Taltech research funding fraud scandal continues as claims conflict

Taltech Rector Jaak Aaviksoo.
Taltech Rector Jaak Aaviksoo. Source: Siim Lõvi/ERR

Following an article published by daily Postimees on Thursday claiming that researchers at Tallinn University of Technology's (Taltech) Ragnar Nurkse Department of Innovation and Governance (RNI) had systematically defrauded an EU program, Taltech responded saying that documents provided by the whistleblower cannot be regarded as proof of fraud.

Commenting on the research financing of the Ragnar Nurkse Department is further complicated by the fact that the role of Keegan McBride, the doctoral student who disclosed the alleged scheme after he had requested an anonymous meeting with university director Jaak Aaviksoo this March but no further action was taken by the latter, still has to be treated as confidential as an agreement between the two parties included the condition that the whistleblower's identity must not be disclosed, Taltech said.

"This is something that has to be kept in mind in connection with the rector's orders for an internal audit and responses to media inquiries in this matter," it noted.

The university added that until the project document has not been established as fraud, it cannot be considered proof of fraudulent activity.

"Based on the information received, the rector called for an extraordinary audit in order to verify the reliability of project reporting," it said.

An allegation has also spread in the media that the rector did not even know which research project was involved in the matter, let alone investigate it. This, however, is where the confidentiality of the conversation that took place [between Aaviksoo and the whistleblower] in March comes into play, Taltech said.

"The university's internal audit could freely choose among all projects, including those referred to by the whistleblower," the university explained. The OpenGovIntelligence (OGI) project discussed in the media was not covered by the extraordinary audit as it had already concluded and the project's final report had already been ratified by the European Commission.

"Keegan McBride has told the public that he did not send the rector any proof as the university did not request it," Taltech said. "The rector and the audit indeed have access to the project documents, however without checks and a corresponding decision, these documents are not proof of fraud. The documents shown by McBride did not constitute proof of fraud, however the rector nonetheless ordered an extraordinary audit."

Taltech said on Thursday that it had convened a committee to investigate the alleged fraud; the committee is to report its initial findings within a week's time.

Paper: Evidence contradicts Aaviksoo's claims

Daily Postimees, meanwhile, reported on Friday that evidence at its disposal suggests that despite his claims, Aaviksoo may have in fact had access this spring already to proof of the alleged misuse of research funding.

In a press conference held on Thursday, following the publishing of the paper's initial investigative piece, Aaviksoo told reporters that he had made no mistakes in connection with checking the information received from McBride in mid-March.

The rector said  that there were two reasons why the audit he ordered did not uncover any breaches. First, McBride was unable to produce sufficient evidence at the time that would have given any reason for the university to get involved in the institute's use of EU support funds. Second, Aaviksoo did not relay to the internal audit the details given to him by McBride as he allegedly sought to ensure the latter's anonymity.

During the daily's investigation, the rector's account of the occurrence changed several times and also contradicted evidence.

"Had there been concrete input, I would have been able to check these specific projects," Aaviksoo told reporters on Thursday. When told by the reporters that he had, in fact, been offered proof the rector denied that this had happened.

According to Postimees, however, McBride had offered to send the rector proof twice.

"I have proof of systematic institutional fraud," McBride wrote to Aaviksoo in a text message prior to their March 15 meeting at the rector's office.

An audio recording at the paper's disposal begins with McBride opening up his laptop and showing Aaviksoo some documents, including an Excel spreadsheet containing the actual and reported working hours of the project, which McBride then proceeds to explain to the rector.

"He did not present any proof," Aaviksoo said at Thursday's press conference. "I have not seen any documents, I don't have them, and they have never been at my disposal."

This claim is likewise inconsistent with the audio from the March meeting. "I can send you the documents," McBride can be heard saying.

"You can send them, but I have to make up my mind about what the next steps will be," Aaviksoo is heard replying. "We have instruments for that in the administration. It is my responsibility to put a stop to it."

Aaviksoo denies being given names

On several occasions this week, Postimees had described to Aaviksoo his conversation with the whistleblower. Among other things, the reporter noted that Aaviksoo had also been given the name of the specific project in which fraudulent activities had allegedly taken place, which the rector also denied.

"[McBride] said that timesheets and some other things had been been erroneously filled out in the European Union projects," Aaviksoo said on Wednesday, before the article was published by Postimees. "If he had a specific case, that it was this particular employee..."

The audio recording from the meeting paints a different picture entirely, the paper highlighted, noting that it indicates that it was Aaviksoo who asked for the names of the projects and wrote them down.

"You named a few projects..." Aaviksoo is heard saying.

"Yes, OpenGovIntelligence for sure — that's the one I work on," McBride responds slowly. "And then there is the funding that you gave us, the DGStakeholder mapping — that's SS438. And then the DGCC — the Digital Governance Competence Center — which is BHV2."

Minister: Scandal casting shadow on our research excellence

Commenting while on a visit to Kazan, Russia, Minister of Education and Research Mailis Reps (Centre) said that the scandal surrounding the alleged fraudulent use of EU support funds at the Taltech institute adversely affects all of Estonia's research excellence, and that that Aaviksoo has been summoned to appear before the minister in order to determine the details of the incident involved.

Nonetheless, although the episode in question is regrettable, the problems that have emerged should not be solved with the establishment of additional checks and creation of more bureaucracy, she added.

"Estonia has in fact been very successful in its use of European research funds," Reps said. "Meanwhile, it is continuously accompanied by a lot of bureaucracy, as we have a number of different agencies that conduct followup audits and checks."

Some 20 percent of the EU support is spent on audits, she noted, adding that the ministry has been under pressure for years to reduce bureaucracy in research funding and place greater trust in universities.

Reps said that she does not believe that schemes such as the one that has allegedly been conducted at the RNI are widespread in Estonia, but noted that in light of the incident, relevant sanctions should be reviewed and possibly tightened.

The education minister refrained from commenting on claims made by Postimees that Aaviksoo concealed evidence presented to him in connected to the alleged fraud, saying that she did not have sufficient information on the matter.

"I would like to hear Aaviksoo's explanations and reasons, and to this end I have scheduled a meeting with him as soon as I return to Estonia," Reps said. "This is one of Estonia's top centers — the RNI is a renowned institute, and we have always cited it as an example."

An incident like this casts a shadow on all of Estonia's research excellence, she added.

Breaches in research funding use deplorable, says TÜ vice rector

Commenting on the scandal at Taltech, University of Tartu (TÜ) Vice Rector for Research Kristjan Vassil told Postimees that reporting unrelated expenses in projects financed by the European Commission as well as in other research projects is deplorable.

"If this turns out to be deliberate deceit, it's unacceptable," Vassil said.

He added, however, that no university can guarantee that the use of European funds will not end in a similar incident.

"If a situation like this emerges, the causes for it must be determined and corresponding measures implemented," the vice rector said, noting that at TÜ, the efficient and targeted use of EU funds is the responsibility of the project's leading researcher.

"On an institutional level, the institution where the project is carried out is held responsible," he continued, adding that if violations are committed, they must be resolved and expenses related to the errors compensated, noting that the parties involved also have to learn from their mistakes.

The use of research funding is checked at random in the university's internal audits, while projects financed by the EU are tracked with audits by Estonian implementing bodies or, in the case of projects within the European Commission's Horizon 2020 program, audits by the Commission, Vassil explained.

"European Commission auditors last audited the University of Tartu in 2018 as they reviewed Horizon projects," he said. "No major violations were detected. Some inconsistencies in the amount of a couple of euros were found, which were caused by certain details in the accounting requirements of the university and the European Commission."

Vassil noted that checking the targeted use of funds is administratively exceedingly expensive and onerous. "The question is, how big a control mechanism is it reasonable to maintain in order to identify a few errors?" he added.

Asked whether or not Aaviksoo should resign as rector of Taltech in the wake of the scandal, Vassil replied that he doesn't deem it necessary to comment on this matter.

RNI researchers defrauded Commission, says paper

According to the information of daily Postimees, researchers at the Ragnar Nurkse Department of Innovation and Governance at Tallinn University of Technology (Taltech) submitted false information to the European Commission, artificially inflating Taltech's working hours, and money was paid as wages to individuals who did not participate in the project.

The paper wrote on Thursday that in 2016, the European Commission allocated €267,500 from the Horizon 2020 program to the Ragnar Nurkse Department as Estonians had implemented their part of the international OpenGovIntelligence (OGI) project.

Detailed OGI reports at Postimees' disposal reveal that while all of the research done within the framework of the OGI project was done by just four researchers earning lower hourly pay, the workload was artificially inflated before the European Commission, and money was also paid to people who did not participate in the project.


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Editor: Aili Vahtla

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