• Throughout 2003 Czech anti-corruption police forces underwent a major institutional change when two units specialised in investigating corruption and economic crimes were merged into Corruption and Financial Criminality Investigation Unit. Recent investigations of local government officials and sports officials suggest the merger may yield positive results. • In January 2004 the justice ministry introduced an anti-corruption hotline to be used by the public to report misconduct or suspicion of corruption in the judiciary. By establishing the service, the ministry followed other government bodies that had launched similar services shortly before, to no great effect.
New bankruptcy legislation urgently needed There is little evidence of systemic corruption in the Czech judiciary, with one exception: bankruptcy proceedings. Current bankruptcy legislation lacks transparent criteria for the appointment and removal of bankruptcy administrators by judges. This had provided opportunities for corruption when bankruptcy judges and bankruptcy administrators collude. Specifically, a limited number of bankruptcy administrators may be given access to lucrative bankruptcy cases and collusion between the judge and the administrator may lead to the siphoning off of post-bankruptcy assets. One illustrative case of the potential for corruption due to such collusion is the ongoing police investigation of Jirí Berka, a bankruptcy judge in the Ústí nad Labem regional court. Police enquiries from 2003–04 revealed that several bankruptcy cases against Zbrojovka Brno, ZKL Klášterec nad Ohrí, Stavební podnik Ralsko, Bánské stavby Most and Krušnohorské strojírny Komorany demonstrated a pattern of corrupt practice.1 First, an indebted company with its head office in Judge Berka’s jurisdiction was identified. Berka’s accomplices then bought out the company’s debts in order to accumulate the claims necessary to file a bankruptcy petition. Immediately after the petition was delivered to the court, Judge Berka declared the company bankrupt and appointed a colluding administrator. The administrator’s task was to satisfy claims of those who had bought out the debts
and allegedly, in cooperation with the court-appointed appraiser, to siphon off bankruptcy assets. Although the case is still under investigation, the unfolding details of this and other cases demonstrate clear institutional shortcomings in bankruptcy proceedings in the Czech Republic, the topic of long-time criticism by some private sector investors. At the time of writing, legislation is being prepared to entrust agents other than bankruptcy judges (such as a creditor’s committee) with the power of assigning bankruptcy administrators to individual cases so as to induce armslength relations between bankruptcy judges and administrators. The same proposed legislation aims to impose stricter requirements for entering into bankruptcy administration and, at the same time, establish a body to monitor their conduct.
Suspicious procurements One of the largest recent corruption cases originated in the ministry of foreign affairs. The secretary of the ministry, Karel Srba, had allegedly been manipulating the bidding process for the reconstruction of embassies abroad and the leasing of other official buildings.2 As the media picked up on the story, Srba and his accomplices took out a murder contract on Sabina Slonková, a leading investigative journalist with the daily Mlada Fronta Dnes, who had managed to trace some of the embezzled money. The police thwarted the attempt and, in June
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