Rolling back the carpet

The Sejm will appoint a new investigative commission to scrutinize the workings of the National Investment Funds (NFI) program. The program was launched in 1995 as part of the general scheme for the privatization of Polish industries. Each of the 14 NFI funds was a joint-stock company established with the goal of restructuring former state companies and leading to their privatization.

The 512 state companies involved in the program were one-third controlled by one main NFI, while around 27 percent of shares were owned by the 13 remaining NFI funds. The state retained 25 percent of each company and the employees of those companies held 15 percent of shares. In addition, the state issued bonds for the companies, which could be bought by private individuals.

"The intention was to enable citizens to own the assets which were the products of their labor," Tomasz Markowski, vice president of the State Treasury Committee, told WBJ. "The program was to bring back the right of private property," he explained, "[but] the effect was the opposite, instead of being regained by society the vast majority of the assets got into the hands of a very small group of people."

Some have gone further, criticizing the program as ineffective, opaque and full of corruption, with cases of the NFIs selling state companies for much less than their actual value. The fact that no shareholder had the ability to take full control of these companies posed an additional problem.

A report by the the Supreme Chamber of Control (NIK) from 2002 showed that after seven years of the NFI program, only 206 companies managed to find a strategic investor, while 74 went bankrupt.

"We need to determine to what extent the failure of the NFIs was due to mere incompetence on the part of the people who handled the process, and to what extent it was the effect of deliberate actions," said Markowski. "This is going to be a difficult process," he added.