Former PM Babiš acquitted: Everything you need to know about today's court decision

This morning former Prime Minister Andrej Babiš was found not guilty of charges relating to EU subsidy fraud in the Čapí hnízdo (Stork’s Nest) legal case, following a drawn-out investigation that formally began in 2017. His then-aide, Jana Nagyová, was also cleared of all charges.

The ruling may play a significant role in the upcoming presidential election, the first round of which is four days away and features Babiš as one of the favorites.

The Čapí hnízdo case refers to Babiš, who is the head of the opposition ANO movement, being accused of illegally and purposefully claiming a EUR 2 million (roughly CZK 50 million) subsidy from the EU for the construction of a multi-purpose complex named Čapí hnízdo, situated south of Prague. 

Only small- and medium-sized companies were eligible for the EU subsidy. Prosecutors argue that Čapí hnízdo was connected with Babiš's multi-billion-crown Agrofert conglomerate, thereby disqualifying Čapí hnízdo from being eligible to receive any subsidy. 

After claiming the payment from the EU in 2008, Čapí hnízdo observed the rules of a small- and medium-sized company before being returned to Agrofert’s hands a few years later. The full amount of the subsidy was eventually returned.

In August 2017, state police requested Babiš’s extradition from the Czech Republic owing to crimes relating to subsidy fraud. Following an appeal and Babiš winning the 2017 general election (serving as prime minister until 2021), Babiš was protected through parliamentary immunity.

The police continued the investigation of the case in 2018, and in 2019 handed over their findings to the state public prosecutor of the case, Jaroslav Šaroch. Prosecution was then halted later in September that year by the Prague Municipal State Attorney’s Office, following no clear conclusion or findings of illegalities being committed.

However, in a twist, the case was then reopened at the end of 2019 by Supreme State Attorney at the time, Pavel Zeman. In March 2022 the Prague Metropolitan Public Prosecutor’s Office charged Babiš with fraud, leading to the case being taken to court. Since then, 15 court appearances spread over months have seen vigorous debate on whether Babiš and Nagyová committed subsidy fraud, bringing us to today's verdict.

Babiš and his aide Nagyová, who had made the application for the loan, argue that the Čapí hnízdo project had been unrelated to Agrofert at the time of application. Nagyová stated in a court appearance earlier this month that nothing illegal had been done, and that all audits found no trace of improper activity. Babiš claims that he transferred part of the ownership of Čapí hnízdo to his son, Andrej Babiš Jr.

Babiš Jr., however, denies knowingly signing any document that would have entrusted himself with the company’s shares. He spoke out against his father in September 2021, claiming that Babiš Sr. had deliberately transferred shares to him without Babiš Jr.’s knowledge. Babiš Jr. later testified against his father in court.

Babiš Sr. claims that his son’s mental health condition – suffering from schizophrenia – makes any accusations unreliable. In December Babiš Sr. accused the media and other political actors of “misusing” his son against him. During a court hearing at the end of 2022 it was found that – following psychiatric evaluation – Babiš. Jr’s mental state was “stabilized” and his testimony was thus valid.

Babiš Sr. also claimed that the whole legal case had been a “political process,” and that he would not have been in court had he not been a politician. The case’s defense team also made clear that Čapí hnízdo had not been competing with, or could not be classified as operating in the same market as, other Agrogert companies during the claiming of the subsidy.

Public prosecutor Šaroch Thursday last week recommended a suspended sentence of three years with a five-year probation period and a CZK 10 million fine for the former prime minister. According to the Czech Penal Code, Babiš Sr. risked being jailed for up to 10 years. According to the plaintiff, the subsidy claim caused damage to the Regional Council of the Central Bohemia region of almost CZK 50 million. 

In his concluding statements this morning Judge Jan Šott remarked that “no evidence was presented that Andrej Babiš was the owner of Čapí hnízdo.” He also referenced conflicting evidence submitted by the police and the public prosecutor.

The saga may not have reached an end yet – today’s decision can still be appealed by the prosecutors, although this is unlikely, writes Seznam Zprávy.

Taking to Twitter this morning to celebrate, Babiš Sr. wrote “I am very glad that we have an independent judiciary and the court has confirmed what I have been saying from the beginning. That I am innocent.”

Presidential candidate Petr Pavel, who will now compete with Babiš Sr. in the first round of presidential election this week, wrote that Babiš "must be opposed by someone who has the necessary experience and has already fought his biggest battles.” He also said that the decision of the court must be respected, and urged his followers to keep a “cool head.”

Fellow presidential candidate Danuše Nerudová said that the ruling “does not change the fact that Babiš only promotes his own interests in politics and contributes to the subversion of democracy.”

The Minister of the Interior was notably critical of Babiš in an earlier tweet, writing “the public has made up its own mind about Mr Babiš's character, not just during the trial – his publicly admitted lies, [and] his behavior towards his own family.”

Prime Minister Petr Fiala wrote “the judgment of an independent court must be respected” and “the real political battles in a democracy take place in elections,” making reference to the upcoming election.

With just four days left until the first round of the presidential election, Babiš will be eyeing up his chances of success. A recent opinion poll put him as the most popular candidate for the first round of the election, and political scientists say that the acquittal boosts his election chances, ČTK reports. Indeed, bookmakers’ odds of Babiš winning the election have shortened since the announcement. 

Today’s decision provides a sense of clarity and earns Babiš some much-needed exoneration amid years-long claims of fraud. Should Babiš win the presidential election, commentators will look back on today as a key moment in the country’s modern political history.