S - 1 Organized Crime

S - 2 Organized Crime Organized crime strengthening in country. Transit drug operations with Turkish gangs growing. U.S. and Western European law enforcement have discussed their concern. On diplomatic level, U.S. and German Ambassador protest to Romanian government. Drug traffic transit is leading to increased domestic use. Organized crime expanding beyond drug trafficking to extortion and kidnapping foreign businessmen for ransom. Several international firms in country have voiced their concerns.

S - 3 Organized Crime (continued) Public perception increasingly believes organized crime is immune from law enforcement and somehow “protected” by certain officials. Problem has become serious enough to have the Prime Minister establish a special commission to look at the problem.

S - 4 Organized Crime II Measures taken to date have failed to stem the tide of increased activities by organized crime. The recent Russian banking crisis has resulted in a massive drive by the Russian Mafia to find new outlets for money laundering. In this effort, attention has turned to Eastern Europe and the newly developed, and often loosely controlled, banks. Rumors reaching the police indicate infiltration of several small banks by the Russian Mafia through control of senior banking officials.

S - 5 Organized Crime II (continued) A senior official of a key private bank mentioned to Finance Ministry officials that he was approached by “criminal elements” soliciting his help in money laundering. German and U.S. drug officials have advised the government that they have “solid evidence” about the laundering of over $100 million through Romanian Banks in the past three months. IMF, EU, and EROB officials in a coordinated effort have warned the Government that “organized crime” must be driven from the banking industry immediately. Otherwise, concessionaire loans are in danger.

S - 6 Organized Crime II (continued) A major Western European bank has quietly advised that they are delaying the opening of a major operation in Bucharest –“the general atmosphere, the reported killing of a local bank official by gangsters, and an incident where one of its visiting officials was offered a bribe.” Government commercial officials note a similar slowdown in transnational firms in opening facilities in Romania because of the growing strength of organized crime. In private discussions, NATO officials quietly advise that the blatant activities of organized crime could injure chances of accession.