Klodiana Lala, BIRN
Drug money is distorting markets and influencing political currents in Albania. Weak institutions appear helpless to stop it.
In 2019, when Skender Methasani, who works at Albania’s Agency for the Administration of Sequestered or Confiscated Properties, took over running of a poultry farm called ‘Rens 2015’ in the northern Albanian region of Shkodra, he found that the chickens were too old to lay eggs.
Yet someone had spent hundreds of thousands of euros on buying the land, building barns, paving roads and raising the first batch of chickens, according to court papers seen by BIRN, before Rens 2015 caught the eye of organised crime investigators.
A poultry farm might seem an unlikely start-up for an accused drug smuggler trying to launder money, but Jetmir Kastrati was thinking of his reputation too, according to phone conversations taped by Danish investigators in late 2018.
“This is something good for me,” Kastrati is heard telling his interlocutor. “I want good PR.”
Shkodra local Kastrati was arrested in Denmark, where he goes by the name Sokol Krasniqi, in June 2019 during an operation codenamed Goldfinger involving some 30 people accused of trafficking at least 1.65 tonnes of cocaine from the Netherlands to Denmark and Sweden.
According to court papers, Kastrati smuggled at least four million euros in cash into Albania between 2013 and 2019, investing the money in real estate in the seaside Shkodra neighbourhood of Velipolja and in Rens 2015. Prosecutors are investigating Kastrati’s brother-in-law, Astrit Beqiri, and another man identified as Dhimiter Shkodrani in connection with the cash.
In the wiretaps, Kastrati brags about illegally adding an entire floor to three beachfront apartments before somehow securing the papers to legalise it.
“For as long as you are permitted, everything goes into buildings, buildings…” Kastrati says. “It’s pretty,” he said of the apartment complex. “I might buy it all.”
Kastrati’s escapades are not unique. Albania is considered particularly vulnerable to money laundering, with drug trafficking the chief of source of “dirty money” penetrating the country’s meagre economy, according to Albania’s General Directorate for the Prevention of Money Laundering.
But it doesn’t simply end in beach apartments and chicken farms. The proceeds of organised crime finance political corruption, sway elections and win protection from prosecution, experts say, seriously undermining the development of a normal economy based on the rule of law.
“No individual, family, business or country can be enriched and develop economically if they tolerate criminal proceeds in their economy and politics,” said Arben Malaj, a professor of economics and former finance minister.
“Their criminal influence in the economy goes hand by hand with their access to political corruption,” he told BIRN. “In some cases, it reaches the level of state capture.”
And Albania is falling short in the fight against money laundering, the statistics show.
‘Weak institutions’
According to the US State Department, Albania made “no significant progress” in 2020 toward thwarting money laundering and financial crime.
“Albania remains vulnerable to money laundering due to corruption, organised crime networks, and weak legal and government institutions,” the State Department said in its International Narcotics Control Strategy Report for last year, published on March 3.
Albania’s Money Laundering Prevention Agency says that, between 2015 and 2019, it referred 1,462 suspected cases of money laundering for police investigation, but only 30 per cent, or 429 cases, were forwarded on to prosecutors. The agency referred some 400 cases directly to prosecutors.
“Some 28 per cent of the cases are the result of drug production and trafficking while some 13 per cent concern tax evasion,” said Agency director Elvis Koci.
The number of money laundering cases registered by prosecutors in 2020 was 131, down from 269 in 2018. Yet last year only three people were convicted of the crime, according to the US State Department report.
Likewise, at the end of 2020, only 15 per cent of the 466 assets administered by the Agency for the Administration of Sequestered and Confiscated Assets, AAPSK – which falls under the Albanian interior ministry – had actually been confiscated under a final ruling by the courts. The rest were subject to ongoing legal procedures. The assets are worth a total of some six billion leks [50 billion euros], but end up costing the AAPSK, according to its head, Artur Kala.
“There are properties that not only do not bring in revenues but they also cost money to maintain,” Kala told BIRN, citing, for example, electricity bills and security guards. “If courts need two to five years to decide on them, that’s a problem,” he said.
Over the last seven years, the AAPSK has transferred some 866 million leks [seven million euros] to state coffers and allocated 93 million leks for the funding of bodies fighting organised crime and taking care of the victims.
Most of the assets seized are real estate properties, but selling them on is no easy task.
“There have been immovable properties such as apartments, land, buildings or commercial enterprises put up for sale several times but no buyer came forward,” Kala said in written comments to BIRN.
Distorting will of voters
Experts say money laundering is distorting the real estate market in Albania.
In January, during a crackdown on money laundering by the Ndrangheta crime syndicate in Calabria, southern Italy, anti-mafia prosecutors found that the group had identified a construction boom in the Albanian capital, Tirana, as a potential opportunity, and was seeking political connections to exploit it.
In one wiretap, two of those arrested were heard discussing a building constructor in Albania who held three building permits for buildings worth 180 million euros but who had only 10 million euros to hand.
“The new skyscrapers are to be sold for 3000-4000 euros per square metre,” one of the suspects says. “And do you know how much it cost to build? 510 euros.”
It’s clear something is not right, said Zef Preci, director of the Albania Centre for Economic Research, a Tirana think-tank.
“If you look at the real estate market, you could hardly miss the fact that there has been a 40 per cent increase in prices since 2015, though there are few sales and only in limited areas,” Preci told BIRN. “You see that the permits for high rise buildings in Tirana having nothing to do with urban development. They don’t create jobs but they are able to corrupt the highest echelons of power.”
According to Preci, the proceeds of crime are moving beyond construction, exerting undue influence over public procurement for infrastructure projects and concessionary agreements.
He believes it is affecting political currents too.
“Over the last several years we have seen many cases of businesses widely suspected as engaged in money laundering entering into partnership with high level politicians, while dirty money is being used to distort the will of voters in elections,” Preci said.
Kastrati indicated as much in the late 2018 wiretap by Danish investigators, telling his interlocutor that he planned to secure state subsidies for his poultry farm, but to do so he would have to share the “pie”.
“You can’t get anything if they don’t get their share of the pie and there’s nothing you can do about it,” he is heard saying. “I should give them 50 and get 150 or 200 [million leks] for myself.”
Rens 2015 is now being rented out by the state at 300,000 leks, roughly 2,500 euros, per month.
Malaj, the economics professor and former finance minister, said the criminal economy was not only distorting competition but making life difficult too for poor and middle-income Albanians.
“[Dirty money] distort markets, for example, prices of houses and tariffs for waste collection, construction or gambling,” Malaj told BIRN.
Without the political will to fight the scourge of money laundering, law enforcement agencies can only do so much, he said.
“The efficiency of these institutions is limited due to a lack of support or due to the political misuse of these specialised agencies for economic or political benefits, by making them fight the competitors instead of the crime.”
Courtesy of BalkanInsight
