In the blog “TRANSPARENCY 12”: Between Health Minister and Industry on January 17th 2011, we pointed out:

“1.- A CEO of pharmacy and health products from the Health Ministry and president of the commission of medicines evaluation, had been CEO of the Ministry of Industry and, previously, vice-president of the Board of Directors of CDTI, organism that regulates the economic grant of funds to industries, including pharmaceutical industry. Her name is Regina Revilla is nowadays Director of External Relation of Merck Sharp & Dohme in Spain, and holds the position of president of the Spanish association of biotech companies (ASEBIO), substituting the Minister for Science and Innovation Cristina Garmendia, in turn founder of the Biotech company Genetrix in the year 2000. The Spanish Bio-companies Association is compounded by more than 130 members, most of them small businesses created from university and national research centers.

One year later, we can find publishes news that demonstrates that the lack of transparency (in this case the mix of public charges with private industrial activities) propitiates the appearance of irregular situations:

First new

“Spanish biotech sector multiplied by 600 its sales in the last decade. In the lasts ten years, the number of biotech companies in Spain has risen in a 359% and its sales have increased in more than 600%, reaching a total of 1429 million Euros in 2010. These are some of the data revealed by the report: “Importance of Biotechology in Spain” by the Foundation “Genoma España”.

Second new

“An internal audit from Consortium EES Bilbao shows that from the Basque public administration, more than 200000 Euros have been deviated to companies of Juan Tomás Hernani's family, General Secretary for Innovation of the Ministry of Science and Innovation when Cristina Garmendia was the Minister. The presumed embezzlement began in 2007, when Hernani was director of Foreign Affairs of the Consortium. In April 2009, Garmendia took him to the Ministry, where he remained until the recent change of government”

From this point we can expand, with concrete data, and relate them to our last year complaint.

1. The grant of public money to R&D, innovation and infrastructure for biotech companies was a total of 2128 million Euros between 2007 and 2010 (inclusive) meanwhile the turnover of 2010 was 1429 million Euro; and it is calculated that the total turnover of the biotech sector in the period 2007-2010 was about 3950 million Euro.

That is the Spanish biotechology industries receive a subsidy equal to 53.87% of its turnover. Remember that Cristina Garmendia founded the biotech company Genetrix in the year 2000 an was Minister for Sciences and Innovation for the years 2008, 2009, 2010 and 2011.

2. The firms Axion 2000 and Cufcuf are linked to Juan Tomás Hernani, general secretary of Innovation of the Ministry for Science and Innovation during 2009, 2010 and 2011 (period where Cristina Garmendia exercise as Minister). He has been identified as the author of diverting 470000 Euro of public money to private companies related to their family.

The company Axion 2000 is a real estate company dedicated to the “acquisition, possession, sale and leasing of houses, buildings, pavilions and fields”, according to the Vizcaya Mercantile Registry. It is owned by the Juan Tomás Hernani's laws. Axion 2000 used 470000 Euro from the ESS Bilbao Consortium to hire J confidant of uan Tomás Hernani itself through the association Eurobulegoa, which he headed, and Innobasque Foundation, which joined Eurobulegoa, entities with a presence of public institutions and private companies.

The company Cufcuf has as objective the “design, production, distribution, importation and marketing of articles, products and feed for cats and pets and all sorts of games and entertainment” and Juan Tomás Hernani is its counselor. In 2007 this company received from ESS Bilbao Consortium, 10325 Euro in respect of “workshop preparation consulting in Brussels to present the candidature of Bilbao-Hungary as host to the future ESS”.

An audit report sent to the Consortium, to which the newspaper elconfidencial.com has had access, is categorical in saying: “There have been no reason of technical or economic origin that justify the procurement of services to such firms, (…) that are assigned to these limited partnerships at the discretion of Mr. Urrutia Elejalde, preventing effectively the concurrence of offers. There are not objective reasons far away from the personal interest of people related with the Consortium. In fact, both companies have been set up by familiars of Mr. Hernani Burzaco, who appeared within the organizational activities of the Consortium when those activities were performed.

3. Juan Tomás Hernani is also the outgoing president of the CDTI (Center for Industrial Technological Development) dependent on the Ministry of Science. During his period as president, the confident of Cristina Garmendia, mediated for a company receives public funds from the same organization that he headed.

This way we can close the circle:

A) Juan Tomás Hernani, who has been referred as presumed author of embezzlement of public funds to familiar’s private companies; he was president of the CDTI, agency that regulates the grant of subsidies and the economical funds to industries, including pharmaceutical industries.

B) Juan Tomás Hernani was general secretary for Innovation, Ministry for Science and Innovation during 2009, 2010 and 2011 as a position of trust by the Minister Cristina Garmendia.

C) Cristina Garmendia was Minister for Science and Innovation from 2008 to 2010 and she was the founder of the company Genetrix in the year 2000 and president of the Spanish Association of Biotechnology (ASEBIO).

D) From 2007 to 2010, biotech companies received 2128 million Euro in subsidies while the turnover of biotechnology sector for the same period was about 3950 million Euro.

From Veterinaria Digital we wondered how long this situation will remain, as it mixes industry, public administration that provide financial funds to industry, public offices that found companies, research centers that set up businesses, ex public office from a sector, that preside industry associations regulating the same sector, directors of associations that go to public agencies that regulates the activity of companies whose association presided previously, public officials that manage consulting companies whose activity is regulated by the administrative department that they preside.

Cases such as those underlined with Margarita Arboix (Blog of Transparency 10 of September 28th 2010) and Juan Tomás Hernani create reasonable suspicion of the existence of opaque situations in the Spanish public administration related to the pharmaceutical and biotech sector.