Last week Latvian Corruption Prevention and Combating Bureau (KNAB) detained the chairperson of the Central Election Commission (CVK) Kristīne Bērziņa.
She was released shortly after her detainment, but it is known that KNAB has asked the parliament to dismiss her. Saeima will soon need to decide on the new composition of CVK. Bērziņa has already made it clear she has no plans to run for the chairman’s post again.
Bērziņa was detained as part of criminal proceedings regarding some procurement in CVK.
According to CVK, only KNAB can comment the topic of the criminal proceedings. The bureau promised to provide comments on Tuesday, 29 November.
According to unofficial information, Bērziņa could be presented with a security measure involving restrictions or full prohibition to perform duties as chairperson of CVK.
KNAB has investigated IT company SOAAR, which has been the winner of major procurements by CVK and other state institutions. The company and its board member are featured in this criminal case.
KNAB has contacted CVK as well, as confirmed by the commission last week. CVK explained at the time they do not have the right to provide more commends on the investigation.
According to information from Firmas.lv, the Jekabpils-based company is owned by Leonards Survilo and Renārs Kadžulis. In 2020 the company worked with turnover of EUR 1 118 557 and profits worth EUR 675 055. No data is available for 2021.
Information from the Procurement Monitoring Bureau indicates that this year the company won in a procurement organised by CVK for the development of an election management system and Saeima’s election module. The contract’s price was EUR 963 515.
Last year the company acquired a contract worth EUR 91 191 with CVK in the procurement for management and user support of the election management system during the elections in Rezekne and Varakļāni in 2021. It was at this time when the company also won in the tender organised by the Office of Citizenship and Migration Affairs (PMLP) for the online election register’s operational maintenance and technical support during aforementioned elections.
In 2021 SOAAR and other companies won in the expensive procurements organised by the National Regional Development Agency.
In July 2022 the State Augid reported that until 2021 CVK was using software provided by SOAAR to organise elections. Between 2017 and 2020 the company was paid more than EUR 2.2 million for these services.
To prevent the risk of the election process being dependent on a single company’s provided services for a long time, CVK decided to start purchasing election management system modules in 2020. CVK planned to spend EUR 1.8 million on the purchase of the equipment and four election modules. A contract worth EUR 900 000 was signed for the purchase of the base and municipal modules. These were procured as part of the planned budget. A contract was signed with SOAAR, which was also the sole participant of the tender.
However, during the procurement of said modules CVK faced a significant price surge for the modules that would later be used in this year’s Saeima elections, which cost EUR 1.16 million instead of the planned EUR 363 000.
It is expected that the purchase of the two remaining modules – for European Parliament elections and national referenda – will cost more than the currently planned EUR 544 000.
After purchasing all the necessary management modules, it will be necessary to also purchase support services. At the same time, the State Audit explained in its report that SOAAR was the only contender, adding that three contracts worth a total of EUR 631 000 were signed with this company.
Additionally, the audit also outlined that two contracts signed with SOAAR for the 2021 municipal elections included a cost position for Covid-19 to reduce the impact of the pandemic on services. As part of these measures CVK paid for the company’s expenses to provide employees with better equipment so they can work remotely even though the service for which this equipment was procured was to last for three months.
Instead of renting the necessary equipment or covering costs for the use this equipment,
CVK decided to pay for the purchase of this equipment. According to estimates, this had unjustifiably inflated the costs by at least EUR 40 000.
As previously reported by Ir magazine, last year CVK warned that due to the shortage of funds this year’s Saeima elections may be at risk. For year the State Audit has warned that CVK is highly dependent on SOAAR, which has been providing them with e-services for a long time and has been dictating prices on the rights of a monopoly.
CVK and SOAAR established their relations during Arnis Cimdars’ term as chairman of CVK more than ten years ago. For 19 years since then this company has provided system development and maintenance services, Ir magazine reported.
CVK is one of Latvia’s smallest state institutions. It has never had an IT office, explains CVK chairperson Kristīne Bērziņa. This is why the commission has been contracting SOAAR all this time. Since 2020, however, the commission has put a great deal of effort into purchasing equipment under the ownership of the state.
Ir magazine also reported that Bērziņa, too, admits CVK is concerned about the monopoly situation.