Corruption in the Republic of Srpska

Weapon in Election Campaign

AIM Banja Luka, 12 January, 2000

Since the New York Times published the story about the corruption scandal in B&H Federation worth about two million dollars, corruption and crime in B&H have become the inevitable topic of numerous political debates and showdowns. And while in Sarajevo politicians mostly competed in the effort to prove that the American journalist had made up the scandalous story in order to compromise honest politicians of the ruling parties, in the Republic of Srpska the story about general criminalisation of the society was used in mutual accusations of the opposition and the ruling coalition. The closer the elections, the more deadly political weapon crime and corruption seem to be. Old unclarified scandals are brought up again and new ones are opened.

The most tragic heroine of the political showdown with crime in RS is former president of the Republic Biljana Plavsic. When she was taking over the post of the president she publicly promised that she would fight organised state crime and for the first time offered the public documentation on involvement of high government officials in the network of crime. Nobody was worried because of her threats. People who had been put on the pillar of shame gradually departed from public life and then from RS. Nowadays they are successful businessmen in Yugoslavia or abroad. The former president not only lost the battle with crime, but she also lost power in the presidential elections. Ministers from her political party (Serb People's League) remained in the new government, but nothing changed. On the contrary, two new scandals were opened at first in the press and then in police files - the one in oil refinery in Serb (Bosnian) Brod and RS Telekom.

In the meantime, one and probably the only research project on corruption in RS appeared in public and in it the thesis was bravely stated that crime and corruption were "designed" and supported by the authorities and that the authorities were not interested in efficient solution of this social problem. In the introductory notes of the study done last year by a non-governmental organisation called International Lex it is stated that the authorities in RS have not invested a significant effort to eliminate norms in the multitude of local regulations which are convenient for development of corruption. The authors of the study claim that the level of corruption of civil servants in RS is similar to that in other countries in transition and that corruption in "its worst form is manifested in the link of political leadership and bearers of administrative and executive jobs and managers of domestic and international companies".

"In Bosnia & Herzegovina it is an open secret that corruption is tolerated in cases of foreign trade and financial transactions, especially in capital investment deals, purchase of new technologies and sale of arms and equipment", the authors of the investigation project on corruption in RS write and stress that corruption has started to appear lately in connection with concessions for exploitation of natural resources and other aspects of investment of foreign capital in RS.

Goran Bubic, one of the authors of the investigation project and director of International Lex, says that no statistical investigation was made in RS on corruption in which scientific methods of criminal phenomenology would be applied, and that there is no court practice that could be investigated. "In elaborating the project we had to use personal knowledge and our own 'reliable' sources", says Bubic and explains the appearance of corruptiveness by dissolution of the state and formation of single-party systems within ethnic communities which identified power with unlimited executive power. "This model practically still operates but in a somewhat more subtle form. Governments simply cannot free themselves of the need to link business operations with executive power and numerous bureaucratic operations. Businessmen are forced to seek various permits and approvals, and in such conditions people seek the shortest way. It always leads through people with strong positions in the authorities", Bubic explains.

General poverty it is stated in the study is even more convenient for development of corruption. Civil servants are barely making ends meet and they seek a way out of this situation in additional 'charging' for their services. "This phenomenon is acquiring such proportions that due to their massiveness and inefficiency of state agencies, persons who commit crimes of corruption are not even trying to conceal the fact. The citizens openly bargain with policemen about the amount of fines, children without any knowledge acquire diplomas of schools their parents are donors of. In hospitals there are few physicians who do not ask for an additional fee for their work which should be paid through regular salaries", authors of the study conclude in the chapter on forms of corruption in RS.

As a special corruptive milieu foundation of state enterprises is mentioned which are controlled via management and supervisory boards nominated by executive authorities. "Management of enterprises is given to the parties who won majority in the elections, so that the parties have literally divided enterprises among themselves. They elected members of their management and supervisory boards from among their own membership, as well as managers" it is stated in the chapter titled "Economic Crime and Corruption". Evidence for this statement could be the piece of news from Doboj which was broadcast by Onasa news agency and in which it is stated that out of 44 managers and directors of state owned enterprises and institutions, 32 are owners of private enterprises or shops registered either in their own name or members of their households. Out of 90 members of management boards and 68 members of supervisory boards of state enterprises more than half own private enterprises, shops or agencies for rendering all kinds of services. Out of 20 directors of state enterprises, only one is not a member of any political party.

A chapter of the study is devoted to the danger of new forms of corruption which appear in the process of privatisation. The authors corroborate their suspicion with the described concept of party management of state enterprises and inconsistent legal regulations pursuant which privatisation will be carried out.

In order to establish the starting balance status, it is said in the study, a special law on enterprises was passed, and a special law on banks and various solutions for cases of registered but not paid share-holding capital. In enterprises the registered but unpaid share-holding capital is written off while in banks that same capital is booked on account of the bank's capital, which implies privileged position of potential share-holders in banks because by subsequent payment they can buy the previously registered capital.

The judiciary was not included in the study, although it is also increasingly said to be corrupt. Two authors of the study are experienced judges and former officials of the judiciary. Goran Bubic used to be president of the lower court in Kotor Varos and Nebojsa Pantic the public prosecutor in Banja Luka. Bubic is now a lawyer, and Pantic the head of the office of the commission for property rights in Banja Luka. The third author (Vojkan Dimitrijevic) is nowadays the Republican public prosecutor. Their former and current posts were indeed a moral obligation to speak up about the situation in the judiciary as well based on experience.

An illustration about the situation in the judiciary could be the recent statement published in Nezavisne novine of a lawyer from Derventa Zoran Simic who publicly accused two judges in the court in Prnjavor for intentional violation of law. It is also possible to hear that among judges there are also owners and co-owners of private enterprises, owners of cafes and shops. Even the authors of the study claim that there are members of management and supervisory boards in state enterprises among judges.

Judging by the (lack of) readiness of the government to deal with crime and corruption, it can be expected that stories about corruption may continue to be just a mortal weapon of political groups in election campaign. Individual arrests like the ones in the scandal in Brod refinery are aimed at creating an illusion that something is being done after all.

Branko Peric

(AIM)