OFFICIALLY EXPOSED STATE CRIME

AIM Zagreb, January 26, 1996

Hundreds of pages of various journal articles were written by independent media in Croatia about extravagance of the Croat political elite in the past several years. In Globus, Feral Tribune, Novi list, and the recently founded weekly Nacional, and even in some of the texts which managed to get through in state-owned newspapers, one could read numerous descriptions of how politicians got rich and how they lived and behaved like aristocrats, as well as the nouveaux riches around them, while at the same time they presented themselves as protectors od state interests.

However, these were texts written by journalists "from outside the ruling structures", so they could easily be shoved among the growing company of "internal and external enemies". Generally, nothing ever happened after these texts had been published - as the old saying goes: dogs barked and the caravans kept passing.

But, a few days ago, a text from "within" appeared and revealed how "the most beloved sons of our people" spent joint money collected for the budget from taxes paid by all citizens. This text verifies once again the credibility of the majority of newspaper articles written about state crime.

The text is the first report of the State Auditing Office about how the government and its ministries, units of local administration and state funds disposed of the money from the budget, in other words, how the state spent joint money. State Auditing Office is an agency established two years ago, and the mentioned report is its first product.

Ms. Sima Krasic, an enthusiastic member of the ruling HDZ, born in Herzegovina, and as story goes a "revolutionary ascetic" - a strict and persistent fighter against corruption and crime, is at the head of the State Auditing Office. Rumours, however, offer a different version as well: Ms. Krasic would have swept the findings under the carpet - which ought to be discussed by the Assembly deputies - if the irregularities had not been so enormous that it was impossible to conceal them. Supporters of this thesis indicate that auditing was done by investigation of randomly chosen samples, so that data presented in the Report are just the tip of an iceberg which projects so high that the revealed fishy dealings were simply impossible to hide.

Critics also add that the report refers to all the government agencies and ministries, that the auditors have managed to get through even to the untouchable Ministry of Defence, but while the investigation was still in progress, the auditors were ordered, allegedly "from above", to withdraw. Findings would have been even more comprehensive had the auditors been able to carry out their job in the Ministry of Internal Affairs which is, along with the Ministry of Defence, the largest consumer of the money from the budget.

The Report is written on about 1400 pages and at first sight already, one can see that none of the ministries passed the test without minor or major complaints against the way they spent state money or managed state property in 1994.

The story begins at the very top: state auditors revealed and wrote in their report how former prime minister Nikica Valentic had exceeded authorization: he not only allocated Osijek District and its first man Branimir Glavas by far the greatest portion of money from the budget item called "relief fund for alleviating damage caused by natural disasters" - about two million German marks - but unlawfully, without Government decision, paid Glavas additional 300 thousand marks, as assistance for construction of a business/sports airport which is more or less open only when Glavas takes off on a business trip.

Among the extravagant ministers, Ivan Parac, at the time of the auditing investigation the minister of labour and social policy, stands out. Parac later became Director of Croat Television, and now he is in the Ministry of Foreign Affairs, preparing to become the first Croat ambassador in Belgrade. Parac's ministry spent hundreds of thousand marks on purchasing various commodities and equipment from numerous privately-owned enterprises - without the compulsory public competition, of course.

Parac's "easygoing" manner in managing the ministry was abundantly used by his employees. One of them "organized" for his own privately-owned enterprise to be the exclusive supplier of the ministry. He collected almost half a million marks for office furniture, construction services, books, even sanitary inspection, and later, state auditors could find no trace among the documents of any delivery notes, dispatch notes or notices of receipt: although obviously paid for, the goods had never been delivered. The only epilogue was that the main actor, Bojan Jancijev, was discharged from state service.

The employees had a perfect model for their business deals - minister Parac himself. He abundantly used his official "Diner's" card for his personal needs. The minister's annual personal "Diner's" fees were paid from the cash-box of the ministry, invoices for a stack of spent money are missing, which means that tens thousand marks of state money were spent for private needs. The latest newspaper articles publicize that Parac managed the Croat Television in a similar manner - he paid fabulous sums of money for clothes and expense accounts of his associates.

Side by side with Parac went Mrs. Vesna Girardi-Jurkic, now ambassador of Croatia in Unesco in Paris, former minister of education and culture. Thanks to her "skill", several hundred thousand state-owned German marks have also gone with the wind. For example, her ministry paid about 250 thousand marks for a five-room apartment for one of assistant ministers. The apartment was built by a Slovene enetrprise called "Stavbar" which reduced it in the meantime to a four-room one, so the "dissatisfied" assistant refused to move in. The attempt of the ministry to get the money invested in the apartment back failed due to some complications with debt clearance. In the end, the apartment remained the property of Slovenia, and the ministry did not get a single pfennig back.

Mrs. Jurkic also ordered 300 thousand marks' worth of computer equipment, but the auditors could not find a trace of any of these computers. The Ministry of culture and education also participated in financing the salary of Marko Novosel (famous basketball coach and assistant minister for sports) booking his 5,000 kunas (about 1400 German marks) as material costs of the Ministry.

Minister Niko Bulic who is in charge of tourism, spent hundreds thousand German marks on unnecessary luxurious tourist brochures, although there was practically no tourist season. Ministry of science allocated four million marks for construction of an institute for brain studies at the head of which is minister Ivica Kostovic; employees of ministries worked on the side unlawfully, ate and bought clothes for themselves with state-owned money, and so on, and so forth...

Many officials and employees of the Government and the Assembly were granted cheap longterm housing credits in 1990 and 1991, at interest of just two per cent and for a time of ten years. They bought apartments in best locations in Zagreb. There was no article in the contracts which expressed the value of the credits in foreign currency, the value was stated only in the then valid currency - the Croat dinar.

In the meantime, inflation played its part, and three and a half years later, the State Auditing Office, in the Government Administrative Service which was in charge of granting the credits, found just a series of payment slips with amounts worth less than one German mark! However, names of credit beneficiaries were not stated in the report.

Cars purchased for "official needs" are a separate story... It is hard to even count all the cars of the highest class and manufactured by best world producers, which appeared in motor pools of various ministries. Taxes were not paid for most of them, they were purchased without lawfully reached decision about it, and it is not quite clear who is driving them, nor where they end up after they spend some time registered on lists of property of a Government agency.

One of the most amoral actions of state officials and employees is doing business with money allocated to the poorest strata of the population and the unemployed. Namely, last year, the Republican Institute of Social Welfare received 220 million German marks from the budget assigned for the aid to poor citizens. Only 36 per cent of the money were actually used for the purpose, and the rest was spent on maintenance and operation of the fund, and among other, for unlawful raise of salaries of its employees. The Employment Bureau received about 180 million marks last year for unemployment benefits. Yet, only about 115 million reached the unemployed. The remaining 65 million German marks were used for purchasing cars, for loans granted to unknown enterprises and squandered in other ways...

But, regardless of the proportions of revealed abuses, it is hard to believe that the Report will have any effects. Although in any normal state, publication of such a report would imply building extensions to the existing jails for ministers involved, this Report with all the established embazzlements, defrauds, unlawful dealings, uneconomical use of resources, purchasing of luxurious cars, detrimental contracts, shortly, plundering of the state, just will just stir up some dust in the Assembly discussion. For operation with "clean hands" in Croatia, it will be necessary to wait until a balance of political powers is reached.

The only favourable effect of the State Auditing Report will be that it might help establish this balance sooner. Because, at the last elections already, the pendulum of interest of the voters, slowly but surely, began moving from general social and state interests towards local and individual problems, and corruption of the authorities, as could be seen after the elections, affected quite a few decisions of the voters.

IGOR VUKIC