Slovakia For Sale

Photo: Peter Župník

Photo: Peter Župník

Svätý Jur, a small town near Bratislava, famous for its wine cellars, is depopulated in the mornings, with its colourful houses and plague column resembling a theatre set. The air is frosty despite the winter sun but the local pub is warm and cosy thanks to the log fire, made of wood from the local Lesser Carpathian mountains that rise right behind the fortifications built in the 17th century to keep out the Turks. As Tom Nicholson enters the pub in his padded jacket, looking as if he has just come down from the hills, the regulars wave a greeting and carry on with their card game. They have accepted him as one of their own even though it’’s been only a few years since he moved here from Bratislava and even though, with his sharply drawn face, long blond hair and beard, he doesn’’t look anything like the locals. For Nicholson is Canadian.

However, a few weeks ago all of Slovakia not only adopted Nicholson but made him a national hero. It all happened because of the Gorilla File, a document whose strange name has become a catchphrase and symbol of the corruption and rottenness of an entire political class. It has brought tens of thousands of people into the streets in the greatest protest since November 1989, frightening politicians who are justly worried they will pay the price of popular wrath in the parliamentary election on 10 March.

Tom Nicholson is the person who knows most about this secret file compiled by SIS, the Slovak Intelligence Service. Since it came into his possession in the summer of 2008 he had tried in vain to publish the results of his investigation in the Slovak media. Eventually he decided to turn the story into a book and just as he was putting finishing touches to it in December 2011 the Gorilla File turned up on the Internet. The huge stir it created throughout the country makes one wonder whether we might be witnessing an unpredictable event that will profoundly affect the country’’s future.

Story Number One

Unhappy is the land that needs a hero, said Bertolt Brecht in the late 1930s. Slovakia seems to be in dire need of heroes right now and Peter Holúbek may be one of them. The SIS milieu, with which Holúbek got involved of his own volition in 1997 and survived several purges under several consecutive governments, is not the most obvious place to look for principled people. The fact is that Holúbek, a.k.a. Peter Mravec, wasn’’t a run-of-the mill snooper. He was a member of an elite group of analysts, one of our very best, according to his former SIS boss who prefers to remain anonymous.

Holúbek lived an apparently ordinary life. He married and had two children, moving his family into a brand new block of flats near the centre of Bratislava sometime in 2000. However, in late 2005 he noticed that cars with government plates as well as vehicles belonging to the powerful Penta investment fund were often parked in the street outside his block. Since everyone in Slovakia, let alone a spook, is aware of the links between Penta and Slovak politics, he reported his observation to his superiors who agreed to launch an inquiry. They discovered that one of the flats in the adjacent block was owned by a certain Zoltán Varga, nicknamed the Midget, an imposing man with a dubious reputation and contacts with the Mafia, who was a Penta security expert and former policeman.

What was even more significant was the discovery that Varga’’s flat happened to share a wall with Holúbek’’s flat in the adjacent building. This coincidence was a godsend for the secret service. The agency requested a court order to set up a wiretap in Varga’’s flat, which was easily granted; the grounds for the SIS original request are not yet known but it is not uncommon in Slovakia. Holúbek allowed engineers to drill holes for microphones from his flat all the way up to the plaster in Varga’’s flat. Wiretapping of this kind doesn’’t involve a transmitter as the wires are directly connected to recording equipment, and it is virtually impossible to detect. And although, as we have learned from the file, Varga had his flat checked by a Czech company specializing in bug detection, engineers searched his flat in vain while Holúbek behind the wall listened to their prying in the comfort of his own home.

The voluminous file named Gorilla, after Zoltán Varga’’s imposing stature, contains Holúbek’’s transcripts of the conversations on which he eavesdropped over a period of eight months, from November 2005 to August 2006, and is full of verbatim quotes. It is a document of remarkable quality and insight into the context, which is one of the reasons why the Slovaks have been up in arms.

The coincidence connecting the inhabitants of two flats through a shared wall and the chain of events that followed are so unlikely it is no wonder the Gorilla File is unprecedented in the contemporary history of Slovakia and probably all of Central Europe.

Story Number Two

Tom Nicholson finished reading the file a long time ago. Ever since Holúbek passed it on to him in the summer 2008, he had tried in vain to get Slovak media interested in the file’’s existence and its contents.

Nicholson recalls, with evident regret, that the daily SME, where he worked as investigative journalist, was unable to secure the publication of a single article on the Gorilla File even though lawyers confirmed the information would stand up in court. “‘I let the editor-in-chief read the Gorilla File,” says Nicholson in fluent Slovak with a charming accent as he orders a beer. “‘Nevertheless, my article wasn’’t published.”’

Many people have asked SME editor-in-chief Matúš Kostolný why his paper remained silent for so long while now, ever since the files have been posted on the Internet anonymously, it has covered Gorilla on an almost daily basis. Kostolný says he couldn’’t be certain of the file’’s authenticity at the time. “In the course of the year that Nicholson devoted to working on Gorilla he wasn’’t able to get a single statement from the police, secret service or politicians, that would have corroborated the existence of the file,”’ Kostolný says, shrugging his shoulders. “‘I couldn’’t be sure it wasn’’t a game played by the intelligence service and I also had good grounds to fear we might be sued.”’

The editor’’s concern is understandable, as Slovak judges have often meted out exorbitant fines to the media for tiny inaccuracies in texts relating to people in power, whose explosiveness doesn’’t even begin to compare to the Gorilla Files. However, looking back Kostolný concedes he should have paid more attention to the files, for example, by calling a key meeting of the paper’’s management in spite of Nicholson’’s plea to keep the files secret from his editorial colleagues. (Nicholson evidently didn’’t trust some of his own colleagues.) In a nutshell, the Slovak media are probably not yet ripe for something as heavyweight as Gorilla, Kostolný admits.

But not only the media: Nicholson passed the file on to the Bratislava police as evidence in an inquiry into a case of bribe-taking by members of parliament under Mikuláš Dzurinda’’s previous government, which features heavily in the files, but the police has somehow managed to “‘lose it”’.

The weekly .týždeň, on the other hand, published an article by Nicholson in April 2011 that mentions a mysterious secret service file for the first time. Nicholson’’s article refers to a part of the file containing “‘the names of 14 members of parliament who had allegedly taken bribes”’ for supporting Dzurinda’’s cabinet and describes his meeting with the state prosecutor who yelled at him: “‘Tell me where you got the file from and who gave it to you!”’

The weekly’’s editor Štefan Hríb recalls that there was “‘absolutely no reaction”’ to the article, even though it has since become clear that by then the Gorilla File had been circulating among politicians as well as some journalists, and the police, too, were aware of it. “‘There was complete silence,” says Hríb.

If Holúbek passed the Gorilla File to Nicholson in the summer of 2008 in the hope that the public would learn the terrible truth of the extent of corruption in Slovakia, he was mistaken. Quite the contrary: Holúbek ended up being fired.

The intelligence service had been irritated by Holúbek’’s activities relating to Gorilla for quite some time. He spent a year putting pressure on his superiors and the police to investigate all instances of alleged widespread corruption that he “‘witnessed”’ behind the wall of his flat. When nothing happened he sent a confidential letter addressed to the chief of the intelligence agency, describing who had tried to thwart the investigation and when, and also naming traitors within the service. In the letter he said he feared for his life since the methods used by people linked to Gorilla included “‘criminal offences of every kind, including physical liquidation”’.

Having received no reply, he sent an e-mail to Nicholson, whom he knew by name only, suggesting a meeting. However, by then Holúbek was already under surveillance by his secret service colleagues who had photographed him passing on the file to Nicholson. He was sacked and lost his pension entitlement.

“‘He’’s been through a lot,”’ says Nicholson, who has also received various threats. The same thing happened to several policemen involved with Gorilla after receiving it from the secret service in 2008: not a single one of them is still employed by the police and the inquiry has been halted twice. However, while Nicholson has been the beneficiary of broad public support and has become a hero, Holúbek has remained virtually unknown, moved out of the notorious “‘flat behind the wall”’ and is in hiding from the press. The only person he sees is Nicholson whom he asked to tell the media that he “will talk once I’’m released from my oath of office”’.

Thus our only idea of what Holúbek looks like comes from an extract of the book Nicholson has been writing, in which he describes him as a tall balding man with distinctive features, who told him during their first meeting: “‘I have tried everything I could and I’’ve come up against a brick wall.”’ The picture is supplemented by the testimony of Holúbek’’s former neighbour who remembers him as a nice man.

Story Number Three

21 December 2011 is the date the time bomb started ticking: it was to explode a few days later when the Gorilla File appeared on a website hosted by a US-based domain and the Slovak media received a link in an e-mail from an undisclosed address (this wasn’’t the first time Slovak journalists gained access to secret documents in this way). “‘I think I know who posted it on the Internet,”’ says Nicholson. He is alluding to one of the newer political parties who are trying to discredit the traditional parties, which implicated in corruption by the Gorilla File. “‘But I never expected it to set off this avalanche of events.”’

It is still not entirely clear to what extent the Internet version of Gorilla is a word-for-word copy of Holúbek’’s transcripts but experts (including Nicholson) believe the overwhelming part of the text is authentic. Either way, what really matters is that the publication of the file has shown the Slovaks how the invisible system of corruption really works, revealing some principles of the power network that octopus-tentacled businessmen and political parties have created in parallel with the building of democratic institutions. “‘It turns out it was privatisation that triggered the widespread corruption which has gradually corroded the entire democratic system from within,”’ says Nicholson.

But privatisation is not the only issue. One intriguing circumstance provides insight into the way the web of corruption works: the file reveals that one of the people who regularly met with the representative of the powerful Penta Group Jaroslav Haščák was the then newly-appointed Minister of Economy Jirko Malchárek. In their conversations Haščák plays the role of the teacher initiating the novice into the mysterious ways of the system.

The file suggests that the key to securing privatisation bids in Slovakia is the ability to get around the rules of the tendering process. The file details the tricks used in the game that is played in the Czech Republic as well, from bribing government ministers to a network of officials involved in approving a transaction. For example, Haščák informs the Minister of Economy Malchárek of the amount he is paying the latter’’s advisers, who also sit on committees deciding on the privatisation of energy companies: “Three million [Slovak crowns, about 100,000 euros] to Ševčík, two million to Vlasatý, the rest later, once the deal has been closed,”’ we can read in the file. Of course, Malchárek stands to gain much more, millions of euros altogether.

The director of the National Property Fund Anna Bubeníková, in her turn, learns from Haščák how to outsmart competitors bidding for medical practices (apart from energy, Penta also has substantial interests in the medical sector), who have submitted their bids in sealed envelopes: “‘You open the envelope enough to stick a microcamera in and run it over the text”’. That can’’t be done unless you have your man on the committee, whom you have paid. And of course, he has such a person.

However, anyone who thinks that this kind of thieving will stop once the privatisation process has been completed is profoundly mistaken. One of the most cautionary tales that the Gorilla File has taught us is the ease with which businessmen can install their people in leading positions within state companies, using political parties. Miroslav Beblavý, a member of parliament for the Social Democratic and Christian Union (SDKÚ), one of the parties in the current ruling coalition, who rose to fame last year as the author of key anti-corruption legislation, believes this practice is particularly pernicious: When business groups place their people in state companies and secure long-term contracts for themselves, it is what the World Bank calls “‘state capture”’.

The Gorilla Files include many examples illustrating how in Slovakia the state has long been captured in this way. For instance, Haščák explains to Malchárek that in the long term only three industries are of any interest in Slovakia — the railways, the electric grid and nuclear energy management (i.e. nuclear waste storage), the last one being the most lucrative since it will require millions in investment. He then goes on to outline for the Minister a new organisational structure right down to middle management level. He wants to install his own men at this level too, as there is a chance that a future minister “‘might not penetrate the company deeply enough and we’’ll stay in business after the election”’. Later on Haščák boasts to the Minister how many people Penta has in the management of key energy companies. In one of them it has “‘three people on the board”’, including two whom “‘we own”’ and one whom they control via a political party.

Another typical phenomenon of the corrupt system is a close entanglement of businessmen, political parties, police and the intelligence service. The following small example illustrates this: on 15 February 2006 the then Prime Minister (and SDKÚ chairman) Mikuláš Dzurinda received from the intelligence service the first interim report on the outcome of Operation Gorilla and the linkages between Penta and politics. During that same week Holúbek overheard in his home Penta representative Haščák reporting to someone on his meeting with the SDKÚ Treasurer Igor Kucej: “Kucej said Mikuláš Dzurinda warned him to be more careful if he wanted to keep meeting Penta”’.

Last but not least, the Gorilla File describes the circulation of dirty money. For example, Holúbek spent several days listening to the “‘gorilla”’ Varga counting banknotes on an electronic money counter, happy that the money was in five thousand notes. Holúbek estimates the total amount was around “‘200 to 300 thousand euros in cash”’ and assumes it was “‘illegal revenue”’. Another detail, however, is more significant: Haščák explains to Bubeníková how she will be rewarded for the services she has rendered in her capacity as head of the National Property Fund. Haščák will help Elementa, a company whose executive director is Bubeníkova’’s husband, buy a commercial building very cheaply and immediately sell it on for a significantly higher sum. The file says: “‘Haščák said he would come up with a safe scenario so that, even if an investigator spent two years looking into it he would not discover the link to Penta.”’

But for the Gorilla File, things would have worked out just as Haščák promised: nobody would have discovered anything. However, thanks to the publication of the file and further investigations by the media the Slovak public has learned that this deal really did go through and that the buying and selling of a commercial building in Považská Bystrica netted Elementa at least 100,000 euros.

Story Number Four

The Gorilla File has caused the same stir in Slovak society as the publication of communist secret police files once did. The insights into the mechanism of a system whose operation was meant to remain a secret has sent shockwaves through society even though Penta representatives insist it is all a lie, hiring the best lawyers in the country (they have even secured an injunction on the publication of Nicholson’’s book Goons) and threatening lawsuits left right and centre. Some of their arguments are legally valid, for example the claim that while the intelligence service had permission to eavesdrop on Varga it should have ignored other visitors to his flat.

However, even the staunchest defence has not so far helped Penta. In the public eye the company, notorious for hiring former communist secret police boss Alojz Lorenc, has come to symbolise evil and every politician who had been involved with the firm has become highly suspect.

Public reaction wasn’’t long in coming. Along with the cold snap Slovakia was swept by a wave of unrest as young people used Facebook to organise protests unseen in the country since 1989. At a rally in Slovak National Uprising square in Bratislava city centre at the end of January the anger of tens of thousand of people was palpable. The crowd cheered unknown young speakers chanting slogans such as “‘gorillas to jail”’ from an impromptu stage in the far distance, with people in gorilla costumes from a theatre rental shop dancing in the wings.

The protests that took place on three consecutive Fridays in a dozen Slovak cities, inspire hope that the younger generation, apathetic until now, has bestirred itself. Alas, young people have also been affected by the widespread suspicion and lack of trust that has permeated society. The protest organisers started to trade accusations of links with political parties that allegedly manipulated them and have announced an interruption in the series of protests after the third rally attracted a far smaller crowd.

The explosion of outrage has thus shifted from city squares into people’’s minds. A survey by the Institute for Public Affairs shows that 74 per cent of the population is not happy with the direction in which Slovakia is going. “‘This is historically the highest figure,” says the Institute’’s social scientist Zora Bútorová. Recent surveys in the run-up to the March general election show a rapid growth of support for populist parties at the expense of the traditional right-wing parties, while the turnout is expected to be at a historic low (an estimated 45 percent). “‘This is an unprecedented decline,”’ Bútorová says. Popular discontent is higher than it was towards the end of the Vladimír Mečiar era because “‘in those days people still hoped Slovakia had another, better side”. Yet these hopes were dashed when the Right failed to support Iveta Radičová’s government, and even more because of the Gorilla File.

Social scientists are at a complete loss. “We’’re on very shaky ground here, explains Bútorová. Anything might happen although new, populist parties are unlikely to prevent the traditional parties coming to power.”  Under pressure from the street protests, politicians have promised to do a lot more to get rid of corruption than before and they are quite clearly aware of their fragile position vis-á-vis popular anger. They can no longer rely on the Slovaks’’ traditional reluctance to protest and a tendency to grin and bear it.

How this bizarre story, triggered by a coincidence and picked up by the intelligence officer Holúbek and journalist Nicholson, will end is anybody’’s guess. The publication of the Gorilla File may turn out to be one of Nassim Taleb’’s black swans, the unpredictable event that will affect the future of the country in a fundamental way.

One way or another, the first victims are already known. Although the head of the National Property Fund Anna Bubeníková, sacked by the government following the shocking Gorilla revelations, claims it’’s all a lie, she has disappeared abroad just in case. “‘Once, in the course of my investigation, I met her in a restaurant and when I told her about the file she burst into tears and ran away,” Nicholson recalls.

Penta itself has faced public anger with Facebook overflowing with appeals for people to give up their health insurance with a company owned by Penta. The Mayor of the spa city of Turčianske Teplice has threatened to stop using the services of Prima Bank (owned by Penta) for administering taxpayers’ money. If he makes good on his threat and if other mayors (most of whom use Prima Bank) follow his example it would hit Penta really hard.

Further threat to Penta comes from the Minister of Interior Daniel Lipšic who, riding the wave of public anger, has promised to investigate every allegation, suggesting the police would come up with revelations so explosive it would “‘no longer be possible to stop the investigation”’. Lipšic also blames the entire political elite for letting the previous inquiry into the Gorilla File run into the ground claiming it just goes to show that people in the highest political circles may have “entered into a tacit agreement not to prosecute top politicians and financiers”’.

Also current Prime Minister Iveta Radičová, who is serving out her term, has vented her disappointment with politics. In spite of all her efforts and of formally being the most powerful person in the country she wasn’’t able to disentangle the invisible web of corruption. In a recent interview she just advised her colleagues whose names are frequently cited in the file to “‘consider whether they should stay in politics”’.

Although the story of the Gorilla File seems to signal the twilight of an entire political generation, it does also offer a glimmer of hope. In spite of its lack of unity the younger generation has shown it is not indifferent to the country’’s future. Younger politicians, who — like Miroslav Beblavý mentioned above — have proved their integrity and ability, have a chance of rising to the top of their parties. “‘Yes, catharsis is the first step toward change,”’ social scientist Bútorová concedes. “‘However, it won’’t come soon and it will be very painful.”

Our two-hour chat nearly over, Nicholson is finishing his third beer while the regulars at the neighbouring table are still playing cards without commenting on his story. They have accepted him as one of their own just as the crowds in the squares that have applauded him. “‘I love this country,”’ says Nicholson who will be granted Slovak citizenship this summer. “The corruption is horrendous but the people here are wonderful and I want to live here.”’

Tom Nicholson. Photo: ?TK / AP

Translation: Julia Sherwood
This article originally appeared in the Czech weekly Respekt.