Transparency Is a State of Mind
The Greek government awards competition-free public contracts to a private company through emergency decree.
On the 13th of April, the Greek government issued an emergency decree which contains a contentious article (69) that allows for the Ministry of Tourism, the Greek National Tourism Organisation, and local administrations across the country to directly award contracts — therefore circumventing the foreseen procedures and legislation regarding public procurements — to a specific company for the purpose of promoting Greece’s tourism campaign. In particular, according to the emergency decree in question, the aforementioned public bodies will be free to award competition-free public procurement contracts to the private company Marketing Greece until the 31st of August.
The decree raises competition issues as well as infringing EU directives
The Hellenic Single Public Procurement Authority (HSPPA) being in line with its scope which is to ensure transparency, efficiency, cohesion and compliance in the implementation of public procurement procedures and contracts with national and European law, issued on the 29th of April an opinion (A16/29.04/2020) which questioned the legality of the article in question.
According to HSPPA’s opinion, article 69 of the 13/04 emergency decree is not compatible neither with EU regulations pertaining to public procurements nor with the Greek constitution and relevant national legislation. Namely, the Authority highlights three main arguments to back its opinion:
- The fact that the decree explicitly names a particular company — Marketing Greece — excludes other potentially interested parties, therefore, raising the issue of unfair competition while infringing fundamental principles of the rule of law.
- Τhe competition-free direct awards can be granted to Marketing Greece regardless of the value of the contracts. Τhe provision in question goes against EU law when it comes to contracts above the threshold while for those below the threshold it is inconsistent with the general principles of the Treaty of the Functioning of the EU such as the ones of equal treatment, the prohibition of discrimination and transparency requirements.
- The fact that the decree in question provides only for ex-post audit processes by the Court of Auditors — rather than preventive audits — raises questions as to its constitutional soundness and its compatibility with the public interest.
The HSPPA concludes by arguing that the auditing process will be practically taking place after the contract has been awarded and potentially even after its completion and the disbursement of the relevant costs incurred. What is more, the decree does not foresee a specific deadline for the submission of the contracts for auditing purposes, neither does it outline the repercussions in case the audit results are problematic.
The claims about the “non for profit” nature of Marketing Greece S.A. and the law that exempts it from taking part in public procurement competitions (!)
Following the public uproar that ensued from the launch of the first promotional clip of Marketing Greece’s campaign, members of the company’s board as well as the Minister of Tourism himself proceeded to provide explanations publicly.
On the 7th of June, Mr. Fotis Kokotos, Managing Director of Elounda Resorts and member of both Marketing Greece’s and the Greek Tourism Confederation’s (SETE) boards, while angrily responding to a comment on twitter by Vouliwatch’s Director (Stefanos Loukopoulos) who was challenging the legality of the process in question, failed to provide concrete answers and threatened to sue him for defamation.
The following day, Mr. Kokotos in an attempt to downplay the concerns of Vouliwatch’s Director issued a statement/interview on a local news outlet where he once again presented his legally unsound arguments as to why the award of the contract to Marketing Greece was in order. Unfortunately, however, he failed to provide legal backing for his claims while avoiding answering the burning questions posed by Mr. Loukopoulos.
On the 10th of June, in Parliament, the Minister of Tourism while answering a relevant parliamentary question blatantly followed the Kokotos line with regards to the legal status of the company and its legal obligations vis a vis public procurements. Prior to this, he had provided a similar answer on Twitter.
Their main counterargument with regards to Vouliwatch’s claims was based on two main points. Firstly that Marketing Greece SA is a non for profit (!) and secondly that the company in question is exempt from the public contracting provisions foreseen by the law.
Let us examine these claims closely:
- “Marketing Greece SA is a non for profit” (!)
To begin with, legally speaking, public limited companies are capital and commercial companies therefore by default profit-making. There is therefore no such thing in the legal or real-world as a “non for profit limited company”. The Minister as well as the company itself — which has branded itself as a non for profit on its official website — base their claim on article 33.1 of Marketing Greece’s statute which foresees that “the intention of the founders and the agreement between the shareholders is that the profits will not be distributed but reinvested for the attainment of the company’s goals. In case of compulsory distribution, the net profits of the company shall be distributed as foreseen by the law 4548/2018”.
Vouliwatch insists that the aforementioned article in Marketing Greece’s statute is not binding neither does it provide the company with the legal status of a non for profit. In fact at any time, with a mere decision of its General Assembly, it may alter the article in its statute and proceed to distribute company profits. It, therefore, follows that both the Minister’s and the company’s claims are at best ludicrous.
It is also worth pointing out that the word “profit” for a company such as Marketing Greece, with the majority of its shares belonging to SETE and with a board comprised of the elite of Greek tourism entrepreneurs, does not necessarily only translate to actual capital gains (in the narrow sense of the word). In fact, the chance is given to Marketing Greece to manage exclusively and distribute as it pleases — and practically audit free — public funds from the Ministry of Tourism, the Greek National Tourism Association and local governments across the country will most definitely be beneficial for the company in other ways too.
2. “Marketing Greece is exempt by law from participating in public procurement calls” (!).
Concerning the absurd claim of both the Minister and the representative of Marketing Greece that the company in question is exempt by law from taking part in public procurement calls, it must be said that it constitutes a blatant case of — either intentional or unintentional — misinformation.
The law that they invoke to back up their argument — which established Marketing Greece with 70% of its shares going to the Greek Tourism Confederation (SETE) and 30% to the Greek National Tourism Organisation (EOT) — was voted in 2012 and a year later was REPEALED never to be replaced (according to article 38 of 4179/2013). What is more, EOT was never included in the statute of Marketing Greece as it didn’t fulfill its equity participation share.
In 2013 Marketing Greece is re-established as a private limited company (with SETE holding 80% of its shares and without the participation of EOT) therefore there is no legal ground for its treatment as a public entity free from the burden of participating in public procurement competitions.
When Vouliwatch confronted Mr. Kokotos with the abovementioned facts he answered that the new Marketing Greece that was re-established in 2013, shares exactly the same statute with the company originally established with the repealed law of 2012 and that this was reason enough for it to be exempt from public procurement calls!
As the representative of Vouliwatch insisted on asking Mr. Kokotos to indicate which law exactly exempts Marketing Greece…from the law, the latter avoided answering and threatened to sue Mr. Loukopoulos for defamation. A threat which later on he took back by deleting his tweet.
To conclude • the first contract award
Following the ratification of the contentious emergency decree, the first direct contract was awarded to Marketing Greece on the 22nd of May. According to the contract, the company will receive a total of 99.000 euros (VAT not included) from EOT for the promotion and management of Greece’s tourism campaign abroad.
Out of the 99.000 euros, the contract foresees a fee of 9.000 euros to Marketing Greece for the planning and management of the campaign’s dissemination. On the 6th of June, following the public exchange on Twitter between Mr. Loukopoulos of Vouliwatch and Mr. Kokotos of Marketing Greece, SETE –the main shareholder — issued a press release stating that “the company has never claimed in the past nor will it in the future the management of public funds of the Ministry of Tourism or EOT”. It then went on to state that “the 9.000 euro fee seen in the contract will be reinvested towards the tourism campaign along with an extra 15.000 euros from the company’s own coffers”.
If this was to be indeed the case then one cannot but ask the following questions: Why is it then that the official offer submitted by Marketing Greece to EOT foresees a fee for the company? Couldn’t they have just included the 9.000 euro fee in the costs relevant to the promotion of the campaign? Are we supposed to take the word of a private company’s press release over that of an official document (contract) published by the Greek National Tourism Association (EOT)?