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Economy

Greek Authorities, EU Probe Fraud in Contracts Worth 2.5 Billion Euros

ATHENS – In what could be another scandal, Greece’s Competition Commission and the European Public Prosecutor’s Office (EPPO) are reportedly looking into €2.5 billion ($2.67 billion) in EU-funded contracts given to 10 companies to see if there was fraud.

These include three telecommunications firms – Cosmote, Vodafone, and Nova – as well as five Information Technology (IT) companies and two consulting companies raided by Greek investigators in March, as reported by the news site POLITICO.

The other targets are the IT and software companies Byte, Uni Systems, Space Hellas, Netcompany-Intrasoft, SpaceCosmos Business Systems, and the two consulting companies Toolbox and Active.

The contracts come under the EU’s Recovery and Resilience Facility (RRF), a €723 billion ($771.94 billion) pot of money for the post-COVID-19 pandemic plan to boost economics held down by lockdowns and slowdowns, with the Coronavirus now waning.

“The Greek investigation centers on public tender processes where companies allegedly colluded to avoid more than one of them competing for the same contract – limiting the number of firms who benefited,” the POLITICO report said.

That could have driven up the fees they charge customers, keeping taxpayers from getting the full benefits of the program, part of the €39.5 billion ($42.17 billion) Greece gets through the RRF program, about 20 percent directed toward digitizing state services.

So far about 600 digital projects worth the €2.5 billion being investigated have been awarded, according to data from the Central Electronic Register of Public Procurement, the competition authorities, and EPPO conducting their own probes.

The Competition Commission said it was examining whether there was a violation of the EU treaty that “prohibits anti-competitive agreements and decisions of associations of undertakings that prevent, restrict, or distort competition, unilateral practices that constitute an invitation to collude or future price announcements to competitors and the abuse of a dominant position.”

Vodafone and Nova confirmed the investigation. “Nova and Nova ICT cooperated fully with the authorities and remain at their disposal,” a spokesperson said. The other companies didn’t respond to requests for comment.

The 10 companies under investigation won the contracts in the technology sector between 2020-23, beginning at the height of the pandemic, each worth at least €100,000 ($106,770), and only a few of the 600 projects had more than one bidder.

WAS THE FIX IN?

The investigation began when European Dynamics, a Greek software and IT services company, filed a complaint in 2023 to the European Commission, which oversees the management of the RRF, claiming one bid was biased to favor specific companies.

The tender set the budget for a digital modernization project linked to Greece’s National Electronic Public Procurement System (ESIDIS) at €44 million ($46.98 million), several times more than national e-procurement project costs in other EU countries.

Long backward in digital services and slow to speed them, that has accelerated under Prime Minister Kyriakos Mitsotakis who has boasted that his government has taken Greece out of the abacus age, especially at state offices long buried under paper files.

After protests by four companies, the project was split into two tenders with a total budget at €5.7 million ($6.09 million) and €12 million over two years. The Greek state must also pay for the equipment, software licenses, and hosting costs for the project.

There was also a complaint about irregular access by unauthorized accounts to ESIDIS systems, two officials not named told POLITICO, raising questions about the credibility of a system used to manage thousands of tendering processes worth billions of euros.

Greece’s digital governance ministry said there had been no violation of the system and no complaint has been filed.

When asked for comment, a Commission spokesperson said decisions to award contracts fell within the remit of relevant Greek authorities. “The primary responsibility to ensure compliance with EU and national rules on public procurement lies with the member states,” the spokesperson added.

New Democracy government spokesman Pavlos Marinakis said the investigation was welcomed, that the Competition Commission investigation follows a complaint and the Hellenic Court of Audit exercises full control over the specific tendering process.

“The government and the individual ministries have always acted with a view to adhering to all the prescribed procedures,” he noted.

A Commission spokesperson confirmed it had received a letter from European Dynamics regarding the ESIDIS tender and had shared all relevant information with the European Anti-Fraud Office, OLAF.

“We will continue to treat every information or complaint we may receive within the scope of the powers foreseen under the EU Treaties and the RRF Regulation,” the spokesperson added, the probe putting a spotlight on how Greece – and other countries – awarded EU-paid contracts.

POLITICO said that it reviewed 110 EU-funded Greek public tenders primarily from the EU’s recovery fund between 2021 and January 2024, finding that 101 were awarded to one of the 10 companies under investigation without any other bidders.

Only nine tenders had more than one bid but it wasn’t said if the investigators from Greece and EPPO are looking into whether – or who – tried to rig the process to benefit specific companies for profit.

And even in tenders where multiple companies bid on one tender, each company had seemingly only bid on a unique segment, the report said, with OLAF sending to EPPO a complaint from European Dynamics.

According to a European Court of Auditors report in 2021, some 42.4% of public contracts in Greece were awarded where there was only one offer. In 2011, 15% of contracts only received one bid.

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