Czech parties gear up to clip wings of billionaire finance minister

Reuters News
Posted: Sep 13, 2016 2:06 AM

By Jan Lopatka

PRAGUE (Reuters) - He is a vivacious billionaire businessman who has emerged as his country's most popular politician, offering Czechs a break with old parties tainted by graft; but opponents who see in Andrej Babis a threat to democracy are pressing him to choose between his commercial empire and political power.

Babis, product of the disillusionment with elites that has shaped politics from Rome and Madrid to London and Washington, is favorite to win an Oct. 2017 election with his ANO movement. He is, he says, no politician - despite his five years in politics - but a businessman who gets things done.

Not all in politics see the current Finance Minister in such a favorable light.

The Czech parliament may vote as soon as Wednesday on "Lex Babis", an attempt to limit the accumulation of media, business and political power which, for some, Babis represents.

The proposed amendments to the 'conflict of interest' law, backed by some government and some opposition factions, would ban any future member of cabinet from controlling companies or having stakes in the media. Firms where they own over 25 percent would lose access to public contracts, non-automatic subsidies and investment aid.

Some have compared Babis with former Italian prime minister Silvio Berlusconi, who combined media and business with political power. In the United States, Republican presidential candidate Donald Trump has drawn on the same anger with the political elite, though Babis might eschew any such comparison.

Babis is the biggest private employer in the central European country with over 30,000 workers in over 250 companies from chemical firms to newspapers and fertility clinics. His weighty business persona he leavens in running a Michelin star restaurant in France, sponsoring pop bands and sending wry tweets. But his rivals are not assuaged.

"The aim of the proposals is that one person cannot sign a decision in the name of the state at 8.10 and instruct a company he controls about which public tenders to take part in at 8.20," said Martin Plisek, deputy for the opposition TOP09 party who proposed some of the amendments.


Babis sees the graft not on his doorstep. In this he finds popular resonance after a series of scandals involving public tenders and distribution of EU funds. A center-right cabinet collapsed in 2013, although graft investigations have not led to any high profile convictions.

Under the proposed law, Babis, if he were to join the next cabinet, or lead it as prime minister, would have to reduce his stake in his main holding firm Agrofert below 40 percent or transfer it to a trust fund, and end his media engagement.

Babis has admitted having conflicts of interest but said he never abused his position.

"It is a law against me," Babis said in an interview with the weekly Tyden released on Monday. "If it is approved, I will start dealing with it, and my lawyers will make a recommendation to me. I cannot rule out a constitutional suit."

Babis had earlier warned the law could break up the ruling coalition ANO is part of, but has not repeated the threats in recent weeks.

The former communist party member and foreign trade official has built up Agrofert since the mid-1990s through a series of acquisitions.

Its Czech operations received 5.5 billion crowns ($228.48 million) in Czech and EU subsidies between 2006 and 2014, according to the latest data Agrofert provided.

Agrofert said these included farming subsidies, available to all farmers equally, and environmental investment aid approved by previous governments. The group also has multiple business engagements with the state, such as provision and storage of commodity reserves.

One of the amendments, proposed by deputy Jan Chvojka from Prime Minister Bohuslav Sobotka's Social Democrats, would ban ownership of media by a member of cabinet.

Babis bought two of the country's handful of daily newspapers and the most popular radio station in 2013, resulting in the departure of dozens of staff.

"The media should play a controlling role. Of course when a member of the government owns a significant media outlet, it does not fulfill this role," Chvojka told Reuters.

Earlier this year, Babis faced accusations that he had bent rules in 2008 by temporarily transferring ownership of a conference center project to his family members so it could qualify for an EU development subsidy only meant for small firms. He denied any wrongdoing in that case.

(Editing by Ralph Boulton)