KAYO bypasses public procurement rules / Former Deputy Minister Irena Beqiraj: Governance is not ownership!

By Irena Beqiraj

Fascism should not be sought in the protesters’ revolt, but in Parliament!

MP Braçe described the situation on the first day of Parliament’s session as a display of “fascism,” arguing that attacks against MPs because of their political beliefs or choices constitute an infringement of political freedom.

In these lines, I will try to offer a different perspective on what fascism really is.

MP Braçe can argue better than anyone else in that chamber that public procurement rules exist to ensure good public governance by guaranteeing the protection of the public interest, because public procurement rules ensure:

1) competition among potential suppliers;

2) transparency;

3) equal treatment;

4) securing the best offer;

5) avoidance of conflicts of interest;

6) review and appeals mechanisms; and

7) protection against favoritism and corruption.

By voting for laws that have now legalized the “KAYO model” in the military and IT services, Parliament has paved the way for the “corporatization of the state,” allowing a pipeline to be created for transferring budget funds into the pockets of certain private individuals without any oversight or transparency procedure. As the Minister of Health also stated on the first day of work, the draft law installing the same model in healthcare will be signed by her and approved by Parliament, because, in her words, “What the prime minister is going to do is one of the best initiatives ever undertaken in healthcare to secure medicines for Albanians.”

By approving these laws, Parliament has allowed a state-owned company or agency to be given the right to enter into an agreement with a private company selected without a competitive process, since the law itself does not require one, while in all cases this is presented as a joint commercial venture.

Through these agreements, state-owned companies, as happened in the KAYO case, effectively commit public funds by purchasing services and products from subsidiary companies, thereby bypassing public procurement rules, which are the cornerstone of financial governance and the protection of the public interest.

Governance is not ownership. It is a mandate to exercise decision-making authority, and Parliament is the guarantor that the exercise of this decision-making always meets the requirements for the organization and functioning of a democratic state. One of the basic requirements is that “if state money is being used, every transaction must be subject to procurement rules.”

Today, this fundamental requirement has been violated. For example, Timak Defence, a company that is 80% private and 20% state-owned, has so far received 30 million euros that have been exempted from procurement procedures, and Parliament has no oversight mechanism regarding their use to safeguard the public interest.

Why is this “state capture”? Because the answers to the questions below lead only to that conclusion.

Who owns the subsidiary companies?

Answer: In the case of Timak Defence, KAYO is a minority shareholder with 20%. In fact, in an astonishing interview with KAYO’s director, it was argued that the state’s stake had been reduced from 45% to 20% because, during the negotiations, the private party increased its “know-how.” 🤔

Where did the funding come from?

Answer: So far, for Timak Defence, which is operational, funding has come solely from the state budget.

Who chose the private partner? Was there an open competitive process? Answer: No competitive process whatsoever; moreover, the selected companies have neither experience nor certifications in the relevant fields, apart from their political connection to the prime minister.

Who are the clients of these companies?

Answer: State entities only. In other words, a company whose commercial decisions are made by the private party is given a monopoly to supply state entities with certain services or goods, at prices set entirely beyond any oversight, as the majority owner sees fit.

Who receives the economic benefit? The private partner, which is the main owner selected without a competitive process.

These answers clearly demonstrate the corporatization of the state through the creation of state-owned companies that establish other subsidiary companies with politically connected private actors selected without competition. These actors gain access to public resources or assets, while procurement rules, oversight, and accountability are bypassed. This is otherwise known as state capture.

This mechanism also deliberately excludes not only public auditors from oversight and transparency, but Parliament itself.

Benito Mussolini is credited with a famous statement: “Fascism should more properly be called corporatism because it is a merger of state power and corporate power.”

Therefore, fascism should not be found in the protesters’ revolt, insults, or the throwing of eggs at MPs. Protesters are not only deprived of public services because, instead of being properly managed to provide more services for them, budget funds enrich the insatiable Roni; monopolies and oligopolies that have seized control of every sector of this economy have also made it impossible for people to secure a modest but dignified life.

Fascism should be sought precisely inside that Parliament.

While, theoretically, MPs are there to ensure that the laws of this country do not conflict with the public interest, in practice, through the laws they have approved, they have willingly abandoned oversight, transparency, and accountability, thereby definitively giving up on guaranteeing good governance and the public interest.