International Policy Digest

World News /26 Jan 2020
01.26.20

What a Bizarre Story of a Beverly Hills Publicity Firm Shows about Power and Corruption in a Globalized World

If you are worried about the current state of democracy in the world, this story of a Slovakian billionaire and publicity won’t do anything to quell your fears.

In the latest in a series of Slovak billionaire, Pavol Krúpa’s stunts, Zdeněk Bakala sued Krúpa in Beaufort, South Carolina federal court for corruption and blackmail.

In September 2018 Krúpa hired the American company “Crowds on Demand” to protest outside of Bakala’s Beverly Hills home.

Upon slightly looking into the incident, it becomes evident that there is a huge and bizarre backstory to the incident that goes all the way to the government of the Czech Republic.

In short, Bakala is a Czech-American philanthropist and owner of much of the liberal media in the Czech Republic and founder of the Bakala Foundation for education. He has become somewhat of a symbol of liberalism in the Czech Republic, and on these grounds, is a target of attack by those in power there. His media company, Economia, is often critical of Czech prime minister, Andrej Babiš, and his fellow nationalist populists and former communist associates. It has been suggested that this is the reason that Krúpa and others, including Czech President Miloš Zeman, have engaged in an anti-Bakala campaign that saw Bakala leave the Czech Republic.

Krúpa has been part of a protracted defamation effort against Bakala, who is perceived as a central figure in the westernization and democratization of the Czech Republic after the 1989 Velvet Revolution. Bakala made his fortune by buying the Czech mining company OKD from the government in 2004 during the Czech privatization period of the 1990s and early 2000s. As in much of the former Eastern bloc, however the privatization period in the Czech Republic wasn’t all smooth sailing.

The government bought OKD back from Bakala under suspicious circumstances. Then finance minister (and now prime minister) Babis nationalized OKD. There is evidence that the price of OKD stocks were deflated so that Bakala was paid a fraction of the price that the stocks were worth. Bakala has since sought a fair trial against the Czech government to return the OKD assets to their rightful owners.

Here, Crowds on Demand enters the picture. Krúpa hired the company to play former OKD miners who were angered by Bakala’s management of OKD and, as such, flew from the Czech Republic to South Carolina to protest in front of his home. In addition, Bakala claims that Krúpa has initiated frivolous lawsuits, promoted death threats on Facebook and instigated criminal investigations against him.

Aside from Krúpa’s latest harassment of Bakala, Krúpa undertook similar actions in Switzerland when Bakala was living there and has attempted to sue Bakala in the Czech Republic. This protracted attack on Bakala stands in contrast with the international justice system beyond the Czech Republic.

Recently Adam Swart, the founder of Crowds on Demand, admitted that he was hired by Krúpa to run a hostile campaign against Bakala. The latest turn of events in the story has seen Swart defect from Krúpa’s side and agree to testify against Krúpa in exchange for a withdrawal of charges against his company. Although this story has not been picked up by the English speaking media, it has been reported on in the Czech Republic, where it was suggested that Krúpa will leave the U.S., despite his being a U.S. resident, to avoid prosecution.

In addition, to this seeming win for Bakala in America, The London High Court ruled in favor of Bakala this year, finding that he does not have to pay back dividends which his company CERCL Mining legally paid itself from New World Resources (NWR).

This instance shows that the U.S. justice system, flawed as it may be, does a better job of handling cases of corruption than the Czech Republic, where Krúpa and those like him have yet to be reigned in by the legal system. Indeed, last year Krúpa was awarded a medal of service from the Czech president, Miloš Zeman.

Krúpa represents the oligarchs who seek to control as much of the Czech Republic’s assets and political control as possible, regardless of the cost.

Let’s hope that the U.S. will remain on the side of justice and along with the UK, demand that Krúpa face the consequences of his actions on U.S. soil. This will hopefully encourage central Europe to build on the foundation of the Velvet Revolution, instead of uprooting it.