again. Romania didn’t claim Transnistria and in 1944 all the above mentioned territories were added to the Soviet Union.

Conflict. Last military conflict Transnistria went through was in 1992, between March and July. Hundred thousand refugees left the county and hundreds of people allegedly died. Transnistria was logistically supported by the Soviet army while Moldova didn’t yet have an army of its own, using police officers from the Nistru area in the beginning of the conflict.

Arms. At the beginning, snipers were the ones making victims, while the separatists used “eccentric” bullets, with modified weight centre and ultra red devices during nighttime. Several types of forbidden ammunition were used, especially several types of antipersonnel landmines. There were also used helicopters, tanks, armored vehicles, missiles, almost everything they could find in the Sovietic military deposits on the left side of Nistru.

Area and Population. The area is of 4.136 square kilometers, and the border is of 816 kilometers. In 2004, the population of Transnistria was officially of 550 thousand people. 300 thousand of them are Moldavian citizens and almost 100 thousand of them are Russian citizens.

Budget. The analysts estimate the budget as being around 80 million dollars every year. The domestic gross, according to the Transnistrian officials, is of 280 million dollars. The local currency is the Transnistrian ruble.

Monopoly. Transnistria is characterized by the monopolizing business activities. The Sheriff Company controls almost everything has any relevance at all in the business environment. The company is controlled by the family of President Smirnov. Other monopolizing business activity is the one of the telecommunications, through Interdnestrcom which is the only company providing land and mobile telecommunication services, internet included.

Penalties. During the last 15 years of negotiations and futile agreements, the international community has taken only two efficient decisions against Transnistria: the interdiction to travel across Europe and the United States for the Transnistrian diplomats (since 2003) and an interdiction to export Transnistrian goods if the trading company wasn’t registered and the export fees imposed to the goods exported by Moldova (since 2006).

Korporatzya

Smirnov’s republic, ruled as a real organized crime group, first needs to be protected. Transnistria is well protected. We are talking about the army, paramilitary groups (The Cossack Army and the Popular Army) and the Defense Ministry forces, as well as the MGB troops. If needed, Transnistria relies on 25 thousand people well trained and thoroughly armed. In a life time of peace all this military structure works for keeping a tight hand over a poor population and for protecting the business interests of the elite. Secret service is in all political parties, governmental organizations, large companies, and mass-media. MGB (built on the old KGB structure) has been functioning ever since. The organization changed only the name and went on with the activity of the predecessors, developing it further on. A good example of the MGB activity is Dimitri Soin. He is a high rank officer, coordinator of the department for the Protection of the Constitution since 92. He studied in Moscow and he develops other additional activities. He is a sociologist, a professor with the University of Tiraspol, a yoga instructor, business man and founder of non-governmental organizations that support themselves financially. Soin is going to open a postmodern yoga centre in Tiraspol, he owns a rehabilitation clinic and he is the mentor of a radical youth organization, Proriv. We shall talk about his involvement in criminal activities in further articles.
Soin is just one of the MGB officers. The entire security structure of Transnistria is made up of that kind of people, active in several fields. All this structure is actively involved in the political and social environment, as well as in the media. The adversaries of the regime are either banished either eliminated.

Economic

The entire security system has several stakes. First of all is the protection offered to the groups of interest from Russia and the Ukraine that are all making business in Transnistria. We discovered a few important groups that were running business activities in the separatist republic. We shall enumerate them, details to be provided later on. First place should go to the groups represented by Alisher Usmanov, a Russian oligarch; then there are the business men connected to Semion Mogilevich, the head of Russian mafia, or to Gafur Rachimov and Serghei Michailov; then we have the business joint activities of Peter Poroshenko, the former head of the Ukrainian Security Council and defense secretary of President Yushcenko; then we also have the trusts Dynamo, SMART Group and PRIVAT Group, all controlled by Ukrainian and Russian oligarchs: Anatoli Ciubais (former Vice Prime Minister, finance minister and Prime Minister), Michail Kasianov (former Primer Minister) and Victor Cernomîrdin (former Prime Minister), but we have also identified two key companies in the European organized crime groups: Gazprom and RAO EES, the Russian energetic giant.

Arms

Secondly, the stakes of the excessive security is armament: production, stoking and transfer of weapons from Transnistria. During the last 15 years, weapons were the strongest currency in the region. The 14th Army deposits and the production units founded during the time of the Soviet Union provided arms for all military conflicts in the Caucasians, the former Yugoslavia, in some African countries, or in Iraq. This is a huge business enterprise that has to be kept under control and which makes money for all carefully selected arms dealers.

Organized Crime

Such characters and company couldn’t have appeared in the area without being accompanied by all sorts of criminal organization, thus labeled by all investigation agencies in the Western Europe and the United States. The Mogilevich grouping and the Odessa grouping of Angert are only two examples of cells working on the Transnistrian territory. To these we can add diverse business connections with Solntsevo. Weapons trader Victor Bout didn’t stay away from this republic either. It is really interesting that in the area there came up as investors, people connecting the United States with Casa Nostra and similar groups from Israel. To all the above one can also add the very interests of some of the most important Russian bankers. At the beginning of the 90’s, the latter founded some financial colossus in the name of the former Communist Party and with the help of the secret service and of the army. The picture is all clear. The common feature of both the oligarchs and the groups already labeled as “criminal” is first and foremost money laundry. Local authorities from Chisinau accuse Transnistria to have been transformed into a money Laundromat, with a cash flow of 2 billion dollars every year.

Collapse

Even if PMR produces enormous amounts of money, there are only very few who enjoy the profit. The 500 thousand inhabitants of the country experience extreme poverty. Infrastructure is almost inexistent; there is no tourism, while the profit made by local industry goes to local politicians through cover companies. Once you got out of Tiraspol, while traveling across the country, you can see a wasteland, left to decay. An old man from Camenca told us “Our children have no chance. They are learning how to steal or how to waste time.”

Profit for Pacifiers

Transnistria is an income source not only for its insiders. All three outside actors benefit from the separatist republic and its status-quo: Moldova, the Ukraine, and Russia. What is quite extraordinary is the fact that Moldova, Ukraine and Russia, the three countries which fought in 1992, became during the last 15 years the “pacifiers”. They have the mission to end the conflict and to assure peace in the region. We can only conclude that only financial benefits kept them on the peaceful tracks all these years. We have shown before that representatives of groups of interest from Ukraine and Russian are developing business activities in Transnistria. To al the above mentioned, we can add the most important political forces. On the other hand, in Moldova, profit is divided between the politicians succeeding to leadership in all these years. A good example is the one of the border stamps. The Moldavian stamps were stolen by the Transnistrians and the latter used them in all import-export actions. Even if there were means of changing those stamps, they kept being used for almost ten years. They were used especially for smuggling and enormous amounts of money were used to corrupt Moldavian clerks to keep the old stamps. All this shows how profitable is to keep a status quo in Transnistria.

Passivity

The only hopes for changing something are the European Union and the United States. Till lately, the latter just observed passively the situation. Most of the times, they both mimed implication, by making negotiations and no purpose agreements, or by kindly asking Russia to leave the republic. Some of the measures adopted by the two, some of them of economic nature, could turn Transnistria into a useless tool for money laundry. The reason is the fact that all these operations are developed through banks from Europe and the USA. What is certain is that neither the Europeans, neither the Americans are aware of the threat represented by Transnistria. This means the problem can still wait for a solution.

In the Future

It is still uncertain how the conflict on the Nistru is to be solved. But it is clear that once the European Union gets nearer to Transnistria, smuggling all sorts of goods would increase. The little traffic will get better organized and more efficient, having as target the Western markets. But if Transnistria became the territory of a recognized country, the larger majority of the local political elite would have to leave the region because of the frauds and, in some cases, murders they committed.
It is very interesting to observe the Russians’ strategy. Before the European Union expanded, they bought industrial objectives that can become extremely profitable after the EU extension towards the East. Another example could be the Metallurgical Unit from Râbniţa. The examples can go on. Soon, everything that worth buying will belong to the Russians. Once the privatization is done, the 14th Army can leave the region because the Russian business men basically control the territory using cover companies. Moreover, in order not the be accused of making business with the Smirnov regime, public Russian companies used middle men, off shore companies, to get hands on such industrial objectives.

The project "Transdniester - Revealing Europe's black hole" is an investigation of CRJI, financed by SCOOP in Danemark and SAS in Switzerland. The participants in this project are the following journalists: Vitalie Calugareanu (Chisinau), Vlad Lavrov (Kiev), Igor Boldyrev (Odessa), Alexander Bratersky (Moscova) and foto Robert Ghement.