OLAF investigative activities

OLAF should not take selective approach towards evidence in the case by concluding that ONLY the investigators can pick and chose activities that are deemed necessary to seek evidence for and against the person concerned. OLAF procedures clearly stipulate the contrary – that OLAF should conduct investigative activities towards collecting ALL evidence in order to establish facts and can be inculpatory or exculpatory.

Z… Ltd and Polish Agency of Industrial Development (PARP) have signed a co-financing agreement which stipulates clearly that the agreement should be conducted by following EU rules of public procurement in a specific way described by the agreement. The rules are applicable to all procurement undertaken by the public authorities of the European Union (EU) and its member states, as well as beneficiaries. The rules apply to awarding contracts for public works and for the purchase of goods and services in accordance with the principles underlying the Treaties of the European Union. Subject of OLAF investigation covers any irregularities or illegal actions pertaining this specific agreement, including failure of public officers (including officers of Managing Authority) to execute the agreement in accordance with the applicable laws of the single market. Clearly investigating any failure to follow rules of single market remains within mandate of OLAF’s investigation. Therefore any failure to follow the law, or even an irregularity, should not be ignored. OLAF should not be dismissing any illegal actions even if they were subject of investigation by national authorities. OLAF rightly pointed out that resolving the legal issues between beneficiary and the Managing Authority is outside of its competences, however the person concerned only requested impartial and independent investigation into whether the agreement has been executed in accordance to EU law or not, regardless of the fact that Managing Authority has already concluded on the issue by judging that it had not broken any laws. Managing authority cannot be impartial in investigating its own actions (or actions of its dependent agencies). Therefore, OLAF should investigate the conclusions made by Managing Authority with full independence, conducting complete verification and thorough legality check of the final conclusions on the matter whether rules of the agreement in accordance to the procurement procedures have been followed.

In the case of Z… Ltd v. PARP specifically highlighted the violations of so-called “rule of fair competition”, which has not been defined in the remit of agreement, however remains the key to a fair single market policy. As the specific EU regulations have been stipulated clearly in the wording of the co-financing agreement, any violation of the single market rules are automatically deemed as either: violation of the co-financing agreement, or a contravention of EU regulations. It is therefore entirely an obligation of OLAF investigators to follow the accusations of violating rules of free competition and/or discrimination of subcontractors – in order to determine illegal actions of either Z… Ltd – which may have violated rules of free competition, and equally to follow up on Managing authority’s administrative decision – which may have discriminated a subcontractor entirely based just on their nationality. Z… Ltd, as well as myself, have presented strong written evidence that specific subcontractor – T… Ltd – has been discriminated by being singled out by PARP as the only subcontractor, which has incurred costs “unacceptable” to the Managing Authority in the project. Issue of discrimination has been raised in the appeal to the administrative decision in very great detail – pointing out exactly how the decision violated a number of national and European regulations, as well as stands against number of EU procurement laws. The decision gave illegal preference to a number of subcontractors in the project pertaining the agreement, as well as discriminated one particular subcontractor – illegally singled out by the decision. Managing authority failed to accept the appeal, making false to OLAF, leading investigators to believe that PARP’s decision was being subject to judicial process, where in fact the appeal was dismissed by the Managing authority. It has never been investigated why Managing Authority told OLAF that the person’s concerned appeal is subject to judicial review, where in fact it had informed the person concerned that it had rejected the appeal of person concerned in writing on the 12th May 2016. PARP rejected the appeal believing that the person concerned had “no legal or material interest in the case”, and in their written decision had questioned whether OLAF had in fact started their investigation or not. Managing authority has concluded that no evidence of any OLAF investigation was ever presented and therefore no legal or material interest of any “person concerned” could have been be assumed (DKI.IV.8311.34.2016.RD.7, page 3). I hereby request that OLAF provides a written confirmation in a form presentable by person concerned to the Managing authority, stating indeed it had launched an investigation and for that reason alone person concerned has a vested legal or material interest in supplying evidence to the Managing Authority in order to reveal full evidence on the matter that Managing Authority is interested in. The requested confirmation is required by person concerned now, even though the Managing Authority has already concluded it administrative investigation with a decision.

Since OLAF reviews any evidence of misappropriation of EU funds, and so does the managing authority and the person concerned himself, it would be entirely unacceptable just for OLAF to back out from investigating issues already investigated by the managing authority, which OLAF suggested (page 1, OCM 2017 0082 – 04/01/2017). As a result of OLAF failure to investigate, the prosecution service in Poland has launched its own new investigation (PO 11 Ds 48.2016) making a good progress already, where OLAF appears still unaware and not interested into looking how managing authority gathered and processed evidence leading to the administrative decision. In fact, I have raised an issue pointing that on the subject of execution of the agreement, and the rule of free competition in particular, has been raised to attention of the Managing Authority a number of times. Embarrasingly, it now seems that the prosecution service will point out OLAFs blind spots – with criminal evidence already collected by prosecution service on the subject of corruption. I have pointed out that a number of similar subcontractors were taking part in the same agreement and were executing the same project, operating under the same type of subcontracting agreement, and which were also declared by beneficiary as personally related to him – all were given preference by PARP because of their Polish nationality. Despite same type of contract and same type of allegation of personal relation to beneficiary – against all three Polish subcontractors have been given preference – deemed as incurring “acceptable” costs. Only one subcontractor, which has been based in another member state – had been discriminated and deemed as generating costs “unacceptable” to the Managing Authority. PARP has indicated no other difference between T… Ltd and any other subcontractor, except of their nationality – has been taken as a factor used to determine whether accept or reject costs incurred in the project. Any instance of discrimination solely based on the nationality of the subcontractors based in member states is clearly a violation of laws in European Union. PARP decision gives a full explanation to the decision, yet it should raise highest concern that such discrimination finds no legal grounds for the arguments provided in PARP decision. Even more alarmingly the conclusions of the administrative decision itself provide no such legal explanation of why preference was given in one case, and discrimination applied in the other. Managing failed to justify or even comment on that before making the decision and in the administrative decision itself. Such illegal discrepancy found no legal justification in the administrative decision, where multiple questions regarding preference or discrimination of particular subcontractors have been raised asking Managing Authority to provide such legal grounds. Managing Authority broke the law only by not responding to those questions, and later by not referring to all three other subcontractors in their decision. Therefore, administrative decision is entirely violating the rules of single market, as well as the procurement procedures stipulated in the co-financing agreement, in particular the Regulation (EC) No 1080/2006, Regulation (EC) 1083/2006, Regulation (EC) 1828/2006.

OLAF cannot enter dialogue with administrative process or negate even illegal decision as it has no such powers. It does not mean however that OLAF should not turn a blind eye on amu illegal discrimination of any entity, specifically that OLAF investigation should be conducted in complete independence of administrative proceedings and is already conducted on the same matter by national administrative bodies. Independent investigation means OLAF should investigate the process in order to conclude that formal and legal requirements in public procurement have not been violated in case of any of the four subcontractors. It is therefore entirely unacceptable that OLAF indicates it does not investigate any discrimination or violation of law if it had been already concluded by Polish authorities. Only independent investigation with no prejudice could provide impartial conclusions. OLAF is well informed in due course of its investigation that T… Ltd has been discriminated and should observe that no legal grounds have been given for such discrimination – which itself is a violation of single market rules and should be followed up. as it pertains same project, same agreement, and therefore alleged misappropriation of the very same funds. OLAF should specifically focus on discrimination of subcontractors and observe the long list of violations of both: national and European laws that have been detailed in the appeal of the person concerned – as those are irregularities easy to prove with all evidence already at OLAF’s disposal. Further to that, OLAF is not allowed to cherry-pick evidence it finds suitable for its investigation, as it should accept ALL evidence in order to establish ALL facts, regardless of their inculpatory or exculpatory nature. According to Guidelines on Investigation Procedures for OLAF Staff, all information or evidence, whether inculpatory or exculpatory, gathered in the course of investigation or coordination cases, shall be collected and recorded in due and proper form. Evidence is anything that is relevant to the facts under investigation. Evidence is collected during an investigation in order to establish facts and can be inculpatory or exculpatory. Evidence includes inter alia information, documents, reports, records, statements, images, digital forensic and scientific analysis. All evidence gathered should be relevant to the matter under investigation and collected for the purpose of the investigation. Conclusions shall be based on an impartial and objective assessment of the entirety of the evidence collected. Only following OLAF procedures brings the Article 41 of Charter of Fundamental Rights to its full implementation. Failure to conduct investigations in line with OLAF procedures or EU Charter of Fundamental Rights renders the investigation legally defective (illegal) and any therefore renders any conclusions of such investigation as completely inadmissible.