Combating Corruption in Eastern Europe: A Principled Role for NATO

Updated February 2022 | First published in the Fall of 2009 | International Affairs Forum

By Natasha Srdoc, MBA, Co-Founder, International Leaders Summit, Adriatic Institute for Public Policy, and Anti-Corruption Intelligence Task Force

In the heart of the European continent lies an entire region where the rule of law and protection of property rights are subverted and political corruption is rampant. The countries of southeast Europe including Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Serbia, Macedonia, Montenegro and Romania are rated very poorly in the categories of the rule of law, protection of property rights, judicial independence and perception of corruption according to international indices.

Furthermore, Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia and Montenegro are below the African average in the area of protection of property rights and the rule of law. Yet, some of these post-communist countries managed to join the North Atlantic Treaty Organization (NATO), namely, Romania and Bulgaria, followed by Albania and Croatia.

On the Brussels front, the European Union (EU) hastened Romania and Bulgaria’s accession in 2007. Within months, the new eu member states from southeast Europe displayed signs of stalled reforms; in some cases, reforms were simply reversed. In 2008, the EU blocked €800 million in aid intended for Bulgaria as punishment for endemic corruption and sternly warned Romania to push forward with judicial reforms. Croatia is purported to be next in line to join the EU.

This region is also known for its sinister Balkan Route, exploited for smuggling drugs, weapons and trafficking humans from the East to the West. According to Interpol, the central path of this organized-crime trail runs through Turkey, Bulgaria, Macedonia, Serbia, Montenegro, Bosnia and Herzegovina, Croatia, Slovenia, and into either Italy or Austria.

Endemic political corruption and the absence of an independent judiciary provide fertile soil for organized crime to flourish in the region of southeast Europe. Romania’s Minister of Justice, Monica Macovei, was dismissed in 2007 — just a few months after Romania joined the EU. During her term as the nation’s justice reformer, Ms. Macovei implemented bold reforms that set the stage for the commencement of investigations which led to the indictment and consequently the trials of cabinet ministers of Romania’s government, including a former prime minister.

Croatian politicians in early 2006 orchestrated the ousting of Vesna Skare Ozbolt, Minister of Justice, a reformer who resisted pressures to appoint a politically favored and corrupt judge as the President of Zagreb’s County Court. Mrs. Skare Ozbolt also dared to oppose Prime Minister Sanader’s pressures to provide him with a clean title on his villa and in this process reject the original owner’s request for property restitution.

Montenegro’s Prime Minister Milo Djukanovic is the main suspect cited by Italian prosecutors for his alleged role in the smuggling of cigarettes and money laundering. The trial is scheduled to begin during the summer of 2009. However, as long as he holds a high-level government position, Mr. Djukanovic is protected by immunity in his own country and diplomatic immunity. According to Croatia’s weekly Nacional published in May 2009, “The Italian press states that it is very likely that the Italian indictment could be reactivated after Djukanovic steps down from his high state function.”

On Montenegro, The Economist’s Intelligence Unit mentions, “a high level of foreign influence on the government, a shoddy civil service, a government that operates on a system of political patronage and the influence of organized crime and corruption.”

During the period from early 2000 to May 2006, and shortly before Bulgaria joined the eu, there had been “more than 150 contract killings related to organized crime and not a single conviction” according to a report prepared by European Union investigators. Albanian Prime Minister Sali Berisha talked in June this year about “the widespread corruption in Albania’s judicial system and government which has exacerbated the country’s human trafficking problem.”

During the year 2008, in which nato leaders decided to invite Croa- tia to begin accession talks with nato, there were two failed murder attempts targeting investigative journalists writing about political corruption and a separate murder attempt on an entrepreneur exposing political corruption in the construction company owned by Croatia’s local government in Zagreb. In October that same year, Ivana Hodak, the 26-year-old daughter of a lawyer defending General Vladimir Zagorec, was murdered in front of her apartment, shot twice in the head. Shortly after Ms. Hodak’s assassination, a bomb explosion in Croatia’s capital killed Ivo Pukanic, a prominent publisher and bold critic of Croatian Prime Minister Ivo Sanader.

Instead of political expediency, which led the EU and naTo to lower their standards, it is time to apply principled solutions in order to eradicate political corruption and organized crime in Croatia and the entire region of southeast Europe. Ignoring this will be at our own peril.

Mr. Pukanic was also one of the key witnesses in Zagorec’s case.
Prior to his extradition from Austria to Croatia, General Zagorec
had mentioned that there were over 80 secret foreign bank accounts
of high-ranking Croatian Democratic Union (HDZ) officials who siphoned off funds intended to buy arms during the region’s United Nations arms embargo. In March 2009, Mr. Zagorec was sentenced to seven years in prison for embezzling diamonds from the government’s safe. The issue of 80 secret foreign accounts with deposits of over $500 million held by high-level HDZ politicians was never brought to light.

A recent bizarre incident was unraveled on June 18, 2009, whereby a Ukrainian cargo plane that took off from Croatia’s capital Zagreb and destined for Equatorial Guinea was confiscated in Nigeria. It was reported by Nigerian police that loads of Russian made arms and ammunition were found on board when the plane landed to refuel. The Ukrainian state weapons-export agency claims that the cargo belongs to Croatia. Authorities in Zagreb issued a statement that no cargo planes took off from Zagreb’s airport that day. This troubling incident requires immediate attention from nato and U.S. authorities.

In Croatia, the twin legacies of communist rule and the Balkan wars created an underground power base com- prised of organized crime, the intelligence service, military, corrupt government officials and their private partners in crime. Organized crime and criminal capitalism thrives in today’s Croatia under the ruling HDZ political party.

CBN News: Cut Off Terrorism Funding | America, Europe, Balkan Route — Afghanistan | Natasha Srdoc and Joel Anand Samy

Conflicts of interest, money laundering, fixed public tenders and embezzlement of public funds have become the most common means of amassing wealth and have led to the unexplained wealth of government cabinet ministers and politicians in Croatia. The Croatian taxpayers’ appeal for accountability and “checks and balances” has been ignored by unscrupulous individuals representing the authoritarian regime. These political figures engage in non- transparent transactions and are unaccountable for their actions.

At his abrupt resignation, Croatia’s PM Sanader did not address the problem of corruption as the reason for leaving office. Croatian citizens and taxpayers were alarmed by the fact the Mr. Sanader intends to slip away with the wealth amassed during his time in office. Mr. Sanader’s cabinet ministers, who were tainted by corruption and resigned earlier, included Croatia’s Minister of Health Andrija Hebrang and Minister of Foreign Affairs Miomir Zuzul. However, they both remain unpunished, active and influential in Croatia’s parliament and within the party structure. Although known for the numerous allegations of corruption, Mr. Zuzul was awarded a post as Croatia’s chief representative to the Organization for Security and Cooperation (OSCE).

The relevant and compelling question ought to be highlighted — “Who are the individuals that nato officials talk to in Croatia?” Croatia’s compromised cadre just allowed former Minister of Defense Berislav Roncevic to get away free after embezzling at least $1 million. One of the HDZ officials was reported as saying, “Well, Roncevic did not put the money in his pocket. The money went for the (HDZ) party.”

Croatia’s current Minister of Defense, Branko Vukelic, formerly served as the president of the Brodosplit shipyard’s supervisory board and then Minister of Economy when a $6 million money laundering scheme was uncovered
by the Austrian Interpol in 2006. The money laundering case remains uninvestigated and unresolved in Croatia’s judiciary. This transaction was even guaranteed by the state-owned Croatian Bank for Reconstruction and Development (HBOR) — with four HDZ cabinet ministers (ministers of finance, economy, agriculture and transportation/maritime) on its board of directors. The HBOR is tied to Europe and receives funds from the European Bank of Construction and Development (EBRD).

Croatia’s politicians arm themselves with an unbreakable immunity. Croatia’s government manipulates the state- owned media Croatian Radio and Television (HRT) to relay its propaganda. The state-owned television is also cannibalizing the commercial television market and spending vast amounts to broadcast programs such as The Sopranos, which feature the mob and gangland killings. Paradoxically, taxpayers are paying mandatory monthly dues to be brainwashed.

The recent report by Croatian journalist Hrvoje Appelt, delivered to the parliamentary committee tasked with combating corruption, revealed a troubling trend of political pressure on journalists and privately owned media. This report was sent to the World Bank and the EU institutions.

Regrettably, liberty is under attack by corrupt authoritarian regimes and extremist terrorist groups who are both driven by self-interest to preserve their oppressive rule over individuals. What these groups have in common is no dif- ferent from former communist regimes that discarded the rule of law, protection of property rights, freedom of speech and individual liberty.

Instead of political expediency, which led the eu and nato to lower their standards, it is time to apply principled solutions in order to eradicate political corruption and organized crime in Croatia and the entire region of south- east Europe. Ignoring this will be at our own peril. We owe it to the taxpayers and citizens of nato’s member countries and EU member countries who have sent billions of dollars aiding corrupt regimes in the region. We certainly owe it to the citizens who are victimized by authoritarian regimes and political corruption and yearn for justice, liberty and economic freedom.

An important first step would be to confiscate the wealth amassed by government officials — which individuals could not have earned legitimately through their government income, inheritance or other legal means. This bold message should be sent: Illicit enrichment will not be tolerated. It will be punished.

In following through with this key principle and upholding the rule of law, nato’s leaders can ensure the promise of a new generation of ethical leaders drawn to the call of serving citizens and not attracted by the current trend of gaining illicit wealth and lifetime immunity.

The reverse burden of proof was effectively used in Hong Kong (under British rule) where — “… maintaining a standard of living (or the control of pecuniary resources or property) disproportionate to individual’s present or past official emoluments made him guilty of an offence, unless satisfactory explanation was given.”

The relevant legislation made sure to close all the known loopholes and hence included, “any person holding pecuniary resources or property in trust for or otherwise on behalf of the accused or acquired such resources or property as a gift from the accused, such resources or property shall, in the absence of evidence to the contrary, be presumed to have been in the control of the accused.”

Moreover, the reverse burden of proof does not require any evidence of corrupt act and prior conviction. It would literally save the lives of journalists and protect victims of corruption who are at risk today because they are obvious targets for knowing too much.

There is abundant evidence indicating that illicit enrichment can not be prosecuted by the judiciaries of countries in southeast Europe. Ordinary citizens and taxpayers of Croatia and the countries in the region understand and welcome the idea of visiting judges and prosecutors from countries with strong rule of law traditions that will have the authority to confiscate the assets of unexplained wealth held by corrupt public officials. The citizens of the Balkan region know that this is the only way to break the vicious circle of corruption and lawlessness which is robbing them and their children of liberty, economic freedom and prosperity.

NATO and EU institutions need to play a major role in the process of establishing the rule of law in southeast Europe.

Let us remind ourselves that nato is an alliance of countries committed to fulfilling the goals of The North Atlantic Treaty and “are determined to safeguard the freedom, common heritage and civilization of their peoples, founded on the principles of democracy, individual liberty and the rule of law.”

It is time for America’s leadership and the new administration to carefully assess the performance of nato’s newer members based on the principles of democracy, individual liberty and the rule of law, which nato is founded upon. We can no longer afford to look the other way while nato’s structures and its very purpose are weakened by its new members. These unreformed members of nato openly subvert the rule of law and trample on the principles of the transatlantic military alliance.

President Reagan communicated this important message, “America’s foreign policy supports freedom, democracy, and human dignity for all mankind, and we make no apologies for it. The opportunity society that we want for ourselves we also want for others, not because we’re imposing our system on others, but because those opportunities belong to all people as God-given birthrights and because by promoting democracy and economic opportunity we make peace more secure.”

Further reading:

Croatia’s Judicial Independence Drops to 126th out of 141 Nations

January 2022 | Fight Against Corruption Stagnating in Balkans, Central Europe: Report

BBC | February 9, 2022 | Fears of new conflict as Bosnia-Herzegovina faces growing Serb nationalism — BBC News

Austria’s Member of Parliament Rainer Hable — ILS Rule of Law Event, Capitol Hill, Washington D.C.

The Huffington Post | Draining the Swamp — Part I | The NATO Swamp

Corrupt Eastern European politicians are using NATO accession and membership to buy legitimacy. For example, the newest prospective member, Montenegro, is a center for transnational organized crime but has used ill-gotten gains to throw parties for visiting Americans. As World reported, John McCain had a 70th birthday party there; Madonna and Bill Clinton received gargantuan payments for flattering elite Montenegrins with a concert and a speech, respectively; and guests from The Heritage Foundation, the Atlas Network, the Cato Institute, and the Mont Pelerin Society have also been feted in Montenegro.

The paradox is striking — while lobbying and whitewashing by lobbyists and think tanks, for compromised NATO members, is being defended as freedom of speech in the US, journalists in NATO Balkan member countries can get thrown in jail, beaten up and sometimes killed for exposing colossal corruption and serious national security concerns. There is no way to reconcile the differences in application of freedom of speech and the rule of law within the same NATO alliance.

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