In July 2023, a former secretary general of the North Macedonian government Dragi Rashkovski was found guilty of abuse of office and money laundering in relation to the purchase of overpriced software for the police between 2017 and 2021. He was sentenced to eight years in prison, while six others involved in the case received prison sentences ranging from three to five and a half years.

In this case, known in North Macedonia as the “Software” case, Rashkovski and his collaborators bought software intended to enhance traffic safety through four tenders issued by the General Secretariat of the Government of the Republic of North Macedonia, which Rashkovski headed at the time. The tenders included procurement of a biometric identification system, software to establish vehicle speed and for issuing fines, cameras for recognising license plates, and metal booths.

However, months after these purchases the system was still not in use. Investigative journalists revealed that the software had not been purchased by the responsible ministry, which in this case was the Ministry of Internal Affairs, but rather by the General Secretariat.

The call for procurement of software to determine the average speed of vehicles in traffic and for issuing fines was issued in November 2019. A contract was awarded to Invoka Group in February 2020 for €81,000. While Rashkovski justified the delays in the implementation of the software by citing the Covid-19 pandemic and the need for legislative changes before the system could be put into use, the Ministry of Internal Affairs stated that the purchased software was not part of their system and that the cameras within their system called “Safe City” were not compatible with the newly acquired software.

The company that developed the software Invoka Group was founded in June 2017, just two weeks before the Social Democratic Union of Macedonia (SDSM) came to power. Further, media investigations showed that since March 2018, Rashkovski had held a patent titled “System and devices for controlling the speed of vehicles in traffic, determining average speed and imposing fines” – an name identical to the procurement call for the software. This discovery prompted allegations that Rashkovski had effectively purchased his own patent.

On 18 March 2021, the Basic Public Prosecutor’s Office for Prosecution of Organised Crime and Corruption opened a pre-investigation procedure regarding the procurement of this speed-determining software following days of media coverage on the topic. The State Commission for Prevention of Corruption (SCPC) informed the public in June 2021 that it submitted information to the prosecutor’s office about four more public procurements conducted by the General Secretariat of the Government which were likely related to the software purchase, and which involved large sums of money.

On 16 April 2021, the prosecutor’s office opened an investigation against four individuals for alleged abuse of official position and authority. After several months of investigation, an indictment was filed in October 2021 against Rashkovski and six other people for abuse of official position and authority and money laundering. According to the indictment, between June 2017 and February 2021, Rashkovski failed to comply with his official duties while conducting four public procurements. In consultation with the subcontractor and participants in the procedure, he provided guidance on technical specifications for the public procurement procedure, carrying out communication in person rather than through the electronic procurement system.

As a result, the contractors benefited in the amount of over 17 million denars (approximately €285,000 in January 2021). Moreover, Rashkovski concluded assignment contracts with external contractors who failed to fulfil their obligations but were nevertheless paid and returned part of the money to Rashkovski, resulting in the damage to the budget of around 1.3 million denars. In addition, according to the indictment, Rashkovski put into circulation around 5.3 million denars which he knew were derived from criminal activities, with the goal of concealing their origin by making cash payments to his own bank accounts and those of family members, and paying off previously taken loans.

On 6 June 2023, Skopje Criminal Court sentenced Rashkovski to eight years in prison, seven for the abuse of official position and authority and one and a half for money laundering. Professor at the Faculty of Computer Science and Engineering Ivica Dimitrovski, who was at the time hired on assignment with the government, was sentenced to five years in prison; Igor Hristov, the owner of the company GBC Systems, was sentenced to five and a half years; while Daniel Stancev of Invoka Group received four years. External government contractors Irena Ivanovska, Igor Ivanovski and Maja Siljanovska each received three years. They were also obliged by the court to compensate for the damage done to the state budget.

Following the issuance of the verdict, Rashkovski was put under house arrest and was banned from communicating with Dimitrovski, Hristov and Stancev. After providing a guarantee of €192,000, he was released from house arrest in October 2023.

The prosecutor’s office appealed the decision, but in November 2023 the Appellate Court in Skopje rejected the appeal and upheld the decision of the Criminal Court to cancel the house arrest. The controversial amendments to the Criminal Code of September 2023 which eliminated certain offences, such as abuse of office in public procurement, were expected to have implications for this case.

On 11 July 2024, the Appellate Court ruled to order a retrial in the Software case, primarily due to amendments to the Criminal Code. The Appellate Court also ruled that the appeal of the Basic Public Prosecutor’s Office for Prosecution of Organised Crime and Corruption, which challenged the first-instance verdict, was irrelevant at that stage of the process.

This case demonstrates that allocation of public funds through public procurement contracts is vulnerable to corruption in North Macedonia as tenders can be tailored to favour politicians’ personal interests or companies affiliated with them. Recent amendments to the Criminal Code are another blow to anti-corruption efforts in North Macedonia as they have negative implications for high-level corruption cases, either due to risks that the statute of limitations will expire, or due to eliminating certain offences that could previously have been applied to high-level corruption in public contracting.