Former Prague 5 Mayor to face corruption trial

An investigation by the anti-corruption police has concluded that Milan Jančík (Civic Democrats, ODS), a former Prague 5 district mayor — without gaining the required approval of the Prague 5 Council — closed a contract with a private company to recover debts for unpaid rent.

According to anti-corruption police spokesman Roman Skřepek, the outstanding debts amounted to Kč 60 million, and the company in question, Agentura Praha 5, made an “illegal profit” of Kč 4.4 million.

The anti-corruption police had investigated the case previously but they did not bring charges and suspended the investigation in 2008. In March 2010, however, they reopened the case after the Czech branch of the anti-corruption watchdog Transparency International (TICR) lodged a criminal complaint and submitted fresh information.

“A contract was signed for debt recovery with one commercial company while according to the Law on the Capital City of Prague such a contract cannot be signed without the approval of the [council] assembly, which evidently did not happen,”  Skřepek told public broadcaster Czech Television.

Police say that that Jančík was fully aware that signing the contract without the approval of the council was illegal.

Anti-corruption police investigated the case beforehand but did not bring charges and suspended the investigation in 2008. The anti-corruption police then reopened the case in March 2010, following a criminal complaint by Transparency International.

Stanislav Beranek of TICR says that in March 2010 his organization asked the police why the case was not being pursued and why information that the watchdog group submitted was not investigated. TICR subsequently lodged a criminal complaint and this, he says, is the reason why the police reopened the case.

“The anti-corruption police told us that they had not received any order from the State Prosecutor to continue with the investigation. But the State Prosecutor told us that they had not received any report including the new information from TICR from the anti-corruption police. We therefore lodged a formal criminal complaint with the State Prosecutor,” Stanislav Beránek told Czech Position.

In October, TICR again enquired as to why no progress had been made in the case. At the same time, Prague 5 councilors Milan Macek (Communist Party, KSČM) and Eva Hochheimerová (non-affiliated) filed another criminal complaint against Jančík. “We’re worried that the case will be swept under the carpet,” Hochheimerová told the daily Právo at the time.

Under pressure from party of the ODS leadership in Prague looking to clean up the party’s image, Jančík announced his resignation as mayor of Prague 5 in June 2010 and left the post the following month. Jančík also faces a number of allegations of involvement in the sale of property previously owned by Prague 5 at discount rates.

An assistant to the former mayor, who answered Jančík’s mobile phone on Tuesday, told Czech Position that he would not comment on the case until Wednesday. “Tomorrow [Jan. 5], there will be a press conference at the Zlatý had (Golden Snake) restaurant in Prague 5, where Mr. Jančík will answer all questions,” the assistant said.

Nevertheless, later on Tuesday Jančík told the daily Hospodářské noviny that the charges against him are “absurd,” and claimed that the contract with Agentura 5 was signed with the knowledge of the Prague 5 council.

According to members of the Prague 5 Council, the district’s administration sold the debts to Agentura Praha 5 as of 2003, when the total value was Kč 85 million, though the administration only paid the company for debts it managed to recover, the Czech News Agency (ČTK) reported. ‘In my view, it was evidently a scam. [Agentura Praha 5] received the debts with blatantly advantageous conditions.’

The Prague 5 administration only received 60 percent of the total value of the debt, and Agentura Praha 5 retained all receipts from fines and interest on the debts, according to ČTK. Under the contract the agency could at any time return to the administration outstanding debts that it failed to recover, without paying any penalties.

“In my view, it was evidently a scam,” Milan Macek, a member of the Prague 5 council, told Czech Position, adding he doubted Jančík would be convicted. “[Agentura Praha 5] received the debts with blatantly advantageous conditions and made huge profits with no risk at all.”

“Unfortunately, the bringing of criminal charges doesn’t mean anything. The police have already suspended investigation of the case several times in the past. I have an unpleasant hunch that this case won’t lead anywhere,” Macek said.

Some of Jančík’s other opponents are more optimistic: “Mayor Jančík intentionally prepared bad contracts so as they could not be cancelled. It’s a good thing that the police didn’t brush the case under the carpet and this is a signal that local government must be transparent,” Ondřej Velek, Prague 5 councilor and leader of the local branch of the Green Party (SZ) told Czech Position.

According to a report published by the server idnes.cz, оn Nov. 1, 2010, Jančík was promoted to the post of deputy chairman of the board of directors of the power company Pražská energetika (PRE).

While it is customary for mayors and ex-mayors to serve on supervisory boards of local utility companies, on the last day as mayor Jančík introduced an amendment to a valid contract the administration of Prague 5 has with PRE that could bring the power company an extra Kč 177 million, the Mediafax agency reported Nov. 11, 2010.

In 2005, the Prague 5 administration signed a contract with PRE worth Kč 88 million for the supply of computer equipment to the Prague district until 2010. The amendment extends the contract until 2015 with the option of extension until 2020.

According to idnes.cz, prior to his promotion, Jančík earned Kč 2.4 million annually as a PRE board member while still serving as mayor of Prague 5. PRE is a member of the Électricité de France (EDF) group.