Probe into Romania's role in breaching YU sanctions

BUCHAREST, May 29, 2000 -- (AFP) Romania's role in breaching UN sanctions against Yugoslavia is coming under the spotlight as part of a scandal which is rocking the country's political establishment, officials said Friday.

A businessman at the center of the scandal, Adrian Costea, already faces charges of money-laundering and theft in France over multi-million dollar deals with the Romanian state.

But new investigations have found evidence that Costea, an Israeli-Romanian citizen, also organized on behalf of the regime of former president Ion Iliescu deliveries of Russian oil to Yugoslavia using front companies and false bills. Iliescu is an old friend of Slobodan Milosevic.

"The violation by Romania of the embargo against Yugoslavia was a political decision at the highest level," said former intelligence chief Virgil Magureanu.

The UN Security Council imposed stringent sanctions on Belgrade in 1993 over its involvement in the war in Bosnia-Hecegovina. Iliescu was Romania's president from 1990-96.

Investigators have so far determined that 695 train carriages carrying 36,500 tonnes of fuel were smuggled through the Romanian-Serb border crossing of Jimbolia. Trains accompanied by secret service staff crossed at night with their lights off.

The Russian fuel was officially sold for tens of millions of dollars, at above market prices, to the Romanian agriculture ministry by the state Bancorex bank, which has since filed for bankruptcy.

The front companies set up by Costea thereby made enormous profits, according to the justice ministry.

At the same time Costea, who presents himself as a grand Romanian patriot, was involved in the illegal funding of the election campaigns for Iliescu, who appointed him as an "itinerant ambassador" for Bucharest based in Paris.

The latest revelations follow a scandal which erupted in March when it emerged that Iliescu maintained a "red telephone" hotline between Bucharest and Moscow following the demise of communist dictator Nicolae Ceausescu.

Iliescu was ousted by reformist Emil Constantinescu in 1996 elections, but is the frontrunner to return to office in November presidential elections, according to opinion polls.

His critics accuse him of having maintained strong links with Moscow following Romania's revolution, one of the bloodiest and most murky in the entire former Soviet bloc.

Iliescu is not the only presidential hopeful suffering from the Costea connection.

The scandal-tainted businessman says he has actively supported the candidacy of former foreign minister Teodor Melescanu, while Constantinescu is being questioned about his renewal twice of Costea's ambassadorial role.

Observers have noted that the only candidate not tainted by the scandal is Foreign Minister Petre Roman. Some critics accuse him of being behind the leaks which have fueled the Costea affair.

Some opposition politicians in Romania even see the hand of foreign secret services in the scandal.

"The Costea affair is part of an international game the aim of which is to put Romania in a grey zone," said Adrian Nastase, deputy head of the Party of Social Democracy (PDSR).

But one thing is sure: in impoverished Romania, shady deals will continue whoever is in power: this week, for the first time in years, police uncovered a Russian oil tanker smuggling oil across the border into Serbia.

Original article