CHARGES of fraud brought against former economy minister Pavol Rusko in association with the 2004 privatisation of the Steam-Gas Cycle (PPC) electricity-generating facility in Bratislava were rather short-lived. Less than two weeks after the specialised police team investigating the Gorilla file, an unverified document posted on the internet that implies high-level political corruption in Slovakia in 2005-06, proposed criminal charges against Rusko, the Special Prosecutor’s Office dismissed the charges calling them “illegal and unjustified”. The former economy minister, who earlier called the charges “completely crazy”, said he is relieved and is now considering taking legal action against the police.
The investigators from the police’s Office for the Fight Against Organised Crime accused Rusko of violating the law in 2004 when he failed to inform other cabinet ministers about an analysis prepared by his ministry about the privatisation deal. The charges brought against Rusko alleged he was jointly responsible for damages to the state of more than €42 million during 2005 and 2006.
“I cannot imagine what would have happened if they had pulled it off,” Rusko stated on March 24, as quoted by the TASR newswire. “In my view it’s the prosecutor’s office that guarantees legality, not the Interior Ministry headed by an ideological nominee who will do anything in order to gain preferential votes,“ Rusko added, referring to outgoing Interior Minister Daniel Lipšic, who made a public announcement about PPC just days before the recent parliamentary elections.
Lipšic was tight-lipped when asked to comment on the decision by the Special Prosecutor’s Office and his spokesman Gábor Grendel only offered the comment that “the investigation of the Gorilla case will continue”.
The Gorilla file, a leaked document which purportedly describes conversations between businessmen and senior politicians and government officials covertly recorded by Slovakia’s SIS intelligence agency in 2005 and 2006, contains certain references to the PPC privatisation involving kickbacks to certain politicians. These references led the police investigators to re-examine the details of the PPC privatisation.
Five days before the March 10 parliamentary elections, Lipšic filed a motion with the General Prosecutor’s Office to terminate the 2004 PPC privatisation, stating that “investigation confirms that the privatisation was done unlawfully and was significantly under-priced”, as quoted by the SITA newswire.
Prosecutor clears Rusko
But the special prosecutor stated on March 24 that Slovakia’s National Property Fund (FNM) had the exclusive authority to carry out the privatisation based on an authorisation from the cabinet and that meant that Rusko could not have participated in reaching the agreement on sale of the shares on March 4, 2004 and “could have not influenced the amount of the allegedly disadvantageous purchase price”.
The special prosecutors also said there was no evidence submitted that proved a direct link between Rusko’s conduct to any damages incurred by the state, specifying that Rusko had failed to submit his ministry’s analysis on the sale of PPC only after the alleged crime had been completed.
Rusko had said earlier in March that the cabinet decided to sell PPC on January 21, 2004, and authorised the sale of 100 percent of the shares, with the FNM then possessing 90 percent of the shares and the remaining 10 percent being owned by Slovakia’s state-owned power producer, Slovenské Elektrárne (SE), which was under the remit of Rusko’s Economy Ministry.
Rusko stated that the FNM signed a contract to sell 90 percent of PPC’s shares to the chosen buyer on March 4, 2004, and only 20 days later was he asked to prepare an analysis of why his ministry had refused to sell the 10-percent share owned by SE, SITA reported. Rusko insisted that the analysis prepared by the Economy Ministry did not examine whether the FNM did or did not sell its PPC shares at an appropriate price.
“It was not within my authority; it was their responsibility,” Rusko stated, adding that the sale was approved by nominees from Lipšic’s party, the Christian Democratic Movement (KDH) as well as from the Slovak Democratic and Christian Union (SDKÚ). Lipšic was a member of the cabinet, along with Rusko, that approved PPC’s privatisation.
Rusko also said that the privatisation could have not taken place without the knowledge of the party heads of the KDH and the SDKÚ, but the chair of the SDKÚ and the prime minister in 2004, Mikuláš Dzurinda, responded that the sale of PPC was fully within the authority of the Economy Ministry.
Rusko told the media that cabinet review of his ministry’s analysis was included on the cabinet’s agenda on April 15, 2004, and that a copy of the analysis was made available to each cabinet member but before the meeting he agreed with Dzurinda that the ministry’s 10-percent ownership share would not be sold and discussion of the analysis was withdrawn from the agenda. He added that the cabinet on June 16, 2004, then cancelled its earlier decision to sell 100 percent of PPC’s shares.
Four bidders were shortlisted in the PPC privatisation and the 90 percent of shares owned by the FNM were subsequently sold to 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 of the FNM agreed to sell the company for Sk2 billion (about €66 million) given that PPC had a binding contract with SE that guaranteed it profits of Sk15 billion (about €450 million), SITA reported.
Rusko said that all the bidders knew about the exclusive contract between PPC and SE as did the FNM. Penta spokesman Martin Danko, as quoted by the Sme daily, said that PPC’s contracts were part of an information memorandum produced for an earlier attempt to privatise PPC in 1999 “in the same way as they were part of the memorandum for the 2003 sale”.