Public procurement

A former mayor of Peticeni reaped a bakery at the expense of kindergarten children

Foto: CIJM
Author: Victoria Dodon
04/02/2016 7860

A group of inhabitants of the village of Peticeni, district of Călăraşi have been struggling for more than a decade for the return of the canteen’s building back to the kindergarten, as, in their opinion, it was illegally alienated. The transaction was done with the consent of the former mayor, and the building became the property of his wife. The case was reported by the villagers on the Corruption Map of Anticoruptie.md website.

The kindergarten (left) and the former food unit, today a bakery (right) Photo: CIJM

In January 2004, the local council of the village of Peticeni, district of Călăraşi (the former judets of Ungheni) issued a decision based on which the canteen building of the village’s kindergarten was taken out of the State property and sold at an auction through direct negotiation. The building of almost 230 square meters was purchased by Hegemon Grup LLC.

The company, founded just half a year earlier, was the only bidder in the auction and, after the procurement, it opened a mini-bakery in the former building of the kindergarten. The contract drawn up on 3rd of February 2004 was signed between Tatiana Ciobanu and her husband, Iurie Ciobanu, who was then the mayor of the village. Two months later, the company also bought the grounds of 32 ares on which the building was located. Shortly thereafter, they set the wheels of the hot bread business in motion.

Many villagers disagreed with it. Nicolae Mardari (72 years old), a former veterinarian, says that the kindergarten ceased its activity in the 90s, because of the shortage of money and the lack of the sense of entrepreneurship. "There was a total staff layoff, a lot of things disappeared in the yard of the kindergarten, even the windows and the doors were stolen. When he became a mayor, Ciobanu gave his word that he would renovate the kindergarten, but instead of maintaining what was left and renovating it, he seized the canteen on the basis of illegal documents", the pensioner says.

Initially, in April 2005, the prosecution authorities of Călăraşi, jointly with Ungheni Territorial Office of the Government, submitted a notification to the local government of Peticeni, requesting the annulment of the local council’s decision, invoking its illegality and the infringements committed at the alienation of the State property. The document also mentions, among other, the infringement of the provisions of the Law on Education (in force at the time) which prohibited the alienation of the buildings belonging to educational institutions for purposes other than training and education. The Council rejected the notification and was further sued. The court of Călăraşi admitted the claim and annulled the decision of the councillors, but Hegemon Grup LLC won the case at the Court of Appeals on 13th of September 2006.

A decision issued based on an invalid expertise

It is interesting that, during the trial, the local council of Peticeni requested to the Institute for research in constructions "Incercom" to assess the state of the building. The expertise report issued in March 2006 and signed by Anatolie Achimov concluded that the kindergarten was damaged and it should be demolished. Based on that document, the mayor Iurie Ciobanu sent a letter to Călăraşi General Directorate for Education, Youth and Sport, informing that, contrary to his previous commitments, he would not be able to open two kindergarten rooms by the 1st of September 2006. In the same time, he requested financial support for the construction of a new kindergarten in the village.

The kindergarten Photo: CIJM

In 2012, at the insistence of the villagers who were discontent with the former mayor, the deputy minister of Regional Development and Construction, Anatolie Zolotcov, ordered a repeated expertise of the building, after which was drawn the conclusion that the building was in a satisfactory condition and its usage does not pose any threat for the safety of children. In the same time, the deputy minister informed Nicolae Mardari, through an official response, that the expertise performed in 2006 had not been registered in the State Service for the Expertise of Projects and Constructions and therefore it was invalid.

"I do not know how the judges of the Court of Appeals could reject the judgment issued by the court of Călăraşi based on this illegal, worthless document. I cannot imagine how it was possible", Nicolae Mardari shows his indignation.

Even if the man, alongside with dozens of other villagers, submitted repeated requests to the authorities, the Police Commissariat of Chişinău issued several resolutions (the last one dates from 2013), which argue that "the provisions of the conclusion made by the expert Achimov were not binding, but recommendatory and they cannot be used as evidence in trial". Consequently, no infringements were identified.

It shall be noted that all the petitions or complaints sent by the villagers to Călăraşi prosecution authorities or to the General Prosecutor’s Office, to the National Anti-Corruption Centre, etc. were rejected, either because of “the absence of the elements that constitute an offence” (with regard to the veracity of the report of Achimov) or based on the final court judgment (with regard to the alienation of the building).

A washing-machine and rolls for free in exchange for the building

Nicholae Mardari shows where was the corridor that connected the two buildings Photo: CIJM

The kindergarten of Peticeni was derelict for 15 years. Its doors reopened for children in 2011, after a lot of renovation works paid with public money. But without the building of the canteen. "The canteen, the laundry and the storehouse are now located inside the central building, against the sanitary rules. The corridor that connected the two buildings was demolished. People are afraid of talking about it, because our village is small and people know each other, when Ciobanu meets them on the road, he intimidates them. I'm not against, I am not malevolent, and a bakery is really necessary in the village, but everything must be done properly", Nicolae Mardari says, while showing the fence which now separates the two buildings.

A financial report of Ungheni Territorial Directorate for Financial Inspection for the period 2010-2011 pointed out that many of the works - plumbing, heating systems, electrical installations, floor covering and the provision of woodwork, including of doors and windows – were performed without any contracts, contrary to the provisions of the Law on public procurements. The required documents appeared only after the kindergarten was put into operation, and the amount of the works exceeds 1, 2 million lei.

In spite of all, at present, 72 children attend the kindergarten. Nicolae Mardari stated that, because of the limited area, not all children can get a place in the kindergarten, but Natalia Gusatinschi, the director of the institution denied it. "All of them can come!", she exclaimed, while showing to us the large and well-lit rooms.

The director is happy that the owners of the bakery bought a washing machine for the kindergarten in 2011, and since then, every Monday and Friday, they offer free rolls to all the 70 children. "Moreover, the maintenance of an additional building would request supplementary expenditures and it would be very difficult for us to maintain it. We have a limited budget and low salaries. The assistants of kindergarten teachers complain about how difficult it is to lift four times a day the pots with food on the higher floors. How would they carry them from the other building which is on the hill, for a salary of 1 000 lei? ", Natalia Gusatinschi argues.

She considers that the yearly budget of over one million lei is sufficient for the institution to exist, but she would like to have some more resources for paving the yard around the building. "It is compact, comfortable, warm in winter, arranged according to all sanitary requirements. Parents are happy, too", she says firmly.

The bakery – the biggest business in the village

Meanwhile, the director of the bakery - the wife of the former mayor, has developed a thriving local business. According to the data of the Public Procurement Agency, during the period 2013-2015, Hegemon Group LLC won procurement contracts worth over half a million lei for the supply of food to a number of municipalities and schools of the district of Călăraşi, as well as to the district hospital.

Moreover, the company also provides bakery products to the districts of Străşeni, Ungheni and Nisporeni. In 2012, the company declared a sales revenue of nearly seven million lei. Over the years, the building under consideration, as well as the grounds around it were pledged many times and still are objects of mortgage contracts. 

The bakery Photo: CIJM

On the other hand, the same financial report for 2010-2011 notes that the local government of Peticeni bought bakery products from Hegemon Grup LLC without any procurement contract - "from the company whose founder was the former mayor Iurie Ciobanu". The document also shows that the local government of Peticeni also committed other infringements of procurement procedures in relation with other business entities.

The head of the company: “I am tired of so many controls”

The company director, Tatiana Ciobanu, states that there was no conflict of interest when she bought a State property with the direct involvement of her husband. "As a person of good faith, I submitted a request to the local council. They analysed and accepted it. I have not bought the building from the municipality, but from the Territorial Agency for Privatization of Ungheni, in the framework of a tender. The mayor had nothing to do with it, he did not sell the building. We have a lot of decisions from all the authorities, including from the prosecution, the National Anti-Corruption Centre, the Ministry of Interior. I am tired of so many controls", she told us.

She states that if there were any falsifications or other infringements, she would have been hold to account long ago. "We started this business with good intentions, we created jobs, we provided support to the kindergarten and we still continue to supply rolls for children", Tatiana Ciobanu explains.

However, after many years, the villagers still insist that the owners leave the building to the kindergarten. They still claim the cancellation of the contract of sale and purchase and the annulment of the technical conclusion signed by Achimov. "I cannot stand illegalities! I complained to the National Anti-Corruption Centre, to the General Prosecutor’s Office and to the President, but nothing happened. In fact, I received some answers, but they all refer to the judgment of the Court of Appeals that reinstated the mayor and according to which everything was legal. The kindergarten was built with our money, the money of our parents and it should be preserved, not be stolen from the children", Nicolae Mardari says.

The current Mayor: “It’s not Ciobanu’s, but the Councilors’ fault”

Soon, children will have dinner Photo: CIJM

The current mayor, Sergiu Şpac, stated that when the kindergarten’s building was sold, he was among the first who opposed, but he was not supported. “If the villagers raised a big smoke when I started, the process of sale would have been stopped, but they awakened after the mayor quitted. Until then, they were afraid, they kept silent and even voted for him a second time, because they saw other things transformed into reality", the official explains.

He recognises that a mistake was committed, but now his hands are tied, because a court judgement was issued. "It is not the mayor’s fault, but the fault of the local council. Iurie Ciobanu just made a proposal and the nine councillors voted for it. At the time, nobody needed the kindergarten and it was derelict, but the councillors had to look ahead", he added. Sergiu Şpac says that even if, as a result of a trial, the building is retroceded, the local council would have to reimburse to the business entity all the investments made over ten years of activity - a colossal sum. "Where from could we get such an amount of money? It is one of the biggest taxpayers in the village and the company with the largest number of employees. In addition to it, they give to the kindergarten free rolls", the mayor of Peticeni justifies.

Expert: Loopholes in the legislation cause problems

According to the experts, from the strictly legal perspective, there is no conflict of interest, because the mayor is obliged to execute the decisions of the council.

"But where is the certainty that the mayor made no abuse of office? In the same time, we need to know very clearly how the information about the sale of that public good was disseminated or at what price the good was bought, if it was not undersold. From the procedural perspective, when the local government decides to sell a plot of land or a building, it must find three buyers. If it does not succeed to find them, a repeated tender with at least two buyers shall be organised. If the repeated tender fails, then an open outcry auction shall be held. If everything took place otherwise, it means that deviations from the law were admitted", Tatiana Savva from Expert-Grup explains. As far as the case under consideration is concerned, she considers it is a moral conflict, which was possible because of the loopholes in the legislation. "We should see very clearly who becomes a mayor, under what conditions. You cannot forbid anyone having a business for four years, but it should be established where his/her opportunities terminate. Unfortunately, this area is not regulated and therefore there will not be order soon", the expert concludes.

Well-developed schemes and legislation with a lot of loopholes

The case of the kindergarten of Peticeni is not unique. The mass-media wrote previously about other preschool institutions brought to the hammer by virtue of the decisions of local councils. In 2013, for instance, 45 buildings of kindergartens throughout the country, or certain parts of them, were liable to privatization according to a Government Decree.

The representatives of the Public Procurement Agency (PPA) said they do not keep records of the privatized institutions subordinated to local authorities. "According to the law, they cannot even be sold as institutions. We only sell buildings whose original destination was the one of a "kindergarten", but remained as unfinished constructions", Eugeniu Vulpe from the press-service of PPA explains. The officials from the Ministry of Education do not know either how many kindergartens in the country were illegally privatized. "Unfortunately, the Ministry does not hold statistical data on this subject, about the kindergartens", declared Gabriela Ştirbu, the spokeswoman of the institution.

In summer 2015, Zinaida Greceanîi, then a candidate for the mayorship of the capital city, claimed that, over the previous eight years, 23 kindergartens and more than 60 grounds surrounding them had been illegally alienated based on the signature of local government administration and with the help of the courts.That fact was confirmed by an analysis made by the General Prosecutor’s office, which found out that many pre-schoolers were not attending kindergartens, because many buildings of such institutions had been alienated. "The prosecutors found out that, over the past years, the local government of Chişinău municipality brought to court a number of cases, claiming the eviction of the tenants from the former premises of preschool institutions. The civil actions were admitted, however, the judgments remain unenforced", the prosecutors’ report says.

A report of Expert-Grup Analytical Centre, published in 2014, indicated that because of the faulty privatization of public assets, Chişinău municipality suffers yearly losses of hundreds of thousands of lei. The experts drew in particular attention to the grounds of the kindergartens and to the fact that 30 hectares of land coming from the sports grounds of kindergartens and schools and from other municipal institutions had been illegally taken over throughout the previous years.

The investigation has been done in the framework of the Campaign „Public Money Is My Money Too”, conducted by the Centre for Journalistic Investigations (CJI) and the Association for Efficient and Responsible Governance (AGER), within a project funded by the European Union and the National Endowment for Democracy.

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