ZAGREB, February 18, 2019 - The anti-corruption investigation agency USKOK has indicted Franjo Varga, a former police IT specialist, and Blaž Curić, a former chauffeur for Agriculture Minister Tomislav Tolušić, for obstruction of justice and aiding and abetting in the obstruction of justice in the so-called fake text messages scandal, recommending an extension of custody for both defendants.

Under the indictment, filed with the Osijek County Court, in the period from mid-2017 to September 20, 2018, Varga made fake electronic correspondence of purported communication between high state officials and other persons in order to obstruct justice in the trial of former Dinamo football club executive Zdravko Mamić and three other defendants in that case as well as in a case involving the extradition of businessman Ivica Todorić from Great Britain to Croatia.

The purpose of the fake correspondence was to show that individual state officials had conspired to have the persons concerned indicted and exerted pressure on other judicial officials to have them convicted without any evidence. This was to be used to show that their right to a free trial had been violated.

Curić is charged with providing Varga with necessary information in the form of phone numbers of individual officials and other persons.

Varga is charged with fabricating SMS correspondence between former chief state prosecutor Dinko Cvitan and a judge who sat on an Osijek County Court panel which tried Mamić, his brother Zoran, former Dinamo director Damir Vrbanović and tax official Milan Pernar. According to the correspondence, before the first instance verdict was delivered, Cvitan pressured the judge into convicting one of the defendants without any evidence.

Under the indictment, Varga gave the fake texts to Mamić, who made them public at a press conference on June 4, 2018. Mamić's attorney then requested that the verdict be postponed, but the panel refused, finding all defendants guilty on June 6 pending appeal.

Varga is also suspected of fabricating another SMS correspondence alleging influence on Supreme Court judges so that Mamić could use it in appellate proceedings.

He was supposed to give the correspondence to Mamić but was tipped off by Curić that he was under investigation.

Curić was arrested on 26 September 2018 in Zagreb on suspicion of warning Varga by phone on September 20 that he was about to be arrested and that he should delete all his phone numbers, messages and other content.

Both Varga and Curić were recently again questioned by USKOK investigators in Osijek and according to media reports, Curić is no longer charged with inciting but aiding and abetting in the obstruction of justice.

After the scandal broke, media claimed that Varga's services were also used by the former leader of the Croatian Democratic Union (HDZ), Tomislav Karamarko, as well as HDZ vice-president and Deputy Parliament Speaker Milijan Brkić, who both dismissed the allegations.

The Osijek County Court will decide on the indictment on Tuesday, given that Varga and Curić's custody, set on 19 December 2018, expires on February 19.

More news on the scandal can be found in the Politics section.

ZAGREB, February 15, 2019 - In Croatia, unlike in stable western democracies, voters punish fiscal responsibility and reward budget populism, while corrupt mayors stand a better chance of being re-elected, it was said at a round table discussion on clientelism and corruption, held at Zagreb University on Thursday.

Political scientists, economists and legal experts who attend the event, organised by the "Miko Tripalo" Centre for Democracy and Law, spoke about clientelism in the country and its forms.

Economist Vuk Vuković said that his research showed that corrupt mayors were more likely to be re-elected and that votes were frequently bought with transfers from the central budget.

One of the ways for politicians to stay in power and avoid any responsibility towards voters is to form a sufficiently powerful group of key supporters who benefit directly from favourable laws and regulations, rigged tenders, jobs in the public sectors and the like, said Vuković.

He noted that there were communities in the country where politicians win local elections with only ten percent or so of votes of the electorate and that at the national level, only 27% of the vote is required for a politician to win elections.

"A local official who successfully maintains his narrow interest coalition is more likely to stay in power for a longer period of time, to be corrupt and to manipulate corruption in order to win elections, as well as keep tax rates high," he said.

Political scientist Kristijan Kotarski presented data showing that compared to other transition countries, Croatia was a weak and party-captured state.

Along with Hungary, Croatia has the highest cumulative share of parliamentary terms (68%) won by two leading parliamentary parties, the HDZ and the SDP, in the period from the first democratic elections to the end of 2016.

Also, the two countries have the highest share of expenses for executive and legislative authorities in relation to their GDP, he said.

Noting that the level of public spending in Croatia considerably exceeds institutional development, Kotarski warned that according to the average level of the institutional development index in the period from 1996 to 2016, Croatia is only in 26th place in the EU, ahead of Bulgaria and Romania.

Subsidies, public procurement and the wage budget for state and public employees are especially liable to abuse in building and maintaining clientelist networks, he said, adding that clientelism in the past ten years had resulted in a gradual erosion of democracy, putting Croatia in the penultimate place in EU rankings with regard to European development.

Ružica Šimić Banović of the Zagreb School of Law said that Croatia's economy could be considered to be an economy by agreement. In terms of the number of tenders with only one bidder, Croatia is first in the EU, and such tenders happen even in sectors such as construction and IT, she said.

Presenting the findings of last year's survey on attitudes among young people to clientelism, political scientist Vlasta Ilišin said that young people today believed that private connections were critical for success, while the same survey in 1999 showed that desirable factors of success among young people were competence, integrity and a pro-active attitude at work.

More news on corruption cases in Croatia can be found in the Politics section.

ZAGREB, February 4, 2019 - The key prosecution witness in the retrial in the INA-MOL bribery case against former Prime Minister Ivo Sanader at Zagreb County Court on Monday repeated his previous testimony, saying that he had received 5 million euro to his company's account that the Hungarian MOL oil company was to have deposited to be handed over to Sanader.

"In early 2009, Sanader told me that he expected transaction of 10 million euro from MOL and instructed me to see how to arrange the receipt," Ježić said. After that, nothing happened until May 2009 when, the witness alleged, he saw MOL's CEO Szolt Hernadi and oil consultant Josip Petrović in Government House who had met with Sanader before him.

Ježić said that in that occasion he told Sanader that "nothing has been agreed to yet," after which Sanader presumably called Petrović, who returned to the prime minister's office together with Hernadi. Ježić said that he was in the adjacent room but recognised Petrović's voice and a few minutes later when they left, Sanader told Ježić that "everything was alright," and that part of the money would be paid immediately and the rest would be paid by the end of the year.

Two Cyprian companies deposited a total of 5 million euro, Ježić said and added that after Sanader had stepped down and when the media started reporting about the relationship between his government and MOL, Ježić realised what this was about.

He allegedly told Sanader then that he refused to accept the other 5 million euro, which Sanader "took calmly."

The retrial against Sanader and Hernadi, in absentia, opened on October 23 last year, with Sanader dismissing all the charges, just as he had the first time around. Hernadi had not been charged in the original trial.

More news about the former prime minister Ivo Sanader can be found in the Politics section.

ZAGREB, January 30, 2019 - The Supreme Court has rejected an appeal by Tomislav Saucha, a former chief-of-staff in the prime minister's office, who has requested that the assessment of his signature in the travel expenses scandal be pulled out of the case file.

Saucha's defence attorney, Darko Maržić briefly conformed this information to Hina.

Saucha's defence lodged an appeal with the Supreme Court after the trial chamber in Zagreb County Court on 19 September refused to withdraw evidence with Saucha's signature, claiming the graphoanalysis of those signatures was inadmissible.

The indictment against Saucha was returned to the USKOK anti-corruption office in March 2018 to be amended following a request by the defence that the graphoanalysis of Saucha's signatures was inadmissible.

USKOK has accused Saucha that while he was the chief-of-staff in former prime minister Zoran Milnanović's office he defrauded the state budget, together with his then secretary, Sandra Zeljko, and in that way illegally gained over 580,000 kuna.

In an extended investigation USKOK further suspected Saucha of sharing the fabricated allowances with Zeljko, the then 'crown witness' in the case.

USKOK suspects Zeljko of having continued to collect fictitious travel expenses even after the end of Saucha's term in the government, saying that in March 2016 she forged the signatures of Saucha's successors Neven Zelić and Davor Božinović collecting nearly 350,000 kuna in fictitious travel expenses.

More news on the scandal can be found in the Politics section.

ZAGREB, January 29, 2019 - Transparency International has published its latest report on countries measures by Corruption Perceptions Index (CPI) in 2018 and it reveals that Croatia's performance continues to worsen, given that the country's latest score of 48 out of a maximum 100 points is by one point lower than in 2017.

Croatia's score measured by CPI in 2015 was 51 points, and 49 both in 2016 and 2017.

Croatia's performance is thus below that the average score of the region "Western Europe and European Union" that stands at 66.

Corruption in Croatia's public sector is perceived as a widespread phenomenon, the organisation says in its comments on Croatia.

The organisation also warns against non-transparent procedures for appointments and decision-making in Croatia and insufficient readiness to tackle corruption scandals or suspected cases of corruption.

Croatia is advised to increase transparency of the work of public sector agencies and to invest considerable efforts to restore public confidence if it wants to halt a negative trend and come closer to the EU average score.

Most countries fail to curb corruption, says TI

Commenting on global trends, Patricia Moreira, Managing Director of Transparency International, says that "with many democratic institutions under threat across the globe – often by leaders with authoritarian or populist tendencies – we need to do more to strengthen checks and balances and protect citizens’ rights."

"Corruption chips away at democracy to produce a vicious cycle, where corruption undermines democratic institutions and, in turn, weak institutions are less able to control corruption," says Moreira.

The 2018 CPI draws on 13 surveys and expert assessments to measure public sector corruption in 180 countries and territories, giving each a score from zero (highly corrupt) to 100 (very clean).

More than two-thirds of countries score below 50, with an average score of only 43, TI reports on Tuesday.

"Since 2012, only 20 countries have significantly improved their scores, including Estonia and Cote D’Ivoire, and 16 have significantly declined, including, Australia, Chile and Malta," read the highlights on the organisation's website.

"Denmark and New Zealand top the Index with 88 and 87 points, respectively. Somalia, South Sudan, and Syria are at the bottom of the index, with 10, 13 and 13 points, respectively.

Cross analysis with global democracy data reveals link between corruption and health of democracies

Full democracies score an average of 75 on the CPI; flawed democracies score an average of 49; hybrid regimes – which show elements of autocratic tendencies – score 35; autocratic regimes perform worst, with an average score of just 30 on the CPI.

"Corruption is much more likely to flourish where democratic foundations are weak and, as we have seen in many countries, where undemocratic and populist politicians can use it to their advantage," says TI chair, Delia Ferreira Rubio.

More news on the corruption in Croatia can be found in the Politics section.

ZAGREB, January 21, 2019 - Former Croatian Democratic Union (HDZ) minister Božidar Kalmeta, who is on trial for siphoning money from road companies, is expected to present his defence before the Zagreb Country court on Wednesday, January 23, and according to his counsel, Kalmeta will once again reject all corruption accusations.

"A total of 90 witnesses and financial expert witnesses have been questions during 54 hearings and not a single witness accused Kalmeta as the perpetrator," attorney Krešimir Vilajtović told Hina.

The USKOK anti-corruption agency suspects Kalmeta of arranging with the Fimi Media marketing firm the production of the film "Croatia's Transport Renaissance" without a proper public procurement procedure, defrauding his ministry of more than 600,000 kuna (80,000 euro).

The indictment claims that in 2007 and 2008 Kalmeta used his ministerial position to arrange the production of the said film with a Fimi Media executive, avoiding the public procurement procedure and "knowing that there was no need to procure and pay for that film with the ministry's money".

USKOK also claims that Kalmeta brought together people from his transport ministry, HAC and the HC road operator and that they shared over 15 million kuna and 850,000 euro siphoned from road maintenance and construction companies.

Kalmeta dismissed all charges.

The other nine accused in this case are Kalmeta's former close associates and heads of national road companies.

More news on the corruption issues in Croatia can be found in the Politics section.

Homeland War veteran Mario Vrbanić has revealed a new scandal in the Ministry of Veterans’ Affairs led by Minister Tomo Medved. Ha has shown text messages which he received from Assistant Veterans Minister Nenad Križić, reports Telegram on January 14, 2019.

The 49-year-old veteran said that he lives in a rented apartment in Vukovar and has no permanent income. He first received countless promises that the problem would be solved, and then Assistant Minister Križić told him that he would talk to the State Secretary at the Central Office for Reconstruction and Housing Nikola Mažar "to turn a blind eye" and allow Vrbanić to break into one of the empty apartments in the town.

In support of his claims, Vrbanić has shown text messages which he exchanged with the assistant minister. In the messages, they discuss whether a 45-square-metre apartment is large enough.

Križić has initially refused to provide answers to journalists who asked him about the scandal. When they finally met, Križić spent half of the conversation explaining how much effort he was investing in providing welfare to war veterans. He also claimed that Vrbanić would get all that he was entitled to as soon as certain status questions were resolved. Asked how it was possible that Vrbanić's war veteran status was still unresolved, given that he has had a Homeland War Memorial Plaque since 1995, Križić replied, "Who does not have that?"

Križić admitted that he did send the text messages to Vrbanić, but claimed that these were actually Vrbanić's messages to him, which he then just forwarded back to him. However, the correspondence shows that the messages came to Vrbanić from Križić's mobile phone.

Križić was also asked whether it was true that he had urged Vrbanić to thank Veterans’ Affairs Minister Medved for helping him resolve the housing issue. “Vrbanić called me after a meeting in Zagreb where we discussed his housing issue and said that everything had been solved. Then I advised him to call Minister Medved and thank him,” explained Križić.

More news on war veterans can be found in our Politics section.

Translated from Telegram (reported by Drago Hedl).

ZAGREB, January 7, 2019 - Croatian Peasant Party (HSS) leader Krešo Beljak on Monday gave a deposition to police on possible political corruption in the wake of HSS MP Mladen Mađer's defection to the parliamentary group led by the party of Zagreb Mayor Milan Bandić, but he would not tell reporters whom he had reported to police or where he got the information on the alleged buying of parliamentary deputies.

Beljak gave his deposition to police after the USKOK anti-corruption office last week confirmed that it was conducting a preliminary investigation into Mađer's changing sides after Beljak pointed to possible irregularities.

Beljak had earlier announced that he would also file a report against Zagreb County head Stjepan Kožić over involvement in the case. Kožić has denied having anything to do with Mađer's joining Bandić's parliamentary group and has said that he will sue Beljak for slander.

Addressing reporters today, Beljak said that he had earlier firmly believed that Mađer could not be bought. "When he left, he did so suddenly, so my previous suspicions grew stronger," Beljak said.

Beljak would not comment on USKOK's preliminary investigation into alleged attempts to bribe Social Democratic Party (SDP) MP Zvane Brumnić with three million kuna. Brumnić arrived at USKOK at noon on Monday for an interview by USKOK investigators regarding the allegations.

In a statement to Hina, Brumnić denied having been offered anything either directly or through a middleman.

Asked about claims by Prime Minister Andrej Plenković that the case had nothing to do with political trade-offs and that leaders of parties that were weak should ask themselves why they were losing party members, Beljak said that he was glad the prime minister concerned himself with the HSS and that this meant that he was afraid of it. "... It shows that he is afraid of us and confirms that we are the only opposition at the moment."

Asked about media reports about Bandić being Plenković's long arm, Beljak said, "That may be the case."

The HSS leader said the election law should be changed to prevent political trade-offs and that crossing over from one party to another was contrary to democratic customs. "What we have been witnessing in the parliament but also in county assemblies and town and municipal councils, is crazy. Crossing the floor is contrary to democratic customs - people vote for one group and end up having a different group of representatives, so the legislation should be changed to make it comply with the Constitution."

More news on the HSS can be found in our Politics section.

ZAGREB, January 4, 2019 - The anti-corruption agency USKOK appealed on Friday against the Zagreb County Court ruling under which former prime minister Ivo Sanader was guilty of war profiteering because in war time he received kickbacks from Austria's Hypo bank which gave Croatia a loan to purchase embassy buildings.

At the time, in his capacity as deputy foreign minister in charge of negotiations to secure a loan from Austria's bank, Sanader had taken advantage of the state of war to make financial gain for himself.

"The defendant was found guilty and was sentenced to two and a half years in prison for war profiteering. USKOK believes the sentence is too lenient and the Zagreb County Court did not acknowledge aggravating circumstances to the extent it should have, while at the same time acknowledging mitigating circumstances," USKOK said in a press release.

In the Hypo case, Sanader was accused of taking 3.6 million kuna in kickbacks when he was deputy foreign minister, after Austria's Hypo bank gave Croatia a loan to buy diplomatic office buildings. At the time, Croatia was in the midst of war, so Sanader was also accused of war profiteering.

At the end of the trial, Sanader said he was not a war profiteer. The prosecution said the opposite, claiming in closing arguments that war profiteering had been proved and that he had been downplaying his role the whole time.

Sanader was already sentenced in this case, when he was also sentenced for taking a bribe from MOL director Zsolt Hernadi in exchange of management rights in INA. However, the Constitutional Court quashed the ruling in the Hypo case and requested a retrial.

The quashed sentence was the first sentence for war profiteering delivered after the Constitutional Court ruled that there was no statute of limitations on that crime. Quashing it, the Court said the Zagreb County Court and the Supreme Court did not establish if the statute of limitations had run out when Sanader was accused and that they failed to enforce a more lenient law.

More news on former prime minister Sanader can be found in our Politics section.

ZAGREB, December 20, 2018 - Interior Minister Davor Bozinovic on Wednesday commented on the forthcoming transfer of Sandra Zeljko, a corruption suspect in a travel allowance scam, to his ministry.

Božinović said that as a result of government efforts to downsize the public administration, several agencies had been merged and added to the Interior Ministry, including the Mine Clearance Office where Zeljko works.

Zeljko is suspected of collecting fictitious travel expenses while serving as a secretary in the Prime Minister's Office.

The USKOK anti-corruption office has indicted Tomislav Saucha, chief of staff in the Prime Minister's Office during the term of the SDP-led government, and his secretary Zeljko for defrauding the state budget of over 580,000 kuna. Saucha was also accused of sharing the profit with Zeljko, a former key witness in this case.

USKOK suspects that Zeljko continued to collect fictitious travel expenses even after the end of Saucha's term in the government. Zeljko is now also suspected of forging the signatures of Saucha's successors Neven Zelić and Davor Božinović himself, from March 2016 to February 2017, collecting nearly 350,000 kuna in fictitious travel expenses.

Božinović explained that during the merger of the agencies the Interior Ministry also takes over their staff.

He said that Zeljko has been on sick leave for a long time and that a medical board would be requested to assess whether she was fit to continue her duties considering her long absence from work.

More news on the corruption cases in Croatia can be found in our Politics section.