Croatia: Corruption and Money Laundering Scandal in Pictures — Hypo Alpe Adria Bank

25 04 2013

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Croatia: Corruption and Money Laundering Scandal in Pictures — Hypo Alpe Adria Bank

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Domagoj Margetic, a EU Parliament Speech re Croatian Corruption & Money Laundering (4/23/13)

23 04 2013

When I was just a teenager, my father, who was a COO at Privredna Banka Zagreb came home one day proclaiming that he has no other choice but to quit his job as an executive.  “The rulling party is making me sign illegal papers transferring large amounts of money,” he said in early 1991.   He quit his job that winter.  By June 1991, there was a civil war in the Former Yugoslavia.   Some other coworkers of his did not quit their jobs, and this is what begun happening in Croatia.

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Please watch Domagoj Margetic’s speech and questions and answers session on this day, April 23, 2013.  This is the day, when the sun started shining and wrongs were unveiled.

Speech at the European Parliament, on April 23, 2013

http://www.youtube.com/embed/IzkSjogx1hE

Questions & Answers Session at the European Parliament, on April 23, 2013

http://www.youtube.com/embed/C7lvsZFBxDo





Hypo Group Alpe Adria Bank – Scandals that Encompassed the Bank from its Inception to 2007 – Money Laundering, Inside Trading and Links to Ultra-Right Wing Nationalism

9 04 2013

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I have been reading Domagoj Margetic’s book called “Banking Mafia” (2008) describing the money laundering that took place after the collapse of the Former Yugoslavia.  A big player in this scandal was Hypo Group Alpe Adria bank.  As somewhat versed in financial language, reading in Margetic’s book about € 100 billion of money laundered from Croatia and Serbia, completely affected destruction of the financial banking system in the Former Yugoslavia before, during and after the split of the country.  It was also a big enough of a figure to enrich the 200 Croatian political elite families allowing them to capitalize some of their private ventures in the region.  This is what economists would call ‘transition of wealth’ from socialist into capitalist hands, a term not  exempt to irony, mostly because the money that was stolen came from employee-owned companies and employees whose lives were stripped from their own retirement packages, etc.  € 100 billion was a big enough of a chunk, to continue to enquire more about Hypo Group Alpe Adria, and who originated these operations, helped during origination and made some serious profits.  The most concerning in this whole money laundering scheme is a strong connection to arms-dealing and ultra-right wing nationalism which continues among masses as the feeding frenzy in Croatia, today.

Six Mega Fraudsters

Behind the scandal hide six mega fraudsters, who have together or separately brought down the Asian banking crisis in Thailand in 1997, have been an international marketing arm of Lockheed and were involved in Iran Contra scandal in the United States, and have continued working together worldwide (some of them still live in California, U.S.) to execute deceptive deals annually, each generating millions of U.S. Dollars – often working in conjunction with company management and CEOs.  Those men are:

  • Regis Possino, U.S.citizen
  • Amador Pastrana, Filipino citizen
  • Sherman Mazur, U.S. citizen
  • Raoul Berthaumieu, a Canadian citizen of Belgian origin
  • Adnan Khashoggi, Saudia Arabian citizen
  • Rakesh Saxena, Indian citizen

The Hypo Group Alpe Adria

The Hypo Group Alpe Adria (HGAA) is an Austrian banking group with numerous cross-border activities in eight (8) countries of the Alps-Adriatic region.  Its network of branches and offices extends from Austria through Italy and Liechtenstein, from Slovenia through Croatia, Bosnia-Herzegovina, Serbia, Montenegro, Hungary and Germany on to Brussels.  Hypo Group Alpe Adria aims to become the leading commercial bank in the Alps-Adriatic region.

There are three strategic business sectors of the Hypo Group—banking, leasing and consulting. The Group’s owner share includes: 100% Republic of Austria.

Much of the below research, often word-for-word, is taken from Nachrichten Heute (click on the link to follow to the source, and I own no rights to neither research nor to the attached picture found on the web).  Dates have been checked, and in certain instances, more details have been added.

In May 2007 the BayernLB (owned by the German State of Bavaria) bought 50% plus one share (controlling stake) of HGAA, Austria’s fifth largest bank, for € 1.63 billion.  The majority shareholderin the BayernLB was up to then the Austrian county of Carinthia/Kaernten, whose governor was Joerg Haider, ultra-right winger and well known for his praise of Adolf Hitler’s labor market policies and his derogatory remarks about foreigners as well as asylum seekers.

When in 2000 his Party, the FPOe or so called Liberal Party of Austria, formed a coalition government with the OeVP, Israel recalled its ambassador from Vienna and the European Union reduced its contacts to Austria to a minimum.

In early 2008 it was revealed that BayernLB had made large losses due to investments in sub-prime mortgage securities in the United States.  Although the extent of these investments has been the topic of speculation, it was revealed from the company’s Second Quarter (Q2) 2008 financial report that over €24 billion had been invested in critical securities, with losses of €2.3 billion in 2007 and a further €2 billion in the first quarter of 2008.  On December 14, 2009, BayernLB, Kärntner Landesholding and Grazer Wechselseitige Versicherung, sold their stakes in the bank to Austrian government for one Euro each.  HGAA was nationalized by the Austrian government to avert a bank collapse.

Hypo Group Alpe Adria, however, was not a stranger to controversies since its inception.

Let’s Start in the U.S. in the year 1993

A man by the name Robert “Bud” McFarlane, security adviser to former US President Ronald Reagan at the time of the Iran-Contra scandal (resigned in 1985, convicted and pardoned by President George H.W. Bush on Christmas Eve 1992 along with the other key players in the scandal, during the lame duck period of Bush’s presidency) and was at that time an adviser to the mercenary company AEGIS Defence Services, headed by Tim Spicer, on a Pentagon contract in Iraq, was with others founding a bank by the name of Czech Industries. The company was in 1996 merged with a company Eastbrokers International, in which a certain Wolfgang Koessner from Vienna became a shareholder.

Wolfgang Koessner brought with him a Bank in Austria by the name of WMP AG, which was now merged with Eastbrokers to be named Global Capital Partners.  However disagreement led Koessner to disengage from Global Capital Partners and after the Global Capital Partners issued more shares, Koessner lost control of the WMP Bank and became a minority shareholder. Noteworthy is the fact, that Czech Industries was majority-owned by Stratton Oakmont, a broker house that was closed by the Securities and Exchange Commission because of fraud.

Minority shareholder at the WMP-Bank, that was now renamed “General Commerce Bank,” was as well the Hypo Alpe Adria Bank.  Koessner did a lot of work to establish the relationship with this bank, before he lost control at the WMP.  As a result, Hypo Alpe Adria Bank sold shares and bonds of Global Capital partners to its customers, worthless shares as it would turn out and many of the customers were at that time suing the bank.

A Crack Crew Arrives

Wolfgang Koessner, no longer in control, had to witness a “turnaround.”  A crack crew appeared in 2000 at the WMP Bank for a “turnaround”, however not for better, but for worse. The crack crew comprised:

  • Regis Possino, former US lawyer, who was arrested after he tried to sell in 1978 Cocaine to undercover agents.  He tried also to land a deal over the monthly sale of Cocaine at a street valued at US$680,000.  He tried to sell stolen bonds to the public, and was arrested during his trial because he tried to influence one member of the jury.  Possino was disbarred as a lawyer in 1984 because of his criminal record.  In 1996, he was again sentenced for stock fraud.
  • Amador Pastrana, Filipino king of the “boiler rooms”. He allegedly commandeered at least 100 boiler rooms, offices, where fraudulent telemarketing of worthless shares is organized from.
  • Sherman Mazur, US citizen, convicted in 1993 in Arkansas for severe check fraud and sentenced to five (5) years imprisonment. Mazur allegedly authorized, while in prison, Amador Pastrana to continue with his fraudulent activities.
  • Raoul Berthaumieu, a Canadian of Belgian origin, alias Raoul Berthamieu, alias Lee Sanders, convicted for check fraud in the US in 1991, met in prison Sherman Mazur, who allegedly taught him there a thing or two.
  • Adnan Khashoggi, international arms dealer and fraudster, involved in the Iran-Contra Scandal. While irrelevant for this research, Adnan Khashoggi’s sister Samira Khashoggi Fayed married Mohammed Al-Fayed and was the mother of Dodi Fayed.  At some point, Adnan Khashoggi was for practical purposes considered to be a marketing arm of Lockheed.
  • Rakesh Saxena, Indian, international megafraudster, allegedly committed fraud at the Bangkok Bank of Commerce in the 1990s, together with the then CEO Krirkiat Jalichandra, to the tune of US$2.2 billion and thus triggering the Asian Banking Crisis in 1997.  Saxena fled with allegedly US$88 million “pocket money” to Canada and continuing his fraudulent activities there from self-paid house arrest.  Extradition procedures to Thailand (Thailand wanted him) lasted until 2009.

This crack crew, with Saxena under house arrest via the phone, allegedly turned the WMP/General Commerce Bank in 2000 into a boiler room, with the fraud allegedly amounting to US$ 1 billion within 1 year.

Dr. Kulterer, CEO of Hypo Adria until 2006, trusted Berthaumieu, the convicted fraudster, according to information he received from the police (The local police station?) an honest man! The Hypo Alpe Adria Bank gave Berthaumieu several loans and tasked him to sort out “problems” at the General Commerce Bank.

In late 2000, Berthamieu introduced Adnan Khashoggi to Dr. Kulterer and his team.  A couple of months later, reacting to pressure from the FBI and SEC, the General Commerce Bank was closed by the Austrian authorities.  One would expect that the day for departure or better sacking of CEO of Hypo Adria, Dr. Kulterer had arrived by now, however the clocks in Haider’s Kaernten/Carinthia were ticking in a different way.

A Friend, a Good Friend

Kaernten/Carinthia was, as already mentioned, the biggest shareholder of Hypo Alpe Adria bank. And the Governor (Landeshauptmann) of Kaernten/Carinthia is Joerg Haider.  Haider praised Dr. Kulterer as “Visionary” and “Austria’s Best Bank Manager.”  Kulterer in return gave a loan to Haider’s then party, the FPOe, for expected election expenses with terms through 2013.  Obviously the voters in Kaernten were “owners” of his party and were going to serve as collateral.  Kulterer accompanied Haider on his trip to Libya in 2000 meeting with Gaddafi, when Libya and Gaddafi were still part of the “axis of evil”.

Ed Fagan Comes on Stage

In 2003, however, Ed Fagan, U.S. star-lawyer entered the stage and took CEO Kulterer and his Bank to court.  He accused them of insider trading, fraud and falsifying balance sheets. Kulterer in return lodged a complaint with the state prosecutor in Austria, accusing Ed Fagan of blackmail.

14 Days in 2004

In 2004, Dr. Kulterer could prove, what a ‘visionary’ he was.  His bank started trading in Swaps and within 14 days lost €328 million.  His bank managers then allegedly tried to hide the loss in the balance sheet by stretching it over several years, a criminal act which came under the spotlight in a parliamentary subcommittee of the Austrian parliament. And he allegedly informed the supervisory board only six (6) months later.

And when the bank ran short of the legally required capital, the bank allegedly issued shares and sold them to customers, giving them at the same time loans in order to buy them, the loan supplied from a subsidiary of the bank in Liechtenstein, re-routing then the money via Virgin Islands back to Austria – a carousel as a money-spinner.

Dr. Kulterer had to vacate his position as CEO however was immediately installed as head of the Supervisory Board, the ‘visionary’ became the controller.  Haider wanted to park him there for a while, and then put him back as CEO. And Kulterer was, in view of his performance at the Hypo Alpe offered and he accepted the job of the head of the Flick Foundation and the manager of the Flick money.

As a remainder: Friedrich Flick was a convicted war criminal in the Nuremberg trials and later he became a billionaire and one of the richest, if not the richest man in post-war Germany.

His son, Friedrich Karl Flick, regarded the inheritance tax, which his heirs once would have to pay as too high in Germany and hence, he emigrated lock stock barrel before his death to Austria.

A Former Croatian General

In February 2007, the former Croatian General Vladimir Zagorek was arrested in Vienna on request of the Croatian government.  He is accused of embezzlement of state money and money laundering. He was a prominent customer of the Hypo Alpe Adria Bank, which is now also under investigation for alleged money laundering.

That year, the weekly DIE ZEIT reported yet another scandal involving the bank, this time in Istria/Croatia, where large tracks of pristine state land were bought at low prices and then sold with a 200 fold price increase, after the land was subdivided into plots in collusion with the local authorities, many of them now behind bars.

A Bank on Sale

The Hypo Alpe Adria Bank was supposed to be floated on the stock market in 2007, however this became impossible in view of the scandals.  Dr. Kulterer actively looked for a buyer and found the Bavarian “Landesbank” (county bank) 100% owned by the state of Bavaria/Germany as being very interested.

Haider flew on May 16, 2007 to Munich to seal the deal.  He was not only met by the CEO of Bayerische Landesbank, Werner Schmidt, but also by the Bavarian Finance minister Kurt Faltlhauser and Home Affairs Minister and future Prime minister of Bavaria, Guenther Beckstein.  They did, what the European Union refused to do, to negotiate with and thus uplifting the reputation of Haider.  And they were not only meeting him, but also exploring ways to strengthen the ties between Bavaria and Kaernten.

Insider Trading?

The sale of the Bank went ahead not without another suspected scandal: Insider Trading.  An investment Company headed by Tilo Berlin, the Berlin AG, where the Flicks had also invested their money, bought in January, when the negotiations started with Bayerische Landesbank, 4% of the shares, and another 10%, when the negotiations were coming to a close.  These shares were now sold to Bayerische Landesbank with 50% gain, 148 million Euro profit, and cash to carry in less than 6 months. If this is not Insider trading, what is it?  However there are more scandals connected with this bank.

A Jewish Family and a Plot in Belgrade

On April 22, 2005 the Hypo Alpe announced, that they had acquired for €20 million from the state, the prime land in Belgrade’s city center.  What the Hypo Alpe regional representative did not tell was, that this plot had a history.  It was called “Three Tobacco Leaves” and was owned for generations by the Jewish family Galich. Two of the family members were killed in 1944 by the SS when they tried to defend the building against German troops, on the retreat, who wanted to blow up the building, which they eventually did.  Immediately after the Germans had left, the Galich family rebuilt the Three Tobacco Leaves Building, however were later expropriated by the Tito government of Yugoslavia.

The Galich Family Emigrated to the U.S.

The building was eventually torn down by the Milosevic Government of Serbia.  Potential buyers were advised by the Galich family, that they intend to reclaim the plot from the state, and thus no buyers came forward until eventually the Hypo Alpe Adria Bank entered the stage.

Totally disregarding the interests of the Galich family and the history of the plot and its former buildings on it, Hypo Alpe Adria Bank grabbed the plot.  However, protests against this ridiculous grabbing mounted and in May, 2005 several hundred people, some of them Holocaust survivors, demonstrated in front of the Hypo Alpe headquarters in Belgrade.  The local newspapers, reporting about the scandal, asked, whether the Hypo Alpe had learned nothing from the scandal related to the Croatian ski-athlete Ivica Kostelic in 2003.

A Ski Athlete Named Kostelic

Kostelic was sponsored by the Hypo-Alpe Adria Bank, better named Scandalpe or Skandalpe. He became not only famous for his skiing performance, but also for his remarks about Nazi-Germany similar to Joerg Haider, Governor of the Austrian county of Kaernten which owned half of the shares of the Hypo Alpe Bank.  Haider, similar to Kostelic also became famous for his praise of Nazi Germany’s labor policy, recommending it as a good example to Austria’s government.  A few statements of Kostelic in 2003:

  • The Nazi-System was a healthy system for an ambitious person.
  • Before a start to one slalom, he felt well prepared like a German soldier on the 22nd of June in 1941 (the day, Hitler attacked the Soviet Union).
  • The Nazi Regime equals to 2000 years of Roman history, compressed into 12 years.
  • The Communists were worse than the Nazis, because under Nazi rule one could pursue a career.
  • He was excited when watching in a movie the attack of the Nazi air force on Britain, the so called Battle of Britain.

As a remainder: England was at that time alone in its fight against Adolf Hitler’s army.  In a heroic performance the British pilots pushed back Hitler’s air force. Their performance was acknowledged in Churchill’s historic speech in the commons “never before in history owed so many so much to so few”. One would have expected, that the Hypo Alpe Adria bank would have immediately cancelled the sponsorship.  That did not happen.  They were satisfied with a lukewarm apology from Kostelic.

What Happened to the Alleged WMP Criminals?

  • Regis Possino was still in business as of February 2013, a resident of Pacific Palisades in Los Angeles (perhaps your neighbor?) when he was charged with 13 others, including Sherman Mazur, for manipulating stock prices, and could face life in prison, for allegedly manipulating stock prices and causing more than 20,000 investors to lose over $30 million.  After the fall of HAA Bank, in 2009, he was with his company “Geneva Equities” on a “roadshow” in Asia and collected US$ 28 million from investors. Geneva Equities was also involved in a fake company by the name of “L-Air” supposedly to be an airline, however its planes never made it to the runway, only the money of the investors flew away-forever.
  • Sherman Mazur was arraigned together with Regis Possino in February 2013, and they were held with no bail, awaiting their trial.  In 2009, Mazur was busy in the United States.  He created a company with his children by the name of “Accu-Poll-Holdings”, and was selling the shares via boiler-rooms, the usual story.
  • As Pacific Palisades Patch reports in February, 2013: “The defendants (referring to Possino and Mazur) are serial market manipulators that executed several deceptive deals per year, each generating several millions of dollars, according to court documents. They often worked in conjunction with company management and CEOs and targeted several industries including the pharmaceutical, green tech, oil and gas development and e-commerce.”
  • Adnan Khashoggi, now close to 80 years old, is allegedly in either the United Arab Emirates or in Monaco and enjoying his retirement.  Deutsche Bank, Germany’s biggest bank, paid US$ 350 million US Dollars in compensation for share fraud, in which both, Deutsche Bank and Khashoggi were involved, in the GenesisIntermedia scandal.
  • Khashoggi, along with Ramy El-Batrawi, was the principal financier behind GenesisIntermedia, Inc. (formerly NASDAQ: GENI), a publicly traded Internet company based in Southern California.  After the September 11 attacks, Khashoggi’s U.S.-based checking accounts were frozen and Khashoggi was unable to make a margin call with Native Nations Securities, whose CEO and largest shareholder, at the time, was Valerie Red-Horse, former office manager of junk bond king Michael Milken.  In turn, Native Nations and Red Horse were unable to meet their obligations on the margin loan to MJK Clearing, Inc.  Trading in the stock of GenesisIntermedia was halted in September 2001.  Khashoggi’s unwillingness to pay his margin loan to Native Nations Securities, and Native Nations (and Red Horse’s) inability to pay its debts to MJK Clearing, began a series of bankruptcies that ended in the largest payout in Securities Investor Protection Corporation history.  Native Nations Securities and MJK Clearing both eventually filed for bankruptcy.
  • Rakesh Saxena was put in prison, pending extradition to Thailand. On October 29, 2009, he was deported to Thailand after fighting the longest extradition battle in Canadian history, which lasted thirteen (13) years.  He is accused of embezzlement in 1994-1995.  He is widely reputed to have been engaged in dozens of high risk ventures and deals throughout the world over the previous three decades.  Saxena has been accused of many things but has not convicted of anything yet.  In India, Saxena has been accused of culpable homicide, extortion, uttering death threats and cheating in the death of biscuit tycoon Rajan Pillai.  Those allegations were laid after the tycoon’s widow, Nina Pillai, accused Saxena and three others of conspiring to kill her husband. Former bank officials in Thailand have claimed that Nina Pillai continued to be financed by Saxena after her husband’s death.
  • The Government of Thailand accuse Saxena embezzling $88 million from the Bangkok Bank of Commerce (BBC) and sought his extradition from Canada. The bank had separately filed civil proceedings against Saxena. He has filed a counter-suit.
  • The collapse of the BBC was one of the first dominoes in a financial crisis that spread across Asia, shaking the world economy in 1997. While some blame Saxena for sparking the inferno – The Wall Street Journal described him as the “Mrs. Leary’s cow of the global financial crisis” – he is not facing court action on that score. He is also linked to some of the major hedge fund problems of the late 1990s, particularly problems linked to third world bonds and leveraged currency and interest rate derivatives on such bonds and to problems now associated with Russian and East Europe privatizations of the Yeltsin era.
  • No charges were laid in the ill-fated Sierra Leone affair.  The British Parliament’s Report of the Sierra Leone Arms Investigation concluded that the purchase of weapons with Saxena’s money only technically broke a United Nations embargo and that Canada was not yet enforcing the embargo.
  • Raoul Berthaumieu did not get a good reputation either.  If you put the name of his company, Pacific Federal SA into a search engine, plenty of warnings appear, not to do business with this company. In 2001, Raoul Berthaumieu, was a head of the supervisory board of GenesisIntermedia.




Something is Rotten in the State of Croatia

3 04 2013

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Croatia is a small, beautiful country sitting at the crossroads of Central Europe, the Balkans and the Mediterranean, with a beautiful serene Adriatic Sea coast that contains more than a thousand islands.  It has a high potential for development. It also has a very high development index, where life expectancy, literacy, education are high (high levels of income are disputable).  Yet, in this 20th Century, there was a bloody war that Croatia was involved in …

Less than ten years ago, in 1995, when all stakeholders of the war in the Former Yugoslavia, including Croatia what, exhausted by infighting, forgot to do – is to deal with forgiveness, despite the close living proximity to those they declared enemies.  Reconciliation is imperfect, but it is necessary. And this incidentally is a rotten part of Croatian development as a state where freedom of speech is restricted, where no political figures have taken up courage to deal with truth, and where there is no division between politics and private sector development.  As the matter of fact, reading the below referenced 2010 report from Amnesty International one can extrapolate that the Croatian government leadership since 1995 has been full of war profiteers.

Longer the truth is closeted, more rotten it is going to continue to be in the State of Croatia. Croatia, however, can thank independent journalism for bringing that much needed truth up on the surface.  Why, every war begins because of money, but in the Balkans people have been duped to believe that it is because of ethnic hatred.  So they continue to hate.

Thankfully, the profiteering and monetary flows have best been described by Hypo Affair uncovered and documented, by an investigative journalist Domagoj Margetic (Sign Change.org petition to support Domagoj.  So now, they can stop hating.  But they don’t.

Indirectly, what Margetic has begun is inklings of Truth Reconciliation Commission, whose members are himself and a clan of dedicated truth seekers across the Balkans.   Incidentally, the ‘truth seeker’ is on Hunger Strike because he is Black Listed by the Croatian Government.

It is safe to say that on the top of Croatian pyramid known as Hypo Group Alpe Adria Affair (there is an Austrian scandal associated with this bank as well), one can find involvement of three political parties led by the Croatian Democratic Union (HDZ), Croatian Social Democratic Party (SDP), and the Istrian Democratic Assembly (IDS).

According to Margetic’s research (please watch the video with English subtitles) and documents that he has in possession about EUR 100 Million of Former Yugoslavian money, half of which belonging to Croatia,  have been laundered and about 200 elite Croatian families have gotten rich as a result of this.   An example is provided of Ivo Sanader.

Margetic’s investigative journalism brought down Ivo Sanader, former Croatian prime minister and the former president of the Croatian Democratic Union (HDZ).  Sanader has allegedly received nearly $700,000 in bribes by Hypo Group Alpe Adria Bank for arranging a loan in 1995.  He has been accused of war profiteering, and has also been accused of receiving EUR 10 million in bribes from the CEO of the Hungarian oil company MOL, Zsolt Hernádi, to secure MOL a dominant position in the Croatian oil company INA.  This pyramid scandal has everyone involved.

Just ask Domagoj Margetic, and he will give you 20+ names of major politicians, 35+ names of major tycoons and other key people involved in the Hypo affair.

Why isn’t Margetic publishing a book about all of this?  He has.  His book, “The Banking Mafia” was written in 2008, topics include:

  1. Money transfers to Liechtenstein  through the Hypo bank;
  2. Ivo Sanader disposed with illicit funds Hypo bank loans in 1995
  3. Money laundering at the Hypo Bank;
  4. Government participated in money laundering through the Hypo bank
  5. Croatian government shares responsibility for the criminal in Hypo Bank
  6. Whom did the bank grant secret loans to?
  7. Laundering of more than 11 billion through the Hypo Bank illegally increased external debt of the Republic of  Croatia;
  8. Fictitious loans granted by the Hypo Bank Klagenfurt served as a cover for money laundering;
  9. Money laundering with the long-term foreign currency bank deposits of the Hypo Hypo Bank  Klagenfurt with the Hypo Bank Zagreb;
  10. Through supplementary capital the Hypo bank Zagreb laundered over 200 million euros;
  11. Hypo bank in Croatia laundered money through related person transactions;
  12. Through secret foreign accounts in foreign banks, Hypo Bank Zagreb laundered around 500 million euros;
  13. Hypo bank through The Slavonian Bank (Slavonska Banka)  increased Croatian foreign debt by more than 301 million euros;
  14. Criminal report for money laundering and concealment of illicit money in Slavonian Bank (Slavonska banka);
  15. The Croatian National Bank provided money laundering by the Hypo Bank through the Slavonian Bank (Slavonska Banka)

Below, you will read about inability of political elite to deal with the legacy of the war, including war profiteering.

Unfortunately this has been the case with a large chunk of Croatian people.  Domagoj Margetic has been called a Serbian agent, a follower of Serbian World War II monarchist paramilitary army (‘cetniks’), etc.

The lack of political elite to release information, provide apologies, establish whistle blowing laws for the companies (which are sometimes government-owned, and at other times formerly government-owned) and media (support a Petition to Establish a Whistleblowing Law in Coratia) is affecting Croatian people drawing them into ‘group-think.’  Croatian elite has done very well in psychologically controlling the masses.

This is why smart, free and independent journalists, like Domagoj Margetic, find themselves on the brink of starvation.  Whereby in America, he would be earning millions of dollars from his investigative journalism work, in Croatia Margetic, will be allowed to starve to death.

Now back to Amnesty International report issued in 2010 (three years ago).  While some references may be outdated, facts and recommendations provided remain, and they call as does this blog post for some serious thought to Croatia needing to belong on international human rights watch.

In 2010, Amnesty International issued a report on Croatia, confirming that while they have no position on whether the Republic of Croatia should or should not be accepted as a member of the EU or any other international organizations, they did confirm that:

  • The accession process into the European Union is “a good opportunity for Croatia to improve its human rights record by complying with the highest human rights standards.”
  • Having said that, the organization continued to be concerned that measures that have been implemented in Croatia did not translate into tangible effects.

While the majority of the report deals with Croatia’s handling of the war crimes, Amnesty International was particularly concerned with:

  • Ethnic bias in sentencing
  • Failure to prosecute war crimes in accordance with international standards,
  • Failure to enforce all relevant legislation providing for the protection of witnesses (in the courtroom and outside, witness support services),
  • Failure to make judges, prosecutors and lawyers fully aware of international obligations in the field of human rights; and most of all
  • The lack of political will in Croatia to deal with the legacy of the war.

And this is the ‘rotten’ part where the focus of this blog post will be placed.

How are politicians not dealing with past?

  • There is the lack of political will to prosecute war crimes cases in Croatia and the failure of the authorities to make it their priority
  • When the three Croatian Army generals (Ante Gotovina, Ivan Čermak and Mladen Markač)  were awaiting their trial in The Hague, the government of Croatia, instead of distancing itself from the case, asked the International Criminal Tribunal for the former Yugoslavia (ICTY) in September 2006 to be allowed to act in the capacity of amicus curiae in the case.  They were rejected.  This makes everyone externally extrapolate that Croatian government is full of war profiteers.
  • The failure of the authorities to provide the ICTY with all the relevant military documents related to the 1995 Operation Storm
  • In his last report to the UN Security Council in November 2009, the ICTY Chief Prosecutor stated that “since the previous report to the Security Council […] no substantial progress has been made in locating a number of key military documents related to Operation Storm of 1995, which the Office of the Prosecutor had first requested in 2007.”   As of April, 2010, when this Amnesty International document was written, no documents were not provided
  • Amnesty International was extremely concerned about the political involvement by some of the highest officials in the country, in the case of Branimir Glavas, Member of the Croatian Parliament, preventing the course of justice, whereby Government waived his detention during prosecution.  On the day of the verdict, the accused fled to Bosnia and Herzegovina, which citizenship he acquired in the meantime.  Based on the agreement on mutual execution of criminal sanctions between Croatia and Bosnia, Glavas was finally arrested in Bosnia on September 28, 2010.    His seven medals were taken away.
  • As was the case with 2010 President of Croatia’s apology to Bosnia in the Bosnian Parliament of Bosnia, Croatian parties took that apology back in the weeks to follow
  • As a result, political figures are undermining efforts to ensure reparation for all victims of the wars.

Possible solutions proposed by Amnesty International:

  • Amnesty International recommends that calls on Croatia to, in line with the United Nations Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of Gross Violations of International Human Rights Law and Serious Violations of International Humanitarian Law, undertake immediate efforts to grant the victims the right to reparation, including an official apology, for the war crimes which, beyond any doubt and as confirmed by the ICTY, have been committed by the Croatian military and political officials.

“Amnesty International urges leading officials in the country to refrain from making statements which undermine efforts to guarantee the right to remedy and reparation, as enshrined in international law, including an official apology.”

  • “The organization calls on the government of Croatia to show true commitment to prosecute all war crimes irrespective of the ethnicity of those responsible for war crimes and their victims.”




Croatia a Banana State: in Which the Most Underaknowledged Asset is the Truth. Domagoj Margetic, Strikes with Hunger Day 22.

1 04 2013

Dear Friends,

with your signature please give support to Croatian journalist Domagoj Margetić who is on hunger strike since 11th of march 2013.  Please:

From Domagoj Margetic, investigative journalist

”This is my last attempt to set through my example to point out the extremely difficult existential and professional position in which Croatia’s investigative journalists have found themselves. We sought to open cases and corruption scandals, which, because of their political background and because high-profile corruption which are networked institutions in this country, and to a certain political party, never should be published.

So my fault and some of my colleagues is very clear: we wrote what was forbidden to write, we provide the public access to information that never should have become public. In short, we wrote and spoke about the forbidden truths. It is publicly known that I was the one of the first investigative journalist who researched, wrote and discovered some of the biggest corruption scandals in Croatia: Hypo scandal, political corruption in the Customs; Affair HAC; Case Soboli; Affair INA and smuggling oil through INA, cigarette smuggling, tobacco mafia and illegal conversion and privatization of TDZ and TDR; Case U.S.; Case Geotechnical Engineering; case secret bank accounts in Villach, Case of secret bank accounts at Privredna Banka; war crimes cases: Sijekovac, Brod, Mrkonjic Grad and Sisak; Affair on illegal conversions, privatization and illegal operations of the Bank of Zagreb, as well as cases of the Croatian Post, Croatian Postal Bank and the Bank of Dubrovnik.

I am an Author of thirteen publishing books on topics of great corruption scandals and investigations of organized crime, most notably, “Who robbed Croatia?” (2003.), “Banking Mafia” (2008.), and “The Case Pukanic: Murder with states signature”(2011).  Still, of all the scandals that I’ve revealed and have written about, the biggest is Hypo scandal, international bankingscandal, in which there is documented evidence presented, the money trail from the Croatian secret accounts abroad, primarily in Austria and Lichtenstein, under control of members of the political and economic elite from Croatia; some documents from Hypo scandal reveals the amount that reaches 47.7 billion euros. It is also known that I’ve, as an investigative journalist, first submitted documentation Attorney General’s Office on the case of Hypo – Mr Ivo Sanader– former Croatian prime Minister, back in April 2008. After that he had been under investigation, then filed charges and ultimately convicted with a criminal offense of war profiteering.

I had conceded all of mine research documents not only to investigating authorities, the police, the State Attorney’s Office and USKOK, but also the National Anti-Corruption Council in Parliament at the time the panel chaired by Dr. Zeljko Jovanovic and to investigative bodies of Austria who research Hypo scandal; I had worked closely with the late president of the Council for the Fight against Corruption Prime Minister Verica Barac.

I’ve worked as a journalist solely in the public interest, so that the citizens who are affected by the information that I have researched, ensure the availability of data and documents about some of the biggest corruption scandals in modern Croatia, Hypo scandal and many consider the largest banking scandal in Europe after the Second World War.  I have often worked against in a detriment of my personal interests and my family, to inform the public about my journalistic research. In the same time I had met with corruption deals, those strongmen who have learned to silence the media, who can buy and pay everyone.

So they had offered me money for journalistic silence and cessation ofjournalistic research as representatives of the Hypo Bank, representatives of one of the tobacco industry, representatives of the Bank of Zagreb and, when they realized that I would not accept any amount that they offered me, it was followed by the threat of very powerful individuals, institutions and companies in Croatia. Along with those whose bids or offers to pay for my silence declined, with the help of the media in which they are paid “marketing services”, and with the help of journalists and editors who they kept on its black payroll, they started a campaign of where the main objective was to discredit me as a man and as a journalist; they were written and published numerous articles and offended me with various accusations, lies and slander, to discredited me in public as much as possible, my journalist questionable authenticity.

So the media and journalists, who’ve often been involved directly or indirectly in the Hypo affair or other corruption cases, ran against me a dirty campaign for years in behalf of the mafia and corrupt politicians. On the other hand, those of whom I wrote about in this country, controlling everything from cash flow, the economy,politics, institutions, and the media, and since that I have not agreed to the settlement and haven’t made a deal with them because I did not agree to stop research and write about these corruption scandals, they have clearly made itknown that they would destroy me existentially if I won’t shut up, and if I won’t withdraw.

At first, I did not believe that they are so powerful and influential that they could deny me any journalistic work in Croatia, but eventually I realized that they control virtually everything. Very soon I found myself on the black list of journalists that Croatia must not allow to work, therefore, on the black list of journalists that no media in Croatia must not be employed. I knocked on the door of the editorial office and the media, but everywhere I’ve got the same answer, “ you’re on the black list, for you anywhere in Croatia there is no job!”

Some of my colleagues were smarter, they would take the offered money, kept quiet about the affair, and today are prized journalists who don’t have to worry about their existence nor their family. I was obviously stupid, because I refused to take money in exchange for the silence. Because, in this society, in this country, in journalism, most tariffs are for the silence, and the lowest tariff for the truth. I obviously didn’t understand at the time.

Capital of the major media in this country, is actually one way or another suspected criminal origin, about which I discovered many traces such as in my research Hypo scandal, in which involved are practically all the big media companies, their owners, or their leaders, and the media only served as a large laundry of dirty money stolen from the Croatian transition nineties. So even today, it is not advisable to explore the origins of capital in our media, and because research Hypo scandal, it is logical that I’m in all the media associated in any way with this scandal among the first names on journalistic blacklists.

Because of my research I ended up on the blacklist of the public broadcaster HRT, and it was no secret that I’m on the list of prohibited persons to HRT, or on the list of banned visits and participation in any of the shows on the channel of HRT. Besides, I am exposed to many other, judicial, police, security and intelligence pressures, to keep me shut up and stop in my journalistic research, primarily in research and writing about the Hypo scandal. And now I’m finally left on the street without any source of income, or no funds for normal existence. In other words, after all the scandals that Iuncovered, I was left to myself, no job, no income, no existential security.

That’s’ the way how the corrupt politicians and criminals, their interests and networked connections, managed to get revenge for what I wrote about and published. I have no longer any means of livelihood, and in fact, the more I have no choice which means I fight for my journalistic rights, I will announce that within ten days at a public place in Zagreb, I’m starting a hunger strike to defend my journalistic rights; primarily my right that criminal power centers in this country don’t silence me with their mafia, corruption, criminal methods. They want me to die in silence of starvation, it’s their revenge for my journalistic work.

Therefore I will starve in public, and what have happened to me, fall of conscience to all of you. If I was silent about corruption, if I like many others traded with information and documents, today I would have no financial problems and would not be forced to this letter, nor the public hunger strike. The lie is that the country and state institutions protect the rights of our journalists.

When we find major corruption scandals, our lives and our existence is not worth anything anymore. To the Mafia and the corrupt system we are an easy target to be removed, not always by physical liquidation, but worsen existence and sophisticated methods of silencing. One by one, while not silence us all, because you let them do it. Today in Croatia can work and survive only those journalists who are doing what they are told. Those journalists who respect the forbidden topic, do not write about them and can not speak, which corresponds to the owners of their media, sponsors, or political and business circles whose interests the media represents and protects.

Most of the media in Croatia today do not work on the principles of journalistic ethics and codes of practice, rather on the principles of media racket and media crime, and major media outlets often actually serve as a criminal money laundry for suspicious investors and shareowners that hidden behind certain media, thus hiding from the public and a genuine interest in the existence and the activities of individual media. Above all, I demand that the process of proposing and adopting the whistleblower protection Law on corruption begin, which would protect journalists, who explore, discover, write and report on cases of corruption and organized crime. If such a law was passed on time, it would not be possible to become an investigative journalist and banned just because I discovered and wrote about the corruption scandals that I mentioned earlier in the letter.

I demand that the institutions of the European Union continue to monitor the process of completing the requirements for membership of the Croatia, especially in regard to the protection of media freedom and whistleblower protection Law on corruption and organized crime. It would be desirable that the European Union reconsider accepting the Croatian membership until the conduct additional surveillance respect journalistic freedoms and rights, human rights and civil liberties, whistleblower protection Law on corruption and organized crime, who are citizens of Croatia in the third row, and in practice almost people with no rights. I demand from Croatian institutions to publicly answers why I am on “Black lists” of banned journalists, on what basis are set these criteria and how they prepare such black list of journalists? If such a black list does not exist, I demand that the state institutions plainly manifest in public recognition for journalistic research in uncovering corruption and organized crime in Croatia, which would have made it public knowledge that the “black lists” of disobedient journalists in this country has finally come to an end.

I demand that in Croatia I can be uninterrupted, uncensored investigative journalist to do my job, regardless of what political, financial, gangster, business, banking or other lobbies and groups I’m researching and writing, which is not the case for all the reasons that I have stated in a letter and that I can always argue further.

For all these reasons, on 11th March 2013. I begin a hunger strike in order not only to achieve the objectives set forth, but also pointed to the disastrous situation of media freedom in Croatia, especially when talking about independent investigative reporters who deal with major corruption scandals and investigation of organized crime. Such is to be silenced at all costs.

The goal is to silence us, so my hunger strike remained the only means to combat these forms of censure and restricting media freedom and rights.

I will continue with the hunger strike by fulfilling my demands.”

Domagoj Margetic, investigative journalist








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