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PRESS DIGEST

Bureaucrats still see state as cash cow

IN FEBRUARY 2003, the Slovak Land Fund (SPF) adopted an "action plan" to fight corruption, and identified "the provision of compensation as restitution to approved individuals" as one of its "problem areas". Four years later, it appears that the SPF's struggle against corruption in its ranks has suffered from too much planning and too little action.

IN FEBRUARY 2003, the Slovak Land Fund (SPF) adopted an "action plan" to fight corruption, and identified "the provision of compensation as restitution to approved individuals" as one of its "problem areas". Four years later, it appears that the SPF's struggle against corruption in its ranks has suffered from too much planning and too little action.

It might seem strange that 15 years after restitution began, the SPF is still fulfilling restitution demands by people who had land or other real estate assets confiscated during communism. However, the continuing inflow of foreign investors and the spread of industrial parks are providing a powerful motive to speculators to buy up cheap land in lucrative areas, and then sell them for a fat profit to private investors or municipal governments that are planning a development.

Restitution gives such speculators a unique opportunity. In cases explored in the past several weeks by the Sme daily paper, the following strategy has been used repeatedly. First, a selected restituent - usually elderly and/or living abroad - has his or her application approved, but is assigned land as compensation in a different (and more lucrative) municipality, such as the High Tatras resort area. The restituted land is then quickly sold by the restituent's lawyer to a third party for a fraction of its true worth.

This kind of transaction is very difficult to police, because it is not necessarily illegal. The law says that the SPF must take into account where the applicant lives, and may only issue land as restitution in other municipalities if it does not have enough spare land in the "home" municipality to satisfy the claim. Proving that the restituent and the SPF were acting in collusion thus requires proving that a local option was deliberately overlooked, a difficult task given that the SPF's statutes allow significant room for subjective decisions.

Privatisation may be all but over, but state officials still have countless opportunities to make money from their control over public assets. While this type of corruption is more difficult to prove, it is far from innocent. For every "winner' in the restitution process, there are hundreds of losers whose applications are collecting dust, while the added costs exacted by speculators must be paid by investors, slowing industrial development in neglected regions.

The response of the Fico government, however, has been phlegmatic. Agriculture Minister Miroslav Jureňa, who has authority over the SPF, has said the transfers "occurred in conformity with the law and the SPF's internal guidelines", while Ján Sláby, the chairman of the parliamentary agriculture committee, also said that the SPF leadership had not broken the law.

It was an irony of the "wild privatisation" era that state officials who sold state assets for well below their value did nothing illegal, as lawmakers had simply not envisaged such practices. In the case of the SPF, too, land is winding up in private hands for a fraction of its market value; these transactions may be legal, but that doesn't mean that they are ethical, or that they are not accompanied by corruption.

Above all, it is clear that they have been going on for years, and involve the appointees of both the current and former government. Now that these deals have been exposed, it falls to the Fico administration to deal with them, rather than to use them as ammunition against the opposition (and vice versa).

If Slovaks have learned one thing from 15 years of democracy, it is that corruption flourishes where legislation is weak, supervision is lacking, and bureaucrats see their posts as cash cows. Which describes the "land scam" to a 'T'.


By Tom Nicholson

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