TALLINN — The Northern District Prosecutor’s Office initiated a criminal investigation last week against Estonia’s Unemployment Insurance Fund, which may have broke public procurement laws.
The Public Procurement Office conducted a preliminary investigation on the Unemployment Insurance Fund’s 940,000 krooni (€60,000) souvenir purchase from a company whose owner is the brother-in-law of the fund’s general director. The fund spent 678,000 krooni (€43,300) from the European Social Fund and the rest from the fund’s own coffers to buy trinkets such as reflectors, pens, pencils, folders, plastic envelopes, calendars, 4GB memory sticks, and clocks. There were a total of 19 bidders for the souvenir purchase, but most of the sales went to [private_supervisor]AD Mad, whose owner is Ago Kurg, brother-in-law of Meelis Paavel, the fund general director.
The Public Procurement Office conducted an investigation from Jan. 22. to Feb. 5. and found that AD Mad was unlawfully favored and should not have won the procurement. The investigation found that the fund judged the prices of the offers with VAT even though AD Mad does not have a VAT obligation, lied about the term saying that the logo has to be printed on both sides of reflector even though AD Mad printed the logo only on one side, among other violations.
The results were sent to the Northern District Prosecutor’s Office, who initiated a criminal investigation last week. Conviction of a public procurement violation includes a one-year prison sentence.
The scandal has opposition members of the Riigikogu livid. Parliamentarian Ain Seppik of the Center Party said that he along with other Center Party members have pressed the prosecutor general to look into the case.
“Yes I contacted the attorney general to inquire whether there was a corruption threat,” Seppik told Baltic Reports. “However, it is not a political issue — we just want to find out the truth.”
Seppik noted that Estonia has more than 100,000 unemployed who don’t need the keepsakes, but jobs.
“The unemployment is huge, and handing out souvenirs is inappropriate in such a serious situation,” Seppik said.
Paavel says he’s cooperating
Paavel said that he is happy that the prosecutor’s office is investigating, and the fund wants to bring clarity on the procurement.
“We are cooperating with the prosecutor’s office and give our best for a fast solution,” Paavel told Baltic Reports. “I assure you that I have not influenced the procurement process.”
Paavel does not plan to resign from his position.
Was Pevkur aware?
Minister of Social Affairs Hanno Pevkur’s hands are tied in this case, according to the ministry, which says Pevkur does not have any real power over the fund’s activities as the fund is a separate organization not under the ministry’s authority.
“The minister is just the member of the fund’s council, he cannot give orders on what or how to do,” Rosenfeld told Baltic Reports.
Whether Pevkur was initially aware of the AD Mad remains unclear.
[/private_supervisor] [private_subscription 1 month]AD Mad, whose owner is Ago Kurg, brother-in-law of Meelis Paavel, the fund general director.
The Public Procurement Office conducted an investigation from Jan. 22. to Feb. 5. and found that AD Mad was unlawfully favored and should not have won the procurement. The investigation found that the fund judged the prices of the offers with VAT even though AD Mad does not have a VAT obligation, lied about the term saying that the logo has to be printed on both sides of reflector even though AD Mad printed the logo only on one side, among other violations.
The results were sent to the Northern District Prosecutor’s Office, who initiated a criminal investigation last week. Conviction of a public procurement violation includes a one-year prison sentence.
The scandal has opposition members of the Riigikogu livid. Parliamentarian Ain Seppik of the Center Party said that he along with other Center Party members have pressed the prosecutor general to look into the case.
“Yes I contacted the attorney general to inquire whether there was a corruption threat,” Seppik told Baltic Reports. “However, it is not a political issue — we just want to find out the truth.”
Seppik noted that Estonia has more than 100,000 unemployed who don’t need the keepsakes, but jobs.
“The unemployment is huge, and handing out souvenirs is inappropriate in such a serious situation,” Seppik said.
Paavel says he’s cooperating
Paavel said that he is happy that the prosecutor’s office is investigating, and the fund wants to bring clarity on the procurement.
“We are cooperating with the prosecutor’s office and give our best for a fast solution,” Paavel told Baltic Reports. “I assure you that I have not influenced the procurement process.”
Paavel does not plan to resign from his position.
Was Pevkur aware?
Minister of Social Affairs Hanno Pevkur’s hands are tied in this case, according to the ministry, which says Pevkur does not have any real power over the fund’s activities as the fund is a separate organization not under the ministry’s authority.
“The minister is just the member of the fund’s council, he cannot give orders on what or how to do,” Rosenfeld told Baltic Reports.
Whether Pevkur was initially aware of the AD Mad remains unclear.[/private_subscription 1 month] [private_subscription 4 months]AD Mad, whose owner is Ago Kurg, brother-in-law of Meelis Paavel, the fund general director.
The Public Procurement Office conducted an investigation from Jan. 22. to Feb. 5. and found that AD Mad was unlawfully favored and should not have won the procurement. The investigation found that the fund judged the prices of the offers with VAT even though AD Mad does not have a VAT obligation, lied about the term saying that the logo has to be printed on both sides of reflector even though AD Mad printed the logo only on one side, among other violations.
The results were sent to the Northern District Prosecutor’s Office, who initiated a criminal investigation last week. Conviction of a public procurement violation includes a one-year prison sentence.
The scandal has opposition members of the Riigikogu livid. Parliamentarian Ain Seppik of the Center Party said that he along with other Center Party members have pressed the prosecutor general to look into the case.
“Yes I contacted the attorney general to inquire whether there was a corruption threat,” Seppik told Baltic Reports. “However, it is not a political issue — we just want to find out the truth.”
Seppik noted that Estonia has more than 100,000 unemployed who don’t need the keepsakes, but jobs.
“The unemployment is huge, and handing out souvenirs is inappropriate in such a serious situation,” Seppik said.
Paavel says he’s cooperating
Paavel said that he is happy that the prosecutor’s office is investigating, and the fund wants to bring clarity on the procurement.
“We are cooperating with the prosecutor’s office and give our best for a fast solution,” Paavel told Baltic Reports. “I assure you that I have not influenced the procurement process.”
Paavel does not plan to resign from his position.
Was Pevkur aware?
Minister of Social Affairs Hanno Pevkur’s hands are tied in this case, according to the ministry, which says Pevkur does not have any real power over the fund’s activities as the fund is a separate organization not under the ministry’s authority.
“The minister is just the member of the fund’s council, he cannot give orders on what or how to do,” Rosenfeld told Baltic Reports.
Whether Pevkur was initially aware of the AD Mad remains unclear.[/private_subscription 4 months] [private_subscription 1 year]AD Mad, whose owner is Ago Kurg, brother-in-law of Meelis Paavel, the fund general director.
The Public Procurement Office conducted an investigation from Jan. 22. to Feb. 5. and found that AD Mad was unlawfully favored and should not have won the procurement. The investigation found that the fund judged the prices of the offers with VAT even though AD Mad does not have a VAT obligation, lied about the term saying that the logo has to be printed on both sides of reflector even though AD Mad printed the logo only on one side, among other violations.
The results were sent to the Northern District Prosecutor’s Office, who initiated a criminal investigation last week. Conviction of a public procurement violation includes a one-year prison sentence.
The scandal has opposition members of the Riigikogu livid. Parliamentarian Ain Seppik of the Center Party said that he along with other Center Party members have pressed the prosecutor general to look into the case.
“Yes I contacted the attorney general to inquire whether there was a corruption threat,” Seppik told Baltic Reports. “However, it is not a political issue — we just want to find out the truth.”
Seppik noted that Estonia has more than 100,000 unemployed who don’t need the keepsakes, but jobs.
“The unemployment is huge, and handing out souvenirs is inappropriate in such a serious situation,” Seppik said.
Paavel says he’s cooperating
Paavel said that he is happy that the prosecutor’s office is investigating, and the fund wants to bring clarity on the procurement.
“We are cooperating with the prosecutor’s office and give our best for a fast solution,” Paavel told Baltic Reports. “I assure you that I have not influenced the procurement process.”
Paavel does not plan to resign from his position.
Was Pevkur aware?
Minister of Social Affairs Hanno Pevkur’s hands are tied in this case, according to the ministry, which says Pevkur does not have any real power over the fund’s activities as the fund is a separate organization not under the ministry’s authority.
“The minister is just the member of the fund’s council, he cannot give orders on what or how to do,” Rosenfeld told Baltic Reports.
Whether Pevkur was initially aware of the AD Mad remains unclear.[/private_subscription 1 year]
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