The mayor of Šmarje Toplice provided the brother with 444,000 municipal euros

A local government body in Slovenia has been found guilty of breaching legal restrictions on business dealings with family members of its officials. The Commission for Prevention of Corruption (KPK) has identified violations related to 23 contracts awarded to a company owned by a relative of the mayor of Šmarješke Toplice, Franc Anderlič. These contracts, totaling over 444,552 euros, were signed between 2021 and 2024 and covered a range of public works including road maintenance, cemetery upkeep, bus station demolition, winter services, and trail development. According to the KPK, these actions violated the law's provisions on limiting business transactions involving close relatives of public officials. The municipality of Šmarješke Toplice has challenged the findings, arguing that individual contract values did not reach the threshold requiring a formal tender process. It claimed that the contracts fell under the category of "minor orders," which do not require such procedures. However, the Administrative Court upheld the KPK’s interpretation, stating that legal restrictions apply to all types of contracts, regardless of their value. This means that even smaller contracts must adhere to the rules preventing conflicts of interest between public officials and their relatives. The KPK investigation revealed that the municipality had engaged the same contractor, Magrad, Gradbena mehanizacija Marjan Anderlič s.p., for multiple projects over four years. The largest portion of the funds was allocated for macadam roads and public paths, amounting to approximately 268,000 euros. This represents more than 60 percent of the total sum awarded during this period. Despite the legal requirement to disclose such relationships, the mayor failed to declare the connection between his relative and the company before the contracts were signed. The municipality argued that it had followed proper procedures by obtaining multiple bids and selecting the economically most favorable contractor. It emphasized that the work performed was of high quality and that citizens were not harmed financially. Additionally, it pointed out that the company had already worked with the municipality prior to the mayor assuming office. However, the court rejected this argument, noting that the relevant legal exceptions do not apply when the contracts were made after the official took office. According to the law, public sector organizations must avoid entering into contracts with individuals who are either employees or relatives of officials. Specifically, the law prohibits such entities from awarding contracts to subjects in which a functionary or their family member holds a position on the board of directors, owns more than five percent of shares, or participates in management or capital decisions. This restriction applies regardless of whether the contract requires a formal tender process or falls under the category of minor orders. Following the court ruling, the KPK declared all 23 contracts null and void. This means that both the municipality and the contractor must return any money received from these invalid contracts. The KPK has informed both parties of this decision, and the municipality has yet to update its list of companies subject to restricted business practices. Currently, eight other companies remain on this list. The KPK also highlighted that the right to declare a contract null does not expire, ensuring that past violations can still be addressed. However, one additional irregularity discovered by the commission could not be investigated due to the statute of limitations. The legal proceedings have been handled by the law firm Senica and Partners, which has recently faced financial difficulties. The case underscores the importance of transparency and adherence to legal frameworks governing public procurement. While the municipality attempted to justify its actions based on the value of individual contracts, the court ruled that the legal restrictions apply universally, reinforcing the need for strict compliance with anti-corruption laws. The outcome of this case will likely influence future interpretations of similar situations within the public sector.