MACEDONIA: ARREST OF OPPOSITION VP PROMPTS

UNCLAS SECTION 01 OF 02 SKOPJE 000464

SIPDIS

STATE FOR EUR/SCE

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TAGS: PREL PGOV MK
SUBJECT: MACEDONIA: ARREST OF OPPOSITION VP PROMPTS
PARLIAMENT WALK OUT

SUMMARY


1. (SBU) Zoran Zaev, Vice President of opposition party SDSM
and rumored next leader of the party, was arrested on 17 July
along with five associates on charges of corruption and
abuse of official position related to financial gains from a
tender for a shopping mall in Strumica, where Zaev serves as
mayor. While MoI officials presented us with details of the
case against Zaev and his associates, the timing of the
arrest and the conduct of the investigation raise questions
about political motivations. SDSM and its "Sonce Coalition"
partners have called the arrest politically motivated and
have walked out of Parliament "until further notice." End
Summary.


2. (SBU) Criminal charges against Zaev and his associates
stem from a tender for a shopping mall, from which the group
was alleged to have profited 7.8 million Euros through
manipulation of the tender process. The tender (for
construction of a mall on state-owned land currently disputed
in the courts under the denationalization process) was
allegedly not broadly advertised as required by law and
categorized improperly as "reconstruction" rather than "new
construction" for added flexibility in the tender process.
Only two bidders on the tender submitted documentation, and
while both submitted incomplete documentation, only one
company's bid (a Bulgarian company) was dismissed. According
to the MoI, the winning company, Deluxe Engineering, is a
newly-formed company with no financial assets, controlled by
a close associate of Zaev's. Zaev is also said to have
violated legally proscribed timelines for the tender process,
closing the deal with his associate's company within a week.
Zaev's relatives are also said to have profited by getting
deals for free or discounted space in the mall.

Conduct of the Investigation Raises Questions
--------------

3. (SBU) Ministry of Interior (MoI) officials report that
the investigation by local Strumica police began in April
2007, and the case was passed to MoI's Department for
Organized Crime in November 2007. Questions have been raised
about the conduct of the investigation. In January 2008, the
MoI placed information on its website, then promptly withdrew
the statement, and, in effect, apologized, saying that there
were no charges. According to the MoI's account, charges
were retracted because the prosecutor called for additional
investigation. Additional investigative reports were then
submitted to the prosecutor earlier this month, resulting in
the criminal charges and order for Zaev's arrest. Zaev and
SDSM leaders were clearly convinced that all charges had been
dismissed in January 2008 and that the case was closed, as
Zaev resigned his newly-won Parliamentary seat to remain
Mayor of Strumica, thus giving up the opportunity to be
protected from prosecution as an MP.


Kicking them When They're Down?
--------------


4. (SBU) SDSM and all other members of the opposition
"Sonce" coalition called the arrest politically motivated and
announced their departure from Parliament "until further
notice" just hours after Zaev was brought to the Skopje Basic
Court for his hearing before the investigative judge. Of
the departure from Parliament, SDSM's Sekerinska said to the
VMRO-DPMNE coalition, "Since you desired absolute power and
dictatorship, you will have the opportunity to exert it in
the Parliament."


5. (SBU) A sizable crowd of SDSM supporters (estimated
between 350 and 800) gathered to protest in front of the
Skopje Basic Court, urged by party leaders to stay until Zaev
made his initial statement and was released. Zaev was
released just before midnight, and his passport was held to
ensure his next court appearance. It is not clear when the
investigative judge will pass the case to the court to
schedule a hearing.


6. (SBU) Speculation that the arrest was politically
motivated and politically timed centers around Zaev's future
role in SDSM. President Crvenkovski announced on 16 July

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that he would not seek re-election. SDSM's President
Sekerinska stepped down following their electoral defeat in
the June early parliamentary elections, and as SDSM aims to
re-group, Zaev's name has topped the lists for leadership of
the party. He also has been mentioned in the press as a
possible candidate for President. SDSM leaders cited the
media circus surrounding the arrest as evidence of a
politically-motivated MoI, arguing that they had called the
media to alert them of the arrest. While in meetings with
us, MoI officials denied alerting the media of the initial
arrest, media later reported that MoI Spokesman texted
reporters on the morning of the 17th: "Looks like Zaev's
leadership aspirations will have problems. He will be
appearing in Skopje Court 1 in half an hour."


7. (SBU) Comment: While it is not entirely clear whether
the case against Zaev is primarily politically motivated, the
reactions from opposition SDSM and its partners were swift
and strong. With their ability to influence the work of the
Parliament limited by the VMRO-DPMNE coalition's 82 seat
majority, SDSM VP Igor Ivanovski called the Parliamentary
walk-out the only way to protest the "ongoing political
chase" VMRO-DPMNE is conducting against SDSM and its
partners. End Comment.



Milovanovic