Yachts and solariums from KPO? The European Public Prosecutor's Office is taking over the investigation. The companies will return the subsidies!

The European Public Prosecutor's Office (EPPO) officially takes over proceedings concerning irregularities in the usage of funds from the National Recovery Plan (NRP). The decision was announced present in Świnoujście by the Minister of Justice Waldemar Żurek, stressing the urgency and independency of this step. This is about controversial grants to companies in the hotel-gastronomic manufacture (HoReCa) which were to be utilized for development, and actually financed, among others, the acquisition of yachts, saunas, solariums or virtual shooting ranges. This breakthrough in the investigation means that beneficiaries who have unlawfully spent public money may shortly be called back. The full issue is of broad interest to the public and politicians, and the government announces detailed accounts.

The European Public Prosecutor's Office enters: What does this mean for KPO?

The European Public Prosecutor's Office is an independent European Union institution set up to prosecute crimes affecting the EU's financial interests. Her prosecutors, elected for 7 years by crucial EU institutions, act autonomously. Minister Żurek reported that after talking to the head of the Polish EPPO, the examination procedure initiated earlier by the Regional Prosecutor's Office in Warsaw will be immediately handed over to European investigators. This is simply a crucial minute due to the fact that Polish law requires the transfer of EU funds to EPPO. Independent prosecutors are expected to analyse rapidly criminal law aspects the full situation, which may lead to concrete allegations and consequences.

Problem scale and controversial spending

Doubts surrounding the KPO grant mainly concern support for the HoReCa sector. The data of the Polish Agency for Enterprise improvement (PARP) show that this programme included 3005 contracts for the full amount PLN 1.2 billion110 million zlotys have already been paid. The problem came about with a list of expenditures that, according to the public and any politicians, were inadequate to support. Among them are: purchase of corporate yachts, saunas, solariums, furniture exchange or investments in virtual shooting ranges. These examples are outraged as KPO's funds were intended to supply recovery and economical transformation after the pandemic, not to finance luxury or non-essential business activities.

Government consequence and possible consequences for beneficiaries

Prime Minister Donald Tusk announced that the issue of grants from the KPO would be the main subject of the Tuesday Council of Ministers meeting. Minister of Funds and Regional Policy Katarzyna Pełczyńska-Nałęcz is to supply detailed explanations on the procedures for granting funds. The Prime Minister stressed that although no "corruption or theft" has been identified for the time being, however, there has been a "carefree spending" of resources that "justly wonders people if they do not annoy". He declared that all case of grants would be thoroughly investigated and where ‘abuse is obvious’, contracts would be invalidand beneficiaries called for reimbursement. Prime Minister Tusk besides did not regulation out "personal decisions" after reading the full material.

Changes in the criteria and explanations of the Ministry

Minister Pełczyńska-Nałęcz besides referred to allegations concerning changes in the criteria in the HoReCa programme. She explained that the drop in turnover threshold was reduced from 30% to 20% in the second phase of recruitment to accomplish the required number of projects recorded in the KPO. According to the Minister, this was a ‘normal procedure’ to run out of funds and support a wider group of entrepreneurs. The programme for the HoReCa manufacture was inherited from the erstwhile government, and a two-year hold in spending funds from the KPO could, according to Prime Minister Tusk, have contributed to little careful distribution. The current authorities are announcing a thorough explanation of all aspects of the matter.

Taking over the investigation by the European Public Prosecutor's Office is simply a signal that Poland takes the EU funds seriously. This means intensifying actions to detect irregularities and to hold individuals and companies liable, which may have violated the rules. Beneficiaries of the grant from the KPO, in peculiar those whose expenditure raises doubts, should prepare for detailed checks and possible calls for reimbursement of unduly collected funds. The government underlines its determination to clarify all aspects of the case and guarantee transparency in spending public money.