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◼ REMARKS Bloomberg Businessweek September 30, 2019Thecruxoftheprosecutors’huntforwrongdoingwas
a proposaltodevelopa hotelandmovietheatercomplexin
Krakow—partofthepowerbaseofKogut,a memberofthe
rulingLawandJusticepartyatthetime.KrychhadmetKogut
yearsbeforethepartywonanoutrightmajorityin 2015 toform
a government.(Hewasamongthehighestvote-gettersinthat
election.)Beginningin2006,Kogut’sFoundationofAidforthe
Disabledwastherecipientof$550,000incontributionsfrom
Krychandhiscompanies,ora fifthofallKrych’scharitable
giving,accordingtodocumentsseenbyBloomberg.Thepros-
ecutor’sofficeallegedthatKoguthelpedmaintainfavorable
zoningrequirementsfortheplannedKrakowcomplex,andso
thecontributioncouldbeconstruedasa defactobribe.(An
auditofGriffinbytheU.K.lawfirmDentons,commissioned
byKrych’scompanyandseenbyBloomberg,saidthat,apart
froma fewdeficienciesinpaperwork,therewerenoanoma-
liesor“fictitiousormisleadingentries.”)
Krychsaidathisarrest,andhasmaintainedeversince,that
thegovernmentallegationwasabsurd—especiallysincethe
KrakowprojectwasthesmallestofthreethatGriffintookover
whenit boughtthedeveloperEchoInvestmentSAin 2015 and,
infact,heneverseriouslyconsideredpursuingit.“Iwouldbe
anidiottogivea bribefora projectwitha valueoflessthan
€5millionwhenthere’sa €5billioninvestmentportfolioat
stake,”hesays.Thepropertyhassincebeenboughtbythecen-
tralgovernment,whichmayturnit intoa museum.
Kogutis nolongerthepowerheusedtobe.He’dbeenthe
chairoftheSenateInfrastructureCommittee,but,onDec.19,
2017—thedayofKrych’sarrest—theNationalProsecutor’sOffice
triedtogettheSenatetowaiveKogut’slegislativeimmunity
tochargehimwithcorruption.Kogutdeniedtheallegations—
whichwerepunctuatedwithnewsofKrych’sdetention—and
waivedimmunitytofightthecharges.Onthesameday,Law
andJusticesuspendedhimfromtheparty.Heresignedascom-
mitteechairbutstayedonintheSenateafterhisfellowlegis-
latorsrefusedtoallowprosecutorstoarresthim.He’sinsisted
onhisinnocence,buthisson,whousedtorunthecharity,
spentmorethana yearunderarrestontheKrakowallega-
tions,whichhedenied.Kogut,whoplanstorunasanindepen-
dentinOctober’slegislativeelections,declinedtocomment.
SeveralweeksafterKrych’srelease,thebusinessman
says,hereceiveda messagefromAdamHofman,a public-
relations executive who used to be a ruling party lawmaker.
After agreeing to leave their mobile phones behind, Krych
says, they took a walk in Lazienki Park in central Warsaw.
According to Krych, Hofman said the real estate magnate was
a victim of a power struggle within the party. Politicians close
to Zbigniew Ziobro, the minister of justice, wanted to reduce
Senator Kogut’s clout in the Krakow region to promote one of
their own allies, hence the probe into the charity. According
to Krych, Hofman suggested he have dinner with Ziobro to
talk over the situation. Krych says he declined.
Hofman tells Bloomberg he talked with Krych in the park
but the meeting wasn’t his idea. He says he knew Krych from
previous work together (a claim Krych denies) but that, afterlisteningtoKrych’sstory,hedidn’tseeanyopportunities
todomorebusinessandtheynevermetagain.Hesayshe
delivered no message to Krych and he wasn’t sent by anyone.
Ziobro’s office didn’t return requests for comment.
Infighting among centers of power is a trademark of the
Law and Justice government. Its decentralized organization
encourages it, with its de facto leader Jaroslaw Kaczynski hav-
ing no official role other than rank-and-file lawmaker. The
party is itself an agglomeration of several preexisting politi-
cal groups, including one led by Ziobro. Cabinet changes can
have dramatic effects, including the sacking of executives at
state-controlled companies, the top posts of which are often
treated as sinecures for allies of powerful politicians.
In the past couple of years, Law and Justice has ignored
the highest courts and passed legislation boosting the sway
of politicians over the judiciary. The party has combined the
job of justice minister—usually a political appointee—with that
of chief prosecutor, who’d been politically neutral. The pur-
suit of justice has thus become a tool that “belongs to a sin-
gle political party,” says Krzysztof Parchimowicz, a prosecutor
who heads a group that says it’s fighting to maintain the profes-
sion’s autonomy. Much concern has been raised about the law
that allows for temporary detentions without formal charges.
The number of such jailings has risen steadily, from 13,665 in
2015 to 19,655 in 2018, according to the Helsinki Foundation
for Human Rights, Poland’s largest human-rights watchdog.
Last year the European Court of Human Rights issued rulings
against Poland in three cases involving temporary detention.
For businesses, the justice system is a minefield. “There’s
a very serious risk when the prosecutor’s office can step into
business affairs at any time and with any arbitrary reason,”
Parchimowicz says. “The bigger the role of the state prosecu-
tor, the less room for economic freedom and the more dam-
age to the creativity needed for business.”
When he was thrown into jail, Krych asked for a broom
and mop to clean his cell. He’d resigned from all his posi-
tions at Griffin at his arrest and was therefore heartened
it continued to operate neatly and efficiently without him.
It concluded one of Poland’s biggest real estate deals—one
worthabout€1billion($1.1billion)—whilehewasincarcer-
ated.HewasalsohappythatPimcoandOaktreestuckby
him.Bothcompanies—boundbytherigorousU.S.Foreign
CorruptPracticesAct—hada stipulationthatallowedthem
toabrogate their contract with Griffin for lack of compliance.
They chose not to activate the escape clause.
About a year after his release, Krych went in a leased
Maybach to outside the prison in Sosnowiec to show a
reporter where he said he’d been mistreated. He didn’t flinch
as guards started filming him and his entourage. “What hap-
pened here,” he said, “poses a risk that everyone who’s con-
sidering investing in Poland should be aware of.” He also
related a recent conversation at one of his monthly sessions
in the prosecutor’s office.Askedwhat he was up to, Krych
said without emotion,“Pursuingbusiness interests outside
Poland.” <BW> �With MarekStrzelecki