Romanian anti-corruption chief: Fraud often begins when tenders are written

Anti-corruption chief Laura Kovesi [Euractiv Romania]

This article is part of our special report Public procurement corruption in Romania.

SPECIAL REPORT: Often those who write the technical specifications of tenders play a key role in the corruption schemes for public procurement, the Chief Prosecutor of the Anti-Corruption Directorate of Romania (DNA) Laura Codru?a Kövesi told EURACTIV Romania.

Laura Codru?a Kövesi took the post of Chief Prosecutor of DNA in October 2006, being the first woman to be appointed at this post. At the age of 33 in 2006, she is also one of the youngest Prosecutors-General that Romania has had. Before her position as Prosecutor-General, Kövesi was the head of the Department of Investigation of Organized Crime and Terrorism Offences (DIICOT) branch in Sibiu County, responsible for the fight against organised crime and terrorism.

She spoke to EURACTIV Romania’s Ioana Morovan and Ramona Diaconu.

In 2014, there were 568 cases of public procurement infringements in the public procurement registered at the DNA. In the same period of time, 93 persons were indicted in 17 of these cases. Are there any conclusions to be drawn on the basis of this statistic data? What is the typology of the public procurement investigations?

Public procurement fraud is more frequent in the field of national funds, while the EU funds are better protected by the Law 78/2000 on preventing, discovering and sanctioning of corruption acts, which has specific provisions for most irregularities in that area. There is no such criminalization for national funds, so prosecutors usually use a very general text – the abuse in office, which doesn’t cover all types of fraud.

Most often, the defrauding process is initiated in the phase of the estimation of the value of the contract to be awarded. For instance, due to a fraudulent agreement between the contracting authority and the company supposed to win the tender, complex and high-value works are mentioned in the general estimate of the call for services. Subsequently, the winner will bid these works to a very small value and submit a financial proposal considerably better than the other bidders, who will use market values. After awarding the contract, the authority will waive the high value works, and the winner will be able to finalize the contract at a profitable value.

Could you give us some relevant examples of trends, compared to last year, regarding the evolution of corruption cases in the public procurements field?

Fraud in the public procurement field has become more and more complex, and the defrauding mechanisms are even more sophisticated.

The moment when a fraud takes place has often switched from the phase of selecting the offer, to the phase of writing the technical specifications.

What is new in the DNA’s techniques and procedures linked to those files and the relevant legislative potential changes?

The investigation of fraud committed in public procurements procedures exceeds “the borders” of the regulatory framework in this field. DNA aims at making a complex analysis of the phenomenon. This implies several elements. One is specific checks at the stage of granting the necessary funds for the procurement, that is, the budget justification, the funds granting, preventive control. A second element is specific checks linked to the granting procedures. And a third element are specific checks linked to the implementation of the contracts. This means analysis drawn up in the fields of accountancy and fiscal issues, products counterfeiting, evaluation of the movable and immovable goods, and last, but not least, verifying of the discipline and quality in the field of construction.

The number of cases involving public procurement fraud is not very high. What are the main reasons?

We feel that more than 500 cases involving public procurement in less than a year is high enough for a structure with around 100 prosecutors, whose competence also involve other types of criminality, mainly high level corruption. You have to keep in mind that DNA’s competence is limited to a specific number of cases, involving high level officials or significant damages, while all the other cases fall within the competence of the regular prosecutor’s offices. More successful investigations would require more notifications form the regulating authorities. The contracting authorities also should conduct more internal checks in order to identify suspicions of fraud, otherwise it is difficult to expect prosecutors to identify by themselves all the irregularities.

Shall the Law 78/2000 on preventing, discovering and sanctioning of corruption acts be extended to the field of the nationally funded procurements? 

DNA has repeatedly asked the Ministry of Justice to initiate a legislative amendment that would criminalize the most serious irregularities concerning public procurement in a similar way to those involving European funds. Although a project was drafted in 2012 with the involvement of all the relevant actors, it is still to be adopted.

What other improvements in legislation would you feel the need to adopt, in order to give the DNA the necessary tools to fight corruption?

DNA has sent to the Romanian Parliament, who is discussing an amendment to the Criminal Procedure Code, several proposals for extending the investigative tools it can use. Maybe the most important would be the ability to close plea agreements with defendants who admit their guilt and are willing to cooperate with the prosecutors. At the moment, those provisions are applicable only for the less serious crimes, not for corruption.

How important is the field of public procurements from the perspective of the Cooperation and Verification Mechanism, which still applies to Romania?

In the last few years, the European Commission paid a lot of attention to the area of public procurement in the CVM reports. That helped a lot, because it helped the Romanian authorities became aware of the size of the problem and forced them into cooperating in order to identify solutions. Fixing the system will require a complex set of measures, because criminal investigations alone are not a panacea if all the other factors are still there.

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