Pressure builds for release of EU fraud investigation report into Czech PM

Pressure is building up for a European Commission fraud report about Czech prime minister Andrej Babiš’ business dealings to be made public. The report into the so-called Stork’s Nest affair has been completed and sent to Prague but officials and lawyers are still analysing whether and when it might be released.

Andrej Babiš, photo: Filip Jandourek

The so –called Stork’s Nest affair has dogged ANO leader and current Czech prime minister Andrej Babiš’ for more than two years.

At its most basic, the report by the European Commission’s anti-fraud unit, OLAF, focuses on the circumstances of a 50 million crown EU subsidy for the development of a hotel and recreation centre on the outskirts of Prague and whether the cash was illegally tapped.

The funds used should have been destined for small and medium sized businesses, but this would hardly have been the case if a clear line of ownership or control could be traced to Andrej Babiš’ massive agro-chemical company, Agrofert. Various corporate and financial gymnastics blur that ownership line, but Babiš eventually admitted last year that the Stork’s Nest was the property of his daughters and a son-in-law.

But the broader significance is whether the report suggests the Czech prime minister and leading ANO party boss and former Agrofert manager, Jaroslav Faltýnek, committed fraud and whether the report’s conclusions will tarnish Babiš’ reputation. The report’s contents could fuel the attacks on Babiš’ suitability to hold top office or could bury the affair once and for all. Babiš and others deny any wrongdoing.

Stork’s Nest|Photo: Filip Jandourek, Czech Radio

And the timing of the report and the possible release of its findings are crucial. Andrej Babiš’ minority government faces a vote of confidence in the lower house of parliament on January 10. A damning report will provide a rallying cry to his opponents and probably damage his chances of trying to negotiate support or acceptance of his government at that vote, or in later chances to install his government which have been promised by the president.

The OLAF report arrived at the Ministry of Finance on Wednesday and first indications there was that an analysis would take around two weeks with nothing released before. That quickly sparked calls from most parliamentary parties for the report’s contents to be released as soon as possible.

Finance minister, Alena Schillerová, addressed these demands on Thursday in a brief response to questions:

"I have to examine whether making this report public would be a matter for criminal proceedings. Already yesterday we send a request to OLAF as to whether the report or parts of the report could be made public."

But she was guarded about what the report itself says and when it might be made available:

Alena Schillerová, photo: CTK

"I do not want to express myself about this until the analysis is finished. I personally am not in possession of this report. It is being analysed by officials."

With the proper clearance, Schillerová said the report could be released within days. The reference back to OLAF is a bit puzzling. Once OLAF reports are completed and sent, the ball’s very much in that country’s court what follow up action to take. Historically, that’s been one of the biggest weaknesses of the EU fraud office with many countries shelving reports. And EU institutions are currently in shut down mode with work cranking up again from January 3. A Brussels answer could take time.