A report from the National Audit Office indicates that over €235 million of the European Union’s (EU) structural funds have been misappropriated in various investment projects in Lithuania. This finding has initiated a political crisis, threatening the current government coalition.
The EU Investment Audit Department evaluated the management and control systems associated with the Operational Programme for Investments of the European Union Funds for 2014-2020. The audit revealed that the allocation of COVID-19 business support was not correctly executed, particularly regarding the “COVID-19 e-commerce model,” which had over €40 million allocated.
Many of the websites developed under this initiative were found to be of substandard quality relative to the funds expended. As a result, the Innovation Agency determined that more than €3.6 million in expenditures were ineligible and required recovery from the project implementers.
Furthermore, the audit identified persistent issues concerning subcontractors operating without proper authorisation for various projects, including the Medical Science Centre and the Study Campus, which resulted in over €3.5 million in ineligible expenditures. The overall error rate in 32 EU-funded projects was calculated at 14.15%, significantly surpassing the European Commission’s threshold of 2% and representing the highest error rate documented in the history of the National Audit Office.
Auditor General Mindaugas Macijauskas emphasised the necessity of addressing these shortcomings to prevent future occurrences in EU-funded projects. The findings have been submitted to the European Commission for regulatory approval.
In light of these developments, the report has triggered a political crisis. Prosecutor General Nida Grunskienė has alleged that Social Democrat MP Arūnas Dudėnas committed fraud, leading to an improper transfer of over €10,500 based on falsified expense reports. Nevertheless, the Seimas voted against the motion to strip Dudėnas of legal immunity, rejecting the prosecutor general’s request. A total of 69 Members of Parliament supported the initiative to lift Dudėnas’ immunity, while two abstained. To prosecute an MP, the support of at least 71 members is required.
Among the 71 MPs who did not vote, 30 were from the Social Democrats, 16 belonged to the anti-Semitic Nemunas Dawn party, 11 represented the Farmers and Greens as well as the Christian Families Alliance, and the remaining included seven Conservatives, two Democrats, one Liberal, and one non-attached member. The Prosecutor’s Office has announced that the investigation concerning Dudėnas must now be closed, as the Seimas did not permit his prosecution.
Seimas Speaker Saulius Skvernelis expressed that the decision not to lift Dudėnas’ immunity has violated the coalition agreement. “There appears to have been a consensus among the groups of the Nemunas Dawn, the Social Democrats, and the Farmers and Greens, who opted to leave the chamber rather than participate in the vote. This action undermines the foundational principle of the rule of law by impeding institutions from performing their duties,” he observed.
Additionally, the board of the Democrats For Lithuania is scheduled to convene on Wednesday to discuss the party’s future within the coalition.
