Finance Ministry Officially Removes Babis’s Stork Nest Project from EU Financing

Andrej Babis

Prague, Jan 29 (CTK) – The Czech Finance Ministry has approved the withdrawal of projects from seven EU-funded programmes, including the Capi hnizdo project, implicating Prime Minister Andrej Babis (ANO), the ministry announced in a press release today.


Central Bohemia Regional Governor Jaroslava Pokorna Jermanova (ANO) informed about the Capi hnizdo farm’s withdrawal for EU funding at a meeting of the regional assembly earlier today and the Ministry confirmed this.


The police accused 11 people, including Babis and ANO first deputy head Jaroslav Faltynek, in the case of an EU subsidy fraud connected with a 50-million-crown subsidy from European means for the Capi hnizdo (Stork Nest) recreational and conference complex.


The European Commission (EC) has proposed to delete 44 projects from six operational programmes, the ministry confirmed.


The ministry announced previously that the withdrawal of such projects from the EU-subsidised Regional Operational Programmes (ROP) would be the best solution for the state budget. Otherwise, the EU subsidies allocated to the Czech Republic might be cut, it added.


“The decision to delete projects from the EU-subsidised programmes does not interfere in the ongoing criminal proceedings on a national level or influence possible future administrative proceedings on the stripping of a subsidy by its provider,” Finance Ministry spokesman Michal Zurovec told CTK.


The subsidy provider has the full right to assess whether the subsidy conditions were violated or not. If such a violation is proved, the provider will either launch administrative proceedings or join criminal proceedings as a damaged party, claiming damage compensation, the ministry said.


Pokorna Jermanova said in view of the Finance Ministry’s decision, today’s reshuffle of the committee of the Regional Council of the ROP Central Bohemia was a mere organisational matter.


The regional coalition of ANO and Social Democrats (CSSD), supported by the Communists (KSCM), gained majority in the 15-member committee today.


Now, ANO has six seat, the CSSD four and the KSCM two, while the three remaining seats are divided among the opposition Mayors and Independents (STAN), Civic Democrats (ODS) and TOP 09.


The coalition proposed a new lineup of the council’s committee supervising subsidies in the ending ROP, in which the opposition had a majority so far.


The opposition parties say this is a reaction to the committee’s decision from mid-January not to remove the Capi hnizdo project from EU financing. The opposition argues that by removing the project the case would be transferred to the national level and might not be solved thoroughly, which the ANO members dismissed.


The coalition, for its part, claims that the committee should be reshuffled due to a recent change in the region’s leadership.


The opposition criticises this. TOP 09 councillor Jan Jakob said the aim was to punish those who had a different opinion on the solution to Babis’s subsidy fraud case.


Until late 2007, the Farma Capi hnizdo company belonged to Babis’s Agrofert concern. Afterwards, its stake was transferred to bearer shares so that Capi hnizdo as a small firm could win the subsidy of 50 million crowns, which a firm of the huge Agrofert could never get. It observed this condition for a few years, but later it became part of Agrofert again. Moreover, the investigators concluded that there was no economic or trade reason to make the change.


In February 2017, billionaire businessman Babis transferred Agrofert to trust funds to comply with an amended conflict of interest law.


Babis denies any wrongdoing in the case, calling the accusations fabricated and expedient.