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Updated: December 10, 2010 09:32 IST

Ex-Croatia Prime Minister flees over sleaze claims

Ian Traynor
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Croatia's former prime minister Ivo Sanader. File photo
Croatia's former prime minister Ivo Sanader. File photo

The former prime minister who dominated Croatian politics for most of the past decade fled the country on Wednesday as state prosecutors moved to have him arrested in connection with a major sleaze investigation.

According to cables from the U.S. Zagreb embassy released by WikiLeaks, Ivo Sanader, the centre-right politician who stood down suddenly as prime minister in the summer last year, features in several of the corruption cases currently terrorising the Croatian political class.

The country’s chief prosecutor told U.S. diplomats in Zagreb this year he had evidence that Mr. Sanader had arranged a bank loan for a business crony in return for a kickback.

The former prime minister was driven across the border into Slovenia yesterday by his daughter, Croatian police reported, after the prosecutor’s office told parliament it wanted to detain him. A special parliament committee promptly lifted Mr. Sanader’s parliamentary immunity from prosecution, but not before he had left the country.

Mr. Sanader lived for many years in Innsbruck and is believed to have Austrian citizenship. Austria is a 90-minute drive from Zagreb via Slovenia. Reports from Slovenia also said he had boarded a flight to London from Ljubljana.

Croatian police said they could not detain Mr. Sanader at the border because no warrant had been issued, fuelling suspicion that the ex-Prime Minister had been tipped off about impending arrest. President Ivo Josipovic last night criticised Mr. Sanader’s flight as a police failure and demanded the resignation of the interior minister.

Ever since Mr. Sanader stood down last year without convincingly explaining why, the Croatian media have been filled with reports of his alleged involvement in several of the high-profile corruption cases currently shredding the political elite.

Mr. Sanader’s former defence and interior minister, Berislav Roncevic, was sentenced to four years this week for fiddling army contracts. He has appealed.

His former deputy prime minister, Damir Polancec, was charged in September in the biggest case concerning alleged embezzlement and money laundering to the tune of EUR60m (GBP50m) at the country’s largest food company. Government officials describe the case as Croatia’s Enron. Mr. Polancec has denied the charges.

In September, Mladen Barisic, the country’s former customs chief and treasurer of the ruling party Mr. Sanader headed, was also arrested as part of an investigation into illegal party donations from public companies. According to the Croatian media, Mr. Barisic has told investigators he carried paper bags stuffed with cash personally to Mr. Sanader, the funds allegedly from several large state-owned firms. Mr. Barisic is in custody but has not been charged.

Wednesday’s drama and the sleaze allegations surrounding Mr. Sanader are reinforced by the U.S. embassy cables.

Mladen Bajic, Croatia’s chief prosecutor, told U.S. embassy officials in January that Mr. Sanader was the “target” of “several ongoing corruption probes”.

“Prosecutors are developing at least one case against the former Prime Minister which could result in his indictment, and they are continuing to uncover evidence in several other cases which could also implicate Mr. Sanader,” the embassy reported in January.

“Mr. Sanader has possible involvement in several cases, but the one in which prosecutors have gathered the most evidence involves illegal mediation between his friends and Hypo Alpe Adria Bank Group of Austria. The Hypo Bank case indicates that Mr. Sanader allegedly arranged a loan of 4m Deutshce Mark for his neighbour, Miroslav Kutle, in the 1990’s and received an 800,000 DM kickback from Mr. Kutle in return,” Bajic told the Americans.

The Hypo bank, based in Klagenfurt in southern Austria close to the Croatian and Slovenian borders, acted as financier to the late Jorg Haider, the far-right Austrian leader. It collapsed two years ago in one of the most dramatic cases of the financial crisis in Europe and was nationalised by the Austrian government. The bank’s failure wrought havoc in Austria and Bavaria, triggering several ongoing investigations into alleged profiteering and property scams in the Balkans, particularly Croatia, Austria and Germany.

Mr. Kutle is a Croatian tycoon and media mogul who has twice been jailed, once for mismanagement, the other conviction being quashed.

Corruption allegations a deterrent to Croatia’s EU chances

The U.S. cables paint a picture of pervasive corruption in Croatian politics and business, while also crediting the current government of Jadranka Kosor with a serious clean-up campaign.

The issue is crucial to Croatia’s prospects of joining the European Union since policymakers in Brussels and west European capitals believe they blundered by letting Romania and Bulgaria join in 2007, importing high levels of corruption, a mistake they are keen to avoid repeating. Croatia is close to completing its EU negotiations and could join in a year’s time.

Mr. Bajic told the Americans that essentially all state-owned enterprises in Croatia, meaning many of the biggest companies, were sinking in sleaze. “All major Croatian SOEs are now under investigation.” These included the state companies for national electricity, water, forests, roads, and railways.

In the biggest corruption case over the Podravka food company, U.S. diplomats said in February that Polancec, the former deputy prime minister now on trial, would not have been able to take “some of the actions prosecutors are alleging without Mr. Sanader’s knowledge”.

In another cable from October last year, a leading figure in Croatian politics and business, Nadan Vidosevic, told the U.S. ambassador that Mr. Sanader was attempting to get the government to close down the corruption investigations.

“Mr. Sanader saw this as a threat to him and other party cronies,” said Mr. Vidosevic, a failed candidate for president of Croatia and a wealthy former chamber of commerce chief.

Following Mr. Sanader’s resignation last year, Kosor invested heavily in an anti-corruption campaign, with EU officials saying its seriousness would be measured by the success in prosecuting senior politicians.

Last Christmas, Mr. Sanader tried to make a comeback and staged an abortive coup attempt in the governing HDZ party, the Croatian Democratic Union. He was expelled from the party and moved to New York to a job at Columbia University. A few months ago, he returned to reclaim his vacant seat in the Croatian parliament as an independent, where he enjoyed immunity from prosecution until today.

Copyright: Guardian News & Media 2010

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