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TI Lithuania: Every 5th euro from municipalities’ publicity budgets goes to politician-affiliated companies



Published december 17, 2019

Every 5th euro from state and municipal budgets (1.4 M euros) and every 7th euro from European Union investments (10.6 k. euros) was allocated to politician-affiliated companies by municipalities to cover publicity costs. The money was received not only by media and public relations agencies, but also by construction, publishing, frozen foods and other companies. This updated information is available on the Transparency International Lithuanian chapter (TI Lithuania) website www.manovalstybe.info.

From 2015 to 2018 municipalities spent 7.8 M euros on publicity costs, out of which 80 k were from EU investments. The money was received by 363 companies, 35 of which were affiliated with politicians, making up one-fifth (1.4 M euros) of all publicity costs.

Compared to other companies, companies affiliated with politicians signed higher value contracts with municipalities. An average contract value received by regular companies was 5 000 euros, meanwhile an average contract value received by politician-affiliated companies was 7 000 euros.

The following politician-affiliated media companies received the most: “Rejspa” (382 033 EUR), “Roventa” (141 468 EUR), “Alytaus regioninė televizija“(140 878 EUR).

“Rejspa” shareholders, among others, are Vanda Kravčionok and Michal Mackevič, both members of Parliament of the Republic of Lithuania (elected with “Electoral Action of Poles in Lithuania – Christian Families Alliance“).

“Roventa” is managed by Romas Venclovas, who during the grant period, was a member of Mažeikiai municipality council (elected with by “Labour party“).

The shareholder of “Alytaus regioninė televizija” is the spouse of Tomas Pačėsas – a member of Alytus city municipality council (from the public election committee “For Alytus”).

“The fact that municipalities fund politician-affiliated companies is not an issue in itself. However, municipality representatives should be well aware that situations like these may pose a conflict of interest. Therefore, they should be able to clearly discern when to refrain from decision making and act accordingly” said Sergejus Muravjovas, the CEO of Transparency International Lithuania.

Based on the results of the analysis, TI Lithuania recommends:

  • To ensure that municipalities have clear objectives and success indicators for their publicity purchases, which would allow them to choose the most appropriate media outlet;
  • To ensure that municipalities have clear guidelines which would remind employees and politicians how to properly manage potential conflicts of interest. This would help to assess whether the allocation of funds for publicity costs to politician-affiliated companies faces a risk of a conflict of interest;
  • For the owners, managers and senior editors of media companies to publish their declarations of interest on their public websites.

The website manovalstybe.info has been updated by TI Lithuania to reflect the newest data on municipalities’ publicity costs for 2015–2018. This data had been obtained from municipalities. Data on EU investments for publicity was obtained from the Ministry of Finance. TI Lithuania compared this data with the data obtained from the Chief Official Ethics Commission, which provided an opportunity to see links between beneficiaries and politicians.

Affiliated politicians are municipal council members, mayors, Parliament members who at the same time were the former or current shareholders or managers of companies which provided publicity services, as well as those whose spouses or they themselves worked for these companies during the period of evaluation.

TI Lithuania carried out the analysis in cooperation with Transparency International Secretariat.

A short summary of the results can be found here.

For more information: Sergejus Muravjovas, 868997579, manovalstybe.info

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