NEW CROATIAN ANTI-CORRUPTION STRATEGY LATEST

UNCLAS SECTION 01 OF 02 ZAGREB 000384

SIPDIS

SENSITIVE
SIPDIS

DEPARTMENT FOR EUR/SCE, INL

E.O. 12958: N/A
TAGS: PGOV KJUS KCRM HR
SUBJECT: NEW CROATIAN ANTI-CORRUPTION STRATEGY LATEST
SALVO IN "PERMANENT WAR"

REF: A) 05 ZAGREB 1580 B) 05 ZAGREB 1756

ZAGREB 00000384 001.2 OF 002


SUMMARY and COMMENT
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1. (SBU) On March 16 the GoC approved and sent to the
Sabor for ratification a new Strategy for the Battle
Against Corruption. In presenting the Strategy to the
public the previous week, Prime Minister Ivo Sanader
emphasized that the battle against corruption is a
permanent war that the Government of Croatia is ready
to wage. The Strategy aims to overhaul and clean up
the political party financing and public
administration, judicial system, health system, local
government and the economy.


2. (SBU) While the political will to battle corruption
is strong and well publicized, it remains to be seen if
this Strategy will suffer from the same weak and
inconsistent implementation of the 2002 version. PM
Sanader and former PM and SDP party leader Ivica Racan
have been sparring bitterly in the press in recent
weeks over the issue of corruption - i.e. which party
is/was more corrupt when in power and which has done
more to combat corruption. This public attention to
the issue of corruption increases the likelihood that
the Sabor will approve the Strategy quickly. However,
the key test will be in the follow up and
implementation. Septel will address the capabilities
and challenges facing the judicial system in combating
corruption and organized crime. END SUMMARY and
COMMENT.

GOVERNMENT SERIOUS ABOUT COMBATING CORRUPTION
--------------


3. (U) The new Strategy for Battling Corruption was
drafted with input from the Council of Europe's Program
Against Organized Crime and Corruption (PACO) to
address shortcomings of the original 2002 Strategy. In
his public comments introducing the Strategy at the
Croatian Academy of Arts and Sciences March 10, Sanader
expressed his strong political will and moral
obligation to battle corruption, making it clear that
the fight against corruption is for the ultimate
betterment of life for the citizens of Croatia.
Sanader claimed that this was the first time a Croatian
government had invited public comment before approving
a document of this importance. Sanader emphasized that
the battle against corruption is a permanent war that
the Government is ready to wage. He further emphasized
that 1) citizens of Croatia must live in a system in
which they do not feel helpless before the government,
and 2) the Strategy is not another condition for entry
into the EU, rather a step ahead for Croatia and Rule
of Law. Sanader emphasized that his government is
responsible for this fight, its ideas have been
implemented and it will succeed in this battle.

STRONG GOALS
--------------


4. (U) The Strategy sets ambitious deadlines and gives
direct responsibility to specific ministries and
government institutions to implement them. Major goals
include: 1) implement stronger penalties against those
who commit acts of corruption, 2) strengthen
professional ethics of state and local administrations
and small and medium enterprises, 3) secure a public
administration that is responsible to the people and 4)
reinstate the trust of the citizens, so that the people
of the country receive proper and complete service.


5. (SBU) The Strategy was drafted by a working group
led by Josip Kregar, Dean of the Law Faculty at Zagreb
University. PACO experts reviewed the November 2005
draft at the GoC's request. The PACO team generally
praised the Strategy for being more action-oriented
than the 2002 Strategy, but cautioned that
implementation mechanisms were sketchy. Kregar told
PolOff that some sections were watered down after the
November review. However, the final version presented
by PM Sanader was substantially identical to the
original, with the most notable addition being
reference to Sanader's business promotion one-stop-shop
licensing initiatave, HITRO.hr (ref A). The other
significant substantive changes were removal of
proposed stricter limits on government latitude to
sidestep public procurement rules. The version

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approved by the Cabinet and passed to the Sabor
(parliament) for approval added an additional section
on improving ethics in academia, scientific research,
and sports.


6. (SBU) Kregar did not take these changes lightly. In
the public presentation of the Strategy March 10,
Kregar specifically questioned the deletion of a
provision calling for removing government officials
from the management boards of state-owned enterprises.
In his widely publicized parry, PM Sanader retorted
that until such enterprises were privatized, government
representatives were necessary on management boards to
protect the State's economic interests.

FRANK