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Wednesday 20.09.2017 | Name days: Marianna, Ginters, Guntra

Volkswagen dealers had organized procurements in officials’ stead

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUE-mail correspondence of Volkswagen dealers reveals that companies had been organizing public procurements on their own.

According to information acquired from an e-mail correspondence, De Facto programme reports that Volkswagen dealers in Latvia had written all the technical specifications for required vehicles on behalf of officials. They had also asked their potential competitors not to participate in organized procurements.

Nearly half of the cars that were procured by Liepaja City Council or its subsidiaries over the course of 2007-2012 were supplied by Volkswagen dealer in Latvia – SD Autocentrs. The correspondence with the dealer reveals that the company likely did not have to work hard to win procurements. It can be assumed that SD Autocentrs had helped itself during procurements: written technical specifications, found fictive participants, and had supplied the necessary vehicles in the end.

For example, four years ago, one of SD Autocentrs employees had sent a letter to Liepajas energija: «Greetings, in the attachment I have prepared specifications for you. Once you have announced it, please let me know and I will prepare offers for myself and other participants. Other participants could be the last time [Competition Council’s informant] and Venta motors. […]»

A couple of weeks later, this employee had sent e-mails to other Volkswagen dealers in Latvia. It is likely that the goal of this was to ensure there would not be a competitor who would offer a lower price. «[…] Client specifications were prepared by me and cars are on their way from the factory. Fleet offer has also been prepared, so please take into account our work. […]»

The Volkswagen cars parked outside of Liepaja municipal police department had been procured by SD Autocentrs. In 2012, one of SD Autocentrs’ employees had sent a letter to other Volkswagen dealers in Latvia. In this letter he noted: «I would like to inform you that after long talks Liepaja municipal police approved the procurement of3 cars and we have jointly developed technical specifications for this procurement, so we would like to ask you to support SD Autocentrs in this procurement and not submit your own offers.»

Unfortunately for SD Autocentrs, its victory in this particular procurement had attracted the attention of Latvian Competition Council and Corruption Prevention and Combating Bureau. It is now known that SD Autocentrs’ employee’s e-mail was written retrospectively: «In the attachment I have sent you documents for the procurement in Liepaja Special Economic Zone. […] This procurement was announced with May 23rd and the deadline for submission in May 27th. My proposal submission date is May 24th, that of Venta motors is May 26th, yours is May 25th, so do put May 25th, 2011 everywhere you need to. […] As you can see, the procurement is being organized retrospectively. This is why I would like to ask you to compile everything you need to as soon as possible. […] Cognac is on me!»

Mayor of Liepaja Uldis Sesks believe «the procurement had been legally accurate and economically sound. I do not have any documents to prove it had been organized in retrospect. We had performed an assessment of the employees who had held the procurement. There was nothing to confirm that they had abused power and caused losses for any of the institutions.»

Unlike Sesks, CPCB believes four members of the procurement committee in Liepaja are guilty of forging documents. However, the criminal process had to be concluded because of limitation period.

On top of that, one of the procured cars – Volkswagen Phaeton – has become Sesks’ official car. Sesks had once been one of the managers and owners of SD Autocentrs, though the company had a different name back then.

Correspondence of dealers reveals that there had likely been fictive procurements in Liepaja and other municipalities, like Kuldiga and Aizpute.

In addition, it seems dealers had formed good relations with managers of state owned companies as well. For example, it is possible that corruptive schemes had been realized by the previous board of LTV seven years ago. Other e-mails say dealers had also agreed on prices they would offer.

CC has fined the companies that were part of the cartel. Officials of state and municipal companies will be investigated by CPCB. No information is currently available on any plans in regard to the possible measures against officials.


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