Why the Czech Republic scored worse in corruption index

Photo: Barbora Němcová

The Czech coalition government has just celebrated three years in power. And if there’s one feature that has perhaps set it aside from its predecessor is the lack of corruption scandals. There have been one or two spread far apart, but that’s about it. So a drop in the country’s ranking in anti-corruption and good government watchdog Transparency International’s corruption perception index was an unwelcome gift. We look at some of the reasons for the fall.

Photo: Barbora Němcová
Only one point less in the corruption perception score compared with last year, but a plummeting 10 place drop in the worldwide rankings to 47th out of the 176 countries surveyed. In Europe, the Czech Republic did do a bit better, it was 19th out of the EU 28, but still found itself behind all of the Baltic States and Poland, which scored a total put it 13th in the EU.

Prime Minister Bohuslav Sobotka of the Social Democrats and the second most powerful man in government, ANO leader and finance minister Andrej Babiš, both cast doubt on Transparency International’s findings. But the findings are not alone. The Czech Republic’s score in the Economist Intelligence Unit’s Democracy Index fell for 2016 to 7.82 from 2015’s 7.94 and it remained in the category “flawed democracies.”

At its presentation last week, local Transparency director David Ondráčka spent a lot of time explain the turnaround in the Czech Republic’s previously improving performance and the reasons why the country appeared to have scored so poorly.

One of the biggest reasons appears to be that many of the government’s vaunted anti-corruption efforts have been stalled, sidelined, or pushed through in watered down form. And that is probably a tribute to the increased effectiveness of a second group of wheelers and dealers on the economic and political scene, the oligarchs. They have in effect realized that they don’t need to corrupt the system when they can own or direct it anyway. David Ondráčka:

“We see a lot of cases that got stuck in judicial procedures and they are seen as the flagship of the anti-corruption fight.”

“We see a lot of cases that got stuck in judicial procedures and they are seen as the flagship of the anti-corruption fight. And lastly we see a trend of state capture which is very visible. Oligarchs are entering politics, they are buying media, and they are trying to influence legislation. I believe that this is what the index is reflecting and this is being reflected in the perception of corruption.”

Or perhaps to borrow from the catch phrase of Czech carmaker Škoda Auto, the crooks have simply got clever in altering their game from overt to covert corruption and in covering their tracks.

“The corruption is becoming much more sophisticated than what it used to be. You see that every big case is followed by money laundering using offshore companies and it’s extremely difficult for journalists, activists, or investigators to trace the money. We see that some powerful groups are really able to influence and rig the rules of the game so they actually don’t have to do anything illegal. They are able to adjust regulations so that they legitimizes their behavior. I think that’s what needs to be discussed because this is the form of grand corruption that we are talking about.”

And while the government has talked the talk on anti-corruption moves, it has not really delivered on a series on changes that would really alter the landscape and make it more difficult for corruption to exist. The blunting of anti-corruption moves can take various forms:

David Ondráčka,  photo: Elena Horálková
“We see generally that the anti-corruption legislation is done very improperly and got stuck in several instances. Examples are the law on whistle blowing, the law on lobbying, or the law on the powers of the supreme audit office which got stuck in parliament and won’t be in place and we believe that is a mistake. In other instances, we see that legislation was passed but not in perfect condition. Some rules could be a lot better or consequent. I would mention the law on party financing, the law on conflict of interest and other regulations. And lastly, there are laws that are enacted but they need to be simply enforced. We see legislation on the betting industry, or the civil service act, that needs to be enforced properly.”

Let’s focus for a moment on the civil service act, a move that was supposed to pave the way for an efficient and effective professional Czech civil service. It was a move long demanded by the European Commission with Brussels eventually having to hold a gun to the Czech government’s head to force it to move. But whatever the faults with the final law, the main failing is that does not appear to have resulted in any dramatic transformation of the service itself or the way it appears to perform.

“Well, I believe that the implementation is in a way fake. A lot of the internal competitions for positions in the public sector are not advertised at all. They just seem to confirm the people who are already in the positions. So there is actually no real inflow of new blood and turnover of public servants. There is still a certain politicization of ministries and government agencies. You see that when someone is not toeing the line they are replaced. And lastly, the remuneration of civil servants was not finalized so that we can still see cases when someone gets an enormous bonus at the end of the year and there is no reason why or it is not explained properly and it can be seen as a gift for loyalty.”

“We see a trend of state capture which is very visible.”

But the news was not entirely bad. Transparency International’s local director highlighted one law demanding that state contracts be made public which he believes could make a real difference once it has been given some real teeth and begins to bite.

“My position is that this online register of contracts is a very positive norm which will actually shed light on a number of shady deals and will be a kind of sunshine act. However, it’s in the initial stage when a number of government agencies are not disclosing this information yet. They are very much hesitating about which contracts need to be disclosed. And above all there is still no sanction in place. From this July, the sanction should be if you don’t publish the government contract online, then it’s not valid. And I believe that’s what will make a change and will create some pressure as regards enforcement.”

One of factors for the relatively poor corruption is that many high profile corruption cases seem to get stalled when they come to court. One of the biggest cases of recent years is that of the former health minister and regional governor, David Rath, allegedly caught red handed with cash taken as bribes. The court case appeared to be proceeding smoothly with Rath sentenced to eight-and-a-half years before an appeal questioned some of the key wire-tap evidence collected by the police and used by the prosecution.

David Rath,  photo: Filip Jandourek
Zdeněk Matula, president of the Union of State Prosecutors, sums up the surprise that resulted:

“It was a surprise for us because according to judicial decisions or according to the European Court of Human rights this kind of decision and the reasoning of this kind of decision is perfect or without any kind of problem.”

Matula says a fundamental flaw of the Czech criminal system is that it very formal and as a result becomes bogged down in procedural battles which drift a long way from proof of guilt or innocence. Reforms have been talked about for years but there are not many votes in it and governments reluctant to act.

“When the proceedings are very formalistic, it is very easy for attorneys to focus on these possible procedural mistakes rather than to focus on the core of the case. So nowadays, 80 percent of our cases are about procedural problems and not about the core matter of the case and that is the problem.”

Another factor which influenced this year’s corruption perception was the government battle over police reforms which gave every impression that they were trying to curb a special unit doing a good job and had little to do with greater police efficiency. The battle cast further doubts over the degree of police independence of political machinations. But while Matula says he does not think the force is corrupt, he does believe it has trouble taking on the big fraud and corruption cases that might have a serious impact.

“There is still a certain politicization of ministries and government agencies.”

“I do not think there are influences on the pending trials, I don’t think so. But if you haven’t a good policeman, a good prosecutor, or a good judge, you cannot have a case. The problem is at the beginning, we definitely need more skilled policemen who are able to deal with the most serious economic crimes. This is the problem. There are policemen nowadays but they need more skills, they need more background that will help them with these cases.”