Andrej Babis

Matt Atlas

Commission Confirms Conflict Of Interest Finding Against Babis

A European Commission auditing review has confirmed that Czech Prime Minister Andrej Babiš breached domestic and EU conflict of interest legislation.

The report, dated October 22 and seen by POLITICO, finds that Babiš controls the Agrofert conglomerate — which includes a wide range of companies in the agri-food sector — despite having transferred his assets into two trust funds in 2017 after a Czech transparency law was passed.

Grants that Babiš awarded Agrofert in his role as a public official after September 1, 2017, thus involved a conflict of interest, according to the new analysis, which confirms a previous audit by the Commission, reported by Czech media.

The 250-page “follow up” document says that Babiš has been “due to his very functions, actively involved in the implementation of the EU budget in the Czech Republic.”

“Mr Babiš as a public official was (and continues to be) in breach … of the conflicts of interest act,” it adds.

Babiš has rejected the charges, telling national media this week: “I do not control or manage Agrofert.”  

Under the Czech conflict of interest act, subsidies or sweeteners are forbidden for commercial enterprises in which a public official holds a stake of 25 percent or more.

The EU financial review also judges that three grants Agrofert received from the European Regional Development Fund (ERDF) breached Czech law and the EU’s common provisions regulation for the ERDF.   

It further identifies a conflict of interest in Babiš’s handling of the disbursement of European structural and investment funds under the bloc’s 2018 financial regulation.

Over the course of the audited period, the “impartial and objective exercise” of Babiš’s functions was “compromised to the extent that he was involved in decisions potentially affecting the Agrofert group interests,” the audit says. 

The extensively annexed audit was prepared by the Commission’s directorates for regional and urban policy, and for employment, social affairs and inclusion. It was addressed to the Czech ambassador to the EU, Edita Hrdá.

A Commission spokesperson said the Czech government will now have three months to respond from the date that the auditing stock-take is translated into Czech, in the next few weeks.

“They will report back to us on their implementation [of the auditors’ recommendations] and we will analyze it and see what to do next,” the spokesperson said.

The report makes several recommendations to the Czech authorities, including that they ensure that “findings which have a financial impact on the EU budget exceeding €10,000 have been reported to OLAF [the EU’s anti-fraud office] in the IMS system for reporting [financial] irregularities.”

The spokesperson declined to comment on what the executive body could do if it does not find Prague’s response satisfactory.

MEP Tomáš Zdechovsky, who belongs to a Czech opposition party, called for Babiš to be immediately discharged from European Council debates on the EU budget or the Common Agricultural Policy. “I think it will be necessary to exclude him from these debates because he is in a conflict of interests,” Zdechovsky said. “His company is one of the biggest owners of land in the Czech Republic.”

Credit: Politico