Posted by on 6 Sep 2010. Filed under Politics, Top news. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

Suspicions of cronyism: massive overspending of yet another state company

Talk of cronyism in Slovakia is nothing new, with cases now popping up like mushrooms after the rain. Another suspected case of overpriced services under the former government, at the expense of taxpayers’ money, has now been uncovered by the Ministry of Economy.

The state enterprise MH Invest, which was set up mainly to deal with the establishment of industrial parks, has been paying out generous amounts of money to its ‘contractors’ for the past four years. MH Invest has just 11 employees and falls under the Ministry of Economy.

For example, Zilina-based company Finecon has being doing particularly well, earning an astonishing EUR 50,000 a month for almost redundant accounting and consulting services for MH Invest. This has cost the taxpayers something in the range of EUR 2.3 million since 2007. What’s more, Finecon wasn’t even selected using a public tender (just negotiated procedure without prior notice).

It’s interesting also that Finecon signed a contract back in 2004 also with the town of Zilina without a public tender. The directors of MH Invest, which signed the contracts, include nominee of former ruling party Slovak National Party (SNS), Stanislav Grobar. Worth noting is that Zilina is an SNS stronghold and SNS chairman Jan Slota was the mayor of the town at the time the contract was signed.

Following the change of government, the newly appointed director nominated by ruling SaS party, Eduard Pekarovic, discovered and revealed the questionable management of MH Invest. Pekarovic also said that all contracts signed by MH Invest would be checked and terminated if required.
The new economy minister Juraj Miskov (SaS) referred to the case as “brutal” money-wasting in MH Invest, saying also that the results of the audit were still not known and that it remains to be seen if the case warrants criminal prosecution.

Other spending of MH Invest include expensive offices in the Aston Esquire Hotel in Bratislava, costing EUR 4,355 a month, even though there were free offices available at the Ministry of Economy. Administration and servicing of IT equipment amassed to nearly EUR 8,400 a month, with internet for the eleven employees costing EUR 2,340 a month.

In an interview with SME daily, former economy minister Lubomir Jahnatek repeatedly denied any knowledge of dubious or untoward dealings going on at MH Invest. Interestingly, the other director was a nominee of his party SMER-SD, Robert Novotny.

It makes one wonder just how much money has been sucked out of public finances in this way, and how much of it we will never find out about. It is also curious as to why nobody ever seems to be held liable for it, but maybe the times have changed. Only time will tell.

1 Comment for “Suspicions of cronyism: massive overspending of yet another state company”

  1. [...] The company Nona was selected in a dubious tender by MH Invest, which has been the target of various investigations recently over other excessive spending practices. [...]

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