PiS-linked foundations shun Polish expenses audit

Reading Time: 4 minutes

Companies and foundations that held close ties to the right-wing populist and national-conservative Law and Justice party (PiS) government that ruled Poland from 2017-23 are refusing to cooperate with the requests of authorities.

Since taking power last month, Polish Prime Minister Donald Tusk has not shied away from the ‘de-PiS-ification’ of the country’s public institutions, following up on his promise to sweep away corruption “with an iron broom”.

“Just as the PiS occupation of Poland ended, so will the occupations of PiS state offices,” Tusk, whose Civic Coalition beat the PiS coalition in October, wrote on Facebook. “Only the occupiers’ reputation will stay with them for a long time,” he added.

NIK inspection meets frosty reception

However, when the Polish Supreme Audit Office (NIK) called, three of the nine entities approached refused to be audited, a NIK spokesperson said at a press conference entitled “Selected expenses of state-owned companies and the foundations they created”, Gazeta Wyborcza reports.

The NIK asked to examine the expenses of nine state-owned entities, which collectively received PLN 795mn (EUR 181.4mn) in sponsorship, over PLN 1bn for media services, more than PLN 562mn for legal and advisory services. Additionally, the 9 entities collectively received PLN 841mn for donations, 81% of which was donated to foundations they established.

Companies controlled by NIK inked over 4,600 media services contracts over five years, mainly with state television channel TVP. The Polish National Foundation received PLN 152mn, and is currently scheduled to receive PLN 634mn from companies by 2026. 

The Chamber asked to examine sponsoring activities from 2017-21, but institutions from the Orlen capital group, among others, did not allow the inspection. The NIK submitted ten notifications to the prosecutor’s office “concerning reasonable suspicion of committing a crime by six state-owned companies and four established foundations.” 

The notifications concern energy giant PKN Orlen, and its affiliated entities, oil and gas companies PGNiG and Energa, as well as media house Sigma Bis, of which insurance firm PZU is also a shareholder, and PZU subsidiaries Alior Bank SA and Link4. 

Companies repeatedly flouted purchasing rules

Some of these companies were previously audited, for instance: Orlen and Energa provided auditors with documents regarding expenses on sponsorship and media services, in 2017, when both companies were headed up by incumbent PKN Orlen president Daniel Obajtek. 

Orlen filed a complaint against the NIK with the prosecutor’s office, which found the company’s lawyers were incorrectly interpreting the State Audit Act.

The six entities that participated in the inspection into purchases of media, legal and advisory services repeatedly flouted their buying procedures. Mining company KGHM ignored the regulations prohibiting sponsorship related to political activity, Gazeta Wyborcza added.

PiS entities also held events, media

State-owned companies sponsored pro-PiS media galas, for example an event organised by Gazeta Polska at which party officials were awarded statuettes and “Man of Freedom” awards. Meanwhile, employees of state-owned companies such as KGHM were also named as the year’s top entrepreneurs, innovators, or “leaders of industry”. In 2018, the president of KGHM, Marcin Chludzinski, received an award.

Sigma Bis, a company that did not admit NIK auditors, was conceived as a business idea by ​​Orlen and PZU, to conquer the media market, and launched in 2020, overseen by Orlen employee Adam Burak, a friend of former PiS politician Adam Hofman. 

Obajtek saw Sigma Bis, along with Ruch and Polski Press, as “a trio to discipline the media through advertising and money” a PiS politician told Gazeta Wyborcza at the time. Meanwhile then deputy prime minister and head of state assets Jacek Sasin lobbied for the state to buy Sigma Bis.

The auditors also revealed that KGHM, for years managed by PiS nominees, sponsored the policy, while ex-prime minister Mateusz Morawiecki and former House speaker Elzbieta Witek fought for influence. 

PiS chairman hits back, pundit warns of risk of ‘dual state’

“Currently”, PiS chairman Jaroslaw Kaczynski told journalists in the Polish parliament building, “the Supreme Audit Office is structured in such a way that it does not meet the requirements of a state office and cannot be taken seriously,” Kaczynski added.

“NIK president Marian Banas should himself stand trial, and if he stood before a fair court, he would not be released for a long, long time,” Kaczynski said, concluding that “we erred” by appointing Banas.

Since the Civic Coalition took power, Justice Minister Adam Bodnar has voided a law passed a few months before the October election attempting to tie the hands of the incoming government, transferred some 150 prosecutors from Warsaw to provincial offices, and announced Poland’s accession to the European Public Prosecutor’s Office. 

Other areas of Polish public life have been upended in the shift from PiS-era populism. Last week, two prominent rightwing politicians were arrested at the presidential palace in Warsaw, after Polish President Andrzej Duda left his residency for a meeting. Days later Poland’s politicised public television station TVP was pulled from the air for several days. When the channel returned to the airwaves, the tone of its broadcasts had markedly changed, and its chief executive resigned. 

An oped in UK business daily The Financial Times said the recent moves from the new Tusk administration have been met with “a tepid response” from PiS voters. “Protests around the public TV headquarters gathered at most hundreds of people. A Warsaw march on January 11, widely promoted by the opposition, had tens of thousands of attendees,” the FT notes.

“Mutual recriminations are creating ‘a dangerous situation’ forcing Tusk to navigate from one crisis to the next, which could lead to the creation of a ‘dual state’,” Polish investor and columnist Pawel Konzal told the FT.