Minister’s partner in Florida deal twice convicted

Czech Minister of Culture Jiří Besser (TOP 09) is under intense media scrutiny for having failed to note on his official property statement that in May 2009 he had bought a $230,000 apartment in Florida through a US company he co-founded with a convicted felon.

While apologizing for having twice “forgotten” to report his stake in Comoros Group LLC in asset declarations to the lower house of Parliament, Besser has said in his defense that when he entered into the partnership with Pavel Hrách — his friend since childhood — the Beroun businessman had not yet been convicted of bribing a board member of the Czech Consolidation Agency (ČKA), the state bail-out agency, in 2006.

“At the time when I was helping Mr Hrách [by joining Comoros Group as a business partner], the verdict [in the ČKA case] was not valid,” Besser told aktualne.cz in a previous interview. “I believed him when he said it [the charge] is false. The court has come to a different conclusion; I accept this, but it is not the case that I would not go to a pub with Mr Hrách over it.”

Now, the news server reports that Hrách was convicted in 2008 for a second crime — stealing from a company where he used to work through fraud, for which he was fined some Kč 100,000, Prague Municipal Court spokeswoman Martin Lhotáková is quoted as saying. The case goes back to 2003; given the close friendship between Besser and Hrách, it is highly unlikely the culture minister was unaware of the case, aktualne.cz notes.

Besser, who served four terms as mayor of Beroun (1994-2010) before being named culture minister, says he did not put any money into Comoros Group LLC (which bought a luxury apartment by a Florida golf course through a mortgage on which he signed off on) or make any profit from it. He claims Hrách needed partners to act as guarantor for the bank loan, and that he did so as a favor, and that was the end of his involvement in the company. Besser has stayed at the Florida apartment on numerous occaisions, Hrách acknowledged.

Since the story broke last week, Besser has withdrawn from Comoros Group LLC and submitted an amended asset declaration. However, for having failed to declare the Florida company — and the property it owns — in his asset declaration, the minister has violated Czech conflict of interest legislation and could be fined up to Kč 50,000; the political stakes are far higher. 

‘The prime minister would consider it a serious problem, especially if confirmed, that the culture minister broke the law.’

The head of the lower house of Parliament’s mandate and immunity committee, MP Jeroným Tejc of the main opposition Social Democrats (ČSSD), has said his party want the committee to begin proceedings related to the misdemeanor, and the Communists (KSČM) are calling for Besser’s resignation.

Meanwhile, Czech Prime Minister Petr Nečas (Civic Democrats, ODS) will meet with Besser to discuss the matter this week after the culture minister returns from a trip abroad, government spokesman Jan Osúch said in a statement issued on Monday afternoon. “The prime minister would consider it a serious problem, especially if confirmed, that the culture minister broke the law,” he said. “The minister should substantiate the financing of the apartment in Florida to disprove all doubts.”

Kč 400 million bribe

Hrách and another Beroun businessman, Josef Lopata, were convicted in early November of taking part in a scheme to influence the sale of nonperforming loans held by the Czech state bail-out agency at discounted prices. The Prague Municipal Court found that ČKA board member Radka Kafková had sought a Kč 400 million bribe from them in exchange for internal information about a Kč 3 billion debt of the company Cetus and influencing the ČKA’s selection process in the related tender.

Kafková was handed down a one-year prison sentence while Hrách and Lopata were given two-year suspended sentences and fines of Kč 600,000. Besser has said he did not know where his friend got the money to pay for the luxury apartment in Florida.

Hrách told the news server tyden.cz in an interview published on Monday that the money came from the proceeds of the sale of his Prague clothing store, and that he took out a mortgage because that money was not yet fully available to him. 

See related article: Czech minister exits US firm, denies corrupt motives