Czech PM angrily rejects preliminary EU report finding him in ‘conflict of interest’

Andrej Babiš, photo: ČTK/AP/John Thys

The European Commission has preliminarily found Prime Minister Andrej Babiš in conflict of interest over EU funds paid to the Agrofert holding he founded and placed in a trust two years ago. The confidential audit reportedly concludes that millions of euros in EU subsidies Agrofert companies received since must be returned.

Andrej Babiš,  photo: ČTK/AP/John Thys
In the wake of news on the EU report, opposition party leaders called for the lower house to hold a debate on Tuesday, followed by a no-confidence in Mr Babiš’s government if the conflict of interest is confirmed.

Agrofert receives tens of millions in EU funding annually. In an address to MPs, the prime minster denied any wrongdoing – insisting that Czech authorities had already determined as much, and that the EU report, would prove groundless.

Addressing MPs shortly noon on Friday, he further characterised the preliminary, confidential EU audit – to which Czech authorities had two months to respond – as the culmination of an “anti- Babiš hysteria” based on “lies and disinformation”.

“I also want to stress that the Czech Republic will not be returning any money. And it would be good if the media stopped lying about it. Again, they are spreading lies. I have not broken either Czech or European laws, and so I am shocked to again see these reports. No money will be sent back. It is not true.”

The Slovak-born billionaire was compelled to transfer ownership of Agrofert – the country’s third largest company in terms of revenues – before taking office in 2017.

But according to an investigation by the Czech branch of watchdog Transparency International published in November, he has remained its beneficial owner of Agrofert, a holding of 230 companies in a variety of sectors, from food and agriculture, to forestry, energy – and the mass media.

Photo: Filip Jandourek / Czech Radio
As such, Mr Babiš could potentially influence the distribution of EU subsidies for his own benefit. That possibility was confirmed in January by the EU Commission’s legal services. But Brussels has thus far withheld its political endorsement of the legal analysis.

The prime minister angrily reacted to earlier statement by opposition MPs calling for his ouster or a no-confidence vote. He said earlier allegations of impropriety and claims the Czech state would have to return European funds had proven false.

He also vehemently denied any wronging in the so-called “Stork’s Nest” case, in which a decade ago he and some family members allegedly improperly received 2 million euros in EU subsidies.

“So, again, please, stop lying. No European funds will be returned. I realise that you have no other themes to exploit. If it weren’t for Agrofert and the ‘Stork’s Nest’, what would you do? You’re absolutely dead! You have nothing to talk about! You have no programme. What would you have to talk about? The ‘Stork’s Nest’ – right; the money was returned!”

The Stork’s Nest has been a focal point for mass, weekly demonstrations against the government since early May over concerns Mr Babiš was undermining the independence of the judiciary. A few days after Czech police said he should face trial on EU subsidy fraud charges, he appointed a new justice minister, seen as loyal to him.

News of the preliminary EU report comes a week after Mr Babiš’s centrist ANO party won the European Parliament elections, capturing 21.2 percent of the vote.

Stork Nest | Photo: Filip Jandourek,  Czech Radio
Just ahead of the European elections, the European Ombudsman, Emily O’Reilly, opened an inquiry into whether – and if so, why – EU authorities had been withholding or delaying the release of information on the case. A few days earlier, the opposition Pirate Party said they would sue the EU Commission for having failed to decide on the conflict of interest issue since January.

Agrofert is the third-largest company in the Czech Republic with annual revenues exceeding CZK 117 billion. An investigation by the German public broadcaster ZDF found Agrofert’s income from European funds has almost doubled since Mr Babiš entered politics, initially as a finance minister.