bne IntelliNews – Former Czech President Vaclav Klaus Reportedly Secretly Sent Soviet Union Loan After Revolution
Post-revolutionary Czech Minister of Finance (and later Czech President) Vaclav Klaus is said to have executed a loan contract made by the head of the Czech Communist government, Ladislav Adamec, with the Soviet Union just before the Velvet Revolution that put end of communist rule, and sent about $ 1.3 billion to the Russians (one third of Russia’s total debt to the Czech Republic), to the daily Hospodarske Noviny (HN) and Aktualne.cz reported.
The documents uncovered confirmed that Czechoslovakia did send money to the Soviet Union and that the Russians recognized the debt. However, the loan was quietly moved to a set of so-called Russian debts from the 1990s that politicians claimed were old pre-1989 debts.
The daily pointed out that the loan to the Soviets was sent despite protests from state bankers at the time, who warned Klaus against the billion dollar loan. “It is not clear from which sources the Czechoslovak Commercial Bank will cover the transfer,” the CEO of the Czechoslovak Commercial Bank (CSOB) Rostislav Petras wrote to Klaus in December 1989.
At the time, CSOB was part of the Czech central bank and was in charge of foreign trade finance under direct state supervision and foreign currency lending.
Klaus himself has denied these allegations. “I repeat once again that I do not know anything about a contract of November 10, 1989.… It has been 32 years. This happened during [the] In communist times, it was certainly a treaty that was not discussed publicly, ”he said, adding that it was a pre-established attack on his person, perhaps in the aim to block his return to politics.
However, based on parliamentary records, Klaus struggled to defend the state budget for 1990 in front of MPs, according to which the money went to the Soviet Union. Klaus used a number of economic terms and assured MPs that all was well and that this was just a paper reflection in the budget of Adamec’s government commitments.
According to the daily, an agreement was proposed in April 1989 by an official of the Ministry of Finance, Zdenek Rachac, who until November 6, 1989 was on the list of the Czech secret police (StB) as a collaborator under the name of Riga code. . Rachac later took a job at the Ministry of Finance, in which he remained after Klaus joined the office as his advisor.
“I do not know the name of Zdenek Rachac, he was probably one of several hundred employees of the Ministry of Finance, but he was by no means my adviser. I never consulted him, I do not know nothing of it, “Klaus refused.
As HN explained, when Klaus became Prime Minister in 1992, Rachac became a member of Finance Minister Ivan Kocarnik’s team. Kocarnik says he has no idea about the loan. “I don’t know if Klaus paid [this loan] after the revolution. If I remember correctly, the loan was pledged by Adamec’s government, ”Kocarnik said.
When Klaus resigned as Prime Minister in 1998 due to uncertain sponsorship from the Civic Democratic Party and the new interim government was appointed, the current President Milos Zeman (then leader of the Social Democrats) became the new chief of staff.
Zeman then hastily agreed with the Russians, who have not paid off their debt, that they would only pay off a fifth of the total debt which amounted to CZK 100 billion and that the rest would be forgiven. The condition set by the Russians to repay part of its debt to the Czech Republic was that the operation be done through intermediaries.
These intermediary roles were assigned (under allegedly Russian conditions) to the RAO UES on the Russian side and the unknown Prague company Falkon Capital on the Czech side despite warnings from the Czech secret service about its founder, Georgian Paat Mamaladze, that the media at the time described as a former Soviet intelligence officer GRU, and Vaza Kiknavelidze, whom the Czech police investigated for his cooperation with Russian organized crime.
HN said that when Falkon Capital started dealing with Russian debt, it had a share capital of CZK 2.5 million, while it was able to repay over CZK 20 billion ($ 400 million ) to Czechia from unknown sources. The Czech government then immediately transferred the full amount of debt to the company.
Later, however, it was discovered that the Russians had indeed sent CZK 53 billion, half of the loan, but where the remaining CZK 30 billion ended up was never clarified, the daily said. In 2012, Zdenek Rachac, who had an idea for the loan, took over the management of Falkon Capital.
According to Russian investigative newswire The Insider, the profits resulting from the repayment of the debt had been divided between the current pro-Russian Czech president Milos Zeman and the Russian party, namely Anatoly Chubais and Alexei Kudrin, as evidenced by the businessman Vladislav Moskalev, currently residing in Canada, who refused to extradite him to Russia.