Vjedh nga te varferit per t'u dhene te pasurve

Hank · 11 Jul 2011

(Gjeta dhe versionin origjinal ne anglisht, teper interesante)

Stealing from the poor to give to the rich.

Dr. Andrea Lorenzo Capussela

In this article I will describe a deal which exemplifies almost everything that is wrong about Kosovo, and probably justifies this populist title. I must ask for some patience by the reader, because the description will be long, and for some indulgence, because I will have to talk of my own actions.

In the short run, the development of Kosovo depends on foreign capital, because there isn’t enough money in Kosovo to fund the investments that are needed to make its economy more productive, create more jobs and pay higher salaries. And foreign investors will choose whether or not to invest in Kosovo also depending on whether their investments are safeguarded: they will look at the state of the rule of law in Kosovo, and at how creditor rights are protected.

In the long run, the future of Kosovo does not depend on its lignite, its metals, its fertile soil or the money of foreign investors, but on its youth. And it will be bright or bleak depending on the quality of the education which they will receive.

The University of Pristina offers to its students inexpensive but inadequate education. The reasons are many, but one big reason is the lack of resources to pay for laboratories, computers, books, good teachers.

The American University of Kosovo (AUK) offers rather good education but is expensive: the yearly fee paid by its students is equal to about two years of the salary of the average Kosovo worker.

AUK is a no-profit private institution, an NGO. It issues degrees which are recognised by a New York university, the Rochester Institute of Technology, and is supported by a charitable foundation established in New York. Admirably, AUK publishes its audited financial statements on its website. There, one can see that in the past four years its average revenue was 2.8 million Euros, and its average expenditure 3.1 million Euros (I exclude from these numbers a large contract with the Ministry of Education which, in the last two years, gave to AUK an average profit of 270,000 Euros per year). Tuition fees represent 95% of AUK’s revenue. Its expenditure is more diverse: 37% goes to the Rochester Institute of Technology, in exchange for the academic accreditation and certain consulting services, 32% is paid for teachers, 9% goes to the New York charitable foundation, in exchange for its help in finding teachers to be sent to AUK, and 4% is the salary of AUK’s president. The rest are for computers, books and the like, and for scholarships granted to deserving students. But most of these scholarships are funded by donors or the Kosovo government: AUK contributes only for 35% of such scholarships, which is only 8% of its overall expenses and a little less than the profits it makes on the government contract.

In essence, AUK is a business which exploits the fact that the University of Pristina offers inadequate education, and that rich students have difficulty in getting visas to study abroad: in exchange for high fees, it provides them rather good teaching and a US degree, and transfers about half of such fees to the Rochester Institute of Technology and the New York charitable foundation. This money pays services (academic accreditation, advice, and finding teachers) for which there is no reference market value, and whose price is freely determined between the parties; this price, for instance, can be increased at will to make sure that AUK doesn’t produce a profit, which would have to be spent in charitable activities in Kosovo. This is precisely what seems to have happened: in the last four years, the prices of these services rose in line with the increase of AUK’s revenue, and, as a result, in 2007, 2008 and 2009 AUK made losses, and last year it made a very small profit (3% of its revenue). AUK is exempt from taxation because it is an NGO: its preference for sending money to New York rather than spending it in scholarships or charitable activities in Kosovo might therefore amount to tax avoidance, and implies that, in purely financial terms, the relationship between AUK and Kosovo’s citizens is a net loss for the latter. Still, private education is a perfectly legitimate business, and AUK does it rather well: it produces graduates with better average skills than those of the University of Pristina or most private universities, which somehow compensates that loss.

At ten past nine of 23rd September 2010, as I sat on my chair at the table where the board of directors of the Privatisation Agency of Kosovo (PAK) holds its meetings, I found a set of papers on a matter which was not on the agenda.

I quickly looked through these papers during the discussion of other matters, and saw that some land belonging to an SOE was being expropriated to allow AUK to build a new campus on it.

At half past twelve, after our frugal lunch, the chairman of the board, Mr. Dino Asanaj, took the floor and asked us to approve the expropriation and the compensation offered for it, saying that this was important to support higher education in Kosovo. This was an ambush: proposed resolutions and the supporting papers must be sent to board members five days before the meeting. I said that the board should not vote, because we had not had any time to study the matter, and vented doubts over the legality of the expropriation. The chairman insisted for a vote: I abstained, together with another colleague, and the six other board members voted in favour. All I obtained was that the proposal was approved only ‘in principle’, pending advice on the legality of the expropriation.

In the late afternoon I studied the papers: on 16th June 2010 the government had decided to expropriate 30 hectares of land – situated in Hajvalia, near the International Village – belonging to SOE IAC Kosovo Export, which is administered by PAK (decision no. 04/130, signed by Mr. Hashim Thaci); the land has construction permits, and easy connections to roads, water, sewage and electricity. The first paragraph of the decision states that the construction of the campus on that land had already started. A letter showed that on 8th July the terms of the expropriation had been discussed and, apparently, agreed at a meeting held at the Ministry of Economy and Finance among the then Minister of Economy and Finance (Mr. Ahmet Shala), the then Minister of Education (Mr. Enver Hoxha), the PAK manager in charge of sales (Ms Mrika Tahiri) and AUK’s president (Dr. Chris Hall). A letter dated 3rd September showed that the compensation payable by the government to PAK for the expropriation of the land had been agreed in 3.4 million Euros, and on 14th September minister Shala had written to both PAK and AUK to reassure them that the government would have paid it.

Everything had been decided before the PAK board was even informed. On the transaction, I reached the following conclusions.

First, the expropriation is illegal, for three reasons. SOE assets must be privatised, and cannot be expropriated (article 44.2 of the law on expropriation); for the same reason, by the way, the expropriations of SOE land to build the highway are equally illegal. Anyhow, expropriation is only possible to satisfy a public interest, not a private one, and can only benefit a public entity, not a private one like AUK (article 4.1 of the same law on expropriation; so, from this perspective, the highway expropriations are legitimate); the reason is obvious: private persons and entities can only buy, or steal, the things they desire to have, but they cannot ask the government to expropriate them on their behalf. Finally, contrary to the law the compensation which the government proposed to pay to PAK was much lower than the market value of land. In fact, the study commissioned by PAK to determine the value of the land says that when banks take comparable land as collateral for their loans, they value it between 50 and 60 Euros per square meter: these are very conservative estimates, because the lower the valuation of the collateral, the greater is the protection for the bank. But the proposed compensation was only 11 Euros per square meter. Now, 60 minus 11 equals 49; and 49 Euros times 309,900 square meters equals 15,185,100 Euros: this is the difference between the proposed compensation and a very conservative estimate of the market value of the land.

Second, this difference damages people who were not involved in the deal. When an SOE is sold, its price is used to pay the workers and creditors of the SOE, and what remains is given to the budget; so, if the price is not sufficient to pay workers’ and creditors’ claims, they lose the difference and nothing remains for the citizens of Kosovo. When it accepted that compensation, therefore, PAK knowingly deprived all those people of at least 15 million Euros.

Third, such open breaches of the law and of creditors’ rights further deteriorate the quality of both the rule of law and the investment climate, and make Kosovo an even less attractive destination for foreign investment. This harms the prospects of its economic development.

Fourth, with this illegal deal the government makes a large gift to AUK, which always showed so little generosity towards Kosovo. Now, the budget of the University of Pristina is considered ‘modest’ by the World Bank: had that gift been given to it, rather than to AUK, those 15 millions of Euros could have paid for computers, laboratories and other improvements in the quality of the education it offers to its students. This would have improved the future prospects of both Kosovo and its youth. This deal, instead, reflects an education policy whereby the state subsidises the university of the rich and neglects public education; and by neglecting it, it supports the demand for AUK’s services.

The solution seemed simple: stop the expropriation and the construction of the campus, and sell the land in an open and competitive tender, as the PAK law says, to collect a price equal to its fair market value. If AUK didn’t offer enough to win the tender, it could build its campus somewhere else; of course, it would have lost the cost of the construction works done until then, but this is what happens to people who build on someone else’s land.

Hank · 11 Jul 2011

[Note: end of the first part. What follows is a short introduction for the second part]

In the first part of this article, published yesterday, I said that the American University of Kosovo (AUK) is a business which offers rather good teaching and a US degree in exchange for high fees, half of which go to the Rochester Institute of Technology and a New York charitable foundation, in exchange for some advice and other services, and I noted that, although AUK is an NGO, it has always been remarkably stingy towards Kosovo and its poorer deserving students. I then recounted how the government and the Privatisation Agency of Kosovo (PAK) made an inexplicably large gift to AUK, by giving to it socially-owned land worth 18 to 20 million Euros in exchange for anything between zero and 3 million Euros. The land lies next to the International Village, and AUK planned to build its new campus on it; in fact, construction had started before the land was expropriated.

According to the documents I have, the dramatis personae of this story are: Mr. Hashim Thaci, who signed the expropriation decision; Mr. Ahmet Shala, Mr. Enver Hoxha, Ms Mrika Tahiri (the PAK manager in charge of sales) and Dr. Chris Hall (AUK’s president), who agreed the terms of the whole deal; and Mr. Dino Asanaj, who chairs the board of directors of PAK, built the International Village and, in an ambush, led that board to approve the deal. But only, at this stage of the story, ‘in principle’.

The first part ended with a summary of the reasons why, in the late afternoon of 23rd September 2010, I concluded that the expropriation on which the deal had been built was illegal, wrong and damaging for Kosovo.

[Note: end of the introduction. Second part begins]

On 24th September I sent my conclusions to several colleagues in the ICO, with an email entitled “An expropriation to be stopped”, and I wrote to EULEX: when millions of Euros float above manifest illegalities and inexplicable policy decisions, crime may be involved.

In the space of ten minutes two colleagues replied to my email, writing prudently only to me: «Careful my dear. You're entering a minefield!» wrote the special advisor of the ICR, and the head of the community affairs unit sent me a more informative warning: «be aware that this deal was negotiated in a number of Sunday walks between Amb Dell and PM Thaci. Might be difficult to fight.». The matter seemed more delicate than I thought, and I discussed it with my boss, Mr. Pieter Feith, who encouraged me to act.

My discussion with the US embassy was conducted through the deputy head of the political unit of the ICO, an American diplomat who in fact leads that unit. I asked him to talk to his embassy, adding that «my point is this: if an [sic!] US interest is involved, or if US has a say on this, can the plan be redrawn, and a more acceptable one be made? nobody is against AUK opening a new campus: the issue is how they buy it». He answered thus: «Thank you for the message. I will inform the U.S. Embassy about your concerns. I think you are aware already, but let me underscore that the American University of Kosovo has no link to the U.S. government.». On its website, AUK indicates the US embassy and USAID as its ‘partners’, and no other partner except the Rochester Institute of Technology is indicated; a partnership is a ‘link’, and I saw the clarification of my colleague as a clumsy attempt to distance his own government from a shady deal. But that was the end of my indirect discussion with the US embassy: nothing followed.

When I outlined my objections to Dr. Hall, the president of AUK, his face became red and he promised proposals to ‘improve’ the deal. Again, nothing followed.

Needless to say, minister Shala never answered to my emails on this deal and the highway expropriations.

EULEX did respond, but very much in its style: the answer was both useless and rather stupid. It came on 13th October with a letter by Ms Isabelle Arnal, the head of SPRK, who advised me to advise PAK to challenge the expropriation and the compensation. The problem, of course, was that PAK had already accepted both, as the documents attached to my letter eloquently demonstrated. Either Ms Arnal didn’t understand, or she didn’t want to understand; in fact, I had also told her of the suspected involvement of the US ambassador, alongside the prime minister.

I had sent my arguments also to the legal department of PAK. But on 28th October, with four votes in favour, one (mine) against and two abstentions, the PAK board gave final approval to both the expropriation and the compensation, despite the fact that PAK’s lawyers had written that the law was being breached, ‘probably’ (this is how they saved themselves).

I then reported my failures to Mr. Feith, and said that determined action by ICO was needed to stop the expropriation and the deal built around it: he asked me to discuss the matter with the deputy ICR (an American diplomat), the chief of staff, the political unit and the legal unit, and then submit him an agreed action plan. I linked this discussion with that on the legality of the highway expropriations, reminding my colleagues that ICO cannot tolerate the fact that the government routinely breaks the law, almost every week. We found a solution for the highway (a small change, or a clarification, in the law; not yet done, by the way), but not for the AUK deal: for more than three months my colleagues enveloped my reiterated requests to agree an action plan into a web of delays, questions, futile comments and fruitless and well-spaced meetings. This unsubtle reaction confirmed to me that the defects of this transaction were intended, and led me to think that it was probably true that the US ambassador participated in designing the AUK deal, because never, in the last year, has the ICO dared taking positions not approved by the US embassy. But the delaying tactic of my colleagues was effective, because it brought us close to the natural end of my mandate, on 31st March.

In three years, I saw many other wrong decisions and had suspicions on many bigger transactions. But in no other case I knew so much on something that was so utterly indefensible. For instance, both the highway contract and the recent salary increases were far more damaging to Kosovo than this deal; but I hadn’t directly seen any explicit sign of wrongdoing on the highway, and the salary increases are just a very wrong policy decision. I had rather clear, written evidence of criminal wrongdoing on the Dardafon deal, but I had given it to EULEX and knew that they were acting on it, no matter how slowly. Whereas stopping the AUK deal effectively depended on me, and I decided to try.

So, in late February I told Mr. Feith and my colleagues that I would not have tolerated further delays: unless they convinced me that my reading of that deal was wrong, I expected ICO to stop it before the end of my contract. They resisted my pressure, and things rapidly reached a crisis: the US colleague who de facto runs the political unit falsely accused me of lying to support my reading of the deal, and a week later our chief of staff – rather than sanctioning my colleague, as I had demanded – instructed me in writing not to talk of the AUK deal outside of ICO. I then set to Mr. Feith a deadline to sanction these two colleagues and stop the expropriation, warning him that otherwise I would have written to his supervisors (the states that compose the ISG) to criticise both the AUK deal and his own deliberate inaction on it. Mr. Feith reiterated the order to keep silent, and threatened to fire me if I breached it. The deadline passed, and I wrote to a few ISG member states (Mr. Feith found out – by breaching the secrecy of my email correspondence, I recently learnt – and fired me for disciplinary reasons at about 3pm of 30th March).

As this colourful story unfolded, I came to see the AUK deal as a laboratory specimen, which displays the worst face of the Kosovo élite and of its international supervisors and foreign friends: their greed, pettiness, timidity, their disregard for their duties, the public interest and the very dignity of their public functions. But also, I should say, their stupidity: I am convinced that not all those involved were fully aware of the gravity of what they were doing. And, had those who defended this deal fooled me with some concessions, they would probably not be reading this article. Then, on the 1st of April (the perfect day), they could have rebuilt the deal exactly as it was before. Of course, I was even more stupid, because I failed to stop this deal. But the determination with which its worst aspects have been defended shows that they were not accidental mistakes, but the product of a design, and explains why a solution was possible for the highway expropriations (the obstacle was a legal technicality) but not for the AUK one: abusing public power to satisfy private interests, and maximising private benefits at the expense of the public interest, is the raison d’être of this deal.

For this illegal, wrong, damaging and deeply immoral transaction I blame Mr. Thaci, who signed the main decision, Mr. Shala, Mr. Hoxa, Mr. Asanaj and Ms. Tahiri, who implemented the deal, Mr. Feith, who didn’t stop it, and Ms Arnal, who didn’t investigate it. For these actions and omissions they are contemptible.

I don’t blame the US ambassador – even if he were, as I think he was, involved in the deal – because he owes nothing to the citizens of Kosovo: it will be up to the US authorities to decide whether he acted properly or not, and I sent them a letter posing precisely this question. Nor can I blame the president of AUK, Dr. Hall, who secured some excellent land for the new campus at very little cost. Nor will I blame Mr. Asanaj, in his capacity as businessman, because his International Village will greatly benefit from having the new AUK campus next to it. But I would expect the reader to remember their actions, the next time they speak about civic virtues or public morality.

At a lower level, I blame Messrs Naser Osmani, Slobodan Petrović, Haxhi Arifi and Bahri Shabani, the members of the board of directors of PAK who gave to Mr. Asanaj the votes he wanted from them, but who knowingly voted against the law, the duties of PAK and the interests of the workers and creditors of the SOE and the interests of the citizens of Kosovo. Citizens who, incidentally, every month pay to each of them and to Mr. Asanaj (and not to me and the other two foreign members of the board) around 1,000 Euros thanks to an illegal decision taken by the PAK board itself in one of its first meetings, in 2008 (article 13.2 of the PAK law says that board members «shall not receive compensation for attending Board meetings»; I still blame myself for not having challenged this decision when I could have done so, and for having followed the advice – not by Mr. Feith: he had encouraged me to act – to avoid open confrontation so early on in my tenure at the PAK board).

And, a little lower, I should also blame some former colleagues in the ICO, whom it will be charitable not to name because they acted under the orders of either Mr. Feith, the US ambassador or both. But I must say that in defending this deal they showed rare inflexibility, surprising ingenuity and a determination that seems worthy of a better cause.

In a letter dated 25th April, Mr. Feith told me that after I had left he has taken ‘adequate steps’ on the AUK deal. Understandably, in a subsequent letter he declined to explain exactly what he did. I am certain that he did something, but it was too little and too late: I understand that the building of the campus continues, and I think that by now those profiting from this deal have secured their gains.

Perhaps the parliamentary opposition, the press or civil society can still do something about it (I can give them the documents I have). If they were to stop this deal, which so perfectly exemplifies what is wrong in Kosovo today, they would score an important symbolic victory, which could lead to further positive developments: where the political system is closed and inefficient, important changes can be sparked by apparently minor episodes. At the very least, by winning a fight which ICO and EULEX didn’t even want to begin, those in Kosovo who aspire to better governance will gain empirical evidence that these two imperfect international creatures have become damaging or, at least, superfluous; which seem good arguments to ask Bruxelles and Washington to either reform or withdraw them.

But even if nothing will happen, I would still make a plea to AUK to be a little more generous to Kosovo. In 2010 it donated 342,572 Euros for scholarships, but paid 1,508,266 Euros to the Rochester Institute of Technology, 359,446 Euros to the New York charitable foundation, 138,000 Euros to its president, Dr. Hall, and made a 341,027 Euro profit on the contract with the Kosovo government. If one deducts this profit from the scholarship donation, only 1,545 Euros remain.

* * *

gurax · 12 Jul 2011

Ende nuk eshte kuptuar ne popullate qe asgje qe permban ne emer fjalen 'amerikan' nuk eshte per bamiresi, por per te nxjerre fitime, pavaresisht se me cfare impakti ne audience dhe pavaresisht audiences: e varfer, e pasur, e zeze, e bardhe, e kuqe, e verdhe, 'straight', gay, diten, naten... Politike e paster monetare.

Thirrje per shqiptaret kudo qe jane, Shqiperi, Kosove dhe kudoqofte: Zgjidhini *mire* modelet arsimore dhe brumosjen kundrejt arsimit! Eshte e vetmja gje qe ka rendesi ne afatgjate, eshte e vetmja pasuri qe nuk mund tua marre askush me force, eshte e vetmja vegel e cila ju duhet per te ndertuar ato vende qe i konsideroni me aq zjarr Atdhe! Patriotizmi nuk ka shume nevoje per brohoritje, por per mend ne koke dhe urtesi!

gangsterja · 28 Nov 2011

Populli shqiptar duhet te tregohet i zgjuar duke mos iu besuar te huajve,por te merren me arsimin.Si Shqiperia e si Kosova duhet te luftojne korrupsionin dhe te kene kujdes me ndihmat e ardhura nga jashte.

Vjedh nga te varferit per t'u dhene te pasurve

Hank

Valoris scriptorum

Hank

Valoris scriptorum

gurax

Pan ignoramus

gangsterja

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