Cablegate: Former Defense Minister Roncevic Indicted for Corruption

DE RUEHVB #0633 2951456
P 221456Z OCT 09



E.O. 12958: N/A


1. (SBU) SUMMARY: In a key corruption case, Former Defense and
Interior Minister, Berislav Ronvecic, and Interior Ministry State
Secretary Ivo Bacic are being indicted on charges of position abuse,
according to prosecutors. Parliament stripped Roncevic, an active
member, of his immunity at the request of the State Prosecutor in
order to allow an indictment to proceed. The charges carry a
maximum sentence of ten years in prison. The case, which first came
to light in 2005, has begun moving quickly by Croatian standards
since prosecutors launched the formal investigation on July 31.
Roncevic is the highest-ranking Croatian ever indicted for
corruption. END SUMMARY.

2. (SBU) Officials at the Office for Suppression of Corruption and
Organized Crime (USKOK) within the Chief State Prosecutor's Office
told poloff that they are indicting the former Minister of Defense
and current MP Berislav Roncevic, as well as his former aide and
current State Secretary in the Ministry of Interior Ivo Bacic, on
charges of authority abuse and signing contracts which damaged the
state budget. They say they will deliver the formal indictment to
the court in the coming days. The two face identical charges and
are both accused of signing the contracts and falsifying reports to
cover up their activities in a scandal known as the "Trucks Affair"
(Reftel). The charges carry a maximum penalty of ten years in
prison. The Croatian Parliament voted unanimously to strip
Roncevic, a member of the ruling HDZ party, of his immunity on
October 16.

3. (SBU) The case is being handled under USKOK's new authority to
lead investigations, instead of relying on investigative judges.
Prosecutors told poloff that this new authority, which took effect
on July 1, 2009, has greatly sped up the process. Questioning the
number of witnesses in this case would have likely taken one and a
half years under the old system and would have been full of leaks,
which would often result in witness tampering. This investigation,
they say, was relatively leak-free and the formal investigation
lasted about two months. The case will be heard at the Zagreb
County Court in the newly established USKOK section, which is one of
four such court sections in Croatia set up to hear organized crime
and corruption cases with panels of specially screened and trained

4. (SBU) The "Trucks" case involves a contract between the MOD and
the firm Eurokamioni in which authorities accuse the MOD of paying
at least 10 million kuna (USD 2 million) more than competing bids.
The initial tender in 2004, which did not rank Eurokamioni among the
top bidders, was cancelled. The next day, Roncevic and Bacic
allegedly entered into direct negotiations with Eurokamioni.
Prosecutors say they have uncovered falsified meeting minutes and
other evidence used to justify the direct negotiations. Roncevic
and Bacic both signed the contracts and other documents linked to
the case. Prosecutors have not yet given any indication that
Roncevic or Bacic directly profited from the contract or who else
may have benefited from the overpayment. The irregularities in the
contracting process were uncovered in 2005, at which time President
Mesic first spoke about the affair to the press. In January 2008,
Roncevic and Bacic moved to new jobs as Minister and State Secretary
at the Interior Ministry, where they would have had responsibility
for overseeing police investigations. Then-PM Ivo Sanader removed
Roncevic from the Interior Ministry in October 2008, after a
high-profile killing cast a poor light on the police, and since then
Roncevic has been a back-bench MP.

5. (SBU) Roncevic is arguing in the press that the charges are
politically motivated, particularly since a parliamentary
commission, with an HDZ majority, cleared him of any wrongdoing
earlier in the year. He is singling out Ivan Simonovic, the
Minister of Justice, for the harshest criticism, claiming that a
statement by Simonovic that the indictment against Roncevic was a
"test" for Croatia's admission to the EU was unacceptable pressure
on the judiciary. Simonovic responded that he merely noted that no
one could be treated as being above the law.

6. (SBU) COMMENT: This case is being watched closely in Croatia and
by the EU, as concerns over the Government's ability to address
corruption are indeed one of the remaining obstacles to EU
accession. Much of the media has been pushing this case for years,
and opposition lawmakers remain critical of how long it has taken.
The new USKOK procedures, however, enabled prosecutors to quickly
assemble a case and maintain secrecy, once the decision was made to
proceed with the criminal investigation. This bodes well for
addressing a rash of new corruption cases springing up in Croatia
should the political will to tackle them continue. END COMMENT


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