Identifier
Created
Classification
Origin
09SARAJEVO1294
2009-11-20 10:26:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Sarajevo
Cable title:  

CORRUPTION, ETHNICITY, AND POLITICAL FAVORITISM

Tags:  PHUM PREL KREF BK 
pdf how-to read a cable
VZCZCXRO3798
PP RUEHIK
DE RUEHVJ #1294/01 3241026
ZNR UUUUU ZZH
P 201026Z NOV 09
FM AMEMBASSY SARAJEVO
TO RUEHC/SECSTATE WASHDC PRIORITY 0999
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
UNCLAS SECTION 01 OF 02 SARAJEVO 001294 

SENSITIVE
SIPDIS

BELGRADE FOR REGIONAL PRM (MOORE); EUR/SCE FOR FOOKS,
JUKIC, BRYANT

E.O. 12958: N/A
TAGS: PHUM PREL KREF BK
SUBJECT: CORRUPTION, ETHNICITY, AND POLITICAL FAVORITISM
KILL RETURN PROCESS IN BOSNIA

REF: SARAJEVO 804

SARAJEVO 00001294 001.2 OF 002


UNCLAS SECTION 01 OF 02 SARAJEVO 001294

SENSITIVE
SIPDIS

BELGRADE FOR REGIONAL PRM (MOORE); EUR/SCE FOR FOOKS,
JUKIC, BRYANT

E.O. 12958: N/A
TAGS: PHUM PREL KREF BK
SUBJECT: CORRUPTION, ETHNICITY, AND POLITICAL FAVORITISM
KILL RETURN PROCESS IN BOSNIA

REF: SARAJEVO 804

SARAJEVO 00001294 001.2 OF 002



1. (SBU) SUMMARY: Several weeks ago, Bosnia's State
Investigation and Protection Agency (SIPA) launched an
investigation into the work of the state-level Return Fund
and the State Commission for Displaced Persons and Refugees
(DPRE Commission),due to numerous reports of alleged
irregularities and corruption in the work of these two
institutions. According to these reports, decision makers
(all from leading political parties) are believed to have
mishandled millions of dollars of state and entity budget
assistance, which was supposed to go to the neediest
displaced persons and returnees in the country. Instead, the
funds were largely used to support political election
campaigns in the forthcoming 2010 general elections.
Unwilling to further participate in this nationalistic and
criminal diversion of funds, Assistant Minister of Human
Rights and Refugees (MHRR) Mario Nenadic recently resigned,
after being verbally (and, we assess, falsely) attacked by
the ethnic-Serb Secretary of MHRR for favoring the return
process at the expense of local integration. Nenadic was a
rare State official who was both capable and non-political
(belonging to no party),and was one of Post,s reliable
contacts for more than a decade. These most recent
developments are likely to further slow the already-fragile
return process in Bosnia. END SUMMARY.

Politicians Devour Return Assistance
--------------


2. (SBU) SIPA recently launched an investigation into work of
the Return Fund and DPRE Commission on the basis of numerous
criminal reports on irregularities and corruption in the work
of these two institutions. It is unclear who exactly
submitted these reports, but some are believed to have come
directly from the returnee associations in the field. One of
the reports alleged that the Director of the Fund (which is a
State-level operational institution responsible for payments
for projects that have been already agreed upon by the DPRE
Commission members) Mladjen Bozovic, used the Fund's money to
pay for his studies in Serbia, to buy expensive gifts for
colleagues, to buy a rotary cultivator for his brother, to
pay USD 37,000 for an expensive SUV for the office, and so
forth. Bozovic didn't deny these claims, but according to

local press, said that "others were doing the same thing,"
and called such accusations "political manipulation at the
time when he was up for re-election to director,s position
of the Fund." Unfortunately, Bozovic isn't the only State
level official responsible for Annex VII implementation who
is alleged to have profited from funds intended for returnees
who are in greatest need of assistance.


3. (SBU) Responsibility for implementation of Dayton's Annex
VII was transferred from the Office of the High
Representative (OHR),in coordination with OSCE and UNHCR, to
Bosnia's state and entity governments in 2002, though OHR
continues to monitor Annex VII issues periodically. NGO
representatives and UNHCR told Post that the whole system of
State level institutions responsible for Annex VII
implementation in Bosnia has been in disarray for more than
two years. HRR Minister Safet Halilovic (a Bosniak from
SBiH),Deputy Minister Slavko Marin (a Croat from HDZ-BiH),
and Secretary of the Ministry Dragomir Kovac (a Serb from
SNSD) have established three parallel, strictly ethnic/party
based decision making channels in one ministry, which has led
to a disregard for all objective criteria determining
assistance needs in the field.


4. (SBU) For example, for FY2009 (as in past years),the
entity- and state-level governments have provided USD 27.8
million in joint funds to support the return process in more
than 30 municipalities across Bosnia. Beneficiaries of
assistance should have been selected on the basis of
clearly-defined criteria, which stipulate that the
municipalities with the largest number of displaced persons,
returnees, and destroyed dwellings should take priority for
projects. However, nine Commission members (three from each
constituent people) have entirely disregarded these criteria
and instead selected municipalities in which they feel they
could score extra political points in the 2010 general
elections (as the projects approved now are likely to be
implemented just before the elections).

Mosques, Chapels, and Churches
--------------


5. (SBU) Besides the use of the above-mentioned joint funds,
Commission members have also agreed to add an additional USD

SARAJEVO 00001294 002.2 OF 002


2.25 million annually as "intervention funds" to support
sustainability of returnees in the most critical areas of the
country. We have been provided documentation on the use of
this intervention fund; more than half of 114 nominated
projects on the list are intended to be used to repair or
build religious objects, i.e. Catholic and Orthodox
churches/chapels, mosques, and so forth. Unfortunately, we
assess this was not done to facilitate the needs of the
believers in these communities, but to please religious
officials who will, in return, use the pulpit to promote
given parties. Other listed projects have been directly
proposed by municipal mayors, not returnee associations, or
municipal return commissions. Some projects were even not
intended to support minority returns, but "local integration"
instead (that is, assistance to those who do not wish to
return to their places of origin, something that has never
been funded and should legally not have been funded through
this system). Some returnee associations claim beneficiary
lists for some municipalities were provided by the MHRR or
DPRE Commission, while in principle the lists should be going
from the municipalities to the Ministry and DPRE Commission.
As a result of this, some associations have filed criminal
reports to SIPA.

"I'll Never Work Again for Bosnia,s Government"
-------------- --


6. (SBU) Irregularities in the work of the DPRE Commission
and the Fund, and frustration in the work of addressing the
needs of the remaining 130,000 displaced persons and refugees
prompted MHRR Assistant Minister Mario Nenadic to resign
after more than 16 years with the Ministry. Nenadic was a
long-time Embassy contact and probably one of the most
professional and hardworking individuals in Bosnia's
state-level government. A State official with no party
affiliation, he told us he could no longer stand the level of
corruption and thievery that had become so obvious in the
MHRR, the Fund, and the Commission. Nenadic also was the
central author and engine pushing for adoption of the
much-needed revised Annex VII strategy, a document that had
clearly spelled out what remained to be done in order to
close the Annex VII chapter in Bosnia.


7. (SBU) Nenadic was also the only person working on a
regional approach to solving refugee issues, and had
institutional knowledge about the whole process from the
beginning. He was verbally attacked by the Secretary of the
MHRR Dragomir Kovac, who told him that he was intentionally
promoting returns only, while disregarding the right of
persons to local integration (something the Serb
parliamentarians used as a reason to kill the adoption of the
Strategy in Parliament in June),an option widely advocated
and preferred by RS Prime Minister Milorad Dodik,s SNSD. As
a result of this incident, and the mounting stress of his
work, Nenadic suffered a mild heart attack. On his way to the
hospital, he told us, he decided to submit his resignation,
telling us he would never again work for a government
institution.

Comment
--------------


8. (SBU) Minority returnees in Bosnia struggling to survive,
and those displaced persons and refugees who are still
seeking reconstruction and return assistance, have once again
been cheated by corrupt officials in the DPRE Commission and
the Fund. With the collapse of the Annex VII implementation
process, it is illusory to expect that any greater progress
would be achieved in the months to come. We will continue to
follow the SIPA investigation of the DPRE Commission and the
Fund. However, it seems now that the chances of reforming
the system to promote meaningful continuation of returns are
quickly dwindling. Political recrimination for misuse of the
Fund will likely follow, with political opportunists blaming
competitors' parties and possibly the international community.
ENGLISH