Czech parliament backs bill aimed at billionaire finance minister

Czech parliament backs bill aimed at billionaire finance minister
Babis' Ano has fought a running battle with coalition partner CSSD
By bne IntelliNews September 14, 2016

The Czech parliament approved on September 14 amendments to conflict of interest legislation banning future government members from controlling companies or owning stakes in media outlets.

The bill - known as "Lex Babis" - targets billionaire Finance Minister Andrej Babis, whose Ano party voted overwhelmingly against the amendments. The legislation is the latest shot in the ongoing tussle between Ano and the coalition leading Social Democrats (CSSD), and threatens to destabilise the government.

The populist Babis is also a target for the centre-right and hard left opposition parties. Ano mustered only 39 votes against the bill, while 135 of the 183 lawmakers present in the lower house backed the bill.

Tipped as the next prime minister, with Ano consistently leading opinion polls ahead of next year’s elections, Babis owns agricultural and chemicals conglomerate Agrofert, the country's biggest employer. The second-richest man in the Czech Republic, with a fortune estimated at $2.4bn, Babis also owns two of the country’s leading newspapers Lidove Noviny and Mlada fronta Dnes.

The combination of commercial, political and media power makes Babis probably the most powerful person in the country. Despite worries expressed by his political rivals and those in industry and the media, the wider public appears less concerned by his numerous conflicts of interest. Opinion polls show Babis is the most trusted politician in the country.

The approved amendments, however, mean that Babis will have to reduce his stake in Agrofert to below 40% and sell his media business if he wants to be a part of the next government. The re-shaped bill also bans companies in which a government member owns more than 25% from competing for public contracts or investment aid.

However, critics note it does not apply to businesses held by relatives of officials. The legislation was initially sparked by a scandal centred on EU subsidies claimed by a high end resort - the Stork's Nest - that is owned by Agrofert.

The CZK50mn was granted under a scheme supporting SMEs. After weeks spent refusing to discuss accusations of fraud, Babis finally told lawmakers that the project had been owned by his family members at the time the application for the money from Brussels had been made.

The passage of the bill will only antagonise relations between Ano and the CSSD. The pair has been sniping at one another since joining together to form the government in early 2014.

Babis threatened to collapse the coalition in June over a controversial police reform pushed by his coalition partner. However, when the CSSD called his bluff and pushed the measures through anyway, the Ano chief quickly climbed down, acutely aware that for the moment his party cannot demand enough support to form a government without the centre-left party.

Ano says it will appeal to the Constitutional Court against the bill. The legislation now needs to be approved by the upper house of parliament.

"It is a law against me," Babis told weekly Tyden ahead of the vote. "If it is approved, I will start dealing with it, and my lawyers will make a recommendation to me. I cannot rule out a constitutional suit."