Supreme Audit Office will look into 'Hayek' deals

THE SUPREME Audit Office (NKÚ) will look into deals that have been making print press headlines over the past couple of weeks and have heated up the situation in Slovakia’s ruling coalition.

THE SUPREME Audit Office (NKÚ) will look into deals that have been making print press headlines over the past couple of weeks and have heated up the situation in Slovakia’s ruling coalition.

The audit authority’s scrutiny means that for now Martin Chren, nominated by SaS as state secretary at the Ministry of Economy, and Ivan Švejna, nominated by Most-Híd as state secretary at the Ministry of Transport, will keep their positions.

Their heads will roll however if the deals that Hayek Consulting, the company which the two co-owned, made with the current government as well as its predecessor display irregularities or are found to be in violation of the procurement rules. The NKÚ’s scrutiny is the solution that Prime Minister Radičová offered on September 24 in order to release some of the mounting tension within the ruling coalition.

Hayek Consulting, when it was apparently still co-owned by Chren and Švejna, signed a €8,100 contract with the National Agency for Small and Medium-Sized Businesses, part of the Ministry of Economy, just a few days after both individuals were appointed to their government positions in July. In mid August, local media reported that Chren and Švejna had terminated the state contract on behalf of the consulting firm.

Under the previous government, the company had competed for several Finance Ministry contracts along with firms that the Sme daily reported were on friendly terms with Hayek Consulting.

The Hayek Foundation, with which Hayek Consulting was affiliated, has claimed that it has become the target of a deliberate political campaign and that this has damaged its reputation. The board of the foundation said it would take legal steps due to what it called purposeful editing of information and unwillingness on the part of the media to present objective information, Sme reported.

On September 24, Radičová said in an official release that, based on legal analysis, the Economy Ministry deal signed in July of this year did not break any laws, but in relation to state secretary Martin Chren “one seriously has to talk about a conflict of interest”.

“Martin Chren himself claims that the company withdrew from the deal immediately after he became aware that such a conflict of interest could have emerged,” the release reads. “He proved this by reference to a letter dated August 16, 2010, in which the firm withdrew from the deal.”

But according to the release, several deals signed by state institutions with Hayek Consulting under the previous government have evoked suspicion as well.

“So that such doubts do not emerge, my government has passed several measures, which are intended to increase transparency of public procurement and the use of public funds,” the statement reads.

“I reiterate that it was this government which published the deals and made public control possible.”

According to Radičová, if the NKÚ does not declare the unambiguous transparency and effectiveness of these contracts she will decide whether both state secretaries will have to step down.

Radičová has also stressed that the ruling coalition parties agree that there are doubts but do not see the situation around Hayek Consulting as a reason to recall the state secretaries.

Radičová had been pressing the party leaders of SaS and Most-Híd over the past two weeks to take a clear stand about what they will do regarding their nominees. Thus far both SaS and Most-Híd have said they continue to back their nominees to the state posts.

On September 23 it appeared that Most-Híd had reached a definitive conclusion that it would not take action to sack its nominee.

At the same time the largest opposition party, Smer party called on Radičová and Speaker of Parliament Richard Sulík, the chairman of SaS, to sack Chren and Švejna over what it called a “scandalous state commission” given to Hayek Consulting.

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