Even before Andrej Babis’s secret purchase of a luxury French property cropped up in a vast leak of files from offshore organisations on Sunday, he was facing a tight race to win a second term as Czech prime minister.
But the revelations that the billionaire, who built an empire stretching from fertilisers to food before entering politics, sent $22m through a sequence of offshore companies to buy the property on the Riviera have given extra uncertainty to this weekend’s election.
Opposition politicians seized on the claims to question whether Babis, who has been dogged throughout his premiership by separate allegations of fraud and conflict of interest, which he has repeatedly denied, was fit to lead the 10.7m-strong central European nation.
“Andrej Babis must prove that he used taxed money for this transaction,” said Petr Fiala, from the rightwing opposition coalition, Together. “If not, he has no right to be in politics and take care of taxpayers’ money.”
Babis denied on Twitter on Sunday having done “anything illegal or wrong”. He claimed that the allegations were merely an attempt to “denigrate me again and thus influence the Czech parliamentary elections”. During a debate on Czech television, he said the money used to buy the property, known as the Château Bigaud, had been taxed.
A poll published on Sunday suggested that Babis’s Ano would emerge as the biggest party from the election, which will be held this Friday and Saturday, with 27 per cent of the vote. However, to form a government, Babis would need the support of at least one other group — something that was not looking straightforward even before yesterday’s revelations about the 2009 château deal.
“It looks like it will be very difficult for Babis to have a functioning government with a majority after the elections. It looks like a stalemate,” said Milan Nic, senior fellow at the German Council on Foreign Relations.
“Because this news came so close to the elections it will probably have some impact. But Babis will try to use it to portray himself as a victim . . . It is a big scandal for one part of society, but for the other, it might just be seen as an attack on Babis.”
Babis entered politics in 2011 having turned his Agrofert company into one of the Czech Republic’s biggest private employers. He promised to use his experience to run the country like a business. Supporters say that is one of the reasons they back him.
“You hear from the other parties that Babis is the worst guy walking on planet Earth. But when you look at it over a 10-year perspective and compare his work to the work and scandals of the politicians before, he is quite solid,” said Lukas, an entrepreneur from Brno, arguing that Babis had simplified construction rules and cut VAT avoidance. He also said the premier’s much-criticised handling of the pandemic was better than claimed by opponents.
For Babis’s critics, his business dealings have long been a point of controversy. The tycoon put his Agrofert assets into trust before becoming prime minister. But in April an EU audit found that he had breached conflict of interest rules because of his continued links to the business, which received EU subsidies while he was in office. In June, police recommended that he should be charged with fraud over the alleged misuse of an EU subsidy in a separate case that has shadowed him for his entire premiership.
Babis has repeatedly dismissed both sets of allegations as attempts by his political enemies to undermine him.
While the allegations have not so far deprived Babis of voters, they have narrowed his political options. The groupings placed second and third in Sunday’s opinion poll — Together, and a separate coalition of the Pirate party and the Mayors and Independents — have both ruled out a coalition with him.
If Babis cannot win over parts of Together, his only chance of forming a government would be some sort of deal with the far-right SPD and other smaller parties, such as the Communists.
But diplomats say a coalition involving the stridently anti-immigrant SPD — whose leader Tomio Okamura once suggested Czechs should walk pigs past mosques to “remind” Muslims that they could leave the country — could leave Babis isolated in Europe.
The SPD has also said that it would demand that a government put forward legislation allowing for a referendum on the Czech Republic leaving the EU or Nato — something that Babis has previously rejected.
“[Sunday’s] disclosures will further raise the post election stakes. Babis’s future options now depend entirely on Okamura and the Communists,” said Nic. “Some kind of post-election coalition with parts of the centre-right bloc — even without Babis as prime minister and after months of talks — is now harder to imagine.”