Lukáš Wagenknecht
Prize for Courage 2015 – 100 000 CZK
He would not be deterred
Lukáš Wagenknecht is an audit expert and a model of honest official. As an auditor, he has exposed several serious economic-management errors in public institutions. But instead of gratitude, he reaped threats and intimidation. His honest attitudes and exposure of financial irregularities earned him dismissal from several institutions and loss of employment. But he remained unbroken and never succumbed to fear.
Two most recent episodes have been widely publicized.
The first was an audit in the Prague Transport Company – DPP. In 2013, in the position of director of DPP internal audit group, Lukáš Wagenknecht exposed wasteful management of public assets. At the time, the DPP was burdened by inherited non-cancellable contracts and disadvantageous contracts from the past. The internal audit conducted by L. Wagenknecht targeted the completion of Metro Line A between the stations Dejvická and Motol. The Ministry of Transport had ordered the DPP to make a 25-percent adjustment due to a breach of law. An internal audit, carried out by Wagenknecht’s team, revealed that the contracts included discriminatory criteria for the selection of contractor, and a great amount of extra work required, which was not in harmony with the Public Procurement Act. Behind the problems with project preparation was the company IDS- Inženýring dopravních staveb, which in addition to the Metro A project also supervised most of Prague’s large transport projects, including the Blanka Tunnel. A few weeks ago the Metro A project and the said issue of extra work and associated costs were to have been examined also by the Supreme Audit Office (NKÚ). But according to NKÚ inspectors, the DPP included the problematic extra work in the costs for which it would not claim EU allowances and would therefore avoid the NKÚ audit.
Following the outcomes of the L. Wagenknecht-processed audit, its author was recalled by DPP CEO Ďuriš without notifying the board of supervisors for DPP audit or giving any reasons for the move. In the curse of audit works, L. Wagenknecht was subjected to various forms of threats and intimidation. But undaunted he carried on with the audit. Background documentation and evidence on the irregularities discerned in the DPP economic management were requested by bodies participating in criminal proceedings. The investigation has not yet been completed.
In his capacity as deputy finance minister, L. Wagenknecht supervised hundreds of EU fund audits. His auditors discerned especially severe discrepancies in connection with the EU fund monitoring system operated by the Ministry for Regional Development: two bidders had filed two carbon copies of one and the same offer. One of them won the contract and hired the other as a subcontractor. Although both bids were identical, each received a different number of rating points.
Most recently, L. Wagenknecht pointed out irregularities in dubious contracts between utility company ČEZ and Radmila Kleslová. As a member of the ČEZ supervisory board, Lukáš Wagenknecht wanted to know the exact content and parameters of R. Kleslová’s long-term consulting contract with ČEZ. In this case, L. Wagenknecht again faced intimidation, this time from R. Kleslová. But he stubbornly insisted on his request. He was immediately sacked from the post of deputy finance minister.
In spite of his adverse experience with public sector institutions, he is determined to stick to his profession and actually encourages public sector workers not to be intimidated and boldly expose wrongdoings and dishonesty.
We asked Lukáš Wagenknecht about his hands-on experience in the field.
What would you recommend to people in the same situation, who have witnessed wasteful practices, if not outright theft of public assets?
- LW: “It depends on the situation they find themselves in, and on their determination to really do something. But I believe it is good to not let it sleep. If you close your eyes, you will actually encourage the system. And that is no good.”
What in particular would encourage the witnesses of unlawful conduct to pick up their courage and blow the whistle on shady dealings?
- LW: “I think positive examples could do the trick.”
Could you estimate how much public funding, wasted by a dishonest, bad public administration you have helped to “save”?
- LW: “I can’t give you the exact figure, but let’s talk about billions of crowns.”
What should the general public do to help stem corruption in the Czech Republic?
- LW: “Press political leaders to adopt strict public spending laws. I have long tried to help bring about a change of the Financial Control Act. But it seems that politicians know a hundred times more reasons why it can’t be done.
The second substantial thing is to make honest people increase their participation in politics. The more such people there are in the political parties, the more difficult it is to create clientelist networks, because there will be more eyes set on the proceedings. We need more eyes and more active control.
Lukáš Wagenknecht has long been preoccupied with the problems of financial management and internal audits in the public sector. A graduate of the University of Pardubice Faculty of Economics and Administration (1998-2003), he started his professional career as an internal auditor at the Ministry of the interior, in 2003. He later worked as a quality engineer and internal auditor of the firm Foxconn and head of Internal Audit at the Central Bohemia Regional Council. In 2009-2014 he was manager of the risk services department of the firm Deloitte Audit. His audit of health insurer Krajská zdravotní exposed overpriced purchases of healthcare technologies in the order of hundreds of millions of crowns, and his unscheduled audit of the Regional Operational Programme Northwest disclosed political and bureaucratic interventions in the choice of projects under Operational Programme Northwest.
At present, having been sacked from the post of deputy finance minister, Lukáš Wagenknecht continues to examine problems of Good Governance and introduces the general public to issues pertaining to public administration and the management of public assets. He explains and shows where the general public can or could control the institutional handling of public finances. He would like to again employ is experience and expertise in the service of the public sector. He knows that the principles and rules of Good Governance are still only grudgingly applied in this country and that it needs honest, well-educated political leaders and officials.
Lukáš Wagenknech´s story - further information
Interview with Lukáš Wagenknech (in Czech only)
