Contracts, Data and Investigations 64
This week: defense procurement, pay-to-play schemes, new data from Italy and an interview with Protenge’s Jamilya Maricheva
[What we are keeping an eye on]
Spending openly while under attack: Even after Russia’s unprovoked invasion, Ukraine’s e-procurement system, Prozorro, has continued to uphold standards of transparency and accountability as much as possible. Urgent requests for items such as food or medicines can be classified under the new category "war for freedom", allowing buyers to purchase critical supplies fast, but transparently. We stand in solidarity with Ukraine, and we’re in awe of the courage and resilience of our Ukrainian colleagues and partners at this gravely difficult time. They helped create Ukraine’s world-class procurement system, and have long been a shining example of what people can achieve when they believe in a better and fairer future for their country.
Defense procurement: It’s usually one of the most secretive procurement sectors, but defense spending is likely to attract more attention as the war in Ukraine puts defense resources to the test. While difficult to verify, analysts have suggested corruption and inefficiency in Russia’s defense procurement may be hampering its troops. Ukraine is certainly buying into this theory: the head of its anti-corruption agency wrote a letter last week thanking Russia’s defense minister for his “efforts to ensure the high level of corruption in the Russian army”. For insights into common corruption schemes in defense contracts, check out some of the cases mentioned in our story on Ukraine’s defense procurement reforms. In Germany, a €100bn investment fund is set to give the military budget a boost after years of being starved of money. As the calls for fast and unbureaucratic spending grow, it’s important to remember that backroom deals with lobbyists can have dire and long-term consequences, as we learnt from the pandemic. For more background on corruption risks in the defense industry, Transparency International’s Government Defence Integrity Index (GDI) provides a valuable tool (last updated in November 2021).
Pay-to-play: In the US, the Houston Chronicle’s Zach Despart exposed a pay-to-play scandal in Harris County, the largest county in Texas. The county awarded $310 million in no-bid infrastructure contracts to firms whose executives were campaign donors to commissioners (local government leaders). During a two-year period from 2020 until 2021, donations from people linked to government vendors made up 79% of all campaign contributions. This paper by Mihaly Fazekas, Romain Ferrali, and Johannes Wachs shows that campaign contributions influence favoritism in US public contracting, using data from 2004-2015.
Secret bank accounts: Money pocketed through corrupt deals must be stashed somewhere. Banks are increasingly under scrutiny for being part of an ecosystem of ‘enablers’. A case in point is SuisseSecrets, a massive data leak and investigation by OCCRP and Süddeutsche Zeitung that provided insights into Credit Suisse, one of the world’s largest private banks. Hashomrim’s Uri Blau reports on the potential link between Israel and German firm ThyssenKrupp, including a controversial $1.8bn submarine deal, and a previously unknown account of an Israeli broker indicted for bribery.
Following the pandemic billions: If you’re in Europe, keep an eye on the EU’s Recovery and Resilience Facility. This massive fund will see the Union give €672 billion in loans and grants to member states to cushion the impact of the pandemic. Our Karolis Granickas and MEP Michèle Rivasi explain what’s needed to track the money in this Op-ed.
This week, the Italian National Anti-Corruption Agency announced new datasets on the country’s public procurement as JSON and CSV files. The data goes back until 2007 and is going to be updated monthly. A dashboard is available too.
[Tips & insights]
ProTenge is an Instagram-based news site created by journalist Jamilya Maricheva to remove the filters on corruption in public procurement in her country, Kazakhstan. With more than 80,000 followers, ProTenge gets an average of 60,000 reactions to a handful of posts per week. The bite-sized stories take on the country’s oligarchs and ask the audience to vote on the worst acts of corruption. Read more on how Jamilya built a media organization on Instagram.
A publication about luxury assets acquired by Kazakh government agencies with taxpayers' money. ProTenge often packs stories about government spending into a carousel of appealing illustrations and short, catchy texts.
Jamilya explains her steps to extracting information from the public procurement system for sharing on ProTenge:
First, take a creative approach. Search the system for anything that occurs to you. For instance, you can look up purchases of Apple gadgets. Jamilya says that local officials really like buying them at overblown prices. ProTenge also regularly monitors how the state hires bloggers to provide PR services, which she believes is an inappropriate use of taxpayers’ money.
Second, test a journalistic hypothesis. After parliamentary or municipal elections, Jamilya began conducting background checks of elected officials to see if they had a business, and whether it won any public contracts.
Third, do a quick scan of public spending by the biggest procuring entities. For example, Jamilya regularly checks all spending by the Office of the President. After all, the higher the body in the state hierarchy, the less it’s written about in Kazakhstan.
“As soon as it comes to the Presidential Administration or some ministerial positions, the fight against corruption breaks down. From time to time, a case is opened against someone, but in fact nothing systematically changes. Transparency should begin with the Presidential Administration. A city with a population of 300,000 people could live off its budget. We don’t see the details, we don’t see what they buy, from whom and for how much,” says Jamilya.
What can you do with public procurement data?
Our guide on open contracting use cases helps prioritize the key data fields that you need to collect in order to draw specific conclusions about procurement, such as whether governments are buying efficiently, getting value for money, or to identify corruption risks. The guide summarizes the indicators that can be calculated with existing data. More here.
You can also review our tipsheet for journalists and this guide that we developed together with the Global Investigative Journalism Network. For recommendations, resources and tools on COVID-19 contracts, check our COVID-19 resource page. Interested in a training or background conversation? Just reach out to Sophie and Georg at firstname.lastname@example.org.
This newsletter has been put together by the Open Contracting Partnership. Thanks for reading. Did a friend forward you this email? Click here to subscribe