Arrests in High Society

AIM Zagreb, 29 February, 2000

After change of the regime - at least that is what it is like in countries with long democratic tradition - the names of persons who played important roles in political life of a country are moved to anonymity. Things are somewhat different in Croatia: their names are still present in public, they just moved from newspaper pages of political columns to the pages of the black chronicle. Sometimes this happens in just a few hours, for instance, former minister of tourism in HDZ government, Ivan Herak, was arrested literally a few hours after the former government had held its last session.

The new authorities elected in parliamentary elections in the beginning of January, are in a very awkward position. Caught between high expectations of the public that they will disentangle the criminal jumble created in the course of the past ten years with a whole-heartedly played role of the highest officials of the ruling Croat Democratic Community (HDZ) and fear that the imminent arrests of the formerly respectable and distinguished persons might be interpreted as a "new revolution", revanchism or retaliation, Racan's government is making very cautious moves which cause suspicion among the citizens that everything will end up just with a few scapegoats. After the arrest of former minister of tourism and the paradigm of plunder through transition, tycoon Miroslav Kutle, who were arrested immediately, in the days of transfer of power, it seems that the new authorities are, after all, taking more resolute steps in settling accounts with crime. Recent arrest of Antun Novalic, tycoon from Osijek, for embezzlement - the police claims, worth about 10 million German marks - in his city bank which has gone bankrupt in the beginning of last year, seems to be the announcement of a new tide of arrests in high society. Mayor of Metkovic, Stipe Gabric Jambo, one of the richest people in the Neretva river valley, was recently taken to the police station for interrogation, but was released quickly. But, since state attorney does not want to let his case go, Gabric will obviously be summoned to the police station again and again, and the well-informed claim that a prison cell has already been prepared for him. In the past few weeks, there has been a tide of newspaper articles mentioning the name of Josip Gucic, jeweller from Janjevo, which testify about various foul deals with the taste of crime in many of his firms and enterprises. The circle is slowly tightening around him, too, and it is highly probable that he will be the next on the list who will end up in prison.

All the mentioned names - Kutle, Gucic, Novalic, Gabric - were linked to the very top of the former regime and until just recently were considered as respectable, highly positioned citizens. Gabric was one of the main fruit and vegetable suppliers of the Croatian Army and the Croat Defence Council, with excellent connections in the Ministry of Defence and Croatian intelligence services. Without these connections, he not only could not have been in such a profitable business, but he would not have been able to get such an attractive price for himself either: although these were wholesale business deals, Gabric charged all deliveries at retail prices with a margin which mostly amounted to up to 300 per cent!

His political sponsors were deputy chairman of Croatian assembly and one of the most prominent HDZ leaders Vladimitr Seks, and for some time director of Croatian intelligence service Luka Bebic. Gabric's open-handedness when politicians were concerned is perhaps best illustrated by the fact that at an auction of paintings held for the benefit of the Croats who are in prison of the International Tribunal for war crimes in the Hague, he paid for an amateur's portrait of the former Croatian defence minister, Gojko Susak, the incredible sum of 400 thousand German marks!

Names of two mentioned politicians - Seks and Bebic - are linked to the name of another arrested tycoon, Osijek banker and businessman Antun Novalic. Novalic was often seen in the company of these two: Bebic was allegedly helping him to buy the Neretva Bank and expand his business in Ploce, while Seks was the person who helped the tycoon from Slavonija to be received by Tudjman himself. Novalic could not directly get to Tudjman; he first had to go through the humanitarian foundation of his wife Ankica. This visit cost him about 180 thousand German marks which he donated to her fund for aiding the children of Croatia, and then, with her recommendation, he was received by president Tudjman. And, as it was not decent to visit the president empty-handed, Novalic gave the president as a gift an oil painting of two top Croatian painters - Kraljevic and Becic which is estimated to cost about 100 thousand marks. But, these are not the only connections of Novalic and politics: just before difficulties started in its business operations, his city bank made a payment of three million German marks for the purchase of Croatian daily with the largest circulation, Zagreb Vecernji list. This transaction seems to have been ordered from the very top of HDZ. Purchase of Vecernji list by the mysterious Caritas Fund from Virgin Islands is one of the most enigmatic privatisation operations performed in Croatia. Not to this day has it become known who the real owner of Vecernji list is, although according to what has been found out so far, it is yet another plunder committed by the former regime of HDZ.

That after tycoons turn might come of other former ministers who are for the time being represented in prison by Ivan Herak alone, is evident not only from the connections they had with the tycoons, but also from the findings of state auditors which were put on the agenda of the assembly a few days ago. It is quite unbelievable what state auditors revealed in business dealings of the central ministries, such as the one which dealt with defence or internal affairs. Not a single major business deal was put up on public competition, but was given to "reliable" HDZ cadre, such as the already mentioned Stipe Gabric Jambo. What was happening under the surface of such trade it is not difficult to imagine. An assembly deputy, disappointed with what he saw, with extreme bitterness, concluded that in central state ministries not even office material had been purchased without violating the law.

It is interesting that these findings, although prepared while the previous regime was still in office, could not be discussed because they bore the sign of "secret" so assembly deputies lay their hands on them only after the embargo on them had been lifted. And what these secrets contained is perhaps best illustrated by the fact that the ministry of internal affairs in two years spent 10 million kunas to pay informers of the police who had, among other, spied on independent journalists while they were investigating various financial scandals.

One of the problems the new authorities are confronted with is the inherited infrastructure in the police, the prosecutor's office and the judiciary. This network was built by HDZ for ten years, which carefully stuck to the principle that it is not important to be qualified, but to be loyal. But the problem is that not only politics and business are involved in crime, but so is the police, the army, and not rarely the judiciary. That is why it will not be easy to disentangle this knot, and the authorities, if they wish to survive, must make quick moves, because the people exhausted by the severe economic crisis are quickly losing patience. Besides, demands are growing for investigation of the property of the late president Tudjman's family which has in the ten years of his rule become one of the wealthiest in the country. For the time being the new authorities are still hesitating to make such moves. But, once the arrested tycoons are brought to trial, clearly many strings will lead straight to the top. That is why it seems that the present knowledge of proportions of crime which raged in Croatia for ten years is just the tip of an ice-berg.

Drago Hedl