The Czech government falls in connection with corruption and sleaze

On 17 June, the Czech Prime Minister Petr Nečas resigned from his post and gave up his leadership of the Civic Democratic Party (ODS) after the head of his office, Jana Nagyová, was arrested and charged with corruption and abusing her position. As a result of extensive police actions, the same charges were also laid against three former ODS MPs and the former Deputy Minister of Agriculture. Charges of abuse of power were also brought against the former and current heads of military intelligence, as well as an officer of the service. All but the head of military intelligence, Milan Kovanda (currently suspended) who has admitted the allegations, remain in custody. The prosecutor’s office has not ruled out arresting further individuals, including Mr Nečas.

The police investigation is focused on matters of surveillance and corruption. The first case concerns the head of the PM’s office, who is alleged to have instructed military intelligence to eavesdrop on Mr Nečas’s wife and two other people. The second case concerns providing positions in state companies to three ODS MPs, who in exchange unblocked the adoption by parliament of an act which was important for the government. The investigators are also scrutinizing the activities of the state-controlled companies ČEZ and České dráhy, as well as the Prague municipality.

Despite the scandal, the current coalition has a good chance of staying in power until the parliamentary elections scheduled for the spring of 2014. The ODS candidate for the position of Prime Minister is the party’s vice-chairman, Miroslava Němcová, serving also as the lower house speaker. It is expected that before he nominates a new prime minister, President Miloš Zeman will want to influence the make-up of the future cabinet. He may also try to get the government’s consent for nomination of his own people to various ambassadorial appointments (which the foreign minister is currently blocking). Nevertheless, the investigation is gathering momentum and doing increasing harm to the ODS, and may lead the coalition party TOP 09 to break with its partner in government and support the opposition’s request to hold early elections.

The investigation on this scale was made possible by the Nečas government’s personnel changes in the police and the prosecutor’s office, thanks to which law enforcement agencies have begun to investigate the crimes of politicians. The prosecution’s allegations, however, concern relatively minor matters. It seems that the investigators have not yet managed to trace the networks between leading politicians, the judiciary and businessmen, which for years have allowed embezzlement with impunity from state-owned companies and institutions.



The police and the prosecutor’s actions


On the night of 12 to 13 June, a special unit of the Czech police, the Office for Combating Organised Crime (ÚOOZ), launched a wide-ranging campaign, in which nine high-ranking people were arrested and 31 locations searched, including the government offices, the Ministry of Defence, offices of the Prague municipality, certain state-controlled companies, and companies and residences belonging to two influential lobbyists associated with the ODS. These actions are the culmination of an investigation launched in January 2012, which was originally concerned with alleged criminal connections between the Prague prosecutor’s office and the so-called ‘ODS godfathers’ (Roman Janoušek, Tomas Hrdlička, Ivo Rittig), who operated at the interface between politics and business. Police searched the homes and businesses of Janoušek and Rittig, although they themselves were not arrested as part of the case. It is not clear whether this line of investigation will continue. As part of their work, the police began to eavesdrop on the head of the Prime Minister’s Office, Jana Nagyová, and came across the bugging of PM Nečas’s wife by military intelligence, as well as the political corruption within the ODS.

Documents leaked from the prosecutor’s office show that Mr Nečas, who is in the process of divorcing his wife, was involved in a relationship with Ms Nagyová, although he probably did not know that his wife was under surveillance. As for the allegations of corruption, the Prime Minister has been named as having promised jobs in state companies to three deputies (via Ms Nagyová), and making sure that the promise was kept. It is possible, therefore, that charges in this case will be brought against the Prime Minister himself.

There is no indication that the police action was politically motivated. It was most likely made possible by the fact that its leadership has enjoyed considerable autonomy, as well as the confidence of the Interior Minister Jan Kubica, a non-party appointee of the ODS, who led the ÚOOZ in the past. There is no indication, however, that he knew the details of the investigation, or had any influence over its course.



Politicians’ reactions


The police action caused great surprise on the Czech political scene. Both the opposition and the coalition have criticised the police and the public prosecutor's office for sharing too little information about the ongoing investigation. The three opposition parties (the Social Democrats, Communists and the Public Affairs party) have unanimously demanded early elections, and rejected the possibility of supporting any cabinet which would govern until the elections scheduled for next spring. This approach has been rejected by the ruling coalition (ODS, TOP 09 and the fringe party LIDEM), who believe that the affair has been artificially inflated by the prosecution and the media. Politicians from the ODS have defended themselves by claiming that the allegations of corruption concerning politicians taking positions in state-owned companies are a criminalisation of the standard behaviour of political parties in a democratic system. The ODS, TOP 09 and LIDEM have agreed that they want to continue to work in a new cabinet, which should be headed by an ODS politician.



Possible scenarios


The resignation of the Prime Minister reinforces the position of the president, who is not obliged to accept the coalitions candidate for the new head of government and can pick another name. If two consecutive nominees of head of state do not receive majority support in the Chamber of Deputies, the Prime Minister will be designated by the Speaker of the House, who is currently an ODS politician. It is expected that President Miloš Zeman will take his time appointing a new Prime Minister, in an effort to have the greatest influence on the composition and policies of the future cabinet. However, it is unlikely that the President will decide to appoint anyone who could not receive the support of a parliamentary majority. The best solution, from the point of view of the head of state, would be to form a technical government with the support of both the coalition and the opposition. In such a cabinet, the president as the guarantor of all-party agreement would have the greatest influence. This scenario, however, has been rejected by all the parties.

TOP 09, a junior coalition partner which is headed by Foreign Minister Karel Schwarzenberg (although Finance Minister Miroslav Kalousek informally runs the party), will undoubtedly seek to strengthen its position in the new government, but the President will try to prevent this as he is unfavourably disposed towards the party. TOP 09 is unlikely to enter the government after the elections (albeit possibly in coalition with the Social Democrats), but the humiliation of the ODS gives the party an opportunity to take the lead on the political right. It is therefore possible that further arrests in the ranks of the ODS, or the results of negotiations on a new government which do not favour TOP 09, will ultimately lead the party to support a proposal for the early dissolution of the Chamber of Deputies (which requires 120 votes) and to call early elections. Such elections would principally favour the Czech Social Democratic Party (ČSSD), which has a clear lead in the polls (before the scandal, it had 37% support).

It may be difficult for an ODS candidate to create a new government based on the current coalition, due to its fragile majority in parliament. In the 200-member Chamber of Deputies (currently 198 as two MPs are in prison in connection with other scandals and do not vote), the current coalition can count on 98 votes. It is expected that in its push for early elections, the opposition will try to convince independent deputies and those less loyal to the coalition (especially from LIDEM) to vote against the new government. The coalition may try to encourage members to leave the room during the vote, in order to lower the quorum. As a result of the ongoing police investigation into political corruption, it will probably be more difficult to shift deputies between the opposition and the coalition than it was before the outbreak of the scandal.