A separate theme in the development of the emerging free republics in the Czech Republic and Slovakia is the activities of former members of the State Security Service (StB) and other security forces of the former regime. While political prisoners or other victims of the regime suffered from disease, poverty and other socio-economic problems, members or collaborators of the StB often found themselves, without any difficulty, among the emerging elites of capitalism.
An example is the situation in Slovakia. There, the law on compensation for political prisoners was adopted almost 30 years after the fall of the socialist establishment, which allowed and directed fictitious political trials against inconvenient persons. The basis of the law is that a political prisoner will be compensated for a roughly ten-year sentence in a camp or prison in an amount approaching one month’s average wage in Slovakia (in 2023).
After the fall of the regime and a short police investigation, at the end of which he avoided punishment in the Czech Republic, the StB king himself – the deputy of the Federal Ministry of the Interior and the last StB director, Alojz Lorenc – started his own business in the field of security consulting and later took charge of the security division of the financial group Penta.
The reason was the thick line the leaders of the revolution wanted to draw behind the former regime. In reality, however, the fact that many of the “new democratic” politicians were in fact former collaborators of the communist regime, only in disguise, probably prevailed. Many other important figures also wanted to buy themselves out of potential trouble. It was also a tragicomic, but above all sad, fact that there was virtually no one to investigate the crimes of communism in the early stages of democracy, and even if the investigation had been successfully completed, the case would have been tried until recently by a judge who himself was concerned about how his previous career would be viewed.
The situation in Slovakia has been exploited, for example, by a group involved in business around the Harvard Funds and in a series of problematic actions by Slovak businessman and former StB officer Juraj Široký. In the 1990s, Široký was close to Vladimír Mečiar’s HZDS. Later, he was close to Robert Fico’s SMERU-SD (in 2023 the name was changed to Smer – Slovak Social Democracy).
Široký’s cooperation with government politicians was repaid by unprecedented success of his companies in public procurement, concessions from the state in disputes with his companies and police protection, culminating in an unprecedented situation where the government paid the debts for Široký’s Váhostav with taxpayers’ money.
It has long been obvious to economic journalists and investigators that Široký is behind the latter company. Politicians and Široký himself have denied this for decades. The “hammer, hammer, hammer” tactic was only disrupted by new rules, introduced after pressure from Brussels in the form of new “anti-security” rules, i.e. the introduction of a register of beneficial owners of companies trading with the public sector.
In certain cases, the set of rules made the payment of state money for public contracts conditional on proving where the money would go, i.e. proving the actual end user of the benefits – the owner. In 2016, therefore, Široký and his protectors around and in the government of Robert Fico lost the magic of the simple incantation “unknown owner”.
In the same year, the Public Procurement Office (ÚVO) began investigating the ownership structure of Váhostav. The company refused to document who its real owners were. After the fines, Široký was threatened with more serious sanctions and therefore declared his ownership in January 2017.
As shown by the analysis of the Office for the Protection of Competition, which was part of the investigation, the ownership structure of Váhostav resembled the composition of the former State Security Department. From 25 July 2016, it was also directed from Slovakia to the Czech Republic. The Czech company Helston Investments acquired a nearly 30 percent stake in Váhostav, which it took over from the New Zealand shell company Beacon Holdings. All this was revealed by the bank, which obeyed its legal obligation and provided the Office with documents proving its true ownership. The registers showed white horses in statutory positions and anonymous shares.
Pursuant to the Anti-Money Laundering Act, the bank sent a copy of the beneficial ownership statements of Helston Investments and Beacon Holdings to the Bureau. “In this document, Mr. Ing. Juraj Široký declared that he was the ultimate beneficial owner of Helston Investments,” the bureau said in a 30-page analysis.
Although Široký has admitted to the bank that he has a stake in Helston Investments, only Josef Poštulka, the chairman of the board of directors and statutory director, represents the company in the Commercial Register. According to state archives, he was a superior of Juraj Široký from the StB and a major in the communist secret service. It is obvious that the pair have been doing business side by side practically since the fall of communism. And they’ve been behind major political and economic scandals.
The Gorilla dossier identifies Juraj Široký as a close friend of Ivan Gašparovic, the former president and former right-hand man of Vladimír Mečiar. It was during the years of “Mečiarism” that he and Viktor Kozeny were supposed to tunnel Harvard investment funds and move money from them to tax havens.
Široký did not only do business with his former colleague Josef Poštulka, but also with another Estébáek, Branislav Králík, who worked as a clerk in Washington (Poštulka was a resident in the US capital). According to the Institute of the Memory of the Nation in Bratislava, Široký was Major Poštulka’s deputy at the Czechoslovak Embassy in the USA between 1988 and 1990.
As an intelligence officer, Široký worked his way up to the position of second secretary at the Czechoslovak embassy. He was in the USA from 1985 to 1990. Branislav Králík became Chairman of the Board of Harvard Dividend Investment Fund Slovakia. With Juraj Široký, Králík owned shares in the Harvard Real Estate Company. They worked together in four other companies.
The described examples illustrate that the beginnings of free business in the Czech Republic and Slovakia were built by people who belonged to the elite of the former regime. Members and especially StB officials can be seen in the birth certificates of most financial groups today, even though they are trying hard to rewrite this history.
