The RAFO CONNECTION

Wednesday, October 8 2003: Organized White Collar Crime

The RAFO CONNECTION

By Paul Cristian Radu (paulradu@crji.org) and Valentin Zaschievici

The collapse of the BANCOREX, one of the leading Romanian state owned banks, in the late ‘90s, meant over 2 billion US dollars losses for the pockets of the Romanian citizens. Nowadays, the same people, the experts that led BANCOREX to disaster, regrouped and initiated new financial scams that led to enormous losses for Romania.
Our investigation went from Romania to Vienna, Austria, where, after the 2000 political election, the persons behind the BANCOREX collapse regrouped under the umbrella of a company that is active in the oil business. The results: a brand new hole, of thousands of billions lei, in the Romanian economy, two oil refineries on the edge of the bankruptcy and another bank that collapsed.

It’s a beautiful September morning in Vienna. The old Viennese Stock Exchange building opened up its gates for the people that arrive here, on bikes or in latest models of Mercedes, to start their business day. The corridors are invaded by people that stroll through the walls, through metallic plates that lead them to the offices of world’s most famous companies. On the right there’s Symantec, one of the leading anti-virus software’s producers, on the left it’s Reuters, leader on the news market, upstairs is Nikkei, the Japanese business symbol. The corridors on the ground floor lead us, though, to a wooden massive door, behind which lie the answers to Romania’s worst financial disasters. Behind the door there’s a decade of corruption and a group of people that masterminded the collapse of a big chunk of the economy. Next the door there’s a metallic plate on which it is inscribed:

*RAFO GMBH

The RAFO GMBH company has been established in November 2000, only one week after the PSD(which was the ruling party between 1989-1996) won the parliamentary elections and one year before the RAFO Onesti refinery(one of the biggest refineries in Romania, situated in the city of Onesti) was officially privatized.
The year 2000 was a very rough year for the RAFO Onesti workers. At that time, the refinery was still state owned and the workers were out on the streets, marching and shouting: “We want to work!; Onesti, don’t forget, RAFO is your chance!”. The conflict situation culminated when the revolted workers blocked a national road.
In the meantime, quietly, one thousand kilometers away from the protests, a deal, involving big names and big money, was done.

The Band of Ten in Wien

According to records from the Austrian Chamber of Commerce, the RAFO GMBH company has been established on the 20th of November 2000 and has its headquarters in the center of the Austrian capital, at Schottenring 16, in the building of the Vienna Stock Market. The president of the company, that has a social capital of 281,000 EURO, is the Austrian citizen, Levente Solyom. Also, in the company, there are: Corneliu Iacobov, Razvan Temesan, Andrei Serban, Toader Gaureanu, Gheorghe Chealfa, Marin Marin, Bogdan Iuliu Dumitrescu, Costel Bancila si Ioan Teodor Caramizaru. Together with them, in the RAFO GMBH, there is associated, as a juridical person, the RAFO Onesti, the Romanian refinery. In fact, RAFO Onesti holds 49 per cent of the company, while the majority, of 51 percent is held by Iacobov, Temesan and Comp.

The Financial Disasters Experts

Corneliu Iacobov. The Moldavian businessman is the owner of the RAFO Onesti refinery, that currently has 6,000 billion lei worth debts to the Romanian state. This is one of the main “black holes’ in the Romanian economy. Iacobov, also, led to disaster another refinery, the Darmanesti refinery, that had to close its gates because it has 3,000 billion lei worth debts to the state.
But Iacobov is one of the main sponsors for the ruling party, the PSD. He, officialy, contributed to the PSD 2000 electoral campaign with 75 million lei.
Despite the debts he has to the state, Iacobov is the owner of the only five stars hotel in Romania and is organizing the RAFO auto rally.

Razvan Temesan. He is nicknamed the “Bancorex Undertaker” but is considered by the Romanian president, Ion Iliescu, “one of the best qualified managers that the Romanian banking system ever had”. Temesan’s name is associated to the biggest banking collapse in the history of Romania that led to the disintegration of Bancorex and to the biggest financial loss in the history of the country: over 2 billion US dollars. Temesan had to do, as well, with the collapse of another bank, Banca Romana de Scont(BRS), for which he was the main financial consultant. The BRS file is currently pending between Supreme Court of Justice and the National Anti-Corruption Prosecution.

Levente Solyom. The name of the president of RAFO GMBH is linked to a loan that was taken, after Iacobov’s intervention, from Temesan’s Bancorex. The money was never returned.

Andrei Serban. His name is connected to a 300,000 US dollars loan taken from Bancorex on the same way like Solyom. Serban is also a PSD sponsor and Iacobov’s right hand.

Bogdan Iuliu Dumitrescu. He was a director of the Unirea bank and had to do with the collapse of this bank. The Unirea bank has been established by Iacobov, while he was the president of the Private Property Fund II(FPP II, the FPPs were early forms of privatizations in Romania, the FPP were established in order to manage the so-called “property coupons” that were given to all Romanian citizens and that meant the citizen is a shareholder of the State property.

Marin Marin. He was, until August 2003, the head of APAPS Bacau (this is the state agency that supervises the privatization process), the representative of the Romanian state. In 2001, when RAFO Onesti was bought by Iacobov, the state decided to erase the debts that RAFO had to pay. The state erased 3,000 billion lei debts and the refinery was, practically, given as a gift to Iacobov. This move can be better understand if we take into consideration the fact Marin Marin, the State representative, has been an associate of Iacobov even from 2000 when they established together RAFO GMBH. Despite this, right now, RAFO Onesti has more than 6,000 billion lei debts to the state.

Toader Gaureanu. He was, until three weeks ago, the general director of RAFO Onesti. Right after we questioned him about the RAFO GMBH affaire, Gaureanu left his position. He now works for a company that imports oil for RAFO.

All the Others. Are very colse to Iacobov’s businesses. They are all tied to the structures created around RAFO Onesti.


*A Complete Cycle of Corruption

The RAFO GMBH is one of the clearest examples of how the Romanian state is defrauded without anyone being made responsible for it. In fact, RAFO GMBH is the foreign link of a complete corruption circle.


THE FIRM. Our investigation found that the president of RAFO GMBH, Levente Solyom, has established a number of companies in Romania. Among these we identified the AUSTROM 95 SA, a company from the town of Tusnad, Harghita county, of which Solyom was a majority shareholder and president. According to the document 8.5.1.6 from the SIF Moldova(former FPP II, that was headed by Iacobov), AUSTROM 95 SA borrowed, few years ago, 470,000 US dollars from the Temesan’s Bancorex. The money was given to Solyom’s company after the FPP II guaranteed, under Corneliu Iacobov’s signature, for the AUSTROM 95 SA’ solvability. The money was never returned to the Bancorex and the bank collapsed because of the never repaid loans(of which lots were given under Iacobov’s signature) of the same kind.
THE BANCRUPTCY. Nowadays, the Romanian state sued the SIF Moldova(former FPP II) in order to recover the Bancorex money. There’s a little problem though: the AUSTROM 95 SA company has disappeared a while ago. It went bankrupt. This situation and the fact that Solyom is now associated with Razvan Temesan and Corneliu Iacobov in the RAFO GMBH company, points out the direct connection between the former BANCOREX president, the unpaid loans from this bank and the fact that Temesan is still compensated for his services. In fact, during Temesan’s presidency hundreds of loans were given to PSD officials, military and police officers and companies with strong ties to the PSD.
CLAIMS. It should be said that Razvan Temesan was arrested four short times for the Bancorex collapse. This happened during 1996-2000 government. He was tried in 17 cases. After the PSD came back in power, in 2000, Temesan was cleared in all this cases in a clear political move. After that, Temesan even declared that he’s going to sue the Romanian state to the European Court in Strasbourg in order to be repaid for the damages he suffered. So far, though, the compensations come through RAFO GMBH.

It should also be mentioned here that, while Corneliu Iacobov was the head of FPP II, he guaranteed for companies that took more than 20 million US dollars from Bancorex. This money was never returned. The money went on the same path as the money taken by Solyom’s Aust-Rom 95 SA. All the other companies erased their traces just like Solyom’s company so that the state can recover nothing.
THE SCHEME. As a conclusion we can say that RAFO GMBH is the place where the creditor-Temesan meets the debtor-Solyom and the intermediary-Iacobov. The three of them, backed by the state representative-Marin Marin, created a dirty business scheme that targeted BANCOREX, RAFO Onesti, the Darmanesti refinery, FPP II and other banks and finally defrauded the Romanian state of huge amounts of money.

*”It’s none of your business”

Very few of those involved in the RAFO GMBH affair wanted to speak about it. Corneliu Iacobov declined all our invitations and never answered his mobile phone. Our attempts to contact him through his business associates hit a stone wall, too. We managed to get on the phone Razvan Temesan but he told us that journalists should know that they should take into consideration “auto-censorship”. He told us that he is convinced that the investigation on RAFO GMBH is sponsored by his rivals. Temesan refused to tell us about the circumstances that led him to entering the business with Levente Solyom.
Levente Solyom declined to talk to us even when we went to Vienna. He told his secretary to tell us that he is on a business trip despite the fact that we saw him in Vienna. The night before he was in the courtyard of his fancy villa in the 19th district, the most expensive neighborhood of Vienna.
Marin Marin said he has nothing to tell us.
Andrei Serban said that, indeed he is associated in RAFO GMBH, but that he doesn’t know anything about this company.

Toader Gaureanu. The former general director of RAFO Onesti told us that our work is in vain because no newspaper will publish the story because the paper for newspapers is made at the Letea factory.(the Letea factory, the only factory for newspaper paper is owned by a person that is related to Corneliu Iacobov)