Czech coalition leader forced to cut campaign funds after losing CZK337mn lawsuit

By bne IntelliNews April 1, 2016

The Prague Municipal Court has dealt the coalition leading Social Democrats (CSSD) a major blow as it ordered the party to pay close to CZK337mn (€12.5mn) in a restitution case dating back 16 years, local media reported on April 1.

The huge tab totals twice the party’s annual income. Prime Minister Bohuslav Sobotka said the CSSD will now be forced to make cutbacks to its plan to spend CZK100mn on the campaign for regional and senate elections this autumn.

The party has seen its popularity falling behind coalition partner Ano in recent polls, with the bickering pair only sticking together due to a lack of a clear lead for either. The cut in campaign funds could, therefore, antagonise the stability of the government.

The CSSD was ordered to pay lawyer Zdenek Altner CZK19mn he was owed for settling a dispute over the party's Lidovy dum headquarters. The remaining CZK318mn is made up of penalties, Echo 24 reports.

Sobotka said the case was an unfortunate legacy of Milos Zeman, a bitter enemy of the PM who is now president. Zeman led the CSSD in 1997 when the contract promising a large success fee to Altner for the return of the headquarters was agreed.

Bankruptcy proceedings began against the CSSD in October 2012, because of what by then had grown to a CZK250mn claim by the lawyer. He had originally sued the centre-left party for CZK145mn, but contractual fines ballooned the amount as the case was on the docket.

Altner published a statement on April 1 (in Czech) with what he said were the terms of the contract, along with his version of events that led up to the lawsuit, and how the case progressed through the Czech court system.

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