How to Buy a President

One of Romania’s richest men has debts of over 150 million euro on his gas bill. He can’t save his empire unless one of his cronies ends up running the Ministry in charge of the states large energy provider. His last chance: the presidential election. Will his candidate win?

That could have been the synopsis of a film trailer based on the recent events in the life of billionaire Ioan Niculae, whose fortune, according to Forbes, was around 1.1 billion dollars in 2015.

PressOne has investigated the 21 volumes of documents and evidence that form the basis of his indictment. The boss of InterAgro was jailed as a result of this mountain of evidence. These are the facts of power in Romania.

I. A meeting of old friends

It's the 5th of November in 2009. The runoff round for the Romanian presidential election is only 17 days away.

The incumbent, Traian Băsescu, who turned 58 the day before, and the leader of the largest political party in Romania (the Social Democrats, or PSD), Mircea Geoană, the 51 year old former Minister of Foreign Affairs, are the two favorites to emerge as frontrunners for the runoff.

At his campaign headquarters Băsescu has a surprise waiting; an orange cake with "Happy Birthday" and "58%" inscribed on it - a play on his age, but also the vote percentage for which his supporters are hoping.

Băsescu, however, doesn’t show and his supporters blow the candles out themselves.

Thursday, around 3 pm at the Marriot in Bucharest, Businessman Ioan Niculae meets his brother-in-law and friend for 30 years, the President of the Brăila County Council and head of PSD Brăila, Gheorghe Bunea Stancu.

Niculae's business is on the rocks. InterAgro, a web of companies scattered across the agricultural industry, is crippled by debt.

The largest debt, over 150 million euros, is to the state owned Romgaz. It’s where Niculae purchases the methane gas for his large chemical plants.

This is why they meet today. Niculae hopes his friend can help save his empire.

Over a year has gone by since the parliamentary elections of 2008 where PSD Brăila had some of the best results in the country. Master over his county, Stancu has "direct access" to the PSD President, Mircea Geoană.

Niculae knows this. But neither he nor his friend knows that the SRI, the Romanian domestic intelligence service, is recording their conversation – after obtaining a warrant the day before on the 4th of November.
But before we listen in on their conversation…

Let’s meet the players...

Ioan Niculae was born in 1954 in Buturugeni, Giurgiu County. He graduated from the Securitate and Militia Officer School in Băneasa and was in active service until 1980. Or, that's what he says. Until the 1989 Revolution, he worked in foreign commerce specializing in the export of chemical fertilizer.

In various media appearances and interviews, Niculae has consistently declared that before the Revolution he’d only had 240 dollars saved at Bancorex. A pretty thin slice for a former Securitate member who spent 10 years working at one of Ceaușescu’s pet companies.

The rebirth of local capitalism gave him wings: in 1990 he started his first business, Interaction, with British and Romanian capital. Four years later, InterAgro was born out of Interaction, and it became the nucleus of a real agricultural, food and petrochemical giant.

In regards to his Securitate past, Niculae told Evenimentul Zilei (Romanian daily) that he was discharged after divorcing at only 24 years of age. "It was a blemish on my record", he stated.

Imagine din documentarul

Photo of Ioan Niculae from the documentary "Kapitalism, Our Secret recipe",  by Alexandru Solomon.

In March of 2011, well into the Wikileaks scandal, the press was quoting fragments from the US Embassy in Bucharest describing Niculae as one of the PSDs most generous sponsors.

Those same telegrams said that, in 2000 and 2001, Niculae had been involved in privatizing the National Romanian Tobacco Company.

After a staged auction, he received controlling shares for 10 million dollars. Later, in 2004, the Ministry of Agriculture regained control over the company, partially wiped its debts and re-sold the controling shares to a company registered in the Virgin Islands, also controlled by Niculae, thus raising his profits.

A diehard hunter, Ioan Niculae was covered by the Sunday Times for reportedly paying 40,000 dollars in 2001 to shoot an elephant in South Africa's Limpopo region, and another 50,000 to a taxidermy company in Pretoria for the animal to be  stuffed and sent back to Romania.

Patronul firmei de taxidermie din Pretoria, alături de

The owner of the Taxidermy business from Pretoria next to Niculae's trophy. (Youtube screenshot)

As opposed to Niculae, who got rich quick during Romania's transition to democracy, Gheorghe Bunea Stancu had no such luck.

Maybe this is in part because, before '89, he was a simple electrician at Brăila's Laminorul factory. Later, he started doing business in the agriculture sector through the Bursagrirom Company, but he tried his hand in construction as well with another company, Concivia.

In 2008, Stancu was elected President of the Brăila County Council.

According to wiretaps from 2009, his influence at the top of PSD was so great that he had people working in the National Agency for Mineral Resources, in the state bank CEC, at the top of EximBank, and at the National Environmental Agency as well as in the Health Ministry.

II. What the sponsor expects from his candidate

Back to the 5th of November in 2009.

Ioan Niculae is talking to his friend, Gheorghe Bunea Stancu. Niculae tells him he's willing to offer a million euro for Mircea Geoană's campaign:

Ioan Niculae: "My friend, go to Geoană and tell him that you talked to Ioan Niculae, that I'm willing to donate one million euro, but the money isn't for... it’s not for having Hrebenciuc handle the..."

Gheorghe Bunea Stancu: "I'll tell him."

Ioan Niculae: "That way, he has Hrebenciuc under his thumb as well, all the money will go to.....very well."

Bunea Stancu agrees and promises he will present Niculae's offer to Geoană personally. And since he's not just anyone, he can ask the InterAgro boss quite directly: "What do you want for it?"

"The Ministry of Economy...if you don't have that, you can't... with Transgaz and Romgaz," Niculae answers simply.

In order for Niculae's machinations to bear fruit, the presidential candidate must understand whose pocket he's in. Stancu therefore calls Geoană on his cell phone and passes it to Niculae.

The businessman acknowledges, cautiously, "Well, aren't we a team? Or haven't they told you?" He whispers an aside to Stancu, "I told him my name. He understands."

The phone conversation ends, and the InterAgro boss explains to Stancu that Geoană point-blank refuses to appoint Mihai Tănăsescu as Minister of Economy if he wins. Tănăsescu was also Finance Minister in the Năstase cabinet.

Mircea Geoană, alături de Mihai Tănăsescu (în plan apropiat) și de Viorel Hrebenciuc. Foto: Lucian Muntean

Mircea Geoană with Mihai Tănăsescu (on his left) and Viorel Hrebenciuc in the background. Photo: Lucian Muntean

Niculae alludes to a "structure" to which Geoană and his brother-in-law, Ionuț Costea, belong. Costea was, at the time, President of EximBank, a state bank.

Niculae recounts Geoană's words from their phone conversation, "If you want [Tănăsescu], I will destroy him!" And then he explains to Stancu, "That's the structure. Geoană wouldn't mind, but his brother-in-law also belongs to the same structure… and I paid a million dollars."

"You’ve paid it all?" Stancu asks.

"Not all, of course, only when he comes with the invoices. If I have the invoices, I pay. Next week he's coming with three invoices, I’ll pay them. That's what we discussed [with Viorel Hrebenciuc]... So, I meet Viorel, he comes by, he gives me the invoice and the contract, and I'll pay."

Ioan Niculae tells Stancu how Hrebenciuc applauded him for his ‘contribution’ to the party, even if he wouldn’t tell him what he’d expect in exchange. "Niculae, you've contributed even more than these guys in Parliament. What do you want?" Hrebenciuc had asked, apparently.

"Let's wait and see, [when Geoană becomes President]. Let's see. And when we want something, I'll tell you 'I want that!', I won’t ask anything just for the sake of it. We won't screw up."

If Bunea Stancu's interests are simple - financing his boss' campagin for the Presidential race - Niculae's are more difficult to interpret.

Don't forget, this is 2009.

The InterAgro Group has a 148 million euro debt to Romgaz, and another 14 million to Transgaz. At this rate, there won’t be anything left of the empire.

*

Ioan Niculae Businesses:

III. Two companies pay for the same report

The million euros Niculae offers to Geoană's campaign will be used to pay off PSD bills while only a part of that sum would be ascertained by the DNA (National Anti-corruption Directorate) prosecutors, as it went into public opinion polls carried out by INSOMAR.

The Institute Founded by Vîntu

The INSOMAR Institute was founded in 1999 and was officially owned by Sorin Ovidiu Vîntu and GELSOR – an investment fund owned by the same Vîntu – until 2002.

In November 2006 the institute underwent a name change; INSOMAR - Political Marketing and Research LLC. The associates remained Gheorghe Teodorescu – known as Gelu, founder of Gelsor and SOV Invest – and Cecilia Zavaleche, a relative to one of Vîntu's associates.

On November 2nd, 2009, three days before the conversation between Ioan Niculae and Gheorghe Bunea Stancu, InterAgro and INSOMAR had signed off on a research report on the state of the construction industry in Romania.

The report, according to the invoice, cost 641,730 lei - approximately 150,000 euro. Therefore, on November 2nd, 2009, Niculae's company, which kept racking up debts for natural gas, was paying 150,000 euro for a "report". The businessman would later declare that the report was necessary for a construction plan for the hotel in Azuga.

That same day, the 2nd of November, Mircea Geoană's campaign director, Viorel Hrebenciuc, calls the head of INSOMAR, Gelu Teodorescu. The subject of the call is unknown, but the Niculae-Hrebenciuc-Teodorescu axis is relevant.

In Niculae's indictment, prosecutors say that Hrebenciuc's call to the INSOMAR boss proves that, in fact, Niculae paid off PSD's debt to INSOMAR.

What’s more, during the same period, INSOMAR offered an identical report to another company, DSE Consulting SRL, controlled by Emilian Dinescu, a friend of Bucharest's District 3 Mayor, Robert Negoiță. Dinescu paid 120,000 euro for the document.

Therefore, two separate PSD entities paid different sums, on the same day, for the same report.

The revelations don't end there. The indictment reads:

"...following an analysis of the report forwarded by InterAgro SA, at DNA's request, the ‘report’ proved to be a 48-page long, general overview of the construction sector in Romania."

Therefore, InterAgro paid around 3,000 euro per page, and DSE Consulting 2,400 euro per page, for a "general overview".

IV. "PSD has yet to name a Director at Transgaz"

On April 1st, 2010, the DNA decides to investigate possible acts of corruption during the 2009 presidential campaign.

The prime suspect is Ioan Niculae, accused of illegally sponsoring the PSD campaign with approximately 150,000 euro in order to support Mircea Geoană's run for the Presidency.

For the one million euro that was promised to Geoană, Ioan Niculae is purported to have requested access to the Ministry of the Economy, but also to have people close to his interests lead Romgaz and Transgaz.

Illegal Donations

Article 5, heading 3, of the law concerning the funding of political activity and election campaigns (Law 334/2006) reads as follows: “Donations received from a private individual over the course of one year can be up to 200 minimum gross national salaries, as valued on January 1st of the respective year.”

In 2009, that salary was 600 lei. The maximum sum Ioan Niculae could legally donate to the PSD was 120,000 lei.

Amongst the mountain of evidence collected in the 21 volumes that comprise the case, a number of conversations that took place in 2009 between Niculae and Stancu stand out. A significant piece of evidence stems from a conversation they had in January 2009 as Niculae was angry because of the Transgaz issue.

Here's a fragment:

Ioan Niculae"Listen, the PSD haven't put up a Director for Transgaz yet, have they?"

Gh. Bunea Stancu: "We'll get somebody, don't you worry, have a little patience."

Ioan Niculae"Do it already! When the hell is this going to happen? Just have your guy talk to Sorin!"

Gh. Bunea Stancu"What are you talking about? Are you going to keep your promise with...urea..?"

Ioan Niculae: "Of course I will. Just give me an address to send it to. Otherwise I can't. I have to fill out some forms, damn urea! I have to invoice it, get a shipping notice. It really isn't that big of a deal, though."

Urea is a synthetic substance that is used for fertilizer.

On March 7, 2009, the domestic intelligence service, the SRI, was intercepting another conversation between the two friends. Niculae was asking Bunea Stancu to profit from the latter's influence in PSD and to convince the Minister of Agriculture at the time, Ilie Sârbu, to sign a piece of legislation that would benefit Niculae's business.

A day later, unhappy with the stumbling blocks before him, the businessman asks for "a forceful approach". The indictment documents don't clarify what this means.

Machetă în mărime naturală a lui Bunea Stancu, în sediul PSD Brăila.

Full size photo of Bunea Stancu, PSD HQ Brăila.

Another interesting discussion took place between Bunea Stancu and the owner of the Adevărul newspaper, Cristian Burci, on July 8, 2010.

Stancu told Burci that he wants to approach 3 or 4 businessmen who can help the PSD financially, especially for the debts accrued by the PSD during the presidential campaign of 2009.

Bunea Stancu had apparently talked to Victor Ponta, the new PSD President, on the matter. Ioan Niculae and the head of Asesoft, Sebastian Ghiță, were also mentioned.

One after another, Ioan Niculae, Bunea Stancu, Viorel Hrebenciuc, Emilian Dinescu, Gelu Teodorescu (INSOMAR), Viorel Barac (InterAgro Director), as well as other employees were summoned by the authorities for questioning.

Mircea Geoană was also called in. Initially, he failed to show up, informing the DNA that he’d only heard about his witness status from the press.

None of those called in for cross-examination cooperated. Most statements made during the investigation were the, "I don't know, I don't recall" variety.

Throughout the four years during which the investigation unfolded, only a single witness would cooperate.

V. Hrebenciuc changes his mind

On January 11th, 2012, after two years of investigations, DNA prosecutors pressed charges against:

  • Gheorghe Bunea Stancu - President of PSD Brăila, for using his influence within the party to obtain money or other undue benefits;
  • Gheorghe Teodorescu - shareholder of INSOMAR, for falsifying documents;
  • Viorel Bărac - Director of InterAgro, for falsifying documents;
  • Ioan Niculae - primary shareholder of InterAgro, for conspiracy to commit fraud in falsifying documents.

On November 20th, 2013, after a number of stays and delays, all four were set free.

One of the judges on the panel for the case, Olimpia Crețeanu, had made a request of abstention from the case on June 25th, 2013, but the request had been denied.

Crețeanu said that her husband, Virgil Crețeanu, had made 2,000 lei that year from contracts with AgroInvest, whose owner and primary shareholder was InterAgro.

The request was denied based on the fact that the contracts had closed before Ioan Niculae was indicted.

Towards the end of 2014, the case reached the Bucharest Court of Appeals, where things started to heat up.

Geoana si Hrebenciuc

Three months later, Mircea Geoană is called in for cross-examination as a witness. He again insists that he had no knowledge of any contract between INSOMAR and InterAgro.

Moreover, he states that he had nothing to do with the financing of his campaign in 2009.

To prove his innocence he offers, as evidence, a sociological study conducted by Benenson Strategy Group (BSG), an American political consultancy practice that ran his 2009 campaign. (Coincidence: Geoană was legally bound to pay his American consultants one million dollars.)

On March 19, 2015, Viorel Hrebenciuc testifies at the Bucharest Court of Appeals and modifies his original statements.

Although he initially stated that he knew nothing in regards to financing the 2009 presidential campaign, in March of 2015, Hrebenciuc testifies that Mircea Geoană, Ionuț Costea (Geoană's brother-in-law) and Ionuț Bazac (businessman and future Minister of Health in 2012) were responsible.

He therefore contradicts Geoană's testimony, who said he wasn’t involved with the funding of his campaign.

"Geoană sent me, personally, to Niculae to ask him to contribute to the campaign. Niculae wouldn't talk to Costea so I met with Niculae and asked him, on behalf of Geoană, to pay for some INSOMAR opinion polls. Niculae agreed and then he spoke with Teodorescu. I later found out that there’d been a contract signed, between InterAgro and INSOMAR, about the Romanian construction industry. The payment was made for Geoană's polls," Hrebenciuc told the appeals panel.

He also said Geoană knew about the manner in which polls were financed:

"Teodorescu insisted to be paid as soon as possible, given previous experiences when he wasn't paid after elections. The payments were made after Geoană talked to Vîntu, who was a shareholder in INSOMAR. I cannot say whether Geoană sent me to Niculae for a legal or illegal payment. As it stood, it was legal."

In April of 2015, Ioan Niculae was given two and a half years of jail time while Gheorghe Bunea Stancu received three. Gelu Teodorescu and Viorel Barac both received two and a half years for falsifying documents. The judges also expropriated approximately 145,000 euros from Ioan Niculae's fortune.

The story doesn't end here

In Găești prison, where Niculae served his time, he wrote five books in a year: "Bioethanol, the Fuel of the Future", "Biodiesel: Ecological Diesel", "Energetical Valorification of Biomass", "Modern Orientations in Crop Production" and "Modern Technologies in Crop Production".

On February 19, 2016, the Dâmbovița County Court rejected his conditional parole request. The head of InterAgro said that he’s become a new man and had not caused any problems while in jail.

He also apologized for his previous outburst when his request for parole was postponed.

"You might as well have sentenced me to life in prison!" Niculae shouted.

In the meantime, he is under investigation in another case, code-named "Low-cost Gas", alongside former Finance Ministers Adriean Videanu and Varujan Vosganian.

InterAgro is bankrupt.

Throughout the trial, Mircea Geoană maintained his ignorance in regards to his campaign funding. He got 49,66% of the popular vote in the 2009 runoff election.

He missed out (on the presidency) by 0.34%.

Mircea Geoană in 2009. Photo: Lucian Muntean