Lahovnik To Quit As Minister And MP (His Schwartz Just Ain’t Big Enough)

Lahovnik and Golobič while they were still on the same team (source)

Yesterday the government communication office released the infamous letter minister of economy Matej Lahovnik sent to Prime Minister Borut Pahor in which he detailed grievances against his former party boss and ministerial colleague Gregor Golobič. Lahovnik’s adios to Zares was not really a surprise, but the timing left a lot of people, yours truly included, a bit baffled. Pengovsky speculated on reasons why Lahovnik took the Fatboy Slim approach (right here, right now) and now it turns out that he thought his Schwartz was bigger than anyone else’s and he turned out to be dead wrong. As a result, he announced his resignation earlier today and even said that he will not re-take his position as MP.

The letter was widely expected to be a bomb-shell. It turned out to be a dud. Basically, Lahovnik complained that companies owned by or connected with Ultra (a company in which Gregor Golobič owns a 7% stake) applied for public tenders and such. Lahovnik’s main grievance – at least according to the letter – was the very fact that a company in which a sitting minister owns a stake runs for public funds. But the devil is – as always – in the details. Lahovnik goes on to write that in no instance (at least no instance which he detailed) did any of the companies win any tenders, but – and this is where he seems genuinely pissed – in one case the company files a lawsuit against his ministry for kicking it out of the tender.

Let’s be brutal. The fact that a company, where a sitting minister (or any other elected and/or public official) owns a stake,  no matter how small, runs for a public tender, is not entirely cricket. The world would be a much nicer place if these things didn’t happen. However, the Ultra issue was over and done with. At least on relation Golobič-> Zares-> Coalition-> Government (the opposition is still trying to keep the whole affair simmering on a low temperature).  If Lahovnik had a problem with that, he should have quit months ago.

From a legal point of view, however, there is nothing wrong with Ultra (or any other similar company) running for public funds. The law stipulates that a company where a public official and/or his immediate keen hold more than 20% stake cannot take part in public tenders. And if it does it anyway, it simply gets thrown out. Pengovsky should know, it happened once with The Firm™. No ifs, not buts, one simply gets a nice letter saying “Sorry, you can’t take part due to anti-corruption legislation”.

But Golobič’s share in Ultra is not above 20%. It is not even, say, 19.5%, which would imply that he is following the letter if not the spirit of the law. No, he holds a 7% share, which he apparently earned by working for the company and that’s it. There are scores of public officials which own various stakes in various companies. After all, we are running a sort of capitalism in Slovenia. But Lahovnik goes on to say, that he finds it hard to believe that Golobič would not use his influence to put Ultra at an unfair advantage vis-a-vis other companies running for tenders. That may be, but in all honesty, you don’t need to have a sitting minister among your stakeholders to better your business positions. All you need to do is know the right people.

However, as noted above, Ultra did not win any of the tenders Lahovnik takes issue with. So, not only was no law broken by Ultra running for tenders, even if pressure was brought to bear, the system worked and threw Ultra’s application out on merit. The fact that the company then filed a suit against Lahovnik’s ministry over it only reiterates the fact that the system worked, because seeking legal protection against what an applicant deems an unfair decision is perfectly normal. It is done by scores of companies practically on a weekly basis.

So, on the face of it it looks as if Lahovnik doesn’t really understand how the system works. Which is kind of hard to believe for a minister who runs a pretty important ministry and (among other things) gave thins country a electronic one-stop-shop system (e-VEM) for setting up your own company.

So, waddafuck is going on? It looks more and more that there was a clash between Lahovnik and Golobič. Either there was some sort of a leadership challenge (less likely, as Lahovnik reportedly refused taking over Zares) or – more likely – Lahovnik felt Golobič was pissing in his pool and wanted to put an end to it. Only he played his cards wrong and put an end to his political life (at least temporarily).

Namely. One area Lahovnik specifies in the letter is the energy sector. There’s a relatively huge debate going on right now in Slovenia whether to invest in Bloc 6 of Šoštanj Coal Power Plant (so called TEŠ6) or to start building the second reactor in Krško Nuclear Power Plant (known as NEK). Pengovsky says “both” and there seems to be a general consensus that Slovenia will need both investments in the mid-term, but the real question is which comes first. Lahovnik was very much in favour of TEŠ6, as it will replace the ageing blocs 3,4 and 5 and produce much less carbon dioxide to boot. However, since Šoštanj is part of Lahovnik’s electoral unit (constituency, if you will), this can also be seen as “bringing the bacon home“, to use an Americanism. Which would all be fine and dandy, had it not been for the fact that some dubious contracts were being signed for TEŠ6 even before the project started for real. I’m not saying that Lahovnik had a hand in this (he probably didn’t) and regardless of his feud with Golobič, energy still is Zares’ turf right now and if there’s a screw-up, Zares as a whole will take the blame anyway. But it seems probable that he felt he was being side-tracked and he took it personally.

The more pengovsky looks at this the more it seems as if Lahovnik only tried to do as much damage as possible and brought up the Ultra affair for no reason other than to hurt Golobič. But he took it too far and forced PM Pahor to choose between a seemingly competent minister and a whole coalition party. Pahor obviously knew where his priorities are and Lahovnik achieved nothing but maybe yet another dent in the government’s already ridiculously low ratings. As a result he really had no other option but to quit his post and PM Pahor undoubtedly told him that his credit just ran out.

This goes for his MP status as well. Upon quitting as minister he could have re-taken his MP seat as he was elected to the parliament first and made minister second. Thus he would have ousted Alojz Posedel of Zares, chipped off one sure vote for the coalition and would even help form a new parliamentary group “independent MPs”, as parliamentary Rules and Procedures specify three MPs are needed for establishing a specific group and there are already two independent MPs (Franci Žnidaršič and Vili Rezman who quit DeSUS months ago), all of which would probably weaken the coalition grip on parliamentary majority, if not immediately, definitely some time in the future.

However, Lahovnik was probably told in no unclear terms that he would be branded a political leper had he returned to the parliament and started stirring shit, so he is apparently returning to the Faculty of Economics from whence he came – and will possibly be awarded membership in one or two low-key supervisory boards somewhere out there. He might have thought he was doing a good thing, but in politics, just as in real life, the road to hell is paved with good intentions. Such is the nature of the beast.

Oh, and just a technicality. Some Slovene media erroneously report that Lahovnik’s function will cease tomorrow. Not entirely true. While he has already tendered his resignation, he will remain in office in a care-taker capacity until a new minister is appointed.