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GOVERNMENT OFFICIAL CLAIMS OVER SK400 MILLION MAY HAVE BEEN FRITTERED AWAY THROUGH FRAUDULENT INVOICES ON HYDRO PLANT CONSTRUCTION

Police investigate massive Gabčíkovo hydro dam fraud

A CABINET official supervising the Gabčíkovo hydroelectric dam has said that firms involved in construction of the site in the 1990s may have defrauded the state of hundreds of millions of crowns through payment for fraudulent invoices.
The official, Dominik Kocinger, added that the government appeared unconcerned by police discoveries, including an allegedly fraudulent invoice for Sk90 million ($2 million) for the Spectrum Marketing firm of Dunajská Streda.
The Interior Ministry confirmed it was investigating over Sk400 million ($9 million) in fraudulent payments to firms on the Gabčíkovo project between 1995-1997, largely through the Váhostav and Doprastav construction firms. However, Interior Minister Ivan Šimko rejected claims that the cabinet did not take the matter seriously.

A CABINET official supervising the Gabčíkovo hydroelectric dam has said that firms involved in construction of the site in the 1990s may have defrauded the state of hundreds of millions of crowns through payment for fraudulent invoices.

The official, Dominik Kocinger, added that the government appeared unconcerned by police discoveries, including an allegedly fraudulent invoice for Sk90 million ($2 million) for the Spectrum Marketing firm of Dunajská Streda.

The Interior Ministry confirmed it was investigating over Sk400 million ($9 million) in fraudulent payments to firms on the Gabčíkovo project between 1995-1997, largely through the Váhostav and Doprastav construction firms. However, Interior Minister Ivan Šimko rejected claims that the cabinet did not take the matter seriously.

Ministry spokesman Karol Tonka said 20 people had already been charged with fraud and money laundering. The police investigation will be finished in several months, added Jaroslav Šátek, head of the ministry's special investigation team.

Corruption has become a major problem in Slovakia in recent years, in terms of both public perception of its prevalence as well as criticism by the European Union and Nato officials.

The public learned of the affair from a news report on the privately-owned Markíza TV station July 23, with Kocinger saying he had been threatened several times after attempting to uncover the alleged fraud.

"Warnings [came] that I should get my hands off," he said.

Július Binder, who from 1991 to 1999 was head of the state firm overseeing the project, Vodohospodárska Výstavba Gabčíkovo (VVG), claimed the affair had been cooked up by the Dzurinda government to cover up its own wrongdoings.

"During my term there could not have been any fictive invoices issued. VVG paid only for work that was carried out," said Binder, now an MP for the opposition Movement for a Democratic Slovakia (HZDS) party, on a Markíza talk show July 28.

Binder's son Július sits on the board of the Inpos firm, one of the companies involved in the allegations of fictitious invoicing. He also sat on the supervisory board of the Alexia firm from 2000-2001 with Dušan Kollar, for 10 years a part owner of Spectrum Marketing.

While Kocinger insisted that "not everything was kosher" with the payments, Binder said that the cabinet plenipotentiary was "a man who suffers a complex from being unacknowledged. He thinks he's the only one who worked hard for the Gabčíkovo water works, and that nobody appreciates him."

Binder later apologized for his comments, but added that the threats Kocinger claimed to be getting were not to be taken seriously.

"Maybe somebody told him in a friendly tone, 'Domino, don't be a fool.' Many people say that to him."

The Agriculture Ministry, which oversees Gabčíkovo, said that an audit of the use of funds allocated for the construction of the hydro plant, as well as another waterworks in Žilina, would start in autumn this year.

Money for the construction came from foreign loans of $500 million and 40 million euros ($39 million), for which the previous Vladimír Mečiar cabinet issued state guarantees.

Interior Ministry spokesperson Anna Majkútova said her ministry would also be auditing the Gabčíkovo and Žilina projects this fall.

"These audits will show how the funds were really used," said Majkútová, adding that a previous ministerial audit in 2000 had already turned up one case of excessive billing and undocumented invoices for a sum exceeding Sk30 million ($66,000).

Shortly before The Slovak Spectator went to print, Július Binder Sr. suffered a stroke and was transported to a Bratislava hospital.

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