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“Balkan Anti-
Corruption Civic
Initiative”
Project financed by EU Commission within IPA Programme.
Project implemented by Partnership for Social Development Croatia,
Open Society Fund Serbia, Centre for Development of Non-Profit
Sector Serbia, Romanian Academic Society Serbia and Open Society
Fund Bosnia and Herzegovina
BACCI
Balkan Anti-Corruption Civic Initiative
Conflict of Interest Research on Local Level with
the emphasis on Local Administration
City of Split
Project financed within EU IPA 2008 Programme
Civil Society Facility: Support to Partnership Actions “Fight against Corruption, Organised Crime and Trafficking”
Conflict of Interest and Corruption:
Phenomenon and level of influence on
public administration’s work and public
interest in the Republic of Croatia.
Understanding corruption and conflict of interest
is a pre-condition for fight against them.
Simplification of transfer of legal solutions,
individual measures or organisational systems
on corruption suppression, without prior defining
of the state of affairs and national or local
diagnostics of the phenomenon, leads to eternal
frustration due to eternal fight without visible
results.
EU Commission in its Progress Reports
for Western Balkan countries continuously
states that “conflict of interest is not
understood on all levels”
What is it that we don’t understand?
Conflict of interest is conflict between one or more
interests in a venture, where a less important interest(s)
or a less principled interest(s) overcomes the most
important or most principled interest(s) and in doing so
venture suffers damage or its effectiveness is reduced.
Corruption is every activity which lies on misuse of
public powers for private gain or use by official(s) or
person deciding on public interest.
Conflict of interest, even though not representing
corruption per se, it represents the basis of organised
and systemic corruption.
By reducing corruption to bribery, we, by ourselves, are
reducing potential impact of measures for suppression of
corruption.
Effective corruption suppression, i.e. conflict
of interest suppression, is based on
transparent public sector work,
availability of data and possibility to
distribute these data and give opinion on
public sector’s work so the public can
make judgement on how certain public
bodies and officials work.
Corruption Ratings
7
6
5
4
3
2
1
0
1999- 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2000
Croatia Serbia Bosnia&Herzegovina
Montenegro Albania Macedonia
Kosovo
World Bank Indicators
Democracy Score
6
5
4
3
2
1
0
1999- 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2000
Croatia Serbia Bosnia and Herzegovina
Montenegro Albania Macedonia
Kosovo
World Bank – democracy scores, 1999/2000–2010
Last 10 Years of Fight against Corruption in
Balkans
Period 2000-2003 coincides with big changes in Balkan
countries and adoption of the first package of basic laws for
suppression of corruption (Freedom for Access to Information
Act, improved public procurement laws, Law on Suppression
of Conflict of Interest).
After the first uplift of reforms, all parameters measuring
development of democracy, freedom, human rights and fight
against corruption had been stagnating up to 2007/2008,
when a negative trend started which continued even till today.
Even a superficial data analysis shows that the money, work
and resources spent haven’t produced expected results and
that it is needed to seriously consider the reasons which are
making fight against corruption stagnating.
Freedom for Access to Information Act (FOIA)
Nr. of
Complete Incomplete Requests
INSTITUTION / CITY requests
answers answers rejected
No answer
sent
City of Zagreb 11 2 5 2 2
City of Split 11 7 3 0 1
City of Sisak 11 7 2 1 1
City of Osijek 11 2 1 0 8
City of Čakovec 11 6 2 0 3
Ministry of the Interior 9 2 2 1 4
Ministry of Administration 9 4 0 4 1
Ministry of Health and Social Welfare 9 5 4 0 0
Ministry of Finance 9 5 4 0 0
TOTAL 91 40 23 8 20
FOIA (in total 91 requests for information)
44% of answers to requests were
incomplete
In 31% of cases, access to information
was not possible
25% of answers to requests were
incomplete, data requested for research
was not delivered (e.g. names of members
of committees for public procurement)
Law on Suppression of Conflict of Interest
Law on Suppression of Conflict of Interest,
with its new amendments, holds its focus
on officials’ assets and not on detection
and sanctioning of conflict of interest and
as such, it will not bring relevant changes
in relation to current state of affairs
Conflict of Interest and the New Law
Committee, or political subjects via Committee, remain the
only parties empowered to start investigations on conflict of
interest. Based on claims Committee can, but doesn’t have to
start investigations.
Small number of officials are obliged to abide by the law on
national and local level, which leaves a lot of space for
manoeuvre for political and/or organised corruption via those
deciding on public interest and those responsible for
protection of public interest.
Example: one of crucial institutes responsible for protection of
public interest on Croatian Radiotelevision (HRT) – almost
completely out of the scope of the Law (HRT Management as
executive body of HRT).
Amendments don’t follow Council of Europe
recommendations regulating conflict of interest, i.e. difference
between real, potential and spurious conflict of interest, and
material and immaterial advantage deriving from them (the
Law deals with property and ownership).
Conflict of Interest and the New Law -
sanctions
Annulment of legal acts deriving from conflict of interest
is possible only in public procurement procedures while
employment, appointment or other legal acts adopted in
conflict of interest remain in force.
Removal of or paying for damages deriving from conflict
of interest is not defined by law.
Sanctioning of untrue data on property/assets in
Declaration of Assets is possible, but sanctioning of
untrue data tied to interests and potential immaterial
advantage for officials is not possible.
Conflict of Interest and the New Law -
sanctions
Sanctions for breaking the Law tied to
property/assets, gifts, fees, other work,
membership in managing bodies and
committees, limitation of business activities
for enterprises and obligations to inform
about gaining assets are:
warning notice, suspension of one part of
monthly salary (2.000 – 40.000 kuna) for a
maximum time limit of 1 year, publishing
of Committee’s decision
Conflict of Interest and the New Law -
sanctions
Only in cases when an official rejects to execute
Committee’s decision about correction of Declaration
of Assets, the Committee can make a proposal to
remove the official from his/her office.
Responsible body within which the official in question
is working is not obliged to implement this proposal.
Possibilities for removal of an official in cases of
conflict of interest don’t exist.
Request for removal of an official – Committee can
ask for his/her removal only in cases tied to non-
fulfilment of Committee’s requests related to data in
Declaration of Assets. – Similar opportunities related
to conflict of interest don’t exist.
Conflict of Interest and the New Law
Conflict of interest management mechanisms (what to do when a
potential conflict of interest arises) cannot provide answers to real
situations of officials.
Sole clear regulation of conflict of interest lies in public procurement
procedures when they include direct conflict of interest, while the
rest of procedure is more or less outside the scope of efficient legal
acts.
Transfer of rights (owner’s share in enterprises) on someone else is
only temporary and it doesn’t prevent the enterprise to get rich
during the mandate, i.e. the official is not prevented to indirectly get
rich during his/her mandate after he/she returns his/her share in the
enterprise after his/her political mandate.
Limitation to conclude agreements only applies to enterprises in
which officials gained share up to 2 years before his/her mandate.
In short, the Law is not based on practice and issues related to
conflict of interest in Croatia, but on solutions taken from other
countries which function within completely different legal framework.
Conflict of Interest and Media and Civil Society
Research in Croatia as well as in other countries in the region,
according to all analysed indexes and results of conflict
interest analysis, point to media captured by political interests
as well as by private capital interests and personal
(immaterial) officials’ interests.
Affairs like FIMI media (and a lot more similar models of
influence on media), state of affairs on HRT, prosecution,
firing and attacks on investigator journalists as well as
complex relationship between officials and private media
groupings on national level disable the basic assumption of
fight against corruption – distribution of information for the
public and formation of adequate public judgement on
officials’ morale.
Research showed that local media are financially, politically
as well as by ownership depending on political establishment.
Conflict of interest related to media, media ownership, media
financing as well as other relations, has been detected in all
analysed cities.
Conflict of Interest and Civil Society
There are only few CSOs working in the field of fight
against corruption, they are often under capacitated and
mainly operate on national level. In most local
communities they don’t even exist.
Tendency of the state to “capture” even this small
number of CSOs is visible in ministries (public
procurement) as well as in public enterprises.
“Cooperation” between civil society and the state in fight
against corruption gets down to “showing” CSOs on
conferences and projects which don’t have any real
effect on problem of corruption.
Voices criticising the work of the state and local
administration are often not welcomed thus the fight
against corruption is left outside the scope of public
criticism and judgement (except in rare cases related to
lower level of state management).
Research Results in Croatia:
Ministry of Finance, Ministry of
Administration, Ministry of the Interior and
Ministry of Health and Social Welfare
Financial Management, Public Procurement
and Conflict of Interest
Ministries’ budgets: budget reporting – non
transparent items
In total - items "Other" from 2008-2009 budgets: Ministry of Finance, Ministry of Administration, Ministry of the Interior.
Ministry of Health and Social Welfare
608.144.946,73 kn;
3,61%
Items "Other"
Rest of the
Budget
16,235,287,373.42 kn;
96.39%
Source: official website of State Audit Office and Ministry of Finance
Ministries’ budgets: budget reporting – non
transparent items
In total: Intelectual and Personal Services in 2008-2009 budgets: Ministry of Finance, Ministry of Administration,
Ministry of the Interior, Ministry of Health and Social Welfare
247.791.125,95 kn;
1,47%
Intelectual and
Personal Services
Rest of the budget
16.595.641.194,20 kn;
98,53%
Source: official website of State Audit Office and Ministry of Finance
Ministries’ budgets: budget reporting – non
transparent items
In total: Current donations in 2008-2009 budgets - Ministry of Finance, Ministry of Administration, Ministry of the Interior,
Ministry of Health and Social Welfare
56.755.125,34 kn;
0,34%
Current donations
Rest of the
budget
16.786.677.194,81kn;
99,66%
Source: official website of State Audit Office and Ministry of Finance
Ministries: Potential conflict of Interest in
Public Procurement Procedures
Concluded contracts per contractors in 2008-2009: Ministry of Finance, Ministry of Administration, Ministry of
the Interior, Ministry of Health and Social Welfare
480,497,361.86 kn;
56.87%
Contractors
Rest of Public
Procurement
364,455,550.08 kn;
43.13%
Source: Quantitive – Ministry of Economy, Labour and Entrepreneurship; Qualitative – media analysis and interviews
Ministries: Differences in Published Contract
Value – Credibility in Reporting
Difference in PP contracts value in 2008-2009 for: Ministry of Administration, Ministry of the Interior, Ministry of Health
and Social Welfare
400,000,000.00 kn
350,000,000.00 kn PP according to Ministry of
271,124,467.13 kn Economy, Labour and
300,000,000.00 kn Entrepreneurship data
250,000,000.00 kn PP according to the State Audit
Office
200,000,000.00 kn
150,000,000.00 kn Difference in value
100,000,000.00 kn
21,207,273.43 kn
50,000,000.00 kn
0.00 kn
2008 2009
Source: Ministry of Economy, Labour and Entrepreneurship and official website of State Audit Office
Ministries’ Budget Reporting
In total, cca 900 million kuna or 5,5% of
the total budget resources are not
available for the public in the reports.
Ministry of Finance: Budget Reporting – non
transparent items
Items "Other", "Intellectual and Personal Services" and "Current Donations" in Ministry of Finance Budget for 2008-2009
3,933,720.29 kn; 1.17%
39,117,797.27 kn; 11.64%
1,250,000.00 kn; 0.37%
Other
Intellectual and Personal
Services
Current Donations
Rest of the Budget
291,641,439.25 kn; 86.81%
Source: official website of State Audit Office and Ministry of Finance
Ministry of Finance: Officials and Conflict of
Interest
Customs Director Mladen Barišić arrested and under investigation because
of “FIMI media” affair, however there has been no investigation and
sanctions related to conflict of interest.
According to interviews and media articles – employments and
appointments in Directorate Generals within Ministry of Finance were
influenced by politics (political parties within the ruling coalition) and
sometimes by personal interests of officials (e.g. appointment of Ante
Šimunović in Financial Agency (FINA) under the influence of former minister
Šuker)
Distribution and advertising of Personal Identification Number (OIB)
(Ministry of Finance Project) via Croatian Post Office, without public
procurement tender, with the contract with Croatian Post Office for media
campaign of OIB, which included even the broadcasting via news even
though the OIB Project was the project of Ministry of Finance.
Contract on adverstising was signed with MASSOL ltd. which is connected,
according to the media, with Ratko Maček, former Spokesperson of the
Government and one of leaders of pre-election campaigns for HDZ.
This kind of situations apparently successfully avoid the radar and, organs
of criminal prosecution and Law for Suppression of Conflict of Interest, and
also the public didn’t have a chance to be informed on affairs tied to
Croatian Post Office. Even though available data with names of potential
witnesses (insiders) were forwarded to USKOK, there is still no epilogue.
Ministry of Administration: Budget Reporting –
non transparent items
Items "Other" and "Intellectual and Personal Services" in Ministry of Administration Budget in 2008-2009
1,024,661.34 kn; 2.85%
2,571,302.31 kn; 7.16%
Other
Intellectual and Personal Services
Rest of the Budget
32,314,419.36 kn; 89.99%
Source: official website of State Audit Office and Ministry of Finance
Ministry of Administration: Differences in
Published Contract Value – Credibility in
Reporting
Ministry of Administration: difference in published contracts in 2009
12,000,000.00 kn
PP according to Ministry of
10,000,000.00 kn Economy, Labour and
Entrepreneurship data
8,000,000.00 kn PP according to the State Audit
Office data
6,000,000.00 kn 3,883,974.92 kn
Difference in published PP
4,000,000.00 kn contracts
2,000,000.00 kn
0.00 kn
2009
Source: Ministry of Economy, Labour and Entrepreneurship and official website of State Audit Office
Ministry of Administration: Officials and
Conflict of Interest
According to research methodology,
researchers weren’t able to detect conflict
of interest of Ministry’s officials
Ministry of Interior: Budget Reporting – non
transparent items
Items "Other", Intellectual and Personal Services" and "Current Donations" in Ministry of the Interior budget for 2008-2009
489,572,416.30 kn; 5.73% 56,264,669.21 kn; 0.66%
3,460,000.00 kn; 0.04%
Other
Intellectual and Personal
Services
Current Donations
Rest of the budget
7,994,601,192.62 kn; 93.57%
Source: official website of State Audit Office and Ministry of Finance
Ministry of Interior: Public Procurement –
credibility in reporting
Ministry of the Interior: difference in published contracts in 2008
PP according to Ministry of
Economy, Labour and
250,000,000.00 kn Entrepreneurship data
PP according to the State Audit
200,000,000.00 kn Office data
139,390,437.07 kn
150,000,000.00 kn
Difference in published PP contracts
100,000,000.00 kn
50,000,000.00 kn
0.00 kn
Source: Ministry of Economy, Labour and Entrepreneurship and official website of State Audit Office
Ministry of Interior: Officials and Conflict of
Interest
During project implementation, Minister tried to
make a direct pressure on this research by
sending answers to offical requests for
information to private address of M.P. via
Foreigners Office instead to PSD address which
is a legal carrier of the research!
Also, the Ministry has completely answered to
only 2 out of 9 requests
Manifestations and Impact of Conflict of
Interest in Managing Public Goods
During research, we have connected Minister Tomislav
Karamarko with ownership of 4 enterprises: STABILIS
CONSULTUM d.o.o., DORON NET d.o.o., IPPON SECURITY
d.o.o., SOBOLI d.o.o.
As these enterprises are not listed in Minister’s Declaration of
Assets, we went to Court Register to search for legal acts on
transfer of rights (management rights), but nothing was there,
except documents stating that Minister is no longer the owner
of these enterprises.
When asking Court Register clerks about missing documents
they told us that they didn’t know but that those documents
should have been there and they asked us to come back the
next day.
Next day, clerks told us that those acts are missing but
everything is “in accordance with the law”.
Minister Karamarko is also the Vice president of Basketball Club Zagreb. In its assembly there are also:
Davor Jelavić (City of Zagreb), suspect in affair related to changes of documents of urban planning
Željko Čović (Pliva); Josip Petrović (Agrokor & Ina) – participants in “Verona” affair, together with Ivo Sanader
related to selling of Pliva to American Barr
Marijan Hanžeković – the wealthiest Croatian lawyer with large contracts for state companies and institutes
Branko Vojnović; Geoprojekt and Zagrebgradnja, under USKOK investigation due to malversations with
properties in Zagreb
Ninoslav Pavić, co-owner of EPH and one of the biggest media owners in Croatia. Suspect in GRUPO & HYPO
affairs. Tomislav Karamarko, while not in the Office, was in close business relations with Ninoslav Pavić.
Ivica Toljan, HEP, suspected by Regional Attorney’s Office for “Flats” affair for damages to HEP amounting over
8 million kuna.
Basketball Club Zagreb is one of the wealthiest clubs in Croatia, for which often Minister Karamarko takes
credit stating how this is due to private, not public money. Sponsorship list is long, and some of
sponsors are:
Pavo Zubak, PZ auto – media questioned acquisition of cars for Ministry of the Interior corresponding to PZ
auto (Škoda cars).
DALEKOVOD, under investigation due to construction of electric power stations for HAC (Croatian
Highways) amounting over 1 billion kuna.
HEP – under investigation for damaging contracts on electricity selling - TLM, Stanova, DIOKI and other
smaller affairs.
Croatia Osiguranje & Hrvatska Lutrija, under investigation for FIMI Media affair and lots of other affairs.
City of Zagreb, under constant suspicion and criminal claims without epilogue. According to media, over
250 claims are currently in State Attorney’s Office.
INA – under investigation because of privatisation (Ina & Podravka affairs) where Ivo Sanader and Damir
Polančec are suspects
Jamnica, Ivica Todorić (owner)- suspect in HYPO credit affair
KAMGRAD
These data are also nowhere to be found in Minister’s Declaration of Assets
Public Procurement and joint interests
Just prior to “Podravka” affair (Spice affair) , PODRAVKA transfered over 3 million
kuna to SOBOLI, for consultancy services!
Research detected that during the time of “HAC” affair, SOBOLI produced an Safety
Estimate for HAC.
According to that Safety Estimate, later the same enterprise won a public
procurement tender for works (services) of several million kuna, which is forbidden by
the Public Procurement Act.
One of owners of DORON NET is Luka Gašpar, former Executive Board member in
Ericsson Nikola Tesla, and today the President of the Executive Board in Emerson.
Emerson is often a sub-contractor for Nikola Tesla. Nikola Tesla is one of the biggest
contractors for ministries. Relationships between DORON NET and other enterprises
formerly owned by Tomislav Karamarko and enterprise Emerson and Nikola Tesla
was not possible to determine within the methodology of this research.
INA and HEP are sponsoring Basketball Club Zagreb, but are also main clients of
Emerson (Luka Gašpar).
KAMGRAD is one of sponsors as well. KAMGRAD worked on construction of new
building for Central Intelligence Agency. Tomislav Karamarko, before becoming a
minister acted as the Director of this Agency.
However, as stated earlier, it was not possible to determine the relationship between
minister Karamarko and enterprises which he had co-owned prior to his minster
duties.
All these situations pass under the radare of Law on Suppression of Conflict of
Interest and are not subject of investigation or other actions by relevant bodies,
discipline ones or penal ones.
New Law on Police
New Law wants to hold appointed individuals on
their positions for at least 5 years under the slogan
of depolitisation and harmonisation with EU
benchmarks.
However, it is important to point out that according
to the new Law, current minister completely
controles employment and appointment
procedures (minister appoints the commission
which for its work answers to the minister), without
influence or insight of the public in procedures
which are marked with the official secret status!
With this kind of system for appointment of
management structure, minister will completely
control the Police for 5 years!
Ministry of Health and Social Welfare: Budget
Reporting – non transparent items
Items "Other", "Intellectual and Personal Services" and "Current Donations" in Ministry of Health and
Social Welfare Budget for 2008-2009
149,837,357.16 kn; 1.89%
52,045,125.34 kn; 0.66%
113,614,148.80 kn; 1.43%
Other
Intellectual and
Personal Services
Current Donations
Rest of the Budget
7,612,184,070.90 kn;
96.02%
Source: official website of State Audit Office and Ministry of Finance
Ministry of Health and Social Welfare: Public
Procurement – credibility in reporting
Ministry of Health and Social Welfare: difference in published contracts in 2008-2009
160,000,000.00 kn
140,000,000.00 kn
131,734,030.06 kn PP according to Ministry of Economy,
120,000,000.00 kn Labour and Entrepreneurship data
100,000,000.00 kn PP according to the State Audit Office
data
80,000,000.00 kn
Difference in published PP contracts
60,000,000.00 kn
40,000,000.00 kn
20,000,000.00 kn 17,323,298.51 kn
0.00 kn
2008 2009
Source: Ministry of Economy, Labour and Entrepreneurship and official website of State Audit Office
Ministry of Health and Social Welfare : Officials
and Conflict of Interest
Journalist Nataša Škaričić wrote about minster’s call to all media
editors in Croatia in order to agree on “the strategy” how to report on
the health care reform. Afterwards, she was fired from the EPH.
During his duties as Vice Head of the County, he was parallely
acting as the Director of Gospić Hospital thus receiving both salaries
(together with his hospital attendances) (in total around 45.000
kuna)
Media wrote about minister’s “stalling of public procurement process
for purchase of 128 ER vehicles”, i.e. not respecting the criteria of
the lowest price but asking for additional reports.
Also, there are articles about the minister and his ministry’s
“donation” amounting 20.000 kuna to association Youth Sings,
organiser of a music festival on which minister’s daughter won.
Independant Traffic Union (NCS) is asking for investigation on
legality of enforcement of local rates payments by HAC, one of
these enforcements is started by community Gospić. According to
NCS, ministers Milinović and Kalmeta are “buying votes in their
counties and communities”.
Part of interviewed people thinks that appointments and
employments within the ministry are done exlusively according to
politics or private interests.
Committee for Supression of Conflict of Interest has rejected claims
against minister Milinović. However, the question arises, will the
Committee check in detail minister’s assets according to the new Law.
Picture: newly built house of minister Milinović in Gosppić
Research Results in Croatia:
Zagreb, Čakovec, Split, Osijek, Sisak
Financial Management, Public Procurement
and Conflict of Interest
City Budgets: Budget Reporting – non
transparent items
In total items "Other" in 2008-2009 budgets - Zagreb, Čakovec, Split, Osijek and Sisak
3,050,070,697.96 kn;
16.29%
Item "Other"
Rest of the budget
15,670,677,550.27 kn;
83.71%
Source: official website of State Audit Office and Ministry of Finance
City Budgets: Budget Reporting – non
transparent items
In total items "Intellectual and Personal Services" in 2008-2009 budgets - Zagreb, Čakovec, Split, Osijek and Sisak
282,263,390.47 kn;
1.51%
Intellectual and Personal
Services
Rest of the budget
18,438,484,857.76 kn;
98.49%
Source: official website of State Audit Office and Ministry of Finance
City Budgets: Budget Reporting – non
transparent items
In total items "Current Donations" in 2008-2009 budgets - Zagreb, Čakovec, Split, Osijek and Sisak
1,392,053,516.95 kn;
7.44%
Current Donations
Rest of the budget
17,328,694,731.28 kn;
92.56%
Source: official website of State Audit Office and Ministry of Finance
City Budget Reporting
In total 4.724.387.605 kuna or in average
25,24% of total budget resources is not
available to the public in the reports of
analysed cities in Croatia.
These items are most often used for
corrupt, political or private purposes within
the work of public administration.
Cities: Public Procurement- credibility in
reporting
Difference in value of published contracts for 2008-2009 - Zagreb, Čakovec, Osijek
1,800,000,000.00 kn
1,600,000,000.00 kn
PP according to Ministry of
1,400,000,000.00 kn Economy, Labour and
Entrepreneurship data
1,200,000,000.00 kn
PP according to the State
1,000,000,000.00 kn
Audit Office
800,000,000.00 kn
369,176,766.28 kn Difference in value
600,000,000.00 kn
400,000,000.00 kn
60,455,559.40 kn
200,000,000.00 kn
0.00 kn
2008 2009
Source: Ministry of Economy, Labour and Entrepreneurship and official website of State Audit Office
Cities: Public procurement- potential conflict
of interest in procedures
Contractors in relation to Public Procurement in Zagreb, Čakovec, Split, Osijek and Sisak for 2008-
2009
1,114,254,158.04
kn; 43.41% 1,452,853,865.89
kn; 56.59%
Rest of PP
Contractors
Source: Quantitive-Ministry of Economy, Labour and Entrepreneurship, Qualitative- media articles analysis and interviews
Research Results in Croatia:
City of Split
Financial Management, Public Procurement
and Conflict of Interest
Freedom for Access to Information Act (FOIA) –
City of Split
INSTITUTION / Nr. of requests Complete Incomplete Requests
No answer
CITY sent answers answers rejected
City of Split 11 7 3 0 1
Compared to last research, Split shows most
movement in area of access to information.
2008/2009: complete answers to 5 out of 14
requests
2010/2011: complete answers to 7 out of 11
requests
Even though, access to information based on
FOIA is better than during previous research,
journalists as well as councillors think that for
them access is limited and that the proactive
informing via official gazettes is cancelled.
This situation is worrying and asks for urgent
reaction by responsible state bodies.
City of Split – budget reporting –
non transparent items
Share of items – Donations, the Rest, and Intellectual and Personal Services
– in City Budget for 2008-2009
The Rest
Donations
Intellectual and Personal
Services
Remainder of the
Budget
Compared to last research, there is progress in
budget reporting as well:
Items ‘the rest’ has, in 2008 and 2009,
amounted 4,96% of budget reporting, and in
2006 was 7,11%
Overall sum of non transparent items, in 2008
and 2009, is 15,68% i.e. 291.238.439,00 KN
In budget reporting, attention should be made to
management of liquid donationas which were
9,43% of the budget.
City of Split – Public Procurement
Signed contracts with the City of Split in 2008-2009 – per contractors
Based on methodology, 33,4% of public
procurement, i.e. 66.006.983.96 KN in
years 2008 and 2009 can be tied to
apparent, potential and real conflict of
interest.
City of Split: Employments and
appointments and conflict of interest
First problem has structural nature. The sole fact that the
Mayor is family with the President of City Council is
disputable in sense of functioning of democracy and
political control which loses its sense with this structure
and there is no political and administrative justification
for this. It is important to emphasise that unfortunately
this situation is legal.
Split – employments and
appointments – conflict of interest
Estimation by interviewed is that since Mayor Kerum has
come in power, there has been around 50 new
employments in public bodies, on key positions in the
city and city enterprises, in order to gain control over
them.
While doing that, it is estimated by the interwieved,
instruments of non existent working and operative
positions have been used, such as ‘advisors’ to the
director, and new enterprises have been founded as well
- Split Gradnja (Split Construction) & Splitska Obala
(Split Coast).
Journalist Petranović, in Objektiv states around 20 tied individuals:
Ivica Livaja – kindergardens, company Taho Keramika
Joško Svaguša
Tomislav Gruica – city utilities, former manager of caffe bar in Joker
Đeni Vuković-Stanišić – advisor for social activities, girlfriend of Fani’s brother
Ante Mladineo
Aleks Kvarantar – director of Splitska obala, son of Kerum’s skipper
Željka Kerum – Head of Economy Section, former employee in Joker
Držislav Brčić – enterprise Promet, former manager of Mayor’s restaurant on Marjan
Željana Klein – Splitska kupališta, former commercialist in ˝Kerum˝
Duško Mucalo – HNK – Croatian National Theatre
Marko Pecotić – Theatre Council
Sanja Quien – Theatre Council
Marko Tomasović – Sea Museum, Managing Board of Park - Forrest Marjan, unofficial bodyguard
of Kerum
Ilija Šundov (Vice Mayor’s son) – Supervisory Board of Čistoća
Alenka (Vice Mayor’s niece) – managing boards in Tourist office, Museum of City of Split,
kindergarden Grigor Vitez
Daliborka Bečić- Supervisory Board of Čistoća
Dunja Matković – managing board kindergarden Cvit Mediterana, daughter of Nevenka
Marica Šarić – Supervisory Board of Vodovod i kanalizacija, Mayor’s cousin
Zoran Jeramaz – President of Council for Urban Planning, Kerum’s ˝house architect˝
Damir Karaman – organisation of many lucrative city manifestations, manager of Kerum’s election
campaign
HOTEL MARJAN
January 2008.- amendments to the Urban Plan, large
increase in the size of Hotel Marjan
Jerko Rošin – designer of Hotel Marjan (president of
Council for Urban Planning)
Branko Poljanić – main urban planner in Split, former
Director of Rošin’s urban planning office
Today, there are conversations about West Coast
design. By designing it, Hotel Marjan project gains on
value, on the other hand some consider that West Coast
should be renewed. So, everything would be in order if
the public and private project wouldn’t have been
managed by the same person. But, like this, it is and it
will be a suspicion in conflict of interest.
* CONSTRUCTION ON MARJAN – LATEBRA
According to data by Civil Initiative Split:
Start in 2006 – development of the Urban Plan – developers put an area classified as artificial bathing area
with a permission to construct a hospitality object of 200 square metres per hectare.
DISPUTABLE – this area consists of a large part of old Marjan forrest → PROTECTED AREA OF PARK -
FORREST MARJAN!!!
In this area, LATEBRA bought a property for construction of a hospitality object.
property WASN’T offered to the state, region or City of Split according to the right of pre-emption in line
with the Law on protected areas of nature.
Latebra (Fani Horvat) on 22 July 2008 concluded a contract for buying 3 properties with 12 former owners
– paid 1,2 MEUR!
Ownership of this property looks as follows (in total 15 thousand square meters):
Fani Horvat (5 500 square meters)
City ownership
Sea wealth
2. Mayor’s acts (around 11 October 2010) – Kerum gives to Latebra task of organising urban-architectual
tender for coast design
↓↓↓
Direct favourising of Latebra → in the moment of publishing tender for concession over beach, Fani
Horvat will have the advantage beacuse she will be the only one familiar with the idea of its design!
↓↓↓
Conflict of interest in legal terms as well!!!
Tender published in Vjesnik, low distribution!
If we return to analysis of Law on Suppression of Conflict of Interest, this Mayor’s action, i.e. City’s
administration will not have any serious sanctions because according to the Law, legal acts in this
business cannot be annuled because they’re not subject of public procurement.
Conflict of Interest and Media
Aside his ownership of Television,
interviewed people say that Mayor is
possibly conditioning his marketing capital
coming from his private companies (not
only the money coming from the City
Budget as in other cities), which can
influence the objectivity and criticism in
reporting on work of the city
administration.
Football Club Hajduk
Same model of management structured in
city administration and city enterprises,
Mayor and co-owner of Hajduk, transfers
to Hajduk as well.
Mayor Kerum sanctioned according
to the law
‘CoI Committee’ issued 2 sanctions for Željko
Kerum amounting 30.000 kuna.
But for not replying to Committee’s request to
deliver data.
Especially this constitutes the key weakness in
the law, legal solutions in relation to similar
cases will not change and improve and secure
suppression of CoI, i.e. adequate sanctions for
CoI.
Journalists: “Kerum has, with his incidental
behaviour, created a barrier so noone
asks him anything serious!”
“Trend of making politics VIP is worrying,
because conflict of interest issues are not
coming to the surface.”
Public policies for suppression of conflict of
interest in Croatia, even after the last
amendments don’t correspond to real
manifestation of the problem, i.e. do not
suppress that private interests prevail over
the public ones.
Conclusion:
Indicators for measuring conflict of interest, as well as concrete
examples in Croatia imply that most of public functions of the state
can be considered to be imprisoned by private interests, i.e.
financial, economical, political, or personal ones.
Situation on local level is quite worse than situation on national
level, and adopted policies for suppression of conflict of interest and
fight against corruption do not have the solution for this growing
problem.
Access to information is still not ensured, and the possibility to
disseminate information and opening the public debate on political
responsibility of officials is on its lowest level in the last 10 years.
Except for the shift toward limitation of officials’ influence in public
procurement, other real progress in the Law for Suppression of
Conflict of Interest does not exist.
Conflict of interest is still in the grey zone of the systemic corruption,
for which there is still no adequate solution.
Recommendations:
Media and Civil Society:
Necessity to ensure respect of media liberties and independence of
media from political influence. Introduction of censorship as a
criminal act as well as system for protection of journalists’ integrity.
It is necessary to protect the public service HRT from influence and
repression of politics and HRT management on journalists.
Creating obligation to finance and establish independent non-profit
media.
Rigorous application of the Law on Media, and its part defining
publication of media owners and public media financing.
Creating fair and transparent market for civil society projects in the
area of fight against corruption.
Allocation of funding to civil society only via public tenders and
respect of perscribed code for all public bodies.
Implementation of special instruments of protection including claim
for damages for investigator journalists, civil society activists and all
citizens that report corruption in good faith.
Recommendations:
Freedom for Access to Information Act:
Strengthen individual responsibility in
implementation, including the obligation of
starting a procedure in front of the Civil Servants
Court for those civil servants that infringe the
Act.
Secure implementation of legal court decisions
related to the Act by introducing criminal
prosecution for officials not respecting court
decisions or by introducing high penalties for
those not respecting court decisions.
Law on Suppression of Conflict of Interest
Declaration of Assets form should be improved in order to ensure declaration of officials’
interests before his/her coming to the office, instead of only properties’ declaration (sports
clubs, associations, artistic projects, membership in secret societies).
All items in the form should be available to the public.
Obligation to declare interests should be applied to all those deciding on public interest
issues, especially on local level, and not only to officials as described in the current law.
Form should be declared as a public document, and in case an official represents his
properties and interests falsely, the law should introduce a provision for criminal
prosecution instead of just disciplinary sanctions.
The public should be able to start a procedure in front of the Committee in order to protect
the public interest.
There should be an obligation for the Committee to start a procedure based on a claim,
with an obligation to response to the individual making this claim and ndividual’s right to
appeal to the Committee’s decision.
Possiblity to ban from the office those officials for who conflict of interest is detected should
be introduced, and not only for those who don’t comply to Committee’s decision about
Declaration of Assets.
Introduce an obligation to annul all administrative/legal acts created within conflict of
interests situation instead of only public procurement contracts.
Introduce a possibility to start a procedure to claim damages created by conflict of interest
for private and legal entities who consciously and purposely participate in conflict of
interest.
Introduction of Integrity Audit Agency which would investigate potential conflict of interest
on lower levels with jurisdiction of State Audit Office related to finances and an obligation to
start an investigation in cases when a public body neglects Agency’s recommendation.
Ensure that Agency’s decisions and findings are public.
Ensure with the Public Procurement Act that public procurement contracts are able to be
monitored from planning (budget) to contract execution.
Partnership for Social Development, Lomnička 1, 10 000 Zagreb,
tel.: 00 385 1 60 55 668, e-mail: info@psd.hr, web: www.psd.hr
Thank you!
