Romanian PM dismisses tax chiefs over EU funds fraud inquiry

Romanian Prime Minister Dacian Ciolos, who will visit Moldova on Thursday. [European Council]

Romania’s prime minister sacked the head of the tax authority and his deputy on Thursday (11 September), a day after anti-corruption prosecutors said they were being investigated as part of a probe into the misappropriation of European funds.

The government press office confirmed Gelu Diaconu and his deputy Mihai Gogancea-Vatasoiu had been dismissed after Prime Minister Dacian Ciolo? said he was waiting for Finance Minister Anca Dragu to propose replacement tax chiefs.

“For me, what is most important is that the tax authority remains a credible institution,” Ciolo? told reporters.

Diaconu and Gogancea-Vatasoiu had been asked to resign by Dragu on Wednesday, but declined to so.

>>Read: Romanian ex-minister’s immunity lifted in latest graft probe

In a statement published on the tax authority’s website, Diaconu denied any wrongdoing and described the case as “Kafka-esque”. “One prosecutor’s actions are destabilising an institution that is vital to the Romanian state,” he added.

Gogancea-Vatasoiu could not be contacted for comment on Thursday.

Prosecutors said on Wednesday (10 September) that two Romanian lawmakers and eight other persons had allegedly defrauded two projects worth a total 27.25 million lei ($6.91 million) aimed at supporting the underprivileged Roma minority.

>>Read: Romania praised in Commission report, but Bulgaria damned

They allege that Diaconu and Gogancea-Vatasoiu signed papers that exempted those involved in the projects from tax.

Romania’s anti-graft prosecutors have been praised by Brussels for their efforts and last year had a conviction rate of over 90 percent. The tax authority has been through an overhaul aimed at helping it combat widespread tax evasion, and collection improved in 2015.

Romania is seen as one of the European Union’s most corrupt states and its justice system is closely monitored by Brussels, which has suspended payment of development funds several times due to irregularities. Its reputation for graft has deterred foreign investment while tax evasion and bribery are a drain on public finances.

Anti-corruption prosecutors have cracked down hard on high-level abuses in recent years, investigating lawmakers, cabinet ministers, mayors and even former prime minister Victor Ponta.

When Bulgaria and Romania joined the EU on 1 January 2007, shortcomings remained regarding judicial reform and the fight against corruption. In the case of Bulgaria, problems also remained regarding the fight against organised crime.

A Cooperation and Verification Mechanism was set up to assist both countries with judiciary matters after their EU accession. Seven years after their accession, the CVM is still ongoing and will continue under the new Commission. 

The Commission reports under the Cooperation and Verification Mechanism every year, on progress with judicial reform, the fight against corruption and, concerning Bulgaria, the fight against organised crime. The last two reports on Romania were largely seen as positive.

>> Read: Commission issues positive monitoring report on Romania

>> Read: Romania praised in Commission report but Bulgaria damned

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