Czech finance minister fails to dispel suspicion of subsidy-fraud as country awaits outcome of EU investigation

Embattled Czech Finance Minister Andrej Babiš faced a special session of the lower house on Wednesday to explain the circumstances surrounding EU funding for his Stork’s Nest farm and conference centre. The minister heard accusations of fraud and unethical conduct and his one-and-a-half hour address failed to convince opposition deputies. At the end of the stormy session the ruling coalition, which is trying to ride out the storm, pushed through a motion to postpone further debate until the outcome of an EU investigation on the matter.

Andrej Babiš, photo: CTK

Finance Minister Andrej Babiš got a hostile reception on Wednesday as he walked into the Parliament building to try to clear his name. Outside, a group of protesters dressed as storks held up banners accusing him of being “a liar and a thief” and asking Brussels for subsidies to “feather their nests”.

Inside the house the atmosphere was thick as deputies waited to hear the finance minister’s explanation regarding the ownership of the farm at the time when it filed for and received a 50 million crown subsidy intended for small and medium-sized entrepreneurs. The minister’s explanation did little to dispel suspicions of subsidy-fraud.

“The Stork’s Nest farm was, at the said time, owned by my two adult children and the brother of my partner Monika. I did not want to disclose the names of the shareholders because I wanted to protect my children.”

Petr Fiala, photo: CTK

The explanation drew jeers from the opposition. Civic Democrat Party leader Petr Fiala said the finance minister was insulting the intelligence of both deputies and the public.

“Whose interests would Mr. Babiš daughters’ have defended other than their father’s and whose interests would the brother of his partner Monika have defended other than his sister’s?”

The opposition TOP 09 said it was scandalous that a man being investigated on suspicion of EU subsidy-fraud was the country’s top guarantor of the handling of EU funds and called on the prime minister to dismiss him. Prime Minister Sobotka said he would not make a decision before the outcome of an investigation by the European anti-fraud office (OLAF).

“I do not think that I, as prime minister, – or anyone else in the coalition or opposition – can take on the role of an investigator, state attorney or even a judge.”

Stork’s Nest, photo: Filip Jandourek

Mr. Babiš’s coalition partners, who have vowed to support a conflict of interests bill which would in future prevent cabinet members from owning companies, joined forces to support a motion postponing further debate on the issue until the outcome of the OLAF investigation.

Meanwhile, the head of the EU’s Commission for Budgetary Control MEP Ingeborg Grassle told Czech Television that she would propose an amendment to EU legislation which would ban owners of companies from positions where they could control or audit EU funds across the 28-member block.