USKOK – Croatia, the War, and the Future

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

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)

Filed Under: Uncategorized Tagged With: Alen Halilovic, corruption, Croatia, Croatian Football Federation, Damir Vrbanovic, Dinamo Zagreb, Eduardo da Silva, HNS, Luka Modric, Robert Prosinecki, Stalinist society, tax evasion, USKOK, Zdravko Mamic, Zoran Mamic, Zvonimir Boban

Tour-de-force Raid In Croatian Capital Zagreb Over Corruption

October 20, 2014 by inavukic 23 Comments

From left: Slobodan L:jubicic, Milan Bandic and Petar Pripuz

On late afternoon/evening Sunday 19 October 2014 police in Croatia’s capital Zagreb have arrested 19 people from the city’s Mayor’s office and associated business holdings. Croatian and the world media are full of this story, as it certainly appears more like a political tour-de-force raid against the city’s authorities rather than a normal train of events following duly conclusive investigations. No doubt, corruption in Croatia (as with all former Yugoslavia states) is a crippling scourge, but one doubts the arrests require such adroit manoeuvre as we’ve seen from this move instigated by Croatia’s Anti-corruption authority USKOK. Why the authorities chose a Sunday evening to arrest these individuals is not clear but it certainly added high drama to the whole process that stinks of political plotting.
The “Tour de force” (a performance managed with great skill) could well be a clever plot – by the pro-communist or ex-communists holding power in the country, including the president Ivo Josipovic whose second mandate in imminent elections is looking more and more unlikely – to push into the background the trial in Germany against two Croatian nationals (Josip Perkovic and Zdravko Mustac) for communist Yugoslavia crimes. The trial in Germany is as far as I and many are concerned a trial of historical importance; it’s likely to reveal quite a string of murderous operations by Tito’s regime – communist Yugoslavia, and as such snatch away quite a few votes from Josipovic and perhaps even more for the ruling Social Democrats at next year’s parliamentary elections.
So, Milan Bandic, the longest serving Mayor in history, generally, this is his fifth mandate since 2000, has been arrested and alongside him the co-CEO of CIOS waste disposal and recycling corporation, Petar Pripuz, as well as the president of public infrastructure firm Zagreb Holdings, Slobodan Ljubičić Kikan. Also 16 other staff and/or associates of the City administration, which operates within a conglomerate of some 20 companies, have been arrested. Names of all have not yet been released.
The public does not know exactly what and if the authorities hold evidence that stacks up to criminal charges but it is expected that Monday, 20th October – today- all will be revealed in a Zagreb court. Or, perhaps not all!
The following announcement can be found on the USKOK (anti-corruption authority) website:
“Following months of complicated criminal investigations associated with illegal practices in the City of Zagreb and Zagreb Holdings, conducted by the Police Directorate and the National Police USKOK, coordinated by the State Attorney’s office and USKOK, several persons have been arrested (19.10.2014)
Certain evidential activities will be carried out in reference to the apprehended persons and will, within statutory time, be brought to the remand superintendent. Applications for criminal charges, based on founded suspicions, for a larger number of criminal acts of corruption, abuse of position and power and trading with influence.”
The news of these arrests has dropped upon the Croatian public like a bomb, even though there have been suggestions for a number of years that corruption and abuse of power has plagued the city authorities. People are in shock and confused by the fact that the arrest occurred on Sunday late afternoon/evening when it was clear that for at least a year and half the ring has been tightening around the city authorities; allegations against Bandic have occupied media space for number of years but nothing stuck… all accounts and receipts and invoicing have been under scrutiny and forensic auditing, even the smallest of receipts such as those for petrol. Bandic has been a sore in Social Democrats’ (read: formerly known as the League of Communists) eyes ever since he left that party in 2009 and embarked upon his, unsuccessful, candidacy for President of Croatia. Open animosity between Bandic and the Prime Minister Zoran Milanovic has often surfaced into the public as tragic and pathetic. There have been expectations that Social Democrats would destroy Bandic but nothing happened for years and now this arrest – on a Sunday evening!
Milan Bandic’s lawyer, Kresimir Krsnik, has stated for Croatian radio:
“When all the investigations are done, we will see what will happen. This is a spin used to divert attention from the trials against Perkovic and Mustac [in Germany]. All the media will now be writing about these arrests. I would like to share with the Croatian public and know why they have been arrested.”
It would seem that the authorities investigating corruption have come to a conclusion that corruption with the Zagreb City administration and operations is not a matter of a few isolated acts but a matter of systemic corruption enabled by the City heads/the Mayor through a creation of a network of corrupt practices.
According to unofficial sources, Bandic, his close associate Ljubicic and a Zagreb entrepreneur Pripuz allegedly caused a financial harm to the city budget by committing a series of corruption-related crimes.
Judging by what the minister for Entrepreneurship and Crafts, Goran Maras, said it would also seem that there is still quite a bit of investigating to be done.
“Given that we’re dealing with a very large number of people arrested it’s obvious that there is a great deal of matters to investigate and I hope that not a single stone will remain unturned. And that everything that is still unclear and suspect will be investigated.”
So, it’s clear: it is still an ongoing investigation and 19 people are behind bars, in remand pending investigation unless some are conditionally released.
Regardless of whether the persons arrested will be found guilty of corruption or not, it is profoundly sad to see that Croatian authorities seem to thrive on sensationalism even with the serious crimes such as corruption is. Processing suspects for corruption and abuse of power should be something that is practiced every day in a country such as Croatia and not seemingly sporadically by bringing the “big fish” to public slaughter (e,g, former Prime Minister Ivo Sanader, Nadan Vidosevic/former head of Croatian Chamber of Economy etc) just to show the government is doing something about corruption when if fact the biggest problem for the country’s well being is the widespread corruption occurring at local levels of government and government offices. Furthermore, one must wonder whether Croatia is becoming a country that likes to arrest first and then look for evidence that would sustain criminal charges? If so, any foreign investor would shudder and turn away. The story behind Zagreb Mayor and the 18 others arrested with him promises to be interesting but I truly hope it leads to a tighter control and policing of practices at all levels of government and state controlled companies for there lies corruption’s lifeline. Ina Vukic, Prof. (Zgb); B.A.,M.A.Ps. (Syd)