Croatia: Former PM and Entire Party Indicted for Graft

After losing elections last week, Croatia’s ruling party HDZ took another blow when the party and former Prime Minister Ivo Sanader, were indicted for graft in connection with operating slush funds for their own election campaigns.

The indictment, the third against Sanader, came just days before Croatia signed an accession treaty with the European Union (EU).   Prosecution of organized crime and corruption were considered fundamental to its EU bid, and the 27 members of the economic alliance say they will continue to monitor anti-corruption trials from Brussels until Croatia officially enters the EU in July 2013.

This is the first time the country has indicted an entire political party.  Ironically, Croatia’s state-wide anti-corruption campaign was started by Sanader’s successor the premiership, Jadranka Kosor.

The indictment comes five days after HDZ, which had been the ruling party for eight years, lost parliamentary elections to a center-left coalition known as the “Kukuriku” bloc.  Most analysts say the loss is a direct result of perceived corruption and a flailing economy.

Sanader and six subordinates allegedly colluded to illegally skim funding from nine public companies for an election ‘slush fund.’  Prosecutors at Croatia’s Bureau for Combating Corruption and Organized Crime (USKOK), say this went on between 2003 and 2009, when Sanader mysteriously gave up his position as Prime Minister and moved to Austria.


According to the indictment, the HDZ took 31.6 million kuna (US$5.6 million), and Sanader personally got another 15 million kuna (US$2.7 million)  during those six years.  USKOK named the party’s former Treasurer Mladen Barisic and former government spokesman Ratko Maek.

The 60,000 page indictment also accuses employees of Fimi Media, a public relations firm, of assisting the government officials.

The former prime minister is already on trial for charges that he accepted bribes from the Austrian bank Hypo Alpe Adria in order to facilitate their entry into the Croatian market in 1995, when he was deputy foreign minister.  He is also accused of accepting bribes in exchange for selling shares of Croatia’s oil and gas group INA to Hungarian energy firm MOL, giving them an advantage in the market.

Sanader denies all of the charges.  He has been held in custody since July, but was due to be released Monday after he was granted US$2.2 million bail last week.  After the new indictment was issued on Friday, USKOK requested that Sanader be detained once again.

Zagreb County Court spokesman Kresimir Devcic said that Sanader would not leave Remetinec prison before Monday, but that he would be released “after all conditions are met,” including Sanader’s proof that he could post the bail and a three day appeal window for all parties.

The bail, the highest in Croatia’s history, will be composed of money proffered by Sanader’s friends and former colleagues including his wife Mirjana and outgoing parliament speaker Luka Bebic. Two other persons, including former Dinamo football player Tomo Sokota, offered €300,000 in cash.