BALKAN BLOG: Sanader and the ABC Syndrome

By bne IntelliNews March 12, 2014

Guy Norton in Zagreb -

Just as surely as night follows day, political hubris is more often than not succeeded by nemesis - as former Croatian PM Ivo Sanader is finding out.

Little more than a decade ago Ivo Sanader was the undisputed heavyweight champion of Croatian politics. He had secured a comprehensive victory in the parliamentary elections of November 2003 for his conservative Croatian Democratic Union (HDZ) party, which had ruled Croatia for the first decade of its independence, but which had been ousted from office in 2000 after Croatian voters had tired of the increasingly autocratic ways of Franjo Tudjman, founder of the HDZ and the country's first democratically elected president.

Having purged the HDZ of its extreme nationalist elements and successfully engineered its return to power three years later, Sanader cut an increasingly assured - some would argue arrogant - figure and was lauded as the darling of the once-again politically acceptable face of right wing politics in Croatia. In the course of two terms as prime minister until his surprise resignation in July 2009, he was widely feted by politicians across the EU and undoubtedly did much to set Croatia firmly on the path to the bloc, which it joined in July last year.

But in the latest in a series of trials Sanader was on March 11 sentenced to nine years in jail, having being found guilty of masterminding a joint criminal enterprise that extracted more than HRK70m (€9m) from public companies that was used to fund both Sanader's own lavish personal lifestyle as well as render illegal financial support to the HDZ party, which was also found guilty of acting in connivance with Sanader's wishes.

After a near two-year trial, Zagreb County Court judge Ivana Calic condemned Sanader as having colluded with a number of fellow HDZ party members to extract funds from state-owned companies via contracts concluded with marketing firm Fimi-Media, which gave the name to the much followed trial which featured over 130 witnesses. According to the first instance verdict, which still requires final confirmation following an automatic appeals process, Sanader was adjudged to have illegally benefitted to the tune of HRK15.27m, while the HDZ was judged to have reaped HRK24.25m in unlawful gains. Finally, the owner of Fimi-Media Nevenka Jurak was blamed with retaining just over HRK2m in illicit revenues, which has been seized; she was sentenced to two years in prison. Former HDZ treasurer Mladen Barisic and chief accountant Branka Pavošević, who assisted in channeling funds to the HDZ, received three-year and 18-month jail terms respectively. Finally former HDZ spokesman Ratko Macek was sentenced to 12 months' probation, suspended for four years.

While Sanader and his close family members have been stripped of HRK15.2m in savings and artworks that are alleged to have been illegally gained, the HDZ will have to repay almost HRK20m to the state.

According to the evidence presented by anti-corruption agency Uskok at the Fimi-Media trial, during his time as prime minister Sanader systematically abused his position to secure funds to finance a lavish lifestyle, which included luxury trips to the US as well as the purchase of suits from Brioni - the mega-expensive tailoring brand so beloved of celebrities such as billionaire property developer Donald Trump.

In his closing statement to the court, Uskok director Zeljko Mostecak, who had pressed for a 15-year sentence, claimed that through his actions Sanader, "indisputably committed an extraordinary abuse of power and office, solely for the purpose of acquiring money and maintaining power with an absolute absence of any responsibility."

In his defence, Sanader claimed that he was a victim of a political witchhunt ordered by Jadranka Kosor - his successor as prime minister and leader of the HDZ - and that the prosecution's case was based on completely unsubstantiated accusations. "Facts? Who cares about facts? Justice?"

The guilty verdict was just the latest in a number of legal hammer blows that have shattered Sanader's image as highly respected politician who restored Croatia's international credibility after the war-torn, hatred-ridden 1990s.

In November 2012, Sanader was sentenced to a combined term of 10 years in prison following the conclusion of two concurrent corruption trials. In the first ever trial in Croatian legal history for war profiteering, Sanader was found guilty of soliciting an illegal €500,000 commission from Austria's Hypo Alpe Adria Bank in 1995 - an offence which occurred during Croatia's 1991-1995 Homeland War (as the former Yugoslavia dissolved).

He was also condemned for accepting a bribe of €10m from Hungarian oil company MOL in 2009 in return for ceding it management control over Croatian oil company INA, which is co-owned by the government. Both verdicts are currently being appealed by Sanader.

Putting the past behind it

Although Sanader was thrown out of the HDZ in 2009, the March 11 guilty verdict against its former leader and the collective guilt ascribed to the HDZ will rub further salt into party's political wounds. While the corruption charges leveled against Sanader and other HDZ officials were a key factor in the party's defeat in the December 2011 parliamentary elections, the HDZ under new leader Tomislav Karamarko has worked hard to distance itself from its shady past under Sanader.

In the course of the Fimi-Media trial, however, the HDZ was shown to have used its ill-gotten gains to buy a luxury bulletproof 7-series BMW limousine for use by Sanader and other senior officials, to hire Croatian singers Marko Perkovic Thompson, Misha Kovac and Nina Badrić to perform at HDZ election rallies, as well as purchase shares in local television stations as part of an attempt to gain favourable media coverage. A number of HDZ members were also granted under-the-table cash handouts as a reward for their political loyalty to the party.

With elections for the European Parliament coming up in late May, the guilty verdicts against the HDZ and the string of one-time senior HDZ officials couldn't have come at a worse time for a political party that is trying hard to convince voters that it can be trusted again. At a specially convened press conference, a visibly distraught Karamarko rejected the guilty verdict applied to the party and claimed that the judgment would undoubtedly be overturned on appeal.

At first sight the convictions against Sanader and his HDZ colleagues might seem to be a godsend for the current centre-left coalition headed by the Social Democratic Party. The SDP has been struggling to turn around the Croatian economy that has been in recession since 2009 and whose overall confidence has been sapped by having to fight a series of bitter ideological battles over issues such as gay rights, sex education and the constitutional rights of the country's Serbian minority - all highly emotive issues in socially conservative Croatia.

However, the SDP has been beset by a number of scandals that have called into question its own particular set of political ethics. For example, Marina Lovric Merzel, the SDP prefect of the Sisak-Moslavina county in central Croatia, is currently under investigation by the anti-corruption police on the back of allegations that she has misused public funds to pay for private parties for her family and friends and to purchase expensive gifts for herself and political supporters.

The graphic reminder of the often venal nature of Croatian politicians provided by the conclusion of the Fimi-Media trial may therefore also serve to hurt the electoral chances of the SDP in the upcoming European poll, as the disillusioned Croatian electorate may judge that the SDP is just as corrupt as the HDZ. As a result, the two traditionally strongest players on the Croatian political scene could find that they lose support to a number of newly formed parties that are as yet untainted by accusations of graft.

Meanwhile, the conclusion of the latest corruption trial in Croatia - more graft cases are in the judicial pipeline - could once again serve as further ammunition for critics who questioned the wisdom of the EU's decision to accept Croatia as a member last July.

Last and by no means least, the problems of graft combined with rampant red tape and a tax-heavy business environment could further depress investor interest in the country and exacerbate what has been coined the "ABC Syndrome" - Anywhere But Croatia.

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