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Saturday, July 24, 2010

Procurement controversies -- Bulgaria and Romania

Bulgaria, Romania rapped for public procurement fraud
Fraud and conflict of interest regarding public procurement are the 'big novelties' in the latest European Commission reports monitoring the progress of Romania and Bulgaria three-and-a-half years after their EU accession. The seventh such reports were published today (20 July).

Shortcomings in the implementation of public procurement procedures are widespread in Bulgaria. As for Romania, substantial improvements are required to protect against conflict of interest and corruption in public procurement, the reports say.

In particular, legislation should address conflict of interest cases related to the business interests of local politicians and their families, the report on Bulgaria says.

In Bulgaria, large-scale schemes for siphoning public funds for the personal benefit of close relatives of politicians and civil servants were recently unveiled.

For example, the head of the national roads agency, Vesselin Georgiev, has been charged for giving lucrative contracts to his brothers, Emil and Boyko. The court case is still pending, writes Dnevnik, EurActiv's partner publication in Bulgaria, as the finance ministry did not send the required documentation to the courts on time.

In another case, Emilia Maslarova, minister for social affairs under the previous Socialist-led government, was prosecuted for awarding a hefty contract to renovate an old people's home - worth 5.5 million euros - to a firm linked to her husband.

Such conflicts of interest are not just the legacy of the former government.

For Bulgaria, the Commission's so-called 'irregularity rate' is almost 100% for large public infrastructure projects, where the authorities are obliged to exert ex-ante control, the report says. It further claims that the administrative and judicial authorities are "not in a position to protect public procurement against conflict of interest in an effective way".

Commission spokesperson Mark Gray said it was indeed a matter of concern to Brussels. It is not a question of introducing a new law, rather one of using legislation that already exists more effectively, he said.

This year's report is more critical of Romania than previous editions. It reprimands the country for having breached its EU accession commitments, after its constitutional court declared significant parts of legislation on the National Integrity Agency (ANI) unconstitutional.

The new law, which was adopted after the constitutional court's decision, undermines the process of verification, sanctioning and forfeiture of unjustified assets, restricts the transparency of dealings by public officials and hampers measures to fight corruption.

In Romania, prominent public procurement cases concern an MP and a high court judge in a case of influence peddling related to public procurement, two former ministers, other current or former MPs and a number of former directors of state companies and locally-elected officials, the report says.

ANRMAP: Romania has already taken action against conflict of interest in public procurement
Romania has already taken action to solve instances of conflict of interest in public procurement, and the European Commission will be notified about the latest updates, Romania’s National Public Procurement Regulation and Monitoring Authority (ANRMAP) mentioned on Thursday in a press release.

The release says the critical report by the European Commission on Romania’s progress with judiciary reform and the fight against corruption was probably drawn up before July 2, when the Government passed an emergency ordinance amending the public procurement legislation.

‘Any bidder/candidate/associated bidder/subcontractor who is a member on the administration board/leading board or supervisory board and/or who has stakeholders or associates who are their spouse, next of kin or is related to him/her up to and including four times remote or doing business with decision makers of the contracting authority shall be excluded from the award procedure,’ the new provisions say.

The Commission’s assessment shows that the competent administrative bodies do not apply effective controls to detect conflict of interest and corruption and do not sufficiently cooperate in this matter.

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