Montenegro: Former President Arrested on Corruption Allegations

Montenegrin authorities today arrested the former president of Serbia and Montenegro, who they suspect was involved in large-scale corruption cases in his hometown of Budva.

Svetozar MarovicSvetozar Marovic was the president of the union of Serbia and Montenegro from 2003 until 2006, when the two countries split. He is also the former speaker of the Montenegrin Parliament, and currently chairs the political council of the ruling Democratic Party of Socialists.

Prosecutors say Marovic was arrested today in Podgorica on suspicion of long-term abuse of office.

Marovic has been suspected in a number of corruption cases that defrauded the local budget of Budva of millions of dollars in recent years. Those cases also resulted in indictments against some of his closest allies and family members.

According to Serbian state television (RTRS), Montenegro's Special Prosecutor for Organized Crime, Milivoje Katnic, earlier hinted at the arrest of Marovic, related to the construction of a resort in Budva.

In mid-August of this year, Montenegrin authorities arrested 13 people, including Marovic's brother and Budva former secretary for investments Dragan Marovic; Budva City Manager and Marovic's daughter, Milena Marovic Bogdanovic; and several other municipality officials on suspicion that they made shady deals with private construction companies.

One of the cases entails overpaying a private company for work on a stage at the Jaz beach, which was used for music festivals. Prosecutors said the case defrauded the municipal budget by € 2 million (US$ 2.2 million).

The other case centers on a deal between the suspects and another construction company, which entails amendments to a contract between the municipality and the company during the construction of the TQ Plaza business center in Budva between 2007 and 2008. Prosecutors say the amendments, signed without Budva assembly approval, defrauded the state by € 8 million (US$ 8.9 million).

RTRS reports that Prosecutor Katnic said the investigation into these cases was expanded to Marovic himself.

According to Montenegrin state television (RTCG), Marovic denies wrongdoing. He was ordered into 72-hour custody.

Marovic's son Milos Marovic, also recently arrested, is being investigated on suspicion that, via connected construction companies, he illegally sold 26,000 square meters of government land.

OCCRP earlier reported that Marovic's wife, Djordjina Marovic, had US$ 3.8 million of undeclared assets stashed in the Swiss HSBC bank.