The National Anti-corruption Directorate (DNA) prosecutors have initiated the precautionary attachment procedure on part of the assets belonging to Elena Udrea, Ion Ariton, Rudel Obreja and three other defendants, in the Gala Bute case prosecuted for transactions between state institutions and private companies participating in the organisation of ‘Gala Bute’, a sportive event organised by the company of the former President of the Romanian Boxing Federation, Rudel Obreja, and which benefited from an important financial support from the state.
“The anti-corruption prosecutors have initiated the precautionary attachment measure on part of the movable and immovable assets of the following defendants, in the Bute Gala case: Elena Udrea, Rudel Obreja, Cornel Resmerita, Miron Dorel Gardean, Miron Lupulescu and Ion Ariton,” the DNA told Agerpres on Friday.
Elena Udrea is currently under preventive arrest, former president of the Romanian Boxing Federation (FRB) Rudel Obreja and Lupeni city mayor Cornel Resmerita were arrested in the same case, while Stefan Lungu, a former advisor to ex-Minister of Regional Development and Tourism Elena Udrea, and Gheorghe Nastasia, a former Secretary general with the Ministry of Regional Development and Tourism (MDRT), are under house arrest.
Ex-Economy Minister Ion Ariton is prosecuted for having intervened for the illegal sponsorship of Gala Bute . He made the representatives of ten state-owned companies, including Hidroelectrica, Nuclearelectrica and Romgaz, to illegally sponsor with a total of over RON 1.7 M the organisation of Gala Bute by Rudel Obreja’s company, according to DNA.
The deeds under the spotlight, connected to illegal award and use, between 2010 – 2012, of funds under the management of the Ministry of Regional Development and Tourism
According to a DNA release on February 2 the request for the start of prosecution for the six persons above proceedings referred to crimes of abuse of power and drawing of undue benefits for self or others, the attempt to use fake documents, the submission of inaccurate, incomplete or false statements for unduly accessing funding from the EU budget and graft.
The deeds under the spotlight are connected to the supposedly illegal award and use, between 2010 – 2012, of funds under the management of the Ministry of Regional Development and Tourism.
“On June 24, 2011, the Ministry of Regional Development and Tourism awarded a contract worth 10,175,168.44 lei under which company SC Europlus Computers SRL [owned by then head of the Romanian Boxing Federation Rudel Obreja] was to provide services for Romania’s promotion in the events that were to accompany the International Professional Boxing Gala organised by the Romanian Boxing Federation. The contract was awarded without negotiation and without the publication of an advertisement, and the amount was to be repaid from European funds. Under this contract, on February 1, 2012, the Ministry of Regional Development and Tourism paid 8,116,800 lei for the promotion services. The public funds were used in a manner that is prohibited by law, specifically for the financing of a sports event organized by a trading company and the amount transferred under the contract represents in its entirety a loss to the Ministry’s assets,” the release reads.
DNA shows that the real purpose of the contract’s conclusion was that of ensuring the necessary funds for the organization of the said boxing gala and the procurement of advertising services was actually just a formal smokescreen, because Ministry did not really need such services and the sole purpose of such actions was to give all these moves the appearance of legality. The anti-corruption body holds that Elena Udrea was actually after electoral benefits, seeking to link her name to that of high-profile boxer Lucian Bute, who was to be the top attraction of the gala. The contract was pushed through under the umbrella of the project “Promoting Romania’s tourism brand” that was supposed to get funding from the European Regional Development Fund.
Yet, the prosecutors note that “the contract was allegedly awarded in breach of legal public procurement procedures and the services acquired are not included in the categories of expenditures that are eligible for European funding programs. These circumstances entailed the refusal of the managing authority of European funds to settle the amount, so that, because of the public servants’ faulty on-the-job acting, the said amounts were fully covered from the state budget. The criminal investigations conducted so far revealed that then Minister of Regional Development and Tourism Elena Udrea had the most important contribution to the perpetration of these deeds and the final outcome.”
The cited source underscores that Elena Udrea decided to have the gala organised following informal talks with Rudel Obreja, that she pressed for the passage of the regulatory acts that defined the legal framework for the financing of the event, repeatedly asked the public servants reporting to her to meet Rudel Obreja to identify solutions for the contract’s conclusion and directly participated in the establishment of the budget the Ministry of Regional Development and Tourism was to assign outside the regulated public procurement procedure.
The existing evidence also shows that Elena Udrea used her influence as a Minister and Deputy Chairperson of the party at rule on a bank decision-maker and the Ministry’s Secretary-general to elicit the fast-track grant, to S.C. Europlus Computers S.R.L, of a bank loan under more favorable than usual terms, reports Agerpres.
DNA: Ex-Economy Minister Ion Ariton put pressure on state-owned companies to sponsor Bute Boxing Gala
Regarding the prosecution of Senator Ion Ariton, a former Minister of Economy between September 2010 – February 2012, on counts of facilitating abuse of power and graft in the Bute Boxing Gala case, DNA release shows that in his capacity as Minister of Economy, Ion Ariton has determined the representatives of 10 companies under the authority of the Ministry he was heading (Hidroelectrica, Transelectrica SA, Nuclearelectrica SA, Transgaz SA, the Turceni Energy Complex, the Rovinari Energy Complex SA, Romgaz SA, Oil Terminal, IAR Ghimbav SA and the National Society of Mineral Waters SA) to sponsor with a total of 1,742,830 lei the organization of the international professional boxing gala organized in Bucharest on July 9, 2011, featuring notorious power-puncher Lucian Bute as the main attraction.
The prosecutors argue that given that the event was organized by the privately-owned company SC Europlus Computers SRL, which was the real beneficiary of the sponsorship, the sponsorship of the boxing gala was actually prohibited by Law No. 32/1994.
Thus, according to Art. 3, Paragraph 2 of the aforementioned law, state-owned trading companies are not allowed to engage in sponsorship activities the beneficiaries of which are privately-owned trading companies.
According to the DNA release, although the real beneficiary of the sponsorships was company SC Europlus Computers SRL (holder of the exclusive rights to organize the event and which entirely collected the gala revenues), the Romanian Boxing Federation was interposed in the scheme so as to bypass the imperative requirements of Law No. 32/1994 and create the appearance that the financial support was directed to a non-profit legal persons.
In this context, the total amount of 1,742,830 lei, which had been provided in sponsorship, represents loss to the aforementioned companies, and at the same time an undue benefit to Europlus Computers manager Rudel Obreja, as the sponsoring of the gala was prohibited by law.
The funds obtained were used to cover the costs of the event’s organization, with Europlus Computers SRL being the sole beneficiary of the gala revenues which were in the end transferred into the accounts of manager Rudel Obreja.
In connection with the crime of graft, DNA shows that, in order to determine the company representatives to bend to his requirements, Ion Ariton used his authority and influence derived from his positions as Minister of Economy, Senator and president of the Sibiu county branch of the party at rule at that time.
“By using authority and influence, Ion Ariton pursued the illegal transfer of 1,742,830 lei into the accounts of SC Europlus Computers SRL,” concludes the DNA release.
Former Regional Development and Tourism Minister Elena Udreaa: Bribe taking crimes, false documents, use of influence in order to attain undeserved benefits
In addition, DNA has requested on February 16 the approval to start legal pursuit and preventive arrest of the former Regional development and Tourism Minister Elena Udrea for three new bribe-taking crimes in Bute Gala case, a press release issued by the Prosecutors’ Office announced. The crimes are mentioned in contracts the Ministry of Development had signed with three companies.
“The present request is formulated in a case of legal pursuit relegated to the supposedly illegal attribution and use of funds in the patrimony of the Ministry of Regional Development and Tourism, during 2010 – 2012. We mention that, in the respective cause, the Chamber of Deputies approved the criminal pursuit and preventive arrest for abuse of office crimes; an attempt to use documents or false statements, inexact or incomplete, in order to unruly gain funds from the budget of the European Union, the use of influence in order to attain undeserved benefits; bribe-taking.
Afterwards, new elements appeared, leading to the suspicion that other deeds were committed, not known at the time the Chamber of Deputies was notified. Some of these deeds are included in the content of the bribe-taking accusation the approval of the Chamber of Deputies was granted for and complete the objective side of this accusation, and the remaining deeds reunite the constitutive elements of two other bribe-taking crimes”, the presentation issued by the Prosecutors’ Office shows.
Here are the three new bribe-taking accusations:
a) Bribe-taking connected to financial support granted by the Ministry of Regional Development and Tourism for the contracts signed by Termogaz Company S.A. with UAT Cavnic and UAT Borsec
In the year 2010, Udrea Elena Gabriela indirectly received, for herself and for others, material benefits from the representatives of S.C. Termogaz Company S.A., to approve financing in due time for contracts of works signed by this company with several administrative territorial units, in the program “Ski for Romania”. During August 24, 2010 – December 20, 2010, S.C. Termogaz Company S.A. transferred the sum of RON 695,367.06 in the patrimony of defendant Lungu Stefan, the Minister’s personal advisor, by means of several fictitious purchase contracts, by which a company controlled by an intermediary was interposed in the relations of Termogaz Company and its usual suppliers. The mentioned sum represents 10 pc of the value of payments made by the Ministry to UAT Cavnic and UAT Borsec from the value of the works performed by Termogaz Company S.A.
b) Bribe-taking related to the payments made by the National Investments Company to S.C. Consmin S.A.
During 2010 – 2011, Udrea Elena Gabriela, along with Topoliceanu Ana-Maria, manager of the National Investment Company (a suspect in the present case), received a sum of approximately RON 300,000 from the manager of S.C. Consmin S.A., in order to ensure payment in due time of the works completed by the mentioned company, based on the contracts signed with the National Investment Company.
c) Bribe-taking related to financing provided by the Ministry of Regional Development and Tourism for contracts signed by Termogaz Company S.A. And S.C. Kranz Eurocenter S.R.L. with UAT Lupeni and UAT Petrosani.
Throughout the year 2011, Udrea Elena Gabriela demanded and received from defendant Gardean Adrian, for herself and for other, undeserved benefits of 10 per cent of the payments made by the Ministry for contracts signed by S.C. Termogaz Company S.A. and S.C. Kranz Eurocenter S.R.L., in return for the guarantee that payments would be approved in due time. Thus, on February 7, 2011, Udrea Elena Gabriela demanded Gardean Adrian to make several “sponsorships” from the sums received from behalf of the Ministry, mentioning that he needed to discuss details with Nastasia Gheorghe, Secretary General of the Ministry. Afterwards, Udrea Elena Gabriela demanded Nastasia Gheorghe to let Gardean Adrian know that the demanded sum totalizes 10 per cent of the value of payments due to be made in 2011.
According to the National Anticorruption Directorate (DNA), in 2011, Nastasia, who back then served as MDRT Secretary-general, requested from representative of Termogaz Company SA Adrian Gardean approximately 10 percent of the of the company’s receipts in exchange for the promise that he will facilitate the approval of financing for the works carried out under the “Ski in Romania” program.
Gheorghe Nastasia told Adrian Gardean that an indicative 3,000,000 lei had to be paid to Rudel Obreja’s company Europlus Computers SRL, as sponsorship for the Bute Boxing Gala.
SC Termogaz Company SA concluded over 2010 – 2011 several public procurement contracts financed from MDRT funds under the “Ski in Romania” program, with the most important such contracts referring to the fitting out of the ski estates in the tourist areas Gutaiul Doamnei and Straja, as well as of a ski lift slope in the Borsec resort.
Also, former Minister Elena Udrea’s personal advisor Stefan Lungu received in 2010, in two installments, a total amount of 695,367.06 lei from SC Termogaz Company SA representatives Adrian Gardean, Miron Gardean and Miron Lupulescu in exchange for the promise that he will talk MDRT senior officials into approving the funding of works contracts concluded by the respective company with several territorial administrative units.
The investigators note that several fictitious procurement contracts were drafted in order to conceal the true nature of these payments.