The rise and fall of Croatian ex-premier Ivo Sanader

By bne IntelliNews November 21, 2012

Guy Norton in Zagreb -

How the mighty are fallen. Until his surprise resignation on July 1, 2009, Ivo Sanader was regarded as the undisputed political heavyweight in the Croatian political arena, striking the fear of God into his political opponents whilst being lavishly praised by the local media. In the course of two election-winning terms as prime minister from 2003-2009, he was widely credited as having done much to transform Croatia's image from one of a former war-torn Balkan backwater to a genuinely credible candidate for admission to the EU, Europe's self-dubbed politico-economic elite club. However, on November 20, this one-time political titan was cut down to size after he was sentenced to 10 years in prison following the conclusion of the first of a series of trials that have lifted the lid on a Pandora's box of corruption scandals in the EU-wannabe state.

The first instance verdict, which Sanader's high-powered team of lawyers have already announced it will challenge, will only be confirmed - if at all - after Croatia's accession to the EU on July 1, 2013. Although a guilty verdict in the first of a number of trials levelled against the former political heavyweight was widely expected, Sanader's conviction, which is likely to be the subject of drawn-out judicial appeals at both home and abroad in the coming years, has naturally attracted widespread attention.

Pro-EU enlargement advocates have drawn comfort from the fact that the authorities in the Croatian capital Zagreb have finally demonstrated a high-level success in the battle against graft in Croatia, while EU-sceptics will undoubtedly point to Sanader's conviction as further proof that the former Yugoslav state remains unprepared for membership of the EU next year.

Regardless of the final judicial outcome in the coming years, Sanader's fall from political grace has undoubtedly called into question Croatia's EU accession credentials, which have increasingly been challenged by politicians from Germany - widely regarded as the de facto leader of the EU and the prime arbiter of its expansion to include further states from the former Yugoslavia.

While Germany was a keen advocate of the EU membership of another ex-Yugoslav state Slovenia, which joined in the 2004, the country has become increasingly intolerant of EU-wannabes from the Western Balkans that it regards as either politically or economically not fit for purpose. Thus the authorities in Berlin have been increasingly vociferous in their opposition to Serbian membership of the EU as a result of its refusal to recognise the independence of its one-time province of Kosovo, while Croatia, a long-time satellite of German influence, has increasingly been berated for failing to live up to Germany's high standards of fiscal and legal rectitude. Clearly, Sander's conviction will do little to calm German politicians' anxieties about Croatia's readiness to join the EU next year.

The Hungary connection

In a legal first for Croatia, Sanader was found guilty of war profiteering after allegedly procuring an illegal commission of HRK3.6m (€480,000) in 1994 for a loan to the Croatian government from Austria's Hypo-Alpe-Adria Bank while the country was still in conflict with Serbia. For that pioneering charge, Sanader received a 3 1/2 year sentence, while he was also found guilty of receiving an alleged €5m bribe from Hungarian oil company Mol in return for granting it effective management control of Croatian oil and gas company Ina in 2009, for which he received a 7 1/2 year penalty. On a cumulative basis, Sander faces a 10-year jail term, plus he has been ordered to pay back HRK41.1m (€5.4m) - equivalent to the solicited bribes - within the next two weeks.

Having received a sentence of longer than five years, Sander was immediately transferred to Remitenec, Croatia's biggest prison on the western outskirts of Zagreb. Moreover, Sanader faces further trials with regard to allegedly masterminding the solicitation of funds from a variety of state-owned companies for either personal use or for the promotion of the Hrvatska Demokratska Zajednica (Croatian Democratic Union) party, which he formerly headed but was expelled from in 2010.

While there's plenty of human drama surrounding Sanader - the son of a humble dockworker from Split who after spending the 1980s in Austria where he gained a degree in comparative literature, returned to Croatia in the 1990s and reached the heady heights of the country's premiership a decade later - arguably the more important dimension surrounds Croatia's political suitability to join the EU next year.

Commenting on his behaviour when Sanader was in power, Judge Ivan Turudic described the former premier as the chief architect of a political system under which decisions were made based on his personal desires rather than on democratic principles. "Your behaviour has contributed to people's disappointment in state institutions and have led to a feeling of general apathy and despondence. You have created an impression that it is pointless to work for the common good and that goals may be accomplished by violating laws and disrespecting the ethics of society."

He added: "In light of the fact that you committed criminal offences while performing the duties as a senior official, the message included in this conviction applies to political office-holders at all levels. You abused your powers for your own personal gain and you did not work for the common good, which you were supposed to do."

Unsurprisingly, Sanader's conviction has dominated the headlines in Croatia, with one-time HDZ party colleagues claiming that the judgment confirms the fact that in recent years the country has made great strides forward in terms of combatting graft. Jadranka Kosor, who succeeded Sanader as prime minister in 2009 and led the country until the HDZ lost the December 2011 general election, told state news agency Hina: "If this judgment is confirmed, it would mean a big step in the fight against corruption and crime in general in Croatia."

Ruza Tomasic, head of the right-wing party HSP Ante Starcevic, said that following Sanader's conviction the Croatian government should seek to renegotiate the shareholders agreement between the Croatian government and Hungary's Mol.

Given that Mol is accused of bribing Sanader, the verdict inevitably generated plenty of media attention in Hungary. In a statement, Mol said: "It is not our duty to comment on the first instance verdict in the Zagreb County Court made today. Being the biggest investor in Croatia, obviously we need to respect it and regard it as a decision of an independent juridical body of the Republic of Croatia."

However, it added: "This is an initial, preliminary ruling; we have many times rejected categorically the accusations made against Mol and we will continue to do so. Our intentions in acquiring our shareholding in INA, built up over many years, have always been positive; as the largest foreign investor in Croatia we want to contribute to make INA even more successful and profitable."

Nevertheless, the court ruling caused Mol shares on Tuesday to drop by 3.68% to a two-month low of HUF17,400 during trading on the Budapest Stock Exchange on the back of the concerns that it might lose influence over the running of Ina, its prime foreign subsidiary.

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