Bribery alleged at Česká spořitelna

Another potential black mark on the Czech business sector's reputation was revealed Nov. 24 and involves one of the largest banks in the Czech Republic, Česká spořitelna, and its Austrian owner, Erste Bank, which stand accused by two former employees of bribing politicians in Central and Eastern Europe.

Hans Leitner and Peter Andahazy, formerly employees at Erste Bank in Vienna, have threatened to file a lawsuit in U.S. Federal Court against the bank, citing bribery and corruption. According to the former bankers, Erste Bank channeled bribes to politicians and officials when buying banking institutions in Central and Eastern Europe, including the privatization tender for Česká spořitelna in 2000. Erste Bank remains "relaxed" about the proceedings, according to Hana Cygonková, spokeswoman for Erste Group Bank AG in Vienna, who added, "In our view, there is no jurisdiction for this procedure."

Members of former Prime Minister Miloš Zeman's Cabinet, which sold the state's stake in Česká spořitelna in December 2000 for 19 billion Kč, have been implicated in the accusations of bribery. Leitner and Andahazy accuse Erste Bank of bribing the Cabinet in order to secure the privatization tender of the Czech bank.

Furthermore, the two say that the same people were involved in the Gripen deal, an alleged case of fraud in which bribery was part of negotiations for the Czechs to lease Swedish Gripen fighter jets. While the Anti-Monopoly Office (ÚOHS) ended its investigation Nov. 30 without filing any charges, server Aktuálně.cz reported the same day that the FBI had begun investigating the case. Leitner and Andahazy allege Erste was funneling money related to the deal, and hope to prove there were additional payments beyond the official figure.

"Business in the whole of Europe is so intertwined that the same people who have been involved in Erste Bank's corruption were involved in the Gripen corruption case," Leitner told Aktuálně.cz.

The Czech Republic leased 14 Gripens from Sweden for 20 billion Kč in 2004.

Now, after the possible lawsuit and allegations were reported widely in domestic and international press, the bank is preparing to take steps for a countersuit.

"We are preparing to file a lawsuit against both former employees for damaging the bank's reputation. The lawsuit will be filed in the respective courts of residence of both ex-fund managers in Austria, in St. Pölten and Wiener Neustadt. This matter is a purely Austrian labor dispute with no connection to the United States," Cygonková said Nov. 30.

According to Cygonková, Leitner and Andahazy were fired this past spring after they were discovered to be trading gold dust from the Congo on their own accounts through a company they had set up in London. The former employees have received legal consultation from an American lawyer and have threatened to sue, but "in a recent letter from their U.S.-based lawyer, they have stated that they will abstain from doing so if they are paid 30 million euros [$45.3 million/779.7 million Kč]," she said.

"The dismissed employees have not produced any evidence for their accusations, and this course of action will take them nowhere. We will take legal action against them as the allegations are without any substance," she added.

The Czech press reported that the FBI had launched an investigation into the bank, but Helena Stehlíková, spokeswoman for the U.S. Embassy in Prague, refused to "either confirm or deny the FBI's involvement."

The pair of former employees has brought their complaints to the United States, as Erste holds a New York banking license. The two have hired U.S. lawyers and plan to file a lawsuit in U.S. Federal Court by the end of the year.

"After it was made public that we intend to fight against the Erste dirty business in the United States, intelligence service agents from across Europe have contacted us, offering us documents that may be helpful in court," Leitner told Aktuálně.cz.

Weston Stacey, executive director of the American Chamber of Commerce in Prague, is not surprised by the latest revelations of corruption among the business sector.

"Every single major party leader has now stated publicly and in campaign material that politicians and state officials are stealing from the taxpayer," he said. "Yet not one party or politician has proved competent enough to effectively prosecute one public official or enact one effective legislative and administrative solution."

Stephan Delbos can be reached at
sdelbos@praguepost.com