Prague - Tomáš Kadlec, a former high-ranking counterintelligence officer that was once considered one of the most powerful men in the Czech Republic, is charged with fraud he allegedly committed when he headed Čepro, a state company that administers Czech strategic fuel reserves.

Čepro's former Business Director Alexandr Houška is accused too. They are charged with infringement of duties. Police believes that the embezzlement cost the Czech Republic 200 million CZK (8 million EUR). 

Knowledge is power

Tomáš Kadlec worked for the Security Information Service (BIS), a Czech counter-intelligence body. Later, he headed the National Security Authority (NBÚ), a state organization entrusted with issuing security clearance certificates.

In other words, Kadlec had direct influence over who would or would not be allowed to learn top secret information not only about the Czech Republic but also about its NATO allies.  

Read more: Czech energy security under influence of Russian Lukoil

Hush-hush

Both Kadlec and Houška have already been charged for their activities as Čepro managers. However, the investigation of alleged 4 billion CZK fraud was stopped with the authorities admitting that the charge was ill-founded. 

However, this time the authorities are sure that the charges will go to court. „According to our opinion it is unambiguous... The investigation will not take very long," a state official informed about the case said to Aktuálně.cz.

Read more: Czechs to build new pipelines amid gas crisis fears

The charges were filed in December 2009, but police kept everything secret until now. This is in contrast with the previous investigations of top Čepro managers when police was informing media about the progresses they were making in a timed manner.

According to the information of Aktuálně.cz, the police changed its strategy towards a more secretive approach due to the surprisingly strong political pressures the previous, more publicized investigation was subjected to.

Personal connections

Čepro has always been considered a company with strong ties to politicians and lobbyists.

For example, Tomáš Kadlec was a protégé of the Social Democratic Party (ČSSD) in the era of Prime Minister Stanislav Gross (2004-5). However, the accusation that Czech political parties use Čepro to illicitly finance their activities is not based on any concrete proofs. 

Aktuálně.cz has learned that the latest case is linked to speculative trades with oil reserves administered by Čepro. In short, the company was selling fuel at cheap prices only to subsequently buy it back at higher prices.

Suspiciously, most of these deals were made with one single firm - Czech Energospace, a company with close personal ties to Kadlec's top management in Čepro. Its director Pavel Zídek is a former employee of Čepro and also a personal acquaintance of the other accused Čepro manager, Alexandr Houška.

Read more: European energy giant ČEZ operates paramilitary unit

In addition to the speculations described above, Czech Energospace was also commissioned to provide Čepro with 200 thousand tons of gasoline and diesel, with an advance payment of one million USD transferred to Czech Energospace. However, there was a loophole in the contract - the company had to deliver the fuel only after Čepro asked for it, which it never did.