Police propose indicting prime minister after investigating Stork’s Nest affair

Stork’s Nest

After concluding an investigation into the case publicly known as the Stork’s Nest affair, Czech police have proposed indicting Prime Minister Andrej Babiš and his former advisor Jana Mayerová. The decision whether to press charges will be decided by a public prosecutor who already dismissed the case two years ago.

Less than two months after Andrej Babiš was found to be in a conflict of interest by a European Commission audit, the Czech prime minister is facing the prospect of a criminal investigation related to subsidy fraud.

Czech police announced on Monday that they had concluded their investigation into the financing of Stork’s Nest, a resort in Central Bohemia for which Mr Babiš is alleged to have illegally acquired EUR 2 million of EU subsidies meant for small companies by temporarily changing the status of the resort over a decade ago.

Andrej Babiš | Photo: Johanna Geron,  ČTK/AP

The investigators recommend pressing criminal charges against both Mr Babiš and an ex-manager from company Agrofert, Jana Mayerová.

Agrofert is a multi-bilion dollar company founded by Andrej Babiš, which he has since placed into a trust fund in order to adhere to Czech legislation. However, according to the audit of the European Commission, he still exercises a level of control over the company, leading to a conflict of interest.

The 34,000 page investigation file has now been handed over to public prosecutor Jaroslav Šaroch, who will decide whether to file a charge, stop the criminal prosecution or settle the matter another way.

Opposition leaders welcomed the announcement. Civic Democrats leader Petr Fiala tweeted that the suspicion of subsidy fraud is one of the reasons why his party cannot support the government led by Mr Babiš’s ANO party. His counterpart from the Pirate Party, Ivan Bartoš, called for Andrej Babiš to “resign and enable an independent investigation of the affair”.

Meanwhile, Industry and Trade Minister Karel Havlíček, who was nominated for the post by Mr Babiš’s ANO party, told Czech Television that the affair is again making headlines due to the approaching elections into the Chamber of Deputies.

Karel Havlíček | Photo: Office of Czech Government

“It is nothing new. Just a repeat of what happened two years ago. This thing has been dragging on for five years. Stork’s Nest was financed 14 or 15 years ago. We can speculate why this has come out exactly when [Mr Babiš] is in politics.”

Mr Babiš and several of his associates have faced a criminal investigation for the Stork’s Nest affair in the past. However, in 2019, the case was dropped by prosecutor Jaroslav Šaroch, only for the investigation to be restarted after a review by Chief Prosecutor Pavel Zeman. Mr Šaroch will now again be making the decision about whether to press charges.

Stork’s Nest originally belonged to Agrofert. In December 2007, the resort became a joint-stock company, enabling it to draw from EU subsidies for small and medium enterprises. The company eventually returned to Agrofert ownership.

Throughout the investigation Mr Babiš has vehemently proclaimed his innocence, saying that the affair is part of a conspiracy to get him out of politics.