Croatia's ex-PM, biggest party sentenced over slush funds

Reuters News
Posted: Mar 11, 2014 6:56 AM

By Zoran Radosavljevic

ZAGREB (Reuters) - Former Croatian prime minister Ivo Sanader and his political party were found guilty on Tuesday of rigging public tenders and abusing state funds in the biggest corruption trial to date in the new European Union member.

The conservative HDZ, which ruled Croatia for 16 of its 22 years of independence, became the first political party sentenced for corruption. The trial, which started in April 2012, was part of an anti-graft drive to boost Croatia's attempt to join the EU, which it did in July 2013.

"This ruling is very important. It sanctions for the first time a political party's illegal funding and this will have a long-term effect on political financing in Croatia," said Davor Gjenero, a Zagreb-based political analyst.

The Zagreb county court gave Sanader, already sentenced to 10 years' jail in another corruption trial in 2012, a new nine-year sentence. The HDZ, now in opposition, was ordered to pay back about 29 million kuna ($5.26 million).

Reading a 30-minute verdict, Judge Ivana Calic said Sanader and four other people had conspired to secure illegal funding for the HDZ from public firms from 2003 to 2009, when Sanader quit the government without explanation.

He was later expelled from the party and fled the country but was arrested in Austria and sent home for trial.

A stern-looking Sanader, wearing a dark suit and tie, stood motionless as the verdict was read, occasionally bringing his left hand to his chin.

The judge said he had used his authority to mastermind a scheme to divert money from public firms to make illegal financial gains both for the party and for himself.

If the ruling is confirmed, the court will confiscate several million kuna from private bank accounts held by Sanader and his family, as well as his paintings and other works of art estimated to be worth more than 1 million euros.

HDZ said it would appeal the verdict.

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"We are convinced we are not guilty and will appeal. We shall never accept collective responsibility," party president Tomislav Karamarko said.

Along with Sanader and the HDZ, the party's former treasurer, accountant and spokesman were also found guilty and sentenced to shorter prison terms.

"If the ruling is confirmed, it will create a serious financial problem for the HDZ and put it in a much less favorable position compared to their main political rivals," Gjenero said.

However, he said, a second-instance ruling is unlikely to be known before the next parliamentary election, due in late 2015.

The ruling Social Democrats still top opinion polls, although their popularity has plunged over the government's failure to improve the weak economy, with the HDZ a close second.

(Reporting by Zoran Radosavljevic; Editing by Angus MacSwan)