Saturday, April 04, 2009

The Polish system of EU fund distribution is corrupt

The Polish system of EU fund distribution is corrupt. Funding applications can be reviewed by the same persons who submit them. 'If I catch anyone doing this, I'll cancel the whole procedure', warns the minister of regional development.

'I think the whole case of how EU subsidies are distributed should be investigated by the Central Anti-Corruption Bureau', Marek Goliszewski, president of Business Centre Club, an industry lobby group, said at a press briefing yesterday.

'The system of expert selection and application review is pathological! Some applications receive preferential treatment, others are rejected without reason. Those who review the applications themselves write them after hours', pointed out Mr Goliszewski, clearly annoyed.

Gazeta has for a couple of days now been investigating the matter itself and its findings are, sadly, consistent with Mr Goliszewski's diagnosis. The main pathology is that the funding applications are reviewed by expert teams whose members can receive up to 10 percent of the subsidy amount if the subsidy is granted. No one has been caught reviewing their own application yet - but the possibility of widespread abuse exists. Also because your application can be reviewed by your own colleagues.

In the Dolnolskie province alone out of the eighty three experts in charge of reviewing the applications, as many as thirteen work for companies that draw up applications for money. Some of those companies actually boast about the fact on their websites.

How did these experts find their way to the review committees? Central and local government institutions every now and then announce open competitions for the purpose. Virtually everyone can run in them.

Pawel Maliszewski, co-owner of Co-Worker, a Wroclaw-based consulting firm, tried to assess the scale of the phenomenon by presenting himself as a client interested in securing a subsidy.

'I had heard that among the members of the review committees were employees or even heads of companies that write applications for money. And it proved to be true', says Mr Maliszewski.

Among the members of the review committee in Wroclaw are two experts from Centrum Wspierania Biznesu, a ?widnica-based consultancy. All five applications that CWB had drawn up for its clients were approved.

'They won easily, ending up 1st, 2nd, 3rd, 8th and 28th, respectively', says Mr Maliszewski.

Barbara Kanikowska, head of the Dolnolskie Intermediate Body (appointed by the local assembly to distribute EU subsidies for business), stresses there were no irregularities whatsoever. She says no CWB officer reviewed applications that CWB had helped prepare.

'All experts sign a declaration of no conflict of interest under the pain of criminal liability, in which they agree not to review applications in which they may have an interest', says Ms Kanikowska.

According to the evidence Gazeta has gathered, the situation in other provinces is similar. Dubious situations can even take place on the central level, where subsidies as large as PLN150 million are awarded.

'I suppose that about one in five of the review committees members reviewing applications in the two parts of the Innovative Economy programme are employees lf consulting firms', Michal Gwizda, partner at Accreo Taxand, tells Gazeta.

We have checked one of the lists of review committee members posted on the Ministry of Regional Development's website. Out of the more than sixty persons on the list, more than twenty had ties to consulting firms.

'The scale of the problem is vast', warns Jerzy Kwieciski, former minister of regional development, expert for BCC and president of the foundation Europejskie Centrum Przedsibiorczoci.

'If such conflicts of interest are tolerated, we will have a situation where not necessarily the best projects are approved. Even if theoretically everything will be done in accordance with the law.'

'I am very sensitive to such irregularities. We'll intensify inspections', Minister of Regional Development Ewa Biekowska told Gazeta.