AN INFLUENTIAL member of the ruling Smer party has rejected allegations that he orchestrated the transfer of a lucrative parcel of state land near Bratislava to a private firm owned by his girlfriend and his former employee for a fraction of its real worth.
Martin Glváč, the deputy construction minister and Smer's No. 8 candidate in the July 2006 parliamentary elections, denies any connection to the LM-Real firm, which bought the land in a complicated "restitution" deal. Restitution is the process of returning land confiscated by the former communist regime to its previous owners.
Glváč said he was ready to resign over the scandal - provided any hard evidence surfaced linking him to LM-Real. He also accused the opposition SDKÚ party of being behind the reports. "I regard the activities of Sme (the daily which broke the story on March 17) as an attack coordinated with the SDKÚ to conceal the party's internal problems with democracy," he said.
The accusations against Glváč come only a few months after Agriculture Minister Miroslav Jureňa was forced to resign after it was discovered that an official he appointed had approved the transfer a lucrative plots of state land under the High Tatras mountains to a company close to Jureňa's ruling coalition HZDS party. The company acquired the land for about one percent of its market value.
In dismissing Jureňa, Prime Minister Robert Fico described the land transfer as "fraudulent" and "an attack on state property, and said he would not hesitate to fire Jureňa's replacement if it happened again.
However, when Glváč, a member of Fico's own Smer party, came under fire four months later, the prime minister had no comment. Instead, a party spokesperson demanded that the Sme daily apologize for linking Smer to the scandal. "The business and other activities of Smer members are their business and under no circumstances can they be directly tied to the party," the party responded in a prepared statement.
Refined fraud
As in similar cases in the past, the current land scandal involved a several-step transfer process in which a private firm close to a ruling coalition politician ended up with property worth hundreds of times what was paid for it.
In this case, Jaroslav and Dalibor Štih laid a claim with the state-run Slovak Land Fund (SPF) to be issued property in Plavecké Podhradie in return for what had been confiscated from them during communism.
In 2003, Dalibor Štih was contacted by a lawyer he had never met, Michaela Toroková from the RHK Real law office, where both Glváč and Fico's wife, Svetlana worked. Toroková offered to help speed up the restitution process, if they would agree to sell the land they were assigned for double the value the SPF assigned it.
In December 2003 the SPF assigned the Štih brothers 140,000 square metres of prime land in Čierna Voda (Chorvátsky Grob district), about 20 kilometres from downtown Bratislava, and claimed it was worth only Sk750,000. A few months later, Sk1.4 million was paid into their account, and 127,000 square metres of the land became the property of the LM-Real company, along with an individual named Ivo Podberský.
In 2005, the municipality of Čierna Voda changed its zoning plan, transforming LM-Real's land from arable land into building lots, and increasing its value to at least Sk140 million.
A year later, LM-Real drew up an investment plan that called for the construction of 100 homes, 31 row-houses and 10 apartment blocks. Even if the company only connects the land with electricity, gas, water and sewage mains, it will be worth at least Sk500 million, according to real estate companies familiar with the area.
Connections
One of the two current owners of LM-Real, Soňa Chanečková, said she knew nothing about the company's development plans. Her boyfriend, Martin Glváč, meanwhile said that he had nothing to do with his girlfriend's business activities. "I take care of my things, she takes care of hers. I know what area she works in, but I'm not filled in on the details."
LM-Real's other owner, Ľubomír Múčka, said that he had "very good relations" with Glváč, but the deputy minister said that Múčka had last worked for him seven years ago, before he went into advocacy. "Given that this land was bought in 2004, I have nothing to do with it," he said.
However, according to the Business Register, Glváč and Múčka appeared together in two firms after this date - in the Jánošík company until December 2006.
Glváč said it was absurd to connect him with decisions made by the Land Fund before 2006, when the second Mikuláš Dzurinda government was in power and Smer was in opposition.
However, an explanation of this may lie in the co-owner of the Čierna Voda plots, Ivo Podberský. Podberský is in the IVPO company with Ivan Krivosudský, who during the Dzurinda government was vice-chairman of the board and financial director at the Transpetrol oil transport company. Transpetrol was under the control of the Hungarian Coalition Party (SMK), which also controlled the Slovak Land Fund at the time. It was Land Fund director František Hideghéty who signed off on the Čierna Voda transfers.
Krivosudský lost his board seat at Transpetrol after the 2006 elections, but remained financial director. He also engaged as his assistant Juraj Široký Jr., son of an influential businessman who is believed to be among the main sponsors of the Smer party and to have a major influence over the current government's policies.
Krivosudský's father Ján is also on the board of the Total Management company with Glváč's girlfriend, Soňa Chanečková.
Reactions
Glváč insisted that he had no influence over the Land Fund at the time the Čierna Voda transfer was made, and thus could not have orchestrated anything. "I guess you think I walked up to the Government Office and asked Dzurinda if he would give me any land I could get rich on," he said.
However, the current opposition said that money - rather than ideology - lay behind such transactions, and called for the guilty to be punished, no matter what their political allegiance.
"We demand that the prime minister acts and that he explains the role of his nominee in this affair," said Pavol Frešo, an MP for the SDKÚ party.
"If something is dirty, it doesn't matter what government it happened under," said Gyula Bárdos of the SMK. "This case definitely stinks."
