USKOK – Croatia, the War, and the Future

No Takers For Croatia’s Head of Corruption and Organised Crimes Prosecution Job

September 24, 2023 by inavukic 4 Comments

A historic first for Croatia!

Nobody wants the head job of prosecuting corruption and organised crime!

Advertisement to fill the vacant position, one of the top positions in Croatia, important hierarchy-wise, of head of USKOK/Office for Suppression of Corruption and Organised Crime, did not bear fruit. With applications closed last week there were no takers! Nobody applied!

To my view, this is largely symptomatic of an overwhelming lack of confidence among the public or the pool from which applicants could be drawn, in the ability to work in the job without political and other pressure or interference, perhaps to even “look the other way” when fraud or corruption show their ugly head, and fear of prosecuting corruption for fear of nasty reprisals. This did occur at this time when corruption is high and government officials have been found guilty of and were involved in many corruption scandals or have been alleged to be involved in serious corruption or fraud whether under investigation or not.

Perhaps the loudest opinions regarding this alarming turn of events where there are no applicants to fill the vacancy of a very prominent job in the country, even the locum or temporary person working in that position did not apply for the permanent position, are the echos in Croatia’s roads, streets, and lanes are the ones that go like this: “Everyone is corrupted and so nobody wants to apply for that job,”… “who would want that job, the whole country is corrupted,” … “that job is like a greased plank, and everyone is greasing it…you will slip off sooner or later,”… “that body operates like an extended arm of the government and, therefore, there is not even an “i” in the independence in its work,” … while the former director of USKOK, Zeljko Zganjer, thinks that today this job, or function, is neither attractive or has anyone to rely upon “if you intend to do this job independently, deal with facts and evidence while ignoring whether today something is politically opportune for criminal prosecution or not opportune for prosecution.”

Speaker of the Croatian Parliament Gordan Jandrokovic said, rather stupidly in my view, that the situation that no one applied for the position of head of USKOK is an indicator that the Government does not control or supervise DORH/State Attorney Office and USKOK, because if it did control them, it would probably find a person to install into that position. This of course does not prove anything regarding government’s pressure upon USKOK, of course, for it could also mean that the government tried to find someone suitable for the position behind the scenes but did not find anyone willing to do the job that could even find it necessary to prosecute the Prime Minister for corruption in the future. And that would surely mean own sinking into social and career oblivion. Certainly, the fact that prosecuting former government minister Gabriela Zalac for fraud and corruption regarding EU funds, where there have been suspicions of the Prime Minister having had his fingers in that pie, was abandoned, and could well be hiding or stifling a whole range on unpleasant goings on for the government and parliament. The opposition accused that words by Jandrokovic point to political instability in the country and not that government has no influence on the work of the anti-corruption body.

As things stand now, current acting director of USKOK, Zeljka Mostecak, appointed to this position by the chief state attorney Zlata Hrvoj Sipek at the end of April this year (after the previous director Vanja Marusic resigned from the position amidst a scandal of not reporting her chauffer being in car accident when not on duty and covering his cost) will continue at the USKOK helm for the time being. One cannot discard the possibility that in this pre-parliamentary election year the ruling HDZ/Croatian Democratic Union party most likely does not want any new corruption or organised crime investigated that could implicate its members and, hence, the technicality of no applicants for head of USKOK suits it perfectly!?

No country is immune to corruption. That is a fact. The fact is also in that abuse of public office for private gain erodes people’s trust in government and institutions, makes public policies less effective and fair, and siphons taxpayers’ money away from schools, roads, and hospitals. Political will can turn the tide against corruption and Croatia evidently lacks much of that, or rather its government and governments before it since year 2000, some of whom, like SDP/Social Democratic Party, are currently in opposition. The other parts of opposition in Croatian Parliament have commented last Thursday that nobody is crazy enough to put their head on a chopping block by applying for the head of USKOK position. Alluding in no uncertain terms that, given high-level corruption scandals and convictions and many in the pipeline, fear for own safety and livelihood could well have poisoned most of the enthusiasm for that well-paid, important position.

A few days ago upon his visit to Croatia (an OECD membership hopeful), the former Australian Minister of Finance and currently OECD (Organisation for Economic Cooperation and Development) Secretary General Mathias Cormann warned about the weak control of corruption in Croatia in the public sector compared to other EU members. In other words, it points to non-existent or ineffective measures put in place to firmly control corruption and eradicate most of it.

It was in late June 2023 when the Paris, France, based Financial Action Task Force (FATF), an international financial crime watchdog, placed Croatia on the so-called “grey list” of countries that would be subject to “increased monitoring”. This essentially means the country on that list has committed to implement an Action Plan to resolve swiftly the identified strategic deficiencies within agreed timeframes. According to the FATF website there is a FATF-Interpol partnership to ignite global change to take the profit out of crime! About time! Many would agree. Money laundering and financing terrorism are among the top priorities to tackle.

Croatia will reportedly work to implement its FATF action plan by: (1) Completing the national risk assessment, including assessing risk of, and vulnerabilities to, being used by money launderers and terrorist financiers associated with the misuse of legal persons and legal arrangements and the use of cash in the real estate sector; (2) Increasing human resources and improving analytical capabilities; (3) Continuing to improve LEAs (Law Enforcement Agency) detection, investigation and prosecution of different types of ML (Money Laundering), including ML involving a foreign predicate offences and the misuse of legal persons; (4) Demonstrating a sustained increase in the application of provisional measures in securing direct/indirect proceeds, as well as foreign proceeds subject to confiscation; (5) Demonstrating the ability to systematically detect and where relevant investigate TF (Terrorism Financing) in line with its risk profile; (6) Establishing a national framework for the implementation of UN TFS/Targeted Financial Sanction measures and providing guidance and conducting outreach and training to the reporting entities; and (7) Identifying the subset of NPOs (Non-Profit Organisations) most vulnerable to TF abuse and providing targeted outreach to NPOs and to the donor community on potential vulnerabilities of NPOs to TF abuse.

If these warnings were not enough to set Croatia on the straight and narrow against corruption and organised crime then one can always add the fact that in July 2023 the European Commission recommended that Croatia increase the efficiency of investigations and prosecution of corruption offences.

The European Commission 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, to increase the efficiency of investigations and prosecution of corruption offences.

Evidently the task for Croatia in curbing and controlling corruption and organised crime still looms larger than life itself. The legitimate concerns of financial probity that have ended up with Croatia on the FATF grey list will surely adversely impact Croatia reputation wise. But also, being on the grey list for monitoring should be the stimulus needed to increase scrutiny of the illicit money and assets allegedly and evidently flowing to and through Croatia. Croatia remains mired in corruption, especially at high levels of government and corporate leadership, but it has done nothing to truly comb through corruption at local government levels or health and academic service where bribes are commonplace and, indeed, necessary to have anything done on time, like building licence for instance or surgery …and so, no wonder nobody is currently applying for the important permanent job of head of prosecution of corruption and organised crime in Croatia. Perhaps at the next round of advertisements or …? Ina Vukic

Filed Under: Uncategorized Tagged With: corruption, corruption control, Croatia, FATF, Grey list, Head corruption prisecutor Croatia, MOney laundering, OECD, Organised crimes, USKOK

Croatia: Corruption – The Cradle Of Intolerable Filth!

March 4, 2023 by inavukic 12 Comments

_{Left: EPPO Chief Prosecutor Laura Codruţa Kövesi, Top Right: Croatian Prime Minister Andrej Plenkovic and his government ministers among latest indictees for fraud and corruption}

As I wrote last week, there was a motion by Croatia’s parliamentary opposition to recall the Prime Minister Andrej Plenkovic with claims, in particular, that he is, among other things, personally responsible for failing to act in curbing corruption which is relentlessly plaguing the country and failing to effectively address and deal with the devastation caused by the earthquakes in Croatia since March 2020. This attempt to depose the Prime Minister from office was not successful. Andrej Plenkovic survived the no confidence vote in the Croatian Parliament on Friday 3 March 2023.

The 77 against and 56 for the confirmation of no confidence with one abstention and 17 opposition members of Parliament missing in action (did not turn up for voting) in the 151-seat assembly provided a rather clear picture that was expected at this time of political turmoil, economic crisis and living standards uncertainties due to price hikes for food and energy. The governing majority votes favoured Plenkovic as leader and Prime Minister. However, despite the colourful differences in both ideology and policy among the opposition political parties, the parliamentary opposition also rose united as well. Nobody is “crossing the floor” on the matter of Prime Minister’s performance in the above key areas from any side of politics just yet, it seems. But, should the Croatian judiciary act more appropriately and with due and deservingly urgent haste in processing indictments for corruption that occurred in the very heart of Plenkovic’s government, should the judiciary work faster in collecting needed evidence to be tested in court, then anything is possible. Even a catastrophic loss by HDZ in 2024 general elections. In the face of so much corruption, in the face of harsh living standards due to price increases of basic and essential food and other essentials for life, no amount of gloss Plenkovic is painting over the economy will stop the corrosive bitterness and disappointments the voters seem to be expressing every day. Pending the 2024 parliamentary elections in Croatia we are now on a most interesting ride which, God willing, will see increased attacks on the communist mindset polluting the democracy Croatia should be, but is not living.

The European Public Prosecutor’s Office (EPPO) has recently published its 2022 Annual Report. Since its launch in June 2021, EPPO opened offices in 22 EU countries, including a branch in Croatia. Its main purpose is to monitor, track and investigate the expenditure of EU funds given to a country and its successful funds applicant organisations.

On the face and perhaps the substance of EU funds given this has changed the [corruption] situation significantly. One may say that the corrupt habits acquired during the life of communist Yugoslavia that groomed people who wielded political power who perhaps could have exerted influence over local investigators are no longer that powerful for EU money and under EPPO’s rudder. And while Croatia itself has an anticorruption body USKOK (Office for Suppression of Corruption and Organised Crime) attached to the State Attorney’s Office (DORH) as a special operations unit dealing with all except fraud and corruption associated with EU funds attended to by the EPPO, it has been very much like a toothless tiger. Corruption scandals that do not involve EU funds also keep popping up like mushrooms after the rain. I.e., there are still many officials working for the public authorities who think and act as if they are free to do what they please with public funding. This is in part because they think they are untouchable, or because they can pull strings in these bodies, or because they expect membership in a political party will always help them get out of problems, forgive their theft and corruption. The communist mindset still reigns in Croatia, the power is still behind and not in front of the “counter” (with people, with clients, with taxpayers). The ruling political parties since the end of the Homeland War and Serb occupation of Croatian territories in 1998, whether they were HDZ (Croatian Democratic Union) or SDP (Social Democratic Party, viz. former Croatian League of Communists), have all equated themselves as being The State. Communist mindset where the political party in government acts as and considers itself omnipotent, in control of people’s lives!

The most prominent scandal investigated by EPPO over the past year and a half in Croatia included a 1.3 million euros case which led to the indictment of the former government minister for EU funds and high-ranking officials of the ruling conservative HDZ party, Gabrijela Zalac, and three of her associates, in December 2021. Zalac, with the director of the Central Finance and Contracting Agency, Tomislav Petric, and two business owners, was apprehended as part of operation “Software” conducted by the European Public Prosecutor’s Office (EPPO) in Croatia. EPPO’s suspected offences against them included an attempt to award a public procurement operation for a software system to one of the indictees without a public tender, and then rigging the price of a subsequent tender. As the saga of Zalac’s criminal/corruption proceedings advance in Croatia, revealing details that may implicate even the Prime Minister Andrej Plenkovic in shady deals or omissions that may have aided success of fraudulent entries, the ruling party HDZ is shrugging the issues off while the parliamentary opposition unleashed a public outcry saying the affair is a sign of a crisis in government.

Another high-ranking official recently investigated by EPPO is former agriculture minister Tomislav Tolusic, who was detained in July 2022 in an investigation over suspected irregularities over around 600,000 euros in EU funding he spent to equip his privately owned winemaking business. This led to State Attorney’s Office/DORH also filing an indictment against three other former ministers in the government of Andrej Plenkovic/HDZ – Darko Horvat, Boris Milosevic, and Josip Aladrovic, as well as four other suspects in two branches of the investigation launched due to alleged illegalities with dishing out incentives. In addition to the four ministers, USKOK/anti-corruption office also filed indictments against Horvat’s assistant Ana Mandac, former state secretary of the Ministry of Regional Development Velimir Zunac, director of the administration for assisted areas Katica Miskovic and the mayor of Zupanja Damir Juzbasic. Eight defendants are charged with abuse of position and authority, inciting, and aiding in abuse of position and authority, trading in influence and assisting in trading in influence.

If we label corruption as filth, then the governing political parties in the past two decades or so in Croatia have been its cradle! Despite their political ideology and operational differences they all share common ground on not doing much to punish and stop corruption that is prevalent across all public administration sectors.

A large portion of the public in Croatia is currently standing on tenterhooks, waiting to see if Croatian judiciary will drag its feet in processing these indictments until the 2024 general elections are over! That way HDZ Party and Prime Minister can keep playing the innocence cards and keep denying that there is a real problem of corrupt culture in the entire public administration system. Any decent and non-corrupt government, faced with serious indictments with serious crimes of several of its ministers, would have already triggered an independent review of all practices and procedures, instigated checks and balances at all spots and levels of public money receipts and expenditure. Not Croatia, though. As reflex reaction it forms Commissions and on them may sit compromised individuals with shady past and encounter with corruption, at least the political kind!

In 2022 alone, EPPO’s investigations in Croatia led to eight indictments and six court verdicts and to the freezing of some €400,000 in assets. They also received 51 reports and complaints, with more than half (29) coming from local authorities and another 17 filed by individuals. In terms of the type of funding involved, most cases were related to regional and urban development (7), followed by agriculture and rural development (6).

It is both interesting and encouraging that Croatian citizens submitted as many as 162 reports to the EPPO of suspicions of criminal offences that are not actually within the jurisdiction of the European prosecutor’s office. This is the largest number of reports or allegations of fraud the EPPO likely received from any member country. This among other things points to a concerning fact that Croatian p[eople are increasingly frustrated and irritated by the inaction or alarming inattentiveness of the domestic courts and judiciary. Furthermore, this has led to an alarming increase in public expressions of distrust in the Croatian judiciary coupled with consensus that courts are nowhere near being independent of the government as they should be. The fact that Croatian citizens are choosing to report suspicious corrupt activities to the EPPO, even though the subjects of such reports are not within the EPPO’s jurisdiction, does demonstrate a concerning level of desperation within the population in trying to achieve justice and root out corruption.

According to its 2022 Annual Report the European Prosecutor’s/EPPO Office in Croatia is currently investigating fraud associated with 313 million euros tied to its lodging of 23 court proceedings in Croatia last year. That is, last year, EPPO commenced 23 cases of suspected embezzlement of 313.6 million euros if European money in Croatia. As stated in the Annual Report, these are mainly investigations into misuse of funds from EU funds and the state budget, manipulation during public procurement, and corruption.

Croatia commonly scores high on the annual Corruption Perception Index compiled by Transparency International. In their 2022 report, it ranked 57th out of 180 countries surveyed globally and 24th in the EU, ahead only of Romania, Bulgaria, and Hungary.

It has come to light last year that Croatia (or rather its citizens) is also among other countries implicated in the 2022 biggest investigation of theft and corruption of public moneys embodied in the so-called Operation Admiral in relation to a complex VAT/GST tax fraud scheme based on the sale of popular electronic goods. All the data collected is being analysed, and the investigation into the organised crime groups behind this scheme is continuing. The estimated damages investigated under Operation Admiral currently amount to 2.2 billion euro. It amounts to the biggest VAT carousel fraud, or Missing Trader Intra-Community (MTIC) fraud, ever investigated in the EU. The criminal activities are spread throughout the 22 EPPO participating Member States, as well as Hungary, Ireland, Sweden, and Poland, along with third countries including Albania, China, Mauritius, Serbia, Singapore, Switzerland, Turkey, the United Arab Emirates, the United Kingdom and the United States.

Whether about corruption, about nepotism, about fraud, about theft, about improper government minister behaviour, new scandals persistently pollute the life of Croatian people. I remember a comment I once read on communist mindset and habits as Croatia was in the throws of seceding from communist Yugoslavia: leaving Yugoslavia will not mean we have also left the thieves behind, and that is why strict anti-corruption laws, and their implementation will be essential for democracy to thrive. Today, in 2023 the implementation of such laws is pathetic or largely non-existent in Croatia. Audits and spot checks are not fully independent, checks and balances to do with government grants and funding practically do not exist as the concept in functioning democracies intends, leaving ample space for embezzlement and theft and other corrupt means. Corruption runs in the blood of former communist operatives and their descendants. Croatia badly needs a political blood transfusion! Ina Vukic

Filed Under: Uncategorized Tagged With: 2022 Annual Report European Public Prosecutor's Office, Anti-corruption in Croatia, corruption in Croatia, Croatia, Croatyian government ministers indicted for fraud and corruption, DORH, EPPO, European Public Prosecutor's Office in Croatia, fighting corruption. communist mindset. Andrej Plenkovic, USKOK

Croatia: A Stalinist Lean?

July 5, 2015 by inavukic 32 Comments

Zoran Mamic (left) and Zdravko Mamic (right)
Photo: Ivica Tomic

Arresting someone on suspicion or charges of tax fraud and embezzlement is not an uncommon thing throughout the world, so the fact that it occurs in Croatia is really not as newsworthy as the government controlled large part of Croatian media makes it out to be. But very few countries could beat Croatia and the current government’s sensationalistic executions of arrest and search warrants at the time when they should actually be publishing what they are doing to prevent hordes of young people exiting Croatia in search of work elsewhere.

When the Croatian public learned on Friday 3 July that the state bureau for combating corruption (USKOK) had finalised its investigation into allegations of embezzlement, tax fraud and evasion against the “bosses” of the Croatian most successful soccer club “Dinamo – Zagreb” and that arrests were imminent, the implicated brothers – Zdravko Mamic, the chairman of Dinamo Zagreb, and his brother Zoran Mamic, the club’s coach – were in Slovenia attending the club’s training camp. The Mamic brothers wasted little time and returned to Croatia to face the authorities but as soon as they crossed the border in a car Croatian police arrested them and drove them to prison from where they are expected to face the court and apply for bail! It’s not as if they were on the run from Croatia! Their homes were searched also and the president of the Croatian Football Federation, HNS, Damir Vrbanovic, was also arrested and placed into one-month custody as a measure preventing any influence on possible witnesses.
Zdravko Mamic is suspected of taking undeclared commission fees from the sale of several Dinamo players to foreign clubs. He has denied his and his brother’s wrongdoing. Sales of Dinamo players of note include: Luka Modric (Tottenham Hotspur, Real Madrid), Zvonimir Boban (AC Milan), Robert Prosinecki (Real Madrid, Barcelona), Eduardo da Silva (Arsenal) and Alen Halilovic (Barcelona).
Zdravko Mamic, known for his ardent love of the Croatian nation and its independence, responded by saying that the criminal investigation represents “genocide” against him, his family, Dinamo and the Croatian state.
“…The whole world will find out about this and will see that the government which is the descendant of the Communist Party has not moved away from its methods, that is, political reckoning with those who think differently. Of course all this is an order from the very top of the government, from the Prime Minister down…It’s clear from all his public outbursts that concoctions of various affairs against people of right-wing political orientation are rife…”

Croatian TV news said Saturday 4 July that this case represents the largest amount of money that the anti-corruption bureau USKOK has so far investigated. Reportedly USKOK alleges that brothers Mamic have through corrupt dealings, embezzlement, scooped for their personal benefit the sum of 117.8 million Kuna (15.2 million Euro) from Dinamo football club and 11.2 million Kuna (1.5 million Euro) from the state budget i.e. tax. Mamic brothers have denied guilt to these charges and vow to prove their innocence.

Croatian media said that the Mamic brothers are accused by the USKOK bureau as having channeled the funds into their private accounts by taking undeclared commission fees from the sale of Dinamo players to foreign clubs and through “illegal” contracts with individual players.

Zdravko Mamic’s solicitor, Jadranka Slokovic, said that her client had laid out a very wide defence through which he denied all charges put against him. She stated that in her opinion this is a case of a “malicious procedure through which documents about transfers of football players are wrongly read and presented” and that “on the other hand, we are looking at a political procedure that has the elimination of Zdravko and Zoran Mamic as its goal.”

The former president of Croatia, Ivo Josipovic, commented that it would be hard to even think that the charges of corruption were an election tool (for the leftist Social Democrats), because that would mean that Croatia is a Stalinist society, and that’s not true – he said.

That indeed is yet to be seen when it comes to this particular case but sadly the due process for either guilt or innocence will not pass through the courts before the elections early 2016. So, in effect, the arrests at this particular time and the sensationalism created around them do smell of political fodder for the public; and that fodder will not benefit the conservative political parties but the ones Josipovic and current government subscribe to. In this year of 2015, arrests on suspicion of corruption and fraud should be a “normal” matter, a “days work” so to speak instead of being unleashed into the media as some sensation that lasts for days! Croatia has been and is riddled with corruption and these latest arrests with their media fanfare for the benefit of the ruling political parties do strongly suggest that it is still all about politics and not about stemming out corruption at every level. To me, whether “brothers Mamic” or some local government officials were found guilty of corruption (and there are multitudes of those) is one and the same thing – equally bad, equally unacceptable. But people of “brother Mamic” social calibre and standing are perfect for the creation of public hysteria, whether “positive” or “negative” – and either does leave noticeable imprint on “opinion polls” and eventually on election results. This really does remind one of manipulations akin to a “Stalinist state” for in a true democracy corruption is individualised and individuals if found guilty bear all the responsibility, not the people or the nation. Ina Vukic, Prof. (Zgb); B.A.,M.A.Ps. (Syd)