Towergate: the plot thickens

The pro-opposition liberal daily “Gazeta Wyborcza” on Wednesday published more revelations about the role of the ruling party leader, Jarosław Kaczyński, in a project to build two tower blocks in the centre of Warsaw.

The liberal daily in extensive materials published on Tuesday gave an account of a conversation that took place between the PiS leader Jarosław Kaczyński and an Austrian businessman Gerald Birgfellner. They centred on a project to build two multi-functional office, hotel, trade and apartment tower blocks on land owned by a company which is run by close associates of Mr Kaczyński.

In 2018 work on the project to build the two buildings was stopped as there was no planning permission. The businessman preparing the project, Mr Gerald Birgfellner, a distant relative of Mr Kaczyński, is concerned and approached Mr Kaczyński for help.

Mr Kaczyński acknowledges that the Austrian businessman has incurred costs in developing the project (surveying the land, architectural project legal scoping etc) but is also aware that there was no formal legal agreement for the work to proceed and no invoices provided.

During the conversation Mr Kaczyński and a relative of his involved in the project suggested to Mr Birgfellner that he would have a good chance of winning payment by going to court and that this would actually make it easier for the company which owned the land to pay, because as things stood without formal contracts payment was legally difficult to justify.

More revelations published

On Wednesday “Gazeta Wyborcza’ published documents showing that the project was advanced and credit agreements with the state-owned Pekao SA Bank secured. A meeting in which Mr Kaczyński, the CEO of the bank and the Austrian Bank was held in March 2018 and was one of 20 meetings that are reported to have taken place with the participation of both Mr Kaczyński and the Austrian businessman. The bridging credit was in the end never made available as the company managing the land withdrew from the project as a result of the failure to obtain planning permission for the planned construction.

The opposition attacks

The newspaper and the opposition have accused Mr Kaczyński of violating the legislation on funding of political parties which specifically forbids parties to indulge in economic activity. The biggest opposition party, the Civic Platform (PO) has filed charges with the public prosecutor accusing Mr Kaczynski of offering paid protection. A smaller left wing party has asked the State Electoral Commission to investigate whether the ruling party’s finances are being administered in accordance with provisions of the law.

However, the Law and Justice Party was not itself involved in the project. The project was in the hands of a company and a foundation which are separate entities, though admittedly are clearly under the influence of the ruling party leader and his close associates. There can also be no denying that Mr Kaczyński was taking a leading role in negotiations on the project.

Image problem?

Jarosław Kaczyński has throughout his career built a reputation of being ascetic and scornful of mixing politics with business. There was indeed a time when he was ridiculed for not having a bank account or a driving license and living in a modest townhouse that was owned by his parents. Now parts of the media are trying to portray him as a wily businessman and ruthless negotiator.

There seem to have been two reasons for the attention he gave to this project. The first is a family angle, a cousin of his was involved. Second, and probably more important, the buildings to be constructed were to host the Institute of his brother’s name. President Lech Kaczyński, the twin brother of Jarosław was killed in the Smolensk air disaster in 2010.

There is no evidence that Mr Kaczyński had any personal stake in the investments. But clearly he was interested in advancing causes he wanted financing, the Lech Kaczyński Institute included.

Thanks to the fact that he and his associates have used the assets they took control of during the privatization process in the early nineties several think tanks and media ventures that are supportive of the ruling Law and Justice party have been able to function and prosper. These assets were acquired at a time when there was not public funding for political parties. That changed in the noughties when parties received generous public funding and were restricted in terms of being able to participate in commercial activities.

Planning permission

It is interesting that Warsaw authorities have decided that they would rule out the building of a tower blocks in that location when on the same street there are such buildings and the city centre is now awash with them. Mr Kaczyński and his associates, sensing political danger and possible entrapment, did not attempt to persuade the local authority to change that decision.

That fact and the abandonment of the project drew the ire of the businessman who had felt confident that Mr Kaczyński’s authority would suffice to move the project forward. If he proceeded in good faith the problems with getting paid must have been particularly irritating.

However, if it transpires, as it is rumoured, he recorded all conversations he held with Mr Kaczyński’s presence questions will be asked as to his motives for so doing. If he was so suspicious as to be recording conversations, why was he so trusting when it came to working without a contract?

Tapes take centre stage in Polish politics again

This is not the first time that illicit recordings of conversations are making waves in Polish politics. We have been here before.

Back in 2003 “Gazeta Wyborcza”’s revelations that it was approached by a filmmaker who it was alleged represented those in power for a big pay-off to secure the purchase of a TV company led to parliamentary investigative committee proceedings and a serious political crisis for the government of the day.

In 2014 illicit recordings of senior officials in two top Warsaw restaurants were a huge embarrassment for the last Civic Platform government. Last year a bank owner recorded a conversation with the chief of the financial supervisory authority in which the state official seemed to be soliciting a bribe in return for regulatory favours.