WHEN Prime Minister Robert Fico fired the leadership of the state-owned Slovak Land Fund for corruption two years ago, he may have imagined the problem had been solved. But following an identical scandal at the beginning of this month, the government has again been forced to send the fund’s management packing.
Once again, the GVM company, whose owners have close ties to junior coalition partner Vladimír Mečiar, has gained lucrative state property in the High Tatras mountain resort area for a fraction of its market value. The property was handed over by the land fund.
“We have to clean it out completely. If these people don’t know how to operate, that’s their problem,” Fico said on December 2 as he announced the dismissal of fund director Miroslav Mihalík and his team.
If there is a difference this time around, it is that the land fund is now under the control of Fico’s Smer party, meaning that Smer also bears political responsibility for the scandal.
Two years ago, the prime minister was able to blame Mečiar’s party, the Movement for a Democratic Slovakia (HZDS), which governs in coalition with Smer and at that time called the shots at the fund.
The political fallout for the prime minister may be all the greater in that his cousin, lawyer Jaroslav Rybanský, is currently head of the restitution department at the fund, and had primary oversight over the questionable land deals.
Back in 2007, the Sme daily unearthed a series of transactions in which GVM gained almost 170 hectares of state-owned land under the High Tatras for about 30 cents per square metre. The market value of the property was 20-30 times that amount, or in total about €15 million.
The scam was based on Slovakia’s restitution process, in which people whose land was confiscated by the communist regime can apply for compensation. According to the law, if the land they originally owned cannot be returned, they can be awarded property in a different part of the country. The Slovak Land Fund, staffed mostly by coalition nominees, oversees restitution, but many claims have not been addressed, and the process has been dogged by corruption.
GVM identified eight people in Michalovce, eastern Slovakia, who were eligible for restitution, and offered to arrange compensation – as long as the restituents would immediately sell any land they were awarded to GVM at a bargain price. The restituents, who are retired and had given up hope of receiving any compensation, agreed.
“We had money, and they wanted to leave at least something to their grandchildren,” said Milan Bališ, GVM’s owner, in an interview with The Slovak Spectator.
“We were looking for a way to make some money on this land,” agreed restituent Katarína Ninitzová. “We were a little hasty, but we didn’t have the perspective we have today. For the company it was certainly a good buy.”
Bališ has worked as a bodyguard for Mečiar, and co-owned a company that in 2005 provided the former prime minister with an explanation of where he got the money to pay for his mansion, Elektra. Another GVM owner, Gabriel Vysaník, was a local boss for Mečiar’s HZDS in Kežmarok and helped run the party’s election campaign in 1998. The third, Pavol Talčík, is Mečiar’s neighbour.
Back in 2007, the fund was controlled by Mečiar’s HZDS. GVM’s Talčík admitted the company had had an inside track. “Vysaník knew someone on the fund and we were able to push it through,” he said.
Two years later, the scenario was repeated. The same restituents were awarded compensation by the land fund in two High Tatras locations – Veľká Lomnica and Stará Lesná – and signed it over to GVM. The company thereby gained a further 140 hectares of arable land, worth about €10 per square metre, for €0.30 per square metre. Together it is worth over €15 million, and much more if GVM manages to have it rezoned for construction.
This time, GVM used a lawyer named Milan Škultéty to lead negotiations. Škultéty was a partner in a law office with Fico’s wife Svetlana from 2004 to 2007, as well as with Martin Glvač of Smer, currently the deputy justice minister. “I didn’t arrange anything for them [GVM],” the lawyer said.
According to the rules, the fund is supposed to offer restituents compensation within the same municipality where the confiscated land was located. If it cannot, then compensation can be awarded elsewhere in the country. In the case of the Michalovce claimants, they were awarded land 200 kilometres away, in the High Tatras. The fund claimed it did not own such large plots of land any closer to Michalovce.
“The only land we owned in the area, or in the whole of eastern Slovakia, was around Poprad and Kežmarok [in the High Tatras],” said the fund’s Mihalík. “The only practical solution was to put them in Veľká Lomnica.“
In fact, the land fund currently owns 250 hectares of land in the district of Snina, only 40 kilometres from Michalovce. In 2003 the fund even commissioned a geometric survey of the land with a view towards subdividing it – in order, perhaps, to distribute it among a number of restituents.
Land fund spokesman Ľubomír Kavjak refused to comment on whether the fund should have offered the land in Snina to the restituents. “We have said all we have to say on the matter."
7. Dec 2009 at 0:00 | Tom Nicholson