How Bosnian reporters uncovered a series of apparent frauds in public contracts for pandemic-related medical supplies.
Journalists in Bosnia and Herzegovina have exposed a number of irregularities in the public procurement of medical supplies in the three months since the COVID-19 emergency began.
The reports by Semira Degirmendzic of the Fokus.ba news site attracted the most attention. She revealed that the government of the Federation of Bosnia and Herzegovina (FBiH) – one of Bosnia’s two semi-autonomous regions, or “entities” – paid 10.5 million convertible marks ($5.8 million) for the purchase of 100 respirators from China. The order went to Srebrena malina, a fruit and vegetable grower and processor.
Fokus also reported that the FBiH agency for medical products issued the necessary permit for importing medical equipment to the company, based on an authorization signed by Fahrudin Solak, the director of the Federation Department of Civilian Protection.
Other media outlets soon joined the investigation. Klix.ba reported the price of each respirator – 80,000 marks – named in the contract signed by Solak and the director of Srebrena malina, Fikret Hodzic. N1 journalist Hana Sokolovic used a simple search on Facebook to cast doubt on government claims that Hodzic’s firm was chosen because respirators are “difficult to get.” The Public Procurement Agency then revealed that the firm is not registered in the public procurement system and issued a press release dismissing as “fake news” the claims that the law regulating public procurement had been suspended during the pandemic or that the agency had eased procurement rules or allowed contracts to be signed without publication of a procurement notice.
On the heels of these media reports, the Sarajevo Canton Prosecutor’s Office opened a case, while SIPA (the State Investigation and Protection Agency) investigated in parallel. On 4 May, the case was transferred to the Prosecutor’s Office of Bosnia and Herzegovina as prosecutors determined the case falls under its jurisdiction. That meant that a resulting trial could end up in the highest ordinary court in the country, the Court of Bosnia and Herzegovina. As of 13 May, however, the prosecutors were yet to name any suspects. SIPA has, in the meantime, raided the premises of Srebrena malina and its accounts have been blocked. Solak has been suspended from his duties. Investigators from SIPA and the Prosecutor’s Office of Bosnia and Herzegovina also searched the offices of the Federation government on 13 May in connection with the case.
The Srebrena Malina Affair
Degirmendzic says she tried to get official confirmation of the purchase of respirators for 10 days before Fokus ran the story.
Solak never answered her calls or Viber messages. Neither did FBiH Prime Minister Fadil Novalic or Srebrena malina’s owner, Hodzic. She then attempted without success to get in touch with the head of the FBiH Inspection Administration, Anis Ajdinovic.
Finally, she heard from the Federation’s health minister, Vjekoslav Mandic, and the assistant minister, Goran Cerkez. They informed her that the FBiH Department of Civilian Protection had taken over all procedures regarding the procurement of respirators.
Degirmendzic also asked the Federation government public relations office to convey her query – about whether Srebrena malina received 10.5 million marks for the purchase of respirators – to any member of the government at one of the regular briefings to update the press on coronavirus measures. The question was not asked at the briefing, held without the presence of journalists under lockdown conditions.
“In any case, the respirators arrived before we had official confirmation that our information was correct. Only after turning to the Indirect Taxation Authority of Bosnia and Herzegovina, after the respirators had already arrived, did we get confirmation of the importer’s identity,” Degirmendzic explained. She says that that the authorities were evidently hiding the information.
Degirmendzic also says that her sources confirmed that her story was indeed the reason the cantonal prosecutors opened the case in the first place. As, step by step, she learned that Srebrena malina was involved with the procurement, some sources who had helped in the past (at least off the record) said that “they weren’t allowed to say anything” about this contract.
“Finally, I had unofficial confirmation and evidence of the amount paid for the respirators,” Degirmendzic continued.
Sources, public servants or otherwise, rarely dare to bring this kind of information to the police, generally choosing to leak it to the media, something that speaks to the devastating lack of trust in the rule of law, she believes.
“But this case is an opportunity for Bosnia’s judicial institutions to show their strength and independence, and restore the long-shaken trust,” she said.
As the public waits for the findings of the investigation, civil protection chief Solak, prior to being suspended, asked the same prosecution office to turn the tables and investigate the media for printing “biased and false allegations” about the respirator deal and running a smear campaign against the Federation government and his department. His threat prompted the BH Journalists Association to lodge a protest note, declaring that after “almost all media outlets in Bosnia and Herzegovina reported in detail about the non-transparent and extremely suspicious purchase of respirators in recent days, Fahrudin Solak is now trying to manipulate and shift the responsibility for these possibly illegal actions to journalists and the media.”
Furniture Restorers Into Virus Testers
Prosecutors in Sarajevo Canton have launched an investigation with several similarities to the Srebrena malina case. The probe concerns the non-transparent procurement of 20,000 COVID-19 tests that the Department of Civilian Protection purchased from Cubicus – a furniture restoration firm. Zurnal.info broke the story, and also revealed that the test kits came from Turkey, and not South Korea as the government claimed.
Reporter Branka Mrkic-Radevic says she faced numerous obstructions as institutions refused to grant access to information.
Part of the reason her source came to her is distrust in those institutions, she says. Public servants are often extremely nervous about what might happen if they are revealed as a source for a news story. “Although this information in some ways may fall under the job description of the source, there is a great sense of fear that revealing it would lead to sanctions, or even losing their job,” Mrkic-Radevic said.
Zurnal also published a story about possible fraud surrounding the procurement and delivery of personal protective equipment to Slovenia organized by Senad Zilo, a businessman from the Bosnian city of Zenica. SIPA also opened an investigation into those allegations.
Zurnal journalist Amarildo Gutic says prosecutors have opened “at least 20” cases as a result of their articles.
“It should also be said that a number of these investigations focused more on revealing our sources than on the illegalities we wrote about,” Gutic says.
A Construction Job in Srebrenik
Journalists from the Balkan news outlet BIRN uncovered another apparent case of improper public procurement abuse connected to the construction of an isolation facility in Srebrenik. The construction job was awarded to a firm in which Fadil Smajic, a city councilor in Srebrenik, owns 33 percent; the law, however, prohibits firms from taking part in public procurement when an elected official owns more than 20 percent of the capital. After BIRN’s report was published, the Public Procurement Agency investigated the matter and forwarded its report to the Tuzla Canton Prosecutor’s Office.
The story began when a source approached BIRN with information that Smajic’s firm had won the job and that the same firm had previously won a contract from the city.
“To be completely honest, we didn’t ask the source if they were doing this out of distrust in the investigative bodies, but it is not a stretch to deduce that the source felt a media investigation was a good way to shed some light on the matter. After all, it was our reporting that led to a formal investigation,” said Semir Mujkic, a reporter and editor with BIRN.
As in other recent instances when the press reported violations of procurement rules, in this case, too, local authorities put obstacles in the way of obtaining information of public importance.
After a delay the Srebrenik city administration finally sent BIRN the documents it had requested.
“What surprised us was that they explicitly claimed that the city councilor was not an owner of the company that was awarded the contract,” Mujkic said. “A court document uncovered later on revealed that he, in fact, owns 33 percent.
“Another problem was that the city administration web page did not contain all the documentation on the construction of the isolation facility. In emergency situations, such as this pandemic, when public trust is especially important, institutional transparency should be far greater. What we are seeing now is that, since February, public bodies have significantly reduced the disclosure of information on public procurement projects.”