Whistleblowers And The Unravelling Corruption In Croatia

 

Fear of reprisals for reporting wrongdoing, whistleblowing on corruption or possible corruption, breaches of legislative regulations etc. is a real concern when fighting corruption and this fear is very pronounced in Croatia. Croatia (like all former Yugoslavia member states) is a country riddled with entrenched corruption stemming from the communist public service and administration culture and it needs a stronger whistleblowing regime. To have a strong whistleblowing regime it means freedom from damaging consequences for those who report wrongdoing and it also means that the number of whistleblowers present and active needs to be high. That is, the number of people raising complaints and pointing to wrongdoing.  That means Croatia needs better protection laws for whistleblowers; better freedom of information laws; a third party to report wrongdoing to in a process of operational  “checks and balances”; cultural change at the organisational and individual levels; and compensation for those suffering retaliation for speaking out.

According to the Croatian justice ministry’s June 2017 issue of Action Plan for 2017-2018 under the Implementation of the Anti-Corruption Strategy for 2015-2020 (PDF of Action Plan), the law that would, among other, make provisions for the protection of whistleblowers should reach the parliament chambers in the third and fourth quarters of 2018. The justice ministry has already established a working group under the government’s Advisory Committee On Combating Corruption.

The above anti-corruption strategy recognises and acknowledges the fundamental role of whistleblowers in highlighting corrupt practices and in contributing to enhance transparency and political accountability. The strategy stresses the “need” to guarantee whistleblowers effective judicial protection, including measures to strengthen judicial transparency, enhance the reporting system for illegal conduct, and complete the regulatory framework to safeguard whistleblowers.

Croatia’s economy is presently overcast by thick clouds of unease and suspicions of major corruption emerging from the Agrokor affair. Related to the Agrokor and its majority owner Ivica Todoric affairs threatening to bankrupt the country once debt recovery claims, especially those from foreign banks such as Russia’s Sberbank, come knocking on the door sits, of course, Pandora’s box of corruption at the highest levels of political echelons. Should the lid of that Pandora’s box be lifted then even if all the “evils” escape into the open the mythical hope (for justice and good) that should remain inside the box is likely to be weak and flimsy, if at all existing.

To open Pandora’s box means to perform an action that may seem small or innocent, but that turns out to have severely detrimental and far-reaching negative consequences for those who open the box and for those associated with them in dealings. It was about one month ago that a former member of the Liberal Party in Croatia, Bruno Mirtl,  revealed to the public that over 10 years ago he received 50,000 kuna (about 6,500 Euros) for the party’s funding from Ivica Todoric of Agrokor, In the days before Todoric’s arrest in London, it was announced that Agrokor – which had enjoyed privileged treatment by all Croatian governments for decades – had filed false accounts, hiding a loss of several billion Euros.

As Mirtl rightly observes, if even such a small party as his own obtained unlawful funding by Todoric, then there is no doubt that the main, more influential parties (Croatian Democratic Union/HDZ and Social Democratic Party/SDP) received much more substantial sums from the same source.

Mirtl’s testimonial account could trigger a domino effect on the Croatian political scene, forcing drastic and forced exodus from the major parties of significant members and political power-brokers come wheelers and dealers. But the domino effect in a political playground can only happen if those fighting against corruption possess hope that such battles can in effect be won. If one was to judge the strength of that hope upon past experiences then cover-ups, stalling of legal processes etc. that have occurred in similar circumstances, that hope will evaporate into thin air. It would seem that major political players from the major political parties, supported by the bent mainstream media are digging their heels in and trying to suppress the Mirtl and Todoric affair under similar connotations that permitted Todoric to pull wool over everyone’s eyes when it came to the origins of his enormous personal wealth.

This goes without saying that if the whistleblower protection is inserted into the legislation draft, one really never knows how even the tightest of plans for such legislation to go ahead can be hacked out of existence, the HDZ government and SDP opposition (as both have governed the country over periods in the last two decades, after Homeland War and may have had their fingers deeply immersed in the corruption pie) would no doubt try their damnedest to  find solutions that ensure wolves (guild owners, managers, senior political officials) remain fully satisfied and the sheep, though perhaps reduced in number, remain anaesthetised.

And the fact that the recently established Parliamentary Inquiry Committee (which is in no way independent of political parties as it should be) on Agrokor is about to be extinguished lends itself to more unrest and recriminations across parliamentary benches. The governing HDZ insists that the applicable legislation requires for the Committee to stop operations once legal proceedings directly related to the reason why the Committee is set up commence, the Committee has no further jurisdiction. The SDP opposition, on the other hand, think differently and says the Committee can continue its operations regardless of separate legal proceedings held in court. Given SDP’s history as well as HDZ’s one doubts that when it comes to unearthing details of corruption in this case the dispute between the two major political parties about whether the Committee can or cannot continue appears blatantly contrived.  It does leave room for speculation as to the genuineness within the motives to set up such an inquiry in the first place and how much of its rushed start has to do with throwing dust in public’s eyes, giving the outlook of real search for corruption was afoot when, in fact, it was all an exercise to win on time.  The real crunching of corrupt culprits and their ill-gotten wealth may never even reach the door that leads into the room where justice and consequences for corruption are dished out as a matter of normal governance of Croatia.

Not all the sluggishness and lack of action from Croatia’s leadership when it comes to affirmative matters and getting things done for whistleblowers, upon whose existence fighting corruption largely depends, can be attributed to the governments of present and past. Croatia’s presidents since year 2000 have not stepped up to the action mark either. And this goes for the present president Kolinda Grabar-KItarovic as well. Shortly after taking office as president of Croatia, Kolinda Grabar Kitarovic appointed Vesna Balenovic as her commissioner/adviser for whistleblowing issues. Vesna Balenovic is a well-known whistleblower, who few years ago denounced some of the executives of the INA oil company (of national importance) where she was employed. She was immediately dismissed, ending up with defamation charges by then Chairman of INA’s Board of Directors Tomislav Dragicevic and former Minister of Finance Slavko Linic. Later on, Chairman of INA’s Supervisory Board Davor Stern advanced the idea that Vesna Balenovic could be re-admitted into the company as commissioner for the fight against corruption. This never happened, but Balenovic has remained present in public life as founder and president of the Zviždač association (Whistleblower Association). INA has stopped being a public company for some time, as the administrative rights were transferred to Hungarian MOL (this matter is the subject in criminal proceedings for corruption waged now for years against former Prime Minister Ivo Sanader). This deal was accompanied by extensive corruption (refer for example to former Prime Minister Ivo Sanader case) that still weighs not only on the bilateral relations between Croatia and Hungary, but also on domestic politics and the work of the Croatian judiciary, which is definitely not equipped to face these kinds of challenges on a fair-and-square basis as it itself is said to be corrupted and filled with former communist operatives that should be lustrated out of the judicial corridors and benches.

Four months after being appointed as commissioner/adviser for corruption by president Grabar-Kitarovic, Balenovic left that office in protest, arguing that she had not even seen a glimpse of the president in the entire time she worked in her cabinet. One could (should) be a cynic here and say that Balenovic had obviously not realised that her only task was to be a trophy in Grabar-Kitarovic cabinet, who obviously has close ties with many persons responsible for or who have contributed to the sluggishness and alarming inaction when it comes to real fighting with corruption that would see deposition, lustration and even imprisonment of quite a number of political elitists.

Taking into account the constant quest to create a climate conducive to entrepreneurship, that would save the ailing economy, both HDZ and SDP political echelons, as well as president Grabar-Kitarovic, it is truly – in the climate where institutions and big business pander to the will of the governing elite and where public administration is heavily politcised – unrealistic to expect any increases to workers rights that include the protection of whistleblowers. Not increasing protection of whistleblowers in law and practice would, without a doubt, devastate further the very core of any economic or business culture recovery or hope for it. Ina Vukic

 

Pot Calls Kettle Black – Agrokor Corruption And Political Wile In Croatia

Agrokor’s owner Ivica Todoric,
leaves Westminster Magistrates Court in London,
Britain November 7, 2017.
Photo: REUTERS/Simon Dawson

High corruption risks and practices, political patronage and nepotism, and inefficient bureaucracy rolled over from former communist days are among the challenges that Croatia has not truly dealt with yet. To deal with that lustration would be an absolute essential.  Corruption and bribery are especially prevalent in the judiciary, public procurement, and the building and construction sector. While the primary legal framework regulating corruption and bribery is contained in the Criminal Code and the Corporate Criminal Liability Act, which make individuals and companies criminally liable for corrupt practices including active and passive bribery, money laundering and abuse of functions. Facilitation payments are prohibited, and gifts may be considered illegal depending on their value or intent. The mechanisms and practice of policing and monitoring compliance with the relevant legislation is practically non-existent. Hence, the road to what is there today with the Agrokor concern – too late to save the company or the livelihood of tens of thousand employees.

Media is running flaming hot in Croatia and abroad regarding the Tuesday 7 November corruption and fraud charges arrest at London Met Police of Ivica Todoric, majority owner of Agrokor business concern whose plummeting towards bankruptcy has also been threatening to bankrupt the country as a whole. One wonders, though, how much of this concentrated hype against Todoric has been designed to hide away from the media spotlight and responsibility of those not related to Todoric family or Agrokor staff. How many in the current and past governments, how many currently sitting in the Croatian Parliament have had their fingers in the Agrokor pie since its foundation during the time of former communist Yugoslavia.

How much of this concentrated media and government effort against the Todoric clan (however justified under law and justice) is in effect a ploy to save the government from falling! Friday 10 November is bound to be a day of upheaval and patience generally running very thin as the yet another vote (in about 18 months’ time span)  of no confidence in the government jumps onto the agenda for the day’s proceedings. Reportedly the opposition Social Democrats are seeking a vote of no confidence against the HDZ- led government.

As both Social Democrats/SDP and Croatian Democratic Union/HDZ have held government power in Croatia since independence from communist Yugoslavia and, many of their leading individual powerful members had held positions of power in the former communist regime, which institutionalised corruption and theft in that country, one truly cannot trust that Social Democrats’ motives are noble in this. How many thieves and corrupt individuals are they trying to hide, one wonders.

Croatia’s richest businessman Ivica Todoric, the founder and owner biggest private food and retail company, the drowning Agrokor that’s been shaking Croatia’s economy for months, threatening to bankrupt the country, was arrested after reportedly handing himself in to the Met Police Tuesday 7 November 2017 in London amid allegations of corruption, fraud. It is alleged that he has embezzled millions from his large retail company, leading it into a massive bankruptcy that is now an issue of national concern in Croatia and the countries around it. Todoric appeared in Westminster Magistrates’ Court and District Judge Richard Blake granted him freedom on 100,000 British pounds ($132,000) bail.

A European Arrest Warrant was issued after the firm collapsed, having amassed debts of over 5 billion euro. Criminal prosecutions have begun in Croatia against 14 senior figures at Agrokor, including Todoric, on suspicions of corruption and forgery. Todoric denies any wrongdoing, is accused of falsifying accounts to hide unsustainable debts estimated at £4.8bn (€5.4bn).

Asked by District Judge Richard Blake whether he consented or objected to the extradition request from Zagreb, Todoric said he would oppose being sent back to his home country, Reuters reports.

Prosecutor Benjamin Seifert, appearing on behalf of the Croatian authorities, told the court Todoric faced three charges back home — false accounting, fraud by false representation and abuse of position — amounting to a total alleged fraud worth about 110 million Euros.

The court heard that there was a worldwide freeze on Todoric’s assets.

This is extremely serious offending,” Seifert said.

The context in which I grant you bail is the knowledge that both within this country and throughout the world, your assets are frozen and your ability to obtain money is limited,” Judge Blake said from the bench. “The security is a very small sum in the context of what sums I have heard being spoken of.”

The judge also set conditions requiring that Todoric wear an electronic tag between midnight and 3 a.m., sign in at a London police station three times a week and give up his travel documents.

Agrokor, which began as a flower-growing operation in the former Yugoslavia in the 1970s, underwent a rapid expansion over the past decades that saw it run up debts of about 6 billion euros ($7 billion). The company employs about 60,000 people throughout the Croatia and neighbouring countries and is so large it now accounts for about 15 percent of Croatia’s gross domestic product. Its debt is too large for the government to rescue it without endangering the state’s financial stability including superannuation or pension funds that have invested in the company.

Although Todoric still formally owns 95 percent of Agrokor, the Croatian government, having rushed in a special law known as “Lex Agrokor” a few months ago has taken over management of the company. It is now trying to keep it alive through restructuring and negotiations with major creditors, which include Russia’s Sberbank and VTB bank, to which it owes 1.4 billion euros and who want their money back.

After he appeared on Europol’s fugitive arrest list, Todoric wrote on his blog that he was not hiding and that his conscience was clear.

As a man whose human rights are deeply violated I have the right to oppose political persecution,” Todoric wrote. “Today, I too am fighting against a corrupt system in Croatia,” he wrote on 6 November 2017, the day before he handed himself in to London Met Police.

Todoric has always claimed that the government illegally took over his company and indicated that he will fight his extradition on the grounds that he is the victim of political pursuit.

Political pursuit, Mr Todoric, has been there always, only before you used it to benefit yourself, to wrongfully create and amass wealth and now you use it to crucify those that helped you in that. Out with the lot of you and your communist heritage – in with lustration! Ina Vukic

 

 

 

Croatia: Lustration To Stop Sinking Deeper Into Mediocrity

 

General Zeljko Glasnovic
Member of Croatian Parliament for the Diaspora

I have lost count of the number of times General Zeljko Glasnovic, Member of Croatian Parliament for the Diaspora, has emphasised and warned in his public and parliamentary appearances that the Croatian diaspora is purposefully excluded from Croatian social, economic and political life and development…and that this must be rectified in order for Croatia to move forward. “Unfortunately, we live in a country taken over by Yugonationalists, and they treat it as a feudal property and with that, they prevent the return of our people (from the diaspora to Croatia),” he said in an interview last year.

A clear and disturbing example, albeit camouflaged in the president’s welcoming speeches about great love for the diaspora, of how those “Yugonationalists”, communist die-hards, operate in excluding the Croatian diaspora from Croatia’s life unfolded during the past week before our very eyes during the president of Croatia, Kolinda Grabar Kitarovic’s official state visit to Australia, Sydney. It struck me, and multitudes of other Croats in Sydney, for an nth time how those close to the president of Croatia organising her visit to Australia and New Zealand have “refined” their communist ways of ignoring and hiding the impressive wealth of Croatian masses from sight by not giving everyone the opportunity to show up and greet their homeland country’s president.

Sydney, for instance, has over 60,000 people of Croatian descent and loyalty and, yet, the Croatian president’s closest advisers and organisers booked only one public venue where the public could come greet and welcome the president and that venue could only fit 2.5 to 3.0 thousand people. Public announcements of the president’s public appearances were not widely made in order to secure attention of all, those (more than 70% of the Croatian Sydney community) that do not frequent clubs or churches or read Croatian newspapers or listen to Croatian radio on a regular basis were excluded. When the first Croatian president dr. Franjo Tudjman visited Sydney in 1995, the situation was entirely different; the public venue where he came to greet the Sydney Croatians carried 20,000 places and was filled with Croats, completely.

Whether president Kolinda Grabar Kitarovic had foreknowledge of this organisational disgrace and insult by exclusion to Croatians in the diaspora is a question the answer to which lies beyond my knowledge. One thing that is painfully obvious, though, is that such organisation, excluding the vast majority from being able to come and greet the president, was done purposefully and, in line with how communist-minded as well as Yugoslav Secret Police (UDBA) had operated before and operate in Croatia now. The ugly brazenness of such organisers whose aim is to divide and alienate from the homeland the bulk of the Croatian diaspora calls for new efforts on the part of the Croatian diaspora to stand united for Croatia and contribute to lustration, the fight against the communist beast that stands in the way of progress to full democracy and a functional Croatian national state. When one remembers that the Croatian Diaspora gave enormous financial and political lobby as well as military generals, officers and soldiers contribution to the creation of independent Croatian state in the 1990’s then renewed unity is an absolute essential in order to achieve lustration in Croatia and complete the goal for Croatia set in 1990: to create an independent, democratic and prosperous state, far far away from communist Yugoslavia totalitarian regime.

President of Croatia
Kolinda Grabar Kitarovic
in Sydney, 13 August 2017

The word “lustration” has its roots in Latin—the verb lustrare means to “purify” or “illumine.” To the citizens of former communist countries in Europe, lustration refers to the process in which the abuses of former communist regimes are revealed, implicating perpetrators as well as victims. Lustration in countries that have so far embraced it in the former European communist countries, which regretfully does not yet include Croatia, has encompassed ensuring former highly positioned people or those in communist secret services are not afforded key positions in the government or key positions in country, opening and making various types of files public—regardless if it is reading the books of the secret police or exposing compromised politicians, the process is sensitive and, at times, painful for people who for decades lived oppressed lives under oppressive communist regimes.

President Grabar Kitarovic’s visit to Australia and New Zealand is cementing the divisional and destructive processes installed and employed by former communists with view to ensuring an alienation of the Diaspora from its Croatian homeland. Grabar Kitarovic as president has called upon the Croatian Diaspora many many times to return to Croatia and help it prop-up its failing economy and plummeting demographic reality. And then she arrives in that diaspora on a visit and does not ask why is only 5% of this diaspora here to greet me!? Where is everybody!? Her speech to a mere couple of thousand, instead of say at least fifteen, sugarcoated with love and openness towards Croats in the diaspora. The organisation of her visit was a closed-door affair; openness is simply not the word that can describe it in any shape or form.

The questions, recently also posted on the Voice of the Croatian Diaspora Facebook page, which masses from the excluded-from-greeting-the-president Croatian diaspora would have put to the president had they had a chance and opportunity to do would have been as follows:
1. What’s happening with the establishment of Minister for immigration/diaspora affairs?
2. What’s happening with regard to installing postal and/or electronic voting system and why is it not utilised for the Croatian diaspora given that the platform already exists, e.g. E-citizens?
3. What’s happening regarding the new Electoral Act, how is it possible that the Croatian diaspora is excluded from the political life of Croatia and reduced to mere three diaspora representative seats in Parliament?
4. Demand for the abolishment of socialist-communist bureaucracy.
5. Most questionable government “Advisory body for Croats living outside Croatia”. Who are these people, what have they achieved so far, what do they do?
6. Why are people who were part of UDBA and KOS (communist Yugoslavia Secret Police and Counter-Intelligence services) posted into the Croatian diplomatic and consular missions and posts?
7. Who and in what manner chooses the President’s advisers – for example the first adviser to the President is Jozo Brkic, brother to highly positioned in HDZ Milijan Brkic, and chief organiser of the President’s visit to Australia – what are the criteria for choosing advisers?
8. When will decommunisation of Croatia commence?

The mediocrity of life is what communists nurtured during the times of former Yugoslavia; most people had just enough means to stay above the poverty line, waiting unrequited for the promise of a better future under the guiding hands of the promise-making communist party to kick-in. The exceptionalism, the promise and fight for prosperity in Croatia that accompanied every single, bloody but victorious 1990’s Homeland War battle for freedom from communist Yugoslavia afforded Croatia the time to convince itself and its original liberation movement HDZ/Croatian Democratic Union (that backed Kolinda Grabar Kitarovic as presidential candidate) couldn’t possibly ever become a “lame duck” when it comes to installing a full democracy and clearing the key posts in society and authority of communists that held important positions in Yugoslavia. HDZ in its fight for independence also fought against mediocrity and for prosperity in life. Today, in reality, HDZ has become the same as SDP (Social Democratic Party) – the latter didn’t want independent Croatia in the first place, and the former does “bugger all” to clean-up the oppressive, incompetent and arrogant public administration, service provision and bureaucracy. In the meantime, Presidents gallivant around the globe with grandstanding rhetoric for needed reforms but matching actions simply never eventuate to the degree that sweeps in the reforms, particularly in the area of returning into the body of the Croatian national state the status of the Croatian diaspora, to which they passionately, rhetorically, pin Croatia’s deliverance from ruin.

Heraclitus — “the obscure philosopher,” the pre-Socratic thinker, is best known as the man who said that you cannot put your foot into the same river twice. “The river/ where you set/ your foot just now/ is gone — /those waters/ giving way to this,/ now this.” (“Fragments: The Collected Wisdom of Heraclitus,” Viking). Letting opportunities go by without implementing lustration that would rid the budding democracy from the inherited communist mindset, laws and practices has led to the feeling one gets about Croatia that many people appear uninspired or lack the energy to rid their community of mediocrities and idiot intoxications communist mindset injects, whether in form of nepotism in employment or whether in getting away with theft and corruption… Given the enemy defined by communist-era mindset and habits, inherited by modern Croatia, a time for the commencement of effective lustration only comes once! It’s just like Heraclitus said “you cannot put your foot into the same river twice”.

When people attack critical voices against communist heritage that must be purged from Croatian democracy, they are accommodating mediocrity. I, for one, do not wish to live in mediocrity – I want Croatia to succeed in achieving its original goal for independence and democratic prosperity and that means it must: thoroughly rid itself from communism and its UDBA, its bloodsuckers. It must lustrate! Ina Vukic

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