The damage of the Draganesti earth dam on lower sector of the Olt river due to foundation liquefaction during 30th May 1990, 0.12 g in site maximum acceleration, Vrancea earthquake is described. The dam is up to 20 m maximum height and border cross-wise and laterally the reservoir with 12.6 km length of the low head hydroelectric power station. The damage consisting of a large slide with about 60 m length at the dam downstream face and some cracks and lift-up of the reinforced concrete slabs at the corresponding upstream toe zone was placed in a zone where any special technology for increasing the relative density of the foundation loose sand layer was not applied. The natural relative density of the above mentioned layer having 1.20…7.00 m thickness was Dr =0.15…0.30, but it was increased up to 0.55…0.65 by vibrated-compacted gravel microcolumns technology, that was applied for over 80 % of dam foundation area. A comprehensive seismic backanalysis is performed in order to explain the damage mechanism