Moldova’s past, present merge in private security sector

On the eve of Moldova’s parliamentary elections campaigns last year, Minister of Internal Affairs Gheorghe Papuc called a meeting with managers of private security companies and asked for help. He also added a warning.

Papuc asked the managers to spread electoral propaganda in favor of the Party of Communists that had governed Moldova since 2001. “We need your support and backup. You must take part in convincing citizens by means of the trustworthy people that you have” he told them.

Papuc also reminded the managers at the July meeting that they “do business together with police” and made it clear they could “remain without business” unless they cooperated. Companies that “disobey” could face even more “severe methods.”

What Papuc didn’t know was that his comments were recorded and later sent to the media.

In the end, the threat was just that. The communists lost to a Liberal-Democrat coalition and Papuc was dismissed. Had he not been, a “witch hunt” would have followed said Victor Pantiru, a well-known lawyer.

“If he had remained in power, Papuc would have definitely tried to expose the traitor,” Pantiru said.

In Moldova, the Ministry of Internal Affairs (MIA) has almost total control of security companies. It also competes against them.The situation has made it difficult for companies to prosper or even to operate at all.

Moldovan law mandates that any license for a company engaged in private security work must be issued by the Licensing Chamber, but only after the MIA has approved it. However, the MIA also controls licensing procedures and is responsible for all regulation. Credentials, uniforms and activities of private security guard companies must be approved by the MIA. Consequently, security companies have little choice but to follow MIA orders, said Pantiru.

At the same time, the State Security Service, an agency under the auspices of the MIA, performs most of the same tasks as private security companies. That means the agency in charge of setting rules for the private security business is in that business itself.

The SSS controlled all security agencies until 1992, when Moldova opened up the security guard market and allowed the creation of private security firms. But by vesting control in the Ministry of Internal Affairs, it left the government as the dominant player and, with state backing, it remains firmly at the top of the market.

Starting in 1992, a number of private security companies formed and today perform an array of services, including work as bodyguards, keeping order during public events, guarding cash and other valuables in armored cars and detective services. They work alongside the SSS, which is still allowed to take on private contracts.

Compared to private companies, which operate mainly in Moldova’s capital on Chisinau, the SSS is a much larger organization, with 35 territorial subdivisions, 500 policemen, 20 specially-trained dogs and about 5,000 civilian paramilitary employees who are paid from the budget of the MIA. There are also 55 mobile intervention groups, which are special teams of officers who are constantly on standby to be called in for important cases.

The SSS provides security to 700 individuals, 10,000 apartments and houses, about 200 banks and their branches and 1,500 commercial enterprises.

Its clients vary from ordinary citizens to politicians. For example, the houses of the family of former president of Moldova, Vladimir Voronin, are guarded by SSS. Anybody can pay for the agency’s services, and in general people in power prefer the SSS because it is considered more prestigious.

By comparison – the largest of the country’s 97 licensed private security guard companies has about 300 employees.

In addition, under Moldova law, only the SSS can provide security to state institutions and other entities of “vital importance”, including companies the government owns or has a stake in.

The SSS, despite having a government budget, is largely financed through contracted security services, giving it financial autonomy. In 2009, SSS earned $11.5 million in revenues and had $11.6 million in expenses. Their officers have perks not offered to regular police officers, including discounts that allow them to pay less for heating, electricity and social services.

Moldovan security companies must be licensed. However, during the past six years the Licensing Chamber withdrew the permits of 19 security companies. Some companies appealed to the courts and regained their right to practice while others were closed for good.

The case of Tantal Group

In 2005, Gheorghe Stepuleac, Director of Tantal Group Ltd., claimed that Government officials were trying to put him out of business. Stepuleac and his brothers are former policemen and the company they founded in 1992 quickly became one of the most important security companies on the market.

But then, in November 2005, Stepuleac was arrested and charged by prosecutors with detaining and trying to blackmail a former employee out of $1,000. The next month, Tantal SRL’s license was revoked after the MIA said the company violated rules about the colors they could use for their uniforms. The complaint also said that Stepuleac had been involved in criminal activities.

The day after his arrest, on Dec. 7, Stepuleac was set free. He told the media that his arrest had been the result of efforts by the ministry to protect its monopoly. Eight days later, he was arrested again. Four months later, he was set free. He eventually was found not guilty. In 2007, the European Court for Human Rights ruled that Stepuleac had been arrested improperly, finding no proof that he was guilty.

The Taller security company was a bit luckier. On December 8, 2008, the Licensing Chamber and the MIA concurred that Taller was guilty of a series of offenses and moved to withdraw its license. The Court of Appeals and, afterwards, the High Court of Justice rejected the Licensing Chamber’s request as groundless.

Taller’s director, Oleg Motinga, refused to discuss the incident in a recent interview with OCCRP, saying only that “business is business; sometimes good, sometimes bad”.

Serghei Ustimenco, chairman of JUSTAR, the largest security company in Moldova, would not talk directly about whether the state monopolizes security services. He said that the notion of “state police security” is outdated and existed only in the Soviet era.

He referred OCCRP to a previous interview where he said “State security is a budgetary organization which must not provide paid services. At this moment, the biggest stakeholder on Moldovan security market is the SSS,” he said in the interview. “In normal countries you will not encounter such a phenomenon.”

While state ownership may have been appropriate a few years ago, “the market is more mature and capable of serving the majority of the country,” Ustimenco said, adding the market should now be regulated according to “European norms.”

Another person opposed to the continued role of the state in the market is Veaceslav Ionita, the chairman of the Parliamentary Committee on Economy, Budget and Finance. Ionita contends that institutions like SSS must not provide services that create unfair competition.

“The aim of the new government alliance is to separate the certification, licensing and economic activity,” he said. “The reformation of SSS is inevitable. We have to find the best solution and it may take 2 years.”

Training of security guards a job for MIA

Although MIA controls most but not all of the security services market, since 2003 it has made training of security guards its exclusive prerogative. By law only accredited educational institutions can train security officers and body guards.

Only the police academy, which is an educational institution under the umbrella of MIA, has been accredited.

Ustimenco said that until 2003 his company operated a licensed training center which trained security specialists.

“Even some of our competitors applied to our training services.” Ustimenco said the current training methods offered by the MIA’s program doesn’t meet their needs.

“The guards’ job in private companies has its own features, which are not taken into account by actual training materials. Regardless of the arguments…this is a pure monopoly.”

VIPs ruling security companies

At least 50 of the 97 private security guard companies were created and are still run by former policemen, some with questionable pasts. For instance, Serghei Suhodol, manager of JUSTAR Ltd. since 2007, held jobs within the Criminal Division of the Police Department under the MIA until he retired in 2003. But while working there in 2000, he was arrested on suspicion of accepting bribes. The General Prosecutor’s Office initiated a criminal case that was closed later due to a lack of evidence.

Moreover, in 2001, the media reported that Suhodol was a friend and informer of Grigore Caramalac, nicknamed Bulgaru, who is wanted by Interpol on a warrant claiming he runs a violent criminal gang. Bulgaru was arrested but has escaped and has not been seen since in Moldova..

In recent months, the Moldovan government has agreed to reorganize the SSS by the end of this year. But the MIA will continue to control the industry as founder and owner of a newly created security company which will became the successor to the SSS.

Tatiana Lariushin, an independent economist, argues that the state is not the most efficient owner.

“It would be logical for the State Security Service to be privatized”, she told OCCRP.

Reorganizing the SSS but still keeping it a state-owned enterprise of MIA will not solve Moldova’s problems with security companies, experts said.

Chiril Motpan, MIA spokesperson, said that the reorganization should be finished by the end of this year. What nobody can say is what the final product will look like.

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