MEPs ‘deplore’ Czech Republic PM’s ‘conflict of interest’ in CAP payments

The European Parliament has adopted a resolution “deploring” an apparent conflict of interest involving the prime minister of the Czech Republic and the company he allegedly controls which receives Common Agricultural Policy (CAP) payments.

The conglomerate company Agrofert is one of the largest recipients of subsidies in the EU. The country’s prime minister, Andrej Babis, is one of the most prominent figures in the company.

MEPs estimate that the company – made up of 230 subsidiaries and 34,000 employees – received a total of around €36.5 million in agricultural subsidies in 2018 alone, as well as a further €16 million in EU cohesion funds from 2014 to 2020.

In its resolution, adopted last Friday, June 19, the European Parliament also called on the European Commission to set up mechanisms to prevent conflict of interests arising in relation to EU funds.

The European Parliament deplores that the Czech prime minister continues to be actively involved in implementing the EU budget while still allegedly controlling Agrofert, which is one of the largest beneficiaries of EU subsidies.

“While a formal EU investigation into conflict of interest is still ongoing, MEPs insist that those confirmed to be involved in these cases at the highest level of national governments have to choose among three possible ways to resolve this,” a European Parliament statement said.

These three options are, according to MEPs: such persons give up their business interests; they refrain from applying for EU funding; or they abstain from decisions that concern their interests, including resigning from public offices.

“MEPs ask the commission to set up mechanisms to prevent conflicts of interest related to EU funds. The rules should include an obligation to publish the final beneficiaries of EU subsidies and direct payment ceilings per natural person,” the statement added.

Currently, there is no rule or law that requires the identity of the actual persons who benefit from CAP payments – merely the entity that benefits. This may refer (and in Ireland’s case, usually refers) to an individual farmer, but can also refer to a company or business interest.

The parliament also condemned the apparently “defamatory language and hate speech” used by Babis against MEPs who were part of a ‘fact-finding mission’ to the Czech Republic in February 2020 as part of investigations into the “irregularities” there in the management of EU funds.

The European Commission’s formal investigation into the Czech prime minister’s conflict of interest has been ongoing since January 2019. In November 2019, all payments from the EU budget to companies directly or indirectly owned by Babis were suspended.

In December 2019, the Czech prosecutor general re-opened the investigation into misuse of EU funds by one of the Agrofert group’s sub-projects. The investigation was originally opened following a report by the European Anti-Fraud Office.