In a shock result, billionaire Andrej Babis’ party has narrowly lost the Czech Republic’s parliamentary election days after the populist leader had to contend with revelations from the Pandora Papers, the biggest offshore data leak in history.
Babis’ centrist party ANO (Czech for “Yes”) was defeated by a center-right opposition group. Voting in the tight race began days after Babis faced investigations and public questioning over Pandora Papers reporting that he used offshore companies to buy a luxury French Riviera estate.
The prime minister, whose turbulent term was marked by criticism of his handling of the coronavirus pandemic and claims that he had tended to his own business interests, sought to discredit the revelations as part of a domestic political smear campaign.
Euroskeptic Babis, who founded ANO in 2012, faced a tough challenge from the centre-right opposition Spolu (Czech for “Together”) and a center-left coalition led by the Pirate Party as he sought another four years in office. Results showed the Spolu group winning 27.7% of votes, ahead of Babis’ ANO party with 27.1%.
“The change is here, we promised it, we will do it,” said Petr Fiala, the Spolu leader who is now a candidate to become prime minister. “It is a victory for decent and value politics,” said Fiala, according to Czech media.
Czech President Milos Zeman could still name Babis as prime minister-designate after promising the billionaire to form a cabinet if his ANO party remained the strongest single party, Bloomberg reported.
In its final days, Babis’ campaign was rocked by reports by the International Consortium of Investigative Journalists and its Czech partner, Investigace.cz, that he used offshore companies to buy a luxury French Riviera estate for $22 million.
Babis, who entered parliament in 2013 and later served as finance minister before becoming prime minister, reacted to the defeat saying his party obtained “an excellent result,” according to Czech media. He added that it was now up to President Zeman to decide who will lead the country
One of the Czech Republic’s richest people, Babis amassed an estimated $3.4 billion fortune during more than two decades as the head of Agrofert, a conglomerate of companies in the chemicals, food processing, farming and media sectors.
Babis was one of the 35 world leaders named in ICIJ’s Pandora Papers. The investigation found that, in 2009, the Czech billionaire used a string of shell companies to secretly buy 16 properties in Mougins, a French village near Cannes. He routed the money through the British Virgin Islands, Washington, D.C., and Monaco, the leaked records show.
After entering politics, Babis did not disclose ownership of the companies or properties in assets declarations public officials in the Czech Republic are required to file every year, according to documents obtained by Investigace.cz.
Babis has repeatedly denied wrongdoing.
“He definitely lost some voters because of this scandal,” Jiri Pehe, director of New York University Prague, told the Washington Post, an ICIJ partner. “I think the opposition alliances will be very united in their efforts to force Babis out.”
With the election nearly behind him, Babis now has to contend with local probes sparked by the Pandora Papers findings.
Shortly after the revelations, Czech police announced they would investigate Czech nationals appearing in the leak, including Babis. The leader of a senate commission said he would request the central bank to examine the transactions involved in Babis’ offshore deal.
In a statement to ICIJ, the U.S. Internal Revenue Service said that the agency was “aware of the release of information by the ICIJ,” and that “[a]nytime a release of this type of information occurs, we work through an internal process to decide how best to proceed in handling this information.” The IRS did not say whether it is investigating Babis’ Washington D.C. company.
Babis campaigned for lower taxes, higher public sector wages and anti-migration policies, and criticized the European Union.
During pre-election debates on national TV this week, lawmakers accused the populist party leader of lying to voters, and of being unfit to understand regular citizens’ concerns. “The prime minister fights against tax havens and then uses them,” said political opponent Fiala.
Here’s what happened when we asked about his offshore company. pic.twitter.com/YpDIkBgtH0
— ICIJ (@ICIJorg) October 3, 2021
Babis insisted that his offshore deal was in compliance with the law. He did not respond to specific questions by ICIJ and partners.