Babis: an unknown quantity

Babis: an unknown quantity
Billionaire entrepreneur-turned-politician Andrej Babis insists his MPs represent an entirely democratic-minded, pro-EU, pro-Nato, centrist party that is the victim of a disinformation campaign.
By Will Conroy in Prague October 24, 2017

The apprehension that the Czech general election result could eventually lead to Polish and Hungarian-style illiberal government policies and a closer relationship with Moscow is worth talking about. The anxieties did not arise from nowhere.

On the other hand, billionaire entrepreneur-turned-politician Andrej Babis — now essentially the prime minister in waiting following the commanding triumph of his Ano (“Action of Dissatisfied Citizens”) anti-establishment movement in the October 20-21 national poll — is scathing of such interpretations. He insists that his MPs represent an entirely democratic-minded, pro-EU, pro-Nato, centrist party that is the victim of a disinformation campaign.

In the wake of his election triumph, Slovak-born Babis accused public broadcaster Czech Television of continuing to lie about him and his plans for the next four years. He has also, reported the October 23 edition of Czech daily Pravo, claimed a public relations agency is organising an anti-Ano protest to “save democracy” for November 17 (a Czech national holiday that marks the day in 1989 when riot police violently suppressed a student demonstration, triggering more protests that led to the downfall of the Communist regime in the Velvet Revolution). 

These claims, however, will not dissolve the fears of illiberalism and a political shift eastwards away from Brussels until it is clear exactly what policies he is to pursue, in what style he is going to pursue them, with what minority government or coalition arrangement and with what level of cooperation with populist Czech President Milos Zeman — a divisive Kremlin-friendly Donald Trump-like figure who prior to the weekend poll stirred headlines by waving a mock gun marked “For journalists”, with a bottle of Czech liquor lodged in place of the magazine, at a press conference (not particularly tactful given that four days earlier ‘Panama Papers’ journalist Daphne Caruana Galizia had died in a car bomb assassination in Malta).

The stakes, as Adam Ereli, a former US State Department deputy spokesperson and former US ambassador to Bahrain, wrote in Foreign Policy on October 10, are high: “Here’s a prediction,” said Ereli. “Whither goes the Czech Republic, so goes the rest of Eastern and Central Europe. If the heirs of Tomas Masaryk, Aleksander Dubcek, and [Vaclav] Havel surrender the legacy of honour, integrity, principle, and freedom that these men of greatness bequeathed to them, the forces of darkness will have won a great and strategic victory.”

The case for anxiety

Zeman has pledged to make Babis prime minister despite the fact that the country’s second richest man faces an unresolved fraud charge over a €2mn EU subsidy, a matter that is also being probed by OLAF, the European Anti-Fraud Office (two days after the election, police also charged Babis’s wife, Monika Babisova, with having a role in the alleged fraud by briefly holding some shares before selling them on to her brother). While PM, Babis will also have to readdress the small matter of whether he served as a Communist secret police (StB) agent during the 1980s when he was a foreign trade official in the then Czechoslovakia. On October 12, Slovakia's Constitutional Court ordered a lower court to re-examine the claim, which Babis says is a devious effort construed by his political enemies to slander him and thwart his ambitions to govern.

Babis was finance minister for three years in the last coalition government before being fired for what Social Democrat (CSSD) PM Bohuslav Sobotka saw as dubious financial dealings. Yet he portrays himself as an ‘anti-politician’, a blunt-talking outsider from the world of business who has a no-nonsense vision of a more efficient state. In a pre-election book, he outlined how he would like the Czech Republic to look in 2035. To assist in realising a more effective government, he has proposed scrapping the country’s Senate and cutting the number of MPs by half.

It is this bringing of single-minded business efficiencies to government, which critics claim could amount to an authoritarian direction that dispenses with bureaucratic — but constitutionally valuable — checks and balances, that has democracy activists worried. And it is not only voices on the fringe that say he needs keeping under close scrutiny. For instance, in the early summer, Jiri Pehe, a highly respected and longstanding Czech politics analyst, told bne IntelliNews: “We don’t know what he would do if he had that kind of power [given by a big election win], but he is not a democrat one bit.”

Babis, it is certainly true to say, has no qualms about individuals simultaneously wielding immense political, economic and media power. Earlier this year the latter sphere caused agrochemicals and foodstuffs entrepreneur Babis, with a personal fortune estimated at €4bn by Forbes, some negative publicity when a leaked tape indicated he had discussed how to cover opponents with a journalist at one of his titles. His media empire includes 23 newspapers (including two of the main Czech dailies, Mlada fronta Dnes and Lidove noviny) and magazines, three small TV stations and the country’s largest private radio station Radio Impuls. He has faced walkouts from journalists who declined to work for an owner who was also a powerful politician.

The disquiet over Babis’s potential exploitation of his combined assets and powers caused CSSD — the senior partner in the previous ruling coalition that also featured Ano and the Christian Democrats as the smallest partner — to successfully demand conflict-of-interest legislation, dubbed ‘Lex Babis’. As finance minister, Babis was forced to move his main holding Agrofert and other main commercial entity, SynBiol, into two trust funds, AB private trust I and AB private trust II, at the start of this year. They are managed by his long-term business collaborators, Agrofert chairman Zbynek Prusa and Agrofert board member Alexej Bilek.

The case against anxiety

If Babis attempted to form a government reliant on the Communist Party of Bohemia and Moravia or the far right Freedom and Direct Democracy Party (SPD) party for backing, the move would meet with a dismayed reception in the West, the Czech crown would take a hit and the country would soon be facing new economic perils.

But, on the evidence available, to assume Babis would like to get away with forming a government tied to extremists is unfair. Indeed, he has said he will not do so, even though that would be an easy option given the division of the new assembly’s seats among nine parties. The Ano leader is first and foremost a business-minded individual; he cannot be described as an ideologue. And besides, during the election campaign he quite plainly said on the record: “We are not an eastward-facing party. I’m ready to fight for our interests in Brussels. We are a solid part of the EU and… of Nato.” In the days before the vote, Babis, perhaps with an eye on perceptions of what is happening in Poland, also clearly reiterated that his party would protect the independence of the judiciary.

“As a businessman — he has been a manager, and run companies for 25 years — he likes to be the one who make decisions, but it doesn’t mean he is a threat to democracy,” Jan Machacek, head of a think-tank close to Ano, told the Financial Times on October 23. Babis himself defended his democratic credentials in an interview with Czech daily Lidove noviny published on October 23, in which he remarked: “I do not grasp the reason for linking [undemocratic ideas] to me. I have not done anything at all that is undemocratic. This is simply the rhetoric of the system, the system of clientelism. Yes, our movement is anti-system: against the clientelism and corruption, which the traditional parties have presented since the revolution.”

When it comes to the EU, it seems that Babis, who barely discussed his outlook on foreign policy until late June, is almost entirely interested in the bloc as a single market. He has little time for Brussels’ ideas of deeper integration or sharing migrant quotas, and has zero appetite as things stand for taking the Czech Republic into the Eurozone. A worry, however, would be if Zeman persuaded him of the merits of holding an EU referendum on a ‘Czexit’, but there is no reliable sign on that front so far.

Another constraint against the introduction of a ‘streamlined’, efficient-but-illiberal government administration is the requirement that to introduce constitutional changes the support of 120 of the 200 MPs in the lower house must be attained. The election result gave Ano 78 seats, the Civic Democrats (ODS) 25, Freedom and Direct Democracy (SPD) 22, the Pirates 22, the Communists 15, CSSD 15, the Christian Democrats 10, TOP 09 seven and STAN six. The ODS, CSSD, Christian Democrats, TOP 09 and STAN are seen as establishment parties, while the Pirates represent themselves as progressive.

With that distribution of parliamentary votes, forming a bloc of support to secure a new constitutional law is a tall order, especially if Ano wants to retain one establishment party in a coalition, which it is likely to want to do to at least reassure the markets. And thus far the markets have very much taken the election result in their stride.