Incompetence on Every Level


Incompetence1A few weeks ago I read a piece called The Illusion of Corruption on the blog of a Romanian who grew up in Canada but has now returned to his homeland (and as a side note, the author is a personal friend) and the more I thought about it, the more I realized what he said is true.

There are a lot of foreigners who deal with Romania, from the casual tourists, volunteers and missionaries who come here on short trips to the businessmen and women who invest and work here to the NGOs, charitable organizations and EU politicians, plus American soldiers, global bankers (IMF, EBRD, WB, etc) and people working for various departments of the United Nations and yet if you don’t speak the language, it’s hard to really get a grasp of the endemic scale of incompetence that goes on here.

“Corruption” as a term tends to imply an aberrance, a (somewhat) rare breaking of the rules and laws, where greedy or evil men and women seek to profit (usually financially) and do so knowingly. The classic example of this is Adrian Nastase, the former prime minister, who was convicted in the “Quality Trophy” case for extorting money to fund his re-election campaign or Sorin Apostu, the incompetent goon who was the mayor here in Unicorn City, a man I tangled with personally, who was recorded on the telephone telling people to hide bribe money under watermelons (at the farmer’s market).

But I realize now that incompetence is really the heart of the matter, even when there is a level of corruption on top of it. Just today I was reading about the case of Alexandru Muresan, the former head of (County) Cluj’s traffic police, now under investigation for “financial irregularities” in the dry verbiage of the courts.

At the heart of the matter are two enormous bank loans that the Muresan family (husband and wife) obtained from BRD, a private commercial bank. The bank says that he falsified documents that established his income (the basis for the loans) while Muresan says that the bank falsified papers to get him in trouble (presumably under pressure from investigators). Muresan showed the bank his papers listing his income from his job (4700 lei per month or just over 1,000 euros) but then apparently also produced other papers showing “permanent income from other sources”, which the bank used to justify the loans.

Now I’ve been here long enough – and any Romanian living here knows – to instantly recognize that paperwork in this country is always tediously difficult, requiring a multitude of stamps and that getting a loan for 1.5 million euros would be damned near impossible for most people. So we’re left to choose between believing that A) the Muresan family bamboozled the bank with false papers or B) the bank for some reason falsified papers under pressure from someone in order to convict the Muresan family. Therefore either A) the bank’s loan officers are incredibly incompetent or else B) the bank’s employees are susceptible to prosecutorial pressure, enough so that they’d gin up false documents for a loan application.

Mind you, all of this is a drop in the proverbial bucket, but there is no way to analyze that one particular case and find anything of merit there. Like I said, even if the prosecution is 100% correct and the Muresan family ends up getting convicted (in a fair trial), it’s pretty shocking that a major commercial bank is handing out million euro loans without exercising due diligence.

Other, larger cases abound. Just last month, the Cluj (County) Court of Appeals ruled that the Romanian government must pay 130000 lei or roughly 31000 euros because back in 1999 DNA chief Daniel Morar arrested then-senator Liviu Ciupe on charges of corruption. Ciupe spent four months in jail but the charges were eventually dropped (presumably because they were unfounded). However during his incarceration, Ciupe’s mother died and Ciupe was not allowed to go to the funeral and the bulk of the payment ordered by the court last month was for “emotional damage” stemming from Ciupe’s suffering at being unable to go to his mother’s funeral.

Even if we assume that Morar was acting in good faith by arresting Ciupe (presumably because of solid evidence of criminal wrongdoing) , it shows a high level of incompetence that ultimately Ciupe was never ultimately charged (or convicted) of any wrongdoing and that Ciupe was prohibited from attending the funeral of his mother. Nobody ever accused Ciupe of murder or some other violent crime, only the misuse of public funds, and at the time that his mother died, he hadn’t even been convicted of anything. Pretty damned incompetent on Morar’s part.

So now the Romanian government has to cough up 31000 euros due to Morar’s mistake (we’ll assume it wasn’t intentional for the sake of argument). Meanwhile Morar is now a judge on the CCR, effectively Romania’s “Supreme Court”, the highest court in the land.

This isn’t even a one-time mistake (again, assuming that’s what it was) on Morar’s part. The most famous case is the arrest of Viorel Burzo (link in English), again at Morar’s orders, which ended up going to the European Court of Human Rights, which found in favor of Burzo and against Romania to the tune of 11,500 euros. So those two “mistakes” alone cost the Romanian taxpayer roughly 43,000 euros.

And so far absolutely nobody can explain the clusterfuck that is e-Romania 2. Back in 2009, when the economic crisis was quite severe and extensive borrowing from the IMF was underway, the government (under Emil Boc, now the mayor of Unicorn City) signed a deal for 50 million lei (roughly 12 million Euros) to set up an “e-government” site in which all government auctions and tenders would be online for everyone to see.

Having an open and transparent platform to see all government auctions and tenders (and which companies were bidding on them) is an essential part of democracy, as I wrote about in my article The Franchise. The EU specifically mentioned in their latest “report card” on Romania how disappointed they were that Romania does not have an e-gov site.

What happened is that in a completely non-transparent way, the Romanian government awarded the construction of this e-gov site in 2009 to a company called Omnilogic, who then proceeded to do absolutely nothing. Even the website itself isn’t working or online. The computers and hardware, not to mention training on the software to run the site, never happened. The whole project was supposed to have been finished in 2011 and here it is 2013 and it still doesn’t exist. Yet Omnilogic has been paid 37.2 million lei (nearly 9 million Euros) so far.

This isn’t a highway, which requires actual asphalt and bulldozers to build, but a frigging website. And yet year after year, these guys at Omnilogic kept getting paid without actually having to deliver anything. Prosecutors are now looking into whether to bring charges against Omnilogic but as far as I can tell there isn’t any corruption angle involving Romanian politicians (i.e. kickbacks). It just looks like Omnilogic (a rather large IT firm) got the contract and then didn’t deliver anything but kept getting paid anyway – sheer incompetence.

Similarly, Posta Romana (Romanian Post Office) paid 19.8 million euros for vehicles that it simply rented instead of purchased. In 2008, Posta Romana signed a six-year contract to pay this enormous sum just to rent vehicles from a private firm instead of buying them outright, so now the contract is about to end and the post office will be short on vehicles and have to spend even more money to acquire new ones. Again, there’s no allegation of corruption or kickbacks here, just sheer incompetence in how handle fleet management.

Likewise, the IMF has been pressuring the Romanian government to sell off state-owned enterprises for years and yet almost without exception, the Romanian government has somehow screwed this up in one way or another.

The recent sale of CFR’s freight division saw two international bidders drop out, complaining that the process was not transparent and overly rushed, and Hidroelectrica (the largest state-owned energy company) was forced to declare bankruptcy and enter into insolvency due to disastrous management. Meanwhile the IMF wants Romania to sell off Hidroelectric. You might also remember my post The Ballad of Cupru Min, when the state-owned copper company was about to be sold, with the “contracts signed” and then at the last moment something got screwed up. And a year later, CupruMin still hasn’t been sold off.

Personally I’m against all of these privatizations but the focus today is on incompetence.

Other examples abound. Year after year, only about half of Romania’s high school students pass the Bacalaureat, the national graduation exam (if you’re American, think SAT and if you’re British think O-levels or the GSCE). This is often cited as proof that Romania has successfully resisted the temptation to lower standards. But I have to wonder, what does it say about the educational system (which is organized almost exclusively on the national level) that the students aren’t prepared to pass this all-important series of exams? God knows the educational system in this country sucks on all levels.

And then of course there is the infamous Bechtel case, in which the government signed a billion euro contract with Bechtel to build a series of national highways back in 2003. Those highways still aren’t finished to this day (despite paying out hundreds of millions of euros) and so the Romanian government this year decided to cancel the contract:

My other concern is that the current government announced the final cancellation of the contract, at short notice, to be effective from Monday of last week. In fact the cancellation did not take place until two days later because the relevant government officials, unbelievably, made their announcement without having even the most basic understanding of the terms of the original contract with Bechtel. Crucially they did not even know if the penalties due to Bechtel, as a consequence of cancellation, ran to tens or hundreds of millions of Euro.

The really scary thing is that, in addition to the on-going disaster of the privatization program, no-one in the Romanian government seems to know or even care about how to do business with the large international companies who are vital in the development of the country’s infrastructure and industrial economic base. Not only was the high profile Bechtel contract held up for two years by the personal duel between two powerful (in Romania) men. But even the cancellation of the contract was postponed because the government was too incompetent to understand its terms.

Clearly there were some hearty laughs back at Bechtel headquarters, knowing that they were about to squeeze Romania twice – first by getting paid to barely do any work on some highways and then secondly by getting paid enormous cancellation fees.

I’ve already written about how Romania incompetently manages its revenue from excise taxes from cigarettes and continually gets punked by the American government, using everyone from Dinu Patriciu to Emil Boc to Teodor Stolojan to Traian Basescu as snitches, pressuring Romania to buy fighter planes it doesn’t need and can’t afford and the fucked up English on Romanian government websites and in official correspondence with the EU.

On a smaller scale, I’ve written about horrendously shitty customer service and hostile incompetence at UPC, a major ISP and cable TV provider here, how political posters are left up for years, how most Romanian bloggers suck and are unfunny to boot, about how thousands of people are annually left sweltering in the heat in Busteni, about rude service I encountered at a local computer store, about how courier companies can’t find my house, about how drunken plumbers couldn’t fix a sink and about how Cluj officials can’t even bother to learn diplomatic protocol for a high-level visit by the ambassador of an important ally.

At some point with EU funds not getting absorbed, corrupt politicians not getting arrested, roads not getting built, medicines stolen, doctors having to take cash from patients, graduation exams not getting passed, potholes not getting fixed, snow not getting cleared, pensions not getting paid, wacko fascists signing deals with ruling coalitions, referendums passing and getting ignored, presidents suspended but never removed from office, a drunken buffoon being the country’s most successful promoter, plagiarists going unpunished, superstitious morons panicking in Timisoara, religious fanatics who don’t read the Bible but get 30 million euros to build an enormous church, animals left to starve to death in ghastly conditions, a clusterfuck policy on what to do with the Gypsies as well as chaos, confusion and corruption in the judiciary, only a combination of colossal inertia, EU charity and Mugur Isarescu is preventing this country from sliding into a morass of staggering poverty.

And so we’re all left waiting for someone – anyone – to step forward and deploy the Golden Cup and clean up this country.

Shaking hands with failure

Shaking hands with failure

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Categorised in: Romania Fail Whale, Scolding of Righteousness

36 Responses »

  1. The caption under that photo should read Failure shaking hands with failure

  2. And obviously it’s not Daniel Morar who has to pay the 43,000 euros, it’s Romania, which means it’s the average Romanian, it’s me and you (well, maybe not you Sam… you’re more Romanian than us…)

    • “It seems to me that our industrial outupt after WWII sustained such growth and now there is no way in hell we can maintain that same level. I’d think 43% or more before a turn around.”Agree. More factories opening, more production. Expansion, based on JOBS. No decent paying JOBS… housing prices collapse.How many years has this country been closing down manufacturing??Lots of empty office space here in the bay area. How can the economy sustain itself on “paper pushing” type jobs, internet ‘click’ advertisng jobs, or better yet, fast food jobs??We have long ago reached the end of the line for high paying jobs, and house prices have to reflect a new reality. Early 1980’s here we come.

  3. Of course it’s Incompetence on every level, what did you expect? Remember Murphy’s law (or was it the Peter Principle?): “In a hierarchy every employee tends to rise to his or her level of incompetence.” I truly believe that Murphy, or Peter (or whoever he was) was born in Romania!

    Nice post, by the way, I really enjoyed it.

  4. Yes, Romania has many problems. But if you think about it, the underlying reasons for all those problems are cultural reasons.
    However, România is not more incompetent than Greece, Italy or even the British government who spends billions of pounds on useless programs like some military airplane modernisation programe which was scrapped, after wasting almost £1 billion. Maybe we should also remember the British MPs who were found to be more than keen to sell their souls to some private contractors for a few thousands of £. My point is that to expect from Romania to be better than other countries with a long tradition in democracy and capitalism (by hundreds of years) is unrealistic. We need to understand the reasons why some things are to be able to provide solutions.

    • Absolutely correct. The truth is that almost everywhere in the world the people who work for the State tend to be far less competent than those working in the private sector.

  5. Romanian people continue to blame Bechtel for the highway debacle. It was a standard milestone based contract. They achieved milestones (such as complete a bridge) and were paid. For the rest of it they sat there waitung for the government to grant them access to site and claimed the contractual compensation (that exists in every large construction contract).
    Bechtel was never the bad guy here. The incompetent romanians were!

    • Actually it was not a “standard” contract or rather it was one where important clauses were missing. Why were they missing? Not so hard to guess. ;-)

      Let me assure you that the contract looked they way it looked not due to lack of competence; the Romanians involved in negotiating and signing the contract knew exactly what they were doing. One of the biggest law firm in Romania was representing and consulting the Romanian state when the respective contract was signed; I know many of the attorneys working there (some of them are former colleagues of mine from the Faculty of Law) and I can tell you that some “mistakes” would never have been possible… unless they were explicitly instructed in a certain manner.

      And Bechtel is far from being the only case; it’s just the most famous.

      • It was very standard. The government never allowed bechtel onto the site hence the costs despite no construction. They should never have started the project because they weren’t ready. Pure incompetence on Romania’s part.

      • Am I correct in assuming you are not a lawyer?

      • I am not a lawyer but have a law degree and work with construction contracts. What are these ‘important clauses’?
        How is this anything but a case of ‘indefinite delay’?

      • Well, I am a lawyer with quite a lot of experience, I’ve made thousands of contracts (this is not a figure of speech, I’ve actually made thousands of them) and, believe it or not, any lawyer who’s any good can make a contract which you think to be good and clear, but when you try to enforce it you’ll understand the depth of your mistake (unless you have a good lawyer yourself to represent you when negotiating that contract, of course).
        I’ve seen this time and again: people negotiating contracts themselves or using “good standard contracts” based on the idea of “how hard can it be?” to conclude a contract. Then they lose their money. Which always reminds me of one of Murphy’s laws which says that “It’s immoral to let idiots keep their money.”

        Now more to the point, it would be too long to explain thoroughly, but, in a nutsshell, what’s missing from a contract is just as important (sometimes even more important) than what’s written in that contract. And HOW it’s written. All clauses must be correlated with each other so they will not allow “interpretations”. It takes good knowledge of the law and years and years of experience.
        For instance, a good contract not only stipulates that a payment is due when a certain phase is complete but also defines what it means by “complete”. Is it complete when the Builder says it’s complete or do we take into account other procedures? In other words, in order for a payment to be due, do we just issue an invoice or do we need the approval of State’s representatives? If so, which representatives (dirigintele de santier, ISC-ul, ministerul etc.)? Is it complete if the bridges over the highway are not built? Do we need all exists/entrances to be completed as well? And the markings? What about the additional spaces (parkings etc.) should they also be ready in order to deem a work complete? And so on…

        All these are just examples and they only refer to one word: what does it mean to consider a work “complete”. There are many many other issues to take into account and I’ll say it again, all good lawyers know these things and since I know some of the lawyers working for the firm who represented the Romanian state, I also know that it was not a matter of incompetence.

      • “I know some of the lawyers working for the firm who represented the Romanian state, I also know that it was not a matter of incompetence.

        If it wasn’t a matter of incompetence on the Romanian contractual party, then please explain how come that the said party ended up in paying over 1.4 billion euros for 84 km of highway.

      • “I know some of the lawyers working for the firm who represented the Romanian state, I also know that it was not a matter of incompetence.”

        Oh, sorry, now I understand: you mean to say that it was just a matter of corruption, not a matter of incompetence. You’re probably right. Romanians are surely very competent when it comes to corruption.

      • This is true as the the ‘complete’ sections but as far as the incomplete or unstarted sections they were simply a case of indefinite delay where the delay clauses of the contract were activated. This meant the Romanian Government had to pay Bechtel to do nothing because they were delayed because of, for example, court cases regarding the ownership of the land.
        This was incompetence as they issued a contract even though land ownership and other issues hadn’t been sorted. The delays were inevitable and ended up being costly.

      • Yes, of course some clauses were “activated” but those clauses should never have been there in the first place.
        My point is that all the shortcomings of the contract were intentional. Bechtel was a bribe, nothing else.

      • Good luck signing a construction contract without extension of time clauses. Still don’t see how bechtel has acted in bad faith or done anything wrong. Is pure Romanian incompetence!

      • I understand that you don’t see, that’s how I understood that you are not a lawyer. :-D

        But Bechtel has not acted in bad faith; the deal was a cover-up for a bribe and both parties knew that. Just the naive public thinks otherwise.

      • Since the contract was signed when Nastase was PM, I guess we can assume where the bribe went…

        But I think what Mihai C. is trying to point out is that the Bechtel deal was never a matter of incompetence, but simply a matter of corruption. It may certainly look like the Romanian party was totally incompetent, but it’s probably the other way around: the contract was probably very competently drawn to include, hide and generate bribes. That’s not incompetence, on the contrary, it’s high competence in corruption.

        Mihai C., please correct me if I’m wrong.

      • This may be true but it doesn’t explain why there is no highway. There is no highway because the Romanian Government and the people working within it are incompetent. There are many ways to steal money. Giving a foreign contractor millions to do nothing (in order to take a bribe) is just ludicrous and in the tin foil hat league of crazy conspiracies. If they were competent the highway would have been built or they would have found a more efficient way to take money. It isn’t as though Bechtel came along and convinced them to build a highway.

      • “There is no highway because the Romanian Government and the people working within it are incompetent.”

        Or maybe because there wasn’t supposed to be a highway in the first place — at least not a complete, 415 km highway. Or maybe there was a combination of incompetence and corruption at a high level.

        “If they were competent the highway would have been built…”

        True. But this is true also: If they were not corrupt the highway would have been built.

        “…they would have found a more efficient way to take money.”

        Actually, signing a contract solely for the purpose of getting bribes seems exactly the most efficient way to take money.

        Anyway, for those interested, the contract signed with Bechtel in December 2003 can be studied here: CONTRACTUL DE CONSTRUIRE A AUTOSTRAZII BRASOV – CLUJ – BORS. The first five pages aren’t part of the contract, but they refer to the renegotiation and include observations regarding the legal and economic problems of the contract. it would be interesting to hear Mihai C.’s opinion regarding the issues detailed on those first pages…

        Also, I can hardly wait to see if Minister Dan Sova will keep his word. According to him, by the end of this week the PM’s control body will start to check all activities related to the Bechtel contract, “to learn how it was possible that after 10 years of contract we have 52 km at such price. Those who signed documents which negatively affected the financial interests of the Romanian state may be held patrimonialy, administratively and criminally accountable”. Honestly, I am very skeptical that any such guilts will be discovered.

      • You’re right, Rocky’s Dad, absolutely right.

        Bechtel was primarily a bribe for the American leaders (Bechtel is indirectly owned by Bush family and Dick Cheney – it’s part of Hulliburton conglomerate) and subsequently some money for our leader (as per “sa mananca si gura mea ceva” principle). :-))

      • Now I know you guys are full of hot air. Bechtel is owned by the Bechtel family. NOT HallIburton. Keep those foil hats on fellas!

      • No, it’s not. It’s a joint-stock company and the majority of stocks are held (directly or indirectly) by companies part of Hulliburton.
        And, by the way, Hulliburton is not a company but a conglomerate (“concern”). A conglomerate is a group of companies which are directly or indirectly controlled by the same person(s) or legal entities… Well, there are laws which define what is a conglomerate, you can read more there.

      • And, Clujfood, remember that between the appearance and reality there is often a big difference.
        The connection between Bush family and Bechtel is nothing new. For instance see this link:

        http://www.informationclearinghouse.info/article3397.htm

        It’s just a tip. If you’ll dig more you’ll find out more.

      • For someone who claims to be a lawyer you know very little about corporate law. It is not owned by Halliburton. In fact Bechtel is larger than Halliburton. You really are pulling conspiracy theories out of your behind!

      • I’ve tried to explain to you that Halliburton is a conglomerate. You are the one who claims to know corporate laws while never practicing law.
        I’ve wasted enough of my time with you. Believe what you like and act as you believe.
        A sucker is born every minute.

      • You claim to be a lawyer but know nothing about anything.
        Let me explain it to you slowly.
        Bechtel is larger than Halliburton.
        Bechtel can therefore not be a part of Halliburton. You realise Halliburton is a public company don’t you? Where is your evidence of anything you have claimed? Or are you just a lonely troll?

      • http://www.secinfo.com/d1Bur.s3d.2.htm

        Surely a lawyer as brilliant as you would know about this. Or maybe not. Looks like your knowledge of commercial law is up there with your knowledge of construction law.

      • Your mind can’t grasp new concepts it seems (obviously there’s no need since you are skilled in all professions) so I will not reply to you anymore.
        But if you will try to prove something about SEC fillings to the rest of the world try using the official website of that institution: http://www.sec.gov

      • Nu cred că ai vrut să scrii „crow” acolo. Nu de alta, dar eu nu mă simt deloc cioară/corb şi cred că nici restul de colgei care au fost la Flex Camp (poate crowd? )

    • True. I guess it’s the perfect example of the old saying “Nu-i prost cine cere, e prost cine dă!

  6. Several days ago I was posting this comment: “The contract was probably very competently drawn to include, hide and generate bribes. That’s not incompetence, on the contrary, it’s high competence in corruption.”

    Here’s a recent article supporting my point of view: Incompetenta ca fateta a coruptiei (the article is in Romanian).

  7. http://magazinonline-incaltaminte.ro/

    Magazinul online Black Heart este cel mai mare furnizor
    de articole din piele de inalta calitate din Romania.

    In scurt timp, prin profesionalismul si calitatea produselor noastre
    am reusit sa ne facem cunoscuti majoritatii, iar prin raportul calitate – pret
    am dovedit ca suntem cei mai buni.

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