In September 2022, former Czech Prime Minister Andrej Babiš and his then aide went on trial in the country for having fraudulently used European Union (EU) subsidies in the past. If convicted, they could face up to 10 years in prison.

In the Czech Republic, political corruption by those in power came under scrutiny after the change in the economic system following the collapse of the Soviet Union. The same was true for neighboring Slovakia, which had been one country with the Czech Republic until 1993. In both the Czech Republic and Slovakia, corruption has advanced in various fields. Looking at the Corruption Perceptions Index (※1) published by Transparency International (TI), an NGO working against corruption and graft, as of 2021 the Czech Republic ranked 49th out of 180 countries worldwide (the lower the rank, the more corrupt), and Slovakia ranked 56th. Within the EU, out of 27 countries, the Czech Republic ranked 19th and Slovakia 22nd, lagging behind many other member states.

This article explores political corruption in the Czech Republic and Slovakia, looking at historical background and recent developments.

Scenes from a protest in Slovakia (Photo: Peter Tkac / Flickr [CC BY-SA 2.0])

History of Czechoslovakia

To understand the background of the issue, let us briefly review the history of both countries. The Czech lands, after being ruled by the Habsburgs from the 16th century onward, came under the rule of the Austro-Hungarian Empire. Slovakia, meanwhile, came under Hungarian rule in the 11th century and was later, like the Czechs, placed under the Austro-Hungarian Empire. When World War I broke out in 1914 and the Austro-Hungarian Empire was drawn into the war, Tomáš Masaryk, who would later become the first president of Czechoslovakia, argued in 1915 for the creation of a joint state of Czechs and Slovaks based on the principles of nationalism and democracy. In 1918, after the collapse of the Austro-Hungarian Empire following World War I, the Czechs and Slovaks achieved joint independence and founded the Czechoslovak Republic.

Although democracy collapsed after a Nazi occupation in 1939, after World War II in 1945, with Soviet support, the exiled President Edvard Beneš returned and the republican government was rebuilt. However, in the 1946 general election, the Communist Party won many seats and advanced into much of the state apparatus. Then, in 1948, with Soviet support, a communist coup took place and President Beneš resigned. This coup turned Czechoslovakia into a communist country and a Soviet satellite state. In the 1960s, economic stagnation increased calls for democratization and liberalization, and the Communist Party embarked on political and economic reforms. In 1968, reforms aimed at “socialism with a human face,” known as the Prague Spring, were pursued. However, in the summer of the same year, a military crackdown by the Soviet Union and forces from five Warsaw Pact (※2) countries was carried out to suppress the democratization movement.

In 1989, the Berlin Wall fell and protests against communist rule erupted in Eastern Bloc countries. The nationwide protest movement in Czechoslovakia from November to December of that year, known as the Velvet Revolution, also led Czechoslovakia out of communist rule. As a new constitution and state structure were considered, differences in economic scale and population between the Czech lands and Slovakia became points of debate, and in 1990, rather than complete integration, a federal republic of the Czech Republic and Slovakia was adopted. However, after the 1992 elections, the prime ministers of both countries began negotiations on separation due to policy differences. As a result of these talks, the two countries peacefully split in 1993, giving birth to the Czech Republic and the Slovak Republic.

Corruption issues

After the split, the Czech Republic adopted a bicameral republican system and Slovakia a unicameral one, but both came to struggle with political corruption. This is one of the common problems in former Soviet states and satellites. For example, regarding the Corruption Perceptions Index ranking mentioned at the outset, focusing on EU member states that were former Soviet satellites, we see that among the 27 EU countries Poland ranks 17th, the Czech Republic 19th, Slovakia 22nd, Romania 25th, Hungary 26th, and Bulgaria 27th — all relatively low rankings.

During the period under Soviet control, national laws and government institutions were subordinate to the Communist Party, and there was no separation of powers, judicial independence, or freedom of the press. As a result, during the post-communist economic transition, opportunities for corruption increased significantly. In many countries where the collapse of communism led to liberalization and privatization, it became common for favors between the public and private sectors to be traded for newly obtained wealth. Corruption has been seen at various levels — from relatively low-level administrative bribery to self-serving diversion of public resources by officials, and to the capture of the state by corrupted networks built through the normalization of such abuses of public authority — corruption was widespread. As opaque systems from the Soviet era persisted, liberalization tied wealth and power more closely together, and corruption and graft (※3) became pervasive.

The Czech parliament (Photo: OSCE Parliamentary Assembly / Flickr [CC BY-SA 2.0])

Next, we look at corruption common to both countries, especially in the administrative and judicial spheres where it is particularly problematic. Based on the categorization in country reports by Gan Integrity, a company operating a risk management platform, we examine corruption in the Czech Republic and Slovakia.

First, corruption in public administration. In both countries, corruption in public procurement is an issue. When companies enter into contracts with the government, bribery and irregular financial flows are said to be common. On the government side, companies that pay specific bribes are favored in bidding, and on the corporate side, it is said they can obtain more contracts on more favorable terms than their competitors. At the same time, the misappropriation of funds to companies and individuals has also been pointed out. In addition, in both countries, most companies are suggested to rely on bribery and connections when receiving public services such as business permits from government agencies. This indicates corruption in the field of public services as well.

Next, corruption in the judiciary. In both countries, corruption also permeates the judicial and police sectors, which should be responsible for tackling corruption. Bribery of courts and judges is widespread, and it is alleged that favorable judicial decisions are obtained in exchange for money. Judicial independence is also a problem, and political influence on court cases is sometimes questioned. In the police, bribery and abuse of authority can be seen, and it has been pointed out that investigations into corruption are obstructed by political influence.

Below we introduce recent issues in each of the two countries individually.

Political corruption in the Czech Republic

We now trace the recent situation regarding political corruption in the Czech central government. Since the split, several administrations have been formed through elections up to the present, but most have resigned due to corruption or political scandals. During the period from 1992 to 1997, when most privatizations took place, the Civic Democratic Party (ODS) held power, and many privatization-related corrupt practices as described above occurred. From 1998 to 2002, the Social Democratic Party (CSSD) held power but designated the ODS, which had led the previous administration, merely as a “contractual opposition,” while in practice the two parties divided important political and bureaucratic posts. As a result, corruption related to the administration is said to have surged during this period. Political scandals continued in subsequent administrations as well.  

In this context, societal perceptions of corruption also gradually shifted. Corruption in politics was not initially a major public concern after the split, but as surveys and reporting on corruption increased year by year, the issue became central to political and social debate. From 2010 to 2013, a coalition government centered on the ODS was formed. The Věci veřejné (VV) party, which advocated political transparency and anti-corruption, also joined this coalition, pledging to combat corruption from within the government. However, even during this period corruption did not improve, and the coalition ended in 2013 amid a scandal linked to the prime minister himself.  

Although there was improvement in the Corruption Perceptions Index ranking from 2012 to 2018, corruption continued to be a concern during this period. Corruption worsened again under the administration from 2018 to 2021. The person who took power during this period was billionaire Andrej Babiš. He campaigned on fighting corruption, but it is said that instead of improving the situation, his rule brought further disarray to public institutions.

Former Czech Prime Minister Babiš (Photo: NATO North Atlantic Treaty Organization / Flickr [CC BY-NC-ND 2.0])

Babiš’s political strategy was to entrust politics to experts to solve problems, with people passively benefiting from it. This approach aligns with what political scientists Lenka Bustikova and Petra Guasti called “technocratic populism.” While combining the appeal of technical expertise with populism may sound positive, in practice it meant expanding executive power and placing parties and courts beyond citizens’ reach. As a result, corruption and graft were less likely to come to light. In this way, Babiš captured state institutions and used that power to grow his assets.

The most consequential of Babiš’s scandals was the revelation that in 2007 he misused EU subsidies to build a resort he owned. The case originated before he became prime minister, when he acquired and owned Agrofert, a company that had been state-owned during the communist era. After the acquisition, he expanded the company into a conglomerate (※3) of more than 300 firms spanning sectors from food to fertility clinics, reaping large profits. He is alleged to have made false declarations to channel EU subsidies through the Agrofert conglomerate. The subsidies thus obtained were invested in a complex comprising a hotel, leisure facilities, and a conference center, completed in 2011. In April 2019, the day after police recommended indicting Babiš over this case, he appointed a new justice minister and avoided indictment.

This scandal lit the fuse for many Czechs. On the eve of the 30th anniversary of the Velvet Revolution in 2019, a mass demonstration demanding Prime Minister Babiš’s resignation was held in Prague. With more than 250,000 people gathering, it was the largest protest since the 1989 Velvet Revolution. Protesters demanded that Babiš resign as prime minister and be held accountable regarding the case. Babiš rejected these demands and claimed the case that sparked the protest was fabricated.

View of Prague, the capital of the Czech Republic (Photo: Erik Cooper / Flickr [CC BY 2.0])

During the general election in 2021, in which Babiš sought re-election, a new scandal emerged. His name appeared in the Pandora Papers, which in 2021 exposed financial transactions via tax havens. It was revealed that in 2009 he controlled a group of offshore companies and used a complex offshore structure to finance the purchase of his mansion in France. According to the Pandora Papers, he used a series of secret loans, moving funds from a company he owned in the British Virgin Islands (a tax haven), through a firm in Washington, D.C., to a subsidiary in Monaco, to raise €15 million. A Czech tax expert characterized this chain of asset transfers as a complex structure designed to hide corporate and property ownership.

In this context, addressing corruption became one of the key issues in the 2021 general election. While Babiš’s ruling party recovered support with its response to the COVID-19 pandemic, a new anti-corruption party, Prisaha (Prisaha), was established and steadily gained supporters. The fiercely contested election ended with an opposition victory, and a five-party coalition government opposing Babiš was formed.

Political corruption in Slovakia

Next, we discuss recent political corruption in Slovakia. From the split until 1998, Slovakia experienced authoritarian and undemocratic politics. The coalition that came to power after the elections at the end of 1998 pledged to prevent corruption, and by the end of 1999 a draft national anti-corruption program had been prepared. However, corruption remained a serious problem, and by 2018 Slovakia was cited as one of the most corrupt countries in the EU.

Robert Fico, who governed three times between 2006 and 2018 (※4), led an administration in which deep ties between criminals and powerful politicians were reported, and due to the strong links between crime and political corruption, the country was even suggested to be a “mafia state.” This system extended to the police and judiciary, keeping many instances of political corruption and organized crime from public view.

Former Slovak Prime Minister Fico (Photo: EU2017EE Estonian Presidency / Flickr [CC BY 2.0])

Public protests against this state of affairs had been growing since around 2012, but the largest occurred in 2018. The trigger was the killing of a young journalist, Ján Kuciak, and his fiancée in February 2018, while he was investigating links between the Fico government and organized crime groups. A police investigation into the murders gathered a large amount of evidence, revealing numerous instances of political corruption that had been rampant yet hidden in Slovakia. As a result, the largest protest since the 1989 Velvet Revolution was held in February 2018. Hundreds of thousands of citizens staged nationwide protests calling for the resignation of Prime Minister Fico and administration officials, and just a few weeks after the murders, in March 2018, Fico resigned as prime minister.

In the general election held in 2020, the public again focused on anti-corruption measures. The OĽaNO party, which campaigned on a tough stance against corruption, won, and a coalition government of three parties was formed.

TI, which publishes the Corruption Perceptions Index, says Slovakia’s response to corruption since 2020 can be divided into two areas. The first is the establishment of systems to prevent corruption, such as enacting new anti-corruption laws and tools. In 2021, the government set up bodies including the Office for the Protection of Whistleblowers and the Supreme Administrative Court. However, further measures are needed in this category.

The second concerns guaranteeing the independence of the judiciary and law enforcement. This category addresses corruption that had extended to the police and judiciary under previous administrations. Since 2020, Slovak authorities have put dozens of senior officials — including former attorneys general and heads of the police and tax authorities — on trial on suspicion of corruption, and this area is rated as having seen significant success. As one outcome of these anti-corruption efforts, Slovakia’s 2021 CPI score rose by 3 points (out of 100) from the previous year.

Protest against the killing of a journalist in Slovakia (Photo: Peter Tkac / Flickr [CC BY-SA 2.0])

Summary and what lies ahead

As we have seen, political corruption has been conspicuous in recent years in both the Czech Republic and Slovakia. Finally, let us look at the current situation in both countries.

In the Czech Republic, a new coalition government was formed in 2021, raising hopes for improvements in corruption. However, in June 2022, a corruption scandal involving a party in the coalition was reported.

In Slovakia, too, the path to improving corruption is still long. It has been noted that disagreements within the coalition have delayed policymaking and that resources available for anti-corruption have been strained by the response to COVID-19. It is also considered a problem that some of the individuals who built corrupt networks remain in politics.

Both countries still face many challenges in improving corruption, but we hope they will move in a positive direction.

※1 An index indicating the perceived level of corruption in the public sector in each country. It is scored from 0 to 100, with lower scores indicating higher levels of corruption.

※2 A military alliance formed in 1955 by the Soviet Union and its Central and Eastern European satellite states. It rivaled the North Atlantic Treaty Organization (NATO) during the Cold War.  

※3 A conglomerate is a corporate group spanning multiple industries, formed through mergers and acquisitions of companies in different lines of business.

※4 Fico served as prime minister three times: from 2006 to 2010, from 2012 to 2016, and from 2016 to 2018.

Writer: Haruka Gonno

Graphics: Takumi Kuriyama

Follow @GNV_tweets