Beta Biotech does not have a long history. Founded in 2014, it focused on small selling, marketing or cleaning services, earning €102,000 in the first year and falling to €14,000 in 2016.
In 2017 the Education Ministry granted Beta Biotech more than €4 million to recycle food industry by-products. It is around three times more money than the company received for selling its products in its entire history. Moreover, this company with no history and a simple website began doing business in the food industry just in May 2017.
“This is not standard,” Ján Rudolf, EU funds expert from The University of Economics in Bratislava told the Sme daily. “Giving eurofunds for long-term research to a firm that doesn’t have any previous experiences in this field is close to violating rules for their distribution.”
Beta Biotech is a special purpose vehicle and the firm was transformed to do business in the food industry by its current owners, who have experiences in this field, Beta Biotech representative Boris Žitný wrote on his blog in response to the criticism.
This grant is one of many given by the ministry to private firms under suspicious conditions, creating the biggest government scandal this summer.
The police are investigating the distribution of EU funds based on the motion of the Special Prosecutor’s Office. Under public pressure and European Commission’s investigation on the distribution process for these funds, Education Minister Peter Plavčan stopped the distribution of all money from the €600 million eurofund budget and cancelled one of the programs funded from the budget focused on long-term research.
On the other hand, Plavčan, who is a Slovak National Party (SNS) nominee, refused to step down amid the government crisis related to the scandal caused by SNS head Andrej Danko.
“I will not step down,” Plavčan said during the August 14 press conference. “I have goals to achieve and someone else is deciding whether I will step down or not.”
Prime Minister Fico stated though that he asked Danko to present a new name for education minister.
“No government party, Smer, SNS or Most-Híd, can afford to gamble with the public trust,” Fico told the press.
Handing out eurofunds
EU launched the funding programme for research and innovation in 2014 and it is available until 2020. Overall it has a budget of €2.2 billion for distribution, partly by the Economy Ministry and partly by the Education Ministry through the Research Agency falling under its jurisdiction.
The Education Ministry is issuing calls for several projects related to the fund and the two largest calls amounted to almost €600 million. In May 2016, the ministry issued a call for a “Long-term Strategic Research” project in which it should distribute €288 million from the programme.
Long-term Strategic Research was available for Slovak universities, but the rectors of the major universities in the country complained that none of their projects received funding. Their research projects did not receive enough points from project evaluators. Other projects were higher up in the rankings and received funding.
The other call, aimed at supporting industrial research and development centres, was to distribute €301 million. The media reported several stories about dubious firms receiving money from the funds.
Deciding about the money
Suspicion surrounds not only the winners of the tender, but also the process of deciding who should have the money. Some evaluators are either close to the government’s SNS party or incompetent, according to Veronika Remišová of Ordinary People and Independent Personalities.
For example, Monika Deneva was evaluating several projects and a lady with the same name is General Director at the Agriculture Ministry run by SNS. The name Pavol Blažanka also appears among the evaluators and a person with the same name is head of the Education Ministry agency, Remišová stated on July 25.
She added that the project for €25 million focused on the sustainability of the steel industry was evaluated by a cardiologist. Another doctor – physician was evaluating research worth €45 million and focused on industrial materials.
During the ongoing scandal František Zvrškovec, head of Prefa Alfa, one of the unsuccessful companies, stated that he was contacted by one of the evaluators, Peter Klamo. He claims that Klamo told him that he needed to pay 20 percent of the project’s value if he wanted it to be successful. Zvrškovec wrote an official complaint to the Office of the Government and to OLAF, the EU anti-fraud agency.
Klamo is a board member of the Welding Research Institute. The institute is a partner for four other projects that have received funding. Since Klamo was evaluating his competitors’ projects, Transparency International Slovensko recently pointed out that he had a clear conflict of interest. There is a suspicion that he deliberately placed his competitors at a disadvantage.
After two weeks of vacation Plavčan organised a press conference on August 14 together with the rectors of universities with research programmes, the Slovak Academy of Sciences (SAV) and Klub 500, which unites the biggest 500 employers in Slovakia.
Plavčan announced that the Education Ministry will cancel the call for EU-funded project proposals in long-term strategic research and development, issuing a new one shortly.
Among other measures, the ministry will also disband its current list of evaluators in charge of gauging projects seeking EU funding, organising a new selection in September. The manneer in which the projects are assessed will also undergo changes.
He pointed out that the ministry has not paid a single euro towards the projects that emerged as successful from the much-disputed call for proposals.
“Everything was stopped at a good time to allow a proper review,” Plavčan told the press.
In addition, he gave assurances that businesses successful in another call for proposals, this time to support new industrial research and development centres, will be required to present their plans to the public.
The media noticed that whenever Plavčan had difficulties answering their questions, he was helped by Vladimír Soták, general director of the central Slovak metals plant Železiarne Podbrezová and head of Klub 500, a business lobbying group representing Slovak firms with more than 500 employees.
For example, when Plavčan was asked why doctors evaluated the steel-focused projects, Soták stepped in and stated that the ministry is not to blame.
“Those people should come out and say they will not evaluate projects they don’t understand,” Soták told the press.
Plavčan also explained his refusal to step down by saying that his predecessors are responsible for the dubious distribution of eurofunds.
One of the education ministers during the previous government solely led by Smer was Peter Pellegrini of Smer. He rejected any accusations that the previous government is the one to blame for current problems.
“It would be manlike to admit to error and not look for culprits in past,” Pellegrini told the Denník N Daily. “If someone is a year and half in the ministry he is fully responsible for what is happening there.”
Rectors present during the press conference also criticised the event because they had no say there.
“After negotiations with the minister, all the university and SAV representatives also remained at the press conference until its end but were not called on to speak,” the rectors wrote in their joint statement.
President Andrej Kiska as well stated that he expects more decisive and comprehensible moves from Plavčan.
“Education Minister Peter Plavčan hasn’t convinced me that the EU funds were really used for top-level research, development and innovation,” Kiska told the press. “He hasn’t persuaded me that the funds were distributed in a transparent manner and that the evaluation process was in the hands of the top experts in the sphere.”
16. Aug 2017 at 14:14 | Roman Cuprik