Another milestone in the corruption of the opposition agreement period was the battle over the state’s stake in Unipetrol. In standard democracies, this would have been an unusual dispute: the struggle between Czech and Slovak oligarchs over this chemical company was more reminiscent of more eastern practices. And although it was not perceived by the public at the time, the events largely outlined the contours of political and lobbying alliances that are still visible twenty years later.
One of the key players in this episode of Czech economic formation was the future prominent politician Andrej Babiš. At the time, this oligarch teamed up with the mysterious and controversial Swiss businessman Andreas Zivi and his company Ameropa. To this day, this is considered one of the cornerstones of the later near-monopoly in agriculture or chemistry under the Agrofert group.
Ameropa, a company unknown in the Czech Republic, was supposed to be Agrofert’s investment partner in the Unipetrol privatisation project. The Swiss company was to be the majority owner of the potentially controlled Unipetrol in the consortium. However, as the later revealed movements in the company’s structures showed, this was apparently only a “money pipeline” through which Agrofert, under the banner of a supposedly strong foreign partner, wanted to convince the seller – the state.
The assumption that this was probably just a “shadow play” is also strengthened by the personal connection – Jan Kadaník has been the CEO of the Swiss company Ameropa since January 2014. Between 2001 and 2007, he worked at Agrofert in the area of strategy management.
Andrej Babiš was interested in Unipetrol long before that, but he first expressed it publicly in 1998, after the Miloš Zeman government came to power in July with Finance Minister Ivo Svoboda and Industry Minister Miroslav Grégre. Babiš broadcast messages through the media that Unipetrol needed private capital, which he would like to provide to the company. He also criticised the state management of the company and some specific persons.
In addition to the media building a beachhead for privatisation, Babiš has also begun to open doors directly within the government structures. Ivan Langr, the ODS boss, was to become his main contact. He met him through an intermediary – President Václav Klaus. The second friendly politician was the “orange” Stanislav Gross. Babiš thus understood perfectly what the opposition agreement was all about – to concede claims on state business to the ODS and ČSSD parties. For Babiš himself it was the perfect conditions.
The government politicians of the opposition treaty have made no secret of the fact that they find Andrej Babiš sympathetic. They justified this by saying that if Unipetrol is to be privatised, it will be good if it ends up in the hands of a domestic company. This was a rather unprecedented claim in a period when the abilities of foreign capital were often artificially glorified.
In 1999, almost out of the blue, ČSSD ministers Grégr and Svoboda began publicly proclaiming that they had found the perfect solution to the Unipetrol issue – a domestic private investor. Before that, however, they had already started to change the personnel of the company’s management.
Pavel Švarc was appointed as the CEO. Prior to Unipetrol, he was the CEO of the Prague Sugar Company and in 1997 he took the director’s chair at Lovochemie, so he was already a member of Babiš’s group of fighters. For a long time no one talked about the connection with Agrofert.
Meanwhile, a seemingly unrelated struggle for control of Chemapol was going on behind the scenes. Chemapol had previously been privatised by the controversial Václav Junek. However, it did not take long for the tunneling to bring the company to ruin. Babiš gamely took advantage of this and extracted everything he could from the rest of Chemapol – especially the brand of a proven chemical company. He needed it, among other things, to meet the conditions for the purchase of 63 percent of Unipetrol. In the end, the state imposed among its criteria the necessity of the investor’s experience in the sector. It did so after several failed privatisation projects in the recent past.
Babiš’s game was smooth for a long time. He falsely managed to meet one privatisation criterion after another. He has also won the affection of decisive politicians. At the end of the day, however, his feet were tripped up by money. Although for a long time – until the end of 2001 – he pretended that a financial partner under the banner of the Swiss Ameropa would cover the whole deal, after doubts about Ameropa itself, he finally admitted that he did not have the money to buy a stake in Unipetrol. The Privatisation Commission recommended to the government to choose the British firm Rotch Energy as the new majority owner of the company after the tender was closed in December 2001.
However, to the surprise of all those involved and the public, Miloš Zeman’s cabinet decided to sell a decisive stake in the company to Agrofert, even on less favourable terms. The plan to sell to Babiš only went down after he himself admitted that he simply did not have the money to buy it. However, even this embarrassment did not put an end to the whole thing.
Persistent efforts to pass Unipetrol to Babiš continued in January 2004. Seven companies or consortia made preliminary bids for the share package. Among the bids was a consortium of Agrofert and PKN Orlen, then owned by the richest Pole, Jan Kulczyk. However, it was only a tacit cooperation that soon burned both parties. This led to a long-running lawsuit and, according to evil tongues, Babiš’s aversion to Poles.
A hidden-camera recording has surfaced in the media of a conversation between Polish lobbyist Jacek Spyra and Zdeněk Doležel, the secretary to Prime Minister Stanislav Gross (who took office in 2005 and served as Interior Minister in the previous government), in which the secretary asked for a CZK 5 million bribe during a conversation about the privatisation of Unipetrol. However, in 2008, the Municipal Court in Prague acquitted Zdeněk Doležel on the grounds that there was no evidence other than the recording.
Spyra himself ended up in prison. And Andrej Babiš got him there. In 2007, Jacek Spyra contacted Andrej Babiš and convinced him that the Polish prosecutor’s office was preparing to prosecute him for corruption in the privatisation of Unipetrol.
He demanded a bribe of CZK 10 million in two instalments to solve the problem. Babiš went to the police and Polák ended up behind bars. Babiš claimed that the whole corruption scandal was concocted by a group of lobbyists, including Spyra, who wanted to profit from the privatisation of Unipetrol in a mafia-like way.
If the privatisation agreement between Babiš and Kulczyk is kept, PKN Orlen would have to give up parts of Unipetrol Kaučuk, Chemopetrol and three other companies. However, the Poles were aware that they would receive only a fraction of the market value of the prosperous companies from Babiš in exchange for the companies.
The crisis with Babiš arose in the autumn of 2005, when a meeting between Ivan Langer and Babiš broke out. The meeting aroused public resentment, mainly due to the fact that at that time representatives from the ODS were setting up an investigative parliamentary committee to look into Andrej Babiš’s strange attempt to privatize the state-owned Unipetrol.
Petr Nečas in particular criticized the meeting from his position as First Vice-Chair of the party. The establishment of the parliamentary commission was initiated by the ODS. The party was shooting at its own ranks and was the first, after the media, to suspect Andrej Babiš of clientelistic relations and corruption in the case of the privatisation of Unipetrol by the CSSD-led government.
Ivan Langer could not explain why he met with the businessman alone and in secret during such a tricky time. A member of the ODS leadership who became Interior Minister in 2006 also pointed out that he was not obliged to notify his colleagues of the meeting.
This brought down Babiš’s attempts to take control of Unipetrol, creating the disgrace of the state’s inability to sell part of a lucrative company and its inability to explain why it had promoted the interests of a particular oligarch for so long. At the same time, resentment between Babiš and part of the ODS was created, although Babiš’s close links to the other part of the ODS were demonstrated. Much of this could be seen in later years in other episodes of Czech history. Here we can also look for the roots of the future migration of many ODS politicians to Babiš’s political project ANO 2011.
