Regardless of the unclear grounds for its operation and millions of dinars which the state paid for its closing, institutions and public companies conclude commercial contracts with Tanjug based on public procurement – including procurements in which Tanjug wins the assignment without competition
By: Dina Đorđević and Anđela Milivojević, Center for Investigative Journalism of Serbia (CINS)
The marble hall of the Tanjug head office in the centre of Belgrade gave out solemn atmosphere during this year’s Museum Night. A disco sphere was hanging from the ceiling, retro music was playing from the loudspeakers, while dozens of photos from the period of the post-war SFRY (Socialist Federal Republic of Yugoslavia) – “On the wings of victory, a new era, new acts“ – were hanged on the walls of the semi-circular hall.
Contrary to this, the reality of more recent history could be observed on the notice board, where only one paper was hanged – page 21 of the Official Gazette as of 5 November 2015 with the Government Decision on legal consequences of termination of the Public Company News Agency Tanjug.
“The state will not allow for the national agency to be closed down” said Branka Đukić, Tanjug director, in her statement for the Blic on 6 November 2015. A week before, the validity of the law on this news agency ceased, following two unsuccessful attempts of its privatization.
The data on the money Tanjug received from state institutions following the day on which it was to be closed – 31 October 2015 – indicates that the state truly did not allow for termination of the agency. Till the present date, the grounds on which the agency operates has remained unclear, while 33 institutions, public companies, and local self-government units paid it 114.4 million dinars (approx. 970.000 eur) from the given date till the end of 2017, as shown in the documents obtained by Center for Investigative Journalism of Serbia (CINS).
CINS analyses indicate that the state paid 76.8 million dinars (approx. 650.000 eur) to close down the agency, while last year Tanjug pledged its works of art to defer its tax debt over a period of five years. Besides, from November 2015 till the end of 2017, state institutions allocated more than 37.6 million dinars (approx. 319.000 eur) for commercial contracts concluded with Tanjug.
The major payments – amounting to more than one million dinars (approx. 8.500 eur) respectively – were based on contracts concluded with Tanjug through public procurement procedures, mostly for media monitoring services, activity recording, and text, photo and video production and editing services. The largest amounts were paid by the Belgrade festival centre, Ministry of State Administration and Local Self-Government, and Office for Kosovo and Metohija.
The contracts also include the cases where Tanjug appeared as the only bidder, while a number of public procurements were implemented in direct negotiations between institutions and Tanjug, excluding the possibility for other agencies to apply for the assignment – through the process of negotiations without publishing a pubic call.
Rade Đurić from Transparency Serbia says that implementation of such public procurements leaves the question of their functionality open, because it is not entirely clear which is the function of agencies besides reporting news and information in relation to ordering parties:
“If this gets down to mere advertising and reporting of news, this does not reflect the exclusivity and uniqueness of the work which in the Serbian market may be done by one company only”.
Such a procurement system allows for the possibility of agreements to be made through agreements among bidders, in this case Tanjug and the ordering party, but among bidders in general as well.
The Ministry of the Interior and Government Office for cooperation with media also concluded contracts with other agencies – Beta and FoNet – through the process of negotiations without a public invitation.
“What is not good is the negotiating process without public calls published is implemented more frequently than it should happen. The second thing which is not good is that in this situation it has become regular practice”, says Rade Đurić.
Representatives of competing news agencies agree that the practice of concluding direct contracts with Tanjug has affected their work; however, on the web-site of the Republic Commission for Protection of Rights in Public Procurement Procedures there is no data on whether Beta or FoNet filed requests for their rights to be protected.
Dragan Janjić, editor-in-chief of Beta agency, says:
“We found nothing illegal in the public procurement procedures we took part in; if we had, we would have lodged a complaint. However, this does not mean that this is fair in terms that there are no favorites for the invitations published by the state. (…) I believe that Tаnjug has been favourized. “
Janjić adds that the number of clients of Beta agency which were connected to the state dropped following the moment when Tanjug was to be closed down.
A similar situation also occurred to FoNet agency; its manager Zoran Sekulić says that when state institutions stated subscribing to Tanjug services, this did not mean larger budgets of such institutions for such purposes, but lower prices of services for his agency. He explains that the agency did not file the request for protection of rights “because of the belief it would be a mere waste of time with an outcome which is known in advance.”
According to financial reports for 2016, Tanjug earned 86,542,000 dinars (approx. 733.000 eur) from sale of its services and products in that year: in the same period, the income of Beta amounted to 65,685,000 dinars (approx. 560.000 eur) , while the income of FoNet was 30,637,000 dinars (approx. 260.000 eur).
Branka Đukić, Tanjug director, did not reply to the questions filed to her by a CINS journalist. CINS also did not receive any replies from the Ministry of Culture and Information.
Only one agency can do the job?
Prior to termination of validity of the Law on the public company Tanjug News Agency, the agency was paid through contracts concluded with the Ministry of Culture and Information, based on a number of laws, rulebooks, and decisions which regulated its subsidizing. In this manner, from the beginning of 2015 till the moment when it was to be closed, the Ministry signed contracts with Tanjug on monthly payments of 17.5 million dinars (approx. 148.000 eur), while its services were used by 112 state institutions.
Following this, after somewhat longer than two years, Tanjug was paid the largest portion of the money for its closing. The Ministry of Labour, Employment, Veterans’ and Social Issues paid more than 56 million dinars (approx. 475.0000 eur) for the purpose of social and other payments. The Ministry of Culture and Information paid more than 20.7 million dinars (approx. 175.000 eur) to enable implementation of the Government Decision on legal consequences of termination of operations of Tanjug – which implied various types of payments for salaries, authorial fees, sick leaves, taxes, and different bills.
Documents obtained by CINS indicate that contracts with Tanjug were signed through process of negotiations without a pubic invitation by the Ministry of Trade, Tourism, and Telecommunications, Ministry of Foreign Affairs, Ministry of Labour, Employment, Veteran’s and Social Issues, and public media services – Radio televizija Srbije and Radio televizija Vojvodine.
Prior to such procurement, the Public Procurement Office provides a positive or negative opinion on whether it may be implemented through direct negotiations with a certain bidder, which excludes competition. This practice was introduced in 2013, while the Public Procurement Office 2017 Report reads that it was “a turning point in curbing participation of the negotiating process”.
The positive opinions the Office issued in relation to implementation of public procurement procedures with Tanjug read that procedures are implemented without an invitation for technical, i.e. artistic reasons, which is why there is only one bidder, in this case a news agency, that could complete the assignment.
Sources from the Public Procurement Office explain that in the case of news agencies, artistic and technical reasons imply specificities of each agency.
They also state that due to the 10-day deadline for passing of opinions, the Office does not have sufficient human resources to verify the information, adding that the ordering party is responsible for veracity of information, and that it is up to competition to file a request for protection of rights and challenge the quotations. They add that procurements of news agency services are of minor value, and that they have more serious cases of far greater value which they need to deal with.
Rade Đurić from Transparency Serbia says that it seems to him that in the documents obtained by CINS, detailed evidence on the technical or artistic reasons why the selected agency is the only one that may respond to requests of the ordering party, such as market analyses or results from the previous period which would encompass all companies who are in this kind of operations, is missing.
Excluding the payments for its closing, Tanjug received the largest amounts of money from the Belgrade Festival Centre – 2,400,000 dinars (approx. 20.000 eur), and all in 2017. This organization did not reply to the request for access to information filed by CINS in relation to grounds for such payments. The 2017 procurement plan of the Centre does not contain data in relation to planning of procurement of media services from news agencies.
The Belgrade Festival Centre consolidated three cultural institutions – Jugokoncert, Belef center, and Fest Directorate. Nowadays, it organizes the International film festival – FEST, Belgrade Music Festival – BEMUS, Belgrade Summer Festival – BELEF, Film Festival in Sopot, as well as concerts and other programmes in Belgrade on the occasion of celebration of New Year ad Orthodox New Year.
The institution which paid the second largest amount of money to Tanjug, excluding the payments for its closing, and after the date on which the agency was to be closed down, was the Ministry of State Administration and Local Self-Government.
The documents obtained by CINS comprise documents on the opened public procurement based on which the Ministry of State Administration and local self-government signed the contract with Tanjug in mid-June 2017, at the amount of 1,994,000 dinars (approx. 17.000 eur), where the agency was the only bidder.
The bidding documents provided a detailed description of the amount of news, photos, and video clips which the bidder was obliged to provide for the ordering party on daily basis. Among others, by this contract, the Ministry of State Administration paid for 250 texts a day from services of not less than two global agencies, 15 video clips, and more than 200 photos a day of at least one large foreign news agency which covers developments throughout the world. The documents may not lead to the conclusion why the Ministry needs the agency cooperating with it to have such content.
Still without a solution for the status of Tanjug
When operations of Tanjug were to be terminated following two failed attempts at its sale within privatization of 73 state media outlets, the Government passed the decision on legal consequences of termination of its work, based on which salaries and other contributions were paid; by this decision, Tanjug archives were to be taken over by the Yugoslav Archives.
The transfer of documents was completed in 2017. The reply of the Archives filed to CINS reads that this are legal, financial and accounting documents and press clippings from the period 1944-2015, copies of photo contacts and negatives for the period 1943-1994, as well as digital photos for the period 1995-2015.
The Decision of the Government also stipulates that once Tanjug director Branka Đukić has paid salaries, fees, and other contributions, she is to delete Tanjug from the Agency for Business Registers, following which the property of Tanjug would be taken over by the Republic Property Directorate.
So far, Tanjug has not been deleted from the records of the Agency for Business Registers; after the Government Decision, its services will be ex officio deleted as media from the Media Registeronce this has been done.
Zoran Sekulić, manager of FoNet agency, says that the problem lies in the fact that the Government Decision “deliberately contains legal gap as the deadline within which operations in relation to company closing needs to be completed is not given.”
“The whole thing lasts solely and only due to political will”, said Sekulić.
Favourizing on part of the current set of authorities headed by Serbian Progressive Party is included in criticism addressed to Tanjug. However, political control was mentioned even before the Law on this agency ceased to exist. For instance, the Anti-corruption Council connected the appointment of Branka Đukić as director in 2009 with influence of the Democratic Party “which had control over media at that time”.
In its 2015 Report on ownership structure and media control, the Anti-corruption Council wrote about the party control of Tanjug exerted through the Managing board which comprised people connected to authorities, as well as about the “obvious political and financial controlling of the Agency” in the course of the 2012 pre-election campaign, when the Government of the Republic of Serbia granted Tanjug 17.5 million dinars grant (approx. 148.000 eur).
In the beginning of April 2018, Aleksandar Gajović, state secretary with the Ministry of Culture and Information, stated for the Danas daily that “conditions for physical closing down of Tanjug are not in place”.
The 2017 Tanjug financial report has not been published yet, while the 2016 report reads that the Ministry announced that the solution for continuation of operation of this agency is sought within the new Media strategy.
Development of the Media strategy is currently at a halt. Prior to this, one third of members of the Working group who had worked on it – representatives of Media Association, UNS, and Coalition of journalists and media workers comprising NUNS, NDNV, ANEM, Lokal pres, and AOM, as well as independent expert Dejan Nikolić – stepped out of it. Following the meeting with representatives of the Ministry of Culture and Information held on 23 May in the building of the Government, the associations announced negotiations on participation in establishment of a new working group.
Deferred tax payment
According to a research recently published by CINS, despite the non-defined status of Tanjug, institutions did not assist the agency only with direct payments. Tanjug has pledged 205 works of art (197 paintings and 8 sculptures) at the total value of 7,069,166 dinars (approx. 60.000 eur) so that the City of Belgrade Public Revenue Secretariat would defer its payment of taxes at the amount of 5,704,093 dinars (approx. 48.000 eur) so that they are paid in installments over the period of five years.
The right to the works of art was transferred to the City of Belgrade in the capacity of the “escrow agent”, which means that, should Tanjug fail to pay its dues to the City within the prescribed time, the City will collect them through sale of the works of art. Consequently, in this period of time, Tanjug must not damage, destroy, or sell the artifacts.
On 13 March 2017, Tanjug filed to the Secretariat a request for deferred tax payment, stating that the tax debt comprised somewhat more than 5% of their total annual income in the previous year, that payment of the total amount would incur the agency “significant economic damage”, and that this would be an “incongruously large burden”.
In their reply to CINS, Republic Property Directorate state that the 205 works of art are included in the inventory of belongings. They add that this inventory represents an overview of state of property, property and other rights and obligations, as well as monetary funds of Tanjug, on 31 December 2015, that it is only a preliminary list and based solely on the Report on the inventory of the Tanjug Commission. It was also stated that the final inventory will be performed once Tanjug has been deleted from the Agency for Business Registers.
Read the story ‘Belgrade grants Tanjug tax deferment‘
This project is financed by the European Union through the small grant project “Protection of media freedom and freedom of expression in the Western Balkans” implemented by the Croatian Association of Journalists within the regional project Regional platform for advocacy of media freedoms and safety of journalists in the Western Balkans, six journalists’ associations from the region – Independent association of journalists of Serbia, (NUNS),Association of BH journalists, Croatian Association of journalists, Association of journalists of Kosovo, Association of journalists of Macedonia, and Media Trade union of Montenegro
The story was republished from the Center for Investigative Journalism of Serbia (CINS) with permission. The headline was changed in agreement with the CINS editors.