Lidové noviny is reporting today that the NKU, the Czech equivalent of the U.S. General Accounting Office, is issuing criminal complaints related to the botched “Internet to Schools” tender. In a detailed report, the NKU charges that the project mishandled 884 million CZK (roughly $31.5 million USD) in a combination of bad management and price gouging on the part of consortium participants.

Disclosure: I worked for one of Czech Telecom’s competitors when they bid for the Internet to Schools tender. Our bid was rejected in very strange circumstances; the boxes containing the hundreds of pages of documents were not sealed with a string and lead medallion, and were therefore rejected. All competing bids besides Czech Telecom and AutoCont’s were disqualified under similar, very suspicious circumstances.

In my opinion, Internet to Schools was one of the most glaring examples of corruption in the last ten years. Everything about that project stinks of greed, graft and corruption, from its rigged bid to the outrageous overcharging, and was a symbol of the kleptocracy of the Zeman-Klaus “opposition agreement.”

I’m personally very happy to see the NKU take an aggressive stance on this and other wrongdoing. But what’s saddest is that the schools who the project was supposed to help probably won’t get any help from the government any time soon.

I’ve translated LN’s front-page article, and you can find it in the link:

Police to solve Internet to Schools

The Supreme Audit Office yesterday took the unusual step of issuing criminal complaints related to the Internet to Schools project. This warrants came one month after auditors published a wide-ranging report on the project, which was prepared by Social Democrat Minister of Education Eduard Zeman.

According to the report, the ministry incorrectly spent 884 million CZK, signed disadvantageous contracts and generally badly prepared and managed the project. In 2000, the government of Miloš Zeman earmarked 7 billion CZK (roughly $250 million USD) for Internet to Schools, where every school was supposed to receive at least one computer from the state. To date, only half are being used. The end of the project was planned for 2002.

Auditors prepared four separate judgements, in which it is alleged that the general contractors for the project, AutoCont Online and Czech Telecom, overcharged up to 600 percent.

Schools are paying for the contracts as well. Their monthly Internet bills are more than 600 CZK ($21.2 USD) more than Czech Telecom’s market rates.

“The way the project was managed by the general contractors did not bring the expected benefits,” auditor EliÅ¡ka Kadaňová wrote in the report. LN was unable to reach Eduard Zeman for comment. According to previous statements, he stands behind the project. “To this day, I am convinced that our solution was correct,” he said in July.

Eduard Zeman blames his replacement, Petra Buzková, for some of the project’s shortcomings. “It isn’t my problem now. It’s all been withdrawn,” Zeman said in an interview with Hospodářské noviny about Buzková’s first steps as Education Minister, where she cancelled contracts that overcharged the government.

Zeman does not feel responsible even for contracts which did not directly have to do with the Internet to Schools, but were paid for by its funds. “The appropriate director signed it.”

Buzková would like to continue cancelling contracts. The question is whether she will be able to. “Many people have struggled with how to implement [the changes]. It’s not simple, however,” said her spokeswoman, Hana Vítková.

The ministry’s opinion on the project will not be known until next week. “We’re still considering whether we should join the NKU and the criminal complaint,” Vítková said.

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