Recently, there has been a lot of media coverage about the detention of 17 people by the CBA in connection with the extortion of grants from PARP, the Polish Agency for Enterprise Development. As is well known, PARP manages funds from the state budget and the European Union intended to support small and medium-sized enterprises. The estimated damage suffered by the State Treasury as a result of the actions of the detained persons amounts to a considerable amount of PLN 27 million. Such a large-scale CBA operation is probably only the beginning. In the future, we can expect further arrests in connection with extortion.
Do wyłudzenia jeden krok
One might wonder how it is possible that in a ‘state under the rule of law’ such practices can take place. It turns out that it can and, interestingly enough, there are situations in which the owners of companies applying for funding are not even aware that someone is using their company behind their back to defraud them of funding.
How is this possible? In this case, advisory companies preparing applications for funding were to blame. In the course of representing our clients, we have more than once encountered a situation in which a consultancy company, despite having many years of experience and millions of zlotys obtained for its contractors, turned out to be unreliable and consequently brought more harm than benefit to the company.
Na tropie niedźwiedziej przysługi
While preparing for another hearing recently, I came across an interesting case. A company producing building ceramics, wishing to develop further and become more competitive, turned to consultancy company X for help in obtaining co-financing.
The company’s project was to develop and manufacture sound-absorbing hollow blocks. In order to obtain the subsidy, the consulting company was to prepare a comprehensive project for subsidy and to assist in the implementation of the project in its subsequent phases. The application submitted by the company was successful and PARP signed a grant agreement with the company after verifying the project. The money started to flow and it seemed that the project goal would be achieved.
That’s when the consultancy, or more specifically its chairman, stepped in. As part of the project, the company was required to construct a building with innovative sound-absorbing blocks. This was to be preceded by a series of tests to verify that the new product certainly met all the conditions for launching it on the market. The agreement concluded with PARP specified all the requirements to be met by the building, from its size to the time of its construction. The costs of erecting the building were, of course, to be reimbursed by PARP as part of the subsidy, after the company had previously submitted invoices.
Seems simple, doesn’t it? An external company builds a building out of innovative bricks, invoices the company, pays for the service and then hands it over to PARP, which reimburses the cost of constructing the building. Furthermore, PARP indicates in the contract that the construction company that will erect the building should be selected through a competition
Do akcji wkracza firma „doradcza”
With such a competition, it is useful to have help, specialists in the creation of hollow blocks are not necessarily familiar with the law and tenders, but after all, what is a consulting company for? After all, they have a lot of experience, they are professionals, surely using their services will be the most optimal. Moreover, it will not cost the company much, after all, PARP will also cover most of the costs associated with the advisory services.
The company therefore turned to its consultants to identify the most advantageous offer. The consultancy company obviously rose to the challenge and selected the best candidate to erect the building. The building is standing, the invoice has been issued, all we need to do is apply to PARP for the next tranche of funding and the case will be closed. Has this happened?
Before answering this question, let us turn our attention to one seemingly insignificant detail, namely the entity that was chosen by the consultant to construct the building, namely the son-in-law of the chairman of the consultancy.
The esteemed Mr. Son-in-law was, yes, in the construction business, so he could have taken part in the competition, but as it happens, he didn’t have to, because his son-in-law approached him directly. Moreover, the chairman had an even better idea. The son-in-law will erect a building, but maybe a little smaller, with slightly different materials, after which he will invoice a very high price for his service. The company will have no problem paying for it, after all, in the end all the costs will be reimbursed by the PARP, and they will split the money they manage to get from it 50-50. And it will all stay in the family.
Otrzeć się o sprawę kryminalną
The finale of this story comes as no surprise – prosecution charges for extortion and abuse of trust, and consequent criminal convictions for Mr President and Mr Son-in-law. Just what about the hollow block company and what about the funding? The criminal court has not commented on this, but given the practice of PARP we can safely assume that due to irregularities in the project the Company had to return the entire grant, not to mention the possible subsequent criminal proceedings.
It would seem that such cases are the exception and that most advisory firms are reliable and competent. However, the professional experience of both the law firm and our clients shows that when entrusting our interests to a consultancy firm, we still need to be vigilant. It is not enough to sign a contract and wait for the funding to arrive. Any entrepreneur who decides to use a consultancy firm should monitor its activities, request reports on the work carried out and be in constant contact with it
This is particularly important now, when the emphasis is on so-called subsidy scams, and from time to time the legislator returns to the subject of passing a law on collective responsibility, which will impose huge penalties on entrepreneurs for any irregularities, even if they are committed not by themselves, but by their contractors or co-workers.
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MAGDALENA SIENKIEWICZ
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