Previous chapters have targeted systemic corruption in the top power structure. As we have explained, however, Andrej Babiš was and still is obsessed with the siege of power at all levels. It is just that it is not in anyone’s power to cadre candidates for elections at all levels, and so all sorts of elements have been and are getting into regional and municipal councils. Babiš certainly does not need his preferences to be knocked down by some regional thieves and thugs. And that is exactly what has happened in several cases.
One of the main narratives on which Babiš’s political project of the ANO movement was built, especially in the early days of its existence, but which it continues to build to this day, is the fight against corruption. The criticism of the old structures – not only the big criminal conspiracies in the privatisation of state-owned enterprises, but also the small deals of regional lobbyists linked to politicians – was what made Babiš an interesting alternative in the eyes of voters for a new policy that would remove the old structures of corruption and clientelism not only at the state level, but also in the regions and city councils.
Great expectations were associated with ANO in Brno, for example. After a decade of trust in the traditional parties ČSSD and ODS, people loudly voiced their demand for a proper airing of the town hall. That is why in 2014, the ANO council candidate was the frontrunner in the city elections. Four years later, the movement got even more candidates into the council. It was therefore obvious that people liked the image built by the movement’s marketing.
A lot of work was done by the popular mayor from 2014-2018, Petr Vokřál. His ubiquitous effort to present a modern image was also enhanced by his infantile campaign before the 2018 municipal elections, where he danced and sang with the slogan “rock Brno”.
Shortly thereafter, however, Brno was rocked by someone other than Petr Vokřál. The imprisonment and corruption charges against ANO members Jiří Švachula and Petr Liškutin led to their expulsion from the party. A ready-made Palermo.
They are exactly the kind of people Andrej Babiš wanted to remove from Czech politics – or so he claimed in his slogans. In contrast to the person of the party chief himself, the leadership’s reaction also showed that not everyone in ANO is immune. While Babiš has not been damaged by personal, political or business scandals, the swift expulsion of the accused members means that even the hegemon of Czech politics has his weaknesses.
And not only in the persons of those already behind bars. The activities of the party’s Brno cell inherently include the Černošek-Faltýnek duo. While the lobbyist Miroslav Černošek, who worked with Babiš before he entered politics, is used to having his name associated with unusual practices, the second ANO man, Jaroslav Faltýnek, was another unpleasant event that revealed to even a naive observer that the proverbial godfathers that Babiš talks about today and every day will not be that far apart.
This is probably why Jaroslav Faltýnek’s somewhat chaotic but zealous defence of the case of the influence on the toll tender and the anti-corruption raids on the Brno town hall. Even if we disregard Faltýnek’s strange activities in state transport companies, we can find a number of peculiar features in the person of the ANO deputy chairman that refer to his importance for the party that is currently ruling the Czech Republic.
Where did the mutual loyalty of Babiš and Faltýnek originate? They ran into each other in the 1990s during the oligarchs’ fight over the Tchecomalt Group. The group gradually took control of 17 companies involved in the malting, animal feed and agricultural commodities business.
The best known part of the group was Obchodní sladovny Prostějov. The company was an important producer of malt also on a European scale. Tchecomalt owned the Prostějov maltings and was to be the intermediary for the former management of Proferta to expand in agriculture.
It purchased former state cooperatives and warehouses or used commodities to guarantee Proferta’s loan at the Investment and Postal Bank. That’s where she went under. After the collapse of both Proferta and the Investment and Postal Bank, the claim for the outstanding Proferta loan was transferred to the Czechoslovak Commercial Bank. The latter wanted compensation for the outstanding debt from the guarantor, i.e. Tchecomalt.
In September 2000, the Board of Directors of Tchecomalt decided to declare bankruptcy. It did not take into account the opinion of ČSOB as the only creditor. In the bankruptcy, Andrej Babiš’s Agrofert took control of the warehouses and malting plants on favourable terms. Jaroslav Faltýnek was the vice-chairman of the board of Tchecomalt at the time. Shortly after the bankruptcy purchase of Tchecomalt’s assets, which was profitable for Agrofert, he moved to Agrofert, where he became the head of the agricultural division.
ČSOB described the bankruptcy of Tchecomalt as purposeful. The bank saw the former management’s move as an effort to maintain control over its subsidiaries and to prevent the main shareholder and creditor of ČSOB from gaining access to the company’s shares. The managers, led by Faltýnek, defended themselves by saying that ČSOB refused to continue financing the company’s operating loans. In 2001, the bank even filed criminal charges against the company’s former management, including Jaroslav Faltýnek.
“By filing for bankruptcy, the former management retained control over the subsidiaries. They pursued their personal interests,” the bank said in the criminal complaint. However, the bank was unable to prove its allegations and was left with only a two-billion-dollar outstanding loan to write off.
Faltýnek’s relationship with Babiš was therefore forged under the scent of billions of crowns. The question is what sustains this relationship today. The people from the Brno “Stoka” case are Faltýnek’s men. Both Petr Liškutin and Jiří Švachula are men from the list created by Faltýnek – who is rumored to have nominated whomever he wanted for positions under his influence, including those in Brno. He created the roster for Brno together with his close friend, business partner and neighbour Miroslav Černošek. In order to make the nominations, however, he had to have them approved by Andrej Babiš. He therefore approved the nominations of people from the Stoka case.
In March 2019, police raided the Brno City Hall. After an extensive detention operation at several locations, 11 people and 2 private companies were eventually charged. However, this is only the first, main branch of the case. Investigators gradually described a system in which fixed commissions were demanded by politicians and officials for contracts of a certain volume and nature. The different branches of the case are dealt with in separate trials and investigations. The lowest branch, for example, concerns tradesmen. They were also required to pay bribes.
According to the indictment, the group created a system of awarding contracts at City Hall so that they would be won by predetermined companies. The companies were either related to those who decided on the contracts, or they were companies that were willing to pay bribes to win the competition. Evidence in court speaks of bribes worth tens of millions of crowns and dozens of rigged contracts, but the actual figure could have been even higher.
The corruption mechanism did not only affect public procurement. According to testimonies, trading in municipal companies was also “clinking”. They were supposed to act on the basis of clear instructions from the movers and shakers behind the scenes. In addition to the “fixers” wearing ANO jerseys, the case also affected well-known lobbyists, big businessmen, officials and dozens of tradesmen who agreed to the corruption game. In an attempt to avoid trial, they entered into an agreement to pay compensation and give testimony incriminating the main defendants.
The case also involves politicians from other parties, such as Jiří Hos and Petr Kalášek of the ODS, which tried to obfuscate and even contradicted Kalášek’s membership in the party. Probably because of this, other political parties never extracted any significant political potential from Stoka. The corruption-like behaviour of the ANO party, which claims to be anti-corruption, was never properly exploited politically and the case soon became quiet. Petr Liškutin was the head of the investment department of the Brno-Central district and deputy mayor of Brno-Ivanovice.
Jiří Švachula was deputy mayor and councillor of Brno-central. Others referred to him as the head of the whole system. Among the key men was also Saman El-Talabani, a Brno “fixer”, a businessman who has been around many corruptible politicians and has correctly assessed the potential of the ANO councillors in recent years. El-Talabani is also dangerous for the ANO leadership. He spoke about commissions for Jaroslav Faltýnek’s son Jiří, and he even spoke about commissions that were at least known to the ANO movement’s number two.
El-Talabani was also supposed to manage another well-known Brno businessman with a controversial label: convicted tax fraudster Pavel Ovčarčin. He described in court how the bribery system worked through traffickers. He explained how he was guided by El Talabani, where and whom to contact with the bribe and which contracts could be bought – and finally, he knew he would get the contract long before the decision to tender was made or made public. Petr Kalášek, a politically active businessman, played a similar role. According to the testimony, some businessmen not only bought contracts but also brokered them.
Thus, there are cases where they have influenced a contract in favour of a foreign company, which gave them a bribe, kept part of it and paid the rest as a share to higher-ranking members of the structure. Quite striking is the very fact that politicians from ANO have created something like an official bribery menu. Between 2015 and 2019, the prescribed bribery categories made it clear what commission had to be paid for which contract. For example, the 15% commission for a small contract was discussed by dozens of tradesmen who did work for Brno and its municipal districts. What is also striking is how long and how many people tolerated the system of corruption and did nothing against it. Some of the defendants united against El-Talabani in their testimony in court.
The businessman, who has since been convicted of tax evasion, has been charged with conspiracy. He allegedly masterminded the whole corruption scheme. The political part of the defendants admitted that they had received various favours from him. For example, sponsorship, lobbying in favour of the ANO movement with football and hockey ultras, favourable services and so on. However, some of the defendants deny that the politicians agreed with the businessman to collect bribes. According to them, they only heard that El-Talabani was collecting some commissions on their behalf.
The case is still alive after all these years and still affects new people. The number of those convicted and their sentences will change depending on when you read these lines. But an important motive in connection with Andrej Babiš is that he knew about and approved the placement of controversial people in key positions in ANO’s possession – even though he tried to obfuscate in every possible way after the scandal broke. It is also another piece of the mosaic that portrays the former number two of the ANO movement, Jaroslav Faltýnek, as an old-style “godfather”. The reaction of the leadership of Babiš’s movement was predictable and understandable. The accused politicians in its colours were expelled at the earliest possible date, and to show a clear cut-off, the entire Brno cell of ANO was closed down. Many people who had been willing to defend the party’s colours in the past did not want to return to the newly created cell.
The biggest blow was the end of former Mayor Petr Vokřál. Some of the former members suffered reputationally from the Stoka case, some were directly involved in it, and the naive rest watched in amazement the testimonies in court describing the organization of the bribery system by their colleagues from the “anti-corruption movement”. Moreover, the new Brno cell was put in charge of the hyper-loyal Tatiana Mala, who had nothing to show for her devotion to the party boss and the embarrassing case about her education and her ministry of justice. Rumour has it that even her colleagues in the party do not have much respect for her.
The case against Jaroslav Faltýnek has a particularly bitter taste. It was about the dispersal of his power influence in Brno and the party also lost support among voters after the case. Moreover, key figure Jiří Švachula had long been Faltýnek’s friend and horse. He put him on the supervisory board of ČD Cargo , which suggested that he was also building his private power ambitions in top politics and state contracts on him. In addition, as a result of the case, the police also knocked on the door of Faltýnek’s son. This is also why Jaroslav Faltýnek senior was sidelined by ANO.
In the following years, the police expanded their investigations and launched the Stoka II case, in which they prosecuted and are prosecuting approximately 10 people.
