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Czech Republic - Corruption

A cartoon caption in a leading Czech daily captured what most Czech view as the country's biggest systemic problem: "We have had capitalism, and socialism too. Now we have corruptionism." Since the early 1990s, the Czech Republic has experienced what one academic called a "mind-numbing" number of corruption scandals. In a March 2013 poll, the Czech Republic's Public Opinion Research Center found that around three-quarters of Czechs think most or almost all public officials are entangled in corruption. Czechs said they consider political parties and ministries the most corrupt institutions. Cases of corruption are exposed. But almost without exception, headline grabbing stories quickly die down, or are replaced by the next sensational scandal, and nobody is ever held to account.

The state seems reluctant to grant law enforcement authorities additional powers to strengthen their ability to fight corruption. There is also great sensitivity about the potential for abuse of personal data, and the overuse of wiretaps. In light of Czech history, in which citizens were under the supervision of the Austro-Hungarian Empire, the Nazis, and then the Soviets, it is perhaps understandable that many are reluctant to give authorities too much power. In the same vein, citizens feel fewer obligations when it comes to the state and public property. There is even a Czech saying that those who don't steal from the state, cheat their families.

Factors contributing to the infrequent prosecution of high-level corruption included inadequate legislation concerning disclosure of sources of assets, the use of anonymous bearer bonds, weak rules governing the financing and lobbying activities of campaigns and parties, a lack of rules to protect whistleblowers and civil servants from political pressure, and the limited number of experienced investigators at regional levels.

There are three types of corruption in the Czech Republic. The first is the type of petty corruption that was necessary before the velvet revolution of 1989. In the old days, the state distributed almost all goods and services and did so very inefficiently. Consumers had to pay bribes to get things the state couldn't provide in sufficient quantities, timeliness, etc. Nowadays, the market provides most goods and services. So this type of corruption is to a large extent gone. Exceptions are the health care sector, where the state is still the main provider.

The second type of corruption involves discrete acts by low-level employees of the state, who abuse their power for personal gain. Traffic police, and employees working at the commercial registry are two examples of this frequently mentioned. The government is trying to use technology to limit this problem. One example is the system which uses a camera to take a picture of a driver running a red light and then mails the violation to the driver, who can mail the fine back. In that case, there is no direct contact between the public and the public official, eliminating the possibility of a bribe. Making it possible to register a commercial firm on-line would have a similar effect.

Policemen make only half of what officers in the military earn. Moreover, because the Fire Brigade has 14 districts, compared to only 8 for the police, there are fewer opportunities for police officials to move up the regional ranks. Krulik also said that policeman must undergo lengthier training than their better paid counterparts in the Army and Fire Brigade, and are even required to learn foreign languages. Those inequities could move some policemen to feel they deserve more money.

The third type of corruption was malfeasance by high level officials, particularly with large public procurements. There aer many reasons why it is unlikely that corruption in procurement, the judiciary, and the legislative process is going to be reduced in the near future. There are many ways of avoiding honest tenders. The competition can be arranged so that only one firm can win. This was the case with the supersonic tender in 2002-3, from which all but one firm dropped out. Administrators can also reject all but one bid, on administrative or procedural grounds - missing a stamp, for example. Finally, Czech laws allow no competition bids. The Army, for example, needn't issue a public call for bids if strategic military equipment, vital for the country's defense, is at stake. However, this clause is used for nearly every purchase the Army makes. Between 1993 and 2003 the Army made more than 700 acquisitions and only nine were put out for public tenders.

On 17 June 2013 Czech Prime Minister Petr Necas said he was resigning over a corruption and spying scandal that had rocked the small European Union nation. Czech President Milos Zeman has said the charges, brought after armed police raids on government and private offices last week, were "serious." Police raided government and private offices, seizing up to $8 million in cash, large amounts of gold and documents.

Following the raid, the prime minister's chief of staff, Jana Nagyova, was charged with corruption and abuse of power. Police said she is accused of ordering the military intelligence to spy on people including, it is believed, the outgoing prime minister's estranged wife. Detectives also said Nagyova bribed members of parliament with offers of positions in state-owned companies. Half a dozen others, including military intelligence heads and former members of Parliament, were also charged.

Current law makes both giving and receiving bribes criminal acts, regardless of the actor's nationality. Jail sentences have been increased to up to eight years for officials, with stiffer penalties for bribery previously enacted by Parliament. Bribes cannot be deducted from taxes. Law enforcement authorities are responsible for combating corruption. These laws are applied equally to Czech and foreign investors. There are frequent allegations, however, that public officials have at times engaged in corrupt practices with impunity.

Political pressure and ineffective police investigative tools contribute to the infrequent prosecution of high-level corruption. Although public figures must disclose the state of their finances each year, disclosure of the origin of financial assets is voluntary. The absence of successful prosecutions for corruption (or exoneration by the courts) has in turn contributed to public disenchantment and concerns over impunity reflected in the 2008 Transparency International (TI) survey of managers in 26 countries, which found that the Czech Republic was 24th in terms of political corruption, finishing ahead of only Mexico and Nigeria.

The Czech Republic ratified the OECD anti-bribery convention in January 2000. According to a July 2009 TI report, there is little or no enforcement of the convention in the Czech Republic, with no cases and only four investigations through 2008. TI listed political influence over enforcement actions, inadequate whistleblower protection, and the lack of criminal liability for legal entities as contributing factors.

While there has been no lack of public accusations and suspicions of bribery, only a few cases have reached the prosecution and conviction stage. Allegations of corruption are most pervasive in connection with public procurement. Common problems with public contracts include unclear ownership of companies bidding on public contracts and a lack of competitive bids. A 2004 government procurement law, required for EU accession, sought to curb illegal activities in this sphere by ensuring that public tenders were not tailor-made for specific businesses.

However, according to the TI chapter in the Czech Republic, the law has failed to reach that objective. Their research has shown that more than half of public contracts in the Czech Republic do not comply with the 2004 Public Procurement Act. TI actively conducts public information campaigns and has given numerous broadcast and print media interviews on corruption and bribery cases. Other nongovernmental organizations in the Czech Republic also focus on corruption issues.

During 2012 the government took several steps to prevent and combat corruption. The 2011-12 National Strategy to Combat Corruption obligates the government to present legislation to address the shortcomings identified above, although progress was uneven in fulfilling the goals of the strategy. The government also passed significant reforms to public procurement rules designed to improve the transparency of public tenders, widen the scope of the laws application, and reduce the threshold for tender rules to apply. However, an amendment introduced in parliament removed certain state-owned enterprises from the scope of the law. Legislation introducing corporate criminal liability entered into effect on January 1. A police anticorruption unit investigated corruption allegations against high-level officials and major regional and local perpetrators, as well as some private individuals and companies. Regular police units investigated lower-level cases. According to the Ministry of Interior, during the first half of 2012 police pursued 83 bribery cases (60 for offering a bribe, 17 for receiving a bribe, and six for indirect bribery) and investigated 36 public officials for abuse of authority, an increase from the previous year. According to the Ministry of Justice, courts convicted 37 public officials for abuse of power, including two who were sentenced to prison, 33 released on probation, and two fined. Of 60 public officials convicted of bribery-related offenses (11 for receiving a bribe, 45 for offering a bribe, and four for indirect bribery), five were sentenced to prison, and 48 were released on probation. The remainder were fined or barred from future public service. From January through July 2012, the specialized anticorruption police unit, which has responsibility for high-profile corruption cases, investigated 79 cases of public corruption. Investigators completed 12 cases, which involved 46 individuals, and forwarded them for prosecution. They also seized 335 million koruna ($17,980,000) in assets. The press continued to report allegations of corruption. There were several arrests and convictions involving EU funds, and distribution of EU funds was suspended in June because of accounting problems. In July 2012 the former director of the Northwest Regional Council, the entity responsible for distributing EU funds in the Liberec and Usti nad Labem regions, was convicted and sentenced to seven-and-a-half years in prison and a 750,000 koruna ($40,000) fine for taking bribes in connection with the granting of EU funds. Six others were convicted on similar charges. In May 2012 police arrested the governor of Central Bohemia, David Rath, while he was in possession of an alleged seven million koruna ($380,000) bribe carried in a wine box. Rath, a member of parliament and former minister of health, had allegedly received the bribe in connection with the granting of a tender for the reconstruction of a chateau. The Chamber of Deputies voted to strip Rath of his immunity in June, and Rath remained in detention awaiting trial. In April 2012 the only anticorruption hotline for citizens to report allegations was discontinued. The hotline was funded by the Ministry of Interior and run by the NGO watchdog group Oziveni. Ministry officials claimed the hotline was ineffective and was eliminated as a budget measure. NGOs protested the move, asserting there was little political will on the part of the current government to fight corruption. Credible allegations of corruption in the judiciary persisted, particularly in connection with proceedings concerning bankruptcy and financial crime.





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