Published in Nacional number 719, 2009-08-25

Autor: Robert Bajruši

A TEST OF HONESTY ahead of the 2009 elections

All the presidential nominees' scandals

THE REAL QUESTION in the presidential election campaign will be how much the candidates respected Croatian laws and customs: Nacional has prepared a list of the scandals the leading candidates for the Office of the President have been embroiled in in the past

The presidential elections broach an important question, and that is in what measure the candidates respect the law and behave morally in their careers to date. Croatia is not a country in which the public is in the habit of punishing politicians given to scandals and eliminating them from the political scene, and when it come to candidates for the Office of President, one must set above average criteria. Especially as the programs offered by most of the serious candidates are similar and more or less acceptable. But the real test in the campaign should be the question of whether there are grounds to suspect their honesty. This is not a question of moralising, but a legitimate topic and a filter at which many well known politicians fail in democratic countries when they face scandals in which it is revealed that they violated laws and customs. That is why it is interesting to see in what scandals the candidates running for the post of President of the Republic of Croatia have been involved.

Andrija Hebrang, the HDZ's presidential nominee has had a number of verbal escapades in the past, and two scandals that have seriously undermined his political credibility, and he has been suspected of being involved in corruption scandals. One scandal took on an international facet when, in 2005, then US Ambassador to Croatia Ralph Frank wrote a letter alerting Ivo Sanader of the unacceptable malversation going on at the healthcare ministry in the procurement of costly medical apparatus. At issue is the Shimadzu scandal. In its 11 years of doing business in Croatia the Shimadzu company has raked in more than 200 million kuna from the Croatian national budget and become the leader in the number of installed medical devices, but because they were linked to Hebrang most of these lucrative contracts have been characterised in the public as dubious affairs. In the past hospitals were equipped with medical equipment from various international companies. Upon taking the seat of healthcare minister in 1994 Hebrang scrapped the contracts that had been in force until then. Prior to 1995 not a single Shimadzu device was used in Croatian healthcare institutions. With the rise of Hebrang's political career Shimadzu has taken over the lion's share of the Croatian market.


The background to Shimadzu's success became clear when it was discovered in 1995 that Shimadzu's European head office in Germany's Duisburg was to open a branch in Croatia, based in Zagreb, and that Gordan Tomac, the son of Hebrang's friend Berislav Tomac, was to be named to head the branch. Over the following years Hebrang was on several occasions publicly suspected of having favoured the Shimadzu company because of his private and business ties to the Tomac's. A tender was issued in 2003 for the purchase of a coronarography device for the Merkur Clinical Hospital, a tender won by Philips. But a contract was never signed with that firm, and instead the tender was repeated under Hebrang's leadership, for no reason, with the bid from Shimadzu this time winning the tender. In mid July of 2004 the public learned the news that the Ministry of Health had awarded as many as seven contracts for the procurement of medical equipment to Shimadzu from 17 May to 28 June. Hebrang's opponents warned at the time that most of these public tenders had technical specifications tailored so that only Shimadzu could meet them. Tenders in which the convincing winner was Shimadzu continued in Croatia in 2005, culminating in the protest letter sent by the US Ambassador.

IVO JOSIPOVIC has been linked to scandals with the Croatian Composer's Association and the Posmrtna pripomoc funeral services associationIVO JOSIPOVIC has been linked to scandals with the Croatian Composer's Association and the Posmrtna pripomoc funeral services associationIn late 2004 Andrija Hebrang, at the time the Minister of Health, was in the midst of another scandal, but this time the criticism was targeted at the ethical nature of his actions rather than at any material responsibility. Hebrang announced that he was suffering from prostate cancer and chose to undergo an operation in Austria rather than in Croatia. It was a slap in the face of sorts to Croatian healthcare, and Government had to intervene, announcing that Andrija Hebrang had opted for a prostate operation abroad because laparoscopic operations of the kind were not yet routine in Croatia. Very soon, however, Nacional learned for a source close to the urological clinic in Innsbruck that Hebrang had been operated on there using the classic method, the same method used in Croatia about a thousand times a year. In other words, the Innsbruck Affair showed that the chief architect of the Croatian healthcare system did not trust local medical experts and choose instead to go to Austria and pay 30,000 euro for the operation.

Ivo Josipovic, the SDP's presidential candidate is mentioned in the context of two scandals, those concerning the Posmrtna pripomoc funeral services association and the Croatian Composer's Society. What is interesting is that both scandals broke in 2000, in articles by music critic Bosiljka Peric-Kempf published in the Novi list daily, an after a short debate in which Josipovic got involved, denying the charges, and receiving the reporter's response to his denial, the entire matter was dropped for a full eight years. Then in April of this year Pero Smiljanic, a former Financial Police official, reiterated the accusations that Bosiljka Peric-Kempf had signed in the past, adding that Josipovic had been fired as a result of the scandal. The first scandal in which Ivo Josipovic is mentioned broke in 2000, and concerned illegal activities at the Posmrtna pripomoc association, whose president, and later Supervisory Board member, was Josip Kregar. There were public allegations at the time of an alleged 360,000 kuna loan that Kregar as the president of the Supervisory Board of the Posmrtna pripomoc association received from the Zlatica savings bank, a firm that the association had set up, and that disproportionately high expenses where entered into the association's ledgers, not based on the amount of business being done, overpriced real estate was purchased and loans approved with low or no interest. At the same time Posmrtna pripomoc was taking loans from these same companies at significantly higher interest rates to cover current accounts.

In an interview for the Javno.hr portal Smiljanic stated that Josipovic had, while serving as president of the Croatian Composer's Society, transferred money to companies owned by Posmrtna pripomoc as loans, but an investigation into this was politically obstructed. When the Posmrtna pripomoc scandal escalated, Josipovic on 9 November of 2000 stepped down from his membership in the Zlatica savings banks' Supervisory Board, but there had already been accusations as to what an expert on the Hague tribunal and musicologist was even doing on the boards of companies connected to Posmrtna pripomoc. No evidence has been published to date indicating that Josipovic might have broken the law, and it all boils down to a number of suspicious activities discovered at Posmrtna pripomoc, with Josipovic singled out as a key member of the Zlatica savings bank. It was Bosiljka Peric-Kempf again who first warned of the second scandal linked to Ivo Josipovic. He was the secretary of the Croatian Composer's Society and was accused of setting up a legal framework for ZAMP (a professional service linked to the Composer's Society protecting royalty rights), whereby the money of 4,000 Croatian composers is invested into various companies or banks. He has been criticised of never having asked the authors if they agreed with this way of investing their money, and that some performing artists are unable to get data on the amount of their own royalties. Simply put, the accusations levelled at Josipovic were that he had manipulated other people's money in a suspicious way and without outside control, and that he did so at a non-profit association. Josipovic rejected the charges and stated that everything had been done according to the law and that the Financial Police has uncovered only minor irregularities, mostly in areas he had nothing to do with. The scandal was not mentioned for years, and with the elections coming up they are again in the spotlight and it remains to see whether they will affect his rating.

Milan BandicMilan BandicIn 1990, at the age of 30, Nadan Vidosevic became the director of Dalmacijacement, and it is from this period that his first scandal dates. With the war going on Dalmacijacement's business was not going well and Vidosevic launched its sale to buyers in Italy. When he left Split in 1993 to take the post of Economy Minister in the Nikica Valentic administration, Dalmacijacement was sold to Italian buyers for 25 million dollars. At the time many experts pointed out that the prices was far too low, and there were suspicions that the actual figure was twice as high. There were intermittent press reports that the buyers shelled out from 10 to 12 million dollars to bribe Croatian officials, and that the entire transfer was carried out by HDZ party officials, with the police and prosecutors lacking the guts to investigate the allegations of profiteering.

Vidosevic is now a member of the Supervisory Board of Dalmacijacement, whose former owner London-based RMC has sold it to Mexico's Cemex. In an interview he stated that the foreigner owners had invited him to take up the post as a respected member of the domestic business community, and said that he had been the company's greatest enemy. But there are also markedly differing views, like that of union leader Ozren Matijasic. "Nadan Vidosevic's role in the privatisation of Dalmacijacement is everything but positive. And although Dalmacijacement was sold after he had left the company, he had been part of the management team that had prepared it for sale. While they handed out pink slips, he and his associates prospered," says Matijasic, the president of the Croatian Federation of Unions. Nadan Vidosevic was involved in two quite similar real estate scandals in which he reaped millions in profits, and much criticism that the deals were very shady. The better known of these is certainly the Mestrovic scandal, in which he quite suddenly became the owner of the Mestrovic Atelier, located at one of Split's most exclusive locations. A few years ago he purchased the atelier and the surrounding estate for a half million euro, and announced in interviews that he planned to open a private art gallery open to the public inside. The president of the Croatian Chamber of Economy is numbered among the top ten art collectors in Croatia, whose collection is estimated by experts to be worth about 500,000 euro, and which in the first public versions was to have been presented to the public. But the Split authorities soon thereafter adopted amendments to the general zoning plan and the Mestrovic Atelier, which is located in the protected Marjan Woods, became a part of the zone in which construction is permitted. Vidosevic soon sold the building, the surrounding land and the construction rights, and the price published publicly was 11 million kuna. In other words, thanks to changes to the zoning plan, voted through by the Split HDZ and it partners, Vidosevic made a profit of about 900,000 euro over a relatively short period of time.

An interesting coincidence connected to Vidosevic's real estate and the changes to the zoning plan concerns a 4,116 square metre lot on Pjescana Bay near Medulin, a scandal revealed five years ago. In 2004, the Glas Istre daily revealed that Vidosevic bought the lot in 1999 for 36,000 German marks, at a time when construction was not permitted in the area. The general zoning plan has since been changed and the land is now estimated at 2 million euro. Nadan Vidosevic is also a participant in the biggest sports and finance scandal in Croatia. Charges were filed against him in 2003 for financial malversation and the disappearance of 55 million kuna at the Hajduk football club from 1992 to 1997 while he was the chairman of its board. Accused alongside Vidosevic were Vedran Rozic, Bartol Kaleb and Ivan Buljan, and they were suspected of having opened secret bank accounts aboard where they deposited money from the transfer of Hajduk's players, thereby avoiding paying taxes, and skimming some of the money from player's contracts. The police found notes on the transactions, and Rozic, Kaleb and Buljan wound up in police detention for 20 days, while Vidosevic claimed that he knew of the bank accounts in Austria, but not where the 55 million kuna had gone. Instead of offering an answer concerning whether he had been aware of any suspicious dealings when recently queried about the scandal, he nonchalantly responded that Hajduk became the fifth-placed club in Europe during his time as its president. Without assuming if there is any guilt, the Hajduk scandal is a vivid example of corruption in the Croatian judiciary. How else can one explain that for irregularities committed 15 years ago, and charges filed back in 2003, no one has been brought to trial to this day?

VESNA PUSIC has not been involved directly in any scandals, but was indirectly accused of having tried to protect her former associate Mislav Zagar (left) from criminal persecution for seeking bribe moneyVESNA PUSIC has not been involved directly in any scandals, but was indirectly accused of having tried to protect her former associate Mislav Zagar (left) from criminal persecution for seeking bribe moneyAnd while Vidosevic worked at top management positions after 1990, the question of where he got the money to buy exclusive houses and properties worth several million euro has been posed frequently. It is the obligation of presidential candidates to disclose all of their assets, and to explain how they acquired them, and Nadan Vidosevic is the only potential participant in the election campaign whose declaration of assets has not been made. The ownership of villas and houses is not now a scandal, but could become one if precise calculations are not published. In the mid-1990s Nadan Vidosevic, his wife and daughter, moved into a newly constructed building in Zagreb's Sigecica quarter, a few years ago he purchased land in an elite part of the Pantovcak quarter, and he owns there one of the most exclusive villas in Zagreb. In early 2007 Vidosevic started construction of a villa in Prekrizje. The edifice is truly magnificent, with 730 square metres of residential space and a yard of 1,200 square metres. A rough estimate of the value of Nadan Vidosevic's Zagreb residence is about 3 million euro. The official investor is his mother Marija Vidosevic, a pensioner.

The former cottage in Nemire has now been expanded and renovated and has several apartments. He is also the owner of a BMW Series 5. As far as his finances are concerned, when he took over the post of CEO of the Kras company in 2005 he purchased a package of stock the value of which is estimated at 6.6 million kuna at favourable terms, and in 2006 was awarded an additional package of shares worth 744,000 kuna. His wage at Kras is 58,000 kuna.

Vesna Pusic, the candidate put forward by the Croatian People's Party (HNS), has never been involved in a corruption scandal or been suspected of violating the law. In the past she was indirectly accused of having hushed up a scandal involving her then close associate and president of the Zagreb HNS organisation, Mislav Zagar. That was in 2003, when businessman Damir Ivan Petrovic reported Zagar to the police for a bribe of 50,000 kuna he was to have given to win the contract to set the lawn on the Hrvatski dragovoljac football club's pitch. The police filed charges against Zagar, and Petrovic said that he had informed the office of Vesna Pusic of the solicited bribe, but that there had been no reaction upon which he had to report the case to the police.

The first scandal in which Milan Bandic found himself embroiled in was in 2001, about a year after becoming the Mayor of Zagreb. The press learned that Bandic had built a cottage in the Samobor highlands without a building permit. The scandal saw its continuation ten days later, as that was exactly the amount of time the Zagreb Mayor needed to get all of the required permits to legalise the construction, even though "common" citizens need years sometimes for the same procedure. Bandic suffered the worst consequences in 2002 in the Alcohol scandal. Milan Bandic was caught in the Sljeme foothills drunk driving, and tried to escape from the traffic police, when he finally stopped, he tried to bribe them, and in the end the police officers were placed on suspension, accused of having told the press what had happened. Bandic was forced to tender his resignation.

In 2004 Bandic got into big trouble over the Zagrepcanka scandal. Back in 2001 he signed for the purchase of a plot of land covering some one hundred thousand square metres with 33 buildings at an attractive location, and the City of Zagreb paid the kuna equivalent of 15 million euro to the account of the Commercial Court. At the moment of payment, however, there were 43 registered claims to the land or part of the land from companies based on debts owed by Zagrepcanka, which created a number of legal and political problems. The biggest of these was when two and a half years ago the Municipal Court registered the Vinkovci-based firm Krma as the owner of the real estate, on the basis of a debt of 32 million kuna. Bandic reacted vehemently, and a paid advertisement appeared in the press under the title "It's True" that disputed the court's ruling, as a result of which the Association of Croatian Judges filed charges. After the scandal Ivica Racan planned to throw him out of the SDP, but abandoned the idea, saving Bandic's political career. The epilogue to the Zagrepcanka scandal came in 2006 when the Municipal Court adopted a ruling whereby the City of Zagreb became the owner of the disputed real estate, and during the recent election campaign for Zagreb mayor Milan Bandic claimed that 80 million euro was paid into the municipal budget from the sale of plots of the land.

In the autumn of 2006 there was the Apartment scandal, when it was discovered that Bandic had purchased a 125 square metre apartment in Buzanova Street, the value of which has been estimated at about 370,000 euro. The problem arose when it was discovered that the apartment was in fact twice that size, and therefore, twice as expensive, but Bandic claimed that the other apartment belonged to his brother Drago. Reporters learned that Drago Bandic is a guest worker of modest means living in Berlin, and it is quite doubtful if he is financially capable of affording this costly piece of real estate.

The 2009 Toilet scandal is yet another financial impropriety linked to Bandic. Reporters learned that 1.55 million kuna was paid for two public toilets at the Dubrava bus station, with the construction done by the Tigra company, owned by Bandic's best man Milan Penava. A year before that City Hall said that the construction of the toilets would cost about 100,000 kuna, and then a direct agreement was signed at fifteen times that price. Bandic claimed that the toilets were of the best possible quality, and rejected the possibility of corruption related to the fact that Penava is his best man.

Echoes of the Radenovic scandal

■ The biggest scandal the Mayor of Zagreb has faced in 2008 was the assault on Igor Radenovic, the director of the Zagreb Roads company. Radenovic was assaulted when he tried to put an end to criminal activity in this municipal company, and the press later speculated that the Mayor may have protected those suspected of being involved in the Radenovic case. And while he has not been connected to the attack on Radenovic, many felt that Bandic was the key figure in the scandal.

Nadan Vidosevic's real estate empire

■ Vidosevic has a residence estimated to be worth three million euro on Pantovcak Street. In Ravna Gora in the Gorski Kotar region of central Croatia he purchased 6.5 hectares of land and built a winter cottage, tennis court and horse stable. The press has also written of his houses at Bjelolasica and Kupres with two tennis courts.

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