Romania: The „Republic of Ploiești“

False patronage politics can weaken societies. Especially when it turns beneficiaries into accomplices and the fight against corruption loses its power.

However, Austrian entrepreneurs see light at the end of the tunnel in Ploiești, Romanias oil town, 60 km northern Bucharest. 

In 2005, Sebastian Ghiţă was awarded the title of „Honorary Citizen of Ploiești “ for his commitment to the local basketball team. This was in recognition of his selflessness and dedication with which he participated in the development of competitive sports in Ploiești. However, this changed a few years later. 

Ghiţă, born in Ploiești in 1978, always had what it takes to be an entrepreneur. He is considered the owner of Romanias highest-rated TV station, an IT company and was formerly a member of Bucharests parliament. Ghiţă fled from Romanian justice in December 2016 and is now in Serbia. Currently, several criminal cases are underway against him in Romanian courts and prosecutors offices. Some of them have already been closed. 

The deprivation of Ghițăs honorary citizenship title has been occupying the city parliament for months. Its members wanted to summon the fugitive himself to the oil city to attend the procedure in person. 

An „iron hand“ is being used to fight corruption, says Karl Leidenfrost, CEO of Austrian Habau, a construction company with a focus on the oil and gas sector in Romania: „Some of the most influential businessmen are now no longer to be found in Ploiești, and if they were able to escape they are not thinking of returning to Ploiești either“. 

After 1989, Ploiești, with its 250,000 inhabitants, was the scene of numerous privatizations. The city experienced rapid growth, was modernized but also became a stronghold of clientelism. In Romania, when someone suddenly changes the attitude, it is often ironically said, „Youre twisting, like in Ploiești.“ 

The city was dominated for years by the so-called „Mafia of Portocală.“ The name is borrowed from the nickname of a former local prosecutor, who was under investigation – for abuse of office and unjustified prosecution, alleged the local press. However, the prosecutor has been found meanwhile not guilty. Recently he claimed damages in court. 

Around 1830, Ploiești, the town with many inns, was a kind of „Babylon“ where the locals shared the streets, the slums, and the city center with pigs. These were released by breeders, obstructing traffic and rooting around in the alleys, markets, merchants stalls, cemeteries and even next to churches. It was up to 1910 when the situation was finally managed with the help of the fire department, which had to chase the pigs. 

THE OIL BARONS OF PLOIEȘTI

In Romania, the first country in the world to export fuel before 1900, the flourishing trade in petroleum products has a long tradition. In 1857, the worlds first oil refinery was opened in Ploiești. 

„Republic of Ploiești “ – this is what Romanians disparagingly call a failed venture, a farce. The designation is based on the disproportion between the means employed and the intended goal of an undertaking. In 1870, an attempted revolution took place – also in Ploiești – that lasted only one day and aimed to overthrow the German Prince “Carol”, installed on the throne of the Romanian principalities in 1866. The masterminds were later released, much to the future kings chagrin. 

Ploiești, also called the „capital of black gold“ thanks to its rich oil fields, was a place of prosperity, of decadent luxury living that attracted many foreigners between the two world wars. For the Nazi regime, allied with Romania until mid-1944, the region was of paramount importance as an important source of oil during the Russian campaign. 

Quite a few Romanians are proud of the frivolous history of Ploiești. In the town, it became a habit for residents to greet each other with _“What do you like to drink?“_ No wonder, there was one bar for every two hundred inhabitants. In 1877, during the Russian-Turkish war, the city hosted Tsar Alexander II and his entire imperial court for a few months.

After 1989, Russians returned to Ploiești as managers of the Lukoil refinery. Surprised, however, they had to watch over the fence as the inauguration ribbon of the neighboring JetFly – transshipment terminal was cut by the U.S. ambassador to Romania during the operation start ceremony. 

After JetFly won the relevant tenders, the Romanian Air Force purchased fuel from the JetFly hub from then on. The prosecutor’s office in Ploiești claimed that kerosene had been adulterated and the Romanian military aircraft, mostly old Soviet MIG21s, had been dameged. They quickly initiated criminal proceedings and arrested the alleged perpetrators who were later released in record time for lack of evidence. A decision that has been confirmed by the Supreme Court in Bucharest.  

In the meantime, the MiG21 fighters are history, what has remained is the criminal proceedings. „There is no evidence or reasonable grounds. The criminal prosecution started back in November 2020 and is still ongoing today“ said Dan Berendel, Romanian Entrepreneur, JetFly – owner. 

UNENDING INVESTIGATION

This „unfinished“ corruption investigation takes a long time and ends extremely late with a court decision. Because of the suspicions associated with the proceedings, a false social norm is reflected. Even if nowadays Romanian judges are no longer patronized by prosecutors, the question is whether the „Republic of Ploiești “ is waking up again. 

Many of these problems that we still encounter in Romania do not longer exist in Ploiești. Today, the healthy development of the city takes precedence over other interests. „For our company headquarters,“ says Leidenfrost, „it was clear from the very beginning: only Ploiești can it be! This because of the proximity to the oil and gas business, the headquarters of many Austrian companies and, finally, because of the well-qualified employees to be found there. There are not many cities with their own oil and gas university.“

Dr. Alex Todericiu, born in Bucharest, Austrian management consultant and foreign correspondent for Romanian media in Vienna.
phone: +43 (676) 9400091, email: alex@todericiu.com

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