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Rusko rejects charges

THE INVESTIGATION into the Gorilla file, an unverified leaked file which implies high-level political corruption in Slovakia in 2005-06, has now led, albeit indirectly, to criminal charges – and denials. Pavol Rusko, a former economy minister, now stands accused of fraud in association with the 2004 privatisation of Bratislava-based electricity generator Steam-Gas Cycle (PPC). He has said he will file a complaint against the charges.

THE INVESTIGATION into the Gorilla file, an unverified leaked file which implies high-level political corruption in Slovakia in 2005-06, has now led, albeit indirectly, to criminal charges – and denials. Pavol Rusko, a former economy minister, now stands accused of fraud in association with the 2004 privatisation of Bratislava-based electricity generator Steam-Gas Cycle (PPC). He has said he will file a complaint against the charges.

Alexander Bíró of the Office of the Special Prosecutor said on March 15 that financial damage incurred during 2005 and 2006 cost the state €42,024,306 and benefited a private company, the SITA newswire reported. The implication is that the financial damage in 2005 and 2006 arose from Rusko’s actions in 2004.

Rusko is accused of failing to inform other cabinet ministers about the existence of an analysis pointing to the disadvantageous nature of the privatisation deal. If found guilty of the charges, he could face five to twelve years in prison.

Five days before the March 10 parliamentary elections, Interior Minister Daniel Lipšic filed a motion with the Office of the General Prosecutor to cancel the 2004 privatisation of PPC. He stated
that “investigation confirms that the privatisation of [PPC] was done unlawfully and was significantly under-priced”, SITA reported.

The Gorilla file, a leaked document which purports to describe conversations between businessmen and enior politicians and officials covertly recorded by Slovakia’s SIS spy agency in 2005 and 2006, refers to the PPC deal as one which involved kickbacks for politicians. It was these references which led investigators to re-examine the PPC privatisation deal.

“It is completely crazy,” Rusko said of the charges at a press conference that he called on March 19 to offer the media his version of the PPC privatisation story.

Rusko said that the government decided to sell PPC on January 21, 2004, and that originally 100 percent of the shares were to have been sold, with the National Property Fund (FNM) state privatisation agency controlling 90 percent of the share package and the remaining 10 percent in the hands of dominant power producer, Slovenské Elektrárne (SE), which at the time was state-owned and under the supervision of the Economy Ministry.

Rusko said that the FNM signed a contract to sell 90 percent of PPC’s shares with the buyer on March 4, 2004, and only 20 days later was he asked to produce an analysis of why his ministry had refused to sell the 10-percent share controlled by SE, the SITA newswire reported. Rusko insisted that the analysis did not look into whether the FNM did or did not sell PPC at the correct price.

“It was not within my authority, it was their responsibility,” Rusko said, adding that the sale was okayed by nominees of Lipšic’s party, the Christian Democratic Movement (KDH), and the Slovak Democratic and Christian Union (SDKÚ). Lipšic himself was a member, along with Rusko, of the cabinet that approved PPC’s privatisation.

While Rusko claims that the sale could have not taken place without the knowledge of the party bosses of the KDH and the SDKÚ, the chairman of the latter, then-prime minister Mikuláš Dzurinda has said that the sale was fully within the authority of the Economy Ministry.

Rusko said that his ministry’s analysis was included on the April 15, 2004 cabinet agenda and was made available to every cabinet member, but that before the session he agreed with Dzurinda that the ministry’s 10-percent share would not be sold and so the analysis was withdrawn. He said that the cabinet cancelled its earlier decision to sell 100 percent of PPC’s shares on June 16, 2004.

According to the Sme daily, Rusko is accused of not informing the June cabinet session about the existence of the analysis, which had found that the share sale was disadvantageous. If the cabinet had known the findings it could have tried to reverse the privatisation, the police investigator found, as reported by Sme. The members of the FNM executive committee who approved the deal have not been charged.

Four bidders were ultimately shortlisted in the PPC privatisation and 90 percent of the shares were ultimately acquired by PPC Holding, a company controlled by the Penta financial group, an influential investment firm which features extensively in the Gorilla file.

Lipšic said in early March that he does not understand why the privatisation committee agreed to sell the company for Sk2 billion (€66 million), given that a contract the firm had with SE guaranteed it profits of Sk15 billion (€500 million), SITA reported.

But Rusko said that all the bidders knew about the exclusive contract and so did the FNM. Penta spokesman Martin Danko, as quoted by Sme, said that PPC’s contracts were part of the information memorandum produced for an earlier attempt to sell PPC in 1999 “in the same way as they were part of the memorandum in the case of the 2003 sale”.

According to Lipšic, the commission at the FNM which selected the winning tender in the privatisation was chaired by Anna Bubeníková, who was sacked by the government earlier this year from her position as head of the FNM after her name appeared in the Gorilla file. Lipšic alleged that she favoured Penta’s bid, the TASR newswire wrote. However, he produced no evidence to back this assertion.

Penta responded to Lipšic’s claims in early March by noting that the PPC privatisation was a highly competitive tender involving seven other bidders and said it had won by offering the best deal.

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