Prime Minister Iveta Radicova is now taking a keener interest in the contracts for EUR 1.5 million from 2007 and 2008 that were awarded by the Ministry of Finance under the former government to the company Hayek Consulting. At that time the company was partly owned by the current state secretary of the Ministry of Transport, Ivan Svejna, and state secretary for the Ministry of Economy, Martin Chren.
In total the affair concerns four contracts between the Ministry of Finance and the company, three of which were awarded without a due public tender. The company Hayek Consulting denies any wrongdoing, explaining that it won the main contract in a regular tender, while the three smaller deals were awarded in line with the law on public procurement. The contracts were for development of effective budgeting for local governments and related projects.
Possibly the biggest problem for the two current state secretaries, though, is the signing of another contract worth EUR 8,100 just after the elections. It was concluded between Hayek Consulting and the National Agency for Small and Medium-sized Enterprises (NADSME) a few days after Chren and Svejna were appointed by the new cabinet. Shortly afterwards they both got rid of their stakes in the company and had the contract cancelled.
Main opposition party Smer-SD has demanded that PM Radicova and SaS chairman Richard Sulik take necessary action against Chren and Svejna, referring to the case as a “scandalous state commission”. “This is an unprecedented conflict of interests, as the minister passed business to his state secretary and party colleague,” said Smer chairman, Robert Fico.
In response, PM Radicova has given the state secretaries until Monday to provide an explanation, and will discuss the matter with her coalition partners at the coalition board meeting on 21 September.
Martin Chren (State secretary for Ministry of Economy) has rejected outright any illegal action when his former company Hayek Consulting won the state orders, and has referred to recent associations of his name with a “notice-board tender” and a conflict of interests as untrue. Regarding the contract signed after the elections, Chren claims he acted in a way so as to prevent any conflict of interest and, in fact, did everything to make sure Hayek Consulting withdrew from the contract before any money could change hands.
In his defence, Chren explained he had cut all ties with Hayek Consulting and the Hayek Foundation after getting into politics, and that the company had won the contracts legitimately and in line with the law, and had even published them over and above the scope required by law.
The coalition will decide on the issue this week and for the sake of keeping face, there is a good chance the two men will be removed from their posts whether guilty or not.