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Ode to Basescu |
 In
describing the great American President, Theodore Roosevelt, Henry Adams
wrote: “[Roosevelt's] vitality was [intense] . . . and he was about
as subtle, culturally speaking, as a bull moose; yet there was no
denying his originality, and his extraordinary ability to translate
thought into deed -- with such blinding rapidity, sometimes, that the
two seemed to fuse. Roosevelt had that singular primitive quality that
belongs to ultimate matter.” Adams’ description of Roosevelt could
apply to Romania’s new President, Traian Basescu, whose leadership style
and temperament are reminiscent of the American “Rough Rider”. President
Basescu’s zeal and determination to solve Romania’s deep-rooted problems
of poverty and corruption resonate through his plain spoken,
down-to-earth, no nonsense manner. Without any of the airs of
self-importance that afflict some Romanian political leaders, this man
tells you where he stands, and where he expects to take the country, in
clear and understandable language, and then he goes about the business
of doing just what he says he is going to do.
The President’s approach is indicative of his background – he is a man
of the people -- a former sailor who rose to command the largest ship in
the Romanian fleet. He is perfectly comfortable sitting around a table
with young people at a beer festival or celebrating New Year’s Eve
amidst a throng of exultant citizens in the center of Bucharest. Traian
Basescu stands virtually alone among Romania’s leaders in his ability to
communicate straightforwardly with his people. This facility will prove
indispensable in the struggles that lie ahead for the country.
Although formerly a rank-and-file communist party member -- like
millions of his countrymen -- he was otherwise not associated with the
former communist regime. After the Romanian revolution, Mr. Basescu
served as the nation’s transport minister, and in 2000 he was elected
mayor of Bucharest where, although thwarted by the central government
which was in the hands of his political opponents, he fought
relentlessly to rebuild the city’s decaying infrastructure. Some people
described him as Romania’s Rudolph Guliani because of his uncomplicated
approach and somewhat irascible manner when confronted with futile
obstacles to needed reforms. It’s a good comparison. When the central
government blocked his plans to improve the city’s central heating
system, he went over their heads and asked citizens to sign a petition
shaming the government into agreeing with his proposed improvements.
Yet these strengths have led some people to question whether Mr.
Basescu’s “can do” attitude fits the role of the President of Romania as
laid out in the nation’s constitution? The Romanian constitution
provides that the president is the head of state -- not the chief of the
government -- and delineates only a few specific responsibilities for
the presidency. These ostensible constitutional limitations have not
stopped President Basescu from exercising his leadership in his
inimitable way. In part, it is Mr. Basescu’s buoyant personality that
unavoidably results in a broader role for the Romanian presidency than
in previous administrations. We believe – and we think that President
Basescu does too -- that this broader vision of the role of the
presidency is what Article 80 (2) of the Romanian Constitution actually
envisions in stipulating that: “The President of Romania shall guard the
observance of the Constitution and the proper functioning of the public
authorities. To this effect, he shall act as a mediator between the
Powers in the State, as well as between the State and society.” These
words require action, not merely reaction, from the head of state. And
action is what Traian Basescu is displaying to the government, the
Parliament, the judiciary, and the people – and, quite frankly, it is
only this sort of action that can effectuate the rapid changes now
required of Romania by the European Union, its other Western allies, and
its people.
In analyzing the proper role of the presidency in Romania, we ought to
keep in mind that the president is the only person elected nationwide by
the citizenry and, once elected, he must remove himself from membership
in any political party. The President is supposed to be the unbiased
guardian of the rights of all Romanians and the protector of the
nation’s institutions. His job is to articulate the hopes, aspirations
and expectations of the Romanian people. Teddy Roosevelt once said: "The
government is us...You and me!" (quoted in Edmund Morris’, “Theodore
Rex”). Traian Basescu seems to act out of a similar belief. |
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Combating Official Corruption |
Within a few days of taking office, President Basescu set about the task
of dealing with the single largest obstacle to Romania’s progress and
the most significant impediment to the large scale investment by small
and medium sized businesses that Romania desperately needs -- rampant
official corruption. Within a few weeks, he was criticizing his own
government for failing to move fast enough to reign in the corrupt
forces that have crippled the nation for fifteen years. He even
suggested that there might be changes required in the ministerial
leadership – just two and a half months after the government was formed.
The President then took the bull by the horns and announced the creation
of a new institution that would investigate the wealth of public
officials, and require new personal wealth disclosures -- the strictest
in Europe – that will require substantiation for the sources of all
current income as well as the basis for the overall worth of officials
and their families. The President next asked for the assistance of
Interpol and highly skilled British investigators to find illegally
obtained monies squirreled away by former public officials. Notably, Mr.
Basescu says that he is even more concerned about impeding the potential
unsavory “clientele” of the new government than he is about tracking
down the perpetrators of past corrupt acts. To that end, on March 30,
2005, at a government meeting presided over by President Traian Basescu,
a National Anti-Corruption Strategy and a Strategy for Reform of the
Justice System was adopted in line with EU suggestions.
In a stunning move, the government froze the assets of 42,000 companies
that owe back taxes to the state of approximately US$4.5 billion, and
gave them a few weeks to pay up or risk liquidation. Eleven of Romania’s
division level soccer clubs were caught up in the net. The President and
Prime Minister Calin Tariceanu have both said that nobody in the
country, including soccer clubs, will be allowed to avoid their fiscal
responsibilities to the Romanian state. One team owner scoffed at the
prospect of the government risking the outcry of millions of fans if it
tried to liquidate his popular soccer team for its failure to pay its
taxes – as he drove off in his new Mercedes Maybach. He ought to read
this article.
But why are Traian Basescu’s intentions any different from those of
former President Ion Iliescu who spoke out strongly against official
corruption, but failed to follow his words with any significant deeds?
(See The Romanian Digest™,
January 2003, Vol.VIII, No. 1) Without in any way diminishing what
we believe to be President Basescu’s sincere disgust for official
corruption, recent Romanian history has taught that no President (or
designated successor) can be reelected if corruption taints his
government. While the government of former Prime Minister Adrian Nastase
performed exceedingly well in many significant areas, its utter failure
to stem the tide of official corruption – perceived by knowledgeable
observers to have grown to unfathomable proportions -- doomed the
presidential candidacy of Adrian Nastase. The lessons are clear – if
Traian Basescu wants another five-year term in office, he had better
deal with official corruption in palpable ways that will result in a
very clear perception that the situation has substantially improved, and
that past and current wrong doers – no matter who they might be – are
being prosecuted to the fullest extent of the law. It does not take much
foresight to see that in the not-too-distant future, Romanians will
witness serious prosecutions of former and some current officials based
upon evidence obtained with the help of major international law
enforcement agencies. Romania needs to do this, its people demand it,
and President Basescu surely understands that he has no choice but to
proceed forcefully. |
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Other Problems to Solve |
On the surface, Romania’s prospects appear to be quite good. The economy
has grown by more than 5 percent every year since 2001. The country is a
member of NATO and EU membership seems likely. Indeed, this month,
Romania will sign the official accession treaty with the European Union
for entry in 2007 – a target date for which Romania is by no means
ready. At the moment, Romania fails to meet virtually every objective
test for EU admission. Its economy is a mess and official corruption has
been so rampant, that even EU members with major corruption problems of
their own are forced to blush. Beneath the surface, the country is a
calamity in-waiting. Corruption and a continuingly burdensome
bureaucracy have driven roughly half the economy underground. Moreover,
the Romanian government must end state subsidies to inefficient
state-owned institutions, close some and privatize others, as well as
reduce bloated public-sector employment – all of which will throw
thousands of people out of work.
"It is time for a new way of government in Romania," President Basescu
told voters. And that seems to be what is happening. Dispensing with
veterans from prior administrations, Mr. Basescu’s ally, Prime Minister
Tariceanu, appointed politically untainted young people to the most
significant ministries: a 36-year-old Oxford-educated historian as
Foreign Minister, a 44-year-old Justice Minister, and a 40-year-old
Finance Minister. Within hours of being sworn in, the new government
introduced a 16 percent flat tax on personal and corporate income. Among
the lowest in Europe, it is modeled after successful initiatives
elsewhere in the region, with the goal being to shrink the black market,
reduce tax fraud and spur local and foreign investment.
Satisfying the EU and making the IMF happy by raising burdens on an
already intolerably burdened populace, while at the same time making
them understand that all that is happening will, ultimately, inure to
their benefit, will require incredibly deft leadership. |
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Success in Washington |
 Last
month, President Basescu came to Washington, DC, as the official guest
of the President of the United States. Inexplicably, some in the
Romanian media labeled the visit as a failure. This imperceptive
mischaracterization of the visit prompted this article. No one who has
experienced all of the visits of Romanian heads of state or heads of
government since 1990 could have been anything but impressed with the
reaction of official Washington and the business and ethnic communities
to Traian Basescu. Indeed, before the President’s arrival, most
observers in those constituencies had either a neutral or even a
negative impression of Mr. Basescu. One would be hard pressed following
his visit to find anyone in the United States who does not harbor
feelings of hope, expectation and even affection for the President.
Most significantly, Mr. Basescu hit it off with President George W.
Bush. Here is a bit of what President Bush had to say publicly to
President Basescu:
“I am impressed by your leadership. I am grateful for your
friendship. Romania has been a steadfast ally of freedom. . . . I told
the President I’m most impressed by his campaign to rid the government
of corruption in Romania – a steadfast, strong commitment. He believes
in transparency and rule of law, and that is very important for American
companies looking for a place to invest to hear from the leader of the
country. But the thing about this president, he’s more than words –
he’s action. And also, Mr. President, I welcome you to the Oval
Office, I thank you for your friendship and I’m proud to call you
friend. . . . I'll never forget my trip to Bucharest -- it was the
rainbow speech. It was a mystical experience for me. It was one of the
most amazing moments of my presidency, to be speaking in the square, the
very square where Ceausescu gave his last speech. And the rainbow that I
saw in the midst of the rainstorm ended right behind the balcony from my
point of view. It's a clear signal that, as far as I was concerned, that
freedom is powerful and –[-PRESIDENT BASESCU: It meant the signal of
destiny, Mr. President.] Well, we'll see. But my point to you is, is
that I was there to assure the Romanian people that we were an ally and
that the Romanian people need not worry about their security, that the
United States, through NATO and through bilateral relations, was
committed to the security of our friend. So the people of Romania need
to know that the days are passed when -- you know, when outside forces
could threaten them without help. . . . I view Romania as a special
ally because Romania shares the same values that we share: human rights,
human dignity, rule of law, transparency in government, anti-corruption.
And this President, I think, is a special leader because he has made a
commitment to those values. We want to work with our friends in the
region to bring stability and peace. And I value his advice and
judgment. I mean, he's no better person to listen to on issues such as
Moldova than the neighbor of Moldova. ‘ . . . And so this is a
special relationship because of the shared values, and I am honored to
call the President my friend, and I'm honored to call Romania a strong
ally. (Emphasis added)
These are truly extraordinary words of support and affection from the
President of the United States and unlike any heretofore heard from a US
President addressed to a Romanian official. Acknowledging this, some
critics nevertheless felt that President Basescu walked away from
Washington with nothing tangible. That is simply not true. Indeed, the
most significant thing that President Basescu wanted from President Bush
was a commitment to work with Romania to stabilize the frozen conflicts
in the Black Sea area, and he got it. There is little doubt that the
United States has now resolved to end what President Basescu calls the
“black holes” of Europe, chief among them being the untenable situation
in the Transdniester region of Moldova. As President Basescu told the
Council on Foreign Relations, “The persistence of lawless black holes
threatens the security of Europe by the spilling over of organized
crime, human and arms trafficking, and transnational terrorism.” He
urged the US and the EU not to leave “. . . the countries of this region
as victims of European history, as unstable borderlands outside Europe.” |
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Can Basescu Succeed? |
 The
greatest difficulty facing President Basescu is the power of the
entrenched mafia-like syndicates of entwined business and government
relationships that have placed personal greed above the common good for
fifteen years. They are incredibly strong and efficient opponents that
could overwhelm our sea captain with a Romanian-style tsunami.
Nevertheless, it took the single-mindedness of Theodore Roosevelt to
overcome the corporate trust syndicates that had a stranglehold over the
American economy and government in the nineteenth century. It is
Roosevelt who bears the nickname, "Trust Buster" and it is Roosevelt who
destroyed the corporate monopolies of Rockefeller, Carnegie, Schwab,
J.P. Morgan's Northern Securities Company, and other nineteenth century
trust and corporate titans of industry. A leader that has his people
behind him, and the skill and determination to succeed, has a very
potent arsenal.
During the President’s visit to Washington, D.C., Mr. Basescu was asked
to assess what might happen if he failed in the enormous tasks before
him. True to character, the President said: “I was a captain of a large
oil tanker for many years, and never once did I fail to reach my
destination." |
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Editors Note: It is our policy not to mention our clients by name in
The Romanian Digest™ or discuss their business unless it is a matter of
public record and our clients approve. The information herein is correct
to the best of our knowledge and belief at press time. Specific advice
should be sought from us, however, before investment or other decisions
are made.
Copyright 2005 Rubin Meyer Doru & Trandafir, societate civila de avocati.
All rights reserved. No part of The Romanian Digest™ may be reproduced,
reused or redistributed in any form without prior written permission
from the publisher.
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