Underhandedly, however, the Fund was advised to buy out Poland’s debt on secondary markets, where the prices were about four times lower than the nominal debt value (Los and Zybertowicz 2000: 165). The Supervisory Council for FOZZ included people who used to hold top state offices. What is more, many of them collaborated with communist secret services or formerly worked for the MSW Intelligence themselves. The FOZZ executive director Grzegorz Zemek allegedly had connections with Military Intelligence and was involved in financial operations connected with the Polish sales of arms to countries such as Iraq and Libya (Bikont, 1991: 16). Under the 1989 law he had an absolute power over the Fund’s finances (Los and Zybertowicz 2000: 165). The funds were obtained from state subsidies, compulsory wage deductions, foreign trade revenues and currency reserves (Smolinska-Borecka 1994: 17).

The FOZZ international financial embezzlements were conducted by use of already existing or purposely set up companies of very short-lasting nature, in numerous countries12. It took the FOZZ managers only several months to transfer abroad millions of US dollars. They were processed via various banks and other financial institutions, which made the future tracing of these operations extremely difficult (Smolinska-Borecka 1994: 17). Only small portion of these funds was used to buy of Polish debt. The rest, as ordered by the FOZZ executive Director Grzegorz Zemek and Vice-director Janina Chim, was used for private business investments. This was done via a network of agents, who as intermediaries dealt with the transfer of money. The recipients – corporate or individual subjects – used FOZZ funds as their own property (Los and Zybertowicz 2000: 167).

Although these irregularities were discovered at the end of 1989, its liquidation happened only in January 1991. Since 1991 there were several attempts at investigation into the fraud committed by the FOZZ, recovery of the lost money, and bringing people responsible for this fraud to justice. There were, however, numerous obstacles that prevented finding the solution to this scandal. The most tragic ones were deaths of people involved in the investigations. Despite having the necessary evidence Polish criminal justice system failed to prosecute the culprits (Los and Zybertowicz 2000: 164-173). The process was reopened in 2001 and six people were charged of misappropriation of 357 mln Polish zlotys ($ 85 mln). Also, new facts related to the scandal were discovered.

The former chief of the Supreme Chamber of Control (NIK) Anatol Lawina testified that the Chamber purposely ignored this case for many years. According to him, FOZZ was a criminal organization from its very inception.In May 2003 he declared that FOZZ was also established as secret source of WSI financing. The executive director of FOZZ Grzegorz Zemek was in charge of WSI finances and his deputy Janina Chim was responsible for UOP finances. According to him NIK attempts at checking FOZZ activity must have been considered as a threat by WSI and UOP secret services as they initiated numerous plots to make NIK’s control difficult. The willingness to protect their source of financing was a driving force for their actions. Lawina also admitted that after Zemek’s arrest, he received a phone call with a bribe offer of $ 2 mln in return for Zemek’s release. Lawina also listed names of people and institutions that benefited from FOZZ dealings. They were according to Lawina: Zygmunt Solorz – the owner of the biggest television network in Poland Polsat, Dariusz Przywieczerski – the chief director of Universal, businessman Zbigniew Olawa, and Colonel Zenon Klamecki – the WSI officer (Ordynski 2003). Another controversial issue revealed by Lawina was the fact that WSI used the funds obtained from FOZZ scam to set up a political party Centre Agreement the founders of which were former Minister of Justice and Attorney General Lech Kaczynski and his brother Jaroslaw Kaczynski. It was later transformed into a new party PiS (Sulkowski 2003).

Up to this day the FOZZ case has not been solved. What really happened with the embezzled money remains a mystery. Only a few people were sentenced in the whole case – among the few others were Zemek and Chim. Presently in Poland, the institution responsible for dealing with Polish foreign debt is based in Warsaw the BGK – currently the only Polish national bank. According to the investigation conducted by Polish newspaper ‘Rzeczpospolita’ among BGK employees are people connected with the FOZZ affair. The only civil servant who was accused in the FOZZ case – Janusz Sawicki – is a part-time consultant of the Bank. Another BGK employee – Jerzy Dierzynski – was the former FOZZ liquidator, and in 1991 worked for a Luxemburg branch of Bank Handlowy International where FOZZ was taking credits. The clearing of these credits was one of the ways the state money was being stolen from the Fund. Dzierzynski, as the FOZZ liquidator was responsible for investigating this case (Nisztor 2009).

The Orlengate was one of the biggest corruption scandals in contemporary Poland. The people involved in the scandal included top executives of Polish and Russian Petrol industry, Polish politicians, and members of the secret services. According to Roman Giertych – the Vice-President of the PKN Orlen Inquiry Commission – the corruption scam began with the agreements Jan Kulczyk and Leszek Miller reached with Russia petrol magnates in Moscow in 2001. The plans involved restructuring of the petrol industry in Poland during the new ruling coalition. The scandal began in February 2002 with the arrest of Andrzej Modrzejewski, the Chief Executive of PKN Orlen, by the UOP. In 2002 the Sejm called the PKN Orlen Inquiry Commission to investigate the scandal (Giertych 2004). The investigations of the Commission were very large in scope and numerous defraudations were brought to light. Because of the space limitation of this project I am unable to discuss them extensively therefore I will focus on discussing the evidence that shows the involvement of the secret services.

Mission Impossible? The Sabina Story in Polish

As part of their responsibilities the WSI was gathering intelligence in the energy industry. According to the report prepared under the leadership of Antoni Macierewicz, the WSI officers dealing with the Orlengate scandal were in possession of important information about the crimes that were being committed. The WSI headquarters, however, restrained the operational activities of secret services and did not pass the obtained information to the appropriate state bodies (Macierewicz 2007: 7). The WSI chief, Colonel Marek Dukaczewski in his letter to then Prime Minister Marek Belka denied any connections of WSI with people working in the petrol industry. This statement was fraudulent as from October 2002 till 2005 the collaborator of WSI Andrzej Macenowicz – pseudonym ‘PARYS’ – was the Vice-President of Orlen (Macierewicz 2007: 125).

Dukaczewski was perfectly aware of that, and Macenowicz himself frequently referred to their acquaintance. Macenowicz collaborated with WSI providing all the necessary information about the meetings of Orlen’s board of directors and details of contracts with Russia regarding the diversification of Orlen’s source of petrol. Macenowicz not only provided WSI with information but also was prepared to undertake any actions suggested by WSI officers, regardless of his obligations to the Orlen’s shareholders as well as representing the Polish Government. He informed WSI that many UOP officers worked undercover at Orlen. ‘PARYS’ was a valuable source of intelligence for WSI. He informed WSI that: ‘in the near future increased Russian interest in the Orlen company should be expected, as after their failure to take over the Gdansk refinery, they will be trying to access Polish petrol industry via their shares in PKN Orlen’ (Macierewicz 2007: 126-127).

From 2003 the Russian plans regarding Polish energy industry were known by WSI. WSI received information about the report prepared for the owner of a Russian company Q – former KGB chief colonel F. J. Bondarenko. The report, prepared by a company based in Pozan and owned by a Ukrainian, contained an economic analysis of Gdansk Refinery prior to its privatisation as well as different aspects of its planned take-over by former USSR countries. The obtained evidence clearly showed Russia’s plans to cause the bankruptcy of the Polish energy industry and its subsequent seizure by Russians. Completed documentation of these plans was passed on to the chief commander of Polish Land Forces colonel Jerzy Skwarc, and the chief of WSI Board Krzysztof Klosinski. It took one year for this information to reach the authorities in Warsaw. Klosinski did not report this to Dukaczewski properly – in writing – but only verbally. They were supposed to decide together whether to inform the Polish Sejm Commission for the Special Services and the Prime Minister. The Commission was informed, but not as a part of WSI chief’s regular report, but two weeks later in a separate document. Neither did WSI pass this information to the Orlen Commission Inquiry. Also, further information on the case was blocked by Klosinski, who ordered WSI operational functionaries to stop any investigations in this matter (Macierewicz 2007: 128-129).

The PKN Orlen case is one of the most serious violations on behalf of WSI. Not only did WSI know about the illegal activities and tolerated their continuation but they were in the mafia themselves. As the report for Bondarenko shows, WSI protected the crimes committed by Russian secret services and mafia, the purpose of which was destruction and subsequent takeover of the Polish energy industry. The evidence on WSI activities prior to the year 2000 is largely incomplete as they were either destroyed or hidden. The evidence for these scandals continued to be destroyed up till 30 June 2006 even though it was known that the WSI will be dissolved (Macierewicz 2007: 131).

3.4.3 The Consequences of the FOZZ and the Orlengate In the previous chapter I have established that the role of secret services in a democratic country should be to protect the state and citizens’ interests. The lawful conduct of the privatisation processes should have been safeguarded by them as part of their responsibilities. Any detected discrepancies or criminal dealings should have been immediately reported to higher institutions and tackled in the most efficient manner. However, although the role of secret services was to secure lawful processes of privatisation of the economy, they not only failed to do that but were themselves breaking the law. Instead of protecting the state property from being looted, secret services provided necessary protection for this process to be successful in order to have a share in profits from these dishonourable dealings. The FOZZ scam was particularly harmful for the emerging democracy, as already indebted Poland needed to improve its financial situation to successfully consolidate its independence. Further financial abuses, such as the Orlen scam, contributed to the worsening of the already unstable state of Polish economy and jeopardized Poland’s chances for the consolidation of the democratic rule (...)

Conclusion. Critique of the Role of Secret Services in Poland

One of the influential indicators of democratisation in the World is the survey of the Freedom House, which since 1990 codes Poland as a free country and since 2001 a consolidated democracy (Freedom in the World 2010, Pisula 2010). As I discussed in the first chapter, consolidation takes place when all politically important groups follow ‘democratic rules of the game’ (Gunther et al 1995: 7, Linz et al 1995: 78). In the light of my research I would like to point out that measures of democratisation such as Freedom House survey, do not specifically address the conduct and accountability of secret services. My findings suggest that the role of secret services is an important factor affecting and ultimately limiting the process of democratisation.

Therefore in order to supplement other research and contribute to more comprehensive account of the status of democratisation I took the role of secret services under careful scrutiny. In my dissertation I have attempted to provide evidence of the integral role of secret services in shaping contemporary Poland. I have found that secret services have played a negative role since the very establishment of democracy in Poland. Firstly, they manipulated their reform process disabling the creation of a new institutions and mechanisms of democratic control and accountability.

As a consequence, the secret services rather than supporting the newly established democracy, provided help to the former elites who re-established their influence under new regime. The lack of control enabled secret services agents to pursue their private rather than national interests. During the process of privatisation of Polish economy, instead of securing and safeguarding the state property from unlawfully conducted privatisations, secret services provided protection for such dealings in order to have a share in profits.

The most serious allegations against secret services conduct, however, are related to the provision of national security. Not only did they fail to fulfil their function but, as I have shown in chapter IV, they were engaged in activities which can themselves be labelled as terrorism. The lack of accountability to Polish Government during the CIA operations shows that Polish secret services are a ‘state within a state’. The implications of secret services misconduct for Polish democracy are severe.

The secret services’ continuous involvement in illegal activities and lack of control and accountability mechanisms undermines Poles belief in the strength of democracy in Poland. Furthermore, the level of trust in the actions and measures undertaken by Polish government continues to be low. Although, the secret services did not succeed in a complete disintegration of Polish society, they have successfully maintained citizens’ fears that they may still not be a free society.

The lessons that can be learnt from the way secret services affected the process of democratisation in Poland can be invaluable for other autocratic states which embark on the process of democratisation. Firstly, proper reform of security apparatus should be conducted immediately after the democratic transition. As I have discussed in chapter II if the ‘zero option’ is adopted (all former agents are dismissed from services), there may be a shortage of experienced people who replace the old intelligence and counter-intelligence personnel. On the other hand, if the former agents are re-employed there may be a risk that they may act against the interests of the new regime. However, if a more efficient vetting process is conducted, the ‘middle’ option has more chances to prove successful.

If the vetting commissions feel threatened by former secret services agents, as in the Polish case, they should have an opportunity to ask for help from independent international oversight organisations, such as the UN, at the very beginning of the process. Furthermore, with the support of independent bodies, powerful control, oversight and accountability mechanisms must be created at early stages of transition. Although the Soviet Union collapsed 21 years ago and Polish intelligence apparatus underwent several reforms, Polish secret services still do not conform to the rules of an institution serving the interests of a democratic country. Therefore further measures to reform them must be undertaken.

First and foremost, powerful control and accountability mechanisms for security services need to be created. This involves introduction of proper policies by the Polish Government. If the Government continues to be incapable of holding secret services accountable, then international organisations promoting democracy and protecting human rights should get involved. Finally, both national and international codes of conduct for secret services should be established in order to clearly specify limits to secret services legitimate and illegitimate actions. As I have mentioned in the introduction, the role of secret services is a relatively new field of research in Poland. There are numerous areas relating to the role of secret services that may be undertaken for future research. I have shown in chapter III that the process of privatisation of Polish economy is still on-going.

The most recent and largest privatisation scheme – the ENEA SA – has not been completed yet and the full account of the role of secret services in this process is still to be investigated. Similarly, when published, the findings of the Polish Government Commission established to investigate the existence of secret CIA prisons in Poland, should be taken under careful scrutiny. The most recent and sad event in the Polish history, which also can be undertaken for research related to secret services, is the crash of the Polish Presidential plane in Russia on 10 April 2010 in which 96 members of political elites including Polish President Lech Kaczynski and his wife Maria, lost their lives. The Polish press has published various conspiracy theories implying that Polish and Russian secret services could be responsible for the tragedy. For now, these are only speculations and whether they will ever be proven is unknown.

Sabina Swierczek

However, what is already a fact is that again the Polish secret services failed to fulfil their role of providing national security, in this case, for the most important people in the country. In the light of this tragedy the reform and improvement of the efficiency of Polish secret services should be an urgent issue. Equally importantly, the attitudes of Polish society towards secret services should have been given due attention, as the priority of a state which wishes to call itself a democracy should be the rights and well-being of its citizens.

Sabina ¦wierczek
fragmenty pracy magisterskiej obronionej na University of Manchester
School of Social Sciences
promotor Dr Stuart Shields

Mission Impossible? The Sabina Story in Polish