ZAGREB WEEKLY ACTIVITY REPORT - MARCH 5, 2009

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SUBJECT: ZAGREB WEEKLY ACTIVITY REPORT - MARCH 5, 2009


1. (U) GENERAL ZAGOREC SENTENCED TO SEVEN YEARS:
On March 2, a Zagreb court sentenced General (retired)
Vladimir Zagorec to seven years in prison for
abuse of office during wartime and stealing $5 million worth
of diamonds upon leaving his post at the
Ministry of Defense in 2000. In addition to the seven years,
Zagorec was ordered to pay back $5 million
plus court costs. His lawyers plan to appeal the verdict and
the prosecutors are also appealing for
a stronger sentence. Additional information will be reported
septel. (CZIMMER)


2. (U) CROATIAN SERBS START FOURTH POLITICAL PARTY:
Croatian Serbs held a convention on February 28 to initiate
the formation of an additional Croatian
Serb political party, the Democratic Party of Serbs. This
will be the fourth party in Croatia
representing Croatian Serbs. Members of the founding
committee criticized the leading Independent
Democratic Serbian Party (SDSS) led by Milorad Pupovac for
not doing enough to help the Serb
community in Croatia and for making too many concessions to
the government. The SDSS is
currently part of the ruling coalition. According to press
reports, Veljko Dzakula, the head of
the NGO Serb Democratic Forum (SDF),is chairman of the
founding committee and a likely president
for the new party, however SDF officials deny that Dzakula
has any political ambitions. The new
party intends to stand in upcoming local elections and its
main goal will be the return of Serb
refugees. (JNCallahan)


3. (U) CROATIA AND HUNGARY AGREE TO CONNECTING GAS PIPELINES:
Croatian gas distribution company Plinacro and Hungarian FGSZ
Gas Transmission company will sign a 359 million EUR
agreement on March 5 for a connecting gas pipeline between
Varsfold in Hungary and Slobodnica in Croatia. The new
pipeline will be 298 kilometers long, of which 88 kilometers
will be on the Croatian side and 210 on the Hungarian. The
pipeline will be finished by the end of 2010. Plinacro
stated that this "is a historic moment for the energy future
of the country, because with the completion of this project,
Croatia will have a new source for receiving natural gas for
the first time in 30 years." The new pipeline will also be
used to transport gas from the (not yet built) LNG terminal
on Krk towards Hungary, and Croatia will be able to connect
to several possible international lines such as Nabucco, Blue
Stream or South Stream. (DMatijas)


4. (U) PROSECUTORS TO ESTABLISH UNIT TO MANAGE SEIZED ASSETS:
Minister of Justice Ivan Simonovic announced on an evening
news program on March 4 that the Croatian State Prosecutors
Office is forming a special unit to manage forfeited assets.
Post has worked closely with Croatian officials to develop
this unit beginning with an ICITAP-funded study visit to
California in October 2008 by prosecutors to examine asset
forfeiture and management systems. The new unit will further
strengthen Croatia's capacity for asset seizure, following a
major expansion of asset forfeiture provisions in the new
criminal code passed in December 2008. (CZimmer)


5. (U) SPECIALIZED COURTS TO HEAR ORGANIZED CRIME AND
CORRUPTION CASES:
The Croatian Ministry of Justice announced that as of Monday,
March 2, departments are now
operational in the four largest courts to fast-track cases
brought by the State Prosecutor's
Office for the Suppression of Organized Crime and Corruption
(USKOK). These so-called "USKOK
courts" are located in the county courts in Zagreb, Rijeka,
Osijek and Split. This completes a
court reform initiated in October 2008 after a high-profile
killing thought to have links to
organized crime. The Minister of Justice, Ivan Simonovic,
said the new departments will
significantly increase the courts' efficiency. Media
reported that 169 cases involving 1040
defendants will be sent to these courts with an additional 70
cases and 263 defendants still
under investigation in the pipeline. All USKOK judges are
appointed for a four year term after
undergoing a security and background check. (Djukic/CZimmer)


6. (SBU) MORE JOCKEYING IN MAYORAL RACE FOR OSIJEK:
The Social Democratic Party (SDP) branch in Osijek announced
on February 27 that they would

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support former Croatian Ambassador to Bosnia and Herzegovina,
Josip Vrbosic, for mayor. The
SDP's decision creates an alliance between the local branches
of the Croatian Peasant Party (HSS)
and the Croatian Social Liberal Party (HSLS). This alliance
is despite the fact the HSS and HSLS
are part of the coalition HDZ government at the national
level. It is also likely that the local
branch of the Croatian Peoples Party will soon decide to
support Vrbosic. Meanwhile,
Branimir Glavas's party, the Croatian Democratic Alliance of
Slavonia and Baranja (HDSSB),has
decided that he no longer will be the party's candidate for
mayor. Comment: Glavas, perhaps more
burdened by his war-crimes trial than he lets on, is fading
in his political relevance--even in
eastern Slavonija. (DMeges)

BRADTKE