WORLD DECEMBER 25, 2013
Like many of his law-abiding compatriots, Petr Sourek resents how corruption rewards cheating and is a drag on economic growth. But unlike others he decided to try and profit—legally—from the Czech Republic’s sleazy intersection of business and politics.
In 2011 he created Corrupt Tour, a company that offers a series of sightseeing tours that highlight, and mock, some of Prague’s most outrageous corruption scandals in the post-communist era.
“We wanted to reverse the usual order of things,” he says. “Corruption basically feeds on business so we decided to start a business that feeds on corruption.”
The 38-year-old Sourek studied philosophy and the classics (Latin and Greek) at university. Something of a dabbler, he ticks off a litany of work—freelance writer, lecturer, translator and art director among them.
Rather than a straight-forward (and depressing) recitation of crimes, alleged crimes and tallies of stolen public funds—all of which have been previously reported in the local media—Sourek created various themes for his different tours in order to bring some levity to the presentations. One tour takes visitors to the palatial villas of well-connected businessmen at the center of recent scandals—and then to the plain, simple homes these businessmen lived in before forming their connections. (Despite a seemingly endless parade of corruption scandals since the fall of communism 24 years ago, almost no one has been convicted of a crime.) Another tour takes visitors to construction sites where taxpayers' money seems to vanish into air; or, in the case of the Blanka Tunnel, underground. The sprawling tunnel—well over three miles long—was supposed to be finished last year at a cost of 26 billion crowns ($1.3 billion). But the project is $500 million over budget, and, recently, ground to a halt by a new city government that is balking at paying the cost overruns. Police are now investigating whether the whole contract should be declared invalid. Yet another tour highlights allegations of corruption and graft said to permeate Prague's hospitals.
The Czech Republic ranked 54 out of 176 nations in Transparency International's Corruption Perception Index for 2012, with nearly 90 percent of adults viewing corruption as “problem number one” according to Radim Bures, an analyst at Transparency International, citing poll results. The ranking leaves the Czechs far behind most of western Europe, and even Eastern European neighbors such as Estonia, Poland and Hungary. Experts estimate that corruption costs the Czech economy 100 billion crowns ($5 billion) per year—a considerable sum for a country of 10.5 million people.
The tour I went on was in Czech, so almost everyone was Czech (though there was also a Canadian guy). At the first stop on a Crony Safari–where the guide deploys an ornithology motif—nearly two dozen tourists stood in front of a drab, prefabricated, apartment block, the kind that became ubiquitous during communism. The guide tells his fellow “bird-watchers” that one of Prague's “crows” has a secondary nest here, and that his primary nesting place in Prague is unknown, though rumored to be palatial.
This particular crow is Ivo Rittig, one of a handful of influence-peddlers, aka lobbyists, the local media have dubbed “the Godfathers.” Rittig allegedly made his fortune by winning a contract to provide a ticketing system for Prague's public transit system, the main way people get around a city of cobblestoned lanes. According to allegations (for which he has not, as yet, been charged), Rittig makes money—less than a penny—on every transit ticket sold.
Minutes later the tour bus trundles past a hidden address—unseen from the road—that is the official place of business for more than 500 firms.
Eventually, the bus stopped before a huge three-story building that looks like a glass-paneled office block but is, in fact, a single family home belonging to another one of Prague's so-called Godfathers: Roman Janousek.
Janousek is currently on trial for attempted murder in a hit-and-run case dating back to March 2012. He was allegedly driving his Porsche Cayenne with an elevated blood-alcohol level when he ran over a Vietnamese woman and sped away. He could get nine years in prison.
The incident occurred just days after one of the country's top newspapers published spectacular details of wire-tapped phone conversations, allegedly between Janousek and then Mayor Pavel Bem, which seemed to illustrate Janousek's undue influence over various city matters, such as land deals and public tenders. So far, however, neither he nor Bem are facing any fraud-related charges.
Usually those who gained their wealth through suspect means keep a low profile in the community, but even before the hit-and-run incident Janousek had already made a name for himself as a bad neighbor.
The Corrupt Tour visitors heard titillating details of how Janousek somehow managed to build his hulking villa on a plot of land that was zoned for open space; how the top floors offer a breath-taking view of the city (a view that was once enjoyed by the inhabitants of the more modest home behind his); and how Janousek (who has also been dubbed Voldemort, the evil character in the Harry Potter series) reportedly attempted to placate his enraged neighbors by offering them a flat-screened TV.
The tour lasts more than two hours, as Prague's so-called Godfathers are gawked at for their exotic lifestyle and ostentatious homes.
The tour ends with a stop at a different kind of nesting place. At least one of the country's wealthiest men wants to ensure his ostentatious style outlives him. Martin Roman is only 44, but he has already erected his final resting place—a mausoleum that stands over 10 feet tall.
Until his resignation in October, Roman led the country's largest conglomerate—the Czech Energy Utility, known by its acronym CEZ (pronounced Chez)—for nearly a decade, first as CEO from 2004 to 2011 and then as chairman of the supervisory board over the past two years.
By any measure CEZ, which has a quasi-monopoly over the Czech energy sector and is 70 percent state-owned, is a cash cow for the government. The industrial behemoth's total assets are nearly $32 billion, which is more than the next eleven Czech companies combined. And its $2 billion net income in 2012 ranked it second in the country. Its outsized role at the nexus of business and politics is why the country is sometimes referred to as the CEZ Republic.
Police were reportedly investigating Roman over allegations he may have benefited from huge contracts awarded to a major subcontractor—allegations he denies.
If nothing else, Roman knew when to sell his considerable stock holdings in CEZ. When he took over as CEO in 2004, CEZ's share price was worth about $7.50, at today's exchange rate. Within three years the share price soared nearly tenfold, and Roman cashed in, making tens of millions of dollars. Today the share price is about $25, or one-third of what it was at its peak.
As word has spread of Sourek's tours, so too has interest. Queries have come in from around the world, and Sourek says he is considering franchising options in countries as comparatively clean as Germany and Japan, as well as in those better known for corruption, such as Italy, Greece, and Thailand.
Back in Prague, tourists get a laminated handout that gives a brief summary of the people involved in the sites to be visited on the tour. Tereza Madlova, a kindergarten teacher, said she bought a pair of 400 crown ($20) tickets to celebrate a two-year anniversary with her boyfriend.
“We live in Prague and this is unusual experience,” she said. “It is interesting to see how these people live, where they live.”
“Most corruption here is connected to political parties,” said Transparency International's Bures, adding that it is difficult to combat because “corruption is the type of crime where you have two people and no victim who would know about it. So it very much depends on whistle-blowers.”
Karel Janecek, a mathematician (and an anti-corruption crusader) who made a fortune creating algorithms for advanced financial trading, joined the fight against corruption nearly three years ago when he started a fund to reward bureaucrats, or other insiders, who present credible proof of bribery, bid-rigging, and other corrupt activities. He recently doubled the award amount to 2 million crowns ($100,000).
“The basic idea behind the Anti-Corruption Endowment is to support whistle blowers,” he said, “to give them some upside—a little bit of social credit and also some money.”
Sourek says he would gladly see his Corrupt Tour go out of business thanks to a clean government, but he doesn't see that happening any time soon.
“I would love to have a system that is more functioning, like the German one,” he said. “The corrupt system limits opportunities for new businesses and start-ups."
The Corrupt Tour, he says, “was probably the only opportunity I had here.”