Yet Another High-Level Corruption Probe In Croatia 


I would love to be able to write about an installation of anti-corruption measures across all levels of government administration in Croatia – local, regional, and state government – but sadly I cannot because such measures do not appear to exist or, if they do, they are ignored, and life continues as was during the utterly corrupt communist former Yugoslavia. When stamped out at grassroot levels – local government – then much of the problem of corruption is eradicated. In May 1990, 94% of Croatian voters chose Yes at referendum seeking secession from Yugoslavia. Then the Homeland War for independence ensued to defend that people’s decision from Yugoslav Army and Serb aggression brutal aggression. 

33 years have passed since that fateful referendum! Corruption that defined communist Yugoslavia was surely one of the factors solidifying the Yes vote at that referendum in 1990. And yet, here we are – ordinary people are mainly suffocating in that corruption – from pressure to pay bribes to officials, professionals, work force and employment, service provision, business dealings, various licences processes… to corrupt deals at evidently high levels that secure privileges and monopoly for certain companies or corporations and severely undercut the obligatory free-trade environment.  

To illustrate corrupt wheeling and dealings Predrag Dragicevic, judge of the County Court in Slavonski Brod, and Darko Puljasic, former Croatian Democratic Union party/HDZ mayor of Požega and member of parliament, were arrested on Tuesday 11 July 2023 morning on suspicion of corrupt crimes. As it turns out, the arrested men are charged with accepting and giving bribes and favouring employment. Searches of homes and other premises used by suspects have been underway in Slavonia since the early hours of that morning. 

To add to the detrimental effects of corruption alarmingly high levels of emigration and corruption don’t just co-exist inside Croatia as politicians would like us to believe  — they correlate with one another, Tado Juric, a political scientist and historian at the Croatian Catholic University, revealed in his 2021 study “Research on Corruption in Croatia – Measuring Corruption.” His research showed that 75% of companies operating in Croatia claim to know companies that bribe the local or state administration in order to do ‘successful’ business. So, the more corruption, the more emigration. 

On 12 July 2023 Croatia’s anti-corruption prosecution office/USKOK, launched a probe into the resale of natural gas by state-owned power utility Hrvatska Elektroprivreda (HEP), local media reported citing unofficial information. USKOK investigators entered HEP’s offices and seized documents, following media reports last week that it practiced reselling of natural gas surpluses at very low prices. 

Since the HEP/Gas scandal broke out in the public arena in Croatia ten days ago the Prime Minister, Andrej Plenkovic, keeps saying that someone in the government knew about the resale of gas, but that he didn’t know! Well, during his Prime Ministership mandate Plenkovic has lost and replaced some 20 government ministers due to either proven corruption charges or suspected corruption and he remains “squeaky clean”! He does not stand down, his government is not suspended, his government is not sacked even though the parliamentary opposition has called for his resignation several times amidst his government ministers’ involvement in corruption as would be the case in a functioning democracy! How is this possible if not because of the lack of democracy and saturation with authoritarian rule as the people had to suffer under communist Yugoslavia. 

This is almost unbelievable. The Prime Minister carries no responsibility it appears; he does not resign nor is he forced to resign from office! The staged investigation into the HEP scandal will simply give Plenkovic more time to come up with excuses to save his own skin.  Not only do the published texts of emails and letters regarding the surplus storage of gas (later sold at obscenely cheap prices) now stand confirmed, which were signed the Head of HEP Frane Barbaric, but at the same time he also informed minister Davor Filipovic and, hence, the prime minister.  Plenkovic simply cannot advertently or inadvertently plead that he knew nothing. By default, if he did not know, read, the submissions of the president of the HEP management, on his cabinet’s desk, then his colleagues, those people who read it and were obliged to inform the prime minister, must have known. If he didn’t know, he had to know. Otherwise, he and his government ministers involved must suffer the consequences of gross negligence at work, in office. 

According to media reports quoting Zvonimir Troskot, opposition member of parliament, HEP was losing 500,000 euro per day by purchasing natural gas from INA at a regulated price of 47.60 euro per megawatt hour, only to resell it later through the Croatian Energy Market Operator HROTE at lower prices (for 1 cent per megawatt it seems!). 

Someone has lined their pockets with cash in this disgraceful example of corruption, for sure. Will the investigation reveal that as promptly as possible or will it bury the case to linger for a decade or more, like similar cases before, is yet to be seen. The effective EU corruption watchdog in Croatia is not involved because there does not appear to be any connection with EU funds but local trade with gas and so not much faith is held in USKOK or any other statutory body in Croatia. They all appear and operate as heavily laced with corrupt individuals who learned their trade during communist Yugoslavia, or whose parents did.     

On 13 July 2023 the Parliamentary Committee for Economy held a special meeting regarding the HEP scandal and the sale of surplus gas by HEP, a government owned energy agency. The only Agenda item at this meeting was “has the government acted efficiently in the energy field, i.e. buying and selling gas. Minister for Economy and Sustainable Development, Davor Filipovic, was sought out to speak at the meeting ad he regurgitated the government’s lamentation about last year’s energy crisis in the wake of Russian invasion of Ukraine and EU’s orders for member states to fill their gas reserve storage capacities and that HEP was to fulfil that duty. Minister Filipovic claimed that the government handled the energy crisis well. He admitted that he received several letters from HEP regarding storage of gas including loan approvals to that end.  He received a letter from HEP about the gas surplus plan in the warehouse and that the surplus gas will be used for local electricity production or sold on the domestic market if the Minister doesn’t order them otherwise. Clearly defensively Minister Filipovic said that letters did not advise him that the surplus gas would be sold “in this way” (read: cheap as chips!). 

Minister Davor Filipovic

“Let’s face it,” said at the meeting HEP Chief Frane Barbaric, “this is not an uncommon occurrence in energy markets around the world. Losses do not occur only in Croatia or only on the gas market …HEP received the gas it had to take over, the demand was low. This was resolved in a prescribed and transparent process over which HEP has and had no influence, but it is a frequent event in the world. If we understood that, no one would make a problem out of this event, let alone an affair.” 

Oh dear! If gas sales are so transparent why was Minister Filipovic so surprised and stated that he did not know the gas would be sold (by HEP) “in that way”! Which by the way generated a loss to the state budget of over 10 million euro! Something stinks in all this, and the Croatian taxpayer is entitled to know to whom the gas was sold so cheaply and whether that buyer sold it on and made profit and split the profit with any person associated with the government. The Parliamentary Committee for Economy was told at the special meeting of 13 July that 63% of the cheap gas was sold to Prvo Plinarsko Društvo/PPD which is a private company that has been enjoying exclusive trade privileges, which in themselves attract a great deal of questions and suspicions of corrupt dealings.     

So, one must ask: since HEP is government owned and accountable to the government were there no government Policies and Procedures in place regarding sale of surplus gas to which HEP had the duty of care to abide by? Why did Minister Filipovic not mention that HEP acted in breach of standing policies and procedures but merely said he did not know the gas would be sold in “that way”!?One would expect that where there are policies and procedures tightly in place for such matters of national importance as energy is. Or is the case simply that HEP had a delegation to create gas sale prices as it liked without checking first the government or minister?  In any case, the government must carry the responsibility of damage done to taxpayers by suspect sale of goods and services purchased from the state budget or supported loans. 

Evidently, there is a rather wide web of guilty people in this surplus gas deal and that no one appears innocent, not even the Prime Minister. Ensuing weeks should reveal more of this corruption scandal and heads will roll from the corridor of power for sure.

Judges and employees of the judiciary in Croatia protest for better wages

Furthermore, the current lingering protest by all court judges as well as court employees for increases to their salaries has paralysed the judiciary and placed a halt to all court proceedings; and there are at least one million of those to yet be completed and processed. The government is stamping its feet, refusing to budge enough for the return to normal in the judiciary. Certainly not a good move in the pre-elections year. 

The European Commission recommended that Croatia increase the wages of judges, adopt laws on lobbying and increase the efficiency of investigations and prosecution of corruption offences, it said. On 6 July 2023 the European Commission had recommended that Croatia revise the criminal procedure code and the law on the office for the suppression of corruption and organised crime, as set out in the anti-corruption strategy, so as to increase the efficiency of investigations and prosecution of corruption offences, it said in its latest rule of law report on. Whether the court judges’ protest has anything to do with cover ups and delay of prosecuting the HEP scandal and other major cases of corruption, we may find out. 

“In addition to recalling the commitments made under the national Recovery and Resilience Plan relating to certain aspects of the justice system and the anti-corruption framework, it is recommended to Croatia to continue structural efforts to address the remuneration of judges, state attorneys and judicial staff, taking into account European standards on resources and remuneration for the justice system,” the European Commission also said.  

Undoubtedly aware of corrupt practices in Croatia associated with public tenders, the European Commission also recommended that the government in Zagreb strengthen the framework for a fair and transparent allocation of state advertising by establishing clear criteria, good practices, and oversight measures to guarantee the effective functioning of the public tender procedure. Ina Vukic  

Croatia: Political Heads’ Pursuits As In “All Quiet on the Western Front”

President Zoran Milanovic (L), Prime Minister Andrej Plenkovic (R) (Portrait photos: Pixsell)

The much-lauded German adaptation of the classic war novel “All Quiet on the Western Front” by Erich Maria Remarque, clinched the Academy Award for best international feature film in March of this year with its timely anti-militarist message as far as current war in Ukraine is concerned but also as far as the destiny of war veterans of the Croatian Homeland War of the 1990’s is concerned. Remarque’s novel, published in 1929, paints a portrait of a generation that leaves school for the front and ends up perishing in World War I from 1914 to 1918. Come 2023 in Croatia. With the relentless intolerance and increasingly aggravated brawls between Croatia’s Prime Minister Andrej Plenkovic and the country’s President Zoran Milanovic the above Oscar-winning movie is eerily topical – their evident pursuit of nerve-pulling populism digs a grave, deeper and deeper, for the heroes that fought for Croatia’s independence and secession from communist Yugoslavia! Here and there, each will throw around some symbolic gesture or phrase in respect and crucial for freedom of the 1990’s Homeland War but, in reality and essence, their intentions and efforts rest in erasing it and resurrecting former communist Yugoslavia, even though they may, falsely, label it antifascist.  Constant conflicts intrusively played out in the public arena, fortunately verbal, but no less exhausting and ominous, mark almost the entire period of overlapping mandates of the two leaders of Croatian politics, President of the Republic Zoran Milanovic and Prime Minister Andrej Plenkovic. The recently delivered President Milanovic’s speech to the nation and the reaction of Prime Minister Plenkovic suggest that this conflict will certainly last until the summer of 2024, and probably until the beginning of 2025; the entire mega elections year approaching. Whether it will continue after that period largely depends on whether the two, the Head of State and the Government, by their own will, and especially by the will of the voters, retain the positions they hold based on the election results.

Given that, in their positions, neither appears politically threatened by anyone – neither is anyone currently profiled as a potential presidential candidate, nor does the diluted and, therefore, weak opposition offer a more serious prime ministerial candidate and program nor does any palpable fraction within the ruling HDZ party. In short, it suits both men to counter each other – it keeps them both on the frontlines of conversation in all homes and around all coffee shop tables! While I have written before about the alarming political crisis in Croatia that has its roots in both the Office of the President and the Cabinet of the Prime Minister, the sickening lack of collaboration and extreme intolerance, as far as the public eye can see and the Croatian nation pulse can feel, between the country’s President Zoran Milanovic and its Prime Minister Andrej Plenkovic continues. This cancerous situation, metaphorically speaking, is evidently purely political and perhaps agreed upon behind the curtain or under the table to the dire detriment for the country and its citizens who spilled rivers of blood during the 1990’s for its independence. Each blames the other, each expects an apology from the other, and neither gives “a farthing” for their duty as the elected leaders of state to communicate effectively on important matters of the state.  

Among other things, in his speech to the nation on June 6, 2023, President Milanovic said the following: “since the Croatian Constitution – to which I swore an oath – obliges me to take care of regular and coordinated activities, as well as the stability of the state government, I decided to warn the Croatian public to the serious threat to the constitutional-legal and democratic order that the Government of Andrej Plenkovic is preparing.   Yesterday I was informed that the Government, in defiance of the Constitution, intends to place the Military Security Intelligence Agency under the direct management of the Ministry of Defence.   Instead of following the constitutional procedure for appointing the director of the Military Security Intelligence Agency and contrary to the established democratic practice, the Government prepared an unconstitutional solution according to which the temporary head of the Agency would be appointed and dismissed by the Minister of Defence.   I want to be clear: it is Andrej Plenkovic’s political attack on the constitutional order and democracy, which returns Croatia to the era when the intelligence services were under the direct control of the ruling party.”

On June 7, 2023, Prime Minister Andrej Plenkovic referred publicly to the above-mentioned statements of the President of the Republic, saying that due to the form of the address, he first asked himself whether a war or a new epidemic had broken out, whether there had been a major earthquake, a huge flood, a fire, a terrible accident in Croatia, and that the Government had not heard about it. It appears that Plenkovic may in fact be the one to blame for the appalling and non-existent communication between the Prime Minister and President (Plenkovic had that streak or evident arrogance when Kolinda Gabar Kitarovic was President, for she complained in public about it and her helplessness in establishing a working relationship with Prime Minster Plenkovic ) that forced President Milanovic, faced with Plenkovic’s repeated rejection to meet with Milanovic, in making a speech, a cry, to the nation about it (?).   “Then I wondered if maybe it wasn’t a holiday? When it’s not Christmas, it’s not even New Year’s, and it’s not National Day either. Nothing of what is usual for the form of address by reading from a meter in a few minutes,Plenkovic said, commenting the (to him) extremely unusual form of address by President Milanovic. “He (Milanovic) assumed that this way of addressing avoided the risk of eliminating the presence of some journalists from certain newsrooms or the risk of answering possible questions….”! How arrogant of Prime Minister Plenkovic. Not only does he seem to adorn himself as a mind-reader but attempts to denigrate the very important facility of a President’s Address to the Nation. Reminding that cooperation cannot continue as if none of this had happened, Prime Minister Plenkovic said that communication between institutions can be done in numerous ways. It can be done directly, he added, but there are prerequisites for that – cultural, normal, and cooperative communication at the level of what is appropriate for behaviour in the public political space. Since there is no such thing, then there are no direct contacts, he said. Communication can be in written form, as well as through associates, and that communication, he asserted, exists.   Prime Minister Plenkovic asserted publicly  that there is no constitutional crisis, but there is a “false thesis of the President of the Republic who pretends to be the head of the opposition“.   President Milanovic had on 6 June invited the Prime Minister Plenkovic to an urgent meeting at which they could seek to agree on a candidate for the new director of VSOA/Military Security Intelligence Agency and the next day Plenkovic stated that such a meeting will not take place until Milanovic apologises! Given that he, yet again, expressly rejected what the president asked of him, Prime Minister Plenkvic obviously blames the conflict exclusively on the President, his messages and behaviour, and apparently, he does not even need cooperation with him because this type of conflict with this type of opponent it fits him personally, not Croatia, perfectly in the political and other collateral senses.  

Today, their verbal conflict is, in fact, a real political war, a Cold War, which has recently gained a very violent extension, eagerly fanned by the media and other actors that stand at a decent distance, except in protocol situations, in which the poles of this conflict pretend that they do not exist with each other, in the same space or country. Even the blind can see that a major shift upwards in the numbers of eligible voters actually voting in 2024 elections is the only tool that will rid Croatia of this political vermin at the head of Government and Office of the President. The Cold War between them has translated into a real war (by stealth ?) that is attacking Croatia’s demography and chasing rivers of young people out, bankrupting the economy, concealing horrific and widespread corruption, belittling the independence-bearer, the Homeland War…The anger and disappointment on the streets is almost paralysing and I hope that such a “paralysis” will fixate the masses into strong and successful action for change for the better, if not lustration! Ina Vukic              

Changing Face of Croatia

On my last visit to Croatia the devastating earthquake in Zagreb in late March 2020, and dozens of smaller ones that followed, amidst extreme Covid 19 pandemic lockdowns that included public transport stoppage,  saw me cut my visit short and leave Croatia and return to Australia. Then more devastating earthquakes in December 2020 in Petrinja, Sisak, Glina and surrounding towns, nearby Zagreb, left the country in utter despair from ruins left, homeless people by the thousands.   

Three years on, the devastation caused by the earthquakes, despite ample solidarity funds offered by the European Union Solidarity Fund purses, to help finance the restoration of key infrastructure in the field of energy, water and wastewater, telecommunications, transport, health and education, not much until recently has been achieved in utilising those funds that in essence meant a lifeline for multitudes affected by the earthquakes. The word on the streets is that, incredulously, the Croatian government has, in the reality of lack of domestic labour,  steered away from contracting the essential restoration building works to foreign companies. Indeed Croatia had continued seeing hundreds of thousands of work age people leave the country for a better life elsewhere. Some temporarily some permanently. Official statistics show some 450,000 have left Croatia in the past ten years, the bulk of working age, creating a demographic crisis for Croatia.

Furthermore, the EU Solidarity Funds are not designed to assist with the needed restoration of private homes and dwellings and the fact that most had had no insurance left people at the mercy of the poor national budget available for national disasters such as earthquakes.  Nevertheless, recent legislative provisions address assistance to private residences damaged by the earthquakes. Owners or co-owners who are placed in containers or other forms of temporary accommodation will be supported at the expense of the state budget of the Republic of Croatia, as well as beneficiaries of the right to co-finance the rent, then owners or co-owners who are recipients of social welfare and persons with disabilities, in the status of veterans or other status according to a special law. The burning problem in the realisation of the latter financial supports lies in the fact that the state budget is inadequate to cover all needs in a timely manner.   

Currently, Zagreb is akin to a lively building site. Earthquake damages on buildings and other infranstructures are being repaired on quite a large scale, as if racing against time. But then, general elections are due next year and the danger of losing the unused EU Solidarity Funds is real.  The reluctance to engage foreign construction companies during the last couple of years has finally been replaced by import of foreign workers, many of whom are reportedly an unskilled labour force but as far as I can see, a hard-working labour force from China, India, Pakistan, Philippines, neighbouring countris like Bosnia and Herzegovina and Serbia etc.

This year, according to some estimates, up to 200,000 residence and work permits for foreigners could be issued in Croatia. More than 120,000 foreign workers have already been issued work permits and this is visible on construction sites, hospitality, waste management …  As to solving the resulting homelessness from earthquakes devastation most affected families are still accommodated in converted shipping containers and mobile homes while others have moved temporarily to ancestral homes away from the devastated cities and towns. 

There is almost no sector in Croatia that does not employ foreign workers. This affects all industries, not just construction. Croatian employers usually employ workers from the region. However, if they run out, they resort to those from distant countries particularly from the Far East. In the first three months of this year, the most foreign workers are from Bosnia and Herzegovina, followed by Nepal, Philippines, Serbia, India, Kosovo and North Macedonia. According to reliable surces every fifth construction worker in Croatia is a foreigner and this is pparent upon visiting the many constructin sites.

Currently, as many as about 520 agencies are active in Croatia for mediating the import of labour. Construction workers, delivery workers, caterers, cooks, postmen. Some industries rely more and more on foreign labour. Agencies are often shut down, and new ones are opened. There are more and more bad experiences, so foreigners pay to come, and then the working conditions in many cases are reported to be not even close to what they expected. Increased attention from government agencies is afoot, attending to curbing possible exploitation of foreign workers.

„Foreign workers must not be exploited but accepted as equal members of the economic system. People who today exploit workers in the worst way should be removed from the market, punished the most severely and thus show that we are not a society that profits from other people’s pain, but a country of opportunities for everyone,” concluded Irena Weber, chief director of the Croatian Association of Employers/HUP, at a gathering last week and said that we should not call those who exploit other people’s pain employers because they are not.

I call on state institutions to resolve this as a matter of urgency ,” she said. 

Employment Minister Marin Piletic, who addressed the gathering immediately after Weber, did not give the impression that he had heard what the chief director of HUP had said. He pointed out that in Croatia, “124,000 foreigners, a population larger than the city of Osijek, have sought happiness in Croatia”, that no one could have even thought of this a few years ago, when the number of foreigners was measured in several thousand, and that Croatia must start thinking about the Strategy for importing foreign workers.

„The Ministry of Internal Affairs has taken responsibility for adopting a Strategy on immigration policy for the first time by the end of 2023, not only on the import of labour, but also on the attraction of foreign students and the return of Croatian emigration,” Minister Piletic continued, not referring to everyday examples of reported exploitation of foreign workers, the slave-owning treatment some are exposed to and the lukewarm or no reaction of the state that Piletic represented.

Haphazzard approach to key problems and questions for the country have evidently defined Croatian governments for the last 25 years, since the final end od war of Serb occupation of parts of Croatia in 1998. I have written about that several times as Croatia transitioned from communism in ways that stifled demcracy and the rule of law, more than applied it. Corruption at all level incuding judiciary. National stratgies that would go hand in hand with the War of Independence values – practically nonexistent.

The current government that has taken the reins for the country in 2016, and those before it, have shouted from the rooftops the calls for Croatian diaspora to return to Croatia. But alas, this has been a mere lip service for political points. No national strategy developed or followed to enable and support such a return from the diaspora. Small steps such as the establishment of the State Office for Croats Living Abroad has been a disaster and more a vessel of photo-opportunity for government ministers to put on a show of government’s „close” relationship to its diaspora (which is far from real) than real actions to enable a return. Most Croats that have returned from the diaspora have been left to their own devices and knowhow than helped by the government with view to easing their transition into their ancestral homeland. 

At least, we now have a changing picture on the streets of Croatia with foreign workers that should reap benefits for Croatia in the field of earthquake disaster relief and pumping up the needed tourism workforce and a hope that the government will finally develop and adopt national strategies for the return of its Croat emigration. Suffice to say, Croatia’s demographic landscape is at crisis point and has been for at least a decade. Lots of talk in that period but little action to enable improvement of the demographics. Ina Vukic    

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