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Wednesday, December 2, 1998
Palacek: Government can't act aloneBy J.M. Giordano Free enterprise, legislation and prosecution key to cleansing business When it comes to dealing with the government's policies on economic crime, Peter Palacek is no stranger. Managing director of the management consulting firm Arthur D. Little International Inc., Palacek is a Czech who lived in Canada for 25 years and received Western schooling in law. He has worked at U.S.-based Little's Prague office for four years. Palacek has much to say about the current government's attitude toward white-collar crime. The Prague Post's J.M. Giordano met with Palacek and asked him to shed some light into the shadows of economic crime. The Prague Post: Do you think that bribery is ingrained in the Czech psyche? Peter Palacek: For years, because of scarcity, you came to the store and there was nothing for you unless you left a bottle of something on the table and when you came back [the storekeeper] would have saved for you a bag of potatoes. You had to have a contact in every store in order not to wait in line every time. So it started with very small things. TPP: How [does the country] break that habit? PP: You break the habit if you move faster into free enterprise, legislation and prosecution of cases. TPP: How do you advise companies to handle problems such as bribery in the Czech Republic? PP: What happened to us with one [company] three years ago -- this is one good example -- we put a contract in and within a week I was called in to sign the contract. You know, they give you a nice, gold pen with which to sign. I asked them if I could have five minutes to look it over and they said it is the same as what we discussed with the chairman. I still asked to look it over. [The contract] contained a clause that if they are not fully satisfied, they reserve the right to pay only 75 percent of the contract. I said that we did not discuss this with the chairman. They said it was a standard clause and it was in every contract. I asked who would -- what third party would -- determine who was unsatisfied. They said come back in three days and they would change it. I came back in a week and it was still there. I made them cross it out and then I signed it. I took the clause to TV Nova and they said, "Peter, you are stupid -- this is in every contract." Once you sign the contract, they say they are unsatisfied [and] you pay the 700,000 [Kc]. You meet the chairman, he gives you back on account 150,000 [and] he keeps 150,000. You have numerous things like this. TPP: What about enforcement? What is your opinion of Minister Without Portfolio Jaroslav Basta and his [Clean Hands] program? PP: I don't think that the current government with Basta is simultaneously responsible for this. I think they have no clue on how to handle this problem. Americans, you know, have got experience. They know how to compartmentalize the information. They know what is the rule of need-to-know. TPP: Minister Basta said that he would welcome German help in dealing with economic crime. Do you agree with Germany intervening? PP: I think America would be far more impartial in helping out. TPP: Finally, what should the government do overall? PP: They have to show the West that they are serious. They had no interest in this during the [Vaclav] Klaus government at all. The new government needs to differentiate from that. They do need help with this, they cannot do it alone.
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