Public office, private gain
By : Juliet D. Golden
At the beginning of November, Marek Winkowski was a step away from the finish line.
As director of Wroclaw city hall's economic initiatives department and the mastermind behind the Wroclaw Technological Park (WPT), he was ready to celebrate the signing of the first international high-tech investor to the city, the motor behind his stalled WPT venture.
Up to now WPT had largely been an exercise on paper. The venture was thought up to pull in high-tech investors who would create jobs and feed off the city's 16 academic institutions.
But in his bid to launch WPT, Winkowski hit a series of delays. In 1998, Wroclaw lost out to Krakow's technology park in luring the $150 million Motorola investment. Since that time, the project has been on hold due to a drawn-out tug of war between Wroclaw and the treasury's Agriculture Land Agency (AWRSP) over control of the land earmarked for WPT investors.
But last month, after almost a year of talks, Finnish telecom giant Elcoteq Network Corporation was ready to set up shop in Wroclaw. Elcoteq declared that it would fork out O30 million over the next year to build a 11,000 square-meter production facility that would create 800 new jobs. While the facility would not be located on the grounds originally designated for the WPT, the city moved to include Elcoteq's site and nearby city-owned property in the WPT project.
For Winkowski, the Elcoteq investment represented the impetus WPT needed. "This was our first real success," Winkowski said. "It gave credence (to the project)."
But on the eve of signing an initial agreement with Elcoteq, local newspaper Slowo Polskie broke a story that not only threatened to derail the Elcoteq deal, but also raised questions about the legality and ethics of Winkowski's conduct as a public official employed in Wroclaw's city hall. In its piece, "The technology of making money," Slowo Polskie charged Winkowski with using his public office for private gain. In addition to holding a public position as director of the economic initiatives department, the newspaper produced evidence that Winkowski held an interest in and was a paid employee of Techtra, a private company that had a management contract with WPT. So on top of his city employee's salary, Winkowski earned a monthly fee for WPT-related work he did as a Techtra employee.
For the city, the story threatened to unravel the Elcoteq deal. "This came out at the worst possible moment, just before Elcoteq's decisive visit," Winkowski said.
For Winkowski, the article tarnished his reputation as a local civil servant and threatened to end his decade-long career in politics and public service. "The charge was corruption," Winkowski said.
Winkowski protests that he is innocent. He argues that his work with Techtra was forced on him by WPT's supervisory board, which included city board member Adam Grehl, then deputy mayor of Wroclaw. "Please imagine how I feel," he said. "I did something that was absolutely open, analyzed thoroughly and discussed with serious people from this city, and the day before success this sensation comes out."
But other people see things differently. "This is clearly a conflict of interest," said Julia Pitera, a member of Warsaw's city council and a board member of corruption watchdog Transparency International-Polska. "A (city) official should not connect any economic activities with his (public) function."
Guilty or not, Winkowski's story is an example of Poland's attempt to grapple with the issue of corruption as the country enters its second decade of democracy and economic transformation. What's at stake is a struggle to define the role of public servants and negotiate between the need to ensure the public good while protecting private interests.
For anti-corruption activists, Winkowski's case illustrates the absence of a clear demarcation line between what's permitted under the law and what is acceptable behavior for public officials. "There are no clear boundaries separating the public from private," Transparency International's Pitera said. "A free country requires clear-cut borders here everything is vague, clouded and relative."
In the spotlight
Spurred on in large part by journalists uncovering high-level scandals in courts and the civil service, over much of the last month corruption has not escaped the front pages of the morning papers or the top of the government's agenda.
Earlier last month, the daily Rzeczpospolita linked a Torun judge with a local organized crime boss. The judge allegedly gave mild sentences in exchange for cars and other favors for himself and other local court officials. Within days of the story hitting the press, heads rolled in the Torun courts and Justice Minister Lech Kaczynski vowed to clean up the nation's justice system.
While major stories of wrongdoing have come and gone during the past 10 years, they have brought little change to Poland's public sector. But the Torun story was different. It managed to command the country's attention and placed the issue squarely in the mainstream of public concern.
"This opened a Pandora's box," said Jerzy Hendrich, director of Commercial Property Services, an independent property consultancy in Wroclaw.
The corruption debate burned on into December after Rzeczpospolita struck again, this time in Upper Silesia, Poland's mining and industrial basin. Last week, Premier Jerzy Buzek set up a high-level government commission led by Interior Minster Marek Biernacki to investigate a scandal involving top officials in the Silesian voivodship who allegedly siphoned off millions of dollars in state funds.
In the immediate aftermath of the story, top voivodship officials were fired and renegade voivod Marek Kempski, renowned in Poland for setting up an anti-corruption hotline last year to clean up his province, resigned from his public office.
The press attention and national debate come on the heels of a series of international reports that identify corruption as a key challenge facing Poland in its bid to join the European Union and develop as a free market economy.
During the past few years, Transparency International's annual reports have ranked Poland as one of the most corrupt countries in Europe. In 1998, Poland ranked 40th out of 89 countries, and fell to 44th place a year later. This year's report showed a slight improvement, with Poland climbing up a notch to 43.
"According to all reports, high level corruption and corruption in public services are serious and getting worse," reads the World Bank's October 1999 report, "Corruption in Poland."
In the provinces
Out of the national spotlight, Winkowski doesn't see anything in common between his case and the national scandals and reports on corruption sweeping Poland. In the absence of an active defense on the part of city authorities on his behalf, Winkowski has become somewhat of a lone campaigner, seeking ways to prove his innocence.
The charges of corruption in Winkowski's case surround his holding shares in and having an employment contract with Techtra, which was contracted to manage the daily running of WPT. In exchange for handling the day-to-day running and marketing of WPT to get the project off the ground, Techtra received zl. 22,000 per month over the past year. For Winkowski, that meant an additional zl. 1,000 in salary with a chance of future bonuses based on his and Techtra's success at pulling in new capital into the WPT. Winkowski declined to give details regarding these bonuses.
"I can't say how much that would mean for me because that never happened," Winkowski said. "These were bonuses for the whole (Techtra) team and the team was supposed to decide how that was supposed to look."
In mounting his defense, Winkowski said the arrangements were transparent and not concocted by him and the other two members of the Techtra management team for personal profit, but imposed by the WPT supervisory board. Winkowski argued that the supervisory board suggested having WPT affairs managed by a third company outside of city hall to ensure that WPT got off the ground in its infancy and help cover management costs WPT could not carry on its own. As a company involved in the hi-tech business, Techtra would offer expertise, contacts, and its administrative infrastructure, while also helping share the costs of the day-to-day running and marketing of WPT.
The WPT supervisory board backs Winkowski's claims. In an unpublished letter sent to Slowo Polskie, eight out of nine supervisory board members claim that the arrangements were clearly defined and thought through. In addition, the board gave its vote of confidence for Winkowski and WPT's management. "All of the legal and statutory issues related to WPT were agreed upon in full and approved in form of relevant resolutions by the supervisory board of WPT," the letter reads. "On numerous occasions, the supervisory board positively evaluated the activities of WPT as managed by Marek Winkowski." Supervisory board member Andrzej Jaroch, Wroclaw's deputy mayor, did not sign the letter.
In the Slowo Polskie article, Wroclaw Mayor Bogdan Zdrojewski claims he did not know the particulars of the arrangement. "I didn't know that Marek Winkowski received any remuneration for work on the Wroclaw Technological Park," Zdrojewski told Slowo Polskie.
Despite ambiguities coming out of city hall, at least part of the Wroclaw business community has also thrown its support behind Winkowski. "WPT was Winkowski's baby," Hendrich said. "Without him, there would be no WPT at all."
For its part, Elcoteq officials have also given Wroclaw and Winkowski positive marks for their role in convincing the company to invest in Wroclaw. Two weeks ago, Elcoteq representatives purchased three hectares of land from the city for zl. 2.8 million ($622,000) and the company plans to launch production in the city late next year.
"We think that city hall works hard to pull in investors and takes care of them," said Zbigniew Ferdynus, a factory director at Elcoteq Poland. "(In negotiations) Mr. Winkowski represented foremost the interests of the city and secondarily (those of WPT). Most of all he was concerned with getting a new investor for the city."
Conflicting interests
Winkowski and Wroclaw city hall are quick to point out that Winkowski did not break existing anti-corruption laws or laws related local government officials. On the contrary, at the moment the city delegated Winkowski to head up the WPT initiative, it revoked his authority to make administrative decisions.
"Having analyzed the situation there haven't been any collisions with the law," said Jaroch, Wroclaw's deputy mayor. "Mr. Winkowski did not infringe on any existing regulations."
"He's wrong," said Barbara Kudrycka, rector of the School of Public Administration in Bialystok. "The powers of the director of the economic initiatives department include monitoring economic development in Wroclaw. WPT has identical goals and wants to promote new technology in Wroclaw. Here the objectives of the director of WIG and WPT clearly overlap."
Kudrycka said the city is relying on legal nuances to push its case and treading a fine line between what is and isn't permitted under Polish law. At a minimum, the situation represents a conflict of interest and should not be allowed to continue.
"The law in such situations is not explicitly formulated and that means that it is very easy to interpret the law in favor of individuals," Kudrycka said. "In my opinion, regulations need to be interpreted in such a way so as not to allow them to be used for individual interests, regardless of any private benefits."
She said "laws need to be changed so they are explicitly formulated. That way such conflicts of interest won't come into play."
Winkowski's direct superior, Deputy Mayor Jaroch, is signaling changes in WPT's arrangements with Techtra. "The awkwardness (of the arrangement) could be considered as not being in good style," Jaroch said. He said that at the next WPT supervisory board meeting in January he would move not to renew the contract between Techtra and WPT. That contract expires at the end of this year. "At this stage we should put a stop to this even if it was justifiable earlier on," he said.
