The fact that Zeman's government sold one hundred billion crowns' worth of Russian debt at one fifth of the price to the non-transparent firm Falkon Capital is generally known. Less known is the fact that the people at Falkon received commission in the government transaction for nine billion crowns. At least that's what David Hurn claims, who is a representative of the Russian energy company RAO JES, which allegedly paid the debt. "It's not so much," says first deputy director of the same company Leonid Melamed, but even he indicated a sum in the billions. "Falkon supposedly financed several programs of the Czech government from this money," added the deputy in an interview for the Russian paper Vědomosti (Knowledge). No one yet has clearly stated that the sale of debt could have involved corruption. The Czech government however is relentlessly remaining silent as to the conditions and circumstances surrounding its extremely suspicious deal.
Operation "Russian debt" is complicated enough that one cannot avoid briefly refreshing one's memory. Roughly one year ago Prime Ministers Miloš Zeman and Michail Kasjanov agreed that Russia would settle its one hundred billion-crown debt to the Czech state treasury with a one-time payment of twenty billion crowns. Kremlin rulers thus got an incredible eighty percent discount and the Czech cabinet then again got twenty billion crowns before elections. But there was a catch. According to an international agreement, Moscow must first pay money to the Paris club of creditors to whose member countries Russia owes altogether one hundred and thirty billion dollars. This agreement however does not concern debt reimbursement to a private firm. Czech and Russian politicians therefore thought up a way to double-cross the club: they involved the private company Falkon, to whom Prague formally sold the debt for the agreed upon twenty billion with the stipulation that it is up to the private businessmen how much they actually recover from the Kremlin. However, everything was agreed upon beforehand. Russia had already prepared fifty-four billion crowns which it freed up from the budget to make the payment. Of course the Czech account in the central bank received only twenty billion. Where and how did the rest disappear?
According to statements made in February by David Hurn, a representative of the American stockholders (owning 11 %) of the Russian energy company RAO JES, through which the debt was reimbursed, this firm paid not twenty but almost thirty billion crowns, nine of which went into the pockets of the non-transparent Czech-Swiss-Georgian company Falkon as a sort of "commission fee". Deputy director of RAO JES Leonid Melamed three weeks later said that Falkon received commission of four percent of the deal price. "I can't tell you more," he replied to a Russian journalist to the question whether the percentage is counted from the fifty billion freed up by the Russian government or the twenty that came to the domestic account. (In the first case it would have been roughly two and half billion, in the second case one billion.) And added in the beginning of the aforementioned sentence that Falkon financed some Czech government programs.
"That is nonsense," claims government press spokesman Libor Rouček. "I have nothing to talk to you about," reacts Falkon Capital head Jozef Čimbora to the question whether his firm paid anything to the government or not. And so, is it an incorrect notion that Falkon not only covered up the fraud on the Paris club, but that it paid politicians from the commission in order to have a very unfavorable business deal approved? (See inset: Czech discount.) After this question Mr. Čimbora hung up without saying a word.
Alleged payer of the debt RAO JES claims that it took out a thirty billion-crown loan at the Russian Sberbanka for the transaction and that the aforementioned fifty-four billion was freed up from the budget only formally. What money actually came to the Czech Republic of course nobody knows. "I don't know what kind of agreements were signed between the government there and RAO JES," says chief Czech negotiator in the debt sale, Deputy Finance Minister Ladislav Zelinka, shrugging his shoulders. Could it have been money laundering? "That I rule out," answers Zelinka. Why then, as the daily Moscow Times wrote, was the money for the Czech government first paid through accounts of sixty-five subsidiaries of RAO JES and then, according to Falkon documents, they went through the French branch of the Moscow bank AKB Eurofinance and Deutsche Bank? "I have no idea," says Zelinka.
The head of Czech intelligence František Bublan says curtly: "We don't know anything new about the transaction." Six weeks ago it came as a surprise even to intelligence that the money went through AKB Eurofinance for example. "The government told us that RAO JES would pay the money, and so there wasn't much to check," added Bublan. The Supreme Controlling Office for instance knows nothing about the transaction. "By law we don't have the right to check this transaction," says press spokesperson Julie Šebelová.
Premier Zeman declared six weeks ago that the agreement may be studied by MP's who are entrusted to be familiar with classified matters, for example members for control at BIS (Security and Information Service). Not even one of them did that. "It was a somewhat crude and unofficial announcement by the premier. Even if I read the agreement I would not be allowed to speak about it. I also don't know why in this case I should have a greater right than an ordinary citizen," says for instance Committee Chairman Jan Klas.
Under the act on free access to information, Respekt requested the publication of the agreements of the Finance Ministry, but Minister Jiří Rusnok in December refused this. In January Respekt filed a lawsuit at the Supreme Court. The clerk who is to state whether the lawsuit will start being discussed by the end of the election term however could not be reached all day Friday.
According to Respekt's information, the transaction is being looked into by the French and Swiss secret service, which requested the cooperation of BIS. The French started investigations because the money went through the Paris branch of AKB Eurofinance, Switzerland started investigating because a member of the supervisory board of Falkon, Beat Urs Moser, is a citizen there; the majority stakeholder of Falkon, the company Magchim, has its headquarters there and it is also likely to be the residence of the central figure of Falkon and boss of Magchim, Paata Mamaladze, who negotiated with the Czech government for Falkon. "According to the foreign secret service there is a suspicion of money laundering," says one BIS agent.
Mamaladze also lives in Prague. Except that the address shown in the Commercial Register is fake. After a long search on Nad Lesíkem Street a local Respekt reporter noticed that a Russian lived in one of the houses there - and upon being asked about Mamaladze he pointed to a vast, inaccessible looking villa a few hundred meters down. After ringing the doorbell an older black-haired woman opens the door. "Huh? Paata Mamaladze?" she calls from the entrance to the locked gate. "He's not here."
Premier Zeman passed off the recovery of a twenty percent share (an eight percent discount) of Russian debt as the success of Czech diplomacy. Except that in 1994 we signed an agreement with Russia on debt recovery whereby the parties under pressure from the Paris club of creditors agreed that a discount may not be greater than thirty-seven percent. "Yes but since that time we've managed to recover only one billion crowns," says negotiator Zelinka, waving his hand over the promise. Slovaks of course signed the same agreement and as of this year have recovered one third of their debt - twenty billion crowns. Last year they rejected an offer that the remaining amount (thirty billion crowns) would be purchased under the same conditions as the Czechs. Germans, Italians, or the French for example do not give Moscow any discount at all when reimbursing Russian debt.