EIGHT months after dubious transfers of state land to companies close to the ruling coalition were first reported in the Slovak media, the government has finally cleaned house at the troubled Slovak Land Fund.
At its January 16 session, the cabinet removed all 19 members of the Land Fund’s boards, including the man whose land deals are now under investigation by the police, former Land Fund deputy head Branislav Bríza.
Agriculture Minister Zdenka Kramplová had earlier said that any dismissals would have to wait until summer, when the Land Fund’s statutes were due to be revamped, but Prime Minister Robert Fico appeared eager to put the scandal behind him.
“Most of the board members submitted their resignations in writing to the cabinet beforehand,” Fico said after the cabinet session.
According to unconfirmed reports, the board members appointed by Fico’s Smer party and the Slovak National Party (SNS) had resigned the day before, putting pressure on the junior coalition partner, the Movement for a Democratic Slovakia (HZDS), to follow suit. The HZDS, through its control of the Agriculture Ministry, also dominates the Land Fund.
The Land Fund scandal reached a peak in December after the Sme daily reported that a company close to the HZDS had gained 1.2 million square metres of land near the High Tatras mountains from the fund for about 1 percent of its real value. After the story broke, Fico forced Agriculture Minister Miroslav Jureňa to resign, sparking the worst government crisis since the Fico administration took power in August 2006. The HZDS considered leaving the coalition, but in the end decided to stay.
The Land Fund administers some 600,000 hectares of state-owned agricultural and forest land, much of which was confiscated from private owners after the former communist regime took power in 1948. It was through a complicated series of deals to return, or restitute, this land to its former owners that Bríza is alleged to have engineered the dubious transfers.
Tibor Gašpar, the head of the police anti-corruption unit, said at the end of last year that a criminal investigation for abuse of power had begun involving eight suspicious contracts signed by Bríza over a two-week period last April when the former Land Fund head was on holiday.
The local cadastral office in Poprad also said on December 4 that the land transferred under the High Tatras would be returned to the state because of a formal error in the purchase contracts.
However, while the cabinet hesitated to remove even Bríza from his post, Sme published another report detailing the business activities of Land Fund director Miloslav Šebek of Smer. The daily reported that Šebek had leased over 12.5 million square metres of land from the very fund he controlled, while companies controlled by Land Fund board members Jozef Gurecka and Jozef Stopka held even larger tracts.
“Šebek cannot be impartial in his decisions,” said MP Pavol Frešo of the opposition Slovak Democratic and Christian Union (SDKÚ). “If the prime minister calls the transfer of land under the Tatras a scandal, how can a situation where a political nominee is at the same time a client of the Land Fund be described as anything other than cronyism?”
Šebek argued that he had signed the lease contracts in 2005, before he became a Land Fund executive. His annual rent is Sk450,000.
“At that time, I couldn’t have anticipated that in 2007 I would become the fund’s director,” he said in denying any conflict of interest.
However, while Šebek’s term as director ends in 2012, the lease contracts on his land come up for renewal in 2010, meaning that he will be ruling on his own applications. As the fund’s director, he also has unique insight into what land is available for lease.
Furthermore, Agriculture Minister Zdenka Kramplová of the HZDS has prepared a draft law that, if passed by parliament, would allow the Land Fund to sell land exclusively to current tenants.
Šebek has said that he has no intention of buying any of the fund’s land, but the managers of companies he controls expressed an interest.
“If the purchases can be spread over 20 years, as the draft law predicts, we could manage it. Having your own land is different from just renting it,” said Alena Segedyová, managing director of Agrospol Hradová, one of Šebek’s companies.
“Sure we’re interested in buying agricultural land,” said Miroslav Maxon, a former finance minister for the HZDS, and now the director of Slovenské Biologické Služby, a position he took over from his good friend and the company’s owner, Šebek. “When you’re investing a lot of money into technology, you want some security.”
Board members Gurecka and Stopka are also interested in buying land they currently rent from the Land Fund. “I can’t rule out that we will apply to buy it,” said Gurecka, owner of the Poles firm, which rents over 2.2 million square metres for a modest Sk22,000 a year.
“It’s logical for a company to want to buy land it works on from morning to night,” said Stopka, who is on the supervisory board of Agroprodukt Slovakia, which leases over 22 million square metres from the fund for Sk550,000 a year.
While the coalition nominees said they saw nothing wrong in the draft law, the opposition said it would allow Land Fund managers to line their pockets.
“I’m convinced that Šebek is only one of many Smer nominees who will be able to get their hands on lucrative plots of land once the law is changed,” said former justice minister Daniel Lipšic, now an MP for the opposition Christian Democrats.
“Smer functions like a business.”
The draft law allowing the purchase of state land, which was prepared by Jureňa and submitted by Kramplová, was recently temporarily withdrawn from cabinet debate. Kramplová said that while she was not backing away from allowing the purchases, she wanted to wait until after the restitution process is complete.
While the Land Fund has been handling restitution claims since 1992, it still has about 70,000 requests outstanding for land to be returned.
In an interview with Sme, Šebek defended the proposal to give people who lease land from the fund first crack at buying it, rather than putting the land on the open market.
“Maybe it looks unfair, but if you allowed anyone to buy it, farmers might end up with nowhere to take their manure, because all of the surrounding plots would be bought up by financial groups,” he said.
“The most important thing is to allow those who actually use the land for something to go on using it.”