Chapter 4. Case Study of Croatia
4.1 Background: Corruption in Croatia
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Chapter 4. Case Study of Croatia
4.1 Background: Corruption in Croatia
Political corruption was recognized as a serious phenomenon in Croatia only after 2000. In the early studies of perception on corruption from Transparency International, Croatia was placed 74th out of 105 countries in 1999 (Grubiša 2010, 75-6). The ranking indicated the corruption levels in Croatia at that time were considerably high, which would classify it among countries with “systemic corruption”. Under the nationalist regime of President Franjo Tuđman, Croatia was considered as unable to efficiently fight corruption, and the
authoritarian style of governance by Tudjman (1990-1999) and the Croatian Democratic Union (HDZ) brought the country to a decade of unofficial isolation with no formal relations with the EU (Jovič 2006). Since then, perception of corruption in Croatia has been changed over time. In 2003, under the Račan coalition of center-left government, the rank of Croatia in terms of perception of corruption raised to 51st, but dropped to 66th in 2009 (Grubiša 2010, 76). Corruption situation in Croatia is rather different from other countries who underwent transition. After the collapse of Yugoslavian socialist system, Croatia has been suffered by the post-conflict legacies and the ruling of authoritarian governments.
Grubiša (2010, 76-8) analyses several causes or events that caused rampant corruption in Croatia, first being the legacy of the old system, particularly the self-managing Yugoslav socialism which was accompanied by communist mentality and corruption culture. The system was characterized with strong party control and in other hand market economy was functioning parallel but with dirigisme form the state. The period was characterized with petty corruption of bribes and grifts, and the lack of functioning market economy and favored short cuts for service from the state paved way for corruption. Moreover, party nepotism and cronyism were also what characterized the League of Communists. The second aspect to induce corruption was the war which had a non-transparent procurement process in terms of arm buying after the UN embargo. Moreover, many anti-communist political elites were involved in arm trades smuggling funds for the defense and many war veterans enriched themselves through embezzling funds for the defense and involved in illicit arm transactions.
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The third aspect was the privatization process of state-owned enterprises which was not transparent, the enterprises were sold to politically suitable clients that belonged to the ruling political elite of nationalist party rather than at the best offer and price as is the practice in the open market economy. A number of these enterprises was distributed to war veterans. The fourth aspect is rather ideological and relies on the political culture of nationalist revolution, since the war against the Serbian aggression created a nationalist state, which did not
resemble post-modern state but rather a national state that did not have the role of service-provider. The fifth cause, according to Grubiša, derived from the same nationalistic ideology;
it created massive bureaucracy and a massive public administration overcrowded with party followers of the nationalist elite that were in charge from 1990 to 2000, and more than two thirds were employed without public competition. This system generated a bureaucratic apparatus that satisfied the needs of the party loyalists rather than the people of Croatia. Sixth cause had to do with hyper-normativism that was generated by power-center state
undermining the service provided to the public. The hyper-normativism generated laws that regulate various aspects of social and political life, but lacking laws that would serve to fight corruption, mainly on the aspects of conflict of interest, political campaigns, and party financing, those laws passed by the legislature only after 2011, as a result of pressure from the EU set but the conditionality for EU accession.
After the death of Tudjman in 1999, the rotation of power in 2000 generated a liberal coalition of parties that launched program that promised institutional change and the restoration of the rule of law that would go in line with European integration. The international community supported the new coalition with incentives of Croatia’s
membership to the North Atlantic Treaty Organization (NATO) and the European Union. In 2001, Croatia and EU concluded the Stabilization and Association Agreement, with
substantive reforms to revamp the judiciary and formal initiatives to fight corruption that brought Croatia close to the EU (Elbasani and Šabić 2018, 1325). The collapse of nationalist government and the death of Franjo Tuđman brought political corruption to debate in Croatia.
Proposed by the center-left coalition led by Prime Minister Ivica Račan, The National Program for Combating Corruption was passed by the Croatian Parliament in 2002, and Office for Combating Corruption and Organized Crime (USKOK) established in 2011.
However, in 2003, the Croatian Democratic Union (HDZ) returned to power and the efforts to fight corruption stagnated and brought back the perception that corruption levels were higher in Croatia (Grubiša 2010; Šeperić 2011).
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The corruption history in Croatia became clearer during the post-communist transition, during the period there was a widespread opinion that corruption is present in society from top to bottom. Data in previous studies show that low-level of corruption is much higher than the high level of corruption, the latter started to be handled by the State Office for Combating Corruption and Organized Crime (Čaldarović et al. 2009).
Croatia was marred by recruitments of political militants and party loyalists in main state institutions such as privatization boards, state-owned enterprises, judiciary, security services, and academic institutions. These actions served to strengthen the hegemonic party rule, and opened way for questionable privatization process and black markets that paved in way for corruption in Croatia (Boduszyński 2010). In 2006, a project call FP6 “Crime as Culture”
was started, the project focused on perception of corruption in Croatia and 6 other European country. The methodology applied in this project comprised of two aspects of corruption
“low-level” and “high-level case”. Other studies that measured corruption in Croatia were 1995 World Value Survey, 1996 Croatian Social Capital Study, and 1999 European Value Survey (Štulhofer 2004, 76) Results suggested an increase of perception of corruption in Croatia, whereas results in 2006 showed progress and decrease in perception of corruption for Croatia in the Social Survey Program (ISSP). Previous studies show that that Croatia’s reported cases of corruption increased throughout the years 2002-2006. However, the indictments and conviction rates showed opposite trajectory. The study shows that in 2006 only 11% of 328 cases were convicted and imprisoned for maximum of 30 days (Čaldarović, et al. 2009, 10-11).
The anti-corruption policy remained limited by misuse of public office in order to fight corruption high political level, an aspect which the European Mission consistently insisted on (Grubiša 2010). The effective way to fight political corruption was to unify the legal
instruments and issue new regulations. Since the existing provisions of Criminal Code and the laws of preventing conflict of interest, public procurement, the right to access
information, and financing political parties needed new provisions to formulate the Law on Fighting Political Corruption (Grubiša 2010). Grubiša (2010) argues that giving emphasis to forms of political corruption such as nepotism, cronyism, patronage, and other forms of forms of corruption would give different environment to mobilize the society in prevention and fight against corruption. Furthermore, he argues that such laws would also include
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protection of whistle-blowers which would open way to denounce political corruption. These changes would also further protect the media and their workers who often faced repression and even murder. Prominent Croatian editor Ivo Pukanic and marketing editor Niko Franjic were both killed in a car blast in center of Zagreb, and six men were found guilty for total of 150 years in prison (Arslanagic 2010). Another case was the beating of journalist Dusan Milijus who revealed corruption affairs of certain individuals, which was followed by more than 200 journalists staging a protest of the act in the city of Zagreb (BIRN 2008).
In 2003, Ivo Sanader a close associate of Tudjman and the new leader of the HDZ became the Prime Minister by running an EU-center platform in his electoral campaign. Croatia adopted the acquis communautaire and enhanced the Copenhagen criteria during Sanader’s period as prime minister 2003-2009 (Elbasani and Šabić 2018). The prosecution of political corruption in high-profile cases was showing great sings in Croatia, several individuals became part of investigative schemes such as former minister of economy, former minister of transport, head of Chamber of Commerce, Milan Bandic mayor of the city of Zagreb, football club executive director and other state-owned company managers (Elbasani and Šabić 2018).
Media and NGOs played a great role to channel the attention to political corruption and the investigations processes. Bosanac argues that issues related to Rule of law conditionality had been part of NGO’s agenda a decade earlier before the conditionality brought issues into the light (Bosanac 2012). Croatian NGOs collaborated with European Commission during the accession negotiations and were considered as reliable partners, and the political influence of these organizations further grew with process of negotiations. Findings of several NGOs in Croatia by shadow monitoring informed EU decision-makers and became part of the annual assessments of the progress of Croatia (Elbasani and Šabić 2018).
The discourses on fighting corruption came back in 2006, when Croatia started the
negotiation process for EU accession. Political corruption was noted as serious problem for the Croatian legal and political system that had to change to match the European legal and political acquis, therefore elaborating the anti-corruption strategy became a benchmark among requirements for EU membership of Croatia (Grubiša 2010).
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