Jobs for the boys and girls
A new government means the game of musical chairs resumes as the incoming party begins stuffing state agencies and state-controlled companies with its own appointees and throwing out the ones installed by the previous government. Political patronate is nothing new and not a speciality of this country by any means: what gives cause for rising concern is the apparent unsuitability for key offices of many of those promoted according to the colour of their party cards.
And there is another important contemporary twist: the suitability of candidates who will be required to fill posts according to the Polish quota in the institutions of the European Union, ranging from directors-general of huge departments down to the chauffeurs who ferry around the EU's top brass and politicians.
Appointments to a plethora of positions at economically and socially critical government agencies and state-owned enterprises are an appreciating currency for all political parties. EU accession, that even as politicians of all stripes pay lip service to ending evident cronyism, it seems that the key criterion for crucial posts remains the strength of political ties and not relevant experience. A bill to curb blatant political appointments to state and state manipulated companies has not yet negotiated the Sejm. At the same time, new powers are sought to reward key jobholders in the same companies with salaries which exceed the present limits imposed by law.
Cronyism remains an influential tool of government, because after subtracting small enterprises, those with nine or fewer employees, employment in medium-sized and large companies is almost equally divided between the private and state sectors.
But what politicians are reluctant to grasp, despite lectures from Brussels, the OECD and other economic agencies is that using state patronage to reward party loyalty frustrates essential reforms in crucial social and economic cornerstones such as social insurance, pensions, agriculture, EU compliance and globally accepted standards of sound corporate governance. Glaring examples where untried hands have found their way to the helms of strategic businesses include ZUS, PSE and Poczta Polska. There have already been examples of full-blown disasters because the party came first. The desire to be weaned away from mixing politics and business, where the governing stops and professional management begins, remains weak.
"Cronyism in Poland is encouraged by the type of political party set up, where political parties behave like employment agencies," said Chris Mularczyk, managing director at the Foundation for the Development of Polish Agriculture. "People join political parties to get a job. They don't join because of real common association of views, more because where they came from in relation to the past." For instance, many SLD politicians owed their political birthright to the Polish United Worker's Party, who under one party rule drenched the system with their own trusties. The SLD retained the same cultural heritage and were often surprised by criticism.
"When a person joins a political party he expects something out of it," Mularczyk said. "He expects to get a job, a contract, whatever. So every party wants to have jobs at its disposal because jobs mean power. Power over its own members, power to recruit more members, and so on. That's where cronyism stems from."
It's a celebrated pastime of opposition parties and political analysts to point out examples of corruption and cronyism among parties or coalitions in power. Successive appointments by the SLD-PSL and AWS governments to ZUS, PSE, Poczta Polska, the Agricultural Property Agency of the State Treasury and the Agency for Agriculture Restructuring among other examples, have draw public anger and not infrequently, ridicule. The appointment process was opaque, and what clarity there was often indicated chicanery and inexperience.
"You have some strange nominations to agencies and state-owned companies: some politicians without business backgrounds," said Rafał Antczak, an economist at Centre for Social and Economic Research (CASE) Foundation.
Inadvertently corroborating these claims late last year, Treasury Minister Wiesław Kaczmarek made Stanisław Dobrzański, a member of coalition partner PSL and former defence minister in the former PSL-SLD government, as chief executive of state-controlled power grid operator PSE. Dobrzański had not made his reputation in the electricity sector, which minister Kaczmarek did not bother to deny. "Staszek wanted to try his hand in business, and I saw no reason not to let him try."
"It was so funny to hear that explanation," Antczak said. "Suddenly, allies appear at the top level. That's exactly the same pattern as in the communist times ... It's called the nomenklatura. And the situation is getting worse."
Politicians do not view the situation through quite the same lens. Michał Tober, the SLD's spokesman, is well aware that the public remains suspicious of many recent appointments made since the election by the SLD-PSL coalition. But he insisted, the burden of proof that employees at agencies and companies are qualified still be judged by the test of events and the future, not on the party.
"There is only one rule: competence," Tober said. "We don't have to prove it. Time will be the proof. Wait one year or more and you will see, compared to the previous state of things. There were a lot of irregularities in the last government, so we had to reconstruct several places."
He insisted that most of the SLD's accusers were mudslingers inspired by loyalties to the former government.
"You can say anything you want even if it is not true," he said "It's freedom of speech. You can say 'the dirty post-communists messed things up,' but that's just not true. It's very easy to understand that if the AWS is losing jobs, it wants to blame someone. People who lose their well-paid jobs will always tell you that it has nothing to do with himself. It was some bad guy."
And even though more politically independent organisations, which tend to balance criticism among all parties that were in power, have written reports with similar accusations, Tober still says that competence remains the watchword on all job appointments.
"It's such a case that we can write reports too; we can even set up a foundation and make 5,000 reports every month, Tober said.
"There's absolute transparency," he said. "It is exactly as Polish law says it should be."
But one head of a powerful agency, which is an SLD member, asserted that while his CV may not conform to the exact demands of his recent appointment, his "life experiences" do. He declined to comment for attribution and asked the Business Journal to shut off the tape recorder during the course of a personal interview, before discussing his qualifications. They included a scientific degree for a position which now involved running a large agency funded by the government. He said only Leszek Miller could add more specific detail on precisely why he was hired.
No-one claims previous administrations have behaved any differently. In 1998, the AWS-led government named Stanisław Alot, a leading supporter and secretary of the union's National Commission, as chairman of state-owned pension provider ZUS.
"The classic case of cronyism came few years ago when AWS was in power, and Stanisław Alot, trade unionist, was appointed head of ZUS," Mularczyk said. "Everything went wrong. And as a result someone more competent got the job. But the damage was done, because he took over ZUS at a key time during pension fund reform."
By September 1999, opposition and coalition deputies were calling for Alot's head, as ZUS's finance, administration and technology staggered towards collapse. The social insurance agency was forced to draw €707 million (zł. 2.8 billion) in bank loans to maintain socially responsible payment schedules. Pensioners were not receiving payments - often their only income - and Alot blamed it on a lax postal system, in one interview he gave. The postal service, for once with propriety, stoutly denied the charge.
"In extreme cases as in the case of ZUS, cronyism can lead to a real problem for a very important public service," Mularczyk said.
The post office has also been colonised by cronyism, according to analysts. Leszek Kwiatek was appointed the agency's director in December. But his track record had been less than exemplary, as his most relevant experience was as a member of the board in the Mazowsze Sejmik, responsible for foreign relations and promotion for the voivodship. One analyst said that during Kwiatek's three years there he failed to create any kind of promotion strategy, which had been listed as one of his principal duties. His recent appointment at the post office, it is said, was at least partly because he is married to SLD deputy Katarzyna Piekarska, one of Miller's assistants during his period as Minister of the Interior.
Poles in the farming community should take notice too. Many have been prematurely counting the euros promised by politicians as a result of EU enlargement. But Brussels has warned that the Agency for Agricultural Restructuring and Modernisation (ARiMR), in charge of SAPARD and IACS, had better shape-up, or risk not getting "a single euro" from the EU. One matter tarnishing the image of ARiMR, at home and abroad, are the accusations that Aleksander Bentkowski, the agency's president, had reshuffled all the qualified civil servants at the agency with PSL and SLD members. Bentkowski has always denied the charges that party loyalties buy jobs at the agency but has failed so far to convince any independent observers.
The European Commission has thus questioned whether Poland will be able to absorb the billions of euros in future transfers from the central budget, following accession. The bizarre circus at the farm agency infuriates them and may yet lead to withdrawal of money for certain key programmes, as EU delegate in Warsaw Bruno Dethomas has bluntly warned in statements to the Business Journal. The agency appears to have bungled every task it was given and found even minor challenges impossible. Larger ones such as installation of the IACS computer system to monitor the cattle and dairy industry, plus marking all animals with ear tags as an anti-fraud precaution completely baffled the Agency. One award went to a second car dealership which turned out to be simply a middleman in buying the tags from a supplier. The agency has not evinced a convincing explanation as to why it did not do a direct deal.
In September Prime Minister Leszek Miller finally acknowledged increasing pressure of public opinion over the affairs of the agency and said that all new employees would be subjected to a qualification test (however, one devised by the agency itself) and only those that passed would keep their jobs. The Business Journal understands there have been only a handful of failures.
There are notable exceptions to the party line. Danuta Huebner, Minister of European Affairs (KIE), who heads the Office of the Committee for European Integration, is cited as a party loyalist who has nevertheless maintained independence from the centralised party machine. "Sometimes you find a good one," Mularczyk said. "Danuta Huebner has refused to do a wholesale clear out of KIE. She simply refused. She had the president's support. She got her own way. She will not accept those who have substandard qualifications." What's more, Mularczyk said, Minister of Labour Jerzy Hausner also selects civil servants on competence alone. "He just won't tolerate anything else," he said.
The European Union has made an issue of unpreparedness at all levels for sharing in the management of the EU and specifically expressed fears that recruiting for jobs in EU institutions will be stained from the outset with political interference. Brussels civil servants are rewarded with salaries stratospherically removed from humble emoluments offered in Warsaw. "Temptations will be high," observed one Euro MP sitting on the European Parliament-Poland joint committee. "We know that. There will be vetting procedures, at least an attempt to scrutinise recruits, but in the end it will be the same as before: we will be compelled to take what we are sent, regardless of skills or experience." Mularczyk believes a stronger line should be taken. "Send monkeys to Brussels and you will get peanuts. That's what will happen."
He continued: "Eventually people will learn from it because they can't afford to let millions of euros go out the window just because we sent the wrong people. These guys think that they can deal with Brussels the way they deal internally. They can't."
The application of the brakes to the privatisation process under the SLD - led administration is also blamed for preserving useful footholds in key positions throughout the economy for political appointees, on supervisory and management boards and important administrative positions.
"It's now in worse shape, but the private sector is the only chance," CASE's Antczak said. "There is no recipe without pain. The political class is unwilling to privatise."
"If you treat the country as some kind of hostile takeover for the party, it's not good for the country," Antczak said. "What is good for the party is not necessarily good for the country."
