The Registration Court in Prague has refused to register the Anti-Corruption Endowment Fund (www.nfpk.cz) established by financier Karel Janeček. The young businessman and head of algorithmic trading firm RSJ wanted to support courageous whistleblowers exposing large-scale corruption in public administration. The fund was to provide “grants” for individuals’ investigative activities, as well as reward those who disclosed corruption.
The Prague court blocked Janeček’s plans on the grounds that it does not concern a publicly beneficial activity. “With its content, the purpose of the established endowment fund does not comply with the nature of a publicly beneficial objective in line with the Act on Foundations and Endowment Funds,” the decision of the Municipal Court in Prague states. It was signed by senior judicial officer Romana Janečková.
Sad showcase for the Czech judicial system
“The Registration Court’s decision is absolutely incredible. It is a sad example of the Czech judicial system if someone considers fighting against corruption not to be beneficial to the public,” Janeček told Czech Position. “Just the fact that such an absurd decision can be made — be it due to the judicial officer’s ignorance or for any other reason — starkly reveals the bad situation of law and order in our country and highlights the critical need for citizens’ civil activities, including the maximum engagement in the fight against corruption.”
Janeček could appeal against the verdict to the Supreme Court, but says he won’t. “If we were to appeal, the suit would drag on for half a year, perhaps even a year, and I don’t want to waste my time. We will submit a new, slightly modified application, and we hope that the court will then eventually register the endowment fund. If someone thinks that after this judicial decision I will abandon my plans to continue fighting against corruption, then he is wrong,” Janeček said.
Janeček says that his representative, Lenka Deverová — who prepared the documents pertaining to the Anti-Corruption Endowment Fund — also participated in drawing up the Act on Foundations and Endowment Funds and is the co-creator of the draft bill on the status of public benefit. ‘Public benefit is not a legally defined concept – it is generally understood as benefit in terms of the whole, the so-called general welfare.’
“The grounds for the decision made by the Municipal Court in Prague substantiating the repudiation of the proposal for registration of the Anti-Corruption Endowment Fund in the Foundations Register is one of those that create a bad image of the legal culture in the judiciary,” Deverová said in a statement made available to available Czech Position.
“The senior judicial officer states that the purpose of the proposed endowment fund is not in compliance with Section 1, clause 1 of Act No.227/1997 Coll., which she quotes. Her decision in no manner reflects that publicly beneficial objectives of foundations and endowment funds are mentioned in the act through a demonstrative listing. This creates scope for a court’s qualified assessment of what can beyond this legal listing be considered beneficial for the public,” he said.
“Public benefit is not a legally defined concept – it is generally understood as benefit in terms of the whole, the so-called general welfare. On the part of a judge, this assumes consideration in terms of wider philosophical connections, reflection of the phenomenon of ‘corruption,’ especially of the fact to what extent it endangers civil society. Pursuant to the valid legal regulation (Section 157, clause 2 of the Civil Procedure Code), the grounds for a decision must, among other things, contain facts which the judge deems proven and which not, and by which considerations the judge acted on. The mentioned decision only states that it is clear that the purpose of the endowment fund is contrary to the law, without it being possible to find out how the judicial officer has arrived at this opinion,” Deverová concluded.
A few weeks ago, when setting up the fund, Janeček declared that corruption within the public budget means stealing from taxpayers. “Most people agree that corruption is damnable in ethical terms. Yet few are able to assess its economic impact, which is the distortion of financial flows and ineffective allocation of capital. Corruption is the theft of public property, which affects the whole population and significantly decreases the standard of living of honest people,” he said. ‘Acceptance of a bribe must be understood and morally and absolutely condemned as the worst possible form of parasitism.’
“Acceptance of a bribe must be understood and morally and absolutely condemned as the worst-possible form of parasitism. Corruption and bribery have reached a critical value in this country. Fortunately, there already exists a strong social demand for eradication of this evil,” Janeček added.
The final straw that forced Janeček to establish the Anti-Corruption Endowment Fund was the power-sharing agreement between the ČSSD and ODS at the Prague City Council after both parties lost the Prague municipal elections in October 2010. He considers it “a direct slap in the face to the Prague voters.”
“It comes as no great surprise that right upon its origination the Anti-Corruption Endowment Fund has a strong candidate for being awarded its prize. He is none other than Libor Michálek, for his courageous investigative activity and exposure of corruption at the Ministry of the Environment,” Janeček said. Michálek was fired as head of the State Environmental Fund (SFŽP); Environment Minister Pavel Drobil (Civic Democrats, ODS) later resigned amidst allegations that he had covered up attempts to pressure Michálek to manipulate a government tender and divert funds to ODS party coffers.
“Public activities and the cases of exposing corruption have of late afforded the hope that the until recently almost intact ice of corruption is cracking and has begun melting. If this process successfully continues, it is possible to expect an overall improvement in both the political and economic climate in our country. For instance, additional reduction of the budget deficit, as well as the total tax burden,” he concluded.
