Radoje Žugić
Author: Lazar Grdinić, MANS Investigative Centre
During the course of 2015 and 2016, company Proxim from Podgorica won three tenders announced by the Ministry of Finance, headed by Dr Radoje Žugić, current Governor of the Central Bank of Montenegro (CBM), and thus earned €170 thousand. According to the documentation collected by the MANS Investigative Centre, two out of three contracts were concluded despite the fact that Žugić had not reported the obvious conflict of interest, which he was obliged to do according to the Law on Public Procurement.
Ivan Bošković
According to the Central Register of Business Entities (CRBE), company “Proxim” was registered by Žugić’s nephew, Ivan Bošković, based on the power he received from certain Milan Vujović, registered as the owner and founder of the company, whose activity was “development, implementation and maintenance of information systems”. The aforementioned power of attorney enabled Bošković to represent the company unlimitedly in all legal affairs, and what is interesting is that the Governor’s nephew registered the company at the end of May 2015, just over a month before Žugić announced the first tender worth €30 thousand. The then Minister of Finance announced the second tender, worth €60 thousand, at the end of July of that year, while the third was opened in April next year.
Proxim company, unknown at the time, applied for the first two public announcements, and won as the only bidder. The public procurement procedure was conducted by a commission appointed on behalf of Žugić by Marina Perovic, the then State Secretary at the ministry, who now works as the head of the governor’s office.
Income from two jobs received from the Ministry of Finance was also the only income of Proxim in 2015, according to its financial statements available on the website of the Tax Administration, which raises the question of whether the company was founded solely for the purpose of participating in tenders announced by Radoje Žugić.
The first public announcement related to the purchase of disks for expanding the memory of the information system of the ministry, while the second sought for a company that would maintain the information system of the State Treasury – SAP. Both public procurement contracts were also signed by Marina Perović, the former State Secretary, on behalf of Žugić. Tender documentation for these procurements obtained by the MANS Investigative Centre shows that Perović, on behalf of Žugić, made a statement that there was no conflict of interest. Moreover, there is no information in the tender documentation that any of the participants in this business recognized the conflict of interest between Žugić and Bošković.
The Law on Public Procurement stipulates that if the conflict of interest arises during the public procurement procedure, the persons involved in the procedure shall be obliged, without delay, to apply for an exemption.
Third tender was announced in April 2016, and again concerned the maintenance of the information system of the State Treasury – SAP, worth €80 thousand this time. Žugić announced the tender after he had personally appointed the tender commission in this case and issued a statement on the lack of conflict of interest.
Raško Konjević
The third tender took place shortly before Žugić handed over the Minister’s position to Raško Konjević, who took over the finance department in May that year, all within the framework of the agreement on the establishment of the Government of electoral trust. Nevertheless, the decision on the selection of the best offer was made then by Konjević, and another contract with Proxim was concluded in September 2016, worth almost €80 thousand.
“I was not aware of the family ties between the then Minister Žugić and Ivan Bošković. For me, it was important that the procurement procedure was correct,” Raško Konjević, an MP in the Parliament of Montenegro and former Minister of Finance, said in a short statement given to the MANS Investigative Centre.
On the other hand, answering the question by the MANS Investigative Centre regarding Žugić’s conflict of interest, Marina Perović referred us to the Ministry of Finance: “It is understandable that I cannot remember every single public procurement procedure from the period when I was the Secretary of State in the Ministry of Finance.”
Proxim was liquidated in April last year due to “changed circumstances, market conditions and inability to continue working”, as stated in the decision to initiate a shortened voluntary liquidation procedure. Ivan Bošković did not deny association with Proxim, and answering the question of possible conflict of interest, he said that the procurement in the Ministry of Finance was carried out “in accordance with the law, powers and without the influence of family ties”.
Until the completion of this article, CBM Governor Radoje Žugić was not responding to our calls, text messages and questions sent by the MANS Investigative Centre regarding the tenders he had announced and the contracts he had concluded with his nephew.
Žugić and his nephew also concluded temporary service contracts
Ivan Bošković currently works at the Central Bank as the Director of the Operational Affairs Directorate in the Information Technologies Department, and has been employed in CBM since 2011, when Žugić for the first time held the post of CBCG Governor.
However, cooperation between the two continued after Radoje Žugić took over the post of Minister of Finance. Namely, in the period from 2013 to 2015, Žugić personally concluded five temporary service contracts with his nephew.
The first contract was concluded in mid-2013, according to which Bošković audited the IT system at the Ministry of Finance for a fee of €1,000. Just two months later, Žugić signed the same contract with his nephew, and Bošković once again audited the same system, this time for a fee of €1,500.
At the end of that year, another temporary service contract was signed, according to which Bošković was in charge of professional analysis of parts of the then proposed new legal solutions concerning the competencies of the Ministry of Finance, for which he received a compensation of €500. It is interesting that the contract was concluded after the expiration of the time-limit for carrying out the work specified in it, i.e. there is a suspicion that this contract only provides written justification for the money that Žugić paid to Bošković.
During 2014, Žugić signed a fourth contract with his nephew, by which Bošković defined and implemented an action plan for the maintenance of the information system for the needs of the Ministry of Finance. Bošković charged additional €1,500 for the service, and it is interesting that at the time he worked on improving the process, whose maintenance was taken over the following year by the company associated with him – Proxim.
Latest job that Bošković did for the ministry independently was also regarding the SAP system. Žugić and Bošković then concluded a contract that obliged Bošković to “perform the tasks of migration of SAP to a new hardware platform”, from February 1 to April 1, 2015, for a fee of €600. The contract was concluded on March 24, 2015, which also implied “retroactive” work.
