Police in Poland launch investigation into fast-track grants disbursed by national research funding agency

08 Mar 2023 | News

Probe starts after opposition MPs raise concerns over allocation of funds in a call for digital innovations co-financed with EU money. The National Centre for Research and Development promises full cooperation

Poland's Central Anticorruption Bureau. Photo: Lukas Plewnia / Flickr. 

Poland’s anti-corruption bureau (CBA) has launched an investigation into grants distributed by the National Centre for Research and Development (NCBR), after two single companies were due to get a full 22% of the funding available under a fast-track call for digital innovations.

NCBR denied any wrongdoing and said it will fully cooperate with CBA. It also stressed the funds have not been distributed yet, and that financing can be withdrawn at any stage of a project’s implementation if there are irregularities.

Over the past few years EU policymakers have been pushing for greater R&D investments across all member states. Poland’s spending on R&D stood at 1.44% of the country’s GDP in 2021 compared to the EU average of 2.2%, and the EU hoped additional money would help it and other lagging countries increase their innovation performance.

One way of increasing R&D spending has been to divert large chunks of allocated structural funds to research and innovation projects that are aiming to develop new technologies and services.

The call in question opened in October 2022 and was financed with EU structural funds. The initial budget was set at PLN 645 million (€138 million) for research projects in cybersecurity, digitisation of industry, and digital creative technologies. In December 2022, the agency increased the budget to PLN 811.3 million (€174 million).

The call results, published in December 2022 showed that of 434 applications, 117 projects qualified for financing. Out of the winning bids, two companies stood out, as they are in line to receive more than 20% of the entire budget.

Opposition MPs Michał Szczerba and Dariusz Joński found the skewed distribution was odd and filed a request for an investigation to the Supreme Audit Office. Szczerba and Joński noted the deadline for submitting applications was extended at the very last moment, and that the funding was increased during the assessment process. "Perhaps it happened so that two specific entities would receive a subsidy," Szczerba said at a press conference in Parliament on February 14.

The biggest grant of PLN 122.9 million (€26.1 million), was approved for Chime Networks, which had submitted a project for building submarine fibre optic infrastructure. 

Opposition politicians claimed the company, registered in Białystok in 2020, had made losses for two years, and they questioned its financial situation. Chime however, said it was established specifically to carry out projects by parent company TB Telecom, and that lack of revenue is not unusual in such a case. The company also said that the increase in overall programme budget by NCBR was not connected to the financing of its submarine fibre optic project.

“Based on the publicly available ranking list, it cannot be claimed that the score obtained by our project would not qualify for funding in the initial version of the budget,” the company said. Chime Networks received 11 points in a call where the minimum score for a grant is 10.

Political campaign

Chime Networks project partner Tomasz Wieruszewski told Science|Business the team includes people who have been involved in large submarine infrastructure projects for over 30 years, and claimed that the company has fallen “victim to a political campaign”, noting parliamentary elections will be held in Poland in late 2023.

The project involves developing methods for analysing signals in the immediate vicinity of submarine cables, based on multi-core fibre and Distributed Acoustic Sensor (DAS) technologies. Wieruszewski said the project also involves partners from the US.

“NCBR grants are for innovative teams, which have very good ideas but [cannot raise] funds to realise them on the commercial market,” Wieruszewski said. “Independently, we have serious investors, who want to join us. We are only waiting for the agreement between us and NCBR to be signed.”

The second company, Postquant received approval for PLN 55 million (€11.7 million) to develop a technology to “track goods in the supply chain and monitor their transport parameters.” The company was founded by 26-year-old Kacper Wiśniewski on October 24, just 10 days before the deadline for submitting applications for the fast-track programme. It is registered in a virtual office in Gdańsk with capital of PLN 5,000 (€1,063). According to local media, Wiśniewski filed his application after the deadline was extended.

Postquant scored 10 in the assessment. However, the amount of funding it has been allocated is about ten times higher than the average for other successful applicants. The minimum amount of funding is €1.2 million and the maximum amount is €50 million, according to NCBR.

In response to concerns regarding the fair distribution of funds NCBR said, “The centre has carried out due diligence aimed at verifying the entities that submitted applications for co-financing. In addition, we ensure that NCBR employees verify the documents submitted by applicants, and their financial situation, including the ability to implement specific projects.”

The extension of the deadline for several hours occurred due to technical reasons, with more than 20 users reporting issues with submitting applications in the last hours of the call. NCBR added that it received 50 applications between 4.00 and 11:59 pm on the last day, of which 10 were recommended for co-financing.

On February 15, NCBR separately announced that Paweł Kuch, its interim head at the time of the call, had earlier sent a notification to the District Prosecutor’s Office in Warsaw, “about the possibility of committing a crime related to potential irregularities in the process of selecting a project submitted for funding under the Fast Track - Digital Innovations call.”

Kuch was replaced by Jacek Orzeł on February 9. NCBR said the only reason for Kuch’s departure was the end of his term.

NCBR declined to provide additional information on the investigation, citing ongoing procedures. Szczerba and Joński did not immediately reply to requests for comments.

In recent years, the European Commission has been attempting to crack down on irregularities relating to EU funds across member states. A report published by the European Parliament estimated that in 2019, EU expenditure under shared management was affected by an estimated 538 fraudulent irregularities amounting to 253.5 million for the EU-27. The most common forms of fraud in the 2014-2020 programming period involved the falsification of documentation, followed by infringement of contract provisions, falsely claiming eligibility for EU funding, and infringement of public procurement rules.

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