MUSLIM-CROAT FEDERATION: CORRUPTION AS A STATE OF MIND

Bosnia-Herzegovina:

Drazen Simic (AIM Sarajevo)

Bosnia-Herzegovina's problem is not corruption itself, which has entered every nook and cranny of everyday life, but corruption as a state of mind of the vast majority of ordinary people. According to them, it is perfectly normal for every new set of ruling politicians to do what they please with state money, including using it for the benefit of their relatives, many friends and acquaintances, and, of course, for their own party which helped them rise to power.

The story of fighting corruption begins in the summer of 1998. Several days before a visit by British Foreign Secretary Robin Cook, the Western press carried extensive reports on corrupt Bosnian politicians, especially ones at the top, describing it as a black hole that swallowed millions of dollars without a trace. Hopes that the coverage was simply a result of the usual summer lack of events were dispelled as soon as Secretary Cook arrived in Sarajevo and repeated the same charges straight to his hosts' faces.

The stunned officials needed a day or two to recover and an avalanche of denials followed. Their key defense were statements by international officials and donors, who to a man confirmed that government officials had not even cast as much as a greedy glance at their money, let alone pocketed any of it. This response was quite understandable: who would be willing of his own free will to admit that local crooks had tricked him out of money he was supposed to safeguard, while simultaneously receiving a handsome sum for the job.

Numerous high-level local commissions were instantly formed only to conclude that the corruption charges were unfounded, that the money was where it was supposed to be, and that the new political elite was as poor as a church mouse, having sacrificed the little it possessed for the sake of the fatherland. What ultimately became of these commissions and their findings is unknown, but what is known is that every single foreign politician who arrived in Sarajevo after Cook asked a question or two about corruption even before shaking hands with his hosts at Sarajevo Airport. An anti-corruption team has been formed with the Office of the High Representative, and together with many local "teams" Bosnian and the Muslim-Croat Federation level. While most of them wasted money and time debating how to assault corruption, local newspapers were teeming with reports of innumerable instances of theft, abuse of authority and scams, with top Bosnian officials in the lead roles.

Fighting corruption thus became a favorite buzz-phrase with no substance, which in practice looked more or less like this: in the morning, Federation ministers would be busy adopting many changes to existing laws as part of the new, anti-corruption strategy, while in the afternoon, sitting quietly in their offices, they would sign papers authorizing the transfer of millions of German marks to undeclared accounts, or approving hundreds of thousands of German marks in donations to "their" sports clubs, media outlets, and associations. Around noon, they would gallantly spend state funds to buy expensive, imported watches, silk underwear, and other such necessities needed to keep a democratic state functioning. During election campaigns, which in Bosnia means every year, state funds would be hastily transferred, via numerous mediators, to political parties, for example, the Party of Democratic Action or the Croatian Democratic Union. The government would also immediately respond to emergency pleas of associations of war veterans barely able to make ends meet: unfortunately, the money would, as a rule, end up by being deposited in banks accounts belonging to political parties. After the OSCE exposed such practices, they were immediately explained away as loans.

Since the privatization process is still underway, it is impossible to make a detailed analysis of the process in which many former state company managers became their owners. The grave condition of the economy and numerous scandals accompanying privatization have shown that many state companies, even profitable ones, were deliberately ruined in order to be sold for pittances. What is interesting is that the closer some people were to government circles, the more guarantees they had of making profitable deals, even founding their own business empires, very likely to survive their political sponsors.

The latest attempt at fighting corruption involves money paid to judges and prosecutors. This time around, however, this income is legal. They are supposed to get a raise, and their salaries will range from DM2,500 to DM3,000 per month, six-to eight times more than the Federation's average. That not everything is just about money was confirmed by developments after auditors completed and published a report on the use of state funds in the Muslim-Croat entity last year. Although the auditing was only partial, despite all their efforts international financial experts could not determine where over DM120 million had actually ended up. Absolute record-holders in spending were former premier Edhem Bicakcic, who was authorized to distribute up to DM200,000 from the budget, and his deputy, Dragan Covic, whose discretionary right amounted to DM100,000. Joining forces, the pair managed to spend DM12-DM15 million in the last year of their term of office alone. True, an investigation into their doings had been launched somewhat earlier, after Bicakcic was removed from political life by a decree issued by High Representative Wolfgang Petritsch, because of several illegal transactions, but no one can say with certainty how the proceedings will end. The most drastic examples of financial scams discovered by international auditors were backed by documents, and made available to the public on the Internet. The only ones who did nothing about it were police and prosecutors, because, as they said, the cases in question were not officially reported to them. This is why the auditing report rightfully concluded: "We do not believe that the existing internal control system will suffice to protect the property of the Muslim-Croat Federation and its ministries from losses resulting from fraud, incompetence, and carelessness."