Amber Gold: Former FinMin grilled by committee

The former Finance Minister, Jacek Rostowski testified on Wednesday before the Special Parliamentary Investigative Committee set up to examine the Amber Gold Affair.

Click here to read an analysis from Poland in English.

The Committee was set up to investigate the scandal of the collapse of a financial pyramid scheme which led to the loss of savings for thousands of people. The Committee is attempting to ascertain whether the response of public officials was adequate.

Jacek Rostowski was the Finance Minister the previous Civic Platform (PO) government at the time of the Amber Gold affair (2012).

Amber Gold was set up in 2009. It stated it was investing in gold and attracted investors by promising a very high rate of return. In the middle of 2011, it invested heavily in the low budget airline OLT Express. OLT Express went bankrupt in July 2012. Amber Gold went into liquidation in August 2012. 19,000 investors lost the PLN 850 mln they invested in the company.

The best form of defense is attack

The former Finance Minister chose to go on the offensive from the off. Before the beginning of the hearing, he spoke to journalists and accused the governing Law and Justice Party (PiS) of having set up the Committee to cover up their own financial scandals. His opening statement made no mention of the matter before the investigative committee.

"I just want to say that when my party was in office …we followed the constitution and the principle of the rule of law. I wish the same could be said of what we have today.”

The Chairperson of the Committee, Małgorzata Wassermann, was ready for the confrontation and answered Mr Rostowski straight away. She said that “for us, the most important is justice, that criminals are in jail and innocent people do not get sentenced for political reasons.”

Rostowski recalls Amber Gold

When the hearing turned to the subject at hand Mr Rostowski recalled that he only learned about the existence of Amber Gold via a report from Poland’s internal security agency (ABW). The report described Amber Gold as a financial pyramid and that the money invested by clients was being used to finance the OLT Express budget airline.

Mr Rostowski admitted that he was “very disturbed “ by the report because he feared that the collapse of an airline would have serious consequences for thousands of people. He informed the Prime Minister of the matter and instructed the Deputy Finance Minister Andrzej Parafianowicz to take action. He did not ask questions about the tax status of the company and admitted that he did not suspect that the scale of the financial pyramid was so great (PLN 850 million was invested in the company).

Clash over role of tax office

Mr Rostowski and Ms Wassermann clashed bitterly over the role of the tax office in the affair. Mr Rostowski attacked Ms Wassermann’s view that had the tax office taken action earlier the financial pyramid could have been stopped. He argued that someone as dishonest as the founder of Amber Gold would have simply employed highly skilled and equally dishonest accountants to provide cover for his actions. Ms Wassermann called his remarks “total nonsense”.

Your financial pyramid is bigger than mine

Mr Rostowski hit back arguing that on the present government’s watch there were much bigger financial pyramids emerging such as the debt collection and trading company ‘Getback’.

The bad-tempered exchanges continued between the two and Ms Wassermann commented that Mr Rostowski would not find the proceedings of the next parliamentary investigative committee amusing, it is being set up to investigate VAT fraud during the period of the last government. Mr Rostowski was not slow to respond, saying he looked forward “to exposing the lies of the governing party”.

Ms Wassermann, in turn, accused the former minister of accepting tawdry and shoddy standards of performance from his officials. She also attacked Mr Rostowski’s politics saying that “I came into politics so that people like you would leave it once and for all”.

Ministry of Finance accused of misleading Parliament

Małgorzata Wassermann claims that the Ministry of Finance misled Parliament about the extent of its knowledge of the Amber Gold scandal when in August 2012 it claimed that it only knew what Amber Gold was doing from the middle of April. She cited the evidence given by deputy minister Andrzej Parafianowicz who testified that he was informed by the chairman of the financial supervisory body KNF of a growing problem with Amber Gold, especially in relation to a lack of reaction from the public prosecutors.

source: PAP, Poland In English

Comment:

The attitude taken by the former minister was confrontational and the chairperson of the Committee responded in kind. It became another chapter in the bitter struggle between the present government and the Opposition over the record of the previous government.

The Amber Gold scandal hurt the government of the day in 2012 as the public did not, and cannot to this day understand, how a young man with previous convictions for fraud was able to navigate the complex world of setting up a financial pyramid and was met with total passivity on the part of the tax authorities, the public prosecutors and the judiciary.

The exchanges between Ms Wassermann and Mr Rostowski have not shed any new light on the scandal. The minister does not believe he did anything wrong. The public and the present government are not inclined to agree.

Return to the top of the page.