PRIME Minister Robert Fico has pushed what he has called one of the most controversial pieces of legislation ever passed by the Slovak parliament through the legislative procedure despite the frowns of his coalition partners and the reservations of the opposition. The new law on proving the origin of assets should become effective next year if okayed by the president, but experts – and even the prime minister himself – do not rule out that it might appear on the agenda of the Constitutional Court sooner or later.
The law should, according to its author, serve as a tool for the state to examine the assets of those who got ‘terribly’ rich during privatisation in the 1990s or through criminal activities. It will enable the police and prosecutors to designate a person’s assets suspicious if there is a difference between their declared income and the value of their assets of at least 1,500 times the monthly minimum wage, which currently works out at €450,000. The burden of proving to a court that the origin of one’s assets is legal will be on the person charged, and if they cannot prove it, the assets in question will be transferred to the state.
“The state must have the right to ask someone who, for example, has assets worth Sk100 million [approximately €3.3 million] and is recorded as unemployed [...] where these assets came from,” Fico said, as quoted by the ČTK newswire. He claimed that the law was designed to address extreme cases in the political and criminal environment, and that it cannot be misused for conflicts between neighbours.
Passage of the law also required an amendment to the constitution. A new paragraph has been added to Article 20, which deals with the right to own property, so that the constitution will only protect legally-acquired property. Parliament’s constitutional and judicial committee did not recommend the amendment, but it was passed by a plenary session of parliament anyway.
Fico’s junior coalition partner, the Movement for a Democratic Slovakia (HZDS), whose head Vladimír Mečiar has had problems in the past clearly explaining the origin of his own property, particularly his ‘Elektra’ villa in Trenčianske Teplice, did not support the act. A group of HZDS deputies previously filed a complaint at the Constitutional Court about an earlier law on property origin (which had also been drafted by Fico). The Constitutional Court ruled that law, which is considered the forerunner of the present act, unconstitutional in 2008.
Most MPs from the Slovak National Party (SNS), another coalition partner of Fico’s Smer party, voted for Fico’s draft on March 4, as did opposition deputies.
This was despite SNS chairman Ján Slota having faced similar accusations to Mečiar about his own lavish lifestyle.
Christian-Democratic Movement (KDH) MP and former justice minister Daniel Lipšic proposed similar legislation a month ago, including a constitutional amendment – but without success. He said upon approval of Fico’s law that it was toothless and would only serve to “catch small fish”.
He later told The Slovak Spectator that the law could have been more effective if the changes he had proposed were incorporated – namely that unusual business operations, as defined by the law against money laundering, were also considered illegal income.
“So that it wouldn’t be possible through unusual business operations such as fictitious loans, fictitious gifts, or fictitious purchases and sales of shares at a high profit to avoid the law and formally declare legal income from laundered dirty money,” Lipšic said.
The fact that the law is very easy to avoid is, according to Lipšic, its main defect. Among other defects he also listed the extraordinarily high difference required between one’s assets and one’s income – specifically, the 1,500 multiple of the minimum wage – which, according to him, exceeds that “even of some representatives of organised crime”. His proposal to change it to 1,000 times the minimum wage was not approved in parliament.
A lawyer for anti-corruption watchdog Transparency International Slovakia, Pavol Nechala, agreed that in practical terms the laws really is toothless, because it is already clear how it can be avoided. He stressed that the main motivation for MPs in passing the law was that the existing tools to deal with illegal assets had failed, but said the new law will have to be applied in practice by the same system represented by the same police officers, the same prosecutors, the same investigators and the same judges.
“So why should this system work if the present system, with its standard tools, doesn’t?” Nechala told The Slovak Spectator, adding that by this law the state is basically getting rid of responsibility and transferring the burden of proof onto the public, and onto the person who is reported as suspicious.
Nechala also pointed to a problem with the retroactivity of the law, which was also a stumbling block for the previous law, ultimately ruled unconstitutional. In its 2008 ruling the Constitutional Court voiced concerns about ownership rights, which the present law has supposedly addressed with the amendment to the constitution, but also concerns about its retroactivity, which remain in the new law.
“It applies to any time in the past, and this legislation wasn’t effective in the past,” Nechala said.
Neither Lipšic nor Fico ruled out the possibility that the new law could end up at the Constitutional Court again.
However, Vladimír Mečiar, who initiated the procedure which ended in the 2008 unconstitutionality ruling, said he would not file another complaint, but is willing to give help and advice to anyone who would like to do so, the SITA newswire reported.
Despite opposition criticism of some of the law’s provisions, and despite opposition MPs’ concerns that this might be a pre-election gambit by the prime minister, they voted in favour of the law.
“Because even if it touches only one percent, or only one in a thousand of those who should be touched by it, just because it is so easy to avoid, even then it makes sense,” Lipšic said, explaining why he had voted in favour of the law in parliament. “Sometimes even the small fish, who will not be capable of avoiding the law, have to be caught.”
Lipšic also said that passing legislation on proving the origin of property now creates space for the future, “when there is a government that is serious about the fight against corruption”, to change the law and make it stricter.
Fico also said he was aware that the law was not perfect and that it needs time to be applied in practice. This, according to him, should take about two years, SITA reported.
Nechala said it is very unfortunate that the discussion about the law will continue, since there are other things lacking that make it impossible to discover certain crimes such as corruption.
“One of them is effective protection of those who report murky practices,” Nechala said. “We all remember how the employees of Lesy SR ended up, despite the fact that they saved the state budget large amounts [of money], since the government had wanted to award subventions to the company and changed their mind after the employees’ petition and the resignation of their director.”
Employees of the general directorate of the state-run forestry company, Lesy SR, wrote a critical open letter with allegations of cronyism and ineffective handling of the company’s property addressed to the sitting director of the company in June 2009. This launched a process that culminated in a reshuffle of the company’s senior management. However, several employees of the communications department, who had drafted the letter, were then sacked by Lesy SR at the end of 2009.
15. Mar 2010 at 0:00 | Michaela Terenzani