Scandal Around Minister Juhelka's Advisor: A Nearly 64-Million-Crown Hole in the Budget

The Czech Ministry of Labour and Social Affairs has admitted that, due to a conflict of interest involving Alexandra Semancová, the former advisor to Minister Aleš Juhelka (ANO), the ministry will not be able to claim 63.8 million crowns from the European Union — funds it was too afraid to submit for reimbursement to Brussels for fear of jeopardising the entire multi-billion-crown subsidy programme.

While working at the ministry, Semancová simultaneously helped shape the rules governing the distribution of subsidies while also receiving payments through her private company from applicants seeking help in obtaining those very same subsidies. As soon as journalists exposed this conflict of interest in March, Minister Juhelka publicly recorded a video in her defence, calling her a "normal woman" and "the right person for the job," and dismissing the criticism against her as a plot against himself.

In reality, however, bringing Semancová on board has left the ministry with a budget hole worth tens of millions of crowns. The ministry kept this information under wraps for almost three months and avoided answering questions, only disclosing the sum after journalists made repeated requests under the Freedom of Information Act.

It still remains unclear who exactly will cover these costs. The ministry claims that the overall amount of funds allocated to the Czech Republic won't shrink, since under the EU's National Recovery Plan, Brussels pays not for specific projects but for meeting certain targets — in this case, the creation of children's groups (a nursery-school equivalent). However, the ministry had promised to pay applicants for four projects handled by Semancová's company, and there is now no clear source for that money.

When journalists tried to question Minister Juhelka in person inside the parliament building, he literally fled from them down the corridors, repeating: "I really don't have any information." Asked what journalists should do to get the facts, the minister answered with a single word: "Wait." He later admitted he probably ought to have information about the conflict of interest involving the advisor he himself had chosen, but he still hasn't said when he will provide details.

According to a journalistic investigation, Juhelka signed off, back in late April, on a decision that the ministry would not submit the four disputed projects to Brussels for reimbursement. This came after the European Commission learned of the situation and sent a letter to Prague expressing "serious concern about the conflict of interest," demanding an explanation of how the ministry intends to resolve the problem.

Because of the scandal, the ministry will now have to find tens of millions of crowns in additional funding for building children's groups in Prague 8 — the very district where ANO deputy mayor Radomír Nepil had used the issue of children's groups as an election trump card. It was Nepil who hired Semancová's company, Siptrade, to secure the subsidies, and in January he was photographed alongside Juhelka at the opening of one of the groups. Two projects in the district will now go without the promised EU funding. Nepil has declined to comment on the situation.

Juhelka himself had previously admitted that the recommendation to take on Semancová as an advisor came from the Prague 8 district administration itself. Siptrade was officially run by her 19-year-old daughter, a student, but according to the ministry's internal review, it was Semancová herself who made the actual decisions on the projects.

The ministry has not clearly stated whether it will seek damages from its former advisor, even though Semancová signed a code of ethics upon being hired that obliged her to avoid conflicts of interest. Officials say that the loss of these funds cannot automatically be considered damage, since the final amount received from the EU may not actually decrease. Semancová herself did not respond to journalists' questions, and the ministry's state secretary in charge of personnel matters, Ingrid Štegmannová, also declined to comment.

Around Prague, based on reporting by seznamzpravy.cz