The procurement pork barrel

AN AUDIT of public procurement tenders held last year under former Agriculture Minister Miroslav Jureňa has turned up substantial evidence not only of graft but also of utter chaos in the registering of tender bids and state contracts.

AN AUDIT of public procurement tenders held last year under former Agriculture Minister Miroslav Jureňa has turned up substantial evidence not only of graft but also of utter chaos in the registering of tender bids and state contracts.

According to a working copy of the audit results, obtained by The Slovak Spectator, 35 Agriculture Ministry procurement tenders from 2007 were vetted, with astonishing results: many bids lacked either dates of submission, signatures from bidders, or stamps from the Agriculture Ministry’s depository, making it impossible to know if they had arrived in time, or were in fact submitted by the companies in question.

Moreover, many tender contracts could not be found, even though they were supposed to be in the ministry’s central registry, while irregularities abounded in how bills were paid, and tenders were held long after the goods or services in question had actually been supplied.
Lining their pockets

One of the most troubling findings of the audit were connections between successful bidders and ministry employees.

For example, the Slovenská internetová televízna spoločnosť (Slovak Internet Television Company) won a tender for almost Sk1.2 million even though its managing director, Branislav Kráľ, was at the time an advisor to Minister Jureňa.

In the tender, which was for a company to organise an Easter fair, not one of the three bids was registered with the depository, while Kráľ’s company won the contest almost two months after the fair took place.

The audit also highlighted the activities of Miroslav Veselý, who became a member of the ministry’s economic and service department on July 1, 2007, with powers to vote on procurement tenders.

By that time, Veselý had already won a tender in January 2007 for Sk440,000, ironically for auditing the tenders the ministry had held in 2005 and 2006.

The audit noted that the ministry could have performed the work itself, and that the bill for the work claimed 290 hours in 10 working days, meaning that each day would have had to contain 29 hours.

Veselý’s company Profirealsk also won tenders in February and December that year, the latter after Veselý had sold his stake in the firm.

While no longer the company’s owner, however, he served on the commission that decided the winner. Slovak tender law requires that anyone who has even submitted a bid in a public tender may not serve on such a commission for at least a year afterwards.

“I sold my stake in the company,” Veselý said. “I don’t know if it won any tenders, there were just some supplies [ordered]. There is certainly no connection between myself and Profirealsk.”
By press time, the Agriculture Ministry had still not replied to questions sent by The Slovak Spectator on September 12.

However, Jaroslav Kondáš, the head of the audit team, said the results of the check-up were still not complete.

“It’s just a working version, there must have been some kind of leak,” he said. “We’re still waiting for a few statements from other state institutions, and we also have to discuss our findings with the parties concerned. It’s possible they will be able to explain some of these inconsistencies, so you shouldn’t take it [the report findings] as cast in stone.”

However, the Special Prosecutor’s Office, which investigates political corruption, has already launched an investigation into the audit findings as a result of a criminal complaint lodged by Jureňa’s successor as minister, Zdenka Kramplová. Kramplová herself was forced out in late August, just as the audit was wrapping up its reporting phase.

“The audit had not been completed by the time I left, because the ministry employees cited in the findings were avoiding their responsibilities [to be interviewed] in connection with the audit,” she told The Slovak Spectator. “I expect they were waiting for me to be fired.”

Kondáš said that Kramplová had requested a working copy of the findings just as she was ousted. “She had a right to do so, even though it wasn’t finished. She handed over some of the files to the prosecutor.”

“Mrs. Kramplová submitted a criminal complaint, but we cannot divulge the specifics,” said Svetlana Močková, a spokeswoman with the General Prosecutor’s Office. “We passed the case on to the Special Prosecutor’s Office, which is now handling it.”

“My complaint addressed three concrete cases,” said Kramplová. “I was shocked by some of the information in the report, and I felt it was my duty to pass it on to the proper authorities.”

Money for nothing, and contracts for free

1. Sk440,000 was paid in January 2007 for an audit of tenders at the Agriculture Ministry for 2005 and 2006. The tender was won by Miroslav Veselý, who on July 1 of that year became a ministry employee with a vote on procurement. The contract was signed on January 8, only three days after the bids were evaluated, and not the minimum 14 days that the law requires. The contract called for 290 hours of work to be performed in 10 days, in other words 29 hours a day. The audit was actually carried out between December 12, 2006 and January 19, 2007, meaning that it was launched before the bids were even evaluated. The audit could have been performed by the ministry’s own control department, meaning that the money was used inefficiently.

2. A tender for toner and cartridges for printers for 2007 was won by Profirealsk, s.r.o. of Rudina, owned by future ministry employee Veselý. The contract was signed on February 26, 2007, but no sum was specified. Veselý later became a member of ministry procurement commissions that awarded contracts worth Sk69 million and Sk11 million to Deloitte Audit s.r.o., even though the law forbids anyone who has won or applied for a procurement contract from holding such a position within a year of the last tender they took part in.

3. Two tenders for computer and copying equipment in November 2007 were also won by Profirealsk, where Veselý was managing director until June 29, 2007, three days before he became a ministry employee. However, the ministry has no information on whether these contracts were actually carried out.

4. A tender worth Sk2,320,500 for a complex construction and technical audit of buildings owned by the Agriculture Ministry was awarded in December 2007, again to Profirealsk, the company formerly owned by ministry employee Miloš Veselý. On this occasion, he was also on the tender commission that awarded the contract.

5. Sk1,181,670 was paid to Slovenská internetová televízna spoločnosť, s.r.o. for organising the ministry’s “Zemeslužby” Easter fair. The company’s managing director was Branislav Kráľ, advisor to Minister Jureňa. Not one of the three bids allegedly submitted were registered with the ministry’s depository for such documents. All three bids contained the same typographical error in section No. 5 of the bid proposal, and all three firms had identical descriptions of what activities they performed. Kráľ’s company was chosen on May 30, 2007, even though the event it had organized had taken place almost two months earlier, from April 2-5, 2007.

6. Almost Sk70 million was paid to SAP Slovensko for providing a PPA integrated information system. The tender method chosen was behind-doors direct negotiations, and the prices in the contract were, in the opinion of the auditors, inflated: SAP instructors billed Sk57,397 a day, or Sk7,175 per hour.

7. Unitrumph Security, s.r.o. won four tenders worth over Sk4 million collectively. In each tender, the same three security firms applied, and not one bid was registered with the depository, meaning none bore a stamp or a signature saying when – and if – it had actually been received. Some bids were even stored in the same envelope.

8. A contract worth Sk2.4 million was signed with the PCM Group company for an evaluation of the SAPARD program. It was signed by Minister Jureňa on November 28, 2007, at a time when he was no longer minister. The auditors found that the original date, which had been whited out, was November 26, in other words the day before the bids were opened.

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