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Prague prosecutors drop EU fraud case against Czech PM Andrej Babis

Prague, Czech Republic – Public prosecutors have halted the 4-year-long criminal EU fraud investigation against Czech Prime Minister Andrej Babis.

Prosecutors lift threat of EU fraud accusation against PM Babis

On Friday, the Prague state attorney said that he had dropped the investigation into whether or not Andrej Babis, a billionaire tycoon and second richest man in the Czech Republic who became Prime Minister in 2017, had misused and fraudulently obtained €2.2 million in EU funds to build the ‘Stork’s Nest’ complex, a modern leisure and conference center outside of Prague.

“The state attorney submitted his final decision in the case, in which he changed his legal opinion”, simply announced spokesman Ales Cimbala in a statement.

Earlier this year, Czech police recommended to indict Andrej Babis for fraud in the Stork’s Nest case, before handing the case to public prosecutors.

After the Justice Minister was abruptly ousted and replaced with Marie Benesova, a close ally from Prime Minister Babis and former aid to President Zeman, many feared the head of government was trying to meddle in the case and undermine the independence of the judiciary.

Public anger grew and, topped with the preliminary revelations of a separate EU investigation that found that the Czech Prime Minister was in conflict of interest due to his ties to his former business empire Agrofert, tens of thousands of people took to the streets to demand his resignation during several consecutive weeks, including all around the country outside of Prague, giving way to the biggest mass protests the country has seen since the end of communism.

“The evidence gathering led to the conclusion that the Stork’s Nest Farm met the definition of a small and medium-sized business”, attorney Martin Erazim said in a statement, and was therefore eligible to receive the EU funds.

According to reports, Czech police may also be looking into the Stork’s Nest center for financial mismanagement, tax fraud and tax evasion.

Mounting concerns over the rule of law in Czech Republic

The decision to drop the fraud cause, which had considerably weakened the billionaire Prime Minister’s tenure over the past two years, has been met with a mix of anger and indignation.

“The decision to drop the case will not do much to improve trust in Czech politics, which is already very low”, reminds Vladimira Dvorakova, professor at the University of Economics in Prague.

Babis, who has always denied any wrongdoing and claimed the case was orchestrated by his political enemies to undermine his credibility, said that the decision, handed around his 65th birthday, was “a nice gift”.

Civil society organizations and the opposition promptly criticized the decision, hinting at some possible political meddling in the case. “If M. Babis were not Prime Minister, he would have been in jail already for a long time”, said Ivan Bartos, leader of the Czech Pirate Party.

“Without a clear and credible explanation of the sudden change, public confidence in the rule of law is severely shaken”, reacted local NGO Million Moments for Democracy, which organized the anti-government protests against the PM, including the upcoming one planned for November 16, on the 30th anniversary of the Velvet Revolution.

Babis’ judicial problems may, however, not be over. The decision can still be overturned by the supreme state attorney, and the Prime Minister faces other investigations, including one led by the EU on potential conflict of interest.

Headed by Kafkadesk's chief-editor Jules Eisenchteter, our Prague office gathers over half a dozen reporters, editors and contributors, as well as our social media team. It covers everything Czech and Slovak-related, and oversees operations from our other Central European desks in Krakow and Budapest.