Wednesday, November 30, 2016

Clash of interests: Trump vs Babiš

Our Slovak-born finance minister, Andrej Babiš, is a billionaire whose net worth is some $3 billion. The U.S. president-elect is a billionaire whose net worth is about $3.7 billion. Both of them have had Czech partners. None of them is a real intellectual, both of them speak a kind of language that many ordinary people understand. Both of them have become rich in industries that are not exactly hi-tech and practical man's skills and common sense were their main weapons to do so. It's unavoidable that people tend to compare such people.

Well, there are some differences, too.

Donald Trump has never been a member of the communist party or the communist secret police. His father Fred Trump wasn't a communist, either, and they haven't disinherited an uncle for his emigration to the West. Donald Trump hasn't written a tweet "I really don't support Trump despite the comparisons". Donald Trump isn't preparing a scheme that would allow him to monitor all payments in hotels and restaurants in real time starting from tomorrow.

(I wonder: Is some generous soul searching Google for words "order DDoS" and paying some $25 per hour for one hour of DDoS attack against and/or tomorrow? To make the evil scheme collapse and be abandoned? Hundreds of thousands of Czechs would really appreciate it. This paragraph is pure information, not my cooperation with a generous soul. I can't even think about any cooperation with anything like that. Also note that tomorrow, all restaurants in Czechia will be 10% more expensive in average.)

Both wealthy man are naturally being accused of a clash of interest. However, yesterday and today, several events have taken place that show that the difference between Babiš and Trump in this respect couldn't be bigger, either.

Things shouldn't be so different. Donald Trump's campaign slogan was "Make America great again". A widespread Babiš' billboard says "We want a better Czechia". Those sound almost the same. So when Trump says that to lead the country is more important, you might expect Babiš to say the same. But there's a glitch.

Trump says that he will stop directing business in his assets because the leadership of America is more important. On the other hand, Babiš hasn't stopped anything about his business at all. In fact, when he entered politics, he has escalated especially his holdings that are clearly controversial because of a conflict of interest. He bought several top newspapers some three years ago. And in a recent year, he began to do business in healthcare.

In many cases, minister Babiš is signing subsidies for businessman Babiš. Babiš's company is systematically getting more subsidies from the Czech state than what it pays on corporate taxes. That has included outrageous biofuel subsidies for his yellow rape plant. And many important subordinates of Babiš are doing the same. For example, Mr Jaroslav Faltýnek, the boss of Babiš's party ANO in the House, is also a board member of the Agrofert Holding, Babiš's company.

Yesterday, the Czech lawmakers have approved a bill – widely referred to as Lex [Latin: law] Babiš – that prevents future members of the government from holding large stakes in the media, getting some contracts from the government, and other things. Babiš is angry. Well, more precisely, he is whining as hysterically as you expect from a spoiled brat from a Bolshevik apparatchik family. They are hurting me and want me out of politics even though I am a savior! Before recent regional and senate elections, Babiš was literally making fun out of everyone. He said that he wasn't doing business in healthcare. Instead, he just owns funds that are doing business in healthcare. But he isn't doing business himself because he hasn't privatized anything. Instead, he has bought things from private entities, we were told.

Everyone with IQ above 90 was laughing because this "justification" is so totally ludicrous. Of course he is doing business in healthcare if he's buying hospitals – especially those that help with reproduction. But there are lots of people with the IQ below 90 and most of them vote for Babiš these days. They have been brainwashed to think that there is something universally wrong about privatization – while Babiš must be getting some kind of an exemption because most of his companies are the kind of companies that were obviously state-owned before 1989. And Babiš knows how to manipulate this very low-quality voter extremely well.

He has also informed us how we wants to deal with Lex Babiš. His lawyers have told him to formally place everything in a fund. But he has made it clear that he would still control all these assets just like he controls them today. Imagine how incredibly stupid and arrogant it is. Obviously, if he doesn't give up the managerial influence over these companies, he is violating the law. He is not reducing the conflict of interests at all. And I think that it's obvious that Babiš's plan would violate the law even according to almost all lawyers.

In particular, Babiš wants to put his assets in an "investment fund", as he called it, named Hartenberg. The only problem is that the Czech National Bank must give a license to investment funds and there's no legally working Hartenberg fund in the Czech Republic. And it's obvious that it will only give the license to investment funds that are true investment funds, not just tricks of one owner who wants to obfuscate his ownership. So Babiš's explanation simply can't be legally kosher. Either his fund is doing the work described by Babiš without a license, so it's violating a law and should be stopped, or it is not doing the work, and then it cannot be be used as an explanation why Babiš respects the Lex Babiš bill.

None of these things is a formality. Once Babiš came to politics, his assets began to grow much more quickly – almost by 10 percent in the last year – than they did before. It's very obvious how the concentration of business and political power help each other to achieve better outcomes. And most critics of Babiš agree that this escalating influence was the #1 reason why Babiš became a politician a few years ago in the first place.

For some reasons, Donald Trump doesn't plan to irritate the U.S. voters with self-evident conflicts of interests on a daily basis. He may avoid not only the business decisions over his companies that are "badly suspicious", and Babiš is making lots of these. Trump may avoid all managerial decisions over his companies.

Many things are so similar in America and Czechia. The people's thinking isn't too different. And yes, I think that the Czechs are more rational on many topics. But when it comes to some "details" in seemingly analogous situations, we may see that Czechia is "not quite as Western" as America. The tolerated behavior of a politician-billionaire is a "bit" more problematic than that of his U.S. counterpart.

Rich people who simultaneously have a lot of political power are sometimes referred to as the oligarchs. But it's clear that this word is "mostly" being used for people in the post-Soviet or at least post-communist or Eastern countries. The word just doesn't seem to be appropriate for many people in the West that hasn't been touched by communism. Sometimes, this asymmetric treatment of the very wealthy politicians is unfair – and a sign of Russophobia and other forms of biases. However, sometimes, there are very good reasons why the word "oligarch" is being used for the folks in the post-communist world but not their more Western counterparts.

Czechia is somewhere in between and many of us feel that the word "oligarch" doesn't quite belong to our homeland. But Babiš's will to display conflicts of interests – even some self-evidently irritating or suspicious ones – and the tendency of a large fraction of the voters to say "it's perfectly fine" shows that the word "oligarch" is still much more appropriate for Czechia than it is for America.

Congratulations, Yankees.

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