Party funding doubts hit Fico and his party

WHEN earlier this year Robert Fico, the country’s prime minister and leader of the Smer party, summoned special press conferences to attack the largest opposition party over what he alleged was murky financing involving shell companies in tax havens, he clearly did not expect that three weeks before the general election he would be facing similar questions about his own party’s finances.

WHEN earlier this year Robert Fico, the country’s prime minister and leader of the Smer party, summoned special press conferences to attack the largest opposition party over what he alleged was murky financing involving shell companies in tax havens, he clearly did not expect that three weeks before the general election he would be facing similar questions about his own party’s finances.

After a document purportedly signed between a financial backer of Smer and the party’s past image-maker – which promised political gains for the donor – was published by the Slovak daily press, one of the co-founders of Fico’s party, Bohumil Hanzel, followed up with an interview with the Sme daily in which he revealed further information about how, he said, Smer financed its 2002 election campaign. The Christian Democratic Movement (KDH), an opposition party, has now filed a criminal complaint with Slovakia’s general prosecutor against an unidentified offender questioning the legality of Smer’s financing activities. The prosecutor has said that his doors are open from early morning until the evening for Hanzel and others to come and give testimony.

Fico called the developments an attempt to discredit his party ahead of the June 12 parliamentary election. Smer also sued the Sme and Nový Čas dailies for publishing the document purporting to show a deal made in 2002 between Ľubomír Blaško, a businessman from the energy sector and Fedor Flašík, the former campaign manager of Smer, to provide Smer with about Sk32 million (€1.06 million at the current exchange rate). In return, according to Sme, Blaško would get to appoint a state secretary – i.e. deputy minister – and control several parliamentary deputy seats and posts in strategic companies if Smer made it to the government.

Smer lost the 2002 election and Blaško died of heart failure in 2004.

Hanzel told Sme that Smer’s election campaign in 2002 carried a Sk284-million price tag and that the costs were shared by various financial sponsors. He also claimed to have seen a copy of an agreement between Fico and five sponsors.

“It involved a lot of money and spots on the party’s list of candidates,” Hanzel told Sme. “With this step he signed a deal with the devil.” (See story above)

Hanzel stated that Fico “knew about each crown in Smer” and that Fico had said it was a “normal requirement by the sponsors to make claims for state orders and positions”. Hanzel told Sme that he had arranged Fico’s meetings with sponsors, who then poured tens of millions of crowns into the party’s coffers, and that he had personally attracted three large sponsors to Smer.

On May 19 Fico told the media that the party’s financing had been legitimate since its very beginning in 1999.

“From the very first day of our establishment we have been under incredibly close watch of how we do things when we gain finances,” Fico stated at a press conference.

The Smer chairman claimed that no audits or reports have shown any discrepancy in party financing. Fico then said that Hanzel had never been a founder of Smer and suggested that he is close to the largest opposition party, the Slovak Democratic and Christian Union (SDKÚ).

Iveta Radičová, the SDKÚ’s election leader, stated after media published the information about Smer’s past financing that Slovakia is ruled by the co-owners of Smer and that Fico had lost his mandate, the SITA newswire wrote.

SDKÚ’s chairman, Mikuláš Dzurinda, withdrew as the party’s election leader in early February after Fico had disseminated information about what he called the suspicious financing of the SDKÚ in past years. Fico claimed the SDKÚ was involved in money laundering through shell companies residing in tax havens.

Dzurinda has said that Fico should resign if he wants to have a political perspective. Dzurinda had previously said that the attack made by Fico against the SDKÚ in January was only a manoeuvre to paralyse SDKÚ because Fico had known that the information about Smer would be revealed, SITA wrote.

The Fair-Play Alliance, a political ethics watchdog, is certain that this method of financial sponsorship is how some or many of the political parties in Slovakia have been financed. The alliance has been pointing out that some political parties’ declared contributions are much lower than the estimated value of their expenditures in election campaigns.

“This problem is shared not only by Smer and the SDKÚ but by most political parties, which either do it more skilfully or have not had any internal problems emerge so that someone from inside the party drags out these documents,” Zuzana Wienk, the Fair-Play Alliance’s director, told The Slovak Spectator.

Wienk says it is still a very serious, open question how Prime Minister Fico’s party financed its campaign in 2002 because the estimates of what it spent in that campaign are much higher than the declared expenditures and that a damaging document has now surfaced with signatures that look very authentic.

Fico cautioned media outlets on May 17 about spreading further information concerning the document or allegations made about the party’s past financing by saying that these were “lies of a political loser”.

On May 19 Slovakia’s General Prosecutor Dobroslav Trnka called on Hanzel to testify and said that the doors of his office are open for him to do so from morning to evening. Trnka also said reporters from Sme can do likewise and deposit the materials that were published in the daily. SITA wrote that Trnka said that if a criminal complaint is filed, the prosecution will deal seriously with it.

Smer insists that Hanzel is fabricating his statements and, according to a Smer news release, says the reason he is saying these things after so many years have passed is that it is now just less than a month before the voters go to the parliamentary election.

KDH lodged its criminal complaint with the general prosecutor’s office on May 20 against an unknown offender. KDH Chairman Ján Figeľ said that his party took this action based on information published by the media which implies illegal acts such as “tax evasion, indirect corruption, unjustified benefit, taking bribes and others.”

Daniel Lipšic, a former justice minister and a co-chairman of KDH said that Smer works as a limited liability company, SITA wrote.

Two deputy chairmen of Smer, Marek Maďarič and Igor Federič, together with Ján Richter, the general manager of the party, filed a complaint later on May 20 with the general prosecutor’s office against an unknown offender charging false accusations, libel and defamation.

There is one other piece of suspicious information falling on Smer. Sme reported that Smer’s Prešov regional organisation has had on its website for more than a month in its section listing “sponsors” a company named Movyrob Prešov with the date of September 18, 2009, attached to the firm’s logo. Sme wrote that Smer’s annual financial report does not list this firm’s name. The owner of the firm, Miroslav Mularčík, confirmed to the daily that “I have given but I do not intend to comment”. Smer’s regional head, Stanislav Kubánek, stated that the firm’s name and logo appeared on the website due to a mistake by the graphic designer.

Wienk commented that power always attracts people who want to corrupt it or oblige it through various gifts or mutually beneficial relations.

Wienk told The Slovak Spectator that “this is why there should be strong public opinion which forces politicians to take responsibility after political scandals break out,” adding that she thinks that such a free and critical society is only “due to media and non-governmental organisations pressing politicians towards more transparency.”

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