BRANKO VUKELIC, NEW DEFENSE MINISTER

UNCLAS ZAGREB 000041 SIPDIS SENSITIVE SIPDIS DEPT FOR EUR/SCE, EUR/RPM, INR/B NSC FOR BRAUN, OSD FOR WINTERNITZ E.O. 12958: N/A TAGS: PREL PGOV PINR MARR HR POLITICAL PARTIES SUBJECT: BRANKO VUKELIC, NEW DEFENSE MINISTER REF: ZAGREB 24 AND PREVIOUS ¶1. (SBU) Among the more controversial appointments made in the forming of the new Croatian government on January 12 was the naming of former Economy Minister Branko Vukelic as Croatia's new Minister of Defense. Vukelic's tenure as Economy Minister was not viewed as among the more successful performances in the past government, and there are continuing efforts by the opposition to raise questions about his past (see below),but the former mayor of Karlovac continues to enjoy the support of PM Sanader. Also critical, given the President of Croatia's role in defense matters, is that President Mesic has been publicly supportive of Vukelic as Def Min. Mesic reportedly pushed to have Vukelic's predecessor as DefMin, Berislav Roncevic, moved from the Defense Ministry. Roncevic has ended up as Interior Minister. ¶2. (SBU) Vukelic began his professional career as a project engineer with the Karlovac-based company "EAB." From 1991 to 1997, he was the manager of the Karlovac branch of INA, Croatian Oil Industry. He became active in politics around the time of Croatia's independence in 1991 and rose steadily through the ranks of the Croatian Democratic Union (HDZ) serving as President of the HDZ branch in Karlovac from 1993, where he also served as member of the City Council until ¶1997. He was Mayor of Karlovac from 1997-2001. In June 2002, he was selected as Secretary General of the national HDZ. Opposition politicians in Karlovac accuse Vukelic of being a very partisan figure who both as mayor and since made support for the HDZ a criteria for local government jobs and contracts. ¶3. (SBU) After Croatia's November 2003 elections, Vukelic was rumored to become the Minister of Interior. But in the weeks preceding his appointment, questions arose about his possible implication in a potential corruption case (in 2001 charges were pressed against him and his deputy mayor for abuse of authority in business and forging official documents),as well as rumors that alcohol had been involved in a 1997 car accident in which Vukelic seriously injured a pedestrian. These rumors apparently sidelined him for the Interior job, so his appointment as the Minister of Economy, Labor and Entrepreneurship was seen as both a surprise and a consolation prize. ¶4. (SBU) As Economy Minister, Vukelic was generally viewed as a mediocre performer at best, and was largely overshadowed by Deputy Prime Minister Polancec as the government's chief economic policy maker. (With Vukelic's move to Defense, Polancec will now take direct charge of the Ministry of Economy while also remaining Deputy PM.) Vukelic's appointment as Defense Minister has drawn widespread media criticism and resurrection of not only the issues mentioned above, but questions about whether he avoided military service during the war and whether he had been sufficiently patriotic both before and during the conflict. Sanader has defended the choice by arguing that Vukelic's performance at Economy was under-rated, and that Vukelic's greatest failing is that he did a poor job of promoting himself with the public. ¶5. (SBU) In our dealings with Vukelic, we have found him open and seemingly well-disposed towards the U.S. However, the positive statements he expressed about strengthening economic relations with the U.S. were never translated into specific actions or assistance in resolving some of the problems of U.S. companies. ¶6. (U) Vukelic was born on March 9, 1958 in Karlovac. He graduated from the Faculty of Electrical Engineering in Zagreb in 1981. He is married to Djurdjica Vukelic. They have one son. Vukelic's hobbies are soccer, horticulture and music. His official biography states that he has a passive knowledge of English. Conversations with the Ambassador have either been in Croatian or with each principal speaking in his own language without translation. BRADTKE