Tax boss quits as PM refuses to back down

THE BOSS of Slovakia’s Tax Directorate, who earlier this year nodded through a five-year, €6.6-million office leasing deal with a firm co-owned by a regional official of the ruling Slovak Democratic and Christian Union (SDKÚ), resigned on April 20. A day earlier, SDKÚ leaders had appeared to agree that Slovakia’s public-finance watchdog would decide his fate via an audit of the deal.

THE BOSS of Slovakia’s Tax Directorate, who earlier this year nodded through a five-year, €6.6-million office leasing deal with a firm co-owned by a regional official of the ruling Slovak Democratic and Christian Union (SDKÚ), resigned on April 20. A day earlier, SDKÚ leaders had appeared to agree that Slovakia’s public-finance watchdog would decide his fate via an audit of the deal.

Miroslav Mikulčík, who had resisted a call by Prime Minister Iveta Radičová for him to resign, saying he saw no reason to go, announced on April 20 that he had decided to quit in order to avoid becoming the subject of a political power struggle.

“I do not want to be a tool in any power struggle, be it in relation to the opposition or within the ruling coalition,” Mikulčík wrote in a statement announcing his resignation quoted by the SITA newswire. “I do not want to get the finance minister, whom I respect immensely, and the prime minister into any conflict and this is why I decided to quit my job.”

Radičová and Finance Minister Ivan Mikloš, both members of the SDKÚ, had earlier clashed head-to-head over the fate of Mikulčík, making the other ruling coalition parties edgy and opening the door to speculation about a power struggle within the SDKÚ.

Radičová hinted that the SDKÚ audit deal was little more than a face-saving exercise in a comment she made following a meeting with ruling coalition partners later on April 19. “I will remain in the post of prime minister only if there is no cloud or shadow of suspicion remaining over the transparency of this government,” she said, as quoted by SITA.

Then, on April 20, she was late arriving at a regular session of cabinet. She confirmed that her tardiness was related to Mikulčík’s continued presence.

Asked if she had threatened to resign over the affair, she stated: “I have unambiguously said that I will not lead a government over which such a shade is hanging.” Radičová later added that she had insisted on transparency on behalf of the ruling coalition.

When the story first erupted, Radičová defended Mikulčík’s actions, but later turned against him, saying that he had given her false information about the leasing deal. However, Mikloš directly contradicted the prime minister’s call for Mikulčík to resign by telling the media on April 18 that the tax chief should remain in his job.

On April 19, Radičová, Mikloš and SDKÚ boss Mikuláš Dzurinda appeared to have reached a compromise: Radičová and Mikloš would respect the results of an audit of the deal to be conducted by Slovakia’s Supreme Audit Office (NKÚ), which oversees the use of public funds. Observers promptly noted that sometimes it takes six months or longer for the NKÚ to produce an official opinion and that Radičová in the end had had to back away from her call for Mikulčík to resign. Analysts said they expect Robert Fico and his Smer party, the largest opposition group in parliament, to make hay from the situation.

“Undoubtedly, Fico will vigorously use this situation for his benefit,” political scientist Miroslav Kusý told The Slovak Spectator. “He will continually remind Radičová of this situation while using any weakness in the ruling coalition, which unfortunately its parties keep displaying.”

Fico said on April 19 that after Easter his party will submit a proposal for a no-confidence motion in Radičová. He needs 30 MPs to sign the proposal in order to force Speaker of Parliament Richard Sulík to summon an unscheduled parliamentary session.

Tensions in the SDKÚ

The SDKÚ’s leadership met on the morning of April 19 to seek a solution to the stand-off. Later in the day, Radičová, Mikloš and Dzurinda withdrew to discuss the matter further in private. After an hour-and-a-half of talks they agreed that the prime minister could maintain her position that Mikulčík should resign, but that she would also respect the authority vested in the finance minister. Dzurinda told the media he did not think that Mikulčík remaining in his post would weaken the prime minister in her position.

“The SDKÚ backed the prime minister and we fully respect all her statements,” Dzurinda said, as quoted by Sme.

Earlier on April 19, Mikloš had said that he was aware of his responsibility in dealing with the building lease deal but added that as the responsible minister he alone would handle those responsibilities and would not yield to media pressure. Mikloš admitted that one of possible option was that the prime minister would propose his own recall. He stated that he had agreed with Radičová that until April 18 neither of them would release additional statements about the case.

According to Mikloš, Radičová explained the change in her position, and her subsequent call for Mikulčík to go, by saying that “those pressures increased”. But Mikloš said he did not agree that ministers should bend to such pressures.

“We should not be solving such issues based on pressures because that is the beginning of the end,” Mikloš stated, as quoted by SITA.

Responding to speculation about the eventual outcome of the crisis, Mikloš said that he is not interested in assuming the prime minister’s chair. He also stated that he is not in conflict with Radičová and that their opinions differ only over this particular issue.

Mikloš has insisted that Mikulčík acted in the public interest when he signed the contract earlier this year to rent an office building in Košice from Nitra Invest, a firm co-owned by Ondrej Ščurka, the chairman of the SDKÚ branch in Nitra.

“It was not a government crisis, since it did not concern all the ruling parties,” Kusý told The Slovak Spectator. “Of course the other parties were very carefully watching and had certain concerns.”

Radičová early on presented a very unambiguous stand, said Kusý, adding that it was in the finance minister’s remit to decide what would happen next to Mikulčík.

“She is the prime minister, with much wider authorities than the minister, and once she uttered such a stand she got into a position from which it was rather difficult and unpleasant to concede,” said Kusý.

The case, which has prompted significant tension within the ruling coalition, was brought to the media’s attention by Fico on April 11, when he presented it as a story of party cronyism. He alleged that some of the money from the deal would end up in the SDKÚ’s accounts, though he presented no evidence to back up this claim. Mikulčík immediately responded that the contract with Nitra Invest was completely in line with applicable laws and would save the state money.

On April 15, Nitra Invest announced that it was withdrawing from the contract, stating that it did not want any further suspicions to affect its name.

Political observers noted that questions of impropriety surrounding the contract have put the SDKÚ in an unfortunate position and have urged the party to leave no questions unanswered. Fair-Play Alliance, a political ethics watchdog, earlier said that the best way to resolve the controversy was to cancel the contract and start the procurement process again, with full transparency.

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