Czechia Pays Lawyers Millions to Review Agrofert Subsidies, but Keeps Contract Terms Secret

Czechia's State Agricultural Intervention Fund has hired a law firm to assess whether subsidies paid out to companies within the Agrofert holding between 2017 and 2021 should be reclaimed. Yet the fund refuses to disclose the specific terms of reference given to the lawyers — even in response to an official request filed under the Freedom of Information Act.

At issue are national subsidies received by Agrofert companies during the period when Andrej Babiš served as prime minister. Although the multibillion-crown holding had by then been formally placed into trust funds to comply with conflict-of-interest legislation, auditors from the European Commission found that Babiš continued to exert direct influence over the group's management.

The state must now decide whether to demand the return of these subsidies, and it is relying on analyses prepared by the hired law firm. According to a report published in June by Seznam Zprávy, the sum in question could be at least 1.3 billion crowns. Former Agriculture Minister Marek Výborný of the KDU-ČSL party has put the figure at three times that amount.

Despite repeated inquiries, the fund has never revealed exactly what task the lawyers were assigned. As for the deadline for delivering the analyses, the fund said only that it had been "set by verbal agreement." It did, however, confirm that the law firm Portos has already billed 2.2 million crowns for its work. At the hourly rate of 2,900 crowns excluding VAT specified in this year's contract, that amounts to roughly 760 hours of legal services.

The contract itself is available in the public Register of Contracts and outlines a more specific procedure: legal services are to be provided "in connection with a specific client assignment," on the basis of which the "subject matter and timeline of performance" are agreed. Asked what specific assignment the fund had given the lawyers, officials replied only that "the task follows from the scope of the subject matter of the contract's performance."

Portos lawyers are to advise the fund not only on whether Agrofert companies can continue receiving subsidies, but also on the possible recovery of funds already paid out. Time is the crucial factor here — if the statutory deadlines expire, the state will lose its right to reclaim the money. Nothing in the fund's response indicates that any recovery proceedings regarding the older subsidies have been launched or are even being prepared.

"The Agricultural Fund's indecisiveness on this matter is simply inexplicable, especially given that there is already a whole series of court rulings in its favor," said Kryštof Doležal, a lawyer with Transparency International. He noted that the fund is obliged to keep written records of all assignments and agreements, since public funds are at stake and taxpayers bear the risk of any losses.

The situation is further complicated by a pending amendment to the conflict-of-interest law. The bill, put forward by a group of MPs, would relax the rules for companies linked to government ministers and would also affect standard agricultural subsidies — including per-hectare payments that are critical to Agrofert. In addition, the amendment proposes shortening the deadline for initiating subsidy recovery proceedings from ten years to four. "If that happens before the Agricultural Fund manages to reclaim the subsidies, the state will never get the money back," Doležal warned.

Around Prague, based on reporting by novinky.cz