Czech prosecutors: Legal loophole hinders fight against white-collar crime

According to Czech law, a person planning to steal from the state need not fear arrest. A simple example: If police receive information about a plot to illegally manufacture and distribute cigarettes, including proof that the necessary equipment has been purchased, until the production line actually starts they are have not committed a punishable offense.

“It relates to an amendment to the Criminal Code. Previously, conspiracy to commit a serious crime could result in a sentence of up to eight years in prison. When the new Criminal Code came into force last year this was decriminalized. We have warned the Ministry of Justice that it will create problems,” Lenka Bradáčová, president of the Union of State Prosecutors and a deputy district attorney based in Ústí nad Labem, told Czech Position.

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“We know, for example, that to evade taxes a certain group of people are creating a sham company and preparing bogus invoices. But the police cannot deploy standard operational techniques, such as putting wiretaps in place, because preparing to commit a crime is not a criminal act,” she said.

A reliable and well-placed source told Czech Position that during the drafting process of the Criminal Code, legislators came under heavy pressure to adopt it quickly. Therefore, the Ministry of Justice purportedly made comprises to allow it to pass the lower house of Parliament and be approved by the government without problems. In this regard, certain economic crimes were decriminalized.

According to the new Criminal Code, the preparation of the most serious crimes carrying a prison sentence of at least 10 years is punishable with it spelled out that the preparation is punishable. For less serious crimes, the police, even if they have suspicions that a criminal act is being prepared, cannot put in place wire taps, with the exception of cases of criminal acts which the Czech Republic is obligated to purse under international treaties.

Justice Minister Jiří Pospíšil (Civic Democrats, ODS) did not respond to Czech Position’s request for comment as to why preparation for less serious crimes are also not punishable under the new Criminal Code.

The lost Drobil case

It became all too clear this summer that conspiracy to commit a crime is not a punishable offense when it comes to corruption cases. It became all too clear this summer that conspiracy to commit a crime is not a punishable offense when it comes to corruption cases.Libor Michálek, then a top Ministry of Environment official, came into the public eye in December 2010 when he blew the whistle on machinations at the State Environmental Fund (SFŽP). He had denounced an alleged attempt to inflate a public tender to divert funds to Civic Democrat party (ODS) coffers and to further the political career of his ODS boss, Environment Minister Pavel Drobil,  who was forced to resign as a result.

Michálek, whom the minister had allegedly sacked for not going along with the scheme, filed a criminal complaint documenting the fraudulent manipulation of the public tender, related to a municipal water works project. According to his testimony (and secretly recorded conversations he’d had with Drobil’s advisor, Martin Knetig) it was rigged in favor of the international consultancy KPMG over another bidder, Mott MacDonald. Furthermore, the cost was inflated by some Kč 50 million, he told the police.

Although the tender was cancelled as a result of Michálek’s testimony, last month the police shelved the case on the grounds that no crime had been committed because the tender had been called off. “It’s not just a problem in my case. The police from the anti-corruption units are now lacking recourse to prepare criminal charges over a number of public tenders, which is an obstacle in the fight against corruption in the Czech Republic. Conspiracy to commit murder is a crime, yet this isn’t,” he said.

Thought crime

The failings of the new Criminal Code have not escaped the attention of the main center-left opposition. “No one warned us of it. Had the state prosecutors come to us, we would have certainly taken into account their recommendations. I would have been in favor of conspiracy to commit a crime being punishable,” Social Democrat (ČSSD) MP Jeroným Tejc, a member of the parliamentary Constitutional Law committee, told Czech Position.

Tejc admitted that the onus was on him and other committee members to spot such failings. According to him, after two years an analytical review of the effectiveness of the Criminal Code must be carried out, during which judges, bar association members, state representatives and non-governmental organizations will be invited to comment. ‘That’s just great. In that case, I can be charged for rape, too, because I have the necessary tool.’

MP Marek Benda (ODS) takes the opposite view, which he illustrated by telling a joke about a man on trial for planning to make plum brandy in his bathtub. A judge rules that the man is guilty because distilling equipment and other paraphernalia was found at his home. The accused responds, “That’s just great. In that case, I can be charged for rape, too, because I have the necessary tool.”

Jokes aside, Benda stated his opinion clearly. “I am an enemy of criminalizing intent, in many cases, simply an attempt to commit a crime. On some points, however, I’m prepared to make concessions,” he told Czech Position, pointing to other inconsistencies in what can be considered a crime, such as a tax return submitted with various omissions or false information. “Is it a simple mistake, or the preparation of a crime?

See related article: How white-collar rogues get away with corruption