The Institute for Ethics and Economic Policy (IEEP)

 

Fordham University is a renowned Jesuit institution with over 165-year history of emphasis on ethics.

 

To promote Governance with Respect Ethics Accountability and Transparency (GREAT)

 

CZECH REPUBLIC

 

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Transparency International’s corruption rank for this country in 2000=42 , corruption perception index =4.3

 

Czech PM faces corruption claim. It was reported that an anti-corruption watchdog has asked Czech Prime Minister Stanislav Gross to explain how he paid for his luxury apartment in Prague five years ago. The Czech branch of Transparency International said Gross’s inability to explain the purchase was fuelling speculation over the money’s origin. (Yahoo News (BBC News), February 2nd, 2005, Rob Cameron, summary by Sherldine Tomlinson).

 

Seventeen more soccer officials accused in Czech bribery scandal. Authorities have accused 17 more soccer officials in a widening soccer bribery scandal that has shaken the Czech Republic's top league. Viktoria Zizkov Sports Director Ivan Hornik was the most prominent official charged, prosecutor Petr Cibulka said, along with 15 referees and their supervisor. If convicted, Hornik would face up to one year in jail, while the others would face two years. (Associated Press, 05 August 2004 summary by Sherldine Tomlinson).

 

POLL SHOWS MAJORITY OF CZECHS BELIEVE CORRUPTION ACCEPTABLE. About 72.3% Czechs think corruption acceptable, SC & C agency poll reveals. According to the survey, 50% of those who have declined corruption attempts saw their affairs handled with a delay while 25% said in contrary. Government’s efforts to reduce the ill-manner including setting up an anonymous phone for such case exposure, have come nowhere as people are in fear of revenge (BBC Monitoring Service, 17 Sep 2003, summarized by Hanh Vu).

 

CIVIL SERVANTS MAY HAVE TO DECLARE ASSETS Under a proposal made by Interior Ministry, a selected circle of civil servants and those who have suspicious contacts or have demonstrably shown "questionable decision-making" can also have his or her property examined, will be subject to property check as an anti-corruption measure. Civil servants would face charge or dismissal if they fail to fulfill asset declaration in time or make false property statement, Mlada Fronta Dnes reported. (Czech News Agency 20 Aug 2003, summarized by Hanh Vu).

 

Corruption Defendant Allowed to GO Overseas. A defendant in the Bridgeport municipal corruption scandal has been allowed to pursue a real estate deal in the Czech Republic just two weeks before his sentencing. Alfred Lenoci Jr., faces up to 46 months in prison and fines of up to $75,000 when he is sentenced in U.S. District Court in New Haven later this month. He pleaded guilty in 2001 to bribery, tax evasion and three counts of mail fraud. U.S. District Judge Janet Bond Arterton approved Lenoci’s request to travel to Prague and ordered him to return to the United States by July 17. Federal authorities say Lenoci had a role in overcharging Bridgeport for demolishing old buildings and removing asbestos and hazardous soil. (CT Now, July 10, 2003, summary by Sherldine Tomlinson).

 

ALMOST 40% CZECHS ADMIT GIVING OF BRIBES Almost 40% of Czechs admit giving of bribes at present, 40 bn. crowns, which would be enough to finance the annual operation of more than 10 teaching hospitals with top standard equipment and equal to around 2% of GDP, are estimated to be given and taken in the name of graft each year. Most bribes go into pockets of civil servants and corruption is also very pronounced in the health sector, police, among judges and customs office, according to the findings of the latest poll on corruption completed by the Gfk agency in March. Each in ten Czechs believe that bribes are unnecessary while one quarter of respondents said they considered bribery natural. (Czech News Agency (CTK) 23 Apr 2003, summary by Hanh VU).

 

Study finds much corruption in Czech Republic. It was reported that the Czech Republic has great problems with corruption, especially in parliament when producing new laws, according to a survey about corruption in EU candidate countries published in Brussels by the Open Society Institute. The study highlights the extensive immunity of politicians and the lack of measures against conflicts of interest.  (Prague Business Journal, November 7, 2002, summary by Sherldine Tomlinson).

 

Prague, FORMER TOP OFFICIAL DENIES CORRUPTION ALLEGATIONS. Former Foreign Ministry General Secretary Pavel Jaros was charged with corruption along with his predecessor Karel Srba. The firm that was awarded the contract for the reconstruction of the Czech Embassy in Croatia allegedly paid Jaros 5m korunas for the contract. According to General Secretary Vladimir Zavazal, the price of the construction work was 50% overvalued. "Someone allegedly bribed me in connection with the Zagreb embassy reconstruction contract. No-one ever offered me anything, I never asked for anything and I never received anything," Jaros told reporters.  (BBC Monitoring Service- CTK news agency, August 12, 2002, summary by Pavlidis George).

 

CZECHS BELIEVE CORRUPTION HAS INCREASED, POLL  It was reported that nearly 50 per cent of Czechs believed that corruption has increased during the past four years, according to a poll.  The poll revealed that 15 per cent of Czechs had given a bribe higher than 10,000 Czech korunas, while 6 per cent admitted that they had accepted a bribe. One-third said that corruption during the Social Democrats’ tenure had grown, while 16.3 per cent said that corruption had grown  substantially. Only 4 per cent of the polled said that corruption  had decreased and 46.4 per cent said that corruption had remained the same.  47 per cent of the pollers stated that bribes were most frequent in state administration, while 14.4 per cent said that bribes were most frequent in the police forces, 8.5 per cent said that bribes were most frequent in the health sector and 7.8 said that bribes were most frequent at courts. Some 3 per cent also said that bribes were most frequent in local politics ,while almost 4 per cent said that bribes were most frequent in state politics.   (BBC Monitoring Service (CTK News Agency, Prague), April 25, 2002, summary by Sherldine Tomlinson).

 

MINISTER AGAINST PROPOSED WAY OF FIGHTING CORRUPTION It is reported that the Czech Republic Justice Minister Jaroslav Bures opposes the Supreme State Attorney Marie Benesova’s proposition of using directed provocation against corruption in the state bureaucracy. Benesova has ordered an analysis of corruption in the Czech Republic where the level of corruption will be quantified and possible solutions offered. The Supreme State Attorney’s Office will hand over the report on corruption to the government this summer. (BBC Monitoring Service (CTK News Agency, Prague), April 4, 2002, summary by Sherldine Tomlinson).

 

CORRUPTION ALLOWS TERRORISM TO FLOURISH- CIVIC LEADERS PROCLAIM AT THE 10th ANTI- CORRUPTION CONFERENCE. At the 10th Anti- Corruption Conference held at the Czech Republic, lawyers, activists and politicians from over 150 countries have advocated for fair and open Government practices in order to deter terrorists and cut off their finances. In light of the September 11th terrorist attacks, Civic leaders of various countries insisted that the ideal way to combat terrorism is to fight the corruption that allows it to flourish by providing the finances. Members and supporters of the organizer, Transparency International, observed that big and small payoffs including those made to officials for obtaining false travel documents, bribes tendered to hide terrorists, etcetera would have been the key to the success of such an enormous task as undertaken by terrorists on September 11th. The participants hoped that the world attention on terrorism would provide a thrust to anti- corruption efforts and lead to a greater co- operation amongst agencies and Governments to root out the ill. (Yahoo, (AP) October 8, 2001, summary by Aruna Balakrishnan).

 

NUMBER OF CRIMES COMMITTED BY POLICE OFFICERS ON THE RISE. Some 369 cases in which police officers have broken the law have been exposed said Interior Minister Stanislav Gross.  The number of individual police officers caught committing crimes has also risen, from 181 last year to 239.  (Czech News Agency, August 7, 2001, summary by Barbara Gray).

 

COMPETITIVE BIDDING MADE OPTIONAL TO SPEED UP CONTRACTING Evzen Kocenda, an associate professor of economics at Charles University in Prague, expressed concern that open competition is being bypassed by government officials in an effort to avoid lengthy dilemmas plaguing major bidding contests in the country.  The Ministries decide whether to opt for public bidding based on whether it ‘in the public interest’; however, there is no set definition for what qualifies as ‘in the public interest’.  Billions of taxpayer crowns are spent on essential projects such as highway construction and rearming the police force, and quick decisions can have dire consequences.  Two such projects cited by Mr. Kocenda are the massive highway extension project connecting central and north Moravia and the multi billion crown contract to upgrade all government and ministry offices’ telephone systems.  A reputation for nontransparent economic conditions may curtail foreign investment.    (The Prague Post, Apr 11, 2001, summary by Marg Reynolds).

 

STUDENTS’ FORUM    Transparency International has announced an invitation to college students to participate in the Students’ Forum of the 10th International Anti-Corruption Conference to be held October 7-11, 2001 in Prague, Czech Republic.  Proposals for papers to be presented at the conference are welcome and conference information may be located at http://www.10iacc.org    (TI Release, Mar. 22, 2001, summary by Marg Reynolds).

THE CULTURE OF BRIBERY.  Transparency International ranks the Czech Republic 39th among the 99 nations that it monitors for economic corruption. Every fifth Czech has been compelled to give a bribe, most often by health care officials and state administrators. The situation is gradually improving due to government-sponsored awareness programs such as "Together Against Corruption." Bribery, though, remains a persistent hangover from communist times. A study by the European Bank for Reconstruction and Development shows that companies in the Czech Republic spend on average 4.5 percent of their annual income on bribes.  "It's a real barrier to business here," says Mr. Weston Stacey, executive director of the American Chamber of Commerce in Prague. "Corruption delays the period between when you have an idea and when you get it into operation. And for entrepreneurs without much money that's a very critical factor. It's delayed by the petty grasping of small bureaucrats," adds Mr.Weston Stacey. Evzen Kocenda , an economist and the co-author of a recent report on corruption in the Czech Republic, estimates that the "gray economy" (untaxed money from bribes) accounts for about 20 percent of the total GDP in the Czech Republic. And that most of this consists of large-scale bribes (Source: The Prague Post, February 13, 2001, summary by Pavlidis George).

Corporate Governance: Wall Street Journal, Nov. 8, 2000 (Front page sec. C) notes that this country is among the lowest ten in corporate governance by CLSA, Salomon Smith Barney. This means that shareholders do not get equitable treatment and disclosed information can be false and misleading.  The laws governing duties of managers, accountants, etc. are inadequate or not enforced properly.

Private computer reveals politician (Vorarlberg online, 18.8.00,

http://www.vol.at/tmh/zr/national/computer/news-47528.shtm).

Anticorruption Service of the Czech Police. This unit was established as a part of the Czech Police Presidium. LTC Zbynek Cermak is in charge as an acting director. odhal@mvcr.cz You can also contact the Public Relations Department of the Police Presidium moos@mvcr.cz or visit the web site of the Ministry of Interior. http://www.mvcr.cz (We thank Marcel Audy, Vice Consul for this information).

The OECD anti-Corruption report on the Czech Republic can be found on http://www.oecd.org/daf/nocorruption/report.htm

The Index of Economic Freedom (by Driscoll-Holmes-Kirkpatrick) for 2001 places Czech Rep. in the “Mostly Free” category with a rank of 27 (Ranks range from 1 for Hong Kong to 155 for North Korea, Wall Street Journal, Nov. 1, 2000). H. D. Vinod’s trimmed correlation analysis indicates that countries free from economic regulation are less corrupt. After allowing for some exceptions by 20% trimming, the correlation is near 0.9.

 

 

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Last Updated:
7 February 2007