Volume 9 Number 4

Fall 2000

Constitutional Watch
     A country-by-country update on constitutional politics in Eastern Europe and the ex-USSR

Romania - On November 26, Romanian voters went to the polls to vote for a president and parliament. Observers were shocked by the second place showing of Corneliu Vadim Tudor (Greater Romania Party [GRP]), who garnered 28.5 percent of the vote, thereby forcing a runoff with Ion Iliescu, who received 36.6 percent. In parliamentary elections held on the same day, Ion Iliescu’s Party for Social Democracy in Romania (PSDR) was also the winner, with GRP again taking second place. In the runoff for the presidency, held on December 10, Iliescu won overwhelmingly with 67 percent of the vote. Turnout was 65 percent in the first round and 56 percent in the second, both much lower than many had expected.

The initial shock in connection with this election, however, had occurred back in July, when President Emil Constantinescu announced he would not run for a second term. As leader of the Democratic Convention (DC) coalition, which came to power in 1996, Constantinescu had seen his popularity drop dramatically after a serious decline in living standards combined with the war in Kosovo (he backed it while the public did not). DC’s growing unpopularity had led its constituent parties to run separate lists in this summer’s local elections. Constantinescu’s announcement caught both allies and enemies by surprise. His party, the Christian Democratic–National Peasant’s Party (CD–NPP), had no likely successor in the wings, and the National Liberal Party (NLP), one of its former coalition partners, had already started to negotiate with the Alliance for Romania (AR) in the quest for a common candidate.

In a dramatic address, Constantinescu told Romanians that he was leaving political life altogether and had no intention of running for parliament or assuming the leadership of CD–NPP. He blamed his retirement on his failed campaign against corruption and the influence of the former secret-service networks—the Securitate. Earlier in the year, Constantinescu had told a meeting of supporters that the Securitate had defeated him. Critics assailed the speech, stating that it sent a message of helplessness and disguised the fact that Constantinescu was a victim of his own anticorruption rhetoric, which he had imbued with populist overtones, and of his willingness to make promises that were impossible to keep.

But Constantinescu’s allegations should not be taken lightly. A scandal implicating high-ranking officers in his personal protection service, known as "Cigarette Two," involved many former Securitate officers who were now members of a private security service. After the National Investment Fund (NIF) failed this summer, it became public that its leadership consisted mainly of former Securitate officers, and that the fund had relied heavily on the same network that was connected with "Cigarette Two." (For more on the NIF failure, see Romania Update, EECR, Vol. 9, No. 3, Summer 2000.) Constantinescu had appointed as directors of the main secret services two personal friends. These men lacked both the professionalism and the courage to reform the services, much less to use them to dismantle the unofficial networks that cut across the worlds of media, politics, and business. NIF’s crash sent hundreds of thousands of investors into streets, and rallies sometimes turned violent—reminiscent of the unrest that ravaged Albania after the collapse of the pyramid schemes.

Constantinescu’s abrupt withdrawal left room for a better-positioned candidate, but the parties within the coalition were unable to work in concert. Constantinescu supported the current prime minister and technocrat, Mugur Isarescu, but Isarescu hesitated. NLP then moved to name a prime minister–president team consisting of Isarescu and—for president—former prime minister Teodor Stolojan, a highly regarded politician who ran a caretaker government in 1991–92. After leaving the premiership, he held a position at the World Bank and then returned to Romania to join the board of a major domestic company. After NLP’s intervention and Isarescu’s refusal to join the team, Stolojan accepted NLP’s invitation and became their candidate for the presidency.

NLP’s projected merger with AR was soon aborted when AR party leader, Teodor Melescanu, decided to run as his party’s candidate for president. Isarescu was finally persuaded by Constantinescu and CD–NPP to run as an independent candidate who they, in turn, would support. Petre Roman insisted that he would run as the candidate of the Democratic Party (DP), despite his poor showing in preelection polls.

The small Social Democratic Party (SDP), which had taken part in government as an ally of Roman’s DP, decided to join forces with Iliescu’s PSDR in the upcoming elections. SDP’s prominent members were granted important seats on PSDR’s electoral lists. Despite being a historical party, SDP had not managed to woo away any voters from the postcommunist left in the last ten years.

CD–NPP labored desperately, deserted by LP, to assemble a new coalition under the banner of the lapsed Democratic Convention. It finally recruited four minor political parties, each unable to reach the new 5 percent threshold, and labeled the newly formed coalition CDR 2000. But the new electoral law, modified by a July 2000 government ordinance, not only raised the threshold for parties to 5 percent but also required coalitions to add 3 percentage points for the second coalition member and one extra point for each additional member. With this formula, CDR 2000 needed 10 percent to enter parliament.

In the elections on November 26, as polls had consistently predicted, Iliescu and his PSDR won the most votes. CD–NPP’s attempt to cobble together a coalition to enter parliament proved suicidal, as the other parties were not able to bring CDR 2000 enough votes to overcome the higher threshold requirement, and CDR 2000 failed to clear the hurdle. The xenophobic GRP, on the other hand, exceeded even its supporters’ most optimistic expectations. Just a week before the elections, most polls had given the party and its presidential candidate around 15 percent of the vote, although this had begun to increase in the days before the elections. The sudden upswing in GRP’s popularity awaits an explanation.

What is the difference between Iliescu’s and Tudor’s constituencies? Iliescu and PSDR scored high among older, rural voters and those who live in the east (Moldova) and south (Muntenia). Tudor, whose usual constituency includes current and retired army personnel and former secret-service informants, made important gains in the urban milieu. Exit polls revealed that Tudor is supported mainly by males between the ages of 50 and 60, residing in relatively well-off areas, with a medium level of education; he is especially popular among those who have attended vocational school. He was not supported by intellectuals and entrepreneurs but, rather, by the unemployed and the poor in small towns. In other words, Tudor is the favorite candidate of the poor in rich regions, and of individuals receptive to his conspiracy theories and paranoid outlook, which includes blaming the West and ethnic minorities for Romania’s troubles.

In the parliamentary race, PSDR won 36.9 percent of the vote, giving it nearly half of the mandates in parliament. GRP won 19.6 percent, for approximately one-quarter of the seats. DP won 7.1 percent; NLP, 6.9 percent; and the Democratic Alliance of Hungarians in Romania (DAHR), 6.4 percent. In the Senate, PSDR won 37.3 percent, which will translate into approximately 47 percent of the mandates in the upper house; GRP won 21.1 percent; DP, 7.6 percent; NLP, 7.5 percent; and DAHR, 6.5 percent.

Immediately after the results were made public, PSDR announced that its best option would be a minority government led by Adrian Nastase. It proposed to the "democratic opposition" (DP, NLP, and DAHR) a one-year nonaggression pact (something like the agreement between the Czech Social Democratic Party and Civic Democratic Party in the Czech Republic) based on the "National Strategy of EU Accession"—a document the Isarescu government had submitted to the European Commission last April. Actions judged to be "in the national interest" and promoting EU accession would be negotiated case by case with the opposition (excluding GRP). At the same time, the three parties would agree to avoid no-confidence votes. The opposition leaders also agreed to endorse Iliescu in the second round and sign a formal agreement to support Iliescu and a PSDR minority government. As it turned out, a preliminary list of Nastase’s cabinet disappointed many, since the names mentioned were all from Iliescu’s 1990-96 government, except for the minister of labor nominee, Alexandru Athanasiu, a new ally from SDP.vFew expected much activity in parliament’s fall session, given its ineffectiveness over the last four years, and the imminent election campaign. However, at the last moment, the coalition parties hastily tried to pass a few of the bills they had promised nearly four years ago when they first took office. The judicial-reform package was not one of them; in fact, it was dropped altogether, after it became clear this summer that Minister of Justice Valeriu Stoica (NLP) lacked the leverage to push the ambitious revision of the Criminal and Civil codes through the two chambers. However, Stoica, who had alienated his former coalition partners with his attempt to ally NLP with AR, had a surprise in store. He negotiated with PSDR (which has threatened that, once in power, it will revise, yet again, the property laws so as to eliminate the alleged excesses of the current government), and in October they joined forces to pass the long-delayed Law for Restitution of Illegally Seized Buildings. The law had been passed by the lower house, the Chamber of Deputies (Camera Deputatilor), last fall, and the Senate has finally adopted it in a compromise form. The deal among the parties was final; the mediation committee between the two chambers only had to seal it and send it to the president for promulgation. CD–NPP was absent from the final vote, and the Hungarian party withdraw in protest.

The final version is a far cry from CD’s electoral promises made in 1996. First, the law does not address the 1948 nationalization since it concerns itself only with nonresidential buildings confiscated—after the nationalization decree—on the basis of unrelated decisions or on no legal basis at all. (An earlier law, 112/1994, does, however, address residential buildings nationalized in 1948.) The new law includes, for the first time, nonresidential buildings, such as hospitals and factories. At the same time, PSDR asked that confiscated buildings now used by the state, political parties, or NGOs be exempt from restitution, although owners would be entitled to some compensation. The form of compensation has been debated for over a year: PSDR claimed that the value of these restitutions would amount to half the total budget—impossible for a state already strapped for cash. According to the final compromise, which was criticized for being ambiguous, owners may receive treasury bonds or shares in newly privatized companies. Economists strongly criticized the law, arguing that it further blurs the property regime in Romania. But the real losers under this law are the country’s Hungarian citizens, since most of the properties they could claim are former ecclesiastical schools now turned into public schools. The Hungarian government has issued a protest but to no avail.

Parliament also tackled the NIF investment-fund case. A committee led by Alexandru Sassu (DP) firmly established the state’s responsibility in the mismanagement of NIF, the country’s largest investment fund. The commission in charge of supervising such funds, which should have noticed the malfeasance at NIF, however, is not under the National Bank’s control but is, instead, supervised by a parliamentary committee. According to the Sassu committee, the director of the commission that supervised NIF was well aware of the fund’s problems.

Parliament wanted to recompense the defrauded investors from government coffers, but Isarescu resisted this measure, suggesting another solution. Cheated investors who earn less than the poverty level will receive credits from a state bank with the guarantee of the Ministry of Finance. Yet the total sum of these credits may not surpass the amount realized from the liquidation of NIF’s assets and the damages paid by managers. The remaining investors may recover their money but must sue individually. The solution was not welcomed by the former investors, given that trials will surely be lengthy and possibly ineffective. Moreover, the fund’s chief manager escaped abroad, and it is unclear whether she will be apprehended or compelled to return the money.

This scandal shook the Romanian political establishment to the core. The list of the "insider" investors—those who benefited from high rates of return and retreated just before the crash—is secret, but many newspapers managed to get some names and have been printing them. The most controversial figure is Sorin Ovidiu Vantu, the founder of NIF and another investment fund, Gelsor, and a would-be media mogul who has sponsored many political parties and public figures. Vantu’s companies, family, and friends withdrew their money from NIF a few weeks before the manager took off with the rest. Vantu is currently under investigation, but most suspect that he can pull enough strings to keep himself out of trouble.

On the eve of its recess, the Chamber of Deputies also made headway on a different though still controversial front—it approved a change to the procedure for regulating parliamentary immunity. The previous requirement (two-thirds of all deputies must vote to lift immunity) was nearly impossible to achieve due to absenteeism in the legislature, and CD–NPP has long wanted to enact a simple majority rule—50 percent plus one of legislators present. PSDR finally agreed on the condition that the new rule would only be applied after the elections—assuming that they would likely win a majority. Several PSDR members are currently under investigation for various criminal charges. The most notable is former prime minister Nicolae Vacaroiu (in power 1992–96), who is charged with breaking the embargo on Yugoslavia through his involvement in a firm trading oil there.

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