A Public Servant from Orhei Has Organised Auctions for His Family’s Company

The company of a public servant of Orhei won, year after year, fat contracts with public money, being a favourite in a number of public procurement tenders. The former Chief of the Economy Directorate of Orhei District Council, Vladimir Gurduza, who also was the deputy chairman of the working group in charge of procurements, facilitated during the period 2011-2014 the winning of a number of procurement contracts with the local government by the company “DCRR-Orhei” JSC, founded and managed at the time by his son. When the district authorities started to call him to account for the infringements committed in the process of organising the public procurements, the official resigned.

Repair with Problems

Roof repair at the gymnasium of Puțintei, district of Orhei, was one of the projects implemented by “DCRR-Orhei” JSC, with serious irregularities, by the way. The money for the works – more than 1 million lei – was allocated from the district budget for the education component, a joint school fund made up of allocations of 3-5% from each school’s budget.

The irregularities have recently come to light, after an internal audit conducted in December 2015 according to an ordinance issued by the mayor of Puțintei, Elena Soboleva. The results of the control revealed a deviation of 160 thousand lei from the amount established for the repair works performed by “Rutcon-Paviment” LLC which, in its turn, had signed a subcontract with the company of Vladimir Gurduza’s son. All these infringements were brought before the prosecutors of Orhei. A joint letter signed by the mayor, the director and the chief accountant of the school of Puțintei was sent to the prosecutors, requesting a repeated verification of the repair works. The signatories of the letter think that the prejudice to the budget is much higher, and, in their opinion, such a fact could be confirmed as a result of an expertise of the materials used, which are of an inferior quality.

Five companies submitted their bids (according to the minutes no. 35 of 24th of June 2013) at the tender for roof repair at the gymnasium of Puțintei. The winning bid was the one of “Rutcon Paviment” LLC, managed by Alexander Leontiev, who proposed an offer of 1.114.133 lei. According to the contract, the works had to be performed within 45 days and be finished before the start of the new school year, that is by mid-August.

For unknown reasons, a few weeks after signing the contract with the district council of Orhei, “Rutcon Paviment” LLC concluded with “DCRR – Orhei” JSC a subcontract for the execution of the repair works at the gymnasium of Puțintei. The subcontracting company was managed at the time by Vladimir Gurduza’s son. On the other hand, by virtue of his job duties, Vladimir Gurduza was directly involved in the preparation of the documents and organization of the tender, holding confidential data.

According to the official documents, “Rutcon Paviment” LLC did not fulfil its commitment to perform the repair works before the 9th of August 2013. However, the company was not penalized anyhow for the breach of the contractual obligations.

Moreover, on 21st of August and 10th of September 2013, were signed two additional agreements with “Rutcon-Paviment” LLC, according to which the value of the contract was increased by about 227 thousand lei, representing 20,39% of the initial value. The reason given by the working group in charge of procurements of Orhei district council was the need for additional works, “unforeseen in the specifications”.

A Certificate of Acceptance for the Family’s Company

While the company owned by his family was performing the works Vladimir Gurduza figured in the documents as a representative of the beneficiary – Orhei District Council, being in charge of the supervision of the legality and of the quality of the executed works. This fact is proved by documents signed by him. It is interesting that on 22nd of September 2014, Gurduza signed an act of the State Inspectorate for Constructions which stipulates that the works at the gymnasium of Puțintei were executed in the absence of an urban planning certificate, of project documentation (general plan, architecture, resistance) and of a construction permit.

In its work completion report, the local government of Puțintei pointed out a number of errors in construction. “The rafters are crooked and the roof does not have the proper form”, “The amount of all the collateral works was minimized”, the document specifies.

On the other hand, the manager of “Rutcon Paviment” LLC, Alexandru Leontiev, thinks that the signatories of the letter to the prosecutors just attempted to denigrate him. “There are political games and someone wants to defame me. If they do not temper, I will take them to court”, the businessman said. Leontiev submitted to us a copy of an act of control issued by the State Inspection for Constructions on 22nd of September 2014 which certifies that no deviations from the regulations in force were established at the gymnasium of Puțintei. The document is endorsed by Vladimir Gurduza.

Contracts of Millions of Lei

Vladimir Gurduza was appointed as the Chief of the Economy Directorate of Orhei District Council in 2011, following the proposal of the former President of the district, Ion Ștefârță. Some of the councillors opposed to the appointment of Gurduza, justifying that he was the director of “DCRR-Orhei” JSC at the time. Expectedly, this company found “a work” immediately after his appointment – it started renovation works in the basement of the Orhei district council’s building. The initial amount of the contract was about 397 000 lei, but 114 000 lei were additionally allocated from the budget later. The money was allocated at the proposal of Ion Ștefârță, who justified that the council “will have a meeting room and the mildew will disappear.” No later than a year after signing of the acceptance certificate, the meeting room was closed once more, again because of mildew. A year later, in 2012, the councillors requested the resignation of Gurduza from his position of manager of “DCRR – Orhei” JSC. Nevertheless, the company remained in the family, being further managed by the public servant’s son

During the period 2011-2014, “DCRR-Orhei” JSC won many tenders organised by the District Council of Orhei. One of them was for the renovation of the House of Culture in the village of Mârzeşti, a project worth over 266 000 lei. Subsequently, this amount was supplemented with over 65 thousand lei, based on an additional agreement. (Note that, over the past four years, only two companies which implemented projects in Orhei benefited from additional agreements).

Even if not a long time passed since the completion of the works, problems have already appeared. Just at the entrance to the House of Culture, there is a large crack giving the impression that the damaged wall is going to crash. Ion Platon, the chief architect of the district of Orhei, said that the drainage facilities on the roof were installed with deviations from the technological rules. “The water runs directly under the wall. This fact is likely to cause the cracks”, the specialist says.

The Resignation

While making this investigation, we found out that Vladimir Gurduza had resigned. Some councillors consider that his resignation is connected with the change of district authorities, while some others say that they will require the investigation of all frauds related to procurement procedures which were committed when Gurduza was in his position. Such requests have already been submitted, but remained unsolved. At one of the meetings of Orhei District Council held last year, the councillor Oleg Vasilcan requested a report about “how much money was stolen from the district budget over the past four years.” His request remained however unanswered.

In his turn, Vladimir Gurduza has an explanation for all imputations. “At the school of Puțintei, we performed even a larger amount of works than foreseen and I do not understand if the document is signed by the construction inspectors or by other specialists … Yes, I signed on behalf of the beneficiary, but my signature did not mean anything. As for the cracks at the House of Culture in Mârzeşti, it’s the first time I hear about. It’s difficult to say why the cracks appeared, if the wall was built by us, we would take the responsibility for it”, Gurduza says.

Regarding the resignation, the former official explains that he turned 65 on 10th of December 2015 and the district authorities did not propose to him to remain in his position. He also noted that he has a “Mercedes”, bought many years ago. In his income statement for 2013Vladimir Gurduza showed that he holds 60.5% of shares of “DCRR – Orhei” JSC, specialized in constructions. Together with his wife, they had that year a yearly income of about 80 thousand lei. His family owns two buildings and a car Mercedes E 200.

Anti-Corruption Expert: “He Had the Obligation to Abstain from the Decision-Making”

The subdivisions of local public administration authorities are subject to Law no. 158 of 04.07.2008 on the Public Function and the Status of the Public Servant, and their staff are subject to Law no. 16 of 15.02.2008 on the Conflict of Interest. “Under these circumstances, the chief of the Economy Directorate of the District Council of Orhei had the obligation, according to the law, to abstain from participating in the decision-making process that ultimately concerned or could concern his son. This is exactly a case when the signature matters”, the anti-corruption expert, Mariana Kalughin, says.

Asked about what the official might risk, Mariana Kalughin mentioned his contraventional liability for undeclared conflict of interest, and for abuse.

 “The documents signed in a situation of conflict of interest are vitiated. Or, under the terms of Art. 12 of the Law on the Conflict of Interest, such acts are hit by nullity. According to the law, after a possible identification of a conflict of interest, the National Integrity Commission is entitled to take court action towards establishing the nullity”, Mariana Kalughin added. She also said that the complaint shall be filed ex officio or upon the request of the person who claims his/her rights were infringed as a result of a conflict of interest. This provision is still valid, when the signer does not hold the respective position anymore.

“In general, the area of public procurements is one of the most corruptible, and the phenomenon of corruption in procurements is often difficult to counter, because of the fact that people who know about the misdeeds do not notify the prosecution bodies or do it too late. Obviously, the prosecution authority of Orhei will have ultimately to decide upon all subtleties of this case. Or, all of them need to be examined as part of a possible criminal prosecution on the case”, Mariana Kalughin concluded.

5 Million Lei – to Alleviate the Consequences of Poor Quality Repairs

The case of Puțintei and the one of Mârzești are not the only situations when serious deviations have been committed. The new President of the district of Orhei, Tudor Golub, says he is aware of these problems and he ordered the establishment of a board in charge of the thorough assessment of the amount and the quality of the renovation works performed at the educational institution and at the house of culture.   

During for procedure for the approval of the district budget for the current year, a number of elected officials insisted on the allocation of financial resources for independent audits to the buildings which were renovated or built with public money in 2011-2014.

Based on the decisions of Orhei District Council, over 5 million lei were allocated from the district budget over the past 10 years to alleviate the consequences of renovation works of poor quality.

According to Elena Sobolev, all problems derived from the fact that the former administration of the district of Orhei deprived the mayors of the right to organize public procurements, especially in the field of renovation and construction of buildings with social and cultural destination. To justify his actions, the former President of the district, Ion Ștefârță, said at a meeting of the District Council of Orhei that the procurements should be carried out exclusively by the second-level local government in order not to “make the mayors run around”. His proposal was supported by the councillors of the Liberal-Democratic Party, of the Party of Communists and of the Social-Democratic Party. Ion Ștefârță issued a directive in this sense on the 28th of February 2012.

Vasile Roman

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.