CZECH CORRUPTION: HOW MUCH IS TOO MUCH FOR VOTERS?

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SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV KCOR EZ
SUBJECT: CZECH CORRUPTION: HOW MUCH IS TOO MUCH FOR VOTERS?


1. (SBU) SUMMARY: Less than a year has passed since Czech
Prime Minister Stanislav Gross (CSSD) was forced out of
office by questions about the source of money used to pay for
his private residence, and succeeded by current PM Jiri
Paroubek (CSSD). Since that time several others in the
cabinet, parliament and government service have been forced
to resign because of alleged ethical misconduct. In addition,
the nation's top prosecutor and her deputy have resigned in
disgust, saying there was no political will to fight
corruption. There seems to be general agreement that
corruption is a serious and widespread problem. Whether
officials feel threatened enough to change their rules and
practices, or whether the public is incensed enough to vote
for new, untainted parties, remains to be seen. The main
opposition party (ODS) is also dogged by persistent
allegations of corruption. The latest political poll shows
surprising support for the Greens, an extraparliamentary
party that is seen as a promoter of clean government. If the
Greens, or one of the other small, untainted parties receive
enough votes in this summer,s general election to make it to
parliament, this would have a profound impact on the makeup
of the next coalition government. END SUMMARY


2. (U) Paroubek took over as Prime Minister on April 25,

2005. Less than two weeks later, his long-time assistant and
newly appointed government spokesperson, Veronika Skorepova,
resigned after being accused of padding her resume. In
August, the Czech TV station Nova ran a tape of Zdenek
Dolezel, head of the Prime Minister,s office, in which
Dolezel seemed to be asking for a bribe from a Polish
lobbyist. The Prime Minister eventually sacked Dolezel.
Agriculture Minister Petr Zgarba (CSSD) stepped down in
November when it came to light that he had allowed, perhaps
unknowingly, valuable public land to be transferred to
speculators. Last month, Michal Kraus (CSSD) stepped down
after nearly two decades in parliament when it came out that
he had participated in a business deal in Ghana with a
convicted swindler. Kraus, who was head of his party,s
parliamentary club and head of parliament,s budget
committee, gave inconsistent explanations of the trip before
finally resigning from all of his official positions. In the
latest scandal, Jan Mares, the head of the government office
that conducts security screenings, resigned February 8, after
he was overheard on a police wiretap of a criminal gang,
discussing ways of acquiring contacts at the President's
office.


3. (U) It is unclear whether the normally tolerant Czech
electorate will see corruption, admittedly widespread, as an
important election issue and vote for the Greens or some
other new party promoting cleaner government, or whether an
increase in the coverage of scandals could lead to greater
support for the Communists, who, because they have been kept
outside the corridors of power, are still untainted by
corruption. So far, public opinion polls show little sign of
erosion in public support for ODS and CSSD, the two main
parties, and the two most often accused of corruption. But
these same polls do suggest some slight increase in support
for two extraparliamentary parties that are still perceived
as clean: the Greens and the newly formed alliance of SNK-ED
merging the followers of former Foreign Minister Josef
Zielenec and former Prague Mayor Jan Kasl.


4. (U) One theory making the rounds in Prague's
conspiratorial circles is that, because of the upcoming
general election, corruption is being used, with the
cooperation of a partisan media, as a pretext to eliminate
rivals. There has been much speculation, both in private and
in public, that former Prime Minister and CSSD party chief
Milos Zeman is behind the Gross and Kraus resignations. Three
years ago Zeman expected a CSSD-led parliament to elect him
as president, but some members of a relatively centrist bloc
within the party withdrew their support, allowing former ODS
chief Vaclav Klaus to be chosen. The argument that is
frequently made is that Zeman is taking revenge on those who
he feels deserted him, and also possibly preparing for
another run at the presidency in 2008.


5. (U) The Embassy spoke with Czech journalist Jaroslav
Kmenta, who broke both the Gross and Kraus stories. Kmenta
participated in a USIA International Visitor Program on
investigative journalism in the mid 1990s. He attributes many
of his successes to things learned on that trip, such as the
value of open sources for information that can lead to major
scoops. In the case of Prime Minister Gross, Kmenta went
through public records at the housing registry and found the
cost of the apartment the Prime Minister was living in. He
and colleagues conducted estimates of the money the
thirty-something Premier could have made in his entire
lifetime and determined that the cost of the apartment
exceeded his possible income. In Prague, where politics can
be murky and convoluted, many suspected a frame-up. But

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Kmenta assured post that it was a simple and at the time,
relatively innocent question, &Where did the money for the
apartment come from?" As history has shown, the awkward,
inconsistent and scarcely credible answers that Gross gave to
this question led to his resignation.


6. (U) In the Kraus case, Kmenta told post that during the
uneventful slow days of the late summer, editors suggested he
try to liven things up by going to prison and interviewing
prominent convicts who had fallen out of the headlines since
their incarceration. During one such interview, with
fraudster Frantisek Rigo, it came out that Rigo had made a
business trip to Ghana with Michal Kraus. Kmenta denies that
he was tipped off, or that politics played any role in the
uncovering of either story.


7. (SBU) Government officials who fight corruption, on the
other hand, say politics plays too much of a role in the
prosecution of official wrongdoing. State Supreme Prosecutor
Marie Benesova left her post in September, 2005, after nearly
six years of leading the fight against corruption and
organized crime. In December, 2005, her former Deputy,
Jaroslav Fenyk, also resigned. Both have cited insufficient
will to fight organized crime and corruption, as well as
political interference in the prosecution of high profile
cases, as the main reasons for their departures. Benesova
told post that she thought it would take two generations to
improve the current situation. She told the Embassy she feels
democracy itself is endangered because there is no political
will to fight corruption or put an end to the involvement of
all political parties in corruption cases. On a related note,
Benesova told us she herself might become a candidate in the
June elections on the SNK-ED ticket being led by former
Prague Mayor Jan Kasl. It is possible that if corruption
becomes an election issue and if Benesova, perhaps the
country,s best known corruption fighter joins the right-of
center SNK-ED party, now polling at slightly more than 2.5%,
her candidacy could help the party get over the 5% threshold
into parliament and shift the outcome from a socialist
victory to a conservative victory. Similarly, the Greens, who
have never been a part of the government of the Czech
Republic, polled their highest ever this month, at 4.8%. If
corruption continues to receive prominent coverage in the
national media, that party, which has already said that it
would join any non-communist alliance, could significantly
change the composition of the next government.


8. (U) Paroubek has done an adequate job, at least so far, of
defusing criticism by expeditiously sacking any party member
connected to a scandal. He has also promised to set up a
bipartisan commission to make legislative and policy
recommendations to fight corruption, if he is reelected. ODS,
which should have been in a position to capitalize on the
negative publicity aimed at its rival, the Social Democrats,
has instead misplayed its hand and hasn't benefited. The best
example of this might be the case of Vladimir Dolezal, an ODS
parliamentarian accused of soliciting a bribe of
approximately USD35,000 from a Prague businessman. The
scandal flared up when the accusation was made public last
fall, then dragged through the papers last December when
parliament debated and ultimately stripped Dolezal of his
immunity before referring the case to the police. The story
was given fresh legs three weeks later when Dolezal resigned
from parliament, and a final shot three days later when he
stepped down from the board of the state debt agency. Another
example of a tactical error involves ODS chief Mirek
Topolanek who was accused a year ago of offering Zdenek
Koristka, a wavering coalition parliamentarian, USD 400,000
and an ambassadorship in exchange for not supporting the
coalition in a vote of no confidence. Rather than letting the
issue fade quietly from the news, Topolanek chose to bring a
civil suit against Koristka, thereby ensuring that the case
would stay in the news. One Topolanek aide told post that
Topolanek had been "exhausted" by the case and was going to
end up spending more time on this one issue than any other in
the year before the general election.


9. (SBU) Although the ruling Social Democrats have done
little to end corruption, with slightly more than three
months to election day, polls indicate Prime Minister
Paroubek will probably get his wish for a minority CSSD
government. But if either the Greens or Kasl,s European
Democrats were to receive at least 5%, the minimum required
for entry to parliament, they would have roughly a dozen
seats and would make it possible for other parties, such as
the Civic Democrats and the Christian Democrats, to form a
majority government. Paroubek, who follows the polls very
closely, is aware of this threat. In January he told party
insiders to be on the lookout for environmental projects that
would help CSSD siphon support from the Greens. Whether the
new, untainted parties can draw enough first-time voters,
alienated voters, and non-partisan voters who have simply had

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enough of the incumbents, will depend to a certain extent on
how many more scandals come to light between now and the
election, and whether the Czech electorate will continue to
shrug them off.
CABANISS