Rajoy picks Indra for 21D ballot count

Madrid argues “needs concerning national defence” to award the contract hastily and without a public tender

After Madrid triggered Article 155 of the Spanish Constitution, many aspects of Catalan society and politics are finding themselves in unusual circumstances. The snap elections on December 21 are no exception. This newspaper has learnt that the ballot tally has been contracted out to Indra without allowing its competitors a chance to bid for the contract.

The Spanish state is Indra’s largest single shareholder, with a 18.7 per cent stake in the firm. That same state has now resorted to what is known as an emergency process, an exception made in the law of contracts for the public sector in the event of “having to take immediate action due to a catastrophe or a situation of grave danger or a need that concerns national defence”. Spain’s Official Gazette had already published that all the steps to do with the Catalan elections this month would be taken through this method, reserved for emergencies.

Spanish PM Mariano Rajoy formally called the Catalan elections on October 27. This unexpected announcement meant that there were less than two months left before the ballot. Under normal circumstances, the administration that organises the election would have published the contract on a public website, together with the economic and technical conditions of the tender. Then any interested parties would have submitted a bid and the administration’s technical staff would have selected a winner.

Since Article 155 was triggered, Spain’s Ministry of the Interior has taken over the powers to organise an election in Catalonia from the Catalan ministries of Economy and Administration. Specifically, on November 3 Juan Antonio Puigserver —currently the technical secretary of Spanish minister Juan Ignacio Zoido— was put in charge of coordinating preparations for the ballot in Catalonia. Sources in Spain’s Ministry of the Interior claim that the ballot count has been contracted out by the Catalan government rather than Madrid (even though the latter has imposed its direct rule on Catalonia via Article 155). Catalan government sources explained that, since time was short, they picked Indra because it was the only company that had any experience of vote tallying in a Catalan election (in September 2015), which would mean less “risk” and would avoid “incidents” during the count.

As a general rule, tenders for an election vote count are published about six months ahead of the vote so that bids can be adequately prepared and technical staff may set the conditions, but it could be completed in a shorter time span. At any rate, in the context of an emergency invoked by Madrid, there is no obligation to process any formal records or start a public tender; rather, the government may pick the contractor they wish. In this case, Indra got the jackpot. As a matter of fact, this emergency procedure may be applied to any purchase by the administration, provided it can justify that it is being done as a result of a catastrophe or in the interest of national defence. Otherwise the decision might be appealed.

We will not know the amount of the contract until it is made public. Still, sources in the sector have pointed out that the budget for the previous Catalan elections amounted to about €1.5M. Even if the contract has been assigned in an unprecedented way, the same sources insist that it is very hard to rig a vote with today’s data management tools and the process should have no bearing at all on the election result. In fact, this time the results will be published not just by municipality, but also by voting station “to provide further assurances in the vote tally”.

Indra, which did not wish to comment when approached by this newspaper, has enjoyed a virtual monopoly over the management of polls in Spain’s democracy. It has only ever lost one contract, in the 2015 Spanish elections, when Catalan firm Scytl won the tender in a joint venture with Tecnocom.

Besides having the Spanish state as its main shareholder via Spain’s SEPI (a public company with industrial interests), Indra’s other main shareholders are Corporación Financera Alba, a firm that belongs to Grup March (with a 10,5% stake), and Fidelity Management Research (9,4%), a US investment fund.

A hasty call

Still, this is not the first time that Madrid skips a public tender process due to a lack of time. In the latest general elections held on June 26 2016, Mariano Rajoy’s government chose to use an urgent procedure to contract out the ballot count. Unlike the process used now, back then a small number of firms, including Indra, Scytl and Ibermática, were invited to submit a bid. There was no public tender either and the conditions were not disclosed until after the contract had been awarded.

Indra won the contract for an amount 40 per cent lower than initially stated in the conditions. The final amount was just under €9.5m. However, no other firms have been contacted for the upcoming Catalan elections and Indra has been awarded the contract directly.

Key facts

1. How has the contract for the 21D ballot count been awarded?

The company that will tally the votes on December 21 has been chosen without a public tender and Madrid has simply picked Indra for the job. Even though other snap elections had been called before with similar time constraints, this time Madrid claims that it is “in the nation’s interest” to rush the contract through the system. In 2016 the Spanish authorities used an urgent procedure to contract out the ballot count (but not with an emergency proviso) and up to three different companies were individually invited to submit a bid.

In contrast, this time no other firms have been approached, just Indra. The contract has not been made public on any official webpage and the usual set of technical and economic conditions has not been disclosed.

2. How does the emergency procedure work?

It is reserved for situations where the State must resolve a tender urgently. Spain’s law of public contracts establishes that this procedure is justified in the event of “a catastrophe”, a situation that might pose a grave danger, or due to “national security” needs.

3. Does this unusual procedure hint at a potentially rigged ballot count?

It doesn’t. All our sources have ruled out any potential irregularities. Besides, Indra will only carry out the provisional count. The definitive tally will be conducted later on. At any rate, the Catalan authorities have explained that the next day Indra will publish the results by polling place and not just by municipality, as usual, in order to provide further assurances.

4. What is Indra’s connection with the Spanish state?

It is Indra’s main shareholder, with an 18.7 stake in the company. This has raised some eyebrows: to what extent can the state contract out a job to a company in which it is the main shareholder? Is there a conflict of interests? In practice, Indra has had a monopoly over the management of polls in Spain.

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