ITF AND DONOR COMMUNITY RESPONSE TO ALLEGATIONS OF

S E C R E T LJUBLJANA 000758 SIPDIS SIPDIS EUR/ACE FOR CDUNN, EUR/NCE FOR MNORDBERG E.O. 12958: DECL: 11/28/2016 TAGS: MASS MOPS PGOV PREL SI SUBJECT: ITF AND DONOR COMMUNITY RESPONSE TO ALLEGATIONS OF CORRUPTION IN BOSNIA & HERZEGOVINA DEMINING ALONGSIDE THE ITF ADVISORY BOARD MEETING REF: A. SECSTATE 190226 ¶B. SARAJEVO 2907 ¶C. SARAJEVO 2706 Classified By: COM for reasons 1.4 (b) and (d). ¶1. (S) On November 22, COM attended the International Trust Fund (ITF) Advisory Board of Donors meeting in Ljubljana. Before the meeting COM delivered the points from reftel A to Slovenian ITF Director Goran Gacnik sharing, in a side conversation, USG concerns about allegations of corruption and malfeasance within the Bosnian mining community. Gacnik told COM that ITF is "cooperating fully" with the office of the prosecutor in Bosnia and Herzegovina and "giving them everything (they request)." Gacnik further explained that the ITF understands full well Embassy Sarajevo's requests to remove potential contractors (by putting them on a "blacklist") and said that once the USG raised a red flag on a contractor, ITF in Bosnia and Herzegovina stops working with them and pulls any money involved. He said he was not sure what the USG or Embassy Sarajevo process is for vetting contractors, but that ITF has been fully responsive. In response to COM's question about what kind of auditing system ITF has, Gacnik replied that ITF does a yearly financial audit. The issue did not come up during the official meeting. ¶2. (S) During the coffee break of the meeting, COM approached United Kingdom Ambassador Tim Simmons and Bosnia and Herzegovina Ambassador Izmir Talic and raised the widespread rumors of corruption in the demining sector of Bosnia and Herzegovina. ITF Director Goran Gacnik and ITF Managing Board Member Darko Vidovic (who is also a member of the Commission for Demining in Bosnia and Herzegovina and is Minister-Counselor at the Bosnian Embassy in Ljubljana) joined the group. Vidovic commented that the journalists who wrote the article in "Bosnia Daily" had raised these issues on the sides of the Ottawa Convention meeting September 18 to 22 in Geneva. Both he and Gacnik said that ITF had sent a formal response to the presenters. Vidovic and Gacnik both commented that the press reports had been linked to events that had happened several years ago, with Gacnik telling the group that the National Mine Center in Bosnia certifies demining contractors and that ITF operates only with certified contractors. Gacnik repeated his earlier comments about following the USG "blacklist" and said that other donors (but not all) also looked to the USG list for guidance. Shortly thereafter, COM spoke individually with Canadian Deputy Chief of Mission Agnes Pust (covering Ljubljana out of Budapest) and Norwegian Ambassador May Britt Brofoss echoing comments about the need for the donor community to make sure that funds were being used in a transparent and responsible manner. ¶3. (S) Gacnik has organized a meeting on November 28th to present what ITF is doing, show the documentation that ITF requires from potential contractors and gives to the boards making decisions on tenders, and to explain the challenge from the ITF perspective. He reiterated that ITF is committed to fulfilling its mandate and doing it in the right way. Also attending will be representatives from the British Embassy, the Bosnian Embassy, and the ITF Managing Board (including Managing Board members also representing the Slovenian Ministries of Foreign Affairs and Defense). ¶4. (S) COMMENT: Gacnik was clearly well aware of the issue when COM raised it and was forceful in saying that ITF in Slovenia was being as responsive to concerns as it could be. In discussions with COM on the margins of the Advisory Board meeting, all but the Bosnians were unaware of this case. It should be noted, however, that Ambassadors attending the ITF Advisory Board meeting are all accredited to Ljubljana. Any attempts we may make to assure others are pressing ITF on this issue should also include reaching out to donor country embassies in the region (e.g. Sarajevo, Zagreb, Belgrade et al) to make sure the message is delivered where the problem may lie. We will ask at the November 28 meeting for ITF to be more proactive as well as to ascertain what audit and investigation tools the GoS has at hand to assure that any possible malfeasance in the future can be identified and stopped early on. END COMMENT. ROBERTSON