Czech Industry Minister resigns over assets hidden from ex-wife

Czech minister resigns after trying to explain how his mother’s mysterious millions were placed with Key Investments

HOT TOP|Politics & Policy
István Léko | 09.11.2011
Martin Kocourek said he entrusted his money with Key Investments essentially to hide it from the woman he was divorcing

Czech Minister of Industry and Trade Martin Kocourek (Civic Democrat, ODS) stepped down from his post Wednesday after his resignation was accepted by Prime Minister Petr Nečas, the ODS party chairman. The move followed just hours after a desperate — and unconvincing — attempt by Kocourek during a press conference to explain away Kč 16 million in bonds in the possession of his mother.

Kocourek’s account to the media on Wednesday afternoon, after five days of silence after the scandal broke on Friday, showed the bonds — invested with the dodgy brokerage Key Investments, which is now under investigation — were an attempt to hide assets during a divorce settlement with his then wife (in this regard, legal experts say, Kocourek could face charges of fraud).

While Nečas accepted Kocourek’s explanation, and said that he did not believe that corruption was involved, he also accepted the minister’s offer to resign. “Nonetheless, steps taken by the minister in 2008 can be regarded as unfortunate. For this reason, the head of the government has accepted the step [resignation] offered by the minister, effective from November 14,” the government office said in a statement. Kocourek declined to speak to the ‘historical’ origins of the money, beyond savings and business activities.

Kocourek was far from convincing during the press conference he called earlier on Wednesday to explain the Kč 16 million of bonds transferred to his mother via the opaque Key Investments; his answers to journalists’ questions were halting, and he often claimed not to know the details of the transactions, while assuring that “no corruption” was involved.

With his own party and others in the government coaltion saying Kocourek needed to offer a convincing explanation of the source of the money, he offered only one vague bit of information: the transfer was related to his divorce. He declined to speak to the “historical” origins of the money, beyond saying it stemmed from his and his parents’ earnings, an inheritance, and an insurance pay-out in his youth.

Kocourek said he had thought hard about what was in his greater interest — to reveal an unhappy episode in his personal life to journalists (i.e., the divorce settlement and his attempts to hide his assets) or to give up his ministerial post without an explanation. On Wednesday he chose the latter option, but as for explaining the connection to the New Mexico shell company Eton Ventures LLC, for example, he faltered. Nečas, often criticized for being a weak leader, was unforgiving.

‘Historical’ earnings

Essentially, Kocourek admitted on Wednesday that he had transferred the Kč 16 million in question — which he claims originated from his earnings and family savings — to his mother due to his divorce. “All the funds belong to me, my family or are historical. I entrusted it [the money] to Key Investments only to remove it from potential problems from my difficult situation in 2008,” the visibly nervous minister said, adding that the money was legal and that “nobody got rich from the transactions” made by Key Investments on his behalf.

‘I have a clear conscience. My actions were rational and permissible. Viewed today, it could appear to be problematic.’

“I’m ready to provide proof of the origin of all the funds to the relevant organs,” Kocourek declared ahead of his meeting with Nečas. “We will assess the situation with the Prime Minister. I have a clear conscience. My actions were rational and permissible. Viewed today, it could appear to be problematic,” Kocourek offered in the early afternoon.

His explanation immediately gave rise to the question as to whether he didn’t divide all the assets he should have done with his now ex-wife, a move that clearly made his continuation in the Cabinet  untenable on moral grounds. Kocourek claims that everything is settled with his ex-wife.

Kocourek refuted speculation in the media that the money either came from the betting industry — as a result of lobbying activities on the sector’s behalf — or in connection with his previous role as chairman of the supervisory board of the state-controlled power giant ČEZ. Nevertheless, Kocourek failed to provide an explanation for his close ties with Key Investments, though admittedly no journalists at the press conference pressed him on that point.

Kocourek’s explanation certainly did not satisfy the main opposition party, the center-left Social Democrats (ČSSD), or the Communist Party (KSČM), who after the press conference called for his resignation.  If Kocourek had stayed on, the scandal would have certainly been exploited by the ODS’ minor partners in the ruling coalition, TOP 09 and Public Affairs (VV).

The New Mexico trail

The story released in the press was that in 2008 Kocourek’s mother, Jindřiška Kocourková, received Kč 16 million on her account with Key Investments from the firm Eton Ventures LLC, which is registered in the US state of New Mexico. In March 2008, Key Investments happened to invest Kč 16 million into this company whose bonds it bought with taxpayers’ money for the portfolios of the administrations of Prague, 6, 10 and 13, which at the time all had ODS-dominated councils and mayors.

Mrs. Kocourková, however, only held untradeable bonds in the firms E Side Property, Via Chem Group and Sincom — all of these bonds were purchased by Key Investments for the above- mentioned Prague administrations — for three months. In June 2008 she received Kč 16.4 million for the bonds. What’s striking is that while Mrs.  Kocourková  received money for her bonds, the Prague administrations have been waiting in vain for a year already for hundreds of millions they in the same

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