Romania corruption fights lands French businessmen.
UCHAREST — Romania’s growing crackdown on corruption has now embroiled a former senior executive with the Romanian arm of France’s Veolia, the world’s largest water services provider, who was charged this week with bribery and influence peddling.
Apa Nova Bucuresti is the Romanian branch of the French-owned Veolia Group, which provides water, waste management and energy to 17 European countries including the U.K., France, Germany and Belgium.
Prosecutors from the National Anticorruption Directorate (DNA), the country’s top law enforcement agency, said Bruno Roche, Apa Nova’s French CEO from 2008 to 2013, set up secret bank accounts and created fictitious contracts. These were then used to transfer millions of euros to senior Bucharest officials, who in return approved steep hikes in water bills.
The allegations originally emerged after police visited Apa Nova’s offices to obtain documents on the September 24, in something the company referred to as “not a formal search.” The police operation also took in Bucharest city hall and ended with two Bucharest officials and a businessmen being arrested on charges of taking bribes from Apa Nova executives.
On Wednesday, Roche was formally charged and placed under judicial supervision for 60 days. Roche’s successor, Laurent Lalague, is also under investigation for the same charges, according to the agency. Lalague was CEO of Apa Nova until June.
Roche and Lalague were responsible for making the payments and for setting up secret bank accounts to ensure confidentially, the agency said. According to prosecutors, they paid out over €12 million in bribes, and succeeded in driving up the price of water paid by consumers in the country’s capital, which has increased by 125 percent since 2008.
In a bid to keep the operation secret, they hired former intelligence agents to “spy and make interceptions” on their own employees, according to a prosecution file made public by DNA. The agency said the goal was to “prevent the disclosure by company employees of data which would lead to the detection of the illegal activities.”
Apa Nova has held a monopoly on Bucharest’s water and sewage services for 25 years. Since 2000, the price of tap water has risen by over 1,400 percent. Over the same time period, Apa Nova’s revenues increased 28-fold, from less than €6 million in 2000 to €167 million in 2014.
The case is just the latest scandal in a national anti-corruption crackdown which has seen dozens of senior politicians, officials and businessmen charged this year. Those currently under investigation include Romanian Prime Minister Victor Ponta and the mayor of Bucharest, Sorin Oprescu.
Apa Nova’s parent company, France’s Veolia Group, operates over 2,000 businesses worldwide and has an annual turnover of over €23 billion. In their financial statement for 2014, Veolia lists Apa Nova as one of their “main companies.”
In a written statement to POLITICO, Veolia Group said Apa Nova “is cooperating, and will continue to cooperate, with the Romanian authorities,” and that prosecutors have asked for seven years of contractual documents, which were provided. The company said the investigation “at this stage does not concern Apa Nova.”
In response to the allegation of fixing water prices, the company wrote: “Although this price increase was substantial, it was justified, and it was, at the time, the subject of a very rigorous communication plan to inform the inhabitants, in collaboration with Bucharest City Hall.”
Roche left Apa Nova in September 2013, after which he became director of Veolia Environment Romania. As of September last year, he is country manager of Veolia Bulgaria.
Neither Roche or Lalague were available for comment.