Capi Hnizdo

Matt Atlas

Court Finds MOF Broke Law By Withholding EU Stork’s Nest Report

The Ministry of Finance’s decision not to provide applicants with a report from the European Anti-Fraud Office (OLAF) on the Stork’s Nest subsidy case was illegal., according to the Municipal Court in Prague. The court upheld the administrative action of the Kverulant organization. Prime Minister Andrej Babiš is facing charges. Kverulant claims that it was in his interest that the ministry did not provide a report. The ministry argued that it did not want to disrupt Czech criminal proceedings.

The President of the Judicial Chamber, Milan Tauber, stated that the Ministry based its decision on a provision of the Information Act concerning the non-provision of information on the activities of bodies active in criminal proceedings. “As is clear from the linguistic interpretation of the provision, the information exception only applies to the information on the activities of law enforcement authorities. The information requested – OLAF’s final report, including annexes – is not information on the activities of law enforcement authorities,” the judge noted.

The Prague City Court, therefore, annulled the decision and returned the case for further consideration. The Ministry must also reimburse Kverulant for court proceedings costs, which amount to approximately 11,000 crowns.

“The verdict is a success for the public. In the future, it will be more difficult to deny them access to important information,” commented Vojtěch Razima, director of Kverulant. According to him, the Minister of Finance Alena Schillerová (ANO) just made excuses.

The ministry insisted in court that his action was lawful. “At the time of decision-making, there was an exception to the provision of information,” said Eliška Váňová, the office’s lawyer. The Ministry may lodge a cassation complaint against the judgment with the Supreme Administrative Court.

OLAF has been investigating the award of a European subsidy of 50 million crowns to Stork’s Nest Farm since 2016. In December 2017, it closed the investigation because there was a suspicion of subsidy fraud. He sent the conclusions to the Ministry of Finance, which on January 4, 2018, published only three paragraphs on the findings. One week later, the Aktuálně.cz and servers brought the complete wording of the report. So it eventually reached the public, but in an unofficial way.

The ministry later provided the report to Kverulant, but this did not satisfy the organization. “Kverulant believes that the report of a major European institution describing the prime minister’s crime should have been made available to the public as soon as he arrived in the republic,” the organization explained.

OLAF’s role is to detect, investigate and defend fraud against EU funds. In the conclusions of the report on the Stork’s Nest investigation, he wrote about the suspicion of a violation of Czech national law and the law of the European Union. He stated that false and incomplete information had been provided when applying for the subsidy.

Babiš questioned the independence of the European office and called its investigation politicized. After receiving the OLAF report, the ministry announced that the Stork’s Nest farm had been excluded from European funding. As the project ceased to be funded by EU money, OLAF did not pursue it further.

The company Farma Čapí hnízdo, then still under the name ZZN AGRO Pelhřimov, belonged to Babiš’s holding Agrofert until the turn of 2007 and 2008. In December 2007, the company was transformed into a joint-stock company with bearer shares. In the summer of 2008, it received a European grant in small and medium-sized enterprises. After several years of adhering to the subsidy condition, the company returned to Agrofert.