On March 16th, Marcin Szumowski, a businessman and the brother of the Minister of Health, Łukasz Szumowski, received a message from his ski instructor. The instructor, who had no prior experience in selling any medical or sanitary equipment, asked: “Is there still any need for more protective masks? I have half a million of them”.
The Minister’s brother responded promptly by contacting the ski instructor with the Deputy Minister of Health in charge of material reserves.
Eventually, the Ministry bought at least 130 thousand masks and 3 thousand visors from the ski instructor and his partners for the total of PLN 5.5 million. According to media reports, they bought the bulk of equipment for approximately PLN 400 thousand, before selling it to the Ministry for more than ten times the price.
The instructor’s good fortunes took a turn for the worse on May 5th, when he got a call from the Deputy Minister and was summoned to his office. There, nearly 40 days after the actual purchase, he was informed that the masks had not complied with Polish sanitary standards. In addition, the certificates presented by the ski instructor were found to be forged. The Ministry threatened that unless he returns the full amount paid, it would involve the prosecutor’s office.
Central Anticorruption Bureau investigates the purchases of personal protection equipment
By the time Gazeta Wyborcza published the first article on the case on May 12, the Ministry hadn’t still informed the prosecutor’s office about the transaction. However, one day after the publication, Minister Szumowski told during his press conference (accompanied by Prime Minister Mateusz Morawiecki) that the Ministry of Health had just filed a notification of suspected crime concerning the ski instructor.
The Minister, who in the past had stayed at the ski instructor’s chalet in Zakopane mountain resort, claimed that the instructor received the contract through regular channels, and that at the peak of panic over the shortages of equipment he, in the Ministry, received many similar offers from various businessmen, and directed all of them to the Ministry’s units responsible for purchases.
Meanwhile, Gazeta Wyborcza was contacted by two companies which reached out to the Ministry of Health in late March 2020, offering a supply of large quantity of protective masks. In both cases, the Ministry showed no interest. One of the companies decided to contact hospitals directly. The company’s owner informed us that the highest price he had negotiated had been almost three times less than the ski instructor’s price.
In its defence, the Ministry stated that it acted very swiftly, since the expertise confirming that the masks did not conform with Polish sanitary norms was issued on May 5, the same day the Deputy Minister contacted the businessman. However, journalists found out that the order to verify the masks was issued only on May 4, or more than a month after they were purchased.
Why? Gazeta Wyborcza found out that the Central Anticorruption Bureau is running multiple inquiries about purchases of equipment during the epidemic. Our source at the Bureau confirms that one of them concerns the transaction between the ski instructor and the Ministry of Health. Most likely, it was only once the Ministry found out about the ongoing investigations that it decided to test the masks in order to cover its back.
A tale of two brothers
Our investigation revealed that the Ministry’s purchase of masks from the ski instructor is not the only case of potential conflict of interest concerning Łukasz Szumowski and his brother.
The Minister of Health, who between 2016 and 2018 served as Deputy Minister of Science, has virtually no savings, according to his obligatory disclosure of assets. However, the value of Szumowski Investments, a company founded by his brother, has grown over the last four years from PLN 40 thousand to over PLN 40 million. A couple of years ago, Łukasz Szumowski has transferred his shares in Szumowski Investments, amounting to 30% of the total value of the company, to his wife.
Szumowski Investments’ most important undertaking is the company OncoArendi Therapeutics, registered since March 2012. According to the available financial statements, it sells almost nothing. Its main source of income consists of grants for research to develop new drugs. The value of its projects is already nearly 300 million PLN, of which 220 million PLN comes from EU funds. Gazeta Wyborcza discovered that since its creation eight years ago, the company failed to develop a single drug that would have advanced beyond laboratory research.
While the leader of Law and Justice (PiS) party, Jarosław Kaczyński, defended Łukasz Szumowski by claiming that his brother’s company was equally successful in obtaining grants under the previous government, an inquiry led by two opposition MPs from the Civic Coalition showed that since the establishment of the PiS government in 2015, OncoArendi has received a total of PLN 140 million from the National Centre for Research and Development, or more than 75% of the total amount obtained since the company was founded.
In 2017, as the Deputy Minister of Science, Łukasz Szumowski was in charge of directly supervising the National Centre for Research and Development for almost two months. Over that period alone, the Centre offered grants worth more than PLN 50 million to a company partly owned by Minister Szumowski’s brother and Minister Szumowski’s wife.
The minister claims that, just as in the case of masks, he removed himself from the decision making process due to conflict of interest. However, those grants and subsidies were awarded to his brother’s company by people subordinate to Deputy Minister Szumowski; their work evaluations depended on him.
How to win grants and influence people
Further investigations showed that the conflict of interest concerning the grants awarded to Marcin Szumowski’s companies went beyond the time during which his brother was the Deputy Minister of Science.
In 2015, Marcin Szumowski was appointed by the National Centre for Research and Development as an expert responsible for assessing grant applications. With OncoArendi applying for multiple grants, the only measure adopted by the Centre to avoid the obvious conflict of interest was for Marcin Szumowski to remove himself from deliberations concerning the grant proposals of his own company. At the same time, he was involved in assessing applications of OncoArendi competitors.
Szumowski was not the only person involved in such a scheme; according to official documents, eight companies which obtained grants from the Centre in 2015 had direct links to seven members of the expert panel in charge of grant evaluations.
The proceedings were thus a clear example of pork-barrel politics, in which the experts were favourably assessing the grant applications of their co-panellists’ companies, who then reciprocated the favour.
In 2017, the Central Anticorruption Bureau audited more than a dozen of grants disbursed by the Centre, five of which concerned OncoArendi. The report prepared by the Bureau was damning and, among other things, underlined the jarring level of conflict of interest inherent in the grant application process. The document prepared by the Bureau is in possession of the Prosecutor’s Office and is part of the ongoing investigation into the National Centre for Research and Development’s activities.
When a cure is worse than a disease
The Law and Justice party came to power on the back of a promise of “renewal” and “strengthening” of the Polish state. While there was no shortage of examples over the last five years that proved these declarations to be hollow, there is perhaps little that epitomises the Law and Justice mode of governing better than the current slate of scandals.
The questionable business dealings concerning Łukasz Szumowski go beyond the protective masks’ purchases and the conflict of interest which resulted in public grants worth several hundred million złotys awarded to his brother’s company. Further journalistic investigations revealed serious issues with Ministry of Health’s procurement of ventilators and Covid-19 diagnostic tests.
Nor was the problem of faulty masks limited to the Ministry of Health purchase of the masks from the ski instructor. On April 14, Prime Minister Morawiecki was personally greeting the supposedly largest personal protective equipment cargo in the world on board of the gigantic Antonov An-225 aircraft flying from China. The equipment was paid for by the state-owned copper giant KGHM as a gift to the nation at a time of plague.
Our investigation revealed that the more than one million three hundred thousand masks arriving from China were single-use, surgical masks which could not be used by medical professionals. In addition, the masks’ certificates were forged and thus there was no guarantee that they offered any level of protection.
What is more, the price paid by KGHM was more than four times as much as their retail price in discount shops in April. Finally, Gazeta Wyborcza found the evidence that the state-owned copper giant had been directly ordered to organize and pay for the cargo by the PM Morawiecki himself who used his prerogatives provided for in the special law on combating the coronavirus epidemic.
At a time when the lives of many Poles are in danger because of the epidemic, and the economic welfare of almost all of them is taking a hit as a result of the recession, the ruling party is jeopardizing the health of its citizens and wasting taxpayers’ money for political and personal gain.
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