DOKUMENT: Audit Jiřího Čunka - Can Mr. Čunek provide convincing...

Mr. Cunek’s declared financial assets

According to tax and other official records obtained by the police, the Cuneks earned, either as wages or through declared profits in Ms. Cunek’s dentist surgery, CZK 8,379,479 in the period from 1982 to 2006. They also received a total of CZK 212,331 in benefits payments.

In the period prior to Mr. Cunek’s appointment as mayor, the couple had declared earnings of CZK 1,512,199 and CZK 171,554 in benefits payments.

Mr. Cunek has stated in the press that he deposited CZK 1,000,000 in savings (equivalent to almost 60 per cent of his total earnings) prior to his appointment as mayor of Vsetin in December 1998. Kroll considers that a deposit of this size could have been made by Mr. Cunek only if he had additional sources of income.

Kroll has established that Mr. Cunek did indeed have alternative sources of income. Kroll estimates that Mr. Cunek’s personal assets in 1998 were considerably higher than previously estimated by the police.

Mr. Cunek has told Kroll that the primary source of his additional revenues during the 1990s were expense reimbursements. This has been confirmed by Messrs Vybostok, Dancak and Kozacek. Given the distances he was travelling it is likely that he earned hundreds of thousands of koruna in this way and much more if he was given a generous mileage rate. Kroll notes these were not declared in his tax returns.

Other sources of revenue have also been identified by Kroll. Mr. Cunek was involved with a number of local entrepreneurs and businesses in the 1990s. He invested his capital in a number of ventures, some of which delivered successful returns, some did not.

In 1994, Mr. Cunek invested CZK 30,000 in a local machine tooling business, Avera s.r.o. He exited the business in April 1997, selling his stake to the other founding partners for an undisclosed amount.

Kroll has to date identified two unsuccessful investments made by Mr. Cunek. In November 1998, Mr. Cunek invested CZK 1,000,000 in a high interest account with Universal Bank. He lost a large proportion of his capital when the bank closed. In 2001, Mr. Cunek invested CZK 750,000 in an investment fund with CSOB. In 2005 he crystallised his investment at a loss, recuperating CZK 544,957.

Mr. Cunek deposited CZK 1,000,000 on 23 November 1998. He made the deposit at the Opava branch of Universal Bank, which was located approximately 200m from the offices of Akcie and Ruchstav, where he was working at the time.

Universal Bank closed the day after Mr. Cunek made his deposit, after the Czech National Bank withdrew its banking license over fears that the bank could no longer meet its capital requirements. Universal Bank’s situation had been documented in the Czech press prior to its collapse. Mr. Cunek is likely to have been one of the last clients to deposit cash with the bank. Kroll has found no evidence of impropriety connected with this deposit.

Following the collapse of Universal Bank, Mr. Cunek was entitled to receive a portion of his investment through a deposit insurance scheme. The first payment under this scheme was for CZK 400,000 and was received on 17 May 1999. According to the audit contained in the police file, he received a second payment of CZK 64,000 in 2003. According to web pages maintained by the Czech National Bank, depositors were repaid from 1999 through to 2004.

Universal Bank was one of approximately ten Czech banks to go bust during the 1990s.

Kroll is aware of at least four examples of Mr. Cunek lending or borrowing significant sums of money. In 1998, Mr. Cunek made a loan to Ruchstav group of approximately CZK 500,000. The same year, he received a loan of CZK 1,500,000 from his cousin, Mr. Machu. In 2000, the Cuneks borrowed CZK 500,000 from an undisclosed associate to fund the acquisition of a dentist surgery. In 2001, Mr. Cunek borrowed CZK 900,000 from an undisclosed associate on a short term basis to demonstrate that he had sufficient funds to support his daughter, who was to visit Australia.

On 12 November 1998, Marie Ulehlova, Mr. Cunek’s retired mother-in-law, deposited CZK 1,500,000 with Union Bank in Zlin. Mr. Cunek obtained signatory power over the account at the same time.

Ms. Ulehlova deposited the money on behalf of Mr. Cunek’s brother-in-law, Petr Ulehla. Mr. Cunek had obtained the money from his cousin Mr. Machu to invest in a joint business.

Kroll has verified that Mr. Machu and Mr. Cunek were planning to set up a business together in Moravia, and that Machu had provided Mr. Cunek with the loan for this purpose. Kroll attempted to reach Petr Ulehla but Mr. Cunek said that he had died.

Mr. Machu was a highly paid IT salesman at the time, working for Sun Microsystems. Czech IT professionals familiar with compensation levels in the 1990s have confirmed that Mr. Machu could have earned and lent this amount of money to Mr. Cunek. Mr. Machu told Kroll that the loan amounted to his annual bonus for the year.

Mr. Machu did not immediately request the loan to be repaid when the business venture was abandoned. Mr. Cunek initially used the money to aid his brother-in-law.

Mr. Cunek deposited CZK 1,000,000 with CSOB on 9 November 1998. The money came from his parents.

According to the valuation of Josef Cunek’s estate in 2006, which is included in Mr. Cunek’s police file, he left approximately CZK 2.5 million in property and CZK 1.17 million in cash.

Kroll is satisfied that the family could have lent Mr. Cunek this amount of money in 1998.

In 1999, Ms. Cunek began working for MUDr. Jitka Benova at her dentist surgery in Vsetin. In late 1999 Ms. Benova fell ill and in 2000, passed away.

Ms. Benova’s husband, Ladislav Bena, agreed a deal with Ms. Cunek on 23 February 2000 to rent the premises. She also agreed an option to buy the practice. Due diligence was conducted and on 30 November 2000 Mr. Bena sold the business to Ms. Cunek for CZK 912,000.

Ms. Bena received an initial payment in cash of CZK 500,000 on 30 November 2000. According to statements made to the police, this instalment was paid for using a loan made to Ms. Cunek by an unnamed friend. None of the Mr. Cunek’s personal savings was invested in the business. Mr. Cunek did not reveal the identity of this friend during interviews with Kroll.

A second payment was made on 29 November 2001 for CZK 340,000 - the balance less CZK 72,000 in rental payments that were deducted according to the agreement. This payment was made from revenues according to Ms. Cunek.

Mr. Cunek told the police in a statement in January 2007 that his wife had not used personal funds to finance her business. He said that their savings were earmarked for their family house, which they had been saving for many years to build. However, Kroll found one instance in August 2002 when Ms. Cunek deposited CZK 200,000 in their personal account.

Mr. Cunek currently owns a number of properties in the Czech Republic. These include the family home, a share in a holiday home and properties inherited from Mr. Cunek’s late father.

In 1986, Mr. Cunek received a plot in Vsetin from his grandfather. The following year, Mr. Cunek received a co-op flat in Vsetin.

In 1988, Mr. Cunek acquired a plot in Vsetin on Plotky street. This street is located a short distance from the Zbrojovka flats where Mr. Cunek was residing. He would later build his family house at this site. He began by building a garage on the site in 1993.

The Cuneks enlarged the plot on which they planned to build their family home through a series of further transactions, beginning on 18 September 1996. Through subsequent transactions with their neighbours, the Woller family, the property gradually took on its present size and shape. As well as acquiring land from each other, the two families acquired two neighbouring plots when they became available.

Planning permission to commence building of their family home was granted on 8 August 2001. Mr. Cunek hired a local firm of building contractors, JASY Vsetin s.r.o., to undertake the work. The agreement was signed by Mr. Cunek and Pavel Hurta, a representative of JASY.

Kroll interviewed Pavel Hurta and confirmed that he is a cousin of Petr Hurta, owner of H&B Real. However, a JASY employee told Kroll that he was a “renegade” member of the Hurta family. The employee said that Pavel Hurta used to work for H&B Real, but left the company for a job “in Bohemia.” Upon his return he joined JASY, a competitor to Coleman SI, a Vsetin-based construction firm controlled by Petr Hurta. This account was confirmed by Pavel Hurta. Pavel Hurta told Kroll that he was construction supervisor at Mr. Cunek’s house.

A number of other contractors were also engaged to work on the project. Petr Hurta made a proposal to construct the roof, but a cheaper alternative was accepted. Kroll has found no evidence that any of the contractors received beneficial treatment from Mr. Cunek nor that they gave Mr. Cunek any preferential treatment.

On 26 January 2001, the Cuneks took out a mortgage for CZK 1.7 million with Komercni Banka (KB). On 28 November 2001 Mr. Cunek paid JASY the first instalment for the work. CZK 400,000 was paid in cash. On 15 February 2002, Mr. Cunek paid two further instalments from his bank account with KB. Records show payments of CZK 256,022 and CZK 100,000. A final payment was made by Mr. Cunek in November 2002. On 18 February 2002, Mr. Cunek also paid by bank transfer CZK 85,000 to Petr Cotek, a roof builder.

These 15 and 18 February 2002 payments, totalling CZK 441,022, are why Mr. Cunek told Kroll that he deposited CZK 497,000 into his bank account, the deposit that some allege came from the bribe. Mr. Cunek told Kroll that the builder asked to be paid by bank transfer, and that to do so he had had to deposit some of his cash reserve. Kroll notes that Mr. Cunek and his wife made other smaller, but substantial, cash deposits that year.