Reconstructing the Czech state

A protest against government corruption in Ostrava, northern Czech Republic, in November 2012. Demotix/Jiri Gadourek. All rights reserved.

Needless to say, Czech voters are fed up with corruption scandals and clientelist schemes, which often resemble practices in non-democratic countries. Former president Vaclav Klaus’ controversial amnesty (which freed many individuals charged for embezzlement of public funds, who happened to commit their crimes during Klaus’ prime ministerial tenure) further aggrieved the Czech population and only strengthened the view that all political attempts to eradicate the instances of corruption and clientelism are mere lip service to voters.

In this atmosphere, a new public initiative claiming to fight the Czech “kleptocracy” has been established. Nearly twenty anti-corruption NGOs, including the Czech branch of Transparency International, have united to form one “anti-kleptocratic” block with a telling name, Rekonstrukce státu (Reconstruction of the state).

This initiative, partly financed by the US Embassy in Prague, is quite unique in its nature. Instead of mere criticism of the state’s practices, it offers a very concrete and explicit plan to give anti-corruption measures a new impulse. A number of lawyers, university professors and analysts have devised nine legislative proposals, which – if passed through parliament – could potentially bring down the level of corruption and clientelism. These nine proposals are:

1. Transparent funding of political parties and their campaigns – due to the lack of a coherent law about financing political parties and political campaigns, many suspect Czech political parties to be sponsored by money of dubious origin.
2. Declaration of assets by legislators – already parliamentarians must disclose the state of their assets on taking office; however, only in handwritten form that is considered a non-binding formality. Disclosure should be made more transparent and electronic.
3. Public contracts on the internet – all contracts and agreements signed by the state and its institutions should be made public in an internet database. This would help control the price of public contracts.
4. Abolition of “anonymous shares” – Czech Republic is one of a few countries that permit companies to issue anonymous bearer shares. The owner of such shares is the person physically holding the share – this instance permits companies to “hide” the names of their real shareholders. This has turned out to be a problem in public tenders, for example. As the justice minister of the Civic Democrats mentioned: “The main goal of the law is to have full knowledge of where every single crown or euro from public funds is going and who is accountable for it.”
5. Professional nominees for supervisory boards – the supervisory boards of Czech state and semi-state companies are occupied by political protégées, not expert in the field of the given company. This allows for nepotism and political “horse-trading”.
6. Depoliticisation of state administration officials – Czech government bureaucrats are not protected against political pressure as in other EU countries. This means that just after taking office, every minister can occupy posts in his/her ministry with his/her own people.
7. Autonomous investigation of corruption – politicians have a direct influence on the nomination and repeal of public prosecutors and have used this influence to hinder investigations in the past. Therefore, strengthening the independence of public prosecutors is necessary for thorough investigation of corruption scandals.
8. A transparent legislative process – each legislator can individually propose “last-minute amendments” to bills, similar to “riders” in the US Congress. Consequently, parliamentarians often do not know what exactly they are voting for. This leaves room for lobbyists to “stick” completely unrelated provisions to bills.
9. Extending the powers of the Supreme Audit Office  – this provision would put one-third of the state budget under autonomous scrutiny, and the management of public finance under tighter control.

Perhaps a tenth proposal could be added to the list – the increased regulation of lobbying. Compared to the United States where systematic disclosure of lobbying is mandated by the Lobbying Disclosure Act of 1995, lobbyists in the Czech parliament enjoy very easy access to representatives. Ideally, lobbyists should be registered in a transparent national database.

Depending on the will of policymakers, these proposals could be passed during the current election cycle (the next legislative elections being scheduled for 2014). A number of legislators have pledged support for the initiative, but its practical impacts are yet to be seen. So far, most propositions are still at the stage of government or parliamentary proposals – though the abolition of “anonymous shares” has been passed through the lower house, only to be returned by the Senate.

Passing three of the nine proposals would be a success, passing all would be a miracle.

Nevertheless, it is important to note that these proposals are in no way an absolute guarantee against further corruption and clientelism. Loopholes have a tendency to appear in any legislature, despite the determination of politicians to pass “bulletproof” laws. But the political class has been warned. The essential message of this public initiative is that within the political system it has identified the flaws which are conducive to “kleptocratic” political behaviour. Perhaps, were this ambitious plan to work, parts of it could be transferrable to other states facing similar problems to those of the Czech Republic.