Czech Republic Passes PM Andrej Babiš’s Fraud Case to EU Prosecutors

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Czech authorities announced last week possible charges against Prime Minister Andrej Babiš for fraud involving EU tax subsidies, but they later reportedly passed the case to the new European Public Prosecutor's Office, launched last week to handle financial crimes against the EU.

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Reported by

Emily Tian
June 8th, 2021
Fraud Tax

A spokesperson for the Prague Prosecution office told media last Monday that the chief public prosecutor is looking into the so-called “Stork Nest affair.” But on Thursday, Prague prosecutors told news sources that the case has been referred to the European Public Prosecutor's Office (EPPO).

The case is centered around the Stork’s Nest complex, a resort and eco-center on the shores of Slavnič Lake, some 60 kilometers south of the capital.

Stork’s Nest had once been a part of Agrofert, the Czech conglomerate that is the source of Babiš’ fortune, before separating into its own joint-stock company.

Babiš — one of the richest men in the Czech Republic — has a net worth of US$3.8 billion, according to Forbes. He has amassed his wealth through Agrofert, which has over 250 subsidiaries across many sectors, including agriculture, food processing, chemical, and forestry.

Between 2007 and 2013, the resort received EU subsidies amounting to around two million euros for small and mid-sized businesses. Police suspect that Babiš hid Agrofert’s ownership structure by briefly handing Stork’s Nest to his family in order to access the funding. Later, Stork’s Nest re-established connections with Agrofert under one of its subsidiary companies, IMOBA.

In 2017, Babiš placed the conglomerate into a trust in order to remain in his post as finance minister. He then became prime minister in October the same year.

An audit by the European Commission found in April this year that Babiš breached conflict of interest rules over his control of trust funds established for Agrofert, and the company is expected to return all EU subsidies — totaling around 11 million euros ($13.4 million) —  awarded after February 2017.

Babiš is the founder of ANO 2011, a center-right populist political party that is currently one of the leading parties in the minority coalition government. The revived charges may pose a thorn in his reelection campaign as he faces down opposition. He has vehemently denied wrongdoing throughout the investigation process, labeling the investigation as politically-motivated.

This is the second time that the Czech police have recommended charges against the Prime Minister. The case had been dropped by the supervising public prosecutor Jaroslav Šaroch two years ago and then revived by the chief prosecutor.

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