Following allegations of misconduct, the proper way for a politician to handle the situation is to stand before public, explain and answer questions. That is how president Andrej Kiska launched his September 12 press conference related to the leaked results from the tax inspection in his company KTAG.
“I have nothing to hide,” Kiska told the press.
The leaked documents show that KTAG unjustifiably counted €136,000 into its expenditures, meaning it paid €27,000 less on taxes. The company acknowledged and expressed regret for the deed and subsequently paid the tax. So the issue is not viewed as a crime, according to law.
Kiska and the company representatives considered their accounting records to be normal and were not trying to evade taxes, the president stated. He added that it is quite common in Slovakia for the tax office and companies to have a different opinion on what can be considered expenditures and what not.
Yet his answers raised even more questions: Why did he not tell the public earlier and not apologise for that? Will he publish all related contracts and invoices? And how it is possible that a company with 24 years of experience does not know that a presidential campaign cannot be counted into its expenditures, according to Transparency International (TIS)?
A day after the press conference Kiska refused to comment on the issues, saying that he considers this case closed.
“We appreciate his repeated appeals and steps to introduce a real fight against corruption,” TIS commenting on the case on its Facebook page. “We’re disappointed by his explanation in this case of proven tax fraud, however.”
However, days after the press conference the anonymous source leaked more details about the tax inspection. The President condemned the use of the financial authority’s documents in a political conflict.
Officers approaching the Kiska brothers
An anonymous person sent an e-mail to several media outlets on September 11, containing a Financial Administration protocol and police statement related to tax evasion of €27,000 dating back in 2014.
Tax officers from Prešov announced a tax inspection for KTAG in December 2015, when Kiska was at the office for 18 months. The tax officers claimed in October 2016 that KTAG violated the law as it had unjustifiably counted €136,000 into its expenditures, meaning that it paid €27,000 less on taxes.
KTAG is owned by Kiska and his brother Jaroslav, along with Eduard Kučkovský as its legal representative. The company focused mainly on travelling but later started to rent out buildings.
The questioned sum was related to company’s expenditures on Kiska’s presidential campaign, including advertisements, billboards, media advisors, etc.
The tax officers also investigated expenditures on business trips taken by Kiska and an authorised KTAG representative, Eduard Kučkovský.
The company acknowledged and expressed regret for the deed and subsequently paid the tax.
The tax officers informed the police about the case. Though the police launched an investigation at the beginning of this year, they closed it after two months.
“A crime occurred and was committed by a certain person, but by dealing with the damages there is no longer any crime,” reads the leaked police report.
Tax law permits an entity involved in tax evasion to express “effective regret”, even immediately after the investigation is concluded, in order to avoid prosecution.
Incompetence or fraud
KTAG was accounting the campaign expenses related to contracts it had with various companies and people. When the tax office questioned its accounting register the company even considered defending itself in court, according to Kiska.
“KTAG representative Mr Kučkovský informed me about it and we were considering it [filling a lawsuit against the tax office],” Kiska told the press, “but we had similar disputes with tax offices in the past and considering my experience I stated that it would be pointless.”
Such an explanation is not trustworthy because it is obvious that a presidential campaign is not a regular activity of the company, according to TIS’s head Gabriel Šípoš.
“I don’t believe that this is incompetence,” Šípoš told The Slovak Spectator. “Of course, more likely someone was trying [to see how far he can get].”
He went on that Kiska should have assumed moral responsibility and publicly apologised for the wrongdoing of his company.
There is still the question of whether apart from tax fraud, former presidential candidate Kiska did not violate the law on election campaign funding and whether he reported all his expenditures or whether he did not perhaps violate the legal limit for the campaign. This could be verified if the president showed the public all invoices and orders paid by his company for the campaign, stated TIS.
President Kiska paid €250,593 for his official election campaign and €1,095,482 on a previous information campaign from his own finances, which he invested into KTAG in 2005. Even the Finance Ministry and independent auditor checked the campaign funding, stated the president’s spokesperson Roman Krpelan.
“Thanks to Andrej Kiska, for the first time the public has learned the real expenditures for an election campaign,” Krpelan told The Slovak Spectator.
Yet Kiska refused to show the documents demanded by TIS.
The Slovak Spectator approached Kučkovský as well but he refused to comment on the case.
On September 14, the anonymous source identifying itself only as “dissatisfied tax office employees” – and signed as Yegor – sent another part of the protocol to journalists, from a Ukrainian email address.
Tax officials minutely describe each checked item connected with the presidential campaign. There is also a note that the Tax Office called on KTAG, owned by Kiska, to explain why these activities were included in operational expenses, and that the firm was not able to sufficiently justify them, the Sme daily wrote.
The President subsequently met with Finance Minister Peter Kažimír for an explanation as to how information from the Financial Administration, protected by law, can leak through anonymous emails from Ukraine.
After the meeting Kažimír stated that the ministry had identified the people who had access to the files. The police is still investigating the leaks.
Press offices received other documents related to KTAG from an anonymous source on September 19. But they contained only two pages of what looks like the criminal complaint of the tax office against KTAG with no new relevant information.
Despite the leaks the President is refusing to disclose all contracts and invoices related to the campaign.
The Parliament’s Financial Committee announced that it will check Kiska’s campaign funding.
Targeting the president
Besides its criticism, TIS stated that the anonymous and selective publishing of information from tax inspections is a problem, adding that the “attack against the president was hardly accidental”.
Kiska recently criticised former education minister Peter Plavčan for his poor explanations concerning the scandal involving the distribution of eurofunds.
If classified documents are used against country’s citizens, these are gangland practices, according to Kiska.
“If a head of state can be attacked in such a way, no single person in Slovakia can be sure that such gangland-style blackmailing practices are not being used against him or her,” Kiska said in his video statement.
The president stated that it is unacceptable for Financial Administration documents to be exploited in a political competition.
Also Financial Administration has approached the police to investigate the leak.
“It’s another attempt to involve Financial Administration in political competition,” administration’s spokesperson Patrícia Macíková told the Sme daily. “It is unacceptable that information under tax secrecy is being used and exploited.”
14. Sep 2017 at 15:26 | Roman Cuprik