Police Suggest Charging Czech Billionaire Premier With Fraud

(Bloomberg) -- Czech police recommended charging Prime Minister Andrej Babis, the country’s second richest man, for suspected fraud following a probe into the alleged misuse of European Union funds.

The probe against Babis, who rose to power by attacking the political establishment and campaigning against Muslim refugees, focuses another spotlight on the EU’s eastern wing, a region that’s been rocked by scandal. Babis rejected the allegations on Wednesday, denouncing them as "an organized plot" designed to ruin his political career.

"If the premier is charged, a massive legal battle will follow," said Lubomir Kopecek, a political science professor at Masaryk University in Brno. "We have a prime minister burdened by a huge problem, which will take up a lot of his energy and of course hinder his ability to govern."

The case, which centers on the alleged misuse of EU subsidies by a company that once belonged to Babis’s chemical, agriculture and media empire, has strained relations between members of his minority ruling coalition. It joins a list of scandals that have rocked the region including one of Europe’s largest money-laundering cases in Estonia and a journalist’s murder that forced out Slovakia’s prime minister last year.

Police have completed a probe into the case and handed the file to the state prosecutors’s office in Prague, Ales Cimbala, a spokesman for the office, said by phone Wednesday. The head prosecutor on the case will now study the file and decide whether to bring charges, he said. Lawmakers stripped Babis of his immunity from prosecution last year.

"We can confirm that the investigation has been completed and the file we received includes a recommendation to bring charges,” Cimbala said. He declined to say how long it might take the prosecutor to make a decision. Government spokeswoman Jana Adamcova wasn’t available for comment when contacted by phone.

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In December, the EU parliament approved a resolution calling for the bloc’s executive to stop subsidies for all companies linked to Babis and investigate possible conflicts of interest. Babis has said he has no power over Agrofert, a conglomerate of more than 250 companies with about $7 billion in revenue, after he placed it in trusts.

Most mainstream parties have refused to cooperate with Babis because of the investigation that began three years ago, and thousands of Czechs took to the streets last year to call for his resignation. The junior ruling Social Democrats said they would wait for the prosecutors to make a decision before any action.

Babis has survived political challenges and his government has boosted spending on pensions and public wages, fortifying support among voters for his ruling ANO party. An opinion survey last month by the CVVM pollster showed ANO leading in support with 32 percent, more than double any other party.

"This is politicized," Babis said after the prosecutors’ office commented, according to the CTK news service. "From the very beginning I’ve regarded it as an organized plot."

To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

To contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Michael Winfrey, Andrew Langley

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