Evidence clearly shows how Estonian scientists took the European Commission for a ride using false data. Rector of TalTech Jaak Aaviksoo has known about the scheme for five months but has done nothing about it in that time.

Rector of the Tallinn University of Technology (TalTech) Jaak Aaviksoo is sitting in his office on March 15 of this year when a doctoral student enters the room. The latter has been waiting to meet the rector for a long time. Perhaps someone will finally listen and not tell him to keep quiet. The young man is nervous, but Aaviksoo is supportive.

“There’s no reason to be nervous, you’re doing the right thing,” he says.

The student speaks. To put it simply, we are paying money from an EU fund to people who are not working on relevant projects. A project I manage called OGI has seen us pay €83,000 to people who are not part of that project,” the messenger says.

Aaviksoo looks surprised and asks whether he understands the man correctly.

“We are falsifying time-schedules. It is embezzlement,” the young scientist explains.

“Not just embezzlement, it is corruption,” Aaviksoo adds after listening to the details.

The whistle-blower breaths a sigh of relief. It seems to him he has finally broken through the ring of defense. “I can forward you documentation,” he offers.

“You can send it, but… I must think about the procedure from here. We have tools for this in the administration,” Aaviksoo says. “You have done the right thing, thank you. It is up to me to stop it. Unfortunately, now that I come to think of it, this thing seems more systematic and serious than I thought.”

Five months goes by. The conversation seems to have produced no results. No one is asking any question, there are no calls. The secret was meant to remain a secret.

The Ragnar Nurkse Department of Innovation and Governance (RNI) is one of the crown jewels of TalTech, teaching public administration – put simply, how to run a country and handle taxpayer money.

The institute has assets it can advertise. Four laureates of national research awards in 20 years. World-class guest professors. Several graduates and students among top politicians, including Prime Minister Jüri Ratas. Countless projects commissioned by ministries.

Even though tech departments look down on the institute, it has a singular virtue. It receives very little in base financing from the alma mater but brings in copious amounts of project funding. The Ragnar Nurkse department is cheap but successful. Here is where the heart of the matter begins.

In 2016, the European Commission allocated €267,500 from its Horizon 2020 project to the Ragnar Nurkse institute for Estonians to realize an international project called OpenGovIntelligence (OGI).

Third of the money gets “sideswiped”

All the money is spent and more. The institute also managed to take charge of support initially meant for the Ministry of Economic Affairs and Communications. The total sum grew to €279,850.

Postimees has at its disposal detailed OGI reports, including fictitious work schedules drawn up after the fact. The editorial staff have spent a month going through spreadsheets, correspondence and salary slips.

There are more controversies to be found than a newspaper article has room for.

Even though the work on OGI was done by four junior researchers who are paid a lower salary, TalTech’s workload was painted as extensive for the European Commission. Several excuses were found for this, from complaining of increased workload because the economy ministry dropped out of the project to claiming that professors were suddenly too busy and had to be replaced with doctoral students. While the latter are paid less, all the money was nevertheless “used up” because it took them longer to complete the work.

Because the work was actually done by just four authors paid their normal salary and in less time, the institute was left with a hefty surplus.

The money left over was paid to people who did not participate in the project. That is to say that resources secured through fraud were used as an extension of the department’s salary fund. At least €83,000 of the total €279,000 was paid out as salary to third parties. In yet other words, the European Commission ended up paying for work TalTech’s scientists never did.

Everyone accepted the money

The largest misused sum – €31,904 – went to research fellow David Duenas Cid who is reported to have spent 2,000 hours working on OGI. Research information system Researchgate.net reveal no trace of Cid having reported his mammoth contribution. They do reveal that the researcher was working on e-governance projects at the time.

Over €22,000 was paid to the department’s de facto head professor Wolfgang Drechsler who serves as the institute’s central figure and authority and must sign off on most or all doctoral degrees. Drechsler spent three months traveling the world during a time work schedules suggest he should have been working on OpenGovIntelligence.

Drechsler’s Facebook had the following to say: in Belgium one day, in Thai a week later, Myanmar four days later, the Philippines two days later, Burma three days from then, Thai nine days later, Germany after five days. To believe the work schedules, he found over eight hours to work on the project every day of his trip.

The salary of RNI guest lecturer, London Business School professor Carlota Perez came form the same source. Perez episodically visits Tallinn to give lectures but has had no contact with OGI.

Postimees called the fictitious authors of the research project to ask about their involvement with OGI. “I do not believe I had a part in that project,” said professor Erik Reinert who was paid for a few hundred hours supposedly spent working on OpenGovIntelligence.

Reports suggest senior research fellow (then junior) Ralf-Martin Soe also spent over a thousand hours on OGI. He initially tells the journalist his contribution was brief. When told that reports show him having worked for over one thousand hours, Soe confirms that was his workload.

“I have written papers directly tied to the project,” the scientist claims, listing several papers to his name. Not one is part of OpenGovIntelligence. His works are not included in the list of publications presented to the European Commission.

“Yes, that is how this project was handled”

“Yes, OGI has paid more people than there were actual contributors,” RNI junior research fellow Maarja Toots admitted when confronted with the evidence by Postimees on Monday. Toots is not the only one. Her comment is corroborated by actual project author Keegan McBride and another RNI employee who asked to remain anonymous.

McBride adds that working hours of actual authors were also subject to scheming. “I spent a week in the hospital, while they jotted me down for 20 hours,” he says. McBride was paid for a total of 2,000 hours but admits his contribution might have been more modest. “For example, it only took me three days to put together the pilot.”

Toots oversaw reporting but is not the author of the scheme. She says she was instructed by OGI project lead professor Robert Krimmer. Instructions of how to use money secured through fraud for salaries of the department’s employees allegedly came from RNI Director Erkki Karo. It is noteworthy that a considerable number of close persons, including the institute’s accountant played along.

Were the people paid aware of the scheme? Yes. Until recently, the accountant had always listed relevant projects on researchers’ pay slips. That is to say that Drechsler, Soe et al. saw that every month they were being paid for something they did not do.

Evidence suggests their conscience did not keep them awake at night. The scheme was referred to as “creative accounting” inside the department. Employees were instructed not to use the world “fraud” in online conversations.

Those doubting the legality of the scheme were told by RNI heads that it was the only way to maintain recent staff volume and avoid cutbacks.

“We did talk about why that was the case,” Maarja Toots recalls. “The administration usually told us the decision was made somewhere. It has not been in my power or the power of other researchers on the same level to change.”

Data suggests the institute might also have taken the university for a ride. For example, when Drechsler was paid €4,280 for a smaller research project. Once more, Drechsler is not listed as being involved in the initial application, and other authors, McBride and Toots, know nothing about his involvement. There is no public record of his participation.

Professor Ringa Raudla was also paid €4,280 for the same project. “No, I did not participate in that project,” Raudla tells the journalist. TalTech paid €45,000 for salaries in two such projects almost €20,000 of which Postimees believes went to fictitious participants.

This means that the institute has embezzled over €100,000 in fictitious salaries, while McBride believes it is likely such accounting has been used for years and on more projects.

Why did the reputable department go down that path? Postimees has at its disposal a recording in which Director Erkki Karo admits that the idea of schemes is to maximize the institute’s income. “We have 7-8 professors, while the university’s base funding is only enough to employ four. That is why we need to build reserves,” Karo told an employee in a private conversation.

Postimees repeatedly asked Erkki Karo to comment this week on whether people who did not really participate in the work have been paid in the OGI project. Karo refused to answer, giving personal data protection as the reason.

Rector Aaviksoo ignored the tip

When Postimees asked Aaviksoo about the March meeting and any steps he might have taken this Monday, the rector initially refused to acknowledge such a meeting had ever taken place. He said he did not know the person he was supposed to have met with, that the circumstances did not ring a bell and that there were no grounds to exercise supervision over RNI. “What do you mean? I have no grounds for action,” Aaviksoo parried.

The rector’s answer changed two days later. Aaviksoo now claimed he denied the meeting trying to protect the whistle-blower’s anonymity. The head of TalTech said he ordered an internal audit of the use of Horizon 2020 funds that was concluded without any violations discovered.

When Postimees looked at a brief summary of the audit, it turned out that OpenGovIntelligence was not part of the sample as all projects the volume of which fell short of €400,000 had been excluded for unknown reasons. In other words, a project specifically pointed out to the rector as potential corruption was not audited.

What is more, even concluding that projects that were audited are clean is premature as the audit department admits it only checked the existence of work schedules but not their truthfulness or the allowability of expenses.

Aaviksoo says in hindsight that the whistle-blower should have been more specific and presented accurate evidence. The rector claims he didn’t even know which project was suspected of fraud. “I can go in there (the project – O. K.), but I need a specific complaint concerning specific counterfeiting,” he explained.

What Aaviksoo doesn’t know is that Postimees has at its disposal a recording of the March meeting cited at the beginning of this article. It clearly demonstrates that the whistle-blower offered Aaviksoo evidence the rector did not deem very useful.

Aaviksoo claims he did not even know the name of the project in question. And yet, the person who came to see the rector clearly reads it to Aaviksoo along with the project code that he then jots down. The rector also had the whistle-blower’s phone number but failed to call him once.