Croatian Transparency Activist Marko Rakar Making Waves Again

Two days ago, Marko Rakar, Croatia's leading transparency activist (and frequent PdF conference speaker), made front-page news there with a massive new data release: All the public procurement data for government spending since July 1, 2009, in easily searchable form. It's being called the "Croatian WikiLeaks." In all, there are about 58,000 individual contracts totally 80 billion Croatian kuna (or about $15-$16 billion) covering more than 13,000 companies in the database, which allows you to see which agency ordered what goods and services, and who received each contract. A search by contractors shows their overall procurement record (how many contracts, what type of contract, what amount of money is involved and to whom was sold goods and services). The database, which is modeled on FedSpending.gov but in some ways more detailed, also allows a user to see how dependent a company is on government contracts.

This information was theoretically already available on official government websites, but it was essentially useless. Customer names and supplier names aren't shown on the same page; you can't search by other criteria; and the data only goes back two months, after which it is removed. Rakar worked with colleagues to collect all the data going back 27 months, and then machine-processed and indexed them. So far, in its first two days, the site has had 56,000 unique visits (for a nation of two million internet users).

Rakar, who runs Croatia's largest political blog, Pollitika.com, and last made waves with his release of the country's fraud-ridden voter files, told me this new release is significant in several ways.

First it is easy to use the tool to understand how much money each agency spent and where (this site covers not only government and ministries, but also agencies, municipalities, public utility companies and basically all entities which are by law obliged to follow public procurement law). Furthermore, it is easy to track and identify "winners" in the public procurement field and it is really easy to spot highly unusual contractors; for example companies which do business with a single government entity, companies with a huge amount of their turnover that only do business with government, or companies which have unusually high profit rates.

We have found a number of companies which appear to be founded only to service a single government contract. Journalists have already found a number of companies which have a number of multimillion contracts and are at the same time huge donors to the ruling party. We have found a horse farm which bid on and won a contract to lay underground power cable, we have found a company which is related to the Speaker of the House which reports unusually high profit rates (50% and above) worth millions (both in Croatian and US currency) and which primarily deals with advertising in public spaces (schools, hospitals and similar). We have found one company which belonged to the Minister of Interior which also received multimillion security related contracts with the government (while he is still in the office).

Corruption in Croatia isn't a new story; if you search the WikiLeaks cables from the US Embassy there you will find many generic references to the problem. But Rakar is confident that increasing the transparency of government spending can help change things for the better.

My basic point is this; corruption is a hard catch because everyone involved has a huge incentive to keep quiet. Tools like this help find anomalies in the system which are not maybe visible on a case by case basis. Also, if we manage to create tools which will expose these shady dealings it will be much harder to make them [going forward]. Basic principles tell us that people will engage into illegal stuff only when the risk of discovery and penality is lower then potential reward. Hopefully, tools like this one shift the odds toward everyone else who is trying to make their money on a fair, honest and above all legal way.

Since being arrested last year on suspicion of releasing a database of war veterans that also demonstrated massive fraud (the government dropped the charges), Rakar formed an NGO that he has, in his inimitable manner, called the Windmill Association. "Windmill in croatian is vjetrenjaca," says Rakar, "and that is the link of my site Vjetrenjaca.org (public procurement is at nabava.vjetrenjaca.org)."

He adds, "It is named windmill because of Don Quijote. Somebody have to run against them. :)"