A procurement that smells of corruption and intrigues

Photo: Remo Tõnismäe

• Minister Kersna made several errors when procuring test kits.
• No other minister has been investigated in relation with procurements.
• The prosecutor’s office has no evidence of someone being preferred in the procurement.

Minister Liina Kersna (RE) signed last autumn two agreements for the purchase of rapid tests for schools; the large-scale breach of laws became apparent quickly enough, but formal response took an unacceptably long time and opened an opportunity for political intrigues during the crisis caused by the war in Ukraine.

The minister of research and education will testify at the Ministry of Finance tomorrow about the procurement of rapid tests for schools. Regarding the first procurement, Kersna has been accused of infringing the procurement procedure by favoring only one supplier; regarding the second procurement that it was subsequently extended after the bidders had submitted the prices.

If found guilty of both misdemeanors, Minister Kersna could be fined up to 2,400 euros. “In our practice, there have never been any misdemeanor proceedings concerning a minister,” confirmed Estella Põllu, Deputy Head of the Public Procurement and State Aid Department of the Ministry of Finance.

Haste

Rapid action after the school holidays brought quick tests: a contract concluded with Selfdiagnostics OÜ provided rapid test kits at a price of 2.5 euros each.

At the same time, Medivar OÜ delivered rapid tests to Selver and Maxima. “The test kits sold there were cheaper than in the procurement. We would have offered the ministry 1.5 euros per kit,” said Kalev Rabi, a member of the company's management board, who said that their lower price was due to direct contacts with the manufacturers.

“I later visited the schools and saw that the winner of the tender had delivered at least three different tests – they had been purchased from different European intermediaries, which explains the high price and small amounts of the test kits. Unfortunately, the kits for professional use with a long rod were not suitable for children and the test did not have a corresponding certificate,” Rabi said.

Rabi heard about the rapid test procurement from the minister's public statement. One day before the contract with Selfdiagnostics was signed he contacted the ministry and announced his readiness to deliver the test kits. “They must have known of us because we had talked about the same matter previously.”

Passing the buck

The Ministry of Education explained that the obligation to procure the rapid test kits had been unexpected because the Ministry of Social Affairs had been unable to carry out the procurement.

Kirsi Pruudel, media relations specialist at the Health Board, said that the Health Board only procured rapid tests for professional use according to a framework agreement with the European Union and the kits had been meant for health care workers. “As the need for testing emerged in schools in the autumn, the Ministry of Education and Research was ordered by the government to provide schools with rapid tests for self-testing."

“Apparently there was a management gap in the government so that the issue dropped between two ministers, but that does not mean that we should not take legal action,” said Urmas Reinsalu (Isamaa), chairman of the Riigikogu State Budget Control Select Committee. In any case, it provokes questions if it subsequently becomes apparent that there had been statements distorting the facts.

Another error

The second procurement of rapid tests already included invitations to the tender and 12 bidders were admitted. “This one, too, was not carried out in the most straightforward manner, regarding the amendment of the procurement conditions after the bidders had announced the prices,” Rabi recalled. This inevitably raised the question of who benefited from this arrangement. Finally, a third public tender was held with 30 enterprises taking part.

However, it seemed most unusual to Rabi that the ministry made a 30-percent down payment for the first transaction. “Selfdiagnostics is a small company and the volume of this contract exceeded its capabilities by far so that it needed the money to buy the test kits,” he said.

“In fact, I have never heard of advance payment being made in public procurements,” Reinsalu noted. The state expects the supplier to be solvent and several suppliers were available. However, only one received the favored treatment. “They could have asked any random person that way: here's the money, go get the tests.”

Minister Kersna said that she is ready to be held responsible if anything was wrong with the procurement. “Of course, compliance with the law must be ensured, and it was with this knowledge that we acted to keep the education system open,” she said. The decisions had been made by a team including lawyers.

The trail goes cold

Reinsalu says that even stupidity can be an illegal act in Estonia. “However, if the minister believes that the end justifies the means, it raises the question of whether such a minister is suitable for office. By accepting such behavior, we lose the moral right to demand any compliance with the law.”

“It is useful to start misdemeanor proceedings quickly. Once it is terminated, criminal proceedings cannot be initiated later,” said Rabi, who believes that there is evidence of crime. “Our letter to the Ministry of Education and Research was wiped under the rug, so that no one knew of the other supplier. I later sent the letter to the Ministry of Finance myself – they were surprised by the evidence.”

“It is not so straightforward,” said attorney-at-law Paul Keres, partner of the Lewin law office, but he agreed that if a decision is made regarding misdemeanor, Kersna will gain a strong argument in favor of dropping further investigation. Keres added that he did not have enough information on whether criminal proceedings could be initiated in a specific case even after the end of the misdemeanor proceedings.

The difference between a crime and a misdemeanor is that the violation was committed in someone’s favor. “There should be the suspicion that someone was preferred. The rejection of other bidders seems quite harsh, and secondly, the advance payment of 1.5 million euros in procurement is completely unheard-of,” Keres said.

On 12 May, the members of the Riigikogu EKRE faction submitted an appeal to the Prosecutor General's office and the Internal Security Service to initiate criminal proceedings against Kersna.

Postimees wrote a week ago that the public prosecutor's office did not initiate it. “We cannot start proceedings if there is no evidence of crime. Neither can we start criminal proceedings to search for evidence of crime,” said Kairi Küngas, public relations adviser of the Prosecutor General's Office.

The procurement saga of the rapid tests

On October 28, the Ministry of Education and Research concluded the first contract for the purchase of rapid tests – 5.1 million euros worth of tests were purchased from Selfdiagnostics OÜ.

A second procurement was organized in the end of November. Again, it was not open to everyone, 12 suppliers were invited. Following the submission of prices, the terms of the procurement were unexpectedly amended and new bids had to be submitted.

On November 24, Liina Kersna answered for the first time the questions regarding the rapid tests: “I categorically disagree that the raid testing is a failure.”

On December 6 Kersna faced the Riigikogu members’ questions regarding the procurement of the test kits.

On December 13, Auditor General Janar Holm judged the procurement of the rapid tests: “Considering the large sum involved, competing buds should have been accepted, even under the pressure of time.”

On May 9 Kersna said: “I we did something wrong, I shall take responsibility for it. It is my signature on the contracts.”

On May 12, EKRE submitted an appeal to the Prosecutor General’s office to initiate criminal proceedings regarding Kersna.

On May 24 it was announced that there was no evidence for the criminal proceedings.

On May 27 Kersna learned that the Ministry of Finance has initiated misdemeanor proceedings and summons her to testify on June 1.