Croatia is More Corrupt Than Romania — EU Must Investigate Theft of Billions of Euros in Illicit Financial Outflows Via Crime Corruption and Tax Evasion

WASHINGTON, DC | RIJEKA — On August 17, 2018, The Guardian reported, “EU authorities are facing calls to defend the rule of law in Romania, a week after more than 400 people were injured in mass protests against corruption and changes to the judicial system.” Over 100,000 peaceful demonstrators took to the streets across Romania demanding justice. Romania’s backsliding included the firing of Laura Codruța Kövesi, the head of the nation’s anti-corruption unit.

Published reports highlighted the National Anti-Corruption Directorate’s success (DNA) which sent to Romania’s court of justice 1,000 defendants in 2017. The news report stated. “… one third of them were individuals with high ranking positions in the public sector, including three ministers, five deputies, one senator and two state secretaries, said Laura Codruta Kovesi, the head of the institution. Kovesi added that over 3,800 corruption cases were finalized last year and EUR 159.5 million in seized assets were recovered by the state. Some 713 court sentences in cases investigated by the DNA were recorded in the same period.”

Romanians took to the streets and Europe’s media and legislators focused on Romania. Criminals attempted to reverse Romania’s great accomplishment — finalizing 3,800 corruption cases and seizing EUR 159.5 million worth of assets. During the same time, Croatia’s judiciary did not finalize one corruption conviction, waiting for the statue of limits to kick in, while culprits are at large with monies already laundered. There is no decision to be reversed, there are no people on the streets. Croatians do not have a champion in the government who is genuinely working on cleaning the rampant corruption in the country — it is best to send their children to Ireland. Focus of Europe’s media and legislators is conspicuously missing.

According to the research by Washington, DC-based Global Financial Integrity (GFI), Croatia’s illicit financial outflows via crime, corruption and tax evasion is $35.6 billion for the years 2005–2014, amounting to 73.16% of the nation’s 2015 GDP. When reviewing the impact of corruption in the Balkans, data from the region reveals that corruption and the assault on democratic institutions is far greater in Croatia compared to Romania.

Romania’s illicit financial outflows via crime, corruption and tax evasion for the same period amounted to $27.7 billion, 15.6% of the nation’s 2015 GDP. Croatia’s population stands at 4 million while Romania has 19.5 million citizens.

In an earlier report presented by Adriatic Institute for Public Policy, “Dr. Dev Kar, lead economist for Global Financial Integrity and former senior economist at the International Monetary Fund states that much of the proceeds of drug trafficking, human smuggling, and other criminal activities, which are often settled in cash, are not included in the figures. Therefore, the actual amounts of illicit financial outflows are even higher.”

A snapshot on Croatia’s major issues which adversely affect the nation’s four million citizens, with over 17% of the nation’s citizens who fled their country to escape rampant corruption and the lack of protection of private property rights:

  1. Over 600,000 back-logged court cases for a nation of 4 million, some stuck in the system for over a decade.
  2. A list of nearly 1 million illegal voters out of 4 million citizens protect the corrupt politicians from the Croatian Democratic Union (HDZ) and Croatian Social Democratic Croatian People’s Party (HNS) and other political groups in the parliament.
  3. The weak and poorly funded Croatian State Prosecutor’s Office for the Suppression of Organized Crime and Corruption or Bureau for Combating Corruption and Organized Crime (USKOK) has failed to investigate and bring to justice several thousand national and local level politicians.
  4. City Mayors including Zagreb’s Milan Bandic and Rijeka’s Vojko Obersnel and other senior officials mired in corruption allegations have not been held to account by a politically influenced judiciary.

In the midst of corruption allegations and serious concerns of abuse of power, Rijeka’s mayor and its politicians are seeking significant EU taxpayer funds to cover the budget for Rijeka, as the EU designate, to host the European Capital of Culture in the year of 2020. Local citizens are calling “Rijeka — a European capital of corruption.”

EU taxpayer funds are pouring into Rijeka’s corrupt networks with the City of Rijeka awarded a large sum of EU funds to refurbish Yugoslavian communist dictator — Josip Broz Tito’s rusty boat. According the Guardian, “The city has just received £8.3m of EU funding to renovate the boat.”

Croatia’s HDZ political party, which included the current President Kolinda Grabar Kitarovic, was found guilty in 2014 for embezzling millions of dollars in taxpayer funds. Grabar Kitarovic publicly defended Prime Minister Sanader in 2008, at the time when he was embezzling millions of taxpayer dollars.

In a HuffPost piece, “Grabar- Kitarovic allegedly attempted to cover-up a heroin scandal at the consulate in Los Angeles by discrediting and firing the whistleblower.”

Kolinda Grabar Kitarovic defending the HDZ-led government and Ivo Sanader stated in an op-ed piece, “Croatian Prime Minister Ivo Sanader is a widely recognized and respected reformer who has demonstrated resolve and determination in realizing the national goals of EU and NATO membership, fully aware of the scope of reforms that entails. In the past several years, Croatia has become an example of a country that successfully pursues reforms.”

The New York Times report of November 20, 2012 states :

Analysts said the ruling was a watershed for the Balkan country, which has pledged to stamp out corruption before joining the European Union in July 2013. Croatia has been struggling to overcome lawlessness and corruption, the legacy of the bloody Balkan wars of the 1990s and decades of Communist rule. Mr. Sanader, 59, who served as prime minister from the end of 2003 until 2009, was convicted of accepting a bribe of €5 million, or $6.4 million, from the Hungarian energy group MOL in return for making sure that it secured controlling rights in Croatia’s state oil company INA. Analysts said the Croatian government could potentially review the shareholding agreement with MOL, which has denied any wrongdoing.

The guilty verdict delivered on March 11, 2014, stated the following:

“Those who are guilty are not only these five people. Also responsible are all those who knew about this as well as those who in some way participated in this. Those who bent down their heads, who turned their heads away, those who closed their eyes and those who were silent about this. All of them silently supported such a way of functioning of the system and thus made it sustainable” — Justice Ivana Calic, Presiding Judge, Zagreb, Croatia

The court’s presiding judge Ivana Calic further stated,

“This sentence is a message that political corruption is evil, that abuse of power to extract personal material or other benefits is shameful, is not tolerated and, in the end of the day, does not pay back. The first defendant [Sanader], with his behaviour, showed an attitude which is not an exception today in the political and public life, which is that there is a perception that politicians are above the law. In the period of the crime [the end of 2003 — January 2009], the legal entity HDZ was in power which means that because of a majority in the Sabor [parliament] it adopted laws, governed the state and its repressive apparatus among others. When this and such a legal entity violates the laws, it undermines the foundations of the rule of law because everyone should ask themselves what message is this to the citizens when those in power violate the laws but those who have elected them are required to obey them”.

Despite the courageous work of a handful of ethical prosecutors and brave judges in Croatia, Ivo Sanader is free at large and was even seen in Russia at the 2018 World Cup games. Sanader and other corrupt politicians in Croatia with unexplained wealth have taken advantage of the country’s parlous judiciary where “telephone justice” rules.

Corruption is rife within EU and NATO’s members. This absence of the foundational rule of law and weak democratic institutions puts the West at risk on the economic and financial fronts.

Rampant corruption also compromises national security, specifically efforts to address the Balkan Route which brings into the heart of Europe illegal immigrants, arms and the annual smuggling of $28 billion of heroin, which finances terrorist groups including al Qaeda, Hezbollah, Lashkar-e-Taiba and ISIS.

While EU structures have rightfully called for a review of Romania’s weakening rule of law and corruption, Brussels’ offices are much closer in vicinity to the colossal corruption in Croatia. It is time to safeguard EU taxpayer funds and hold to account Croatia’s corrupt politicians and their private partners in crime. The growing frustration among citizens within SE Europe and Western EU nations paying Brussels’ EU funds is increasing by the day. Election results in Germany, Italy and Sweden are proof of the call for greater accountability of the EU, which has failed on several fronts including the oversight of taxpayer funds.



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