UPDATE 5-Czech PM in survival struggle after court keeps aide in custody

Sat Jun 15, 2013 3:09pm EDT

* Partners in coalition government consider pulling out

* One of PM's closest aides detained in graft probe

* PM fires the aide and denies knowledge of any offences

By Jan Korselt

OSTRAVA, Czech Republic, June 15 (Reuters) - Coalition partners of Czech Prime Minister Petr Necas said they were considering whether they could stay in government with him on Saturday after a court ordered the detention of his close aide on corruption charges.

A court in the eastern city of Ostrava ruled that Jana Nagyova, who had been in charge of Necas's office for years, be remanded in custody. Prosecutors allege she bribed politicians and illegally ordered military intelligence to spy on people in whom she had a personal interest.

The lawyer for another of the eight people charged in the case, head of military intelligence Milan Kovanda, said Kovanda admitted issuing orders for people to be put under surveillance and that one of the subjects of that surveillance had been the prime minister's wife.

Necas said earlier this week he and his wife, his college sweetheart, were jointly filing for divorce.

The corruption operation threatening the prime minister's job was the biggest in 20 years in the Czech Republic, a country that threw off Communism with a "Velvet Revolution" but where successive governments have been mired in sleaze.

After the court ruling, Karolina Peake, leader of one of two junior partners in the coalition, the small liberal party called LIDEM, told Reuters: "The situation is becoming more serious from hour to hour."

The other junior partner, TOP09, gave the prime minister a qualified reprieve. It said it wanted a meeting of the coalition for an honest discussion about the scandal. But it said its priority was to carry out the coalition's programme between now and scheduled elections in 2014.

"Everything will be decided after the coalition negotiations," said Foreign Minister Karel Schwarzenberg, TOP09 chairman.

Necas issued a statement saying Nagyova could no longer carry on in her job. But he said he had no knowledge of the offences she is alleged to have committed, and that some of the charges were "nonsense".

He said that when he returned on Sunday from a scheduled trip to Poland he would meet coalition partners. It could be a showdown that decides the fate of his government.

Necas's Civic Democrat party alone does not have a majority in parliament, so if either of the junior partners turn against him, he is likely to fall. A new election could follow, or President Milos Zeman could try to pick a new prime minister to form a cabinet.

PM'S WIFE

Prosecutors have not officially named the people targeted in the alleged illegal surveillance, but media reports and lawyers for two of the defendants say prosecutors allege one of them was Radka Necasova, the prime minister's wife.

Tomas Matzner, lawyer for military intelligence boss Kovanda, told Reuters on Saturday his client, charged with abuse of power, admitted putting Radka Necasova under surveillance.

"He confirmed he did issue the order for surveillance," said Matzner. "He was not aware that he would damage the interest of the country in any way."

Starting around midnight on Wednesday, around 400 officers, some clad in balaclavas to conceal their identity, raided 31 premises, including bank safe deposit boxes, and seized at least $6 million in cash and tens of kilograms of gold. They did not say from whom they seized the assets.

The court in Ostrava did not rule on the substance of the charges, but by keeping Nagyova in jail it showed it believed prosecutors at least had a credible case. That made it harder for the governing coalition to dismiss the allegations as a witch-hunt by rogue prosecutors.

Nagyova's role is crucial to the prime minister's political survival because, although there are no allegations he was involved, the two have worked very closely together for years.

Outside the court in Ostrava, Eduard Bruna, a lawyer for Nagyova, said she denied taking some of the actions alleged, while in other cases, she argued that she acted in good faith.

Czechs are confronted daily with evidence of corruption, including reports about kickbacks paid to government officials and disdain for the law among the wealthy.

The investigation into Nagyova and others appeared to show a new willingness by police and prosecutors to strike at well-connected people.

That may be, in part, due to Necas himself. Under his watch, the government has tried to appoint prosecutors with a free hand to go after sleaze.

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