Transparency International issues a second complaint about Andrej Babiš’s conflict of interest and European subsidies for Agrofert
Transparency International Czech Republic (TI CZ) sent a complaint to the European Commission on suspicion of a conflict of interest between the Prime Minister of the Czech Republic Andrej Babiš and his economic interests in relation to the AGROFERT group. Both the complaint and the open letter are addressed to the Directorate-General for Regional and Urban Policy (DG REGIO) and the Directorate-General for Agriculture and Rural Development (DG AGRI). TI CR has also shared the information with foreign media.
Andrej Babiš, the Prime Minister of the Czech Republic | source: Mr. Michal Růžička, MAFRA
The complaint concerns a breach of EU law, in particular, Article 57 of Regulation (EU, Euratom) No 966/2012 and Article 61 of Regulation (EU, Euratom) 2018/1046. These stipulate, among other things, that those involved in budget implementation (including national authorities) shall refrain from any action that could bring their interests into conflict with the EU’s financial interests.
Andrej Babiš is not formally the direct owner (shareholder) of AGROFERT, a.s., but the publicly available information reveals that in relation to trust funds he is in the position of the founder and the beneficiary, which allows him to directly or indirectly control them.
Both trust funds manage the shares of AGROFERT, a.s., which is the controlling company of the AGROFERT group. It also includes companies benefiting from a significant amount of subsidies from EU funds, while Andrej Babiš is also a person involved in the implementation of the EU budget.
Therefore, it cannot be ruled out that there has been and continues to be a conflict of interests between Andrej Babiš and the EU, which has impeded an impartial and objective decision on the allocation of EU funds at the national level. We understand as a decisive period especially the time when Andrej Babiš held the post of the Minister of Finance and subsequently, the Prime Minister of the Czech Republic.
“Given these revelations around a potential conflict of interest involving a European Head of State being a beneficial owner of a company that received EU funds, the European Commission needs to immediately look into PM Babis’s ties to the Agrofert group and ensure current measures to avoid such conflicts are up to scratch,” adds Carl Dolan, Director of Transparency International EU.
“Whenever TI CZ has evidence of illegal behavior, we always initiate review of the institutions involved, no matter who is the subject of review. This case has European dimension, the conflict of interests of PM Babiš threatens the interests of Czech Republic in negotiations regarding EU budget,” says David Ondráčka, Director of TI CZ and member of the Transparency International’s global Board of Directors.
We will not publish the full text of the complaint at this time to allow relevant institutions to carefully investigate our arguments.
The Berlaymont building, the headquaters of the European Commission in Brussels | source: TI
„Days of our lives“ with the complaints
In June 2018, TI CZ drew attention to a document in the Slovak Register of Public Sector Partners (which, unlike the Czech Register of Data on Real Owners, is open to the public), which, according to the TI CR, shows the names of five so-called real owners of AGROFERT, a.s.
Subsequently, in August, we submitted the first complaint, which concerns the suspicion of a breach of the Czech law on conflict of interest in relation to media ownership. If the competent authority finds a violation of the law, Andrej Babiš, as a natural person, is facing financial sanctions of up to CZK 250,000. The competent authority to deal with this offense is, based on the permanent residence of Andrej Babiš, the Municipal Office in Černošice.
Later on 5 September the Czech chapter of TI issued an open letter to European Commissioner Corina Creţu in advance of her meetings with PM Babis. TI CZ urged Commissioner Creţu to ensure that negotiations regarding the allocation of EU funds were conducted in a transparent manner.
Now, we have sent a second complaint to inform the European Commission of the facts.
TI CZ director and a member of the TI‘s Board of Directors
T: +420 605 814 786
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Transparency International Czech Republic
We have been actively fighting against corruption in the Czech Republic for 20 years as a branch of Transparency International‚s global network of NGOs. Our team of 13 employees and 7 interns, with a budget of around 9 million CZK per year, engages civil society, the private sector and the state sector in a broad debate on good governance. We benefit from years of transnational experience and experience in setting up anti-corruption programs and strategies. Through our projects, we are contributing to systemic changes, ranging from gambling regulation, sports financing, through public procurement, municipal policy, and election campaign financing to police and justice sectors.
We run a free anti-corruption legal advice centre for the public, which is used by hundreds of clients from all over the country. Our investigators are setting corruption cases in motion. We have started the case of Lesy ČR, stopped the overpriced Ekotendr, dealt with the case at the Transport Company of the Capital City of Prague. We uncover the networks of politicians and entrepreneurs, e.g. around ROP Severozápad, laundering of post-Soviet money in the Czech Republic or the First protected workshop. We are focusing on the issue of conflicts of interest over the long term, currently in connection with the Prime Minister Andrej Babiš and Agrofert. Our activities helped save billions of CZK from public budgets.
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Given these revelations around a potential conflict of interest involving a European Head of State being a beneficial owner of a company that received EU funds, the European Commission needs to immediately look into PM Babis's ties to the Agrofert group and ensure current measures to avoid such conflicts are up to scratch.