Prime Minister Robert Fico rushed to the defense of Labour Minister Viera Tomanová by accusing the media of cronyism and comparing private pension fund management companies to pyramid schemes.
The row erupted after three newspapers reported that Tomanová approved a state subsidy of Sk1.5 million (€44,800) for the Privilégium non-profit organisation.
Before becoming a minister, Tomanová worked as a manager at Privilégium, which owes more than Sk17 million (€507,000) in payroll taxes to the social security provider Sociálna Poisťovňa.
Fico stood up for his minister.
"The Prime Minister and the Labour Minister repeatedly gave the public specific arguments and evidence that the allocation of subsidies was in compliance with rules in force," the prime minister's spokesperson, Silvia Glendová, said on August 6.
The private social service centre received the money for its Diana guest house in the village of Krajné (Trenčín region). According to Fico, the subsidy money was intended for 44 convertible beds and tables.
"I claim responsibility for those 44 beds," he said. "You can say that I am responsible for that. Write about it. Just stop persecuting the minister.
"If buying 44 beds is a crime, you can punish us. The minister is not persecuted by the media for giving money to buy 44 beds for poor, but rather for having changed the pension system, which threatens the private capital."
Further, Fico openly accused all Slovak media of cronyism.
"The Slovak media, which absorbed more than Sk1 billion from the advertising campaign of the pension fund management companies, and enjoyed ski trips abroad financed by these companies, continues to one-sidedly attack the government," Fico said. "They are helping the pension fund management companies' efforts to halt the bill proposed by the Labour Ministry that interferes in the unilaterally profitable business of these private companies."
According to the Labour Ministry website, Privilégium also received Sk500,000 (€15,000) for the Community Centre of Social Services in Bratislava.
The organisation's general manager, Štěpánka Mádlová, owes the social security provider another Sk264,626 through the company Madex, according to Sociálna Poisťovňa.
Privilégium also owes taxes nearly Sk2.8 million in taxes to the Bratislava IV Tax Office, the Plus Sedem Dní weekly reported.
Mádlová and Privilégium co-founder Miroslav Mečíř have run for the Smer party in past municipal elections, the Pravda daily reported. After she was elected a member of parliament, Tomanová took part in a local government meeting in Vrakuňa where she was supposed to defend the Privilégium.
The Labour Ministry strongly protested against the media reports, calling them "false information" on August 1.
"(Tomanová) considers the published information a personal attack against her and damaging to her reputation and honour," a ministry statement read.
Tomanová worked in Privilégium from Sepember 22, 2005, until she acceded to the post of minister, the statement continued.
"She was not a founding member, nor senior manager, nor a member of any body of this non-profit organization," it said. "She had nothing to do with the management of this organisation or with its financial issues. She dealt with methodology and consulting in social services."
The ministry also said that Privilégium admitted its debt and has been repaying it continuously, according to an installment calendar.
Another ministry statement said that in 2006, Privilégium got a subsidy for the Diana guest house project.
"It used the financial resources in accordance with the signed contract for making the interior and outer space of the facility accessible to handicapped people, and for purchasing convertible beds and equipment for the facility rendering social services in Krajné village, which provides complex care for people with grave mental disorders and behavioral disorders, including fully immobile patients," the statement read.
The Diana guest house also operates commercially. The Village of Krajné advertises 120 beds for tourists in the guest house.
Mádlová said in an interview with the Sme daily that Privilégium was meant for financially solvent clients, and that it is financed mainly by their fees.
A stay in its facilities sometimes costs as much as Sk25,000. Some clients can use a whirlpool, pool or tennis court.
"These are not facilities for poor," Mádlová told Sme. "We are private company. Who will do something for the rich? The public administration? The public administration should work for the poor, for the socially weakest. We should work for everyone."
In an interview with The Slovak Spectator, Mádlová denied that the existing debts were the result of government mismanagement. She thought the group did not get the subsidy just because she knew the minister Tomanová, she said.
The head of the Institute for Public Issues non-governmental think-tank, Grigorij Mesežnikov, said Fico attacked the pension fund management companies and media to find a way out of the Tomanová controversy.
"It suits him well that he can distract the attention of public and at the same time harm the pension companies," Mesežnikov told The Slovak Spectator. "It is scandalous that a prime minister is making the pension companies out to be a kind of counter-agent. He is creating unfavourable conditions for their operation, and in fact harming them."
So far Tomanová has behaved like a very loyal member of the cabinet, Mesežnikov said.
"Actually, she was an instrument for applying Smer party policy," he said. "I think Fico is quite obliged to her; that is why he is trying to save her."
Mesežnikov believes that moreover, Tomanová and Fico are share political beliefs.
"They both perceive the social system in the same way," he said. "The nostalgia for the old socialist models from totalitarian times is evident.
"The prime minister has admiringly said several times that he considered the previous system socially just. And Tomanová confirms by her actions that she prefers this solution to introducing of market elements to the pension system."
Political analyst Miroslav Kusý told The Slovak Spectator that Fico's attack on media has the features of paranoia, and the prime minister basically considers the media to be his enemy.
"Fico attacks the media mainly to deflect the public's criticism from the government," Kusý told The Slovak Spectator. "This is a favourite trick used by demagogues. He attacks the media, pointing out cases that can be justified, but which have nothing to do with the original case. It is just distracting the public."
Fico's attack on the pension companies included income figures for top pension fund management company managers. The prime minister used materials that were probably obtained illegally in his attack, Kusý said.
"Of course, this is an abuse of these materials," Kusý said. "He is doing what former prime minister Vladimír Mečiar used to do - he allegedly found such materials on his own desk from time to time, and later scandalised it.
"Fico says, too, that it is not the public's business to learn how he acquired the materials. Moreover, Fico doesn't mention why this material was created. He interprets it in an unfair way."
The disputes between Fico and the media first appeared on election night, when the winning party Smer ordered journalists out of its premises.
"Prime Minister Fico has the same, or a similar attitude, towards media as most of the post-communist politicians in Central Europe," political analyst Jiří Pehe, head of the New York University in Prague, recently told The Slovak Spectator. "This means that he cannot treat media very well, he is not able to co-operate with them and he takes every criticism too personally. We are seeing this not just in Slovakia, but also in the Czech Republic in case of Prime Minister Topolánek, or in Poland in the case of the Kaczynski brothers, or in Hungary.
"It is the general symptom of a low political culture and the immaturity of politicians, who instead of using the media to their advantage, get involved in conflict with the media and begin to behave arrogantly."
Opposition parties have already said that they would request the dismissal of Tomanová. The chairman of the strongest opposition party, the Slovak Democratic and Christian Union (SDKÚ), is expected to file a proposal for the dismissal of the Labour Minister in the next few days.
Representatives of two other oppositional parliamentary parties - the Christian-Democratic Movement (KDH) and Hungarian Coalition Party (SMK) - approved the same move some time ago.
The official website of the coalition party Movement for the Democratic Slovakia (HZDS), headed by Mečiar, criticises Fico's fight with media.
According to a statement from former HZDS senior representative Marián Klenko, Fico is looking for substitute rivals who he could present to the public as his enemies instead of the opposition.
"This pattern of com-munication can be effective for a while, but over the long term, a row with the media does not pay off for politicians," Klenko added.
Privilégium grant paid for furniture
The Slovak Spectator interviewed Štěpánka Mádlová, general manager of the non-profit institution Privilégium.
The Slovak Spectator (TSS): What do you think about the fact that you received a subsidy in spite of having a debt with the Sociálna Poisťovňa social security provider, and the Bratislava IV Tax Office? Is it just that you know Labour Minister Tomanová?
Štěpánka Mádlová (ŠM): Well, I think we did not receive it only for this reason. Certainly. We will draft a statement and you can call me tomorrow, OK?
TSS: You have talked about it so often. If you could just try to explain it in one sentence.
ŠM: I feel uncomfortable, as I do not know, you see, what you would like to hear.
TSS: Isn't it strange that on one hand, Privilégium is a debtor to the Sociálna Poisťovňa social security provider, and the Bratislava IV Tax Office, and you still got the subsidy?
ŠM:Now, tell me, what if the subsidy was granted to a non-existent insitution, as it was the year before?
TSS: What did you get the subsidy for?
ŠM: For beds. For the equipment and furnishing of the facility, to be precise. There are not just beds, but also nightstands, and also the barrier-free access. We could use the money for construction adaptations.
TSS: Are we speaking about the Diana guest house?
TSS: Media have pointed out that in the Diana guest house, there are not just medically handicapped people, but the facility has normal boarding rooms as well.
ŠM:I can explain that so that you do not misunderstand. This has nothing to do with us. We have rented the ground floor and the first floor of the guest house, and there are three more floors. The owner has a general agreement with the Folklore Festival, which is financed from Euro-funds, to have boarding rooms for the dancers. And we enabled him to do so. That had nothing to do with us. It is a big building. It has many entrances and exits.
TSS: Why did Privilégium choose Diana?
ŠM: We have 10 facilities.
TSS: But why Diana? Why are the beds for handicapped people situated there, and why have you asked for a subsidy for this particular guest house?
ŠM: To me it seems like a ridiculous question. You know, there are very few buildings in Slovakia that could be appropriate for such an activity, as they are either seedy and requiring restoration, or they have other problems, and you do not have enough space there. The sanitary requirements cannot be avoided. Do not think that this is the only facility I visited. I saw hundreds of facilities, and I made my choice so that it met the standards.
TSS: So you chosen the Diana guest house because it is a nice place.
ŠM: It has a garden, in a quiet neighbourhood. These are all aspects that I must take into consideration. We have put up a fence so that the place is closed, so that our clients will not run freely in the streets. We have arranged all of this. Why did I ask for a subsidy? You know, when you work with handicapped clients, you need the beds to be adapted to their state of health. The beds are very expensive.
TSS: We have learned that you agreed to a payment schedule with the Sociálna Poisťovňa social security provider.
ŠM: We do have a payment schedule with Sociálna Poisťovňa.
TSS: And what about the tax debts?
ŠM: For God's sake, we have been doing our work for five years. All the time we have been fluctuating - one time we pay, the other time we do not.
TSS: How do you repay your tax debt?
ŠM: And what about you, your company? How do you manage?
TSS: We do not have tax debts.
ŠM: How can I know? I do not know.
TSS: And, besides, we did not receive any state subsidy.
ŠM: And what about taxes?
TSS: We do not owe a crown in taxes and levys.
ŠM: God, be reasonable. I hope I am talking to a grown up, clever person.
TSS: Do I understand it right, that you cannot answer a simple question: in which way will you repay the tax debt? Amounting to Sk2.7 million?
ŠM: I will not answer this on the phone. So bye-bye.
13. Aug 2007 at 0:00 | Ľuba Lesná