English• President Traian Basescu chairs Defence Council, Mircea Basescu involved in defence & security businesses
• A travel agency registered in Ilfov County became overnight a potential platform for one of the biggest businesses in the country: modernizing the Romanian Army
• Representatives of large U.S. companies, employing even former NATO commanders in Europe and former U.S. Army officers, have established a company together with Mircea Basescu, the Romanian President"s brother, retired General Ion Eftimie Sandu, Deputy to the Head of the Armament Department of the Ministry of Defence, and Aurel Cazacu, the former Director of Romtehnica and President of Romarm, who negotiated the scandalous affair of the British frigates.
The controversial world of armament and military technology has reached as far as the doorstep of President Traian Basescu"s family and has the potential to place him in the most serious conflict of interests since he took office in December 2004.
As president of Romania, Traian Basescu is also Head of the Supreme Defence Council, which has the authority to approve the armament and military technology procurement programmes of the Ministry of Defence. For the past two months, his brother, Mircea Basescu, has associated with the heads of the Romanian defence industry as well as with representatives of major U.S. companies in the armament and military technology industry, which employ even former high-ranking officers of NATO and the U.S. Army.
The business of the President"s brother started in June 2009, merely a month after the Defence Council had discussed Army procurements and the Ministry of Defence had announced the start of the tender for modernizing the two British frigates, which were bought by the PSD Government in 2002 and have already cost us over 120 million GBP. The key character in the frigate business, Aurel Cazacu, who has in charge of Romtehnica at that time, became an associate of President Basescu"s brother in Desintco in June 2009.
Another associate in Mircea Basescu"s business is retired General Ion Eftimie Sandu, Deputy to the Head of the Armament Department of the Ministry of Defence, the ministry which will organize the tender for Army procurements.
Which also places General Eftimie Sandu in a conflict of interests. A few days ago, Mircea Basescu"s business partners pompously organized the Naval Defence Exhibition in Constanta. The event was co-organized by the Ministry of Defence and was attended by notable players in the global arms industry (the list is attached).
The Supreme Defence Council is the authority that approves the armament and military technology procurement programmes of the Ministry of Defence. A contract such as the one concerning the modernization of the frigates would normally require the Council"s go-ahead. This makes it almost unexplainable that President Basescu"s brother decided to join an armament business at such time, together with the Romanian official who had negotiated the purchase of the frigates and especially with one of the leaders of the Armament Department of the Defence Ministry - the one in charge of Army procurements. Thus, the Desintco Affair pops up at a time of intense focus on bringing the Romanian Army closer to the requirements of NATO, which Romania joined seven years ago. Cost estimates for the procurements required for the three branches of the Army (Air Forces, Navy, Ground Forces) point to more than 10 billion EUR in the following years.
• The preparations
May 2009. The Ministry of Defence starts the tender for modernizing the frigates. Rumoured cost: 500 million EUR. Ministry representatives claim that 11 companies have already announced intent to participate, but will not disclose their names.
Ilfov, June 2009. A simple travel agency, established in 2009 and having the registered office in the home of a known businessman, Romeo Oita, became overnight a business consultancy firm.
On 25 June, Envy Tour Travel registered in Voluntari, Ilfov, had one owner: Alina Oita, the daughter of Romeo Oita. The next day, the travel agency becomes Defence, Security and Intelligence Co. - Desintco SRL. Romeo Oita"s daughter exits the company, making room for the brother of the President of Romania. On the same day, besides Mircea Basescu, the business is joined by Defence Ministry officials and leaders of the Romanian defence industry: retired Major-General Ion Eftimie Sandu, Deputy to the Head of the Armament Department of the Ministry of Defence, and Aurel Cazacu, the former Director of Romtehnica and Romarm and the man who had negotiated the controversial purchase of the British frigates. Aurel Cazacu did not join the company directly, but through his daughter, Maria Cazacu.
The interests of the three of them converge within Desintco with those of Romeo Oita, the representative of the U.S.-based Navigator Development LLC, and those of Cristian Geamanu, Vice President for Eastern Europe of the U.S.-based General Defense Corp.
The sudden transformation of the travel agency into a military-oriented company indicates that the associates did not have time, for whatever reason, to set up a new company.
Constanta, August 2009. Cristian Geamanu and Romeo Oita organized the Naval Defence Exhibition in Constanta, on 14-16 August 2009, in partnership with the two U.S.-based defence companies: Navigator Development and General Defense Co., as well as with the Ministry of Defence. The list of organizers is almost a perfect match to the list of Mircea Basescu"s business partners in Desintco:
• The organizers of the Naval Defence Exhibition (NDE):
Cristian Geamanu - President of NDE and Vice President for Eastern Europe of the U.S.-based General Defense Co.;
Romeo Oita - Executive Director of NDE and representative for Romania of the U.S.-based military and specialized software consultancy Navigator Development Group;
Major General Eftimie Sandu - Assistant to NDE President Cristian Geamanu;
Andra Anicai - Assistant to the NDE Security Director and Economic Manager of Desintco and a business partner of the Geamanu family;
Aura Buiac - NDE Public Affairs Director. Aura Buiac is also the editor and manager of Intercity Magazin. The magazine is published by Astrid Business Development SRL (controlled by the Buiac family), which, since 2005, has the registered office at the same address on Calea Mosilor as the General Defense Co. office in Romania, managed by Cristian Geamanu;
Cristian Negoita, NDE Marketing & Sales Director. Cristian Negoita is also the Marketing Manager of Intercity Magazin.
While at the exhibition in Constanta, the representative of BAE System (the British company that supplied the frigates to Romania) stated that the modernization of the frigates should be awarded to the same company that supplied them. However, the race is tight as the contract is quite rich. The event was also attended by Aurel Cazacu, as representative of the Ministry of Economy for Defence Industry Affairs, and Iulian Fota, National Security Advisor to President Traian Basescu.
• The Desintco shareholders
-Romeo Oita (48 years old), 30%. Oita is President of the Association of Security Services Providers;
-Cristian Andrei Grigore Geamanu (49 years old), 30%, Vice President for Eastern Europe of General Defense Co. USA;
-Ion Eftimie Sandu (54 years old), 5%. He is Deputy to the Head of the Armament Department of the Ministry of Defence since 2007. He was promoted to Major-General by President Basescu in the same year. General Sandu retired in February 2009. He was formerly a Member of the Board of Directors of important companies in the Romanian defence industry: Aerostar, IAR Ghimbav, Avioane Craiova and Uzina Mecanica Plopeni;
-Mircea Basescu (56 years old), brother to President Traian Basescu, 30%;
-Maria Cristina Cazacu (21 years old), daughter to Aurel Cazacu, former Director of Romtehnica, President of Romarm and Director for Defence Industry Affairs in the Ministry of Economy. Aurel Cazacu was a Member of the Board of Directors of IAR Ghimbav, Eurocopter Romania, Romaero, Avioane Craiova and Romarm. Maria Cazacu holds 5% in the business.
• The frigates affair
The amount guaranteed by the State for the acquisition and modernization of the two frigates was not limited to 116 million GBP, as the Government had approved, but to 122.78 million GBP. The difference of 6.7 million GBP (discovered by BURSA at that time) is strikingly close to the amounts calculated as illegal commissions paid in this affair. This matter prompted the British authorities to start a vast investigation in 2006. In 2002, the Romanian Government and the British Government had signed an agreement by which Romania was to buy two used frigates for the Romanian Navy. This ships were actually purchased from the British company BAE Systems, which had bought them from the British Ministry of Defence for only 200,000 GBP. Two British citizens, Barrz George and his Romanian-born wife, Georgiana George, were taken into custody by the British authorities in the summer of 2006 under suspicion of having received an illegal commission of 1 million GBP for brokering the sale of the two frigates between the Romanian Government and the British Government. The British police released them the following day because of lack of evidence. In addition to the commission paid to them, the investigation also concerned the payment of another 6 million GBP to accounts opened in tax havens. The British press said at that time that the Romanian-based company Axis Trade & Consulting, controlled by Georgiana George, was involved in the payment of the illegal commission.
The modernization programme for the frigates stipulates an offset clause forcing the foreign-based winner of the contract to ensure domestic investments in an amount equal to the value of the contract.
The company in which President Basescu"s brother is a shareholder seems to have been created for offset consultancy, too.
• Companies represented in Romania by Mircea Basescu"s associates:
1. NAVIGATOR DEVELOPMENT LLC - the parent company of Navtech LLC
- a private consultancy company registered in Enterprise, Alabama;
- provides services of management consultancy, strategic planning, military operations, system procurement etc;
- also operates under the name of Navtech LLC;
- owner: Albert Patterson
- In January 2009, Navtech won a contract to equip the University of Agricultural Science and Veterinary Medicine - Iasi with new technologies (3D visualisation system for experimental use) under a 4 million RON (1.3 million USD) contract. The contract was awarded by negotiation without prior advertisement. The explanation for the absence of any advertisement was: "The products in question are made exclusively for research purposes, for experimental, study or development purposes as per the relevant directive."
- the head of the Romanian office, Romeo Oita, is a partner in Desintco.
1. GENERAL DEFENSE CORP. USA
- a leader in support services for critical defence missions on land, water and air and a leading provider of weapons and munitions:
- is registered in Fort Lauderdale, Florida, and has international offices in Madrid and Bucharest;
- General Defense specializes in defence and aviation related systems integration and procurement services for the U.S. Government, the armed forces of allied nations, and for law enforcement and security services throughout the world.
- General Defense Corp is also a leading supplier of Warsaw Pact defence related equipment. General Defense Corp is currently acting as a global procurement company utilizing the broad network of worldwide suppliers and manufacturers that have been developed over more than twenty-five years. Additionally, it is forging strategic alliances with various companies around the world that gives them exclusive or semi-exclusive rights for certain products in various markets.
- General Defense Corp is licensed to trade in defence equipment by the U.S Department of State and the Bureau of Alcohol Tobacco and Firearms.
- Vice President for Eastern Europe: Cristian Geamanu, a partner in Desintco.
• What do the actors of the affair say
Aurel Cazacu: "Mircea Basescu"s name is a guarantee"
Reporter: How was this company created, with Mr. Mircea Basescu?
Aurel Cazacu: My daughter met Mr. Oita and Mr. Geamanu at the Black City last year. In fact, I told them that, if she was going to have to do work related to the defence industry, she would leave the company. Initially, the company was intended to solve problems related to offset, and not anything to do with my registered business. As you can see, General Sandu joined, after having recently left the Ministry of Defence. The company was focusing on identifying business opportunities to solve contracts.
Reporter: Then why should your daughter leave the business?
Aurel Cazacu: She should, because after the exhibition in Constanta it is possible that the company may have certain things... I"m not taking any chances. It may become involved in projects related to the defence industry and my daughter, honestly, I have spoken with her and I will find her a job in a company that has nothing to do with the defence industry. The frigates will have to be modernized by someone who has to include Romanian companies. It doesn"t matter who they are. It"s not about who is involved... The point is we they need to help us create jobs in the country. That"s the point.
Reporter: Is Mircea Basescu"s name a guarantee for this business?
Aurel Cazacu: It is a guarantee. If a big company comes along and they want to talk to... someone in Cotroceni... he (i.e. Mircea Basescu) can take them there, can"t he?
Editor"s Note: The statements were obtained courtesy of the BizBazar programme on Antena3. President Traian Basescu refused to discuss this subject with the Antena3 reporter in Constanta and denied any involvement. The other actors were not available for comment yesterday.
• The American partners
Navigator Development Group was established in Alabama, twelve years ago. It employs retired high-ranking officers of the U.S. Army and NATO. The best known of them is Virgil L. "Duz" Packett, a Member of the Advisory Council of Navigator Development Group. Virgil Packett was Commander of the NATO SFOR in Bosnia after 2003. In this capacity, General Packett commended the Romanian troops in 2003 for their performance in Bosnia Herzegovina.
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