Czech Republic Corruption
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Czech Republic perceived as being the third most corrupt country in the EU | Radio Prague International
There are three possible explanations for elite corruption in the Czech Republic.
Czech Republic Perceived As The Third Most Corrupt EU Country
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The current ministers in the Czech Republic.have shown little compunction at exploiting every opportunity for personal gain.
As it has become more entrenched and powerful, this Russian# m a f i a - i n t e l l i g e n c e network has exerted a corrupting influence
on Czech institutions.
"The response of most Czechs to continued corruption has been a retreat into passivity and continued acceptance of corruption as a norm.."
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Czech Republic Corruption Index Below On The www.inltv.co.uk webpage
Children for Sale: Croatia’s Corrupted Institutions Have Blessed Illegal Adoptions
"... Remember : All they do is to steal money from people that they control in the Czech Republic.
They can not do nothing to people they can't control i.e. outside the Czech Republic. ".... Irish Eddie Paul McGuinness
Irish Eddie Paul McGuinness
Josef Doucha, a former police investigator, was Slouf’s top choice for president of the police force. In 1996, as a UOOZ investigator, Doucha was criticized for cultivating contacts that “exceeded the framework of police work” with the Russian and Ukrainian mafias..."
Most importantly, it was later revealed that Vaclav Jakubik, the official who announced the conclusion of the investigation, is connected, through a chain of business partners and companies, to one of the most powerful and dangerous bosses of the Russian mafia, Sergei Mikhailov..."
Czech Republic perceived as being the third most corrupt country in the EU | Radio Prague International
Other newcomers to the EU have made progress in fighting corruption so what is the Czech Republic doing wrong - or rather -what has it failed to do? We called Michal Sticka of the Czech branch of Transparency International to find out.
"One of the most efficient tools to combat corruption in the political sphere would be an effective conflict-of-interests law. Political parties should be more transparent in financing their activities. When we look at bureaucracy, it should be said that the Czech Republic is still lacking a good civil service law that would govern the civil service sector and if we look at the judiciary, the main problem remains in insolvencies - we need to reform insolvency proceedings."
Now, we've said that this study is based on perception - perception of corruption in different countries - can you tell me how exactly it was conducted and how accurate it is, given the fact that it is based on perception alone?
"It should be said that there is no accurate tool with which to measure the level of corruption objectively. If you look at police or judicial statistics you will only get a notion of how the police and judiciary of a given country are able to prosecute crimes such as bribery. Therefore we need indirect tools and the CPI /Corruption Perception Index/ is one of the indirect tools which helps to measure the degree of corruption in a given country. It is based on data from various surveys conducted by renowned international organizations."
Where do these organizations get their own data from? Are people in the street asked if they think there is corruption in the Czech Republic or if they themselves have attempted to bribe anyone?
"The CPI is draws on data from organizations who survey academics, entrepreneurs and risk analysts, among others. Therefore there should be some elimination of the so called street bias. The street usually follows big scandals, it is usually very sensitive to media coverage of certain political scandals and the above mentioned target groups should be less prone to following the public outcry so to speak."
o what extent do you think reports such as this could damage the Czech Republic in the eyes of potential investors, for instance?
"The CPI score for the Czech Republic hasn't changed much since the beginning of this century so investors may have got used to the level of corruption in this country -given the flow of investments to the Czech Republic - on the other hand recent studies have shown that an increase of one point in the CPI index brings about a 15 percent rise in direct foreign investment to the country in question. So it is definitely better to make progress in curbing corruption - it really pays off."
SAIS Review vol. XXII no. 2 (Summer–Fall 2002)
Jeffrey Jordan recently received his M.A. in International Relations from Johns Hopkins University-SAIS. This essay earned him first prize in the annual SAIS Review student essay contest. An earlier version of this essay appeared in Radio Free Europe’s online journal, East European Perspectives (Prague), 20 February/6 March 2002, <www.rferl.org>.
Patronage and Corruption in the Czech Republic
by Jeffrey M. Jordan
Corruption was endemic to the communist system of the Soviet bloc prior to its collapse in 1989, and Czechoslovakia was no exception. In the
postcommunist Czech Republic, corruption remains a deeply rooted problem.
A corrupt elite political and business class has emerged to exploit opportunities for illicit profit that are inherent in the process of postcommunist transition. Corruption has inflicted damage upon the Czech economy, prolonged the process of transition, and imposed costs on Czech taxpayers. It has also damaged democracy and for some, delegitimized the political system. There are three potential explanations for the continuation of elite corruption in the Czech Republic.
Corruption was endemic to the communist system of the Soviet bloc prior to its collapse in 1989, and Czechoslovakia was no exception. This corruption generally arose from shortages inherent to the communist system, and usually took the form of bribery. Such behavior became generally accepted since, in a dysfunctional and illegitimate system, the rule of law was subordinate to the pursuit of personal well-being. This idea was encapsulated in the communist-era Czech axiom: “If you do not steal from the state, you rob your family.”
Corruption remains a deeply rooted malignancy in the postcommunist Czech Republic, and the problem has become increasingly serious, particularly in the past four years, under the current Social Democrat-led government. Transparency International, an anticorruption watchdog, underlined the seriousness of Czech corruption in its Corruption PerceptionsIndex1997,which ranked the Czechs twenty-seventhout of fifty-two countries.1In 2001, the Czech Republic dropped toforty-seventh out of ninety-one countries surveyed. More to the point, in 1997, the Czechs were tied with the Belgians; now they are tied with the Bulgarians. 2
cronies to exploit lingering market distortions for their own benefit.
This occurred on an enormous scale, enriching a few and leaving Czech taxpayers with the bill.
From the lowest level of functionaries to the highest level of official governance, a considerable part of the Czech bureaucracy is infected with corruption. At the top levels, the stakes are extremely high and opportunities abound for the entrepreneurial politician to benefit from the privatization of remaining state-controlled industries, the awarding of pubic contracts, or from simply turning a blind eye toward the misdeeds of other profiteers.
Sadly, those few who have remained above the fray, such as President Vaclav Havel, have been discounted as astute moralists, but ineffectual politicians.
Rather, “it exists on a national scale as a sophisticated enterprise that is parallel with public service.”3
There are three possible explanations for elite corruption in the Czech Republic.
Czech Republic risk report
Updated: Thursday, November 5, 2020
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Corruption can impede business in a number of sectors in the Czech Republic; corruption risks in the public procurement sector are perceived to be especially high, but many other sectors, including the public administration, carry moderate corruption risks. Patronage and nepotism are considered especially problematic in the country. The Criminal Code criminalizes attempted corruption, extortion, active and passive bribery, bribery of foreign officials and money laundering. The Czech Republic prohibits facilitation payments and any gift given with the intent to illegally influence decision-making may be considered a bribe. Criminal liability for legal entities covers domestic and foreign corporate entities registered in the Czech Republic. Nonetheless, the government does not implement the legal anti-corruption framework effectively. Although the majority of citizens do not encounter petty corruption in their daily lives, bribes or gifts are occasionally needed to speed up public administration processes.
Patronage and Corruption in the Czech Republic by Jerrfrey M. Jordan
cronies to exploit lingering market distortions for their own benefit.
This occurred on an enormous scale, enriching a few and leaving Czech taxpayers with the bill.
From the lowest level of functionaries to the highest level of official governance, a considerable part of the Czech bureaucracy is infected with corruption. At the top levels, the stakes are extremely high and opportunities abound for the entrepreneurial politician to benefit from the privatization of remaining state-controlled industries, the awarding of pubic contracts, or from simply turning a blind eye toward the misdeeds of other profiteers.
Sadly, those few who have remained above the fray, such as President Vaclav Havel, have been discounted as astute moralists, but ineffectual politicians.
Rather, “it exists on a national scale as a sophisticated enterprise that is parallel with public service.”3
There are three possible explanations for elite corruption in the Czech Republic.
Judicial system Moderate risk
There is a moderate risk of corruption when dealing with the judiciary. Bribes and irregular payments in return for favorable judicial decisions are common (GCR 2015-2016). Corruption within the judiciary is said to be "very sophisticated", making it hard to detect (FitW 2016). The judiciary is constitutionally independent and in practice, the court operates independently, but political influence in high profile cases has occasionally been a problem (NiT 2017; BTI 2016). There are concerns about career advancement of judges happening in a non-transparent manner (GRECO 2016). Approximately two out of five companies rate the independence of judges as fairly bad or very bad (JS 2017). Companies are broadly dissatisfied with the efficiency of the legal framework in relation to settling disputes and challenging regulations (GCR 2017-2018). Companies should be aware that decisions may vary from court to court (ICS 2017). A new Civil Code was introduced alongside the existing Penal Code without a procedural law explaining how the two laws should be applied, leading to problems in the application of the law (ICS 2017). Court proceedings move slowly and many judges lack familiarity with commercial and intellectual property cases (ICS 2017).
Enforcing a contract is significantly more costly and slightly more time-consuming in the Czech Republic compared to the OECD high-income average (DB 2018). The Czech Republic is a state party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and it is also a member of the International Centre for the Settlement of Investment Disputes (ICSID).
Police Moderate risk
There is a moderate risk of corruption when dealing with the Czech police. Businesses have sufficient trust in the reliability of the police services (GCR 2017-2018). Nevertheless, more than half of surveyed businesses pay for security (ES 2013). More than half of citizens perceive the police as corrupt (European Commission, Feb. 2014). Less than one in ten report to have paid a bribe to traffic officers (GCB 2016). Corruption among the security forces is a problem; in 2015, the police investigated 174 cases of corruption among its own forces (HRR 2016).
Public services High risk
The Czech public administration carries a moderate to high risk of corruption. Bribes and irregular payments when dealing with public services sometimes occur (GCR 2015-2016); one in ten companies report expecting to give gifts to "get things done" (ES 2013). More than two-thirds of companies perceive nepotism and patronage to be a problem (European Commission, Feb. 2014), with a significant majority believing that bribery and the use of connections are the easiest way to obtain a public service (European Commission, Feb. 2014). Almost two in every ten surveyed households perceive local public officials to be corrupt and less than one in ten report to have paid a bribe to obtain official documents (GCB 2016). Inefficient government bureaucracy is cited as the second most problematic factor for doing business in the Czech Republic (GCR 2017-2018). Businesses also cite inconsistent competition policies among the deterrents to investment (ICS 2017).
Starting a business in the Czech Republic takes almost twice as many steps compared to the OECD high-income average (DB 2018). Similarly, obtaining a construction permit also takes nearly twice as many steps and a significantly longer time compared to the average among OECD high-income countries (DB 2018).
Land administration Low risk
The land and construction sector poses a moderate to low corruption risk for businesses operating in the Czech Republic. Private property rights are generally well-defined and respected by the government (BTI 2016). Companies report moderate confidence in the government's ability to protect property rights (GCR 2017-2018). Only a small percentage of companies expect to give gifts in order to obtain a construction permit (ES 2013). Companies should note that the process of tracing the history of property and land acquisition can be complex and time-consuming (ICS 2017). Expropriation is only possible when done for public purposes and in a non-discriminatory manner in compliance with international law (ICS 2017). The new Civil Code has clarified the treatment of property rights and what constitutes 'public purposes' in expropriation cases (BTI 2016).
Registering a property takes slightly longer than the OECD high-income average (DB 2018).
Tax administration Moderate risk
The tax administration poses a moderate risk of corruption. Businesses report that irregular payments and bribes when making tax payments are uncommon (GCR 2015-2016); virtually no companies indicate they give gifts when making tax payments (ES 2013). As revealed by statistics from the Supreme Public Prosecutor, tax fraud is among the most occurring financial crimes (ICS 2017). A third of businesses indicate that they perceive tax fraud to be common (EU Barometer 2014). A number of initiatives have led to increased capabilities in the tax administration for detecting tax fraud, including the ability to detect foreign bribery cases (OECD 2017 Phase 4 Report).
Companies spend significantly more time on filing taxes each year than in other OECD high-income countries (DB 2018).
Customs administration Low risk
There is a moderate to low risk of corruption when dealing with the Czech customs administration. Businesses report that irregular payments and bribes are uncommon in customs procedures (GETR 2016). Fewer than one in ten businesses report expecting to give gifts when obtaining an import license (ES 2013). Businesses are satisfied with the efficiency and time-predictability of the clearance process (GETR 2016). Burdensome import procedures and tariffs are cited as among the most problematic factors for importing (GETR 2016).
The average time and cost required to deal with exports and imports are far below OECD high-income averages (DB 2018).
Public procurement Very high risk
There is a high risk of corruption in the Czech Republic's public procurement sector. Over two-thirds of businesses consider corruption to be widespread in national and local public procurement (European Commission 2014). The energy, rail, forestry and postal services are particularly susceptible to undue influence and conflicts of interest (EUACR 2014). Irregular payments and bribes in the process of awarding public contracts and licenses are perceived to be very common (GCR 2015-2016). Companies report high levels of favoritism in decisions of procurement officials and frequent diversion of public funds (GCR 2017-2018). Among the main corruption risks are customized criteria for certain bidders, closing a deal on a contract before the specifications for a call for tender have been identified, and abuse of emergency grounds to justify the use of non-competitive procedures (European Commission, Feb. 2014). In 2014, a fifth of contracts were granted without a call for tender and another fifth were awarded in tenders with only a single bidder (OECD 2016). According to a recent analysis carried out by the NGO zIndex, sponsors of political parties received contracts worth USD 19.5 billion, and companies owned by political donors acquired 40% to 60% more public contracts than companies owned by non-donors (zIndex 2015). Companies are generally able to compete on the same terms as state-owned enterprises (SOEs), but there are frequent accusations that large domestic firms (both private firms and SOEs) are able to use their political clout to gain unfair advantages (ICS 2017). Public Procurement is primarily regulated by Act. No. 134/2016. Tenders are required for acquiring services and supplies exceeding CZK 2 million and construction work exceeding CZK 6 million (ICS 2017).
In one corruption case, an aide to former Prime Minister Mirek Topolanek had been charged for demanding a multi-million dollar bribe from a foreign company in return for a government defense procurement contract (Reuters, Feb. 2016). After a lengthy trial, including a conviction which was overturned, but ultimately reinstated by the country's Supreme Court, the aide was handed a five-year jail sentence (Radio Praha, May. 2017).
Legislation
The Criminal Code criminalizes attempted corruption, extortion, active and passive bribery, bribery of foreign officials and money laundering. Money laundering is also regulated under Act No. 253/2008 Coll. There is no exception for facilitation payments under Czech law (CMS 2016). There is no specific threshold for hospitality expenses, but any gift given with the intent to illegally influence decision-making can be considered a bribe (GCN 2016). For officials, penalties for bribery and abuse of power can be up to 12 years in prison, forfeiture of property, monetary penalties, and a number of other measures (CMS 2016). Anti-corruption laws are not always effectively implemented, and government officials often engage in corruption with impunity (HRR 2016; ICS 2017). The OECD has noted that there is an absence of prosecutions for foreign bribery, despite the high risk of bribery in sectors such as export of machinery and defense materials (OECD 2017 Phase 4 Report). Private sector bribery is criminalized (CMS 2016). Companies and high management can be held liable for corrupt acts by their employees, provided the company benefited from the act (CMS 2016). Penalties for companies include fines, forfeiture of property, disqualification from participating in public tenders and receiving subsidies (CMS 2016). Companies can be exonerated from criminal liability if they can prove they "have made every effort that may be reasonably expected to prevent the commission of a criminal offense" (Lexology, Feb. 2017). In February 2017, a company was exonerated from charges of illegal conduct in public procurement because it has implemented an ethics code (Lexology, Feb. 2017). Legislators, members of the cabinet, and public officials are required by the Conflict of Interests Act 2006 to annually declare their assets. Asset information can be viewed by sending a written request, but the provided information often lacks sufficient detail. A conflict-of-interest law, passed in 2017, limits the business activities of government ministers; its effects are unclear as of the time of review (NiT 2017). The Law on Civil Service prohibits political interference in the public administration and operations of state-owned enterprises (ICS 2017). The Contract Register Act requires all contracts related to the disbursement of public resources and property, as well as some private law contracts when certain public bodies are a party to a contract exceeding CZK 50,000 in value (Lexology, Jul. 2016). There is no comprehensive whistleblower protection legislation and whistleblower protection is inadequate (ICS 2017; Lexology, Jan. 2017).
The Czech Republic has signed and ratified the United Nations Convention against Corruption (UNCAC) as well as the OECD Anti-Bribery Convention.
Civil society
Freedoms of speech and of the press are guaranteed by the Constitution of the Czech Republic and are respected by the government (HRR 2016). Politicians sometimes use hostile rhetoric against media outlets (FotP 2016). There are concerns about ownership concentration among a small group of wealthy businessmen (FotP 2016). A conflict-of-interest law passed in 2017 includes restrictions on media ownership among members of the government (NiT 2017). Freedom of information is guaranteed under the law (FotP 2016). NGOs have reported difficulties and reluctance among officials to release information relating to the salaries of public officials, public tenders, and other uses of public finances (HRR 2016). The media environment is considered 'free' (FotP 2017).
Freedoms of assembly and of association are protected by the Constitution and are also respected in practice (HRR 2016). Civil society is well developed and varied with many forms of civil society organizations (BTI 2016). National, regional and local authorities reportedly cooperate with civil society actors (BTI 2016). The Czech non-governmental sector suffers from a lack of funding and is largely dependent on public funding (NiT 2017). Implementation of programs that would draw on EU structural funds has been delayed (NiT 2017). With the support of national businesses and international donors, more than 20 NGOs launched an anti-corruption campaign named the "Reconstruction of the State" (BTI 2016)
Sources
- World Bank: Doing Business 2018.
- World Economic Forum: Global Competitiveness Report 2017-2018.
- US Department of State: Investment Climate Statement 2017.
- European Commission: EU Justice Scoreboard 2017.
- Freedom House: Nations in Transit 2017.
- Freedom House: Freedom of the Press 2017.
- OECD: Phase 4 Report on Implementation of the OECD Anti-Bribery Convention 2017.
- Radio Praha: "Dalík Again Convicted for Soliciting Bribe over Military Deal", 25 July 2017.
- Lexology: "Czech Republic: Compliance Programme Saves First Company from Criminal Prosecution", 17 February 2017.
- Lexology: "Czech Republic: Whistleblowing vs. Employee Loyalty", 17 January 2017.
- Freedom House: Freedom of the Press 2016.
- Freedom House: Freedom in the World 2016.
- CMS: Guide to Anti-Bribery and Corruption Laws 2016.
- US Department of State: Human Rights Practices Report 2016.
- Bertelsmann Foundation: Transformation Index 2016.
- Transparency International: Global Corruption Barometer 2016.
- GRECO: Fourth Evaluation Round - Czech Republic 2016.
- OECD: Economic Survey Czech Republic 2016.
- World Economic Forum: Global Enabling Trade Report 2016.
- Global Compliance News: Anti-Corruption in Czech Republic 2016.
- Lexology: "New Anti-Corruption Legislation in the Czech Republic", 28 July 2016.
- Reuters: "Former Czech PM's Right Hand Sentenced to 5 Years for Graft in Army Deal", 2 February 2016.
- World Economic Forum: Global Competitiveness Report 2015-2016.
- Freedom House: Nations in Transit 2015.
- zIndex: Public Procurement Ratings 2015.
- European Commission: Flash Eurobarometer - Business Attitudes Towards Corruption in the EU, February 2014.
- European Commission: Special Eurobarometer 397- 2014.
- European Commission: The Anti-Corruption Report- Czech Republic 2014.
- World Bank Group: Enterprise Surveys 2013.
- Open Democracy: 'Reconstructing the Czech State', 27 March 2013.
- Czech State', 27 March 2013.
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Children for Sale: Croatia’s Corrupted Institutions Have Blessed Illegal Adoptions
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It was headline news all over the Czech Republic when the police announced it had broken up an organised crime group that had been seeking bribes in return for contracts from Prague’s public transport operator, DPP. At its centre was the city’s deputy mayor, Petr Hlubucek, of the coalition Mayors and Independents party (STAN).
Although its heady mix of high politics, mafia, drugs and public property sounded like a toxic cocktail from the post-Communist 1990s, the Dosimeter scandal, as it became known, actually blew up in June last year. Unfortunately, the government’s response has been similarly unevolved, argues Ondrej Kopecny, who heads the local office of the anti-corruption advocacy group Transparency International.
The subsequent probe revealed that Michal Redl, a mafia-linked middle man implicated in the scandal, enjoyed significant influence throughout the centre-right coalition party.
“The patterns remain the same,” Ondrej Kopecny tells BIRN during an interview in TI’s distinctly unglamorous office above a post office in the gritty Palmovka neighbourhood of Prague. “When it comes to public companies handing out billions in contracts, there are business and political figures that expect their share.”
What was most disappointing, he adds, was the government’s reaction, which saw the five coalition parties swiftly circle the wagons.
When the ties to Redl came to light, Stanislav Polcak, a leading Stan MEP, voluntarily suspended his party membership (he then quietly reactivated it in March), while Petr Gazdik, a leading light in STAN, resigned his post as education minister though not his seat in parliament, while declaring: “I do not feel guilty in any way.”
Noting that Gazdik was “neither accused nor investigated”, Czech Prime Minister Petr Fiala labelled the resignation “an honest solution”. Alongside the rest of the coalition, he rallied to defend Vit Rakusan, the deputy prime minister and interior minister who, as STAN leader, had failed to keep the mob-linked Redl from gaining so much influence in the party.
“There was some change compared with past governments, but if we talk about political integrity, they didn’t raise the bar by much,” laments Kopecny.
Missing links
There has been some progress towards improving transparency over the past 18 months, Kopecny concedes, but as the Dosimeter scandal illustrates, not nearly enough.
June 16, 2022 illustrated this ambiguity. On the one hand, the government pushed through a bill tightening conflict-of-interest rules; on the other, GRECO, the Council of Europe’s anti-corruption unit, issued a damning report.
The tightened conflict of interest regulations, which ANO and the far-right Freedom and Democracy party (SPD) sought to block, will ban all politicians from owning media outlets starting from next year. Companies owned by members of the government will also be prevented from seeking state subsidies.
The previous rules, introduced in 2017 and branded “lex Babis”, blocked politicians and government members from “controlling” such assets. This saw the billionaire put his Agrofert conglomerate into trusts headed by his wife and his lawyer.
The EU, for one, claimed the prime minister still retained influence over these assets during his time in office, and so froze millions of euros in funds to Czechia due to this conflict of interest. The recently amended legislation will, starting in 2024, apply limits to “beneficial ownership”.
“It’s good that they tightened the legislation,” Kopecny admits, though asserts that it’s a crucial weakness in Czechia’s conflict-of-interest regime that companies owned by politicians can still take part in public procurement.
The GRECO report, meanwhile, bemoans the fact that just two of 14 recommendations it made in 2021 on preventing corruption among lawmakers, judges and prosecutors have been fully implemented.
It complains that, among other missing components, there’s still no ethical code for MPs regarding gifts or benefits, or any law governing lobbying. Kopecny pinpoints to the latter as a glaring hole. To maintain public trust, he insists, politicians must be transparent about whom they’re meeting.
Shoring up the independence of prosecutors is another missing piece of the rule-of-law jigsaw, despite pre-election promises. At present, the government of the day can hire or fire the chief state prosecutor at will, without criteria or reference to institutions such as the Constitutional Court.
Meanwhile, it took a fine of 54 million koruna (2.15 million euros) levied by the EU for missing a 2021 deadline to push through legislation for the protection of whistleblowers, which will now take effect this summer.
But Kopecny criticises the quality of the new law, which he calls a “missed opportunity”. Most crucially, he points out, the possibility to file anonymous reports is not included in the bill, “which makes the law much less effective, especially when dealing with bigger cases.”
And that’s no oversight, he suspects: “Across the political spectrum, politicians are afraid of transparency. They see it as potentially dangerous to themselves, and they also worry that it could be used by their competitors.”
Lack of enthusiasm
It’s Fiala and Co’s obvious lack of enthusiasm that is perhaps most worrying for those hoping to see an improvement in Czechia’s rule of law.
Without genuine political will to increase transparency, the government’s anti-corruption pledges are little more than a repetition of the political marketing on which the system has been running for decades.
Many worried that could prove to be the case when the ODS – which saw its support plummet when its last premier, Petr Necas, left office in 2013 amid a welter of accusations both political and personal in nature – returned to office.
“There’s very little self-reflection on the part of the ODS,” Kopecny says. “They look at the fall of Necas – which came about because the prime minister’s lover used military intelligence to spy on his wife – and still seem to feel it was all a plot.”
He points again at the tepid response to the Dosimeter scandal. Or the ongoing fuss around Pavel Blazek, the old-school ODS justice minister and his role in a public housing scandal in Brno.
That issue is testing the unity of the coalition. The Pirate Party, a junior coalition partner, is demanding Blazek resign over suspicions he has been using his office to interfere with the investigation – actions that the progressive party says “threaten public trust in the rule of law and the fulfilment of the government’s stated policy goals”.
However, Fiala and his party have dismissed the accusations outright. The prime minister insists that Blazek has explained all – although only to him – and in his role is “strengthening respect” for the law.
But many remain unconvinced, and worry that there’s little chance that the “anti-Babis coalition” will deliver the kind of systemic approach required to uproot Czechia’s longstanding corruption networks.
“I think [improvement] will take some time, simply because this system has been entrenched in the Czech Republic for almost 30 years now,” political analyst Jiri Pehe told Czech Radio in May, following Czechia’s ranking as second only to Russia on a global “Crony Capitalism Index”.
“Some of the billionaires who are now playing significant economic and political roles in the Czech Republic have sort of been legitimised by the fact that nothing has been done against them and so it will be an uphill battle,” he continued. “I don’t think that much will be done given the current composition of the government in which the lead role is played by the [ODS], which actually presided over all of this in the 1990s.”
Czech Republic perceived as being the third most corrupt country in the EU
A report by the international watchdog Transparency International suggests that the Czech Republic has a serious problem fighting corruption. With a corruption index of 4.3 out of an ideal 10, the Czech Republic is perceived as the third most corrupt country of the European Union.
Other newcomers to the EU have made progress in fighting corruption so what is the Czech Republic doing wrong - or rather -what has it failed to do? We called Michal Sticka of the Czech branch of Transparency International to find out.
"One of the most efficient tools to combat corruption in the political sphere would be an effective conflict-of-interests law. Political parties should be more transparent in financing their activities. When we look at bureaucracy, it should be said that the Czech Republic is still lacking a good civil service law that would govern the civil service sector and if we look at the judiciary, the main problem remains in insolvencies - we need to reform insolvency proceedings."
Now, we've said that this study is based on perception - perception of corruption in different countries - can you tell me how exactly it was conducted and how accurate it is, given the fact that it is based on perception alone?
"It should be said that there is no accurate tool with which to measure the level of corruption objectively. If you look at police or judicial statistics you will only get a notion of how the police and judiciary of a given country are able to prosecute crimes such as bribery. Therefore we need indirect tools and the CPI /Corruption Perception Index/ is one of the indirect tools which helps to measure the degree of corruption in a given country. It is based on data from various surveys conducted by renowned international organizations."
"The CPI is draws on data from organizations who survey academics, entrepreneurs and risk analysts, among others. Therefore there should be some elimination of the so called street bias. The street usually follows big scandals, it is usually very sensitive to media coverage of certain political scandals and the above mentioned target groups should be less prone to following the public outcry so to speak."
To what extent do you think reports such as this could damage the Czech Republic in the eyes of potential investors, for instance?
"The CPI score for the Czech Republic hasn't changed much since the beginning of this century so investors may have got used to the level of corruption in this country -given the flow of investments to the Czech Republic - on the other hand recent studies have shown that an increase of one point in the CPI index brings about a 15 percent rise in direct foreign investment to the country in question. So it is definitely better to make progress in curbing corruption - it really pays off."
establish their members or collaborators in bodies of state power and political parties. 68
One economic sphere that mafia elements appear to have penetrated is the $3.6 billion in debt owed by the Russian government to the Czech government. Approximately $2.5 billion of this
amount was retired in January of this year in a highly irregular transaction involving a very suspicious intermediary called Falkon Capital. Observers, including an array of journalists covering the deal in the two countries, as well as the French and Swiss secret services, suspect that the transaction may have been part of an melaborate money laundering scheme. The transaction itself was highly complex and shrouded in secrecy on all sides. The net result was that the Czech government received about twenty billion crowns (roughly $540 million) from Falkon and cancelled $2.5 billion of the debt owed by Russia. Although this represents a seem- ingly paltry 20 percent collection rate on the debt, it nonetheless represents 3 percent of the government’s election year budget.
Since the agreements among the Czechs, the Russians, and Falkon have remained classified, experts and journalists must deduce the details of the transaction based on leaked information and inter views with Russian and Czech officials. However, there are still many questions as to what actually transpired.
It is not known where Falkon, a tiny firm that was recently recapitalized last November with about $70,000, obtained the $540 million with which it purchased the debt from the Czech govern-
ment. But what is known is equally strange—that this small, un- known firm received approximately $700 million dollars from the Russian government in what observers say was “record time.” The money that Falkon received in exchange for its rights to the Russian debt took a circuitous route, the actual point of origin remaining unknown. All that is known is that the funds flowed through the Russian state-owned electricity monopoly, United Energy Systems (UES), including about sixty-five of its subsidiaries, and then through the French branch of a Moscow bank called AKB Eurofinance, to Deutsche Bank, and then to Falkon. The funds that flowed from UES to Falkon seem to be from one of two possible sources: the Russian government transferred $1.35 billion UES, and UES also borrowed $700 million from Russian Sberbank.
Of this $2 billion flow to UES, $700 million found its way to Falkon through the path just described. In addition, UES will compensate Falkon over the next several years with an additional $30 million in electricity on very favorable terms, which Falkon then plans to export.
There are many problems with this. Obviously, a tremendous amount of money appears to be missing. While a portion of the funds that originally went to UES were used to settle UES tax li-
abilities to the government, intercompany loans among its subsidiaries, and to make a loan to Gazprom, there is at least $635 million of the funds transferred from the Russian government to UES, supposedly as part of the debt transaction, that did not reach Falkon. On the Czech side, the only information to transpire is that Falkon received $700 million and that the government re-
ceived about $540 million, leaving $160 million available for unspecified ends.
There are also many unanswered questions about how Falkon became involved in these transactions. 69
not investigated, the apparent financing agent for the transaction—AKB Eurofinance.
By the time the transaction was executed, the Czech government was well aware of the risks involved, but it did not consider the risks sufficient to justify calling off the deal. Apparently the
Russian contention that they “know Falkon well” was enough. Perhaps the amount of money involved for the state budget, for party coffers, or possibly for personal use was enough to justify this lapse in judgment. The Russian newspaper Vedomosti quoted a U.S. representative of UES, David Hurn, as saying “Falkon supposedly financed several programs of the Czech government from this money.”72
nance Minister Ladislav Zelinka, the chief negotiator of the deal for the Czech side, is a bit more Machiavellian:
You know, I am not interested in Russian rackets and schemes.
That is their business. For me, it is essential that here we have twenty billion and that the department of financial analyses which reports to me states this money is not dirty. 73
When challenged by opposition parties in parliament to give an explanation of the transaction, Prime Minister Zeman offers this classic bit of obfuscation:
Let some of us stop behaving like a resentful and indolent blockhead, who, after he himself is unsuccessful, criticizes the working results of others. I wish people would stop acting like
those who announce to the world that they are going to save itand then do not even manage to save themselves. To put it briefly, I would hope that no one behaves in the manner of—in truth—
the [opposition] Quad Coalition. 74
Zeman thus registers the Falkon transaction as a diplomatic coup, even though it has further muddied the name of his country abroad. Prague essentially helped to defraud the Paris club, to
which Russia is obligated to repay $130 billion before obligations to other creditors. However, these international agreements stipulate that payments are to be made on a government-to-government level. By engaging Falkon, the Czechs were able to break in line ahead of their Western allies. And Zeman’s coup was not a good deal by comparable standards—while the Czechs recovered 20 per-cent of the cancelled debt, the Slovaks recovered over one-third of their debt this year, and the Germans, French, and Italians do not give discounts on Russian debt at all.
Of course, in addition to skirting international agreements and double-crossing allies, the Falkon transaction may have a more sinister side. Respekt journalist Jaroslav Spurny clearly outlines the criminal possibilities in which the Czech government may now be complicit:
Falkon simply enabled the Russians to release money from their budget as if it was earmarked for the amortization of debts, while keeping it somewhere for uncontrollable usage, corruption,
propaganda, and other necessities in the struggle for power. In return, the company was given the attractive opportunity to launder tens of billions of crowns that it may account for as
received ‘installments’ from Russia, no matter what kind of money it actually is. 75
The Falkon transaction, which Zeman heralded as a huge success for the Czech Republic, is only the latest in a series of con-
spiracy theories that have hounded the Zeman government.
It has not been proven that money laundering occurred, though there is also not enough evidence to rule it out, and the governments involved do not seem to be interested in proving the conspiracy theorists wrong. Still less is known about the possible involvement of people like Slouf, Doucha, and Jakubik in this scheme. Time will hopefully tell. At present, how-
ever, interested observers, such as the United States, consider the presence of such individuals at high posts in the government bureaucracy, with their potentially dangerous contacts with Russian mafia and intelligence organizations, to be just cause for concern.
According to Karel Kovanda, the Czech ambassador to NATO, Washington has become apprehensive about the Czechs as a security risk within NATO. He adds that it is possible that the U.S.
Senate will not ratify Czech accession to the ATOMAL treaty, which provides NATO members with classified information about U.S. and British nuclear weapons, for fear that some of these secrets may fall into the wrong hands. 76
Looking Ahead
“Tva vlada, lide, se k tobe navratila.” “People, your government has returned to you.” Vaclav Havel borrowed Tomas Masaryk’s words, delivered in 1918 upon the founding of the first Czechoslovak Republic, for his 1990 New Year’s Day speech. In 1990, as in 1918, the statement was an honest pledge to the Czechoslovak people as well as a call to the responsibility that their new freedom would entail. However, the response of most Czechs to continued corruption has been a retreat into passivity and continued acceptance of corruption as a norm
The ruling power bloc has done its utmost to take the gov- ernment back from the people. In its Nations In Transit report, Freedom House cites a steady decline in democratization, press independence, and rule of law, and an increase in corruption in recent years. Yet the Czech people have remained startlingly acquiescent
The response of most Czechs to continued corruption has been a retreat into passivity and continued acceptance of corruption as a norm to such negative developments. It is possible that disgust has led to apathy. It is also possible that they are not fully aware of the costs that they must individually bear as a result of widespread corruption. 78
zen-based initiatives have been too few and far between, and the current government has been suspicious of nongovernmental organizations. The Czechs are still coming to terms with the burden of responsibility that accompanies their new freedom, and the cost that each member of society must bear to defend it. Until Czech society at large is willing to bear this burden, conditions will remain ripe for continued corruption. 79
In addition to pressure from below, institutional reform must accompany any serious battle against corruption. The public bureaucracy, the court system, and, as discussed earlier, local
law enforcement continue to be subject to political pressure. Corrupt or corruptible individuals must be removed from service, and the institutions themselves detached from the possibility of political influence.
and ODS, are already working to preserve the current bloc. Hopes previously rested on the ability of the Quad Coalition parties to garner the support needed to gain a spot in the government. 80
However, following a financial scandal involving one of the coalition members, the Civic Democratic Alliance (ODA), the coalition disbanded. Two of the former Quad Coalition parties, the Christian Democratic Union (KDU-CSL) and the Freedom Union (US- DEU), have decided to remain in coalition with one another.
Candidatures that would have gone to the ODA will now be offered to independent candidates. 81
Finally, the Czechs need continual outside “encouragement” to clean up their act. Organs like NATO and the EU are well positioned to pressure the government into adopting and abiding by the standards and values embraced by the West. This influence is all the more imperative given the efforts of external criminal networks to further corrupt the system. The EU is particularly important since most Czechs recognize, whether they will admit it or not, that their future lies with full integration into Europe. It should be made clear that to become part of Europe, and to fully participate in its institutions, the Czechs must not only adopt a body of laws, regulations, and standards, but they must put them into practice. In the most recent EU annual report on the Czech Republic, overt criticism of the state of Czech corruption was conspicuously absent. This was to be the last report before accession decisions were made, so it was politically imperative to cast the Czech Republic in a positive light. 83 At the same time, however, Brussels must know that admitting a still dysfunctional Czech Republic into the European club is not good for anybody.
If both sides are serious about enlargement, the challenge posed by endemic corruption must be faced head-on
1 Transparency International, “Corruption Perception Index 1997,” <www.gwdg.de/~uwvw/rank-97.htm
political imperative to avoid selling “the family silver.” Finally, the majority of Organs like NATO and the EU are well positioned to pressure the government into adopting and abiding by the standards and values embraced by the West.
7 Fiscal budget deficits tripled between 1997 and 2000, to 46.1 billion crowns (3.7 percent of GDP). Unemployment increased to 9.3 percent in 1999 from 3.6 percent in 1996 due to flagging or bankrupt enterprises. While these trends are not exclusively the result of the privatization methods chosen by the government, the direct costs of bankruptcies and ongoing subsidies, as well as the arrested development of competitive industry, have certainly contributed to the current economic woes. “Czech Republic, EIU Country Profile 2001,” The Economist Intelligence Unit, 30, 50-51.
Empire, Czechoslovakia was one of the largest arms producers in the world. By the late 1980s, the industry employed well over ninety thousand people and accounted for about half of the country’s foreign trade. During the Cold War, Czechoslovakia was a principal supplier of arms to areas of Cold War conflict, including Iraq, Ethiopia, Syria, Sudan, Libya, Algeria, India, and Vietnam. The Czechs were also a favored supplier to numerous terrorist organizations and they developed a bad reputation worldwide for indiscriminate sales of explosives
and machine guns to such networks. The Czech plastic explosive, Semtex, was employed in the Lockerbie bombing in 1988. “Czech Arms Deals Burgeoning Even After Transition,” Respekt, 18 June 2001.
#
2001 <http://www.transparency.org/
“Prague Seeks to Ease US Concern at N-Tech for Iran,” CTK Czech News Agency, 23 February 2000.
22 Minister of Industry and Trade, Miroslav Gregr, even proposed that the United States reimburse the Czechs for lost trade resulting from RFE/RL broadcasts to Iran and Iraq. Adela Knapova, Respekt, 1 February 2000.
23 The Czechs also have legitimate security concerns about the presence of RFE/RL in the center of Prague. In 1998, a BIS investigation uncovered a plan by Iraq to bomb the building, but the Iraqi agent in charge of the operation defected to Britain. The BIS only informed the United States after the fact. Jindrich Sidlo, Respekt, 15 February 2000.
The Slouf-Jedlicka connection has aroused sufficient suspicion in the U.S. government to justify personal warnings by former U.S. Ambassador John Shattuck to both Prime Minister Zeman and Foreign Minister Kavan, and by Secretary of State Albright to President Havel. Jedlicka’s later involvement in organizing Zeman’s planned fall 2000 trip to the United States is thought to have been the reason for the trip’s cancellation by the U.S. government, though this is staunchly denied by Zeman. Pavla Novakova, “The Secret Iraqi Mission Ended in Failure,” Respekt, 16 November 2000.
/www.law.nyu.edu/eecr/
33 In such circumstances, an entrepreneur could actually repurchase his own loan at a steep discount, regain title to the collateral, and have the Czech taxpayers cover the difference.
34 Jan Machacek, “State leaping into privacy and grabbing power while the media sleep,” Prague Business Journal, 1 October 2001.
35 The figure is based on the GDP for 2000, estimated at 1,968 billion crowns. Assets in the CKA amount to approximately 45,000 crowns per capita. See “Czech Republic, EIU Country Profile 2001,” 52. (Note: 1 USD equals 37.6 Czech crowns; The Economist, 1 December 2001). See also Hana Lesenarova, “Gregr’s investment council puts finishing touch on an old plan,” Prague Business Journal,
8 October 2001.
36 These appointments represent only a few examples of a trend toward invoking an “emergency” procurement clause and bypassing the tender process altogether. The Office of Protection of Economic Competition, which oversees procurement law, has yet to seriously investigate any of these instances. Also, even when the tender process is employed, there have been numerous recent examples of opacity and suspected corruption in selecting winning bids.
37 Strangely, the winner, TDC (formerly Tele Danmark), was chosen without even negotiating a price. TDC purchased Radiokomunikace for 6.8 billion crowns and is now in the process of breaking the firm up and selling it off in parts—the mobile phone division alone is expected to fetch fifteen to twenty billion crowns.
38 Jan Machacek, “Too much power concentrated in too few hands a bad thing for the public,” Prague Business Journal, 4 February 2002.
39 Marek Prazak and Jiri Nadoba, “Further Fouls in the Tender for the CEZ,” Mlada fronta Dnes, 2 November 2001.
40 Machacek, “Privatization unplugged.”
41 A peculiar friendship has blossomed between Klaus’s ODS and Vladimir Zelezny’s TV Nova, by far the most popular TV station in the country. In 1997, Klaus threatened Nova with a 100 million-crown lawsuit following an inaccurate report concerning his alleged ownership of a Swiss villa. Zelezny and Klaus settled the matter out of court, and the two have since embarked on a very profitable friendship. Jan Machacek, “The odious and the ominous in Klaus’ meeting with Zelezny,” Prague Business Journal, 26 November 2001.
42 Lauder provided the funding for Nova’s start-up in 1994, but Zelezny was able to force him out and retain the broadcast license through a technicality in Czech law in 1999. Last year, a Prague court legitimized this, recognizing Nova’s commercial and legal status. Zelezny is also the subject of numerous other lawsuits pending in Czech courts, some relating to tax evasion charges worth about 18 million crowns. See ibid. and Marius Dragomir, “Court ruling on CME bad PR for CR,” Prague Business Journal, 24 September 2001.50 SAIS Review Summer–F ALL 2002
43 While people like Klaus, Motlik, and Zelezny might plausibly argue that the investigative weekly, Respekt, serves a similar function as a mouthpiece for
President Havel, it is doubtful that Respekt’s owner, Karel Schwarzenberg, has a similar vested interest in Havel’s political success.
44 Jan Machacek, “The odious and the ominous in Klaus’ meeting with Zelezny,” Prague Business Journal, 26 November 2001.
45 Mrnka had also headed CT during a crisis in 2000, when employees of the station protested and started their own broadcasts in response to the appointment of new management they believed was biased in favor of the ODS.
See “Head of Czech TV political programmes axed following Speaker’s criticism,” CTK Czech News Agency, 11 June 2001.
46 Marius Dragomir, “Balvin elected to head Czech Television; member says council was pressured,” Prague Business Journal, 5 November 2001.
47 Evidence of Kavan’s willful cooperation remains inconclusive, even though a book purporting to expose Kavan’s StB file sparked a heated controversy. “UK Publicist Holding Czech Minister’s StB File Since 1991,” CTK Czech News Agency, 23 May 2000.
48 “Sula: Bolshevization of Politics Legalising Communist Past,” CTK Czech News Agency, 10 April 2000.
49 At the time of Zeman’s planned visit, Jedlicka was apparently trying to arrange the sale of U.S. F-16 fighters to the Czech Republic. While this may account for his involvement in Zeman’s trip, it offered no solace to the U.S. government to have an alleged gangster with established connections to Iraq arranging the sale of U.S. military technology. Jaroslav Spurny and Jindrich Sidlo, “Miroslav Slouf, Our Man in NATO,” Lidove noviny, 19 September 2000.
50 The journalists who published the leaked story later faced criminal prosecution for failing to reveal their source, but they were subsequently pardoned by President Havel. “Prime Minister Zeman Will Dismiss Advisors Sima and Sarapatka,” Pravo, 25 August 2000.
51 Before he was dismissed, Srba had been in charge of the “Clean Hands” anticorruption program at the Foreign Ministry. Jiri Kubik and Sabina Slonkova, “Czech Official in Charge of ‘Clean Hands’ Involved in Blackmail, Corruption,” Mlada fronta Dnes, 26 June 2001.
52 Jaroslav Spurny, “The President Is Pulling on the Emergency Brake; Purges in Elite Police Squad Underway,” Lidove noviny, 14 March 2000.
53 Following the BIS investigation, Sirek was fired by the new Deputy Police President, Vaclav Jakubik. See ibid.
54 Machacek’s trial, along with that of another officer accused with him, is currently in progress. Numerous irregularities surrounded the investigation and Machacek was indicted in spite of a solid alibi—he was abroad on holiday when the alleged incident occurred. “Former Czech Anti-Mafia Unit Head on Trial— Framed by Mafia?” Hospodarske noviny, 5 September 2001.
55 Ondrej Neumann, “Ruml Knew About Contacts with Mafia,” Lidove noviny, 25 October 1996.
56 “Former Czech Anti-Mafia Unit Head on Trial—Framed by Mafia?” Hospodarske noviny, 5 September 2001.
57 Although the President can task the intelligence services, ultimate responsibility and authority over them lies with the government.
58 Jiri Kominek, “Unsure Future for Czech Intelligence Services,” Jane’s Intelligence Review 12, no. 5 (1 May 2000): 16-17.
59 “Czech Premier loses dispute over work of elite police units,” Lidove noviny, 19 July 2000.
60 One former business partner is longtime master StB spy, Miroslav Cemus.
61 Mikhailov was also present at U Holubu during Machacek’s famous raid, and he received a ten-year prohibition on entering the Czech Republic. Jindrich Sidlo and Jakub Unger, “Policeman’s Problem: Mafia? Police Corps’ Number Two Has Problems Passing Security Clearance,” Mlada fronta Dnes, 12 October 2001.
62 Jaroslav Spurny, “Security clearance finished, forget it,” Respekt, 25 March 2002.
63 When questioned about Jedlicka’s involvement in the proposed US trip, and about the alarm expressed by U.S. officials, Zeman offhandedly dismissed the whole issue and denied any such conversation with (then) U.S. Ambassador John# Shattuck. He claimed that their conversation had instead focused on trade relations between the two countries and jibbed the press with the comment that “the export of cheeses is far less attractive to the media than some Mafioso.”
See, “Zeman has denied Respekt’s assertion that he is not going to the US because of a Mafioso,” Pravo, 19 September 2000.
64 “Havel Suspects Slouf of Trying to Destabilize Police,” Mlada fronta Dnes, 28 March 2000.
65 Kominek, “Unsure Future for Czech Intelligence Services.”
66 Walter Mayr, “Brothers, to the Sun, to Karlovy Vary,” Hamburg Der Spiegel, 24 April 2000.
67 “Czech secret service accuses Russia of attempts to penetrate ministries,” CTK Czech News Agency, 24 October 2001.
68 “Mafias operating in Czech Republic adopt more classy approach,” Mlada fronta Dnes, 12 July 2001.
69 Journalists who have tried to ascertain more about Falkon have found only a series of dead ends. The company does not maintain a website, and its representatives refuse to answer any questions. The address listed as its headquarters in the Prague commercial registry is that of a Dominican monastery, but the gatekeeper of the monastery insists he has only heard of Falkon as a result of the constant inquiries made as to its whereabouts. Also, the registered address in Prague of Paala Mamaladze, one of Falkon’s main principals, is nonexistent. Other principal members of the firm are two Swiss brothers named Moser, from the small town of Neuhausen, where Falkon also has an office. Two journalists from Respekt magazine visited the office to inquire about the transaction and, not surprisingly, were unable to garner information from firm representatives. What was surprising was that, in this town of 7,000, nobody seemed to have heard of the Moser brothers or of this hometown firm, Falkon Capital, currently making such a name for itself in the world of high-profile sovereign debt collection.
70 Roman Kupchinsky, “The Two Headed Falkon—One Scenario,” Crime, Corruption and Terrorism Watch, Radio Free Europe/Radio Liberty 2, no. 5 (11 February 2002), <www.rferl.org >.
71 Jan Kovalik and Jaroslav Spurny, “The Swiss falcon shows the white feather,” Respekt, 29 October 2001.
72 Jaroslav Spurny, “The dark path of Russian billions,” Respekt, 18 March 2002.
73 Jaroslav Spurny, “Russia’s debt a prime-time issue again,” Respekt, 21 January 2002.52 SAIS Review Summer–F ALL 2002
74 “Milos Zeman: Do Not Behave Like Blockheads,” Lidove noviny, 8 February 2002.
75 Spurny, “Russia’s debt a prime-time issue again.”
76 James Pitkin, “U.S. hedges on giving up classified nuclear data,” The Prague Post, 6 March 2002.
77 “Poll shows majority of population consider Czech Republic ‘corrupt nation,’” Czech News Agency CTK, 11 July 2001.
78 The potential economic impact of political control over the privatization process and corporate restructurings could be enormous, particularly since the Czechs are already among the most heavily taxed people in the world. Karanycky et al., Nations In Transit 2001, 168.
79 The large public outcry against political appointments made at Czech TV in late 2000 could certainly be seen as a step in the right direction.
80 This genuine political opposition in the current government was principally led by the center-right, pro-Western Christian Democratic Union and Freedom Union.
81 Prague Business Journal, 7 February 2002.
82 Jan Machacek, “CSSD-ODS opposition agreement: Here today and—very likely—here to stay,” Prague Business Journal, 2 July 2001.
83 Internal EU politics also obscured the truth in this latest report. For example, irregularities in EdF’s courting of the Czech government in the CEZ privatization were ignored, most probably because of lobbying from the French state-owned electricity producer. Jan Machacek, “EU report reveals special interests and little about real problems,” Prague Business Journal, 19 November 2001.
Czech election: Meet the new anti-corruption party that wants to clean up the Czech Republic
Andrej Babis began life as an anti-corruption crusader. So what happened?
In the days leading up to the October 8-9 general election in the Czech Republic, Prime Minister Andrej Babis faced renewed scrutiny over alleged corruption.
Babis, the second-richest person in the Czech Republic and who the European Commission recently found to be in conflict of interest over his business dealings, is now under pressure to explain a convoluted offshore structure he used to purchase a €15m mansion in the south of France, as disclosed in the “Pandora Papers”, the largest ever trove of leaked offshore data.
During a televised election debate at the weekend, he blamed the “Czech mafia” for the allegations surrounding a house purchase that he said dated back to 2009. On Sunday night, he tweeted that he thought the reports were intentionally published days ahead of next weekend’s general election to undermine his campaign.
In recent months, Babis’ ruling ANO party has soared in the polls. Its support dwindled to near-record lows in early 2021 because of the Czech Republic’s woeful pandemic record, when it had one of the world’s highest infection rates per capita.
But ANO’s popularity has recovered as most lockdown measures were lifted in the summer and infection numbers remain relatively low.
The latest survey by STEM, a local pollster, gives ANO 27.3% of the vote, about six percentage points ahead of the second-place SPOLU alliance, formed earlier this
The STEM poll also puts the anti-corruption Prisaha (or “Oath”) party in sixth place with 5.7% of the vote, its biggest tally in months and enough for it to enter parliament.
The election on October 8-9 is expected to be tightly fought. No clear winner is projected and some analysts forecast a protracted post-election standoff between the main parties, as each makes an attempt to form a government. A full-blown constitutional crisis is possible.
The new party trying to keep corruption in Czech
One of the biggest developments could be the success of Prisaha, formed earlier this year by a retired investigator of organised crime, Robert Slachta.
It is one of a new breed of single-issue, anti-corruption parties that have sprung up in recent years across Central and Eastern Europe.
At last year’s general election in neighbouring Slovakia, which split from the Czech Republic in 1993, the anti-corruption Ordinary People and Independent Personalities (OĽaNO) party came out of nowhere to win the ballot, starting an anti-graft campaign that has seen a widespread clearout of the Slovak bureaucracy and judiciary.
Ivana Karaskova, from the Association for International Affairs in Prague, said that anti-corruption narratives have a long history in Czech politics.
“ANO has won elections based on a pretence that Babiš is not a part of the establishment and that he would deal with [a] corrupted political elite,” she said, referring to the party’s victory at the 2017 election when it campaigned heavily on an anti-corruption platform.
“Corruption as a topic, either the real one or imaginary, seems to resonate well with the electorate and Prisaha is just one of the political subjects which discovered that,” Karaskova said.
The Czech Republic was ranked last in an evaluation of 42 countries by the Council of Europe's anti-corruption body, GRECO, for not following its recommendations since 2019. It was also ranked 49th worst out of 180 countries in Transparency International’s latest Corruption Perceptions Index.
According to the same organisation’s Global Corruption Barometer report, published in June, some 69% of Czechs said their government performed badly at tackling corruption, the third-worst score in the EU. In late 2019, more than 300,000 Czechs demonstrated against Babis’ alleged corruption in what were the largest protests since the fall of communism in 1989.
According to the latest opinion polls, Prisaha now commands more support than most of the other small parties and could even beat the Social Democrats (CSSD), the country’s once-dominant centre-left outfit that could this year fail to win seats in parliament.
Slachta came to public attention as the head of the Unit for Combating Organised Crime, and his investigations into official corruption brought down the coalition government of Prime Minister Petr Necas in 2013. His autobiography, Thirty Years Under Oath, from which his new party takes its name, was a best-seller when it was published last year.
But question marks remain over whether Prisaha can maintain its position over the coming week, especially as pollsters find that roughly a third of voters are still undecided.
“Prisaha has voters whose relationship to the party is very weak and uncertain,” noted Lubomir Kopecek, a professor of political science at Masaryk University.
Analysts reckon that many of Prisaha’s early supporters were former voters for the ruling ANO party, which dwindled in the opinion polls for most of 2021.
A recent survey by Kantar CZ and Data Collect, two local pollsters, asserted that Prisaha has an electoral potential of up to 9.5 per cent, higher than the current opinion polls that are slightly skewed by the significant number of non-committed voters among the Czech electorate.
There is also some doubt whether a single-issue party led by a charismatic figure is the proper way to go about fighting endemic corruption.
“Corruption is a strong theme in Czech politics and Czech democracy is still quite immature,” said Jiri Pehe, a political analyst and a director of New York University´s Prague campus. “So enough people are still attracted by parties led by strongmen, who promise to use their power to fight corruption and other social ills,” he added.
The corruption allegations against Czech PM Andrej Babis
What’s more, without a change of leadership in the Czech Republic analysts reckon there will be little progress in anti-corruption efforts.
“Elections and political will are the bases on which an anti-corruption drive starts”, said Richard Q. Turcsanyi, an Assistant Professor at Mendel University in Brno.
If Babis is elected again and President Milos Zeman is willing to protect him, it’s very difficult to imagine any success for an anti-corruption drive against people connected to the leadership, he added.
For years analysts have alleged that President Zeman, who is also dogged by corruption allegations, has pulled some strings to stop investigations into Babis’ business affairs. Zeman has also already said that he will allow Babis the chance to form the next government, even if one of the two opposition alliances wins the upcoming election.
Most allegations against Babis stem from his ownership of the conglomerate Agrofert, one of the Czech Republic’s largest firms. In the past, Czech police investigated alleged misuse of EU subsidies to finance the “Stork's Nest” hotel-resort owned by Agrofert, although these have stalled.
In April this year, a European Commission audit found that Babis had breached the bloc’s conflict-of-interest rules when his company was paid EU subsidies while he was prime minister.
It found that he still directed the firm’s decisions despite him formally putting his assets into blind trust funds, and Agrofert was ordered to repay €17m in subsidies it had taken from the European bloc.
This could have major ramifications for the Czech Republic since the European Commission intimated earlier this year that it could face delays in accessing vital EU funds until the government makes progress on its anti-graft efforts. The Czech Republic has been a net beneficiary of EU funds since it joined the bloc in 2004.
It could also have wider ramifications for Babis himself. Analysts have speculated that if ANO loses power after next weekend’s election, the next government could restart domestic police investigations into Babis’ Agrofert and his alleged corrupt dealings.
Although his ANO party is widely tipped to win the election that starts on Friday, it is highly unlikely to win enough seats in parliament to be able to rule alone and its current allies are fading in the polls.
The Social Democrats, the junior partner in ANO’s ruling coalition since 2018, are on only 4.4% of the vote, which would mean the party fails to enter parliament for the first time ever, according to the latest STEM poll.
After 2018, the Communist Party of Bohemia and Moravia (KSCM) backed up Babis’ minority government in parliament but it withdrew its support earlier this year and there’s no guarantee of it backing ANO again. The KSCM is currently polling on around 6.5% of the vote, according to STEM, down from the 7.8% it won at the last general election, which means it could control fewer parliamentary seats come next week.
The Freedom and Direct Democracy party (SPD) has said it won’t cooperate with Babis, and he would face a considerable backlash if he tries to form an alliance with the controversial far-right party, which is polling at around 12%. None of the other smaller parties that would likely ally with Babis are expected to win seats in parliament.
Rumours also abound that Babis could try to cut a post-election deal with one of the larger opposition parties if he isn’t able to form a stable government. The centre-right ODS might agree to work in coalition with ANO on the condition that Babis does not remain prime minister, Karaskova told Euronews in an earlier-published article. This could come with the tacit promise of clemency for Babis.
“Babis is scared,” said a source close to the current cabinet, who requested anonymity. “He knows that if he loses the election, he could also lose his freedom.”
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SPARE THE ROD, SPOIL THE CHILD? CZECHIA MOVES AGAINST CORPORAL PUNISHMENT FOR CHILDREN
At the beginning of June, the Czech Justice Ministry unveiled the Childhood Without Violence Initiative aimed at reforming the Civil Code and bringing the Czech Republic up to date with its international obligations on child protection and the fight against domestic violence.
The amendment, which is expected to be submitted to Czech MPs over the summer, is meant to declare the inadmissibility of physical punishment on children at home (its use is already illegal at day-care centres and at school) – a practice the UN defines as “any punishment in which physical force is used and intended to cause some degree of pain or discomfort, however light.”
“The Czech Civil Code contains similar declaratory provisions,” Deputy Ombudsman Vit Alexander Schorm tells BIRN. “For instance, that spouses should be faithful to each other or that children should respect their parents. In this way, as a society, we subscribe to values that are important to us, and I believe that such core values in the 21st century include a simple fact that ‘we don’t hit children’.”
Slow to catch up
The Czech Republic has long been lagging in that area. Since Sweden became the first country to do so in 1979, at least 65 countries around the world have fully banned corporal punishment of children, including most European states. Initially slow, the momentum gained speed after the adoption of the UN Convention on the Rights of the Child in 1990, making the Czech Republic one of the last remaining countries in the EU today not to have such legal provisions.
A 2014 reform of the Civil Code did strengthen the protection of children at home, stating that “educational means can be used only in the form and extent as is reasonable, does not endanger the health of the child or its development and does not affect the human dignity of the child.”
Lacking any explicit prohibition of violence, the amendment did not go far enough according to children’s rights advocates, and the following year the Czech Republic was declared in violation of the European Social Charter by the Council of Europe.
Over the past ten years, successive Czech governments have, nevertheless, deemed current legislation sufficient to protect children against “excessive” and “unreasonable” cases of violence at home, while occasionally organising awareness-raising campaigns to promote “good parenting” methods.
The status-quo has prevailed since, with authorities reluctant to instruct parents what they’re allowed to do to educate and discipline their children behind closed doors, or to tell them what’s off limits.
No harm, no foul?
As a result, there has been very little change over the past decades in how Czech parents relate to the use of corporal violence against their children, studies show.
A 2018 research by the Open Men’s League showed that about two-thirds of them declared they used or would be ready to use physical punishment to deal with their offspring’s misbehaviour or to discipline them when necessary. Most Czech parents also believed that it remains a parental prerogative to do so if they consider it beneficial or necessary to the child’s upbringing.
“This trend is not over yet, and we are yet to see a generational change in this area,” notes Wunschova of Centrum LOCIKA which, in its eight years of existence, has dealt with and cared for more than 2,500 children exposed to physical and domestic violence in the Czech Republic.
According to her, “the bad experience with state interference in the intimate space of the family, the disturbed intergenerational empathy, and the low awareness of parents about the impact of so-called ‘ordinary educational violence’ on their children play a significant role” to explain why “so many parents, simply trying to raise their children well, believe that physical punishment is a good way to give them order, set boundaries and build resilience.”
There are also more pervasive reasons why parents in the Czech Republic and elsewhere may be reluctant to change their ways, especially when the same disciplining means are “passed down” from one generation to the next: younger parents admitting that the use of physical punishment against their own child may be considered “wrong” or “abusive” amounts to conceding that what their own parents did to them was also wrong, and that they themselves were unwilling victims.
A “protectiveness” exists towards the methods used by our own parents, which is usually justified by “we were occasionally slapped as kids and turned out fine” or other statements to the effect of dismissing the need for any kind of blanket ban, experts note.
“The fact that there is a strong trans-generational transmission is a big factor,” underlines Deputy Ombudsman Schorm. “Children tend to take what happens at home as a norm, and when they grow up, repeat the methods or patterns they themselves experienced as children.”
Vit Alexander Schorm, Czech Deputy Ombudsman.
A loving smack?
Regardless of the moral debate, social and psychological studies have long shown that even the most common forms of physical violence perpetrated by parents on their children are counterproductive and can have serious long-term consequences.
“All corporal punishment carries an inbuilt risk of escalation,” warns the World Health Organisation, citing a string of possible outcomes to show that the risks, quite simply, outweigh the potential benefits: physical and mental ill-health, low self-esteem, poor educational outcomes, impaired cognitive development, increased aggression, damaged parent-child relationship, etc.
“We have a lot of evidence to say that there are several harmful effects, even for measures that are considered mild,” commented Pavla Gomba, head of UNICEF Czech Republic, which conducted a poll that found that about 11 per cent of children experienced some form of violence at home. “There is also no evidence that physical punishment changes the original unwanted behaviour of the child.”
In other words, it is unlikely a child would see a “loving smack” or “harmless spank” as either loving or harmless, and very likely the punishment will have the opposite effect than intended. Not to mention studies indicating how mild forms of corporal punishment may lead to more brutal instances of physical violence and child abuse.
For Wunschova, all this evidence shows the absurdity of “the question of how much a parent can hit their child to make it okay.”
“The only correct answer is not at all”, she argues.
Asked how the law might be able to differentiate between mild cases of corporal punishment for disciplinary purposes, excessive physical violence and outright child abuse, Schorm is equally adamant: “That’s exactly the problem here! It’s not possible. The only way to protect children is to make it clear that any physical contact intended to cause pain or discomfort is not an acceptable way to raise children or to resolve conflicts.”
Far from calling for state powers to prosecute or fine misbehaving parents, proponents are hopeful that a new amendment would change societal behaviour, citing studies from Sweden and around the world showing how a legal ban commonly leads to significant decreases in the use of corporal punishment on children at home, as well as in its overall acceptance in society at large.
Their overall message seems to be: while a quick slap on the hand or smack on the cheek may be the easiest disciplinary measure and does not necessarily amount to child abuse, there is always an alternative to physical violence. And this alternative, they argue, should always be favoured.
But many parents “lack the experience that it can be otherwise, that the child-parent relationship can be respectful without the parent losing authority,” Wunschova tells BIRN. “Often, they also do not have the necessary information or reason to change their behaviour because it is commonly tolerated, sometimes even demanded in society.”
Describing the need to enact the inadmissibility of corporal punishment as “the beginning of a journey rather than an end in itself,” Deputy Ombudsman Schorm hopes it will become “a stimulus for a society-wide discussion and a subsequent rethinking of how we view raising children”, as long as the legal change is accompanied by a comprehensive information campaign, the strengthening of preventive services for children and the possibility of counselling for parents.
“I sincerely believe that in 10 years’ time, we will see the current debate about whether and how hitting children can be seen as an absurd relic,” Wunschova concludes.
Czech election: Will the vote prompt Prague to turn its back on Russia and China?
Czech election: Will the vote prompt Prague to turn its back on Russia and China? | Euronews
Relations have already frayed considerably over the past year
The Czech Republic’s ties with China and Russia are tipped to either remain as they are -- a mixture of caution and dented optimism -- or get considerably worse after the upcoming general election on October 8-9.
And there is little expectation of improvement in the relations that have frayed considerably over the past twelve months.
Much depends on the composition of the next coalition government, which is looking increasingly hard to predict.
Some analysts speculate that the Central European state could be heading towards a constitutional crisis.
A brief history of Czech relations with China and Russia
Relations with China and Russia, which were shunned after the end of communism in 1989, went through a brief period of resurgence in the middle of the last decade as the newly elected president, Milos Zeman, sought to alter the Czech establishment’s traditional attachments to the United States, European Union and NATO.
After his presidential victory in 2013, Zeman became the loudest proponent of opening up to the East, motivated by China’s global economic rise and Russia's return as a geopolitical entity in Europe. He found some support from across the political spectrum.
In 2012, then-Prime Minister Petr Necas, from the centre-right Civic Democrats (ODS), had mocked the country’s traditional values-driven foreign policy as “just a trend” and appealed for economic concerns to trump squeamishness over China or Russia’s human rights record. Zeman also found some support in the coalition government that took power in 2013, led by his former party, the Social Democrats (CSSD).
In 2015, Zeman boasted that the Czech Republic could be China’s “gateway” to Europe, a comment made when in Beijing as the only European head of state in antecedence for a military parade to mark the end of the Second World War.
Around the same time, Zeman was also one of the few European premiers who visited a similar ceremonial event in Moscow, where he spoke in favour of renewed relations with his counterpart, Vladimir Putin. Zeman had previously defended Russia’s annexation of Crimea.
Some inward investment began to flow from China. CEFC China Energy, one of China’s largest privately-owned firms, snapped up several well-known Czech brands, including the country’s historic football team, Slavia Prague. CEFC founder, Ye Jianming, was named an advisor to Zeman in 2017 and appointed some of the president’s associates, such as former defence minister Jaroslav Tvrdik, as executives on CEFC-owned entities.
Ye’s business empire crumbled after he was arrested for corruption in Beijing in 2018. Another Chinese firm, the state-owned CITIC Group, moved in to buy up its Czech investments.
But the promised billions of investment from China never materialised. Estimates vary, but it is believed that only around €1 billion worth of Chinese capital has flowed into the Czech Republic, a trifling figure compared with the billions of euros China had poured into its Central European neighbour Hungary.
Even Zeman threatened in January 2020 to boycott an upcoming meeting of the “17+1” forum, a China-led dialogue with Central and Eastern European states, over the lack of investment from Beijing.
“I don’t think the Chinese side has done what it promised,” the Czech President commented, although he later reversed his decision.
The opening up to Russia and China was never official Czech policy. The coalition government that took charge in 2018, led by Prime Minister Andrej Babis’ populist ANO party, was agnostic about the idea though expressed support if it brought economic benefits.
Instead, it was led by a coterie of President Zeman, who is supposed to hold mere ceremonial powers, well-connected former politicians and the country’s business tycoons.
But this coalition inspired a backlash from the Czech security establishment, whose affiliations have long been to the United States and NATO, as well as from opposition politicians who argued that warming relations with Beijing and Moscow was a repudiation of the country’s historic liberal-inspired foreign agenda.
The breaking point over China came in the summer of last year when the president of the Czech Senate, Milos Vystrcil, paid a visit to Taiwan, which the Beijing government claims still belongs to the People’s Republic. China’s foreign minister, Wang Yi, reacted furiously and threatened to punish the Czech Republic, which only seemed to galvanise the country’s anti-Beijing voices.
President Zeman, increasingly isolated, cut off talks with Vystrcil, the third most senior political official, and escalated his long-running feud with the Czech intelligence agency (BIS), which warned against allowing Chinese and Russian firms to invest in the country’s strategic assets.
The coalition government, the occupier of the middle ground between the country’s pro-east and pro-west factions, appeared to take the side of the latter when in February this year it disqualified a Chinese state-owned firm from the pre-qualification tender for the planned €7.5 billion expansion of the Dukovany nuclear power plant, although a Russian firm will still be allowed to take part.
The Czech government has also stepped up its associations with Taiwan, including donating a symbolic 30,000 COVID-19 vaccines to the contested island in July.
At the same time, attempts to reconnect Czech relations with Russia, considered by many Czechs as a former imperial aggressor because of the Soviet Union’s past domination of Central Europe, also appeared to grind to a halt.
Relations deteriorated considerably in April of this year when Prime Minister Babis accused two Russian intelligence agents of being behind the major explosions at a munition depot in the southeast of the Czech Republic in 2014. The same pair, Czech intelligence said, carried out the 2018 poisoning of the former Russian military intelligence officer Sergei Skripal and his daughter in Britain.
The Czech Republic’s accusation was followed by the expulsion of diplomats by both countries and warnings of retaliation from Moscow.
How could the election change things?
Because of these events, it would now be difficult to get any political momentum behind more positive relations with Moscow and Beijing, said Ivana Karaskova, of the Association for International Affairs in Prague.
“The overall sentiment in the Czech Republic’s policy circles, excluding the extreme political parties, is cautious,” she added.
According to a survey published earlier this year by Sinophone Borderlands, a project run by Palacky University Olomouc, some 29% of Czech respondents held “very negative” and 27% “negative” views of China.
Of all the political parties, supporters of the far-left Communist Party of Bohemia and Moravia (KSCM) and far-right Freedom and Direct Democracy (SPD) had the most positive views of China, the survey found. The two parties’ leaders themselves are also among the most positive about building relations with Beijing and Moscow.
Much depends on the outcome of next month’s general election, which is set to take place on October 8. Analysts reckon the Czech Republic could be heading towards either a major post-election stalemate or even a constitutional crisis.
The ballot looks set to be dominated by the current ruling party, Babis’ ANO, and two new coalitions formed by the largest opposition parties, none of which will likely control enough seats in parliament to go it alone, according to the latest opinion polls.
President Zeman has also intimated that he doesn’t like the new alliances and wants to allow the biggest single party to try to form the next government - and possibly allow it to remain in power even if parliament doesn’t give it a vote of confidence.
According to the latest opinion polls, Babis’ ANO party is widely tipped to take first place and he is expected to have a first crack at forming a minority government, although it remains unclear with whom since ANO’s current coalition partner, the CSSD, could fail to even win seats in parliament next month.
If ANO is able to form a government, perhaps with the support of other smaller parties, then relations with Russia and China will remain as they are now, said Jiri Pehe, a political analyst and a director of New York University´s Prague campus.
According to Karaskova, of the Association for International Affairs, because Babis has no interest in foreign policy he may again offer the Ministry of Foreign Affairs to a coalition partner. Since 2017 that cabinet post has been controlled by the CSSD, the junior coalition partner.
The Social Democrats’ views on Russia and China are mixed. Many of the party’s former grandees, including President Zeman, are among the most passionate advocates of an Eastwards-looking foreign policy.
And a report by the now-named MapInfluenCE, a project run by the Prague-based Association for International Affairs, has argued that links between the Chinese Communist Party and the CSSD are “personally guaranteed” by Jan Hamacek, the current CSSD leader and Minister of Interior.
But CSSD member Tomas Petricek, who served as foreign minister from 2018 until April this year, frequently warned about risks posed by Russia and China, and some analysts speculated that his dismissal was due to his pro-Western stance.
On the other hand, the expected post-election frenzy might instead see the Czech Republic’s two new opposition coalitions try to form a government, in which case the country would take a much more hardline position on China and Russia, Pehe said.
The SPOLU alliance was formed earlier this year by the centre-right ODS, the current largest opposition party, and the smaller Christian Democrats (KDU-ČSL) and TOP 09. The progressive Pirate Party, currently the country’s second-largest opposition outfit, formed a separate electoral pact with the Mayors and Independents party (STAN).
While there’s much daylight between the two coalitions on domestic politics, they have notably taken strong stances against Chinese and Russian influence in the country and both advocate for a liberal, westwards-looking foreign policy.
The Czech senate president who visited Taiwan last year, which precipitated much of the current antagonism with Beijing, is a senior member of ODS. Pirate member Zdenek Hrib has pursued openly anti-Beijing and anti-Moscow policies since becoming mayor of Prague in 2018, including replacing the Czech capital’s sister-city relationship with Beijing for one with Taipei.
In the earlier-mentioned Sinophone Borderlands survey of public opinion, the most negative views on China were held by supporters of centrist TOP-09, with around 80% holding negative opinions, followed by ODS and STAN. More than two-thirds of supporters of the Pirates Party held negative views on China.
The SPOLU alliance’s campaign website states that it would pursue “unambiguous orientation to the West,” although it makes no specific mention of China. The Czech Republic faces “hostile action from undemocratic regimes,” meaning Russia and China, asserts the manifesto of the Pirates and Mayors alliance. Similar to SPLOU, it argues for a Western-orientated foreign policy that more closely aligns the Czech Republic to the EU and NATO.
But even in the unlikely scenario that an opposition alliance takes power after next month’s elections, the country’s foreign policy agenda is likely to become increasingly tribal, with the government pulling one way and a coterie led by President Zeman still pushing the other.
After all, Zeman is going to stay in office until the next presidential election in 2023, noted Richard Q. Turcsanyi, a programme director at the Central European Institute of Asian Studies at Palacky University Olomouc.
“Although not a head of the government, Zeman is very influential,” he added.
And the Czech president shows no signs of giving up his friendships in China. Following a phone call between him and Chinese President Xi Jinping in July, it was announced that Zeman will visit Beijing next year, his sixth visit as president.
Perhaps one of the most important tasks of the next Czech government will be to refashion how the country’s foreign policy agenda is set, disentangling the many vested interests that have fractured the agenda in recent years.
As the manifesto of the Pirates and Mayors alliance puts it: “the discrepancy in foreign policy between the president, the prime minister, the foreign minister and other actors is harmful.”
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Czech Republic Corruption Index
Corruption still prevalent in Czechia according to worldwide ranking - Prague, Czech Republic
Corruption still prevalent in Czechia according to worldwide ranking
Transparency International says Czechia has been treading water for 15 years and lacks the courage to make needed reforms.
Written by Expats.cz Staff Published on 31.01.2023
After it was in the 19th position in the 27-member EU for three years, Czechia moved up to 16th to tie with Italy and Slovenia. The lowest rankings in the EU go to Bulgaria, with 43 points, and Hungary, with 42 points.
Among the Visegrád (V4) countries, Czechia took the lead for the first time, overtaking Poland, which dropped to 55 points. On the other hand, Slovakia added another point, rising to 53 points. Hungary was last in the V4.
Denmark led the ranking with 90 points, followed by Finland and New Zealand, each with 87 points. On the contrary, Syria, and South Sudan ranked worst with 13 points, followed by Somalia at 12 points.
The Czech branch of Transparency International said curbing corruption is still faltering in Czechia. Progress in the long term has been “two steps forward and two steps back” with politicians lacking a clear strategy and the will for making systemic changes.
“It seems that [the government] was satisfied with the fact that Andrej Babiš is no longer the prime minister and forgot that he can be one again,” Kopečný said.
Petr Leyer, a lawyer and board member of the Czech branch, said the CPI needs to be looked at in the long term as it shows the development and trends of the given society. “Czechia has clearly been treading water for 15 years. It is not markedly sinking like, for example, Hungary, but it has not been improving in general,” Leyer said.
'Czexit': What chance of a referendum on the Czech Republic quitting the EU?
Czech Republic's ruling party may need post-election support from a right-wing movement that wants a referendum on leaving the EU.
Czechs have no great affinity for the European Union - in fact, they are among the most sceptical of the bloc.
But since their country is a net beneficiary of funds from Brussels and there currently exists no means of holding a referendum, a “Czexit” has remained the pipe dream of far-right parties and Eurosceptic columnists.
However, there’s a slim chance of a referendum if the country’s leading eurosceptic party is able to gain access to the corridors of power amid the political turmoil expected after the country's October 8-9 general election.
But much comes down to electoral arithmetic. The ruling ANO party is tipped to win the ballot that takes place today and Saturday but its current partners are projected to lose seats.
Unable to command a majority, Prime Minister Andrej Babis might have to turn to the far-right Freedom and Direct Democracy party (SPD) -- the loudest proponent of a plebiscite on leaving the EU -- for backing.
Referendum on Czechs leaving EU 'improbable'
Japan-born Tomio Okamura, the leader of the anti-immigration SPD, said in a recent press conference that passing a new law to allow national referendums, including on EU membership, was his condition for supporting Babis’ campaign for a second term in office.
The majority of commentators reckon it's improbable, however, even if the SPD ends up supporting Babis in the next government.
“An EU referendum is unlikely to the point of impossibility,” said Sean Hanley, an associate professor in Central and Eastern European politics at University College London.
An early 2020 study by the Behavio research agency found that Czech public approval of EU membership was the lowest in the 27 member states, with only 33% saying it was a good thing. Some 15% of respondents said it was bad, the third-highest of the 27 nationalities, and just 47% said they would vote to remain in the bloc.
Despite the public mood, none of the main political parties supports leaving the EU and most importantly its funds, of which the Czech Republic has been a net recipient since it joined in 2004. It is expected to receive more than €7 billion from Brussels between now and 2026 as part of the EU’s recovery fund, as well as other grants from the bloc.
The centre-right Civic Democratic Party (ODS), the country’s second-largest party, has Eurosceptic ideas but is committed to reforming the bloc from the inside, not leaving.
The ODS will challenge this weekend’s ballot as part of the SPOLU alliance, currently tipped to come in a close second behind ANO, according to the latest opinion polls.
The libertarian Pirate Party and Mayors and Independents party (STAN), whose alliance is expected to finish some way behind in third, are firm pro-EU advocates.
The Czech constitution currently does not have rules on holding national plebiscites. Only one has been held since the Czech Republic was formed in 1993 when 77% of voters voted in favour to join the EU in a 2003 referendum.
The SPD -- tipped to finish fourth with between 10-12% of the vote -- has long campaigned for constitutional reform. Their numerous proposals have all been rejected by parliament.
But the current governing coalition, with support from the Pirates, had tabled their own motion on a referendum law, although it would forbid any scrutiny of EU and NATO membership. Because the lower chamber has dissolved ahead of this weekend's election, the motion failed to get a proper reading.
The SPD has some support for holding a referendum on EU membership. The far-left Communist Party of Bohemia and Moravia (KSCM), tipped to pick up between 5-6.5% of the vote this weekend, is in favour of putting the question to the public, as are the smaller far-right parties that are unlikely to win seats.
The KSCM has supported the outgoing government in parliament since 2018, a position the SPD could find itself in after this weekend’s general election.
In the past, ANO and the SPD said they couldn’t work together, and similar allegations that Babis would partner with Okamura after the last general election proved false.
“Babis would not be excited about the cooperation with the SPD, but if he does not have another possibility, it is possible,” Lubomir Kopecek, a professor of political science at Masaryk University, told Euronews last month.
Opinion polls on the eve of the election suggest the Social Democrats (CSSD), the junior partner in the outgoing ANO-led government, will either lose seats or could even fail to enter parliament. The KSCM is also tipped to drop seats.
Without this support, Babis will struggle to boast enough MPs to win a vote of confidence in parliament, which he will need if President Milos Zeman recommends him as the next prime minister.
What could the post-election landscape look like?
Pundits reckon it is possible that the far-right party wouldn’t formally join ANO in government but offer its support in parliament, as the KSCM has done since 2018. In return, the SPD could demand that Babis agrees to back its referendum plans.
This could also work in Zeman’s interest, recently wrote the journalist Tim Gosling. “Zeman is expected to push Babis to swiftly start working with the SPD and any other illiberal parties that make it to parliament,” he asserted, adding that the SPD and KSCM support Zeman’s pro-Russia and pro-China agenda.
Back in 2016, after the British referendum on leaving the EU, President Zeman also said he was in favour of Czechs holding a similar plebiscite. Although he vowed to campaign to remain in the bloc, he said he would do “everything for [Czechs] to have a referendum and be able to express themselves. And the same goes for a NATO exit too.”
After a meeting with Zeman late last month, the SPD leader Okamura said that in return for the SPD supporting ANO, “one of the fundamental conditions is for the government manifesto ... to include a referendum law including the possibility of a referendum on leaving the EU or potentially NATO.”
Radim Fiala, SPD's deputy leader, also said in a recent interview with the Dnes newspaper that his party might agree to support ANO if it backed the far-right party’s plans for a national referendum law.
“There is no way Babis wants to contemplate Czexit both because he has a realistic appreciation of the Czech republic’s economic interests and of his own, which are closely tied to Germany and Western Europe,” said Hanley, of University College London.
If Babis and Okamura were to work together it would unlikely be in the form of a coalition, which would damage both of their reputations, Hanley added. So with some arrangement less than a coalition, the SPD’s condition on a referendum would more easily be forgotten about. “Okamura has actually worded it in such a way that he can wriggle out of it,” Hanley said.
For Babis, this could be a “deft tactical move, relying on a negative outcome,” wrote Radko Kubicko, a prominent Czech opinion columnist, in an article this week for Czech Radio.
On the one hand, he could win the SPD’s much-needed backing in parliament by agreeing to such a law. On the other hand, because Babis wouldn’t want to govern in a country wrecked by the havoc of leaving the EU, he would have to wager a 'Czechxit' referendum would never actually happen or, if it did, the Czech electorate would vote against it.
Yet it could end up in a similar situation as in Britain when then-Prime Minister David Cameron launched the Brexit referendum believing that it would be easily defeated and quieten the eurosceptic-wing of his Conservative Party, a plan that backfired.
“Although it seems that the topic of a 'Czexit' is only a secondary issue in Czech politics, after the elections... it might not be the case,” Kubicko wrote.
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Czech Republic - Transparency.org
Transparency International Czech Republic (TIC)
OUR WORK IN: Czech Republic
Reaccreditation concluded 09 / 2023
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Advocacy and Legal Advice Centre in Czech Republic
We have an ALAC in Czech Republic that can be contacted to report corruption.
ALACs provide free and confidential legal advice and allow people to safely report corruption.
Country data
Corruption Perceptions Index
2022 Rank
41/180
2022 Score
56/100
Since its inception in 1995, the Corruption Perceptions Index, Transparency International’s flagship research product, has become the leading global indicator of public sector corruption. The index offers an annual snapshot of the relative degree of corruption by ranking countries and territories from all over the globe. In 2012, Transparency International revised the methodology used to construct the index to allow for comparison of scores from one year to the next.
Global Corruption Barometer
29%
Percentage of people who thought corruption increased in the previous 12 months*
11%
Percentage of public service users paid a bribe in the previous 12 months*
*Since the most recent publication of the GCB - European Union
Since its debut in 2003, the Global Corruption Barometer has surveyed the experiences of everyday people confronting corruption around the world. Through our barometer, tens of thousands of people around the globe are asked about their views and experiences, making it the only worldwide public opinion survey on corruption.
Our activity in Czech Republic
Why can’t Western governments tell us what they’re actually doing to sanction Russian kleptocrats?
News •
We are still waiting to hear back from countries about the measures they have taken to locate and seize assets.
CPI 2022 for Western Europe & EU: Undue influence and fragmented anti-corruption measures hurt progress
News •
While once again the top-scoring region in the CPI, anti-corruption efforts have stalled in most countries for more than a decade.
CPI 2021 for Western Europe & European Union: Trouble ahead for stagnating region
News •
Western Europe and the EU still tops the CPI, but the COVID-19 pandemic has threatened transparency and accountability across the region, leaving no country unscathed and exposing
Pandora Papers: 10 countries that urgently need to act
News •
Investigations implicate high-level public officials and private sector intermediaries around the world.
Projects
Anti-corruption in focus: Thematic leadership for the OGP
Project
Integrity Pacts – Civil Control Mechanism for Safeguarding EU Funds
Project
Preventing corruption in government contracting through independent monitors. Explore our 17 ongoing Integrity Pacts across 11 EU member countries.
Whistleblowing programme
Project
Features our work to improve whistleblower’s protection, including our policy recommendations and our achievements in around the world.
Publications
Monitoring public contracting: Experience from 18 integrity pacts in the EU
Publication •
This publication sets out key facts, figures and achievements from the integrity pacts in the EU between 2016 and 2021.
Integrity pacts in the EU: Suitability, set up and implementation
Publication •
Between 2015 and 2021, 15 civil society organisations monitored 46 public contracting procedures in the EU. This experience and learnings now help us to understand how to…
Global Corruption Barometer: European Union 2021
Publication •
The Global Corruption Barometer – European Union is the largest, most detailed set of public opinion data on people’s views and experiences of corruption and bribery in all 27 EU…
Building on the EU Directive for Whistleblower Protection
Publication •
To support effective implementation of the EU's Whistleblower Protection Directive, we have prepared this analysis, which provides recommendations aimed at closing loopholes and…
Blog
Small steps to lasting transformation: How Integrity Pacts advance institutional change
Small steps to lasting transformation: How Integrity Pacts advance institutional change
Data don't lie
Is the approaching Czech whistleblower protection an illusion?
Small steps to lasting transformation: How Integrity Pacts advance institutional change
Data don't lie
Is the approaching Czech whistleblower protection an illusion?
Exposing the truth to save taxpayers’ money
Press releases
Exporting Corruption 2022: Enforcement against foreign bribery hits historic low
Press •
Leading organisations release open letter: Open up company and beneficial ownership registers across Europe
Press •
People in the EU concerned about government corruption, ties between business and politics, survey reveals
Press •
Czech Prime Minister Andrej Babiš now listed as beneficial owner of Agrofert’s German subsidiary
Press •
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Czech Republic Corruption Index & Rank 2023 | Take-profit.org
CZECH REPUBLIC CORRUPTION INDEX AND RANK
CZECH REPUBLIC CORRUPTION DATA
| Indicator | Data | Period |
|---|---|---|
| Corruption Index | 56 index points | 2022 |
| Corruption Rank | 41 place | 2022 |
LATEST DATA ON CORRUPTION INDEX (INDEX POINTS)
Historical Data (index points) by years
| 56 | 2022 | 31.01.2023 |
| 54 | 2021 | 04.04.2022 |
| 54 | 2020 | 02.02.2021 |
| 56 | 2019 | 23.01.2020 |
| 59 | 2018 | 29.01.2019 |
| 57 | 2017 | 22.03.2018 |
| 55 | 2016 | 11.08.2017 |
HISTORICAL CHART BY PRESIDENTS (INDEX POINTS)
Other business indicators in Czech Republic
| Index | Updated | Actual | Previous |
| Business Confidence | Sep/23 | 89.4 in. pt. | 93.9 |
| Ease of Doing Business | 2019 | 41 place | 35 |
| Manufacturing PMI | Sep/23 | 41.7 in. pt. | 42.9 |
| Manufacturing Production | Aug/23 | -0.5 % | -1.1 |
| Competitiveness Index | 2019 | 70.85 in. pt. | 71.18 |
| Corporate Profits | 2021 | 13.657 B USD | 10.505 |
Corruption Index in other countries