EU Lawmakers Take Aim at Czech PM Babis Over Suspected Conflicts of Interest

December 13, 2018 Updated: December 13, 2018

STRASBOURG/PRAGUE—European Union lawmakers backed a resolution on Dec. 13 calling on the EU’s executive to act against suspected conflicts of interest involving Czech Prime Minister Andrej Babis and halt funding to his former business empire, Agrofert.

Babis, the Czech Republic’s second-richest person, has battled accusations by opponents since entering politics in 2011 but now faces a new challenge as the fight moves into the European arena.

Babis last year placed Agrofert, founded in the 1990s and comprising about 200 food production, agriculture, chemicals, and media companies, into trust funds to meet Czech conflict-of-interest laws. Critics say that’s not enough, as he’s still the beneficiary of the trust funds that hold a company that receives tens of millions of euros annually in farming subsidies and development programs.

Babis, who says he has no control over the funds or business, denies breaking any rules.

The European Parliament on Dec. 13 called on the EU Commission to suspend EU funding to Agrofert until a full investigation has been completed.

“The role of Andrej Babis as head of the Czech government and his business dealings obviously create this conflict, as also concluded by the European Commission’s legal service,” Inge Grassle, the EU parliament’s budgetary control committee chair, said. “The Commission should also recover all funds that have been illegally or irregularly paid out.”

Heading a minority government since June, Babis has risen to the top of Czech politics by tackling government with a business sense and attacking political-party corruption. Scandals, including a police investigation into allegations he hid ownership of a convention center a decade ago to qualify for EU aid, haven’t dented his appeal.

Babis said that opponents are trying to shift the political fight to Europe. “For me, this is a political affair. I am convinced it will be shown that I do not have any conflict of interest,” he said on Czech Television. “I proceeded according to Czech law.”

Brussels Battleground

The commission has taken up the case after receiving complaints from a Czech MEP and Transparency International since a new European financial regulation that deals with conflicts of interest took effect in August.

Gunther Oettinger, the EU commissioner for budget and human resources, said Dec. 12 during the EU parliament debate on the resolution that subsidies in question wouldn’t be paid until the situation is resolved. A team is due in Prague in January for checks, Oettinger said.

Czech officials said this concerns funds for Agrofert, not other payments to the country. The Czech Finance Ministry also said it would halt requests for payments of EU funds for Agrofert-related programs until the situation is settled.

Agrofert receives EU subsidies in a combination of non-discretionary direct payments for farming, and for business, environmental, and other projects. It was not clear what subsidies or what amount would be affected. The ministry didn’t reply to requests for comment.

By Foo Yun Chee and Jason Hovet