Guy Norton in Zagreb -

The preliminary hearings for the biggest ever corruption trial in Croatia kicked off in Zagreb on March 19-21, with both the country's former ruling party and its one-time leader and prime minister due to face the music over charges that they siphoned off at least HRK70m (€9.3m) from state-owned companies to finance both lavish personal lifestyles as well as political campaigning costs.

The so-called "Fimi Media" case - named after the marketing firm that is accused of being used as the main conduit for the collection and dispersal of the alleged political slush funds - is set to be a major media event in Croatia with a raft of former and current political heavyweights set to be called as witnesses. Perhaps more importantly, it will serve as a showcase for the purported anti-corruption drive in a country that is set to join the EU on July 1, 2013.

Ahead of the preliminary hearings on March 19-21, Croatia's anti-graft agency, the Office for the Suppression of Corruption and Organised Crime (Uskok), announced that two of defendants in the case - Anita Loncar Papes and Bojan Dimic - had signed plea bargain agreements. The Fimi Media trial judge Ivana Calic announced that in return for pleading guilty, Loncar Papes will receive an 11-month jail sentence and had agreed to pay back HRK2m, while Dimic will serve a six-month prison term and will repay HRK1.8m to the state, as well as liquidate his company Onida which he admitted was used to siphon off state funds.

Meanwhile, three others indicted in the landmark trial, which is due to formally start in mid-April, have admitted their guilt: Mladen Barisic, the former treasurer for the right-wing Croatian Democratic Union (HDZ) party, which has ruled the country for 18 of 21 years since the country gained independence from the former Yugoslavia; former HDZ accountant Branka Pavosevic; and Fimi Media owner Nevenka Jurak. However, they have not reached plea agreements with Uskok and so will stand trial in the coming weeks.

Two of the major players in the case have entered not guilty pleas - former prime minister Ivo Sanader and Ratko Macek, a former government spokesman and HDZ election campaign manager. Damir Sesvecan, the attorney representing the HDZ, which has become the first political party to be indicted on criminal charges in Croatia's modern history, also denied that the HDZ was guilty of illegally soliciting funds from major state-owned firms.

Premier problems

The 500-page Fimi Media indictment, which is likely to feature hundreds of witnesses, is the third trial to involve Sanader, who returned the HDZ to power in 2003 after three years in opposition and led the country until July 2009 when he unexpectedly tendered his resignation without giving any credible explanation.

Uskok alleges that Sanader personally profited by HRK15m from the Fimi Media dealings. Meanwhile, Sanader is also on trial for war-profiteering on charges that he received an illegal commission in connection with a loan that Croatia raised from Austrian lender Hypo-Alpe-Adria in 1995 when the country was still at war with its neighbour Serbia. He is also charged with accepting a €10m bribe from Hungarian oil and gas company Mol in return for granting it management rights over its Croatian peer Ina. Commenting on the latest criminal charge raised against him, a defiant Sanader told state broadcaster HRT: "The approach is similar to the previous cases. Someone admits... to committing a crime and then says, 'Sanader told me to do it'."

Separately, the HDZ's legal representative Damir Sesvecan said the HDZ would prove during the forthcoming trial that Sanader and not the HDZ had been responsible for the illegal solicitation of funds. "We know that the responsible person, which is also alleged by the prosecution, from 2003 to 2009 was Ivo Sanader, even though the party's statute says that the responsible person is the HDZ Presidency, which did not decide on any actions of which the HDZ has been accused."

The Fimi Media trial will certainly be closely followed by EU officials who though acknowledging that in recent years Croatia has made great progress in investigating white collar crime in Croatia, have previously bemoaned the lack of charges levelled against high-level government officials such as Sanader.

A successful prosecution of the former prime minister would therefore undoubtedly benefit the country as it makes its final push towards EU membership next year. But according to Natasha Srdoc, co-chair of the Adriatic Institute for Public Policy, the sole independent think-tank in Croatia which has long been a fervent critic of Croatian political corruption, the latest trial ultimately represents nothing more than a sticking plaster solution to Croatia's socio-economic ills. "The Fimi Media case is just one example of robbery that has been going on in Croatia for the past 20 years and clearly describes why Croatia has been lagging behind most of the former communist countries in privatisation and getting the government out of the economy and to build an accountable, transparent and open government," she says.

"This case is a 'pin strike' rather than an effective approach to tackle 'criminal Croatia's behemoth' and establish the rule of law and protection of property rights," she adds.