Czech PM gives up the ghost as corruption probe widens

By bne IntelliNews June 17, 2013

bne -

A bribery and spying scandal that exploded onto television screens last week in a series of police raids on the prime minister's office and other ministries has forced Czech Premier Petr Necas to resign, taking with it his terminally ill government. The resignation leaves his party and its partners scrambling to form a new government under the current centre-right coalition. But with the new leftist President Milos Zeman in the castle and an opposition riding high in the polls, early elections are looking increasingly likely.

Following consultations with his Civic Democratic Party (ODS), as well as coalition partners Top09 and Lidem, Necas announced late on Sunday, June 16 that he will depart ahead of a no-confidence vote in the government that the opposition Czech Social Democratic Party (CSSD) had planned for June 18. Despite insisting he would stay in office as the storm broke on June 13, Necas received little subsequent support from his coalition partners as further - and more embarrassing - revelations emerged about the reasons behind the police raids.

Two former MPs, an ex-minister and the current and former heads of military intelligence were detained on June 13, while the organized crime police unit seized as much as CZK150m (€5.8m) in cash and a stash of gold bars after raiding ministries, 31 homes and a Prague branch of Komercni Banka. However, the real sting for the PM came when police charged his close aide - and alleged lover - Jana Nagyova of illegally ordering military intelligence to spy on his estranged wife. Necas only announced on June 11 that the couple is set to divorce.

"I will resign as prime minister tomorrow," he told a press conference. "I am aware fully how the twists and turns of my personal life are burdening the Czech political scene and the Civic Democratic Party."

The PM insisted that he knew nothing about the surveillance of his wife, but admitted that the charges are so toxic that his coalition partners signalled they could no longer support him.

The three coalition parties will now have to decide whether to try to form a new government to serve out the rest of a term due to end next year. They will face opposition from the CSSD)- a certainty to win any new election due to the coalition's hugely unpopular austerity programme and drip-drip of scandals since it came to power in 2010 - and President Zeman, who has the task of appointing a new PM. Practically the first words out of Zeman's mouth when he was elected president earlier this year was a call for Necas' government to call early elections.

Necas, who also stepped down as head of the ODS, urged Zeman to respect tradition and name his successor from parties that can muster a majority in parliament. One problem with that is the coalition only controls 98 of parliament's 200 seats, and has relied on independents for support over the last few months.

The coalition parties are "obliged to do everything" to continue in government, Finance Minister and deputy head of Top09 Miroslav Kalousek said on CT24 news channel. "We are convinced that it is our obligation toward our voters that the government of fiscal responsibility continues until regularly scheduled elections."

Indeed, a period of prolonged political crisis - analysts say the earliest that new elections could be held is September - is sure to hamper efforts to drag the economy out of recession. And analysts worry the scandal could also presage an assault on the rule of law in the Czech Reublic, which legions foreign investors already complain is so weak that it has allowed corruption to flourish.

"The political pressure on prosecutors is intense. We must hope that they stay focused on the single goal of law enforcement, however determined politicians are to discredit them now that they have started to do their job," says James de Candole of the Prague-based public affairs firm Candole Partners.

"Private" matters

The scale of the police raids on June 13 always looked likely to finally unseat a prime minister who had survived several crises last year only by the skin of his teeth. The last of those instances was orchestrated by rebels from within his ODS party - with then-president Vaclav Klaus widely thought to be pulling the strings - who used the coalition's slim majority to bring it to its knees on a budget vote. Three rebels suddenly quit the ODS shortly before a deadline vote on the issue, only then to be handed jobs at state firms.

Nagyova, head of the PM's office, is thought to have been charged with bribery in connection with that case, according to CTK. Meanwhile, she is suspected of abuse of power for allegedly ordering Ondrej Palenik, former military counter-intelligence head, and others to shadow Radka Necas, a lawyer for the ex-spy chief said on TV on June 14.

High State Prosecutor Ivo Istvan said charges have been levelled against seven people overall, adding that Nagyova illegally asked intelligence officers to spy on a person in a "private" matter. The prosecutor declined to name the target.

A day earlier, police revealed that they are also looking into several deals involving Prague city hall and Roman Janousek - the lobbyist whose close connections to former ODS mayor Pavel Bem were exposed last year. Anti-corruption police (UOOZ) has asked for documents related to a CZK1bn tender for municipal waste collection, reports CTK, as well as tenders for the reconstruction of Charles Bridge and various orders for the construction of infrastructure around the capital.

Around 400 UOOZ officers swooped late last week, in an operation unprecedented in size and scale. That action has been made possible by efforts from Necas to free the hands of judicial authorities to fight the corruption that plagues the country. Many see some irony in the fact that the PM has been buried by the very anti-corruption push he has helped create. On the other hand, his administration has been rocked from the start by such cases.

The former head of the ODS parliamentary faction Petr Tluchor, former agriculture minister Ivan Fuksa, and Government Office head Lubomir Poul were also arrested on June 13. Police said all but one suspect out of the seven arrested remain in detention.

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