Tuesday

19th Mar 2019

Opinion

'Trumped Up': The curious case of Babis' conflicts of interest

  • It is obvious that Babis´s family is benefiting from the economic success of Agrofert, which in turn is influenced by its receipt of EU funds and subsidies, even if Andrej himself is not named (Photo: anobudelip.cz)

Back in September, Transparency International sent a complaint to the European Commission on suspicion of a conflict of interest between the prime minister of the Czech Republic, Andrej Babis, and his ownership of the Agrofert group, a large Czech conglomerate that received €75m in EU subsidies in 2017.

This gained a lot of traction in Brussels and beyond, the most recent development being a leaked commission legal opinion confirming that a conflict of interests does indeed exist, and raising the possibility of Agrofert having to pay back the funds they've received.

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The case of Babis, his business and EU funds is a curious one.

One could be inclined to compare these accusations of conflicts of interest to the misuse of public funds in Hungary – for example in the way that close friends and associates of Viktor Orban have also profited from EU funds - but in the case of the Czech Republic's leader, we have drawn a parallel from a little further afield, from across the Atlantic.

The first step in becoming the EU's Trump is to use your public profile in business to enter into the word of politics.

Babis is the second richest man in the Czech Republic and a well-known businessman.

He ran for election on an anti-establish platform based on the Action of Dissatisfied Citizens movement. Echoes of 'drain the swamp' ring loudly here.

The next step in the journey is to not give up your business interests once you take office, and even involve your family members in your conflicts of interest.

Mrs Babis

Both the Slovak Beneficial Ownership Register and the European commission's legal opinion detail that Babis's wife is one of the beneficial owners of the trusts that he shifted his Agrofert shares into.

She also sits on the board that oversees the trust.

It is obvious that Babis´s family is benefiting from the economic success of Agrofert, which in turn is influenced by its receipt of EU funds and subsidies, even if Andrej himself is not named.

A move that we've seen across the pond with reports of Ivanka Trump and Jared Kushner being embroiled in their own conflicts of interest cases.

You have almost reached your ambition of becoming the EU's Trump when you invent conspiracies and plots to oust you.

Trump constantly invokes a 'witch hunt' involving the FBI, Democrats, media and others when talking about the Mueller investigation into links with Russia, and Babis is also no stranger to invoking similar conspiracies.

Back in 2017, he was fired from his post as finance minister amid claims of tax evasion.

Babis threatened to sue the then prime minister for slander and told the media the accusations were merely a plot to get him out of politics.

More recently, following the complaint, he has repeatedly come out in public saying that Transparency International Czech Republic and its Director are "jealous" and "corrupt".

These public attacks on civil society, public institutions and the press alike easily lead to heavy-handed censorship and restrictions on fundamental rights further down the road.

It is interesting to note that all Czech media have prominently reported this conflict of interest story - except the media company owned by Agrofert, which only gave it delayed and watered-down coverage.

Both leaders find themselves under investigation, and both have come out against it.

Premier Babis most recently dismissing the European commission legal opinion, stating that he simply doesn't have time to control two trust funds with his full-time role as prime minister

Mr Trump on the other hand prefers to cite the 'waste of taxpayers' money' as a way to dismiss the Russia investigation.

Once, you have mixed censorship of civil society, using public office for private gain, and extending your web of conflicts of interests to your family members, you have finally made it.

You've finally reached peak Trump.

Thoughts of a 'White House on the Elbe' aside, there is a very serious side to this.

Too often, we have seen the EU wait too long to act on backsliding on the rule of law and abuse of power in some of our member states.

That this has gained visibility so early after the alarm was raised by our colleagues in the Czech Republic is encouraging, but legal opinions and debates – such as the one that takes place on Wednesday night (12 December) in the European Parliament – are not enough.

We also need tough action from the European commission.

Agrofert 'ineligible'

That means being clear that Babis´s company, Agrofert, is ineligible for further EU funds; it means clawing back the funds that Agrofert has received while this conflict of interest was unresolved; and it means investigating whether the Czech authorities have adequate measures in place to deal with these kinds of conflict of interest involving EU funds, and publishing the results of this investigation.

The rise of illiberal politics in the EU is sometimes seen as an unstoppable force of nature, and one might question whether the European commission is best-placed as an institution to act as check on these tendencies.

But even bureaucrats have options.

They may not be able to address the deep-seated grievances behind the rise of illiberalism, but they can certainly stop funding it.

Carl Dolan is director of Transparency International EU

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