SANADER'S MEDIA PLAN The former Prime Minister planned to unify the significant marketing budgets of state owned companies under the umbrella of Fimi-media so that he could direct money towards obedient media houses and destroy those who would not toe the line The Croatian judiciary has received confirmation from seven persons of the claims made by Damir Mihanovic, a member of the board at insurance company Croatia Insurance, of a meeting held in the spring of 2007 at which former Prime Minister Ivo Sanader ordered the directors of some twenty state-owned firms to engage the services of the privately-owned Fimi-media company, owned by Nevenka Jurak, a close friend of the head of the Customs Directorate and until recently HDZ chief treasurer Mladen Barisic, for all future public relations contracts.

Sanader denied Mihanovic's claims this Sunday in a press release, but according to the information Nacional has, investigators no longer have any doubt that the meeting was in fact held and that the business operations of Fimi-media were discussed. Moreover, according to unofficial information an inspection of the official log of visitor entries to the seat of Government at Banski dvori confirms the meeting and a list of those who participated in it.Some, like oil company INA's Josip Petrovic and Mario Crnjak of Croatian Motorways, have denied press reports of their participation at this meeting, but no one, Sanader included, is still denying that the meeting was held. What is more, according to the information Nacional has received from well-informed sources, the meeting in question served only as the immediate cause of a much broader investigation into the operations of Fimi-media, currently being led by both USKOK and the State Attorney's Office.

Investigators hope to be able to reconstruct precisely the flow and quantities of money pouring from various state-owned companies into Nevenka Jurak's company, and where this money wound up in the end. If they succeed in doing so, they will have grounds to establish the criminal responsibility of all those involved in the scandal. But even if this does not happen, the controversial meeting could prove to be the key event in shedding light on the corruption that has been occurring for years among top Croatian politicians.

If, namely, witnesses confirm the description of the meeting as told by Mihanovic, it will be the first time that concrete evidence has been found of the criminal responsibility of former Prime Minister Ivo Sanader. If it is true that Sanader did in fact order the directors of state owned companies to do business in the future exclusively through the Fimi-media company at the meeting, the formal conditions will have been met to launch criminal proceedings against him. That kid of privileged treatment of a privately owned company with money from state owned companies can be qualified as an abuse of office, i.e. of position and authorities, which is punishable be prison sentences of from three months to three years.

If it is also shown that his actions resulted in significant material benefit, for which there are serious indications at this time, Sanader could be looking at upwards of ten years behind bars. Insofar Mihanovic's testimony could prove devastating for the former Prime Minister, and his vehement denial and announced lawsuit for slander come as no surprise.

In the press statement, however, Sanader did not deny that the controversial meeting took place, only that he did not order that business be done with Fimi-media. Sanader could try to lay all of the blame for operations between that company and state-owned firms on Barisic, his long-time friend and one of his closest associates. For now we can only speculate how, faced with a long prison sentence, Barisic will behave, i.e. whether he would be willing to testify about Sanader's role in the scandal, and it is also an open question how, if she is charged, Nevenka Jurak will conduct herself.

But, Nacional's sources in legal circles say that the scandal surrounding Fimi-media should be viewed in a broader context, and claim that it was an attempt to create a pseudo-state apparatus that would control the entire media space in Croatia. Over recent years, namely, state-owned companies have taken a significant chunk of the domestic advertising market, and by unifying all of their budgets under the control of a privately owned company owned by a person of their confidence, Sanader and his associates would have gained yet another powerful lever with which to pressure Croatian media using state money.

Media houses that toed the line would have been rewarded with fat marketing contracts, while this revenue would be denied to those who would not gear their editorial policies to the wishes of the national leadership. This pertains in particular to print media, which in the past two years have been hit hard by a drop in marketing revenue. This was largely due to the policy of undercutting the price of advertising space on national TV networks started in 2008 by Croatian Television (HTV), with which Fimi-media did most of its business. What is more, in 2008, when the company started doing business with HTV, it was customary for half of the marketing to go to TV, and half to print media. That changed after HTV significantly cut their marketing prices and started selling broadcast slots in large packages.

These packages were purchased by Fimi-media, and according to some sources even the employees of the company wondered how Nevenka Jurak managed to cut such favourable deals with the HTV top management. This HTV policy, however, which the other television networks also adopted, resulted on the one hand with almost all time slots going to a handful of large agencies, while smaller agencies practically foundered, and with television taking on a significant share of the marketing revenue that had previously gone to print media.

Just last year publishers saw a 30 percent drop in marketing revenue, making them even more dependent on contracts with major state-owned companies. In the context of the new revelations concerning the operations of Fimi-media, these events on the advertising market and the business policies of the top people in the national TV station take on a completely new connotation.