Lithuania’s corruption buster: firms donating to hospitals stand better chance in tenders

The majority of the winners of the tenders organised by major Lithuanian hospitals have expressed their gratitude to the health providers by making donations to them in the form of financial support.

The scheme spans at least 10 major Lithuanian hospitals, including the Santaros Clinics in Vilnius, the Kaunas Clinics in Kaunas, Lithuania’s second-largest city, and the main hospitals in the towns of Panevėžys and Šiauliai. The corrupt dealings were revealed this by Lithuania’s Special Investigation Service (STT) this week.

According to it, supporters of hospitals or related associations have a clear edge in winning public procurement tenders. There have been a number of cases of the kind, according to STT.

That Lithuanian hospitals favour certain suppliers has long been a topic of the rumour mill, and the media too, however only now STT, the corruption watchdog, is ringing alarm bells.

Asked about the timing, Renata Endružytė, the Communications head of the Service, told BNN that STT commences a probe only when it has gathered «sufficient evidence” of a corrupt activity.

«The Service has been gathering the evidence in form of different data for the last couples of years,» she accentuated.

According to her, the investigation into the procurement deals at the Santara Clinics is still ongoing, however she could not say if the kind of probe will be expanded to other Lithuanian hospitals.

«The nature of the Santara Clinics investigation is not only legal but also analytical,»Endružytė emphasised.

So far, pre-trial investigations have been commenced not only in the Santara Clinics, but in some other hospitals, too.

Jovitas Raskevičius, a deputy director at STT, said the probe shows that the Santaros Clinics in Vilnius, Kaunas Clinics as well as the main hospitals in Šiauliai and Panevėžys dominate in such schemes.

«After we launched a pre-trial investigation against the Santaros Clinics, we also wanted to look into whether the same phenomenon is characteristic of other hospitals,»he told journalists this week.

In late February of the year, suspicions have been brought against eight individuals at the Santaros Clinics and the number was expected to rise.

STT suspected them of having been involved in the mechanism of demanding, allocation and use of illicit support. At the cusp of the probe at the Santaros Clinics was its director Kęstutis Strupas as well as other three other employees.

Strupas has been suspended from his job on suspicions of abuse of power amid the scandal. Bribery suspicions have also been brought against the clinic’s Information and Development Center director Romualdas Kizlaitis and two IT project managers. Other four suspects included representatives of private companies.

Among the mentioned names implicated in the Santara hospital scheme, was Atea, a company of the Norwegian-owned IT solutions group Atea Baltic. Santaros in early November 2017 signed a 502,500-euro computer and software contract with Atea. That followed the signing in late July 2017 of a firewall purchase and installation contract worth almost 150,000 euros with Atea and Fortevento. Prosecutors suspected representatives of the Santaros Clinic demanded unlawful financial rewards from the companies for granted public procurement tenders, estimated at nearly 2 million euros in 2017 alone.

Strupas, the hospital director, stepped down with dismissal looming.

According to STT, 87 legal persons provided financial donations to the Santaros Clinics in 2013-2016, and they accounted for more than a fifth of all winners of public procurement tenders. They secured contracts worth 130 million euros, o 72 per cent of the total value of the hospital’s public procurement.

Separately, STT also looked into alleged corruption at the Santaros Clinics in 2015-2017. It identified 319 legal persons who won the hospital’s public tenders worth almost 164 million euros. Out of these, 123 had provided support for more than 4 million euros to the hospital itself or related support receivers. STT pays attention to the fact that these financial donors won 87 per cent (more than 142 million euros) of the Santaros Clinics’ public procurement tenders.

In other case of the sort, during 2013- 2016, 52 legal bodies, or 11 per cent of all tender winners, allocated financial donations to the Kaunas Clinics and won 56 per cent, equalling to 150 million euros, of the tenders’ total value.

In tenders organised by the Republican Šiauliai hospital, 40 companies, i.e. 18 per cent of all tender winners, made «support» payments to it after winning 56 per cent, or 33 million euros, of the hospital’s tenders’ total value. In the Panevėžys hospital, the numbers stood at 27 per cent and 66 per cent respectively.

STT officials refrain from naming the companies involved but plan to turn to the Public Procurement Service and other institutions.

Raskevičius, of STT, says the existing situation might be down to legal flaws and the lack of control.

«A mechanism for covering-up received support exists and whether it’s down to legal imperfections or lack of control, I think, we’ll get the answers in the future,» he told journalists.

He exhorted local businesses to inform of tender organisers’ suspicious hints to support them.

«We will scrutinise each case of the kind. At the moment, we do not have information incriminating anybody, however we see the numbers that speak for themselves,» the STT official said.

According to Lina Bušinskaitė- Šriubėnė, spokeswoman of the Lithuanian Health Minister, Aurelijus Veryga, the Ministry «values very much” the STT analysis and the facts about the shady schemes of support to Lithuanian hospitals and the revealed connection between it and the winning of the hospitals’ tenders.

«Nevertheless, these facts did not surprise us, as the information gathered by the team of the Ministry’s Corruption Prevention Department, has shown a very similar situation,»she told BNN.

According to her, the Ministry has drawn up and sent out special recommendations to the country’s medical facilities instructing them how to ensure maximum transparency in their activity.

To improve the situation, the Ministry suggests that medical facilities obtain status of support recipient and that they make information about received financial donations accessible to the public.

«We also suggest to obligate medical facilities to announce publicly how they use received financial support. Is it used for promoting the medics’ skills or (are they used) for enhancing the public health and so on,» Bušinskaitė- Šriubėnė said.

Lithuania’s effort into combating corruption ought to be firmer, several international corruption prevention watchdogs have said. Yet the country is slowly but steadily improving its score on Transparency International’s Corruption Perception Index – it was 38th among the 180 ranked countries in 2017. On the list, Lithuania is ahead of Latvia and Poland, although still behind Estonia and most of Western Europe. According to Eurobarometer, corruption experience among business managers has decreased from 21 per cent in 2015 to 7 per cent in 2017.

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