At present, a company caught illegally influencing the outcome of a public tender merely has to wait for the heat to die down before it can go back to its old ways. But that may change.

Acting Interior Minister Ivan Langer is trying to take a hard line against firms tainted with corruption. If he has his way, companies that have been guilty of misdeeds would be banned from bidding in state-held public tenders.

He proposed the plan to Prime Minister Mirek Topolánek's Cabinet Oct. 25.

Following the project, the Justice Ministry would maintain an electronic register — effectively a blacklist — of violators. Companies wishing to participate in state-held tenders would need to file a declaration stating that they are free from corruption.

Langer said this system could significantly improve the transparency and fairness of many state tenders.

"Given the tough competition governing most markets, there is no doubt that competing companies would keep an eye on the blacklist and will make sure that it is complete," Langer said.

His plan will be negotiated in Parliament this fall. Langer was unable to specify if and when the bill would pass.

"Given he current stalemate in Parliament, it's hard to predict how it would respond," he said.

Loopholes open

Langer says his plan would clean up lucrative government tenders, as well as smaller municipal tenders. The opposition Social Democratic Party (ČSSD) disagrees.

Lengthy court proceedings and the inability to ban any company until it is found guilty will make the plan ineffective, ČSSD officials say.

Indeed, while the police investigate nearly 130 cases of business corruption annually, courts have not reached a verdict on a single case this year.

Opponents also say corrupt companies could shut down and reopen under a different name, enabling them to access public tenders again.

"As a result, the blacklist will be useless," said Marie Benešová, former state attorney and current ČSSD shadow justice minister.

Langer said special anti-corruption tribunals should be launched at regular courts in order to speed up court dealings regarding corruption.

He also wants the police to use special agents to infiltrate business circles and monitor questionable companies. Undercover officers would then participate in various business meetings between private companies and government officials.

The spies would not be able to hint that they would accept bribes, but they could make audio and video recordings.

Corruption haven

Langer's initiative came three months after the World Bank reported that corruption in public tenders was increasing dramatically in the Czech Republic.

While the number of cases in Central and Eastern Europe have been on the decline, the number of domestic cases is rising.

The World Bank found that about a quarter of the businesses offered bribes in order to receive various state orders, based on research conducted among some 600 Czech companies in 2002–

05. Czech companies spent 0.6 percent of their annual revenues on bribes.

The Czech Republic ranked behind Albania and Lithuania.

The government hand-picked more than half the tender winners last year, according to an independent study by Transparency International (TI), a longtime critic of Czech public tenders.

"Not only are big state tenders controversial, but also smaller municipal ones," said David Ondráčka, TI's expert on public tenders.

Ondráčka said that 58 percent of Czech public tenders last year were not open to all interested bidders.

These nontransparent selection processes create a breeding ground for illicit practices, he said.