Putin Hiding Under A Czech Candle
Turkey’s downing of a Russian fighter plane will test the mettle of NATO leaders: an overreaction by Russia could trigger member nation commitments to Turkey under Article V. But how will NATO members respond? Recent press articles have raised doubts about the leaders of some NATO member states, particularly the Czech Republic, in the face of Russian operations to undermine the alliance.
Anne Applebaum, the Pulitzer Prize winning writer; and Kristofer Harrison, a former DoD and State Department official; wrote about officials from NATO-allied governments who amplify Putin’s voice. They specifically named Andrej Babis, the Czech Finance Minister; Milos Zeman, the Czech President; Robert Fico, the Slovak Prime Minister; and Viktor Orban, the Hungarian Prime Minister. Andrej Babis, alone among the four in responding to Applebaum’s assertions, claimed he has no friends in Russia and is allied strongly with America. His denial is worthy of investigation.
One indicator of friendship with Russia was manifest on November 3. It was reported that the Czech Export Guarantee Agency (EGAP), a subsidiary of Babis’ Ministry of Finance, had underwritten a record loan guarantee to PhosAgro, a Russian company that is co-owned by Putin’s close friend Vladimir Litvinenko. EGAP guaranteed the loan in spite of a track record of significant defaults — over a billion dollars — in Russia. This gesture was important enough to the Russian government that the Russian vice-prime minister came to the Czech Republic for the signing ceremony. Russia must truly appreciate the financial assistance by a Ministry of Finance subsidiary in times of financial sanctions imposed by the West. Friendly is as friendly does.
In a more bizarre example of friendship, diluting the impact of the sanctions imposed on key Russians after the invasion of Ukraine and occupation of Crimea, it was also disclosed recently that a sanctions target and close friend of Putin, Chechen President Ramzan Kadyrov, has a team of racing horses stabled in the Czech Republic, in which he maintains a close personal interest. When sanctions required those assets to be frozen, the Ministry of Finance decided not to sell the horses and put the funds in escrow, but are rather continuing to race the horses and keep them active, as if the sanctions were not in place.
The Ministry of Finance, asked to explain, responded by email that, “It was taken to consideration that these assets can be devaluated just by restrictions on their ordinary activities, such as training, participation in competitions or in breeding. Given to the character of secured assets, high securing and managing costs can be assumed. Ministry of Finance has decided that within EU the ordinary activity of racing stable will not be restricted, but all the profits will be used only for managing and securing these assets. In the event that revenues exceed expenses, those would be secured in the Czech Republic.”
In other words, the Ministry has decided to allow the animals to continue to race, and to use any profits to defray security and operating expenses. The result is that any utility derived by Kadyrov by watching his horses race may continue without interruption; if racing revenue exceeds the expenses of upkeep and security, the net income will be held in escrow. The Ministry ignored questions about the extent of any personal involvement by Finance Minister Babis in this politically sensitive decision, but it is safe to assume that Kadyrov appreciates this kindness from the Ministry. It also prompts a writer to wonder who shows up in the owner’s box at the races.
Another aspect of Babis’ response to the Applebaum article was of interest. In response to her statement that his company, Agrofert, buys Russian gas, he made a specific point of asserting that he does not buy gas from Russia, but only from Germany. However, in 2007 Hospodarske Noviny reported that Agrofert was negotiating to change its gas supplier from a German company to VEMEX, the Czech subsidiary of Gazprom, the state-owned Russian firm. Babis is quoted as saying that Agrofert is the largest consumer and Vemex is the largest supplier of gas in the region. A perfect fit, according to Mr. Babis? I contacted both Vemex and Agrofert to ask about their commercial relationship, but received no response from either firm.
Articles in The Daily Caller, Foreign Policy and elsewhere worry about Babis’ Communist heritage, and allege a connection between him and select police and prosecutors, whom he misuses to attack political enemies and commercial rivals.
The final bit of mystery for the Czechs in this affair is the speculation by Czech media about the involvement of the American Embassy. Commentators have gone to some length to suggest that he has the support of the American ambassador: he has been photographed with the ambassador at the annual party congress for ANO, Babis’ political party; Babis has referred to the ambassador’s visit to his country house, called The Stork’s Nest; and ANO credited the ambassador with arranging a high-profile trip for him to the U.S. earlier this year, with commentators saying it is part of a campaign by America “wooing” him. Repeated requests for comment from ANO went unanswered.
Foreign Service sources in Washington tell me there is no way the Embassy would support a political figure so openly, and that the Czech public are misreading the facts, and are victims of propaganda. The integrity of the U.S. Foreign Service is well known: Embassies carefully avoid any kind of endorsement in domestic political activities.
Perhaps there is a reason that my questions on these matters have gone unanswered by the Ministry of Finance, Agrofert, VEMEX and ANO. Perhaps there is more to the picture than meets the eye. There is an old adage in Czech that “the darkest place is always under the candle’s flame.” Is Putin sitting under the candle, using his friends right under our noses, to undermine our most important alliances? What will be the consequences for NATO capabilities in the face of escalating threats, of our inaction, especially if Russian influence on prosecutors and police in the Czech Republic could undermine the transatlantic defense industrial base? This is particularly alarming and requires further journalistic investigation to bring it to the attention of the public and the U.S. government.
It’s time to move the candle around, and take a closer look at what is happening right in front of us.