INTERIOR MINISTERY QUAKED AGAIN Spectacular Arrests In Baneasa Property Scam Affair

The bitter fight for control over the intelligence service of the Ministry of Interior (MoI), which have already caused two ministers to resign within three weeks after their appointment, has led to the most spectacular arrests in the last 20 years: the director of an intelligence service and a prominent businessman.

Barely installed in office ten days before, the director of the MoI intelligence service was taken into custody on Tuesday evening by the National Anti-Corruption Department (DNA) for having provided businessman Gabriel Popoviciu with confidential information from his criminal case in exchange for personal benefits.

Ioan Alecu, the former president of the Agricultural Science University of Bucharest, and Gabriel Popoviciu have been investigated since 2002 for abuse of office and, respectively, complicity to abuse of office, for having created an illegal property business involving 224 hectares of land in Baneasa, owned by the State and managed by the University. The criminal investigation against the two of them started from a criminal complaint filed by George Becali, after he did not manage to become himself involved in the business with the University land.

• Losses reach almost 1 billion EUR

Prosecutors have been investigating the case with no result for seven years, after the matter was thoroughly digested by the media, members of Parliament and the Court of Audit. Without exception, the ministers summoned before Parliament stated that the partnership between the University and Popoviciu"s company was legal, despite having been concluded without a tender. Moreover, at the time when the deal was signed, in the year 2000, the Agricultural Science University did not even have a deed to the orchard in Baneasa.

Ownership to the land was only secured in 2002, after a court ruling was not appealed. The land was reappraised again in 2003 by a team of five experts. Eventually, the University"s contribution in kind to the business was evaluated at 948 billion RON or approximately 25 million EUR at that time. This means that the experts appraised the land at only 10 EUR/square meter in 2003. Prosecutors believe that the land was underpriced by approximately 1 billion EUR. According to the appraisal ordered by prosecutors, the land was worth some 450 EUR/square meter at that time.

The prosecutors are also investigating the circumstances under which the company controlled by Gabriel Popoviciu entered the joint venture without a tender and whether the Agricultural Science University had the right to enter the joint venture at the time when it did, in the year 2000.

• Seven years, no money

The orchard was destroyed to make room for the Baneasa residential business because the University did not have 5 million EUR to repopulate it or the money to pay for security against vandalism. So the University accepted to become part of Gabriel Popoviciu"s joint venture called Log Trans SRL (later on renamed Baneasa Investment) and have 49% in the company in exchange for the 224 hectares of land, which was supposed to be repopulated with fruit trees and vine. However, the University claims that no significant revenue was derived from the joint venture until 2007.

• Utilities installed with Bucharest taxpayer money

Baneasa Investment donated approximately 25 hectares of land to the Bucharest City Hall in exchange for the obligation to install utilities and build roads with money from the municipal budget. Electricity will be provided to the real estate development by City Utilities, a company controlled by Baneasa Investment and managed by Sorin Tesu, the former Chief of Staff of former Prime Minister Adrian Nastase.

• Old connections

Sorin Tesu is the son of one of dictator Nicolae Ceausescu"s Agriculture Ministers. Gabriel Popoviciu is the son-in-law of one of Ceausescu"s First Deputy Prime Ministers, Ion Dinca, and the brother-in-law of the president of Dinamo Football Club, Nicolae Badea.

Gabriel Popoviciu"s father, Aurel Popoviciu, is a professor at the Agricultural Science University of Bucharest and a colleague of Ioan Alecu, the President of the University, who facilitated the real estate scam and has been recently taken into custody.

• SRI beats MoI intelligence arm

The heads of the MoI intelligence service were taken into custody by DNA prosecutors based on telephone conversations intercepted by the Romanian Intelligence Service (SRI) and a self-denouncement by a former police officer who had transferred to DNA after being involved in the Baneasa Investment affair.

According to DNA sources, the prosecutors believe that the losses caused to the State by the underpricing of the land that the University contributed to Baneasa Investment amount to 1 billion EUR. However, DNA has not announced officially whether the appraisers were under investigation, too. The sources added that the ongoing investigation also included several directors of Baneasa Investment and a number of employees.

• The stakes

Some sources say that the actual stake of the ongoing clashes within the Ministry of Interior is the prospective disbandment of the Ministry"s intelligence unit, the only such unit allocated to PSD upon the creation of the incumbent Cabinet. In fact, this was also the reason why PSD leaders opted for this Ministry instead of the Transport Ministry.

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