East European Perspectives: March 6, 2002

PATRONAGE AND CORRUPTION IN THE CZECH REPUBLIC (Part 2)

By Jeffrey M. Jordan

III. Power Politics: The ODS And The CSSD (continued)
Media Relations

This Motlik-Klaus connection is only one component of the ruling bloc's patronage of "friendly" media sources, while conversely, the government has used all instruments available to suppress and intimidate media that take a more critical stance. Vladimir Zelezny's TV Nova has been very gracious in its reporting on the ODS-CSSD opposition agreement, never exposing the truth behind it, and always dutifully presenting the ODS as a true opposition party. In return, the government has treated Nova with the utmost benevolence. It recently extended Nova's license for another 12 years virtually for free, in spite of the fact that Czech taxpayers face a possible 23 billion crown judgment against the country as a result of Zelezny's misdealing with U.S. businessman Ronald Lauder ("Prague Business Journal," 26 November 2001). Zelezny is also the subject of numerous other lawsuits pending in Czech courts, some relating to tax evasion charges worth about 18 million crowns ("Prague Business Journal," 24 September 2001).

The Klaus-Motlik-Zelezny circle may be completed via the CEZ privatization. The tabloid "Super" -- which lauds the ODS and trashes the opposing, though recently dismembered, Four Party Coalition, as well as anyone close to President Vaclav Havel -- is owned by EPIC. EPIC stands to gain a tremendous amount of money if Electricite de France wins the CEZ tender. "Super" and Nova, already close through other connections, have recently agreed to merge their advertising businesses. Motlik and Zelezny have both been generous in their sponsorship of the ODS, and Nova has been particularly vocal in its endorsement of Klaus as the next president ("Prague Business Journal," 26 November 2001). While people like Klaus, Motlik, and Zelezny might plausibly argue that the investigative weekly "Respekt" serves a similar function as a mouthpiece for President Havel, it is doubtful that "Respekt" owner Karel Schwarzenberg, has a similar vested interest in Havel's political success.

Klaus has proven equally efficient in disposing of his enemies on the airwaves. In June of last year, the director of Czech TV's (CT) political programming department, Martin Mrnka, was dismissed over some trivial management mistakes. The fact that his dismissal closely followed the airing of a program entitled "Tentacles of Corruption," which Klaus described as "tendentious, expedient, and tantamount to an attack against the democratic system in the Czech Republic," was explained by interim CTDirector Jiri Balvin as an "unfortunate coincidence." Incidentally, Mrnka also headed CT during a crisis in 2000 when employees of the station protested and started their own broadcasts in response to the appointment of new management they believed was biased in favor of the ODS (CTK, 11 June 2001). Balvin was rewarded with his election as general director of CT for the next six years ("Prague Business Journal," 5 November 2001).

The most notorious example of the current power bloc's drive to solidify its hold on public opinion and silence opposing voices is the widely publicized lawsuit threatened against "Respekt" magazine. Though Zeman has had an acrimonious relationship with "Respekt" for some time, his government gave an unprecedented response to an op-ed piece in the magazine that criticized the entire government for its failure to win the war it declared on corruption in its 1998 platform, the "Clean Hands" initiative. In addition to filing a criminal libel suit, each minister would sue the magazine for civil damages of 10 million crowns, amounting to a total 170 million-crown claim - enough to put the magazine, with circulation of less than 30,000, out of business. Zeman's stated intention was to "eliminate" "Respekt." This move garnered international attention as a publicly expressed intention by a government to attack the freedom of expression. Although a number of ministers later backed down from their threats, owing largely to the cash costs they would have to bear to initiate such a suit, the "Respekt" incident marks one more notch on the stick the government has used to attack and intimidate independent media. One can also surmise that the attack on "Respekt" was, in reality, a warning shot fired at larger and more influential critics, namely the two independent national newspapers, "Lidove noviny" and "Mlada fronta Dnes" ("Prague Business Journal," 29 October 2001).

The Mysterious Mr. Slouf

The second component of this corrupt network within the government involves the ascendancy of old-guard communists to positions of influence in the CSSD. Allegations of communist complicity have surrounded several ministers for some time. Foreign Minister Jan Kavan's purported cooperation with the secret police (StB) while he was living in Britain in the 1970s was widely publicized, though evidence of willful collaboration remains inconclusive (CTK, 23 May 2000). Several formerly high-ranking communists have recently been appointed to cabinet posts in the government by Interior Minister Stanislav Gross and by Minister without Portfolio Karel Brezina. Gross and Brezina, (then) at ages 30 and 27, respectively, are the two youngest members of the government. Opposition party members speculate that the CSSD is compensating for their lack of experience by having them appoint older "Bolshevik" advisers (CTK, 10 April 2000). The encouragement behind such appointments likely comes from the mysterious but powerful influence of Miroslav Slouf.

Miroslav Slouf, Prime Minister Zeman's chief adviser, is a former high-ranking communist "apparatchik." He joined the CSSD in the early 1990s and has since had a growing, if insidious, influence in the party. Well-connected to his old Soviet-era network and well-practiced in its ways, he is a serious political force in the current government. Stories of his business dealings, contacts, and capabilities have attained mythical proportions. It is claimed that he is willing and able to buy support with favors, and that many are obliged to him for past services performed. Those who do not feel duly grateful are allegedly held at bay by compromising information he holds and influence he wields. His involvement in the Iraq trip and his connection with Czech-American Milan Jedlicka are certain, but there are still more questions than answers as to what they exactly mean. In any case, the Baghdad trip and the Slouf-Jedlicka connection, especially in the planning of Zeman's proposed 2000 trip to the U.S., were sufficiently questionable to arouse suspicion at the highest levels of the U.S. government. At the time of Zeman's planned visit, Jedlicka was apparently trying to arrange the sale of U.S. F-16 fighters to the Czech Republic. While this may account for his involvement in Zeman's trip, it offered no solace to the U.S. to have someone with established connections in Iraq arranging the sale of U.S. military technology ("Lidove noviny,"19 September 2000).

Slouf's role in several conspiracies aimed at discrediting Zeman's political opponents is fairly well-established, though he and Zeman deny any involvement in or knowledge of such affairs, and lower-level aides have generally taken the blame. In the "Olovo Affair," detailed plans to attack the reputation of Petra Buzkova, a high-ranking CSSD member and vocal opponent of Zeman, were leaked to journalists at "Mlada fronta Dnes." All evidence pointed to Slouf's involvement, but two lower-level aides, Vratislav Sima and Zdenek Sarapatka, took the fall ("Pravo," 25 August 2000). In the "Stirin Affair," pressure was placed on the director of Stirin Castle to corroborate a story alleged to have been concocted by Zeman and Kavan that former Foreign Minister Josef Zieleniec had bribed journalists at the castle. In spite of Slouf's apparent involvement, he somehow avoided the official blame while Foreign Ministry official Karel Srba, who also played an instrumental role, got sacked. Ironically, Srba, before his dismissal, had been in charge of the "Clean Hands" anticorruption program at the Foreign Ministry ("Mlada fronta Dnes," 26 June 2001).

Efforts to intimidate and discredit political opponents make a good scandal and are certainly worthy of rebuke, but surely by now the Czechs have grown accustomed to intrigue and can recognize it when they see it. Much more alarming is Slouf's alleged drive to capture control of the police force.

On 13 March 2000, President Havel tasked the BIS with investigating apparent attempts by "one concrete person" to destabilize two elite units of the police squad, the Office for Uncovering Organized Crime (UOOZ) and the Section for Uncovering Corruption (SPOK). Havel's suspicion arose from a series of anonymous letters concerning the state of investigation of a number of serious crimes. The investigations had started to falter as early as 1996, but since the CSSD came to power, the inability of the police to successfully prosecute cases "assumed almost incredible dimensions." While over the previous five years damages to the Czech economy from "tunneling" (the pillaging of corporate assets from within by owners and managers, leaving behind only a hollow shell for unsuspecting shareholders) and tax evasion exceeded 250 billion crowns, not a single important case was successfully closed. It appeared that certain crimes were receiving protective cover from high places, particularly the investigations of ODS Swiss accounts, major cases of asset stripping, and political scandals such as the Stirin affair.

Havel's curiosity was also piqued by the opposing verdicts of Zeman and Interior Minister Vaclav Grulich on the work of the heads of these units. While Grulich evaluated their work positively, Zeman termed it "far from brilliant." Zeman's assessment may provide some insight into an effort by those close to him to remove and replace the leadership of the police force. Grulich privately confided to Havel that Slouf was indeed trying to influence personnel decisions at the highest levels in the force. Grulich also made a public statement to this effect shortly before he was involuntarily dismissed from office by Zeman and replaced by Stanislav Gross.

Other forms of direct pressure had already been applied to the heads of the two departments. SPOK head Evzen Sirek had been accused of accessing top-secret computer files from his home PC, but was later cleared of guilt. However, the mere fact that a criminal investigation had occurred would be enough to ensure that Sirek never passed security screening, thus severely limiting his career ("Lidove noviny," 14 March 2000). In fact, following the BIS investigation, Sirek would be fired by new Deputy Police President, Vaclav Jakubik.

Around the same time as the Sirek case, the head of the UOOZ unit that specializes in investigating the Russian mafia, Zdenek Machacek, was arrested and detained on trumped-up charges of blackmail. Machacek's trial, along with that of another officer accused with him, is currently in progress. Numerous irregularities surrounded the investigation, and Machacek was indicted in spite of a solid alibi -- he was abroad on holiday when the alleged incident occurred. The Machacek case is especially informative since the attorney representing the star witness against Machacek is a man named Josef Doucha.

Doucha, a former police investigator, was Slouf's top choice for president of the police force. Doucha currently works as an attorney, and in addition to representing the star witness in the blackmail case against Machacek, the former chief of the anti-Russian mafia police unit, he represents a group of Russian "entrepreneurs" with apparent links to the Russian mafia. In fact, Doucha's and Machacek's paths had crossed previously. In 1995, Machacek was the lead investigator in the largest mafia "round-up" to date. About 200 people were arrested in a raid on the U Holubu restaurant in Prague, where mafia bosses were said to be dividing spheres of influence. Doucha currently represents some of those detained in the operation ("Hospodarske noviny," 5 September 2001). Naturally, Havel became concerned when he learned that Slouf was pressing hard to have Doucha named as police president.

Havel's announcement of the investigation sparked immediate criticism both by CSSD and ODS members. The two parties immediately proposed changes to the Czech Constitution that would remove the president's powers over the BIS. Shortly after the investigation began, Zeman removed Minister without Portfolio Jaroslav Basta from office. Basta had been in charge of the government's "Clean Hands" campaign, and its lack of success was cited as the cause for his dismissal. Basta had also been in charge of Czech intelligence services, including the BIS. After his removal, authority over the BIS was assigned to Deputy Prime Minister Vladimir Spidla, Zeman's heir apparent and close ally, but a man with no experience in intelligence (Kominek, 2000).

Several months later, newly appointed Deputy Police President Vaclav Jakubik announced the results of the investigation. There were "no serious shortcomings," and both elite police units were "working effectively" ("Lidove noviny," 19 July 2000). This outcome, which at the time was hailed a victory and a vindication for the president, must be examined a bit more closely. Immediately after the investigation began, control over the BIS was shifted to Zeman's protege, Spidla. Notwithstanding this, the BIS has proven itself time and again perfectly capable of ineptitude. Most importantly, it was later revealed that Vaclav Jakubik, the official who made the announcement concluding the investigation, is connected, through a chain of business partners and company links, to one of the most powerful and dangerous bosses of the Russian mafia, Sergei Mikhailov. UOOZ has been on Mikhailov's trail for quite some time. In fact, Mikhailov was present at U Holubu during Machacek's famous raid, and he received a 10-year prohibition on entering the Czech Republic. Now it appears that he may have a very influential friend in Jakubik, who oversees UOOZ ("Mlada fronta Dnes," 12 October 2001). From all appearances, the communist-criminal network that operates both in and out of the government has succeeded in increasing its influence in what are probably the two most crucial police divisions in the Czech Republic today. And it was all accomplished under the political cover of a BIS investigation of the forces initiated by a well-intended President Havel. If accurate, Slouf could certainly congratulate himself.

One must seriously wonder about Prime Minister Zeman's awareness of and involvement in his chief adviser's exploits. Is Slouf a "rogue" within the CSSD, or is he Zeman's right hand? Available evidence points to the latter. Slouf's activities are clearly beneficial to Zeman's government, if detrimental to democracy. He has been instrumental in helping the CSSD-ODS bloc consolidate a great deal of power, he has been useful in dealing with actual and potential political opponents, and he has assisted in covering the trail of guilt left by those in power. Yet despite all the scandals, the loud calls for Slouf's dismissal, and even a recent criminal investigation of Slouf for embezzlement, Zeman does not fire him. Furthermore, Zeman's responses to revelations of Slouf's machinations are generally evasive, demonstrating a lack of desire for transparency and democratic accountability on his part. When questioned about Jedlicka's involvement in the proposed U.S. trip, and about the alarm expressed by U.S. officials, Zeman offhandedly dismissed the whole issue and denied any such conversation with (then) U.S. Ambassador John Shattuck. He claimed that their conversation had instead focused on trade relations between the two countries and jibbed the press with the comment that "the export of cheeses is far less attractive to the media than some Mafioso" ("Pravo," 19 September 2000). When President Havel confronted Zeman with his suspicions of Slouf's pressure on the police force, Zeman was similarly unconcerned. According to a Havel aide, "We were surprised at Zeman laughing loudly at the idea. He considered it a good joke, while it sends shivers down my spine" ("Mlada fronta Dnes," 28 March 2000). One plausible explanation for the Zeman-Slouf relationship seems to be that Slouf operates under orders from Zeman, and Zeman simply plays dumb when questions are raised. Alternatively, it is possible that Zeman is not kept fully apprised of Slouf's activities. But his response when these activities are disclosed suggests that Slouf has his tacit approval. Either way, whether by direct order or "carte blanche," Zeman is implicated in Slouf's power play.

IV. From Russia With Love
According to "Jane's Intelligence Review," "the Russian mafia also has strong links with the Russian intelligence apparatus" (Kominek, 2000). Several recent BIS reports have documented efforts by both the Russian mafia and Russian intelligence to gain influence over sections of the Czech government and economy. As it has become more entrenched and powerful, this Russian mafia-intelligence network has exerted a corrupting influence in Czech institutions. This external network may have already gained a foothold to manipulate the workings of the Czech Police, and possibly even sections of the Czech government under Zeman.

One only needs to take a 10-minute walk through idyllic downtown Karlovy Vary to gain a sense of the continuing Russian presence in the Czech Republic. The town is marked by streetsigns printed in Russian, and the streets are filled with Russian "nouveaux-riches." There is even a newly constructed Russian Orthodox church. Certain hotels and spas cater exclusively to Russians. But Karlovy Vary's eastern clients are not there just for the healing waters. According to a 1997 BIS report, the Russian intelligence services are firmly entrenched there and have purchased a significant amount of real estate in town. There has also been a steady wave of immigration from Russia to Karlovy Vary. The editor of the local Russian language newspaper estimates about 15,000 full-time Russian residents while, interestingly, the mayor of Karlovy Vary estimates only 100-200. The majority of these immigrants allegedly got rich during Russian privatizations, and they still maintain business connections with the industrial heartland, oil fields, and arms factories of central Russia. The old Soviet crony network remains strong in Karlovy Vary, and it is easily transported to and fro as Karlovy Vary's airport runs a daily flight to Moscow ("Der Spiegel," 24 April 2000).

Russian intelligence services are not confined to this West Bohemian resort, however. A 1998 BIS report estimated that one-half of the 400-member staff of the Russian Embassy in Prague, which maintains a staff three times larger than in Warsaw, is comprised of secret service agents. The report also asserts that Prague is currently the center of operations for all Russian espionage activities in Europe. If so, then Karlovy Vary, with its proximity to the German border, is certainly an important outpost. Senator Michael Zantovsky, head of the Senate Foreign, Defense, and Security Committee, questions BIS vigilance in dealing with Russian spies. He notes that while about 150 spies have been expelled from Western countries in the past 10 years, only one has been expelled from the Czech Republic ("Respekt," 21 September 1999).

In its 2000 annual report, the BIS cites the ongoing attempt by the Russian secret services to gain influence in the Czech government. This outside interest has grown due to events like the opening of the Temelin nuclear power plant and Czech accession to NATO. Russian intelligence has attempted to infiltrate various Czech ministries in order to influence decision-making and to discredit the Czech Republic abroad. It has also aimed to raise questions within the Czech Republic concerning the costs and appropriateness of NATO membership (CTK, 24 October 2001).

The same 2000 BIS report, as well as statements from the Ministry of Interior, cited a parallel rise in mafia activity along with a shift in tactics by the mafia. Already firmly entrenched in the Czech Republic, the mafia is now branching into legal businesses such as financial and real-estate investments, trade in raw materials, and manufacturing. Using the capital generated in other countries from criminal enterprises, the mafia is setting up such legitimate businesses in the Czech Republic. It is also seeking to gain influence over the economic spheres in which it operates, and over the government that regulates them. "They attempt to penetrate economic spheres, gain interest in strategic economic sectors, and they try to cause corruption of state administration and influence decision making. They try to establish their members or collaborators in bodies of state power and political parties" ("Mlada fronta Dnes," 12 July 2001), according to the Ministry of Interior.

To wonder whether or not this heavy Russian mafia penetration is facilitated by the influence of Slouf, Doucha, and their likes is to engage in dangerous conspiracy theories. On the other hand, who would deny that some conspiracies do exist, and that the best way to cope with that favorite East European pastime of wild speculation is to remove their "raison d'etre"? Experienced politician that he is, Milos Zeman must be aware of this. And yet he has failed to act. Why?

V. Conclusion
"Tva vlada, lide, se k tobe navratila." "People, your government has returned to you." Vaclav Havel borrowed Tomas Masaryk's words, delivered in 1918 upon the founding of the first Czechoslovak Republic, for his 1990 New Year's Day speech. In 1990, as in 1918, the statement was an honest pledge to the Czechoslovak people as well as a call to the responsibility that their new freedom would entail. However, the response of most Czechs to continued corruption has been a retreat into passivity and continued acceptance of corruption as a norm. Following the release of the Transparency International index, a poll revealed that 52 percent of Czechs consider their nation to be corrupt. Over 40 percent also said that corruption has always existed, exists now, and will always exist, and that it is thus useless to try to fight it. Moreover, only 4 percent said they were ready to report corruption (CTK, 11 July 2001).

The ruling power bloc has done its utmost to take the government back from the people. In its "Nations In Transit 2001" report, Freedom House cites a steady decline in democratization, press independence, and rule of law, and an increase in corruption in recent years. Yet the Czech people have remained startlingly acquiescent to such negative developments. It is possible that disgust has led to apathy. It is also possible that they are not fully aware of the costs that they must individually bear as a result of widespread corruption. The potential economic impact of political control over privatizations and corporate restructurings could be enormous, particularly when the Czechs are already among the most heavily taxed people in the world (Karanycky et al, p. 168).

Citizen-based initiatives have been too few and far between, and the current government has been predictably suspicious of non-governmental organizations. The Czechs are still coming to terms with the fact that freedom goes hand-in-hand with responsibility, and that there is a cost to defending it. Until Czech society at large is willing to bear this burden, conditions will remain ripe for continued corruption. The large public outcry against political appointments made at Czech TV in late 2000 could certainly be seen as a step in the right direction.

In addition to pressure from below, institutional reform must accompany any serious battle with corruption. The Czech bureaucracy, court system, and, as earlier discussed, Czech law enforcement continue to be subject to political pressure. Corrupted or corruptible individuals must be removed from service, and the institutions themselves detached from the possibility of political influence.

Finally, the Czechs need continual outside "encouragement" to clean up their act. Organizations like NATO and the EU are well-positioned to pressure the government to adopt and abide by the standards and values embraced by the West. This influence is all the more imperative given the efforts of external criminal networks to further corrupt the system. The EU is particularly important since most Czechs recognize, whether they will admit it or not, that their future lies with Europe. It should be made clear that to become part of Europe, and to fully participate in its institutions, the Czechs must not only adopt a body of laws, regulations, and standards, but they must put them into practice. In the most recent EU annual report on the Czech Republic, overt criticism of the state of Czech corruption was conspicuously absent. This was to be the last report before accession decisions were made, so it was politically imperative to cast the Czech Republic in a positive light. Internal EU politics may have also held sway over the truth. For example, irregularities in EdF's courting of the Czech government in the CEZ privatization were ignored, likely due to lobbying from the French state-owned electricity producer ("Prague Business Journal," 19 November 2001). At the same time, however, Brussels must know that admitting a still-dysfunctional Czech Republic to the European club is no good for anybody. If both sides are serious about enlargement, the challenge posed by endemic corruption must be faced head-on.

(The author lived and taught in the Czech Republic from 1997-2000 and is currently an MA candidate at the Johns Hopkins School of Advanced International Studies.)

SOURCES

CTK (Prague), 2000-2001.



"Hospodarske noviny" (Prague), 2001.



Karanycky, A., Motyl, A. and Schnetzer, A., (eds.), 2001, Nations In Transit 2001 (New Brunswick: Transaction Publishers for Freedom House, Inc.).



Kominek, J., 2000, "Unsure Future for Czech Intelligence Services," in "Jane's Intelligence Review," 1 May, vol. 12, no. 5, pp. 16-17.



"Lidove noviny" (Prague), 2000.



"Mlada fronta Dnes" (Prague), 2000-2001.



"Prague Business Journal" (Prague), 2001.



"Pravo" (Prague), 2000.



"Respekt" (Prague), 1999.



"Der Spiegel" (Hamburg), 2000.