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Exclusive: Ion Cilea, Chairman of Valcea County Council, blocked the use of EUR 122 millions of European funds. See below how he deliberately planned to avoid the National Integrity Agency law

Postat la: 09.02.2014 - 12:50 | Scris de: Ziua News

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The Chairman of the Valcea County Council blocked EUR 122 millions of European money of the county development funds. Ion Calea, also PSD (Socialist Democratic Party) Vice-Chairman, blocks the activity of a private company limited by shares for the only faulty of failing to include his protege. Cilea planned to avoid the ANI law by a clever manoeuvre of using a sole entity to work throughout the county.

Ion Cilea, Chairman of Valcea County Council, managed to block the activity of APAVIL by using an intricacy in the ANI law on incompatibility. Cilea succeeded in managing a development association, entity that controls the activity of APAVIL SA hiding behind delegated management. The private company limited by shares was granted by the NGO run by Cilea the management and lease rights for their business in Valcea County.

Given Mr. Cilea's previous experiences, he was well aware that his capacity as Vice-Chairman of a County Council prevented him from being a member of a company or public authority. Thus, he became member and Chairman of APA Valcea, a community development association, whose other members are various local councils and the Valcea County Council that did their best to transform SC APAVIL SA into a regional player by granting the private company all public water and sewage contracts. Cilea managed to avoid the law and a potential incompatibility because incompatibility is found, according to the ANI law, solely in cases of direct involvement in a company.

The Association, the new method to be involved in business

Ioan Cilea became in 2008 a member of the regional development association APA Valcea, a so-called NGO incorporated by the decision of various local councils in Valcea County and the Valcea County Council, aiming at "common construction and development of infrastructure projects for water and sewage in Valcea County, based on the Valcea County Development Strategy and the common supply of services currently provided by each local authority. The main purpose is to promote and implement a common project to establish and develop the public water and sewage services."

The plan, strategy and business of the association for the Valcea County public water and sewage referred to the "delegated management, by delegating some of the long term service tasks and responsibilities to regional player SC APAVIL Valcea SA by a sole delegated management agreement."

Although the memorandum of association clearly stipulates that the public water and sewage management is delegated to SC APAVIL SA, according to the same memorandum of association the Chairman of Valcea County Council, in his capacity as Chairman of the Association, is directly involved into the management of the APAVIL business. Thus, the Association is entitled to monitor and control the compliance of the company, already a regional player, with the rights and obligations as stipulated in the agreement on the "compliance and fulfilment of the obligations of the regional operator on the performance index and the relation with its users." Literally, it means that the association is entitled to verify the internal agreements of the company concluded with its clients, including the efficiency level of APAVIL. The association is also entitled to verify "the management, usage, preservation and maintenance of the public utility system, the development or modernization of the public utility system for an efficient and secure use of the system or other public/private assets controlled by the county administrative units." As it can be clearly noticed, the commercial decisions and actions of the private company APAVIL are directly controlled by the association run by Cilea who, as chairman of the association, is directly involved into a business and may be easily declared incompatible, should the ANI law be abided.

The GSA decision attacked in Court, best proof for Cilea's incompatibility


Cilea's plan to indirectly manage the county business on water and sewage through the association was clearly seen when, due to political interests, the individuals appointed in the General Shareholders' Assembly were not loyal to Cilea. Cilea fought in Court against the decision taken by the General Shareholders Assembly to appoint new members in the Board from his own position as Chairman of the Association. In other words, he asked the Court to acknowledge his right to be involved directly in the decisions taken by the Company.
Cilea not only revoked the delegated management right for the water and sewage business to APAVIL SA, which he had initially approved from his capacity as Chairman of the association, but he also asked for an official acknowledgement of his power to be involved in the internal decisions of the private company. Cilea, who votes and approves the budget of the Regional Development Association from his capacity as Chairman of the Valcea County Council, also has to approve the money spend in his quality as Chairman of the Association. Mr. Cilea approves the business plan of APAVIL SA, nominates the potential Board members, approves the strategies, while the annual budget of the regional operator is decided in keeping with the business plan approved by the Regional Development Agency APA Valcea.

The Imperfect ANI Law


According to Article No. 87 of Law No. 161/2003 on certain measures to be taken to provide the transparency of public office holders, the position of County Council Chairman is incompatible with the position of county representative in the local interest companies' general assemblies or the position of state representative in the national interest companies' general assemblies. Cilea attempted to control the private company SC APAVIL SA through a certain NGO, which does not represent an actual incompatibility, according to the law. However, according to ANI representatives, the presence of mayors and chairmen of various county councils in the Regional Development Associations generates incompatibility for the very reason that the regional operator is controlled by the association. Following the public statements of ANI officials, hundreds of mayors members of such associations resigned in order to avoid being declared incompatible.

Hundreds of mayors resigned to escape the ANI. Cilea keeps strong


Ion Cilea was appointed Chairman of the Valcea Water Interregional Development Association, as it can be read in his declaration of interests. Mr. Cilea is also Chairman of the Interregional Development Association for Valcea County Sanitation Services, nominated as of 2010 to represent the Valcea County in the General Assembly. However, the Valcea County Council Chairman failed to mention this position in his declaration of interests in 2010, 2011 and 2012 and remembered it only in 2013. While Cilea was appointed the new Chairman of Valcea Interregional Development Association in Hunedoara County, the Chairman of the Valcea County Council officially informed all mayors in his county that there was a potential incompatibility situation with their local IDA (Interregional Development Association) position of chairmen. The problem was solved by replacing them with other individuals who were not in an incompatibility situation. Take the counties of Salaj and Satu Mare, for instance, where several mayors who could have been considered incompatible, given that they held public positions both as mayors and in the IDA Board remained simple mayors and passed the IDA positions to librarians or priests because 44 of the 6 mayors suspected to be incompatible by the National Integrity Agency (ANI).

Cilea and his previous ANI experience

Ion Cilea was declared incompatible in 2005 by the ANI inspectors for holding simultaneously the position of Valcea County Council Deputy Chairman and management positions with the Public Order Regional Authority.

Romania was unable to use European funds effectively because the decision-making postions were held by individuals whose behaviour was at least doubtful.

ZIUAnews presents below how a local decision-maker blocked EUR 122 millions of European funds because he did not succeed in involving his "protege" in the project. Ion Cilea, Chairman of Valcea County Council, blocked in court the EUR 122 millions investment using his capacity of Association Chairman and not Chairman of Valcea County Council because the project managers had not involved his "protege" Ion Costache in the project.

Cilea's action cannot be sanctioned in court as it was not illegal, just a mere proof of how local decision-makers empoverish their regions unless they are given a slice of the cake.

Cilea, the double chairman

The amount of EUR 122 millions represented the share of the Europeam Bank for Reconstruction and Development in financing the European project "Valcea County Water and Sewage Water Network Extension and Rehabilitation". Cilea blocked the project because his protege had not been included in the management of APAVIL, the beneficiary of the European funds.

In August Cilea fought in court against the nomination of new members of the APAVIL Board, although a representative for the Valcea County Council had been present at the General Shareholders' Assembly where nominations had been approved. Thus, Ion Cilea argued on behalf of the "Apa Valcea" Interregional Development Association that he runs and not from his position as Chairman of the Valcea County Council, capacity which actually made him Chairman of the Interregional Development Association.

Cilea claimed in court that a Decision of the Local council had been broken, decision that empowered the Local Council, as well as the County Council, to nominate three members for the APAVIL Board. "We hereby atempt to correct a very serious error of APAVIL Board. No entity should be allowed to disregard a Local Council Decision. If I remember correctly, it is Local Council Decision No. 151 nominating three Board members. However, some of the APAVIL General Shareholders' Assembly members preferred not to comply with the provisions of the Local Council Decision and to endorse other potential APAVIL Board member or members", claims Cilea.

Nevertheless, the Decision No. 6 of May 24 2013 of the APAVIL General Shareholders' Assembly for the nomination of the Board members stipulates that "it is hereby approved the nomination list for the Valcea County Council representatives and the Valcea Local Council representatives". Sources within the USL considered Cilea's legal action as "coming too late, only to block further activities."

Valcea County has lost the water and sewage network rehabilitation funds

By contesting the APAVIL Board, the company managers will be unable to sign the financing agreement with the European Bank for the 122 EUR millions are to be used by November 2014. Nevertheless, the legal action started by Cilea six months ago is still at an early stage. The case was delayed twice: the first time so that the Chairman of Valcea County Council would be able to comply his request to annull the General Shareholders' Assembly Decision with the provisions of the new Civil Procedure Code, while the second time a new term was given for mid-February, without any explanation.

Cilea, accused of illegal actions

According to information in the possession of ZIUAnews, the Valcea County Council appointed Mircea Predescu, civil servant and Cristian Jianu, the company General Manager, as APAVIL Board members, while the Valcea Local Council nominated Lucian Tanasescu, Ovidiu Samson and Cristian Floricel.
Anonymous sources declared for ZIUAnews that Ion Cilea did not approve the nomination of Ovidiu Samson but in return wanted to appoint Ion Costache in the company management in a civil servant capacity. According to the same sources, the appointment was illegal because, according to Government Emergency Decree No. 109 of 2011, Article No. 28, Line 1 there will be only two civil servants in the Board: "(...)There will be a maximum number of two civil servants or workers from other public institutions". In fact, the legal provision would have been broken by appointing Ion Costache civil servant in the APAVIL Board.

Ion Costache, Cilea's protege

According to information in the possession of ZIUAnews, the complete legal action taken by Cilea was a revenge for not having his protege accepted in the APAVIL Board. Costache has, according to his CV, worked for several years for Valcea County Land Improvement and Reclaim Agency, which was run by Cilea for a long time. ZIUAnews was told by USL sources that "Costache is basically Cilea's protege, he works for Valcea County Land Improvement and Reclaim Agency, run by Cilea for 20 years." The same sources accuse Cilea of having attempted to disobey the law: "Cilea wanted to disregard the Government Emergency Decree No. 109 by appointing two civil servants in the Board, which was quite foolish. The General Shareholders' Assembly members did everything in their power to comply with the legal provisions, despite being pushed by Cilea not to."

By Ruana Ceausescu

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