Prague: Mafia Involved in Defense Contracts

Police anti-corruption head makes charges

January 3rd, 2008 issue

(Updated Jan. 4, 2008) Organized crime influenced Defense Ministry contracts, Mladá Fronta Dnes reported, quoting Roman Skřepek, head of the anti-corruption and financial crime unit of the Czech Police.

"It is one of the most extensive cases of corruption," Skřepek said, adding that 24 ministry officials and associated entrepreneurs are currently accused of corruption.

According to state prosecutor Barnabáš Liška, the ministry was penetrated by a mafia which made tens of millions of crowns by manipulating contracts.

He said that a few key individuals were involved in the manipulation of dozens of construction contracts worth hundreds of millions of crowns.

One of the key witnesses, former commander of the air force base in Náměšt nad Oslavou Martin Hejra, told military investigators that the many of the construction contracts at the base were hugely overpriced.

"Several builders confirmed it, but I couldn't stop the swindles," Hejra said. "Those in Prague always told me, 'This is how it's going to be.'"

Several former high-ranking ministry officials who resigned due to the frustration over the corruption also cooperated with the investigation, including Deputy Defense Minister Pavel Štalmach.

"Several times I suggested that the minister should fire the head of the property administration section, but it was in vain," he said.

According to sources MFD did not name, the section chief would give subordinates slips of paper with the names of selected "winners" of construction or maintenance tenders, while speaking of completely unrelated things.

During the period of investigation, the maintenance budget for military buildings was 2.5 billion Kč. ($140.5 million).

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