The Czech Rowing Association (CVS) faces an investigation from their National Sports Agency, after the national news outlet, Radiožurnál, revealed suspicious boat buying practices. From 2019 to 2021, CVS paid CZK 1.8 million (approximately USD 81,100 or GBP 66,000) more for Empacher and Filippi boats than market rates, compared with contemporary official corporate boat manufacture price lists.
CVS purchased the boats through an intermediary called Sportcentrum Račice, which was a subsidiary company of CVS. Sportcentrum Račice organises rowing competitions and runs a hotel at Račice, ordinarily it does not trade boats. (Some athletes were located at the hotel during the 2022 World Rowing Championships.)
In order to deliver the contract Sportcentrum Račice hired subcontractors, one of which was JVL Prosport. At the time Josef Johánek was a majority shareholder of JVL, sat on the board of Sportcentrum Račice, and was the general secretary of CVS. Despite this, he claimed there was no conflict of interest, as per Radiožurnál.
Eighty percent of the funds used to buy the boats were government subsidies. For this reason, Czech government officials have cause for concern. “The submitted documents show signs of wasteful use of the subsidy,” Aneta Lednová, spokeswoman for the Ministry of Education, told Radiožurnál.
It seems an unusual, inefficient and costly approach to procurement. By comparison, Radiožurnál spoke with the Slovak Rowing Federation and Dukla Army Club who buy direct from boat manufactures.
“We bought both new and used boats from Filippi and dealt directly with Filippi. I myself dealt directly with Mr. Filippi several times at the races, he gave me a business card and said if you need anything, call me directly,” the president of the Slovak Rowing Association, Ján Žiška told Radiožurnál.
Another peculiarity was the requirement to deliver both Empacher and Filippi boats in the same contract. This stipulation is thought to be extremely disadvantageous and according to Jiří Skuhrovec from the Datlab Institute, it violates the 3Es (economy, efficiency and effectiveness) of public spending. For this reason, the Dukla Army Club typically divide their orders.
“These are such different suppliers that putting them together in one contract is like buying a ship and a train together. At that moment, you will condemn yourself to economic frenzy, because you will only find a reseller who will negotiate with them, buy it from them and resell it to you, of course, at a higher price. …the order will be overpriced,” the head of Dukla’s logistics department, Roman Zubík, told Radiožurnál. Indeed, Sportcentrum Račice was the sole bidder for the CVS contract.
Although the benefit of buying through an intermediary was questionable, CVS repeated the same model for consecutive years. Purchases went through Sportcentrum Račice, which first had to buy the boats and then resell them to CVS. In 2019 the difference between the purchase price and those indicated by the manufactures’ price lists was CZK 1 million.
Former members of the CVS leadership refused to comment. But the former CVS president Ondřej Šebek, who took the role in May 2021, agreed to be interviewed by Radiožurnál. He saw no wrongdoing. “I don’t see any room for doubt, all tenders were entered in accordance with the law,” Šebek told Radiožurnál. As for 2019’s CZK 1 million difference, he did not wish to comment. “I don’t know what your price lists are, and I don’t want to know.”
In a statement, CVS claimed the price difference corresponds to the costs incurred by Sportcentrum Račice, for example transporting the boats to the Czech Republic. When asked by Radiožurnál how much the transport costs were, they did not answer.
A Filippi sales representative, who supplied Filippi boats to the sports centre, told Radiožurnál that one delivery of boats from Italy usually costs about CZK 50,000 to CZK 60,000. Thus, transport costs do not explain the price differences.
“The purchase of goods through intermediaries is not prohibited, but if the association uses a state subsidy for this, it must meet the condition of economy, expediency and effectiveness,” Jakub Večerka, a spokesperson for the National Sports Agency, told Radiožurnál. “The inspectors will also check whether the tender procedure, thanks to which the Secretary General supplied boats to his own union, was carried out according to the law.”
Should the National Sports Agency uncover misconduct, according to Večerka, it can order CVS to return part or all of the subsidy. It will depend on the seriousness of the misconduct.
There’s more. As of December 1st 2022, Ondřej Šebek is the new chairman of the National Sports Agency, so his current subordinates are examining action taken by CVS from the time when Šebek was president.
“I can guarantee that I will not interfere at all. I’m not crazy so the first thing I do here is to communicate with the inspection section about the inspection of the rowing association,” he told Radiožurnál. “And if there is a mistake, I will proceed very strictly.”