Media reports from the Czech Republic state that an audit report, recently finalised by the European Commission, has found Prime Minister Babiš in a conflict of interest with the company he founded, Agrofert, and the non-agricultural EU funds it receives.
The conflict of interest was first raised by Transparency International Czech Republic (TI-CZ) in June 2018. Information contained in the Slovakian public register of beneficial ownership showed that Babiš is the sole beneficiary of two trust funds that own all of the shares of Agrofert. As Prime Minister, Babiš is involved in negotiations of EU subsidies to the Czech Republic.
This final report according to number of Czech media confirms a preliminary European Commission audit report from June this year. As a result, Agrofert has not been eligible for non-agricultural funds and subsidies from the European Union since at least from February 2017. The company is estimated to have received over 75 million Euros per year in subsidies in general. An audit report examining potential conflicts of interest in EU agricultural subsidies to Agrofert is expected next year.
“This is a significant moment in the fight against ongoing state capture in the Czech Republic,” said David Ondracka, Director of Transparency international Czech Republic. “Czech public institutions controlled by Babiš’s ANO party have given rulings that fly in the face of obvious and publicly available facts. They cannot ignore this report by the European Commission. Agrofert receives not only European funds, but national funds as well. Until he resolves this international conflict of interest, Babiš should resign to prevent any further damage to the Czech Republic.”
“Oligarchic politicians reaping the benefits of EU funding for their private gain completely undermines one of the basic ideas of the EU project,” said Michiel van Hulten, Director of TI EU. “The EU needs to be much more diligent in ensuring that conflicts of interest are detected and prevented. Setting up stronger control mechanisms is the only way to ensure these types of funds are used as intended.”
TI has acted solely in public interest
Transparency International Czech Republic has filed a defamation lawsuit against Prime Minister Babiš over his repeated description of the anti-corruption organisation as “corrupt”. “Despite the attacks against our organisation by the Prime Minister, it is obvious that we have acted in public interest. Laws are meant to obeyed, not circumvented,” Ondracka added.
Delia Ferreira Rubio, Chair of Transparency International, said: “Countries with more corruption in the public sector are also environments where civil society organisations face more threats and challenges, from smear campaigns, to physical risk, to legal problems. This case in the Czech Republic clearly demonstrates the essential role that civil society plays in bringing corruption to light and safeguarding state resources for the benefit of citizens.”
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