It's money for nothing and the pollution is free: Adrian Bridge writes from Cluj, a city thousands of Romanians are flocking to in the hope of making a fast lei

FOR a few fraught days earlier this month, the Transylvanian city of Cluj was seized with panic. Grown men were seen to be close to tears. Some clenched their fists; others simply gnashed their teeth or cursed.

The cause of this outpouring of human misery was an announcement by the organisers of an extraordinary money chain based in Cluj that payments due to participants would stop forthwith. For hundreds of thousands of Romanians, the news signalled an abrupt end to their dreams of getting rich quick.

But then Ioan Stoica, the mastermind behind the Caritas money pyramid and a saint and saviour in the eyes of much of the population, appeared on television to reassure his flock. The halt in payments - the first since Caritas was launched in Cluj in June 1992 - had been due to errors in the computer system, he said. It would soon be rectified, he added, promising that during the remainder of the month 1.1 million people would be collecting their 'cash earnings'.

'Cash earnings' come remarkably easily under Mr Stoica's scheme which, despite its name, has no connection with the Catholic Church's charity, Caritas. All you have to do is deposit some money, go away for three months, come back and, hey presto, you collect eight times what you put in.

It certainly beats working for a living. And when news of it spread this summer it precipitated a gold rush. At least 3 million Romanians have already made the pilgrimage to Cluj to stake a claim. No matter that mathematically it does not add up. For many ordinary Romanians the pyramid offers the one and only chance of escape from the lives of drudgery and economic destitution to which most of them are condemned.

Not surprisingly, therefore, there was an almighty sigh of relief in Cluj last week as the Caritas wheel began to turn again and the payments resumed. On Sunday, a crowd of 8,000 gathered at the sports stadium from which Caritas operates to thank Mr Stoica.

The bubble, it appears, has not burst yet. But that little blip two weeks ago has left an indelible mark. Never again will those who flock to Cluj be able to invest their money quite so confidently.

Tantalisingly little is known about Ioan Stoica, the 45-year-old slightly balding founder of Caritas. He comes from Transylvania and studied economics at Brasov University. In one of his earlier incarnations he is said to have been a book-keeper; in another he is rumoured to have provided a guiding hand at the roulette table to Nicolae Ceausescu, the late Romanian dictator. In his frequent television appearances, Mr Stoica desperately seeks to convey an image of trustworthiness and competence. Under attack, however, he looks uncomfortable and shifty.

Caritas now employs 1,500 people in Cluj and at the mention of their boss's name - or the sight of his black Alfa Romeo - they adopt a reverential tone. 'He is a miracle man,' said 'Lica II', one of several broad- shouldered bouncers keeping an eye on things at the sports stadium. 'He is an elusive genius. But he is also kind. He helps handicapped children. He is deeply religious. He is always talking about God.'

Mr Stoica often talks as though he is God. 'I represent a new world, and I will be that world,' he is fond of telling his disciples. In the heaven on earth that he propounds, poverty will be banished and true happiness - in the form of unlimited access to televisions, hi-fis and Western cars - will reign. He personally has benefited hugely from his scheme, to the tune of millions of dollars. But he stresses the large donations to worthy causes he has made at the same time. Although attacked for appropriating the Caritas name, he says that his operation is also a charity, 'a useful system for those who want a more decent life'. Millions of Romanians, staring helplessly at triple-digit inflation and average salaries of 60,000 lei ( pounds 40) a month, agree with him.

To date, Mr Stoica claims that Caritas has created some 40,000 Romanian lei millionaires and dozens of lei multi-millionaires. Certainly in Cluj, a city he predicts will one day rank among the top 10 in Europe, business is booming: more than 300 new cars are sold every day and property prices have rocketed. Until the little mishap with the computers, many people chose to reinvest most of their winnings in the hope of even greater profits - thereby enabling Caritas to carry on paying out. Now they appear to be cutting their losses: taking the money and running.

Such a trend could precipitate a cash flow crisis and, ultimately, a total collapse. 'Do not fear,' say Caritas employees. 'Mr Stoica has a secret formula.' In the absence of hard facts, speculation about that formula is rife. According to some, Caritas is simply a racket cooked up by the government as an excuse to print more money to cover up inflation and create a consumer boom to distract attention from an ever- worsening economy. According to others, the Caritas money is laundered, coming either from Colombian drug dealing, Italian Mafia operations or gun-running to the former Yugoslavia.

Then there is the Cluj connection. The city, once one of the jewels of the Habsburg empire but now somewhat the worse for wear and almost permanently smothered in smoke, is not, on the surface, the most likely-looking Eldorado. Pollution apart, it is a focal point for tension between Romanians and ethnic Hungarians, who make up 25 per cent of its 325,000 population. Why, people ask, did Mr Stoica decide to set up the nerve centre of his operation here rather than Bucharest? And what, more importantly, is the precise nature of his relationship with Gheorghe Funar, the rabidly nationalist mayor of the city?

Certainly, when Caritas first came to Cluj Mr Funar could not have been more obliging. In addition to giving the organisation free space in municipal buildings, he wasted no time in endorsing it publicly. In return, it is said, Mr Funar was to be allowed to claim some of the credit for the resulting consumer boom and to be given a slice of the profits, some of which were to go towards good works in Cluj, and some into the coffers of his extreme right-wing Party of Romanian National Unity.

Not surprisingly, both men dismiss such suggestions and journalists who have sought to investigate them further have found their paths blocked by Lica II and his pals. Perhaps, when the big bang does come, as it must, the truth will out. Perhaps, like so many things in Romania, it will remain a murky mystery. 'In the end, I am not sure if people here really want to know the truth about Caritas,' said Cristina Stihi, a Radio Cluj journalist. 'Nobody really cares if the money is dirty or not, just so long as they get their hands on some of it.'

The end, most educated observers in Romania say, is now a matter of time. But they are filled with dread at the prospect. For when it does come, they say, the howl of despair will be louder than any heard in Romania since the darkest days of the Ceausescu regime. And fists will not simply be clenched - they will strike out furiously.

(Photograph omitted)