BOSNIAN DEMINING INVESTIGATION UPDATE:

S E C R E T SARAJEVO 000369

SIPDIS

NOFORN
SIPDIS

DEPT FOR EUR (DICARLO),D (SMITH),P (BAME),EUR/SCE (HOH,
SAINZ, FOOKS),EUR/ACE, EUR/NCE,EUR/RPM (BROTZEN),F,
L/LEI, S/WCI, OIG, AND PM, NSC FOR BRAUN, USNIC FOR
WIGHTMAN, OSD FOR MARK JONES, USNATO FOR SHAFFER

E.O. 12958: DECL: 02/13/2017
TAGS: MASS PREL MOPS PGOV KCRM BK SI
SUBJECT: BOSNIAN DEMINING INVESTIGATION UPDATE:
INVESTIGATION INITIATED, PM/WRA VISIT, KOJIC RAID

REF: A. STATE 495


B. 06 SARAJEVO 2907

C. 06 SARAJEVO 2706

Classified By: Ambassador Douglas McElhaney for reasons 1.4 (b) and (d)

SUMMARY
--------------


1. (S/NF) In consultations regarding investigations into
allegations of misconduct by organizations involved in
demining, State Prosecutor Jurcevic and SIPA officials
informed us that they would begin investigatory work shortly.
Both organizations again pledged to undertake a thorough and
complete investigation of the allegations of malfeasance and
corruption. PM/WRA Director Richard Kidd also visited Bosnia
to inform post, prosecutors, and the State Investigation and
Protection Agency (SIPA) of the Department's activities in
connection with the investigation. Separately, NATO and
EUFOR raided the residence of Radomir Kojic and seized
documentation related to his possible activities in support
of the Radovan Karadzic network. End Summary.

INVESTIGATION IN PRELIMINARY STAGES
--------------


2. (SBU) Embassy held initial consultations with the State
Prosecutor and SIPA over the scope of the investigation into
possible misconduct by organizations involved in demining.
State Prosecutor Marinko Jurcevic informed us that "Case KTA
46" was officially opened though he had yet to appoint a
prosecutor to oversee the investigation. He agreed that the
investigation should be broad-based, and kept entirely
separate from the ongoing Kojic matter. Jurcevic planned to
formally task SIPA to undertake a full investigation later in
the week. In a separate conversations with SIPA, Director
Sredoje Novic told LEGATT that he had long heard of serious
improprieties by organizations involved in demining and that
he was pleased that the USG was pushing Bosnian authorities
to examine these activities.

PM/WRA VISIT
--------------


3. (SBU) PM/WRA Director Richard Kidd visited Sarajevo
February 6-7 to discuss his office's efforts in support of
the demining investigation with SIPA Director Novic and the
state prosecutors handling the Kojic case. Kidd stressed
that a full investigation by Bosnian law enforcement
officials is important, but noted that the process should not
become politicized. Kidd emphasized that it was of
importance both to the USG and Bosnia that demining work
continue, and that any investigation should not destroy the
institutions, especially the International Trust Fund (ITF),
that undertake demining work. Kidd informed the officials
that Department had contracted a firm to undertake
independent evaluations of demining firms accredited to
BHMAC. Kidd explained that the contractor, Quality Solutions
International (QSI),would complete on the ground surveys of
the demining firms and assess their capacity and competency
to legitimately engage in demining work. All firms not
meeting minimum criteria would be barred from receiving
tenders. Kidd also said that the March tender process would
go forward, and a representative from his office and the
Department's Contracting Office (AQM) would travel to
Sarajevo to participate in the tender and evaluate any flaws
in the process.


4. (SBU) Novic noted that this investigation would be the
biggest case SIPA had undertaken in some time and thanked the
USG for referring the matter to Bosnian law enforcement
authorities. Novic agreed that resolving the allegations was
of utmost importance to Bosnian citizens, and took into
account the message that the investigation should not
cripple the demining process. Novic said that he had decided
to assign two SIPA investigators full-time to the case and
his organization could be counted on for "full and complete
cooperation, and a full dedication of resources." Novic
stated that the investigation could lead to other countries,
and was reassured to hear from Kidd that the matter had

already been addressed with Slovene authorities.


5. (SBU) The state prosecutors handling the Kojic case
re-hashed their progress to date and again raised their
request for USG documentation to assistant the prosecution.
(Note. We received the documents on February 9 and we
presented them to prosecutors on February 12. End note.) They
stressed that their investigation is currently focused on the
events from 1997-2003, and that they had a witness and
further evidence to back up their money-laundering and
embezzlement charges against Kojic. While they had little
evidence of more current misconduct, they expressed a general
concern with demining organizations not acting in full
accordance with Bosnia tax and labor laws. (Note: In response
to these similar concerns ITF changed its tendering processes
in 2005 to require all competitors for tenders to submit
proof of proper registration and payment to Bosnian
authorities. End note.) The prosecutors again noted that they
believed the demining firms Terra-Prom and Medecom had been
established by Kojic and his associate Radilsav Illic to
steer around their ban on demining work.

NATO AND EUFOR TARGET KOJIC
--------------


6. (S/NF) Separately, NATO and EUFOR conducted a raid of
Kojic's home in Pale and seized documents and computer
hardware possibly related to his alleged support of PIFWC
Radovan Karadzic. The raiding force, led by NATO but
composed primarily of Italian Carabinieri attached to EUFOR,
spent six hours in Kojic's home but did not detain him. The
seized items will be further analyzed and NATO and EUFOR
will determine if follow-up action is required. According to
NATO officials, there was strong suspicion that since his
release from pre-trial custody in December, Kojic had likely
become re-engaged in the Karadzic support network. NATO HQ's
preliminary assessment of the raid is that it was
successful. Bosnian state prosecutors were not consulted on
the raid.

COMMENT
--------------


7. (SBU) It is a positive signal that both the State
Prosecutor and SIPA consider the investigation into alleged
misconduct by some organizations involved in demining to be
of the highest priority. While we realize that we need to
follow-up with the authorities to keep the investigation on
track, their initial reaction to our request indicates that
they will pursue a full, thorough, and transparent
investigation. Neither Jurcevic nor Novic has given any
indication that they will use the investigation for political
ends, nor will they feel compelled to continue to pursue the
matter if they find no or little evidence of malfeasance.
PM/WRA,s visit highlighted this spirit of cooperation, and
all parties, commitment to moving the demining process
forward while fully examining all concerns over misconduct
and fraud. In the near term, we also expect to deal with
fall-out as word of the prosecutor's investigation and the
QSI review circulates throughout the demining community. We
have already been approached by one head of demining training
firm, who told us that ITF had informed him of the upcoming
QSI inspection and asked for further clarification. Director
Kidd agreed with Post's concerns that equipment could be
shifted from one organization to another to present the
impression of more capability than is actually the case. He
indicated that QSI would be directed to take all feasible
steps to prevent and/or detect such actions.

Office Director Richard Kidd has cleared on this cable.
MCELHANEY