You can also listen to the article in audio version.
About 2.3 million crowns. The State Agricultural Intervention Fund (SAIF) has already paid so much for various legal opinions to answer the question of whether it can send money to Agrofert.
The state fund, through which European and national subsidies to agriculture flow, requested opinions due to former Prime Minister Andrej Babiš. The chairman of the YES movement is the founder and also – as it turned out last year – the real owner of Agrofert.
He did not lose influence even after he formally transferred his companies to “independent” trust funds in 2017. The State Fund therefore checked with millions of experts to see if the conflict of interest law was being violated.
List Reports referring to the Information Act have repeatedly requested that the SAIF provide copies of all legal opinions on which it has relied in recent years in its practice regarding subsidies for Babiš’s Agrofert. And also for the state fund to communicate the authors and the price of individual contracts.
The fund initially rejected the applications, saying it could not publish anything until the European Commission’s audit investigation was completed.
The data provided show that a total of four opinions were drawn up on Babiš’s conflict of interest. The most expensive – for 1.5 million – was from the law firm Deloitte Legal. The other three supplied other influential Czech figures in the field of law: the law firm Skils led by Karel Muzikář, the lawyer Aleš Gerloch and the law firm Císař, Češka, Smutný.
But the number of opinions ordered and paid may be even higher. SAIF chief Martin Šebestyán himself said in an interview with Seznam Zprávy in January this year that there are “five or six” opinions.
At least one report “to Babiš” is missing. This also follows from the fact that the SAIF itself pointed out in one of its partial replies the legal opinion of last August, which is not listed among the published four.
Three ways to (not) pay Babiš
SAIF has chosen three different approaches to the payment of agricultural subsidies. As for agricultural “area” payments, which are demanding subsidies for all farmers, money flows there to the companies of the Agrofert group without restrictions. The prevailing view was that Babiš had no way of influencing these pan-European subsidies, even in the role of Czech Prime Minister.
However, in the case of investment (non-eligible) subsidies from the EU, SAIF finally suspended the administration of the affected projects and is still waiting to see how the audit will turn out. About thirty projects from the Agrofert group for several hundred million crowns were frozen in this way.
However, this suspension only applies to projects approved between 2 August 2018 (when the European Financial Regulation on conflicts of interest entered into force) and the end of last year (when Babiš ceased to be prime minister). Now, from the SAIF’s point of view, Babiš and “his” Agrofert are no longer covered by the relevant section of the Conflict of Interest Act, and investment subsidies from the EU may flow again.
In the case of so-called national subsidies, the Agricultural Fund has opted for a separate legal interpretation since the beginning of the dispute and has continued to provide these subsidies. The fund claims that the provisions of Czech legislation on conflicts of interest do not apply to the activities of SAIF at all, as the fund is not a provider of subsidies according to budgetary rules. It is said that only the providers of subsidies from the (European) Cohesion Fund have to follow the budgetary rules, while the SAIF pays agricultural subsidies according to a special law.
Two turns at the instigation of unknown advisors
SAIF’s position is still based on anonymous legal opinions. Last year, the List of Reports also drew attention to one very strange turn. The question was whether Czech farmers could, for example, buy tractors from companies from the Agrofert group for subsidies.
In July 2021, the fund sent a letter to farmers stating that it was suspending the administration of their projects, urging them to be careful when awarding contracts to trust fund companies.
He specifically named those associated with Andrei Babis. This is, for example, the company Agrotec, a seller of agricultural machinery.
However, after a month, the applicants for subsidies received a second writing from SAIF with a completely different wording. This time, the same officials told them that, thanks to the opinion of an unnamed law firm, they had admitted that the law on conflicts of interest did not apply to public procurement, and therefore again started the administration of their projects.
When List News tried to find out from the fund what its officials actually meant, they received no response. Instead, a third letter came to the farmers, again with a different legal interpretation. In it, they read that applicants for subsidies have to look for conflicts of interest in their investments, but the fund does not have to control it.
The ministry is intervening
To date, the State Fund has not explained these issues, and even in this case it has still not provided the editors with the required expert opinion from last August, on which it relied in this case. In January, SZIF Director Martin Šebestyán admitted to the Report List that he might publish all expert opinions. But that happened.
In this case, too, the Ministry of Agriculture, which considers the SAIF’s procedure for concealing legal opinions to be indefensible, has now intervened in the appeal proceedings, annulled the fund’s decision not to provide information in recent days and returned the request for a new hearing.
The Office, headed by the People’s Minister Zdeněk Nekula, decided that the SAIF must duly justify the failure to provide the required information. And if there are no legal grounds for concealment, “an opinion, including the names of the authors, must be provided”.
SAIF still argues that it can only publish the opinions of lawyers after the European Commission’s audit investigation has been completed. Judging by the preliminary conclusions and some other indications, it is expected that the agricultural audit will also be to the detriment of Babiš (and the Czech Republic). As the first audit on EU cohesion policy has already been made, it revealed that the Czech Prime Minister was indeed in an unacceptable conflict of interest.
It already seemed that the decisive moment for the second audit had come. The Ministry of Agriculture was preparing a special press conference for its results on April 12. In the end, however, it canceled it at the last moment and postponed it (probably until June). As spokesman Vojtěch Bílý said, the audit report in Brussels has so far only passed through the “departmental” Directorate-General for Agriculture and Rural Development (DG AGRI), but is awaiting approval from the European Commission.
“The audit will be received by the Committee on Agricultural Funds in May and its publication is planned for mid-June this year,” said spokesman Bílý.
