Bureaucratic goof could cost country billions of crowns

What appears to be gross bureaucratic incompetence may cost the Czech Republic billions of crowns. The country’s belated bid to become a party in the ongoing criminal case against the former managers of the Czech mining firm Mostecká uhelná, involving billions of crowns now frozen in Swiss bank accounts - has been thrown out by a Swiss court, leaving the Czechs out in the cold.

The fact that the country’s administration is slow and cumbersome is common knowledge, but rarely is the price of bureaucratic incompetence so staggering. The country’s failure to respond to a Swiss offer for the Czech Republic to be a party to the case has dimmed its hopes of ever seeing a substantial part of the 12 billion crowns which were reportedly siphoned off from the Czech company. The Swiss court ruled last week that in view of the circumstances it was inadmissible for the Czech Republic to be a plaintiff in the criminal proceedings. Although the Czech authorities have 10 days to appeal the verdict Finance Minister Miroslav Kalousek made it clear on Tuesday he was not holding out much hope.

Miroslav Kalousek

“We are going to appeal the court verdict even though we know the chances of succeeding are slim. We feel it is important to use all the options open to us. But our main efforts are aimed at being part of the civil proceedings. That is the only real option for the Czech Republic now and that is the course we are following.”

Switzerland launched a probe into the case in 2005 on suspicion that the Czech mining company’s directors were embezzling huge sums of money, some of which were being transferred to Swiss accounts within an extensive money-laundering scheme. Six Czechs and one Belgian citizen have been charged with money laundering and around 600 million Swiss francs were frozen in close to 100 bank accounts. The Swiss authorities say they approached the Czech side about the case as early as 2006 and had been sent from one institution to another in a vain attempt to elicit cooperation.

In Prague, the Czech Finance Ministry and the Public Prosecutor’s Office are pointing accusing fingers at each other and squabbling over which institution should rightly have responded to the case. Two officials from the Public Prosecutor’s Office have been sacked for sleeping on the job and although the Czech finance minister tried to make light of the matter it is clear that Czech participation in the civil proceedings will be much more costly and much less advantageous than if the country had been in the role of a plaintiff. At a time of belt-tightening and fears of a new recession in Europe, this is a goof that the public will find it hard to understand or forgive. Not to mention the embarrassing fact that it was left to the Swiss authorities to uncover and tackle a big corruption case in the Czech Republic.