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Financing Zeman and his party
Before the Presidential Elections, which led him to power, Zeman spent almost 10 years in his country home, keeping in touch with the limited number of people, among which was Zdeněk Zbytek. Zeman also had close links with the influential Russian businesspeople who became “Zeman’s friends” over time – for example, Vladimir Yermakov. This person owned an artificial diamond-producing company in Luhansk and moved his business to Russia after the People’s Republic of Lugansk (LPR) was formed in 2014. Senior managers of the Russian company named Lukoil Aviation, Martin Nejedlý and Pavlo Halushka, became involved in financing Zeman and his party SPO (Strana prav obcanu – Citizens' Rights Party) and later became Zeman’s advisors. Nejedlý financed Zeman’s election campaign. Lukoil financed SPO, Zeman’s party, which was run by his personal doctor, Lubomír Nečas.
Jaroslav Strnad was also one of the largest official sponsors of Milos Zeman and the SPO. In 2013, the company DAKO-CZ, which was purchased by Strnad, Beljajev and Lazar in 2007, and was supplying braking systems for moving stock, gave CZK3.5 million to Zeman’s election campaign and an additional CZK4 million to Zeman’s SPO party. In 2014, it gave the SPO another CZK1 million. In January 2015, Zeman took participated in the opening of a new assembly and expediting facility at DAKO-CZ. On 21 December 2017, Strnad and Beljajev, through DAKO-CZ, donated CZK2 million (US$92,160) to Zeman for the January presidential campaign of 2018. Other Strnad companies gave another CZK1.9 million to Zeman. The second most generous sponsor of Zeman became another company founded by Strnad, Composite Components, which donated CZK1 million; this company was managed by Petr Rusek. These two companies accounted for two thirds of the funds collected for Zeman’s campaign.
Jan Nekola sent CZK900,000 to Zeman’s account (his lawyer participated in many important events linked to Strnad). The presidential ‘non-campaign’ of Zeman – he announced that in 2018 he would not conduct an official election campaign – cost CZK17 million. Rather than Zeman himself, the large portion of advertising billboards and other election-related expenses were paid for by SPO, the Friends of Miloš Zeman society (headed by Zeman’s chancellor Vratislav Mynář and head a head of the Jazz Section Karel Srp), as well as Euro-Agency society. Ivan Drobohlav, the secretary at Euro-Agency, used to sell tractors until 1989.
According to Yefim Fishtein, it was Mynář, together with Nejedlý, who implemented corrupt business projects initiated by Zeman, the beneficiary of which had to have been Zeman personally. It should be added that neither Mynář nor Nejedlý has managed to pass a standard Czech state employee security clearance for high-level government officials.
“There is a basis to talk not about political sympathies, but of financial ties – more precisely, about financing in exchange for this or other services,” commented Roman Máca, an analyst at the Institute of Politics and Social Problems in Prague. “It is known that during his first election campaign, people closely tied to Russia could be found in Zeman’s inner circle: Miroslav Šlouf, the organizer of a series of electoral campaigns for SPO and Zeman, who died at the beginning of 2018, as well as Zdeněk Zbytek, Martin Nejedlý and others. Some are part of his inner circle to this day.” The SPO “was created for promoting the candidacy of Miloš Zeman for the post of the head of the state. Without him, it is meaningless. Zeman was elected, so it fulfilled its function. But there are also parliamentary parties, which promote the implementation of the Kremlin’s interests in our country, one way or another,” Máca added.
“It’s great if the president helps the businesspeople of his country. This happens everywhere, or rather, this should happen everywhere, and it is one of the few things that a head of state can influence during foreign visits. It is far less normal for these enterprises to send to the President “thank-you gifts” or provide sponsorships. We can call this whatever we want, it doesn’t change the reality. This is what happened in the case of DAKO-CZ from Jaroslav Strnad’s company,” wrote one of the Czech publications.
Having repaid those who financially supported Zeman’s election campaign and his party (GRIP counted nine statements by Zeman in support of Strnad), Zeman publicly called himself an “unpaid agent of Tatra” and expressed constant dissatisfaction with the laws in his country limiting arms exports; he also complained that the ban of the arms exports to countries, where they could end up in battles, had a chilling effect on the development of business. In March 2017, during Zeman’s visit to Excalibur Army, he called for a reduction of government control over the export and re-export of arms.
Felshtinsky: As for Zeman, his American card was played out completely. For now he only has the Russian and Chinese cards remaining in the deck. Фото: ЕРА
During his speech at the opening of the International Defense and Security Technologies Fair (IDET) in Brno on 31 May 2017, Zeman was even more explicit:
“Sometimes our licensing policy incorrectly limits our exports to the so-called “safe” countries, or to countries not under embargo, under the pretext that re-export risks exist to countries that cannot in any way be called safe. To this I always say: why do you care? You export to safe countries, and what these countries do further is already their business, not ours… I consider such bureaucratic limits the main obstacle for our export.”
In June 2017, Zeman “publicly supported the lax issuance of arms export licenses and even went so far as to criticize his own foreign service for its diligence in preventing arms proliferation.” It was during the same months shortly before the Presidential Elections in the Czech Republic in 2018, when Zeman and his party needed the election campaign funds, and CSG was actively involved in supplying the arms to Azerbaijan through Israel.
In early 2018, an envoy from the Presidential Administration of Armenia approached Washington to complain about the activity of a Dutch registered, Czech-headquartered defense holding, CSG. Specifically, the envoy alleged that the company had knowingly violated a Czech, E.U. and NATO-level arms embargo to supply self-propelled artillery units to Azerbaijan. It was suggested that the arms sale helped finance the successful, if razor-thin, re-election of Zeman in January 2018. Since that time, various sources alleged that the funds from this deal were laundered and then spent on television advertisements at the final stage of the January 2018 Presidential Election in the Czech Republic. The sources of funding for these advertisements have never been disclosed.
By that time, CSG had become one of the key arms enterprises in Central Europe and became one of the top 10 of the largest Czech private companies. With the support of President Zeman and Prime Minister Babiš, CSG had practically succeeded in monopolizing the supply of military equipment to the Czech Army, although the CSG representative categorically denied any assertions of this kind, stating that: “CSG is not a monopolist in the weapons market of the Czech Republic.”
Formally speaking, CSG in this period was the second-largest producer and supplier to the Czech Army and the second-largest exporter of the Czech arms abroad. However, the former head of the Czech Intelligence believed that CSG was the largest producer of arms in the Czech Republic; the Czech press wrote about this as well.
Since 2016, the CSG group companies employed over 8,000 people. In 2016, CSG generated a turnover of CZK15.4 billion and a profit of CZK1.9 billion (according to other sources, CZK756 million). The revenue of the company in 2017 was almost US$1.5 billion, while its sales amounted to around US$5 billion during the same year and its turnover was CZK25 billion (around EUR1 billion).
However, the financing of Zeman’s election campaign took place according to a more complex scheme and was not at all limited by the “injections” from DAKO-CZ and Composite Components. According to the police who conducted an investigation of the firms that sponsored Zeman, they underpaid tens of millions of CZK in taxes in the Czech Republic. In July 2018, nine people were charged with tax evasion connected to this case. The firms issued fake invoices to each other and had falsified books with the intent to defraud the Government, while at the same time transferring hundreds of thousands of CZK to SPO, which in turn, financed Zeman’s Presidential Campaign. Presidential advisor Martin Nejedlý was responsible for the financing of this campaign until March 2018.
Zeman’s sponsors attracted police’s attention almost accidentally. The first step in the fraudulent scheme, according to investigators, was the firm M&T úklid, whose suspicious trading deals were flagged by the Southern Czech branch of the police unit investigating financial crimes, who were conducting a financial inspection. Tax fraud, according to the police, took place in the period of 2014-2017 and involved dozens of different firms. During this time, several firms that are now under investigation, sent money to SPO. As a result of the investigation, M&T úklid ceased operations and was auctioned off. Until 2017, it was involved in, among other things, cleaning of the army barracks and other Ministry of Defense facilities. In 2009, it received CZK tens of millions for these services. The Czech Supreme Audit Office (Nejvyšší kontrolní úřad) repeatedly criticized the situation around these government contracts since in its opinion; the Ministry of Defense was making serious errors in awarding these service contracts.
More than half of the funds flowing to the Zeman’s party (not to be confused with Zeman’s campaign) came from employees of the firms established by Swiss lawyer Fabio Delco who owned the majority shares and who was connected to Putin. This was the same person who registered the company which, on paper, belonged to the musician Sergey Roldugin and to other Russian oligarchs (as became known from the publication of the Panama Papers).
Delco, in turn, owned firms in the Czech Republic through two intermediary offshore companies. They represented two branches of the SPO sponsors. The first branch was Lichtenstein-based Norwalk Holding represented by Delco, which co-owned a Czech company Stegenato, together with businessman Michal Pechan. Stegenato did not have a web page and did not publish financial reportings in the Commercial Register as was required by law. It is not known what the firm did, how much it earned, whether it paid its employees and why the Swiss lawyer Delco, together with Pechan, invested in it.
The second branch of the SPO sponsors was a Swiss-based firm called Waren Partners Ventures owned by Delco. This firm manages the Adamovské strojírny (construction) factory, which, in turn, owns the Adast and Benepro companies. The companies transferred to SPO approximately CZK12 million over the course of several years. In response, Zeman frequently visited Adamov and he took Adast representatives on his visits abroad.
Besides Delco, an Ostrava lawyer named Daniel Tomíček, himself a major sponsor of the “Zeman people”, also supported both branches. Together with his wife, they sent approximately CZK650,000 to the “branches”. His signature appeared on the documents of both branches. In the Czech Republic, he was the legal representative of Delco and held various positions in Delco’s companies.
In both groups of firms, there were companies with names resembling Italian names, which were founded by a Brno resident Daniel Janda. Besides Stegenato, he founded Indimenta (now Adamovské strojírny factory), Formicola and Napoletino, which were owned by Pechan’s fitness center trainer, Michal Uzel. SPO received CZK300,000 from him. Before Uzel became the owner of Napoletino, it was owned by a group of companies from the area around the location of Adamovské plants.
Businessman Michal Pechan was one of the most active participants in the SPO financing. Through his firms, employees donated to SPO more than CZK800,000. In exchange, Pechan’s firm Astacus obtained profitable government contracts from Prague Castle. For example, it organized Christmas markets. At the same time, Pechan’s companies (Astacus, Pralinka, Galaxie Production and Infiteam), as well as Pechan personally, avoided being criminally investigated despite having been suspected in conducting fictional sales.
Among the firms that, according to the judicial complaint, deliberately altered their books, was the firm Bigbone, which was owned by the manager of Pechan’s club Theatro, Jana Bendová. She sent CZK100,000 to the SPO in 2015. Bigbone provided another CZK200,000.
The police concluded that the companies, which at first glance had nothing in common, engaged in fictional trading deals with each other. The unsanctioned deductions amounted to tens of millions CZK. “The defendants managed the activity of a group of firms, which employed the so-called “white hourses” – i.e., people who knew nothing about these companies’ business. They kept books and filed tax returns for these companies; they “owned” the books and managed these companies’ business, which was conducted only on paper,” – the criminal complaint alleged.
According to the police, the central figures in the whole undertaking were businessmen from Tábor – Karel Čaban and Martina Martišová. The investigators stated that several firms, which were used for this operation, belonged to the residents of Brno and to the citizens of Lithuania, Serbia, Romania and Ukraine. “It was uncovered that in fact there were commercial and personal ties between these companies. The same people had access to the bank accounts of various companies and received money from bank machines,” the police concluded.
Nejedlý, who was the Deputy Chairman and Treasurer of SPO until March 2017, stated that he did not know anything about the facts in the above-mentioned police documents: “The annual report on financing was always accepted by the Chamber of Deputies without any comments. I am convinced if that if the companies were under investigation, we would not have accepted their money. The names of the firms do not mean anything to me.” Nejedlý also referred to the SPO Chairman and the personal doctor of the President, Lubomír Nečas, who, according to his own words, also did not know anything about the investigation and refused to return the money received: “We do not have the ability to investigate such things about our sponsors. Unlike journalists, we do not have the time. And in this case, we are talking only about a suspicion. It is all not proven, and therefore we will not do anything about it,” Nečas said.
Zeman’s Chinese Card
In September 2013, the Secretary General of the Chinese Communist Party Xi Jinping announced China’s Belt & Road Initiative – i.e., the creation of a New Silk Road from China to Europe. The Czech Republic became a key location along the Belt & Road route and was one of the first countries in the region to sign the memorandum of understanding with China to promote it. In 2014, Zeman first visited China. His second visit took place in August-September 2015 when he took part in the Jubilee Parade of Victory on 3 September. In turn, Xi Jinping visited the Czech Republic on 28-30 March 2016.
The visit of Xi Jinping to Czech Republic was the first state visit by a Chinese President since the two countries established diplomatic relations and Xi's first state visit to a Central and Eastern European country since he took office in 2013. During his visit, Xi met with his Czech counterpart Miloš Zeman, and both sides agreed to elevate their ties to a strategic partnership as the two countries inked a host of intergovernmental agreements to promote ties in various areas. Czech Republic intended to become financial and air travel hub in Central Europe for China.
Milos Zeman and Xi Jinping. Phptp by ЕРА
In 2016, the Czech exports to China amounted to US$2 billion and imports – to US$14 billion. It is difficult to imagine that in a country of ten million people such as the Czech Republic, a statistically average citizen purchased US$14,000 worth of Chinese goods per year. Prague indeed became the “Chinese gates” to the EU countries. The number of Chinese tourists visiting the Czech Republic has increased dramatically: from only 50,000 in 2012 to about 500,000 in 2017, mainly due to the direct flights between Prague and Beijing, Shanghai and Chengdu. No other country comparable in size to the Czech Republic, with a population of only about ten million, had so many direct flights to China.
By March 2016, China had become Czech Republic's second-biggest trading partner, after EU, while the Czech Republic became China's second-biggest trading partner in Central and Eastern Europe. In response, Zeman refused to mention the human rights problems in China and during his last visit to China announced that China had territorial rights to both Tibet and Taiwan. “He would sell his mother if this is advantageous for him. He is pragmatic. He does not have any friends; he does not care about anybody but himself… Except for one thing: his Chinese business... But trying to build strategic partnership between China and the Czech Republic – it’s like building a union between an elephant and a mouse. But he is really preoccupied with this partnership,” former Czech Intelligence chief commented. He added that at the present stage, CSG had ceased to be the main financial source for Zeman. Petr Kellner, the richest man in the Czech Republic who accompanied President Zeman on his trip to China had taken its place, as well as the finance group named PPF.
In May 2017, Zeman visited Beijing to attend the Belt & Road Forum for International Cooperation that took place on May 14-15. “The topic of most concern to me is the Belt and Road Initiative, the world's biggest initiative for building infrastructure,” said President Zeman at a joint press briefing before his trip to Beijing.
Probably no other world leader has spent as much time and given as much attention to building cooperation with China as the President of the Czech Republic Miloš Zeman. On 19 July 2017, Zeman invited about 1,500 of businesspeople, experts and officials from the Czech Republic and China to Prague Castle for a wrap-up dinner at the conclusion of the China Investment Forum. The Prague event became one of largest investment gatherings since Beijing hosted Belt & Road Forum for International Cooperation in May.
Shanghai-based China Energy Company Limited (“CEFC”) became one of China's leading investors in the Czech Republic with a total investment of more than ¥14 billion (US$2.1 billion). Among its investments were purchasing a majority stake in brewer Pivovary Lobkowicz Group and purchasing the oldest Czech football club SK Slavia Praha, which might have seemed not the best investments from the economic viewpont since both were experiencing financial difficulties. But “[b]rewing and football are associated with Czech culture and lifestyle. So we invested in them and saved them from bankruptcy,” CEFC president Wang said.
However, in the whirlwind of the Chinese party and economic investigations and purges, Zeman’s advisor on Chinese and economic issues Jie Ťien-Ming, who was a member of his Presidential inner circle, had suddently disappeared; he was the person behind incomprehensible Chinese investments into the Czech Republic. At the same time, the Czech security services noted that the Chinese investment that did not seem to make economic sense (e.g., the purchase of a Czech football club or a bankrupt beer brewery) appeared to be a smoke-screen for the Chinese attempts to influence the Czech Republic’s inner life and political forces. According to BIS, the Chinese investment was also linked to the activation of the Chinese spies in the Czech Republic. “All of this was happening with the knowledge, and even under the cover, of President Zeman,” the Czech press wrote. However, the departure of Jie Ťien-Ming had weakened both Chinese influence in the Czech Republic and the ambitions of Zeman, who “presented something short of CZK30 billion coming from China to the Czech Republic as a rescue of the Czech economy.”
Miloš Zeman and Steve Bannon
The supply of CSG arms to Ukraine invaded by Russia 2014, most likely could not have received Zeman’s political blessing and support, or, for that matter, Russia’s blessing and support. According to the former Czech Intelligence chief, Zeman’s support for CSG was gradually diminishing and Strnad, for his part, had already used up all of his ability to capitalize on his connections with Prague Castle.
All of this was happening against the backdrop of yet another strategic shift by Zeman. On “Russian front” Zeman continued to fight against the imposition of sanctions against Russia. “It was the US who started the current trade war with other countries, and any trade war brings only losses and defeat to all parties involved”, Zeman said in an interview with the Czech News Agency.
Zeman was talking about US imposing additional duties on aluminum and steel imports, which resulted in some of the affected countries responding by announcing retaliatory measures with respect to the US. Zeman said that he had learned of the damage inflicted by the protectionism and trade wars from the textbooks on basic Economics: “Any trade war, not only between America and the European Union, but also between America and China, America and Russia, is a war that is the so-called lose-lose strategy, which brings failure and loss to all parties,” he said. The Czech leader added that he could pinpoint who started the trade disputes: “Although I recently praised the American President, it was initiated by the United States in this case,” he said.
It would have not been advantageous for CSG to support Zeman in his anti-American rhetoric since CSG was now trying to enter US-controlled NATO market. Chinese market, of course, could be very promising - especially in the railroad and aviation industries, but the NATO contracts were a reality here and now, while the Chinese market was in the distant future. The sale of weapons to China was out of question for a multitude of reasons.
In March 2018, Prime Minister Babiš succeeded in the expulsion from the Czech Republic of the three Russian diplomats who had been accredited at the Russian Embassy in Prague. This was in response to the poisoning in the UK of the former double agent Sergei Skripal and his daughter Julia. At the same time, Zeman was adamantly against the expulsion. “Babiš and his government, with this albeit small step, supported the impression of the Czech Republic as a pro-European, democratic and friendly Transatlantic country, and in no way pro-Russian or pro-Chinese … Andrej Babiš is departing from the union with Prague Castle and becoming a European politician,” the Czech press commented.
At the end of March, Russian citizen Evgeny Nikulin, who was accused of hacking into American social networks, such as LinkedIn and Dropbox, was extradited to US despite the Russians having had officially requested that the Czech Ministry of Justice extradite him to Russia. Zeman personally asked Czech Justice Minister Robert Pelikan in February 2018 to send Nikulin to Russia. When this did not happen, Zeman's spokesperson Jiri Ovcacek described the move as “unusual.”
Still, this was not the only conflict Zeman had with the US administration at the time. Prague Castle, on behalf of Zeman, condemned on 14 April 2018 the U.S.-led air strikes in Syria. Ovcacek officially stated that “a military solution to the situation should be the last resort.” The chair of the Czech Foreign Affairs Committee Lubomir Zaoralek described the whole situation as “a nonsensical demonstration of a military power” and expressed his condolences to the Syrians. The leader of the Czech Social Democratic Party Jan Hamacek stated that he did not support the Syria strikes since they were carried out without an approval of the UN Security Council.
The Czech Government, however, had different opinions on the Syrian strikes. “The strike against the Syrian regime was inevitable,” said Prime Minister Babiš. The Czech Foreign Minister Martin Stropnicky stated that an immediate and independent investigation of the chemical weapons use by the Sirian government was necessary. The Czech Defense Minister Karla Slechtova announced that the Czech Republic had always condemned the use of chemical weapons and pointed out that the goal of the attacks was not a change of government but a “payback” for the use of chemical weapons by the Syrian government.
Zeman’s authority in Prague was slowly diminishing. His party had now no influence (Zeman had to run as an independent to win the Presidency in January 2018). His own special service agencies did not trust him. Economically, the focus of Zeman was now China, not Russia. Zeman’s “friend” Yakunin, a close associate of Putin and a head of the Russian Railways, ultimately had to leave his post at the Railways. For Zeman, this could signify the loss of status in Moscow, as Yakunin was his chief supporter in Kremlin. Now Yakunin remained only the head of the Dialogue of Civilizations forum, which was widely known to be a structure under a close oversight by the Russian Foreign Intelligence Service (SVR).
At the same time, Zeman could allow himself to become more independent since he could not run for reelection and thus did not need the financial support of his “friends.” This was his last term as president. “He is very smart and he has a very good memory, but he is getting older and seeks revenge on anyone who has ever wronged him in any way. Revenge now rules his life. I consider him a talented person but his talent is not being directed for the benefit of this country,” opines the former head of Czech Intelligence who knew Zeman personally.
“He is a person who is difficult to control, an authoritarian loner, a heavy drinker and a heavy smoker,” says Yaroslav Shimov of Radio Liberty (Svoboda). “But he likes the role of an alternative politician. It flatters him. He doesn’t want to be like the Presidents of the countries of the Baltics or Bulgaria, someone who simply follows the common European line. He likes to provoke negative emotions.”
It is in the context of these events that one should consider a project by CSG, which involves inviting Lanny Davis and Steve Bannon to Prague to “take part in the debate.”
Bannon visited Prague twice, in May and September 2018. Consequently, CSG’s American lawyer, Lanny Davis claimed that it was he who came up with the idea of inviting Steve Bannon to the Czech Republic to “debate” the current affairs. Whether this was really the case is difficult to establish. Davis also told one of the journalists that Bannon agreed to participate in the debate as a personal favor to him.
Lanny Davis. Photo by ЕРА
It was initially announced that Bannon was invited to Czech Republic by the CSG to visit the strategic sites. “I asked the spokesman of the CSG why they were inviting Bannon and he told me that Bannon would visit some strategic Czech companies... They wanted to use Bannon as a point of contact for the future military contracts in the US. But if they would invite only Bannon, it would have been risky. That is why they also invited Lanny Davis… They might then pretend that they invited them both for the debate only,” said Kundra. In fact, as one publication pointed out, CSG was hoping to increase their orders in the US market.
CSG press secretary Andrej Čírtek told Respekt on 14 May 2018 that Bannon and Davis would visit “before the debates on Tuesday” 22 May, several strategic Czech factories, including the Kopřivnitsky auto plant of Tatra Trucks located next to the plan for the production of Tara Defence Vehicle armored vehicles, as well as Pardubice-based companies producing radar systems for Retia and Eldis.
“Steve Bannon and Lanny Davis were able to get to Kopřivnitsky and Pardubice on an American UH-60 Black Hawk helicopter from the fleet of the Slovak Training Academy company. This member of the Czechoslovak Group runs a training center for helicopter pilots in Kosice, Slovakia,” Czech press reported. However, on 23 May, Bannon had already left Prague and arrived in Budapest speak at a forum, to which most Western journalists have not been invited and which one described as an “Ultra-Right forum.”
From the Czech press reports, it could be concluded that Bannon visited CSG’s companies. Nonetheless, if one carefully reads CSG’s formal press release issued after Bannon’s visit, it is impossible not to get the feeling that Davis really did visit the CSG enterprises on 21 May, while Bannon did not: “One day before the debate, Lanny Davis visited several strategic Czech industrial companies of the Czechoslovak Group. And after that, both Americans attended an informal meeting with Czech academics.”
One more unspecified reason for Bannon’s visit to Prague was his meeting with President Zeman, during which they obviously would have discussed the upcoming and long-advertised meeting between Zeman and Trump. On the day of his arrival to Prague on 22 May, Bannon said to journalists that the meeting was inevitable: “Donald Trump has been in office for eighteen months, and I'm sure he will come to visit. Such things must always be discussed and prepared, but it will certainly happen.”
In the meantime, the preliminary meeting between Bannon and Zeman took place in the Presidential Palace in absolute secrecy. According to Respekt, “almost no one in the Presidential Office knew about it; this meeting was not officially prepared for by the departments of the Presidential Office and the Castle did not announce the Bannon meeting in advance. The meeting was announced only after the fact by Zeman's spokesman, Jiri Ovcacek, in his twitter account.”
Kundra confirmed this in a private conversation: “No one in the Office of the President knew that the meeting between Zeman and Bannon would take place. The Office of the President was not ready for it at all. The spokesman for the President announced the meeting after it already took place, not before.”
The debate, in which Bannon and Davis participated, was organized by the Center for Transatlantic Relations of the private college “CEVRO Institute”. It was held on May 22. At 3pm local time, the Czech television started transmitting the debate live. Media reported that Bannon received US$20,000 for participating.
According to the media and the organizers, the debate went well. CSG stated the following in a formal press release on May 28:
“Industrial holding CZECHOSLOVAK GROUP in cooperation with the CEVRO University invited to Prague two influential Americans, who have attracted special guests and also worldwide media to Czech metropolis. Steve Bannon, a Republican who served as a chief strategist for Donald Trump and Lanny Davis, a Democrat and a former White House special counsel, met in debate on Prague’s Žofín on the 22nd of May. The former Czech Minister of Defense and the Ambassador to US Alexandr Vondra moderated.
Both individuals, in addition to the two-hour debate on the topic of ‘What’s Happening in the US?’ also spent 5 hours for the interviews with the media, including BBC, Wall Street Journal, Washington Post or Bloomberg…”
Lanny Davis and Steve Bannon. Photo by ЕРА
…Andrej Čírtek, a spokesperson for the CZECHOSLOVAK GROUP, said: “CSG is Western oriented industrial group operating mainly in machinery and defense industry. It has strategic ties and projects with US corporations or their subsidiaries: For Raytheon CSG provides the training of helicopter pilots and from General Dynamics European Land Systems (European subsidiary of GD Corporation) CSG obtained the license for manufacturing of wheeled armored carriers Pandur. By organizing this debate, we want to commemorate also the 100th anniversary of the modern Czech statehood, the milestone, which would be impossible without key support of USA and then president Woodrow Wilson. We also want to boost American interest in the Central Europe.”
After the meeting with Bannon, Zeman let it be known that his visit to the White House or Trump’s visit to Prague Castle was forthcoming shortly. “In Prague a president who has referred to himself as ‘the Czech Trump’ — indicates that Europe’s populist fever is far from breaking,” – the Washington Post wrote on 22 May 2018.
Nonetheless, things have gotten tenser between the “two Trumps”, because Bannon, who was not well-versed in the Czech economic situation, slammed foreign countries in his speech in Prague for engaging in unfair competition by using cheap labor, not realizing that most of the Czech GDP come from exports, that is, cheap labor in the Czech Republic. It is obvious that everyone, from journalists to President Zeman, noted that misstep by Bannon. One of the publications provided an expanded analysis of Bannon’s speech in Prague on 22 May 2018:
“His fallout with Czech president… was no mere diplomatic faux-pas, but the tell-tale sign of irreconcilable differences. …While Bannon hits many of the right ideological notes, he’s also preaching economic blasphemy”, wrote Tim Gosling after Bannon spoke at a conference in Prague… The economic nationalism of America First and the weakening of NATO unity are serious and tangible threats for the Visegrad Four countries. Although the shift to the right in Central Europe is irrefutable, it is mainly driven by political opportunism, and thus indifferent to Bannon’s blinkered ideological vision…
As Tim Gosling astutely pointed out, Bannon’s criticism of the “unfair competition using underpaid labor in other countries” was met with a “stunned silence” in the audience. What may have worked in the U.S. to criticize alleged unfair trade practices from Mexico or China, could in no way apply to Central European countries. Quite the contrary. After Bannon appeared at the “Future of Europe” conference in Budapest… Hungarian pro-government media were also quick to express their disappointment and frustration over his positions, including his criticism of China and Iran, two pillars of Orbán’s foreign policy.
To post-communist countries for which joining NATO has been the cornerstone of their “return to the West” policy since the 1990’s, he crudely proclaims that “Russia isn’t in your top five threats,” before lecturing them on their insufficient defense spending and urging them to “act like an ally, not a protectorate.” He appears as the errand-boy of a U.S. President whose attacks against NATO and questioning of its mutual defense mechanism have sent chills from the Baltic to the Adriatic.Condescendingly, he tells those countries what they should really look out for: instability in the Middle-East, which could bring waves of migrants to their doorstep. First, the Visegrad Group is not the coveted dream destination of refugees risking their lives crossing the Mediterranean Sea. Second, ageing Central European societies need foreign workers. Third, despite rising xenophobia and growing anti-immigration sentiment, Czechs, Slovaks, Poles and Hungarians know that, while terrorism and immigration might be one of the greatest challenges currently facing the E.U., they pose no direct threat to their own country.
To countries jealously eyeing Chinese investments, he singles out Beijing as the greatest adversary. To countries whose prosperity mostly relies on free trade and exports, he sells the ‘America First’ policy, in which the E.U. and Germany, by far the V4’s biggest trading partners, are lambasted as the biggest foes; a policy where tariffs on car imports could be slapped anytime, and thus threaten 60% of Slovakia’s exports to the U.S. and nearly 100,000 jobs in Poland, Hungary and the Czech Republic.
Bannon’s “economic nationalism” could mean one of two things: literally, it would entail reinstating trade barriers, the end of the E.U. as a free-trade area and economic suicide for Central European countries. In a more imaginative – and V4-friendly interpretation – it could translate as “European nationalism”…
There’s another explanation for the shortcomings of Bannon’s self-marketing strategy: his rhetoric simply cannot be adapted; ‘America First’, as the name clearly suggests, cannot be exported nor molded into a specific local context: it can only be achieved at the expense of other nations, E.U. included.
Clearly, one could not introduce more dissonance into the relationship between Trum and Zeman. “He would never be invited to the White House. He understands this, although he has really tried. He was one of the first who supported Trum before the Presidential Elections, and was one of the first who congratulated him on his win. Trump called him two days after being elected and Zeman bragged that he had already been invited to the White House and was only sorting out the details of the visit. Zeman sent the new Ambassador to arrange a meeting. But the meeting never happened, because the State Department and other US governmental institutions said that Zeman was “bought” by China. The Ambassador is absolutely out of favor now,” recounted Kundra.
In July 2018, the mainstream media criticized President Trump for allegedly inviting Zeman to the White House. Zeman, in turn, has been demonstrating ties to the Trump family through his friendship with Ivana Trump and even offered to name Trump’s former wife Ivana as the Czech Republic’s Ambassador to the United States. The White House declined to consider the offer.
James D. Durso, a director at a consultancy firm Corsair LLC, indicated that Nejedlý was directly involved in coordinating Zeman’s visit to Washington, which did not happen. “Zeman had claimed for months that he was invited by Trump for a state visit, and his team had worked the State Department, the National Security Council, White House staff, and even hired lobbyists to make it happen. Their intent was to combine the visit with insinuations about the Trump children’s Czech heritage (through their mother, Ivana) to suggest that Zeman was a bridge to Trump on behalf of Putin… Babiš also was part of Zeman’s purported delegation to meet Trump in the White House… While this may sound crude to American ears, it was effective propaganda in Europe, and gave pause to American allies there.”
“He carries out exclusively dirty work,” Efim Fishtein said of Zeman. “He gives Putin an international cover. By the way, Zeman is not invited anywhere. And, please note, that when Trump came to power, Zeman said: ‘I will be first to the White House. We are cut from the same cloth’. To this day, he has not seen Trump. I am absolutely convinced that there is a pretty simple reason for this: Zeman has the reputation of a Russian agent and of a great friend of Russia. I think that the people in Trump’s inner circle told him a while ago: do you want to hurt yourself? Why do you need this?”
Nevertheless, Bannon still needed Zeman and the Czech Republic. In September 2018, he attempted to unite the “right” forces in Europe and to make Prague the center of that activity, with Zeman’s political and CSG’s financial and logistical help. “Bannon repeatedly appeared publicly with Britain's Eurosceptic and Brexit's supporter Nigel Farage, as well as with the members of the French National Front headed by Marine Le Pen, Hungarian Prime Minister Viktor Orbán and Italian and Polish populists. Getting the Czech President into that club could have been a boost for Bannon,” wrote Czech magazine Respekt.
Steve Bannon. Photo by ЕРА
“Steve Bannon is on a mission,” wrote The Guardian. “President Trump’s former chief strategist has visited Europe twice in the past four months, touring several capitals. He has been spreading the gospel of the ‘national populist revolt’, and he sees Europe as fertile ground for his global crusade. Maybe there is some truth in that. Italy’s current politics are a gift to him. However, audiences in Prague, Budapest and France have also applauded him… His trips across the Atlantic are part of an ideological struggle between ‘nationalists’ and ‘globalists’… He was recently introduced on stage as “a great thinker” in Budapest. In Italy, he hailed the new far-right populist coalition as a “historic alliance.” In Prague, he called the postwar liberal order a “fetish.” Earlier this year, in northern France, he attended a gathering around Marine Le Pen, where he electrified the crowd with these words: “Let them call you racist, xenophobes… homophobes… wear it as a badge of honor!”
On September 23, Bannon chartered a private jet and flew to Prague for a half-day visit with Zeman. Petr Bystron, a lawmaker for Alternative fȕr Deutschland (“AfD”), an ultra-Right political party in Germany, who comes from the Czech Republic, was there as well. Speaking by Skype from Berlin, Bystron said that the atmosphere in Prague was relaxed: “Zeman's spokesman came in sneakers. He says there was coffee and cake, and that those in attendance complained about the European Union and the President listened as Bannon described his project. The next stop was Budapest, for a meeting with people close to the country's right-wing Prime Minister, Viktor Orbán.”
But the reality turned out completely different. The September meeting of Zeman with Bannon ended with a fissure, according to Kafkadesk. Zeman told the Parlamenti Listy that Bannon’s take on protectionism could lead to a global economic crisis that would damage the Czech Republic, whose economy depends on the exports. “He asked for an audience, got 30 minutes, and after 30 minutes I told him that I absolutely disagree with his views and I ended the audience,” said Zeman.
“The reason why I disagree with his views is because he was defending American trade restrictions,” continued Zeman according to other reporting. “We broke up in a cold atmosphere”, Zeman told reporters citing not only disagreements with Bannon’s protectionism but also his hardline stance on China.
“The chief architect of ‘America First’ came to Central Europe hoping to find the Promised Land. Instead, he came face to face with his own contradictions. The words chosen by Czech President Miloš Zeman to describe his September meeting with Steve Bannon could hardly be pithier,” wrote Kafkadesk.
“Bannon could not find common language with Zeman and had to ‘replace’ Czech Republic with Italy, using political support of Salvini,” the UK Daily Mail continued. Bannon had lost one of his ‘wild cards,’ without a doubt. As for Zeman, his American card was played out completely. For now he only has the Russian and Chinese cards remaining in the deck.
The investigation began on May 1, May 2, May 3.
The opinion of the author may not coincide with the opinion of the publisher.
