ECONOMY

Official reports against subsidy cheaters systematically ignored

When Kathimerini recounted on June 8 the tribulations of an employee who was fired when she revealed that the Greek subsidiary of a multinational did not observe the conditions according to which it was subsidized under the investment incentives law, it was hard to imagine that such phenomena are the rule rather than the exception. Since then, we have received a good deal of evidence about specific enterprises that reveals not only how both national and Community subsidies are wasted but also how scandals are systematically covered up. These are cover-ups directed from above and implemented by consulting committees, either through unexplained delays in the suspect cases or through continuous postponements of discussions. The phenomenon of covering up for enterprises that have not observed the conditions under which subsidies are granted or have simply not implemented the investment schemes – and have even reduced staff in some cases – is, among other things, blatantly unfair to those firms that abide by the rules, waiting for months for the approval of the consulting committees, whose role in disbursement is crucial. The evidence coming to light shows cases of enterprises which, despite having been taken out of the relevant programs two years ago due to failure to abide by the rules, suddenly reappear on the list of applicants for consideration. These include firms that would have normally been struck off the list, after being found by the Financial Crimes Squad (SDOE) to have over-quoted the cost of the investment; alas, the responsible consulting committees shy away from conferring. And when they do, they hasten to meet the demands of those that not only failed to implement the schemes for which they were financed but presented as investment outlay various maintenance expenses such as mops and toilet paper! A characteristic case was that of a well-known company which, according to a SDOE report, «set up an offshore company which it presented as an intermediary supplier, in order to over-quote the cost of engineering equipment. The aim was to show the cost of equipment as incomparably higher than the real one… in order to receive a higher subsidy for their purchase»; the report was ignored. In much the same way, the consulting committee ignored the seriousness of recommendations by the Development Ministry’s Industrial Investment Department for a large industrial enterprise which «far from investing in building installations according to its plan, a large part of the expenses it presented concerned consumables, such as water supplies, or airline tickets and hotel accommodation during the Thessaloniki International Trade Fair.» It also appears that transfers of public servants who object to such scandalous practices happen frequently. If their reports are not favorable, the case is assigned to another official until black is made to appear white. And if the hitch still remains unsolved, the consulting committee moves in again. Well-informed sources say that the ruling party’s political clientele mechanisms in the Development Ministry are well-geared to «treat» the new applications for subsidies; the consulting committees are said to receive lists of which investment proposals have to be given preference. Obviously, a number of questions emerge for the minister and his deputies, particularly as regards the role of the committees. Above all, are they above the law?