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​High-stake, secretly signed agreement between Romanian company and the company owned by Elliot Broidy, US lobbyist who took top Romanian politician close to Trump

de Dan Tapalaga, Adrian Vasilache, Victor Cozmei Vineri, 9 februarie 2018, 1:55
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An agreement with a major financial stake was signed February 1st this year between representatives of a Romanian state company and a US company owned by Elliot Broidy, an American lobbyist involved in the visit of two top Romanian politicians to Washington for the inauguration of Donald Trump's presidency. Representatives of Romania's Economy ministry have confirmed the information for HotNews.ro. The agreement was signed in secrecy, without media presence or press releases, in an opaque manner, despite it being attended by top ministers and the US Ambassador to Bucharest.

The agreement was signed between Romanian state company Romarm, which is under the wing of the Economy ministry, and representatives of US firm Circinus. The event was attended by Romanian Economy minister Danut Andrusca, Defense minister Mihai Fifor and US Ambassador to Bucharest Hans Klemm.

While Economy Ministry officials did not specify what the agreement is about, information obtained by HotNews.ro point to the C4ISR system, one of the major, high priority programs to equip the Romanian Army. The program is valued at about Eur 180 million.

  • Romanian newspaper Adevarul, owned by a well-connected businessman, Cristian Burci, is the only media institutions to have published a report on the agreement. But the article, published one day after the event, was deleted from the Adevarul website a day later. It has remained in the Google cache memory and presents the event in detail, with exclusive statements from Circinus Defense company. The Adevarul report says the agreement was signed between Romanian company Romarm and Circinus Defense SRL, a Romanian offshoot of US company Circinus.

Journalists from US news outlet McClatchydc.com on Thursday published an investigative report on the businesses run by American lobbyist Elliot Broidy. The report suggests that Broidy's invitation of two top Romanian officials to US a year ago is linked to his interest in expanding his business in the field of defense contracts, considering Romania is one of the countries which spend 2% of the GDP on defense procurements.

Elliot Broidy is the one who invited Liviu Dragnea, Romanian House of Deputies speaker and leader of the governing Social Democrats (PSD), and then-PM Sorin Grindeanu (also PSD) to attend the events surrounding the inauguration of the Donald Trump presidency in Washington DC a year ago.
  • Dragnea, who leads the winners of Romania's 2016 general elections, has been facing massive opposition at home, due to his bad record in terms of fighting corruption. He has already received a sentence for eletoral fraud and faces others in separate cases. He used the visit to the US a year ago to show himself in pictures close to and even shaking hands with Donald Trump, who was having dinner with other people at a hotel.

According to the McClatchydc.com report, one of Broidy's firms, Circinus LLC, specialized in high tech defense services, established a Romanian branch in May 2017, Circinus Defense SRL, where it holds a 99% stake. Since then, it has established a partnership with Romania's National Institute for Information Technology Research (ICI), which is mentioned in ICI's August 2017 activity report. The partnership contract was aimed at attending a Romanian Defense Ministry bid for a unified command center, valued at Eur 1 million".

On the newer agreement, the one signed with Romarm on February 1 this year, Economy Ministry representatives stopped short of providing details about the purpose of the deal.

"On February 1, 2018, representatives of Romarm, a company in the subordination of the Economy Ministry, and officials of US firm Circinus met at the Economy Ministry HQ for the signing of an agreement", ministry officials told HotNews.ro on Thursday, February 8. Thy said the signatories of the agreement were the managers of the two companies - Marius Ioana (Romarm) and Alan Blaine Stone (Circinus), in the presence of the Romanian and US officials mentioned above.

The information was also confirmed by the Romanian Defense Ministry and the US Embassy to Bucharest. The embassy said it was common practice that the Ambassador attended the signing of contracts involving American companies.

What is the C4ISR program

A C4ISR system is one of the major, top priority military equipment programs of the Romanian Defense Ministry. C4ISR refers to Command, Control, Communications, Computers, Intelligence, Supervision and Reconnaissance. On the list of major Defense programs  amounting to a total of Eur 9.3 billion put up by the Ministry and approved by the Parliament in April 2017, the project is valued at about Eur 180 million.

A draft Government Decision to approve the acquisition of such capabilities had been put up by the Defense Ministry under a previous, non-PSD government in November 2016. It involved the signing of a 7-year framework agreement. While the draft decision was forwarded for public debate, it has not been yet approved by the Government. The decision established specific terms for the Ministry to select a strategic Romanian provider for the acquisition of C4ISR systems.

Broidy's offshoot in Romania

The deal signed by the Romanian branch of Elliot Broidy's Circinus company with Romanian institute ICI recalls the status of accepted contractor which Circinus LLC obtained as part of a larger US government contract, valued at USD 7.2 billion, as mentioned in the McClatchyDC.com report.

According to information obtained by HotNews.ro, Circinus representative Alan Blaine Stone showed up at ICI last summer, along with Mihai Gherman, CEO of IT company CSR Ltd Romania. Mihai Gherman is the son of a former Senator, Oliviu Gherman. Circinus and CSR planned a consortium to attend the Defense Ministry procurement procedure, with ICI involved in the partnership as a provider of software development services.

After the signing of the partnership with ICI, Circinus representatives held a presentation of company products at the Romanian Military Technical Academy.

Until the publication of this report, it is not clear whether the Romanian Defense Ministry gave the contract to Circinus.

According to Romania's Registry of Commerce, Circinus Defense SRL was established in May 2017, with Elliot Broidy-owned Circinus LLC holding 99%. The administrator is Alain Blaine Stone, who holds 1% in the company.
  • In October 2017, Stone, a founder and CEO of Circinus LLC and an expert in intelligence and military contracts, attended a reception organised by the Romanian American Business Council in Bucharest.
  • In May last year, by the time Circinus was opening its branch in Romania, HotNews.ro reported that Liviu Dragnea was lobbying hard for another visit to the US, where he hoped to be received at the Department of State.
  • Also at that time, HotNews.ro wrote that a group of US lobbyists, the onse who have set up Liviu Dragnea's visit to the US in January 2017, reportedly visited Romania at Dragnea's invitation, to take part in hunting parties in the Danube Delta. Among them - Elliot Broidy, a powerful US lobbyist and fundraiser for the Trump campaign.
  • In September 2017, Romanian Defense minister Mihai Fifor reportedly had an unofficial meeting on the margins of his visit to the US, a meeting attended by Romanian businesman Cristian Burci (owner of Adevarul newspaper) and Elliot Broidy.
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