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INVESTIGATORS CONTINUE TO TRACE THE TUNNELS OF MEČIAR-ERA PRIVATISATION

Former minister charged for corruption

A SLOVAK Interior Ministry investigator has laid charges against a former privatisation minister and other top officials for misusing public authority and illegally handling privatisation income.
According to investigators, former privatisation minister Peter Bisák, along with other top officials, transferred without authorisation vast sums of privatisation revenue between various accounts of the ministry, the FNM state privatisation agency, and individuals while serving under the three governments of former prime minister Vladimír Mečiar.
Investigators say that Bisák set up different accounts for the privatisation ministry between 1991 and 1996 to handle revenue from 'small-scale' privatisation - including small businesses and land whose owners could not be identified. At least Sk15 billion (360 million euro) in privatisation revenue intended for local administrations and property restitution went through the accounts, say police.


INTERIOR Minister Palko (left) says billions of crowns were lost.
photo: TASR

A SLOVAK Interior Ministry investigator has laid charges against a former privatisation minister and other top officials for misusing public authority and illegally handling privatisation income.

According to investigators, former privatisation minister Peter Bisák, along with other top officials, transferred without authorisation vast sums of privatisation revenue between various accounts of the ministry, the FNM state privatisation agency, and individuals while serving under the three governments of former prime minister Vladimír Mečiar.

Investigators say that Bisák set up different accounts for the privatisation ministry between 1991 and 1996 to handle revenue from 'small-scale' privatisation - including small businesses and land whose owners could not be identified. At least Sk15 billion (360 million euro) in privatisation revenue intended for local administrations and property restitution went through the accounts, say police.

But between 1995 and 1997, at least Sk4.3 billion (112 million euro) was shifted from the ministry to the FNM without authorisation and through back channels. Other top ministry and FNM officials are implicated in the case.

"In this way, the FNM was able to illegally gain resources to which it had no right, and then treat the money as its own," said Interior Minister Vladimír Palko, presenting the charges on February 21.

These are the latest in a string of accusations against former officials of the privatisation ministry and the FNM for serious financial mischief under the under the rule of Vladimír Mečiar, PM from 1993 to 1998, except for a six-month stint by Jozef Moravčík in 1994. Mečiar has also been the leader of the Movement for a Democratic Slovakia (HZDS) party since its founding just after communism fell in 1989.

Last November, another former privatisation minister, Ľubomír Dolgaš, was accused of illegally diverting Sk7 billion (166 million euro) to FNM accounts in 1993. A number of other top officials are implicated in that case, including Emil Vrždák, former director of the capital transfers division at the privatisation ministry.

"Accounting was supposed to be done for the first time in 1993, but we were not able to do it. You had to be there at the time [to understand], there was complete chaos with privatisation," said Vrždák last year, about the accusations. Both Dolgaš and Vrždák say they are innocent.

The November allegations followed charges from last spring that Bisák and former FNM head Štefan Gavorník took over Sk19 million (450,000 euro) in bribes during the privatisation of some companies.

Among other alleged misdeeds by privatisation officials are the signing of disadvantageous privatisation contracts with individuals close to the then-ruling HZDS party, siphoning privatisation revenues into the coffers of the HZDS and the defunct newspaper Slovenská Republika that had ties to the party, selling land in cloudy deals to individuals close to the HZDS, and widespread bribery and corruption in the privatisation process.

Although Mečiar, then PM, temporarily took over the management of the privatisation ministry and the FNM in 1993, after Dolgaš's departure, he has denied any wrongdoing, saying he had more important things to manage at the ministry at the time.

While admitting that Bisák had told him in 1998 before the end of his cabinet's term that there was still money coming in from small-scale privatisation, Mečiar said that he knew nothing of any special accounts and that he "did not intervene in the matter."

The process of privatisation and property restitution was one of the biggest challenges faced by former Warsaw Pact states, but the way it was carried out in Slovakia was especially problematic, say economic professionals.

"Our predecessors from 1994 to 1998 did not care about the companies they sold," said current FNM director Jozef Kojda last summer, complaining of difficulties the agency has had trying to recover money still owed from privatised businesses now bankrupt.

In the early 1990s, Czechoslovakia initiated a 'voucher privatisation' scheme, whereby citizens received investment vouchers exchangeable for stakes in state companies.

The process was officially cancelled in Slovakia in 1994 in favour of 'direct privatisation' to firms and individuals - meaning that the government would itself decide to whom Slovakia should sell assets of the former communist state.

In 1995, PM Mečiar transferred authority to make direct-sale arrangements from the cabinet to the FNM, greatly accelerating the privatisation process but removing the sale of state assets from public scrutiny. Despite a Constitutional Court ruling in 1996 that the transfer of authority to the FNM had been illegal, direct sales continued unabated.

"Consciously and willingly, the [Mečiar-led] governing coalition turned the FNM into a tool for looting national property for its own benefit," concluded a report on the privatisation process in Slovakia by the Mesa 10 think tank.

These new charges, however, are unlikely to bring a resolution to the issue. Investigators are still trying to track the missing money and further indictments will likely follow, but Slovakia's judicial system remains inefficient and suspect. The accused remain free while the investigation continues.

Although corruption charges continue to mount, along with EU pressure to rid the courts of graft, Slovakia has yet to score a single conviction for corruption by a ranking public official.

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