PRIME Minister Robert Fico’s decision to dig up a long-dormant case concerning unexplained financing of the opposition Slovak Democratic and Christian Union (SDKÚ), and to season it with some new information about what he called money laundering, fictitious firms and tax-haven bank accounts, has signalled that the political fight in the lead-up to this year’s parliamentary election will be merciless and possibly dirty. With the renewed claims, aired in mid January, Fico now asserts that the SDKÚ, which has accused his own ruling coalition of corruption and theft, channelled money through foreign accounts supervised by its officials.
While observers suggest that Fico is trying to overshadow some of the still-smoking political scandals generated by the ruling coalition of Smer, the Slovak National Party (SNS) and the Movement for a Democratic Slovakia (HZDS), the prime minister’s accusations have prompted SDKÚ leader Mikuláš Dzurinda to file a criminal complaint against him.
However, Dzurinda publicly admitted that his party is unable to answer all the questions that journalists are asking about the party’s financing between 2000 and 2004.
“We are sorry about it,” Dzurinda said shortly after Fico reopened the SDKÚ party financing issue. The prime minister called Dzurinda’s confession “political suicide”. Dzurinda, in defence of his party, said that back in 2000 the law did not oblige political parties to publish annual reports on party financing or the names of their donors.
Fico opened up the SDKÚ financing case on January 22, after a four-and-a-half-year lacuna. The case involved a so-far unexplained transaction which helped the party to clear its then-Sk22 million (approximately €730,000, at current exchange rates) debt and at the same time allowed it to sell its Medená Street property for Sk27 million (approximately €896,000, at current exchange rates). Fico initially suggested that the unidentified owners of Swiss bank accounts and shell firms in tax havens were involved in the deal.
Then, on January 27, Fico claimed that the SDKÚ is controlled by shell companies based in London, with CEOs operating in tax havens and holding accounts in Swiss banks.
“There is a serious suspicion that the SDKÚ transferred abroad commissions from privatisation of strategic companies and covered them by [using] fictive firms and today is using them to finance its activities,” Fico said.
The claims relate to a historical loan of several hundred thousand euros to the SDKÚ from a London-based firm, Allied Wings, established only a few months before the transaction. The firm’s basic capital then stood at Sk350,000 (approximately €11,600, at current exchange rates) and its scope of business was not loan provision, according to the Sme daily. Fico claimed that the firm was dissolved last June, shortly after he suggested that he would disseminate information about money laundering, Sme wrote.
According to Fico, Allied Wings is linked to another company, Destor Investments, since both firms are based in London and have the same founder and secretary. Destor Investments is the owner of 100 percent of the shares in another company, Involve, which owns the SDKÚ party logo. Igor Kucej, the main treasurer of the SDKÚ, is the authorised representative of Involve. The address of the director of Destor Investments is recorded as being in Dubai, according to Fico.
“The circle is closed,” said Fico, as quoted by Sme. “If the finance-master of the SDKÚ is the authorised representative of a fictive English firm, Destor Investments, he also has a connection with Allied Wings, which provided a loan to the SDKÚ. The party which is accusing us of theft and corruption is sending money from foreign accounts under the supervision of SDKÚ people.”
The SDKÚ financing scandal originally broke in 2005. Between 2003 and 2004 another company, Soul, with basic capital of Sk200,000 (approximately €6,600, at current exchange rates) took over the party’s Sk22 million debt and also paid for the party’s building, thus providing Dzurinda’s party with about Sk50 million (approximately €1.66 million, at current exchange rates). Fico suggested that the SDKÚ had transferred part of the money received from Soul to an account of Allied Wings held at Credit Suisse, a Swiss bank, the SITA newswire wrote.
The SDKÚ claims that this was repayment of a loan of €404,000, with 7 percent interest rate, which they had taken in August 2000. However, the party has produced neither the loan contract nor information about Allied Wings, SITA wrote. The prime minister stressed that Allied Wings emerged on January 13, 2000, only a couple of months before it provided the loan to the SDKÚ.
“It is not possible that a postal box in London with a director in Saint Christopher and Nevis [a Caribbean island state] provides a loan worth millions to the SDKÚ without having the account of an SDKÚ representative with illegal money behind it,” Fico said, as quoted by SITA.
After Fico published the first information, Dzurinda said that his party had already paid the price twice for unanswered questions pertaining to his party’s financing between 2000 and 2004: once in 2002, and again in 2006, in the parliamentary elections. Since then, the party’s financing has been completely transparent, he said.
“We did not hurt or harm anyone,” said Dzurinda. “We did not scratch a single heller [one hundredth of a Slovak crown] from this state.”
However, on January 26 Dzurinda also said that he has never really handled the financing of his party and that he deals with party financing only once a year. The SDKÚ chairman has said that the attacks can be attributed to Fico’s efforts to divert attention from the scandals of the ruling coalition and to intimidate the opposition.
“If the political party I lead has committed a crime, why does a policeman, prosecutor, or the chief of the anti-corruption unit not announce the start of criminal proceedings? Why has the prime minister been signalling this since last June, only to announce it at a press conference today [January 22], as a politician?” Dzurinda told the public service Slovak Radio. “This is proof that Fico does not care about the rule of law.”
Shortly after Fico’s January 27 press conference, the SDKÚ said that it was filing a criminal complaint against Fico.
However, Sme journalists reported that they had not, so far, received any answers from the SDKÚ about why its logo is owned by Involve, which in turn is owned by a foreign firm, and not by the party. The paper asked why Involve, for which SDKÚ treasurer Kucej is the authorised representative, is owned by Destor Investments.
Political scientist Miroslav Kusý told The Slovak Spectator that even if suspicions remain about the SDKÚ’s funding, Fico’s efforts are nothing but an effort to obscure the current government’s scandals by bringing up older issues.
“It now depends on how the SDKÚ pursues newer cases, which are there but which Fico denies,” said Kusý.
The Fico government has still not shed light on the suspicious sale of Slovakia’s excess emission quotas to an obscure firm, Interblue Group, whose registered address was a lock-up garage in the USA, while a scandal in which Slovak police planted live explosive in the luggage of an unsuspecting Slovak citizen who then carried the explosive to Ireland is still smoking. Labour Minister Viera Tomanová, a nominee of Fico’s Smer party, is also under fire over problems with the functioning of the so-called ‘social companies’ scheme backed by Smer.
Kusý also noted that at the time when these cases emerged, the regulations were different and publishing information was not obligatory. Nonetheless, he expects Fico to continue stirring the case.
“It is in fact a 6-year old case, which at the time when it broke out evoked considerable distress,” said Kusý. “Though the public prosecutor closed the case down the prime minister has now has reopened it.”
Fico promised to reveal further information.
The director of political ethics watchdog the Fair-Play Alliance, Zuzana Wienk, told The Slovak Spectator that the explanation SDKÚ has provided is not satisfactory at all. However, she also suggested that Fico has been using very strong words and if he stands behind them, he should have filed a criminal complaint.
“The fact is that the SDKÚ has never explained suspicions of non-transparent financing and many open issues remain about why the concealed patrons helped the party; how they were rewarded and whether the party did not have a whole system of firms abroad which helped the party with its financial situation,” Wienk said.
According to Wienk, if the party wants to prevent a loss of public trust and the revival of these scandals it should investigate the case internally and draw personal responsibility, which would mean replacing the leadership with new faces and adopting new rules of behaviour.
Prosecutor General Dobroslav Trnka confirmed to the financial daily Hospodárske Noviny on January 27 that his office has been collecting material regarding the case and has requested material from SDKÚ.