On the eve of the Czech general election this weekend, opposition parties received a surprise present: among the worldwide Pandora Project’s leaked files was evidence that the PM Andrej Babiš had hidden his acquisition of a French chateau through a web of offshore companies.
The only question is, can the opposition make use of it effectively?
The bombshell dropped just hours before the start of a major TV Prima debate on Sunday evening between four of the party leaders, at which the new scandal was chosen as the first topic.
The Slovak-born businessman was clearly flustered – he kept peering through his owlish glasses at a sheaf of papers, and his statements were littered with grammatical mistakes. He denied any wrongdoing and alleged that the whole international Pandora Project was somehow a “mafia” conspiracy to ruin his chances at the election.
Babiš says he has proof that he paid tax on the money used to buy the chateau, though he has yet to furnish any. Nor has he explained why he used such a convoluted structure to hide the acquisition if it was all above aboard. The revelations are now being investigated by Czech police.
“Babiš must prove that he used taxed money for this transaction,” said Petr Fiala, leader of the Civic Democrats, from the centre-right opposition coalition SPOLU. “If not, he has no right to be in politics and take care of taxpayers’ money.”
Top Czech TV moderator Vaclav Moravec, long accused by Babis of being biased against him, tweeted on October 5 that the then finance minister had told MPs in May 2015 “I don’t have any offshores like your friends. And some of you as well. You keep your companies in offshores.”
Babis’ agro-chemicals conglomerate Agrofert is based in the Czech Republic and pays it taxes there, unlike most of the holding companies of the other Czech oligarchs, something that he has often boasted about.
Based on the Pandora Papers, Babiš could have taken money out of Agrofert without paying dividend tax, transferred it offshore, and then used it to buy the French property, while also evading any future liability for capital gains tax.
He denies that the money was untaxed, though he is clearly guilty of not declaring the properties, as he is meant to do as a public official.
Yet even if it is not a game-changer, the Czech election is so tight that the Pandora Papers scandal could make the difference between the two opposition coalitions having the votes to form a government together or not.
If not, and the polls are right and the election is a stalemate, according to some commentators the revelations could at least make it more difficult for the rightwing Civic Democrats to go back on their pledge not to work with Babiš.