Croatia cursed by crime and corruption

Britain's Foreign Office is warning visitors to Croatia this summer to beware of a threat from organised crime, following a number of assassinations and attacks on prominent figures, reports Matt Prodger.

Irena Scuric shows Matt Prodger the scene where Ivo Pukanic was killed

"We heard a very loud and low noise, something like voooom!"

On the evening of 23 October 2008, Irena Scuric was eating pizza with her daughter in a restaurant less than a minute's walk from the offices of one of Croatia's most popular newspapers, Nacional, when they heard a blast.

"We saw the car, which was burnt," she tells me, pointing at parking bay number 38, the tarmac of which is still pitted with shrapnel scars.

"There was a little bit of smoke around and the doors were open. And then we saw two bodies covered with plastic."

The bodies were those of Ivo Pukanic, Nacional's editor, and its marketing chief Niko Franjic, killed by a bomb planted beneath the car.

Ivo Pukanic was a controversial figure - an outspoken journalist who wrote about organised crime. He had friends in high places, including Croatia's president, and in low places, with close links to one of the country's most notorious gangsters.

Most agree that it was his stories about a Balkan cigarette smuggling operation which cost him his life.

Two weeks before Ivo Pukanic's murder, 26-year-old Ivana Hodak, the daughter of a well-known lawyer, was shot dead in the stairwell of her apartment block in central Zagreb.

Did gangsters murder Ivana Hodak in a message to her father?

Police say they have now caught her murderer - a homeless man, who they say acted alone.

Others are sceptical, and tell a murkier tale which dates back to the Balkan wars, and involves a former general, missing gemstones, a kidnapping and a prominent mobster.

I caught up with Ivana's father, Zvonimir Hodak, shortly after his client, the former general Vladimir Zagorec, was jailed for seven years for stealing gems meant to fund Croatia's war effort in the 1990s.

He does not believe the police story of his daughter's death, and believes she was murdered by criminals with an interest in the Zagorec case.

"I'm convinced that this was a message to me from some organisation," he tells me, as we sit beneath a framed photo of his daughter on the wall of his office.

"They knew that if they killed her they would hurt me most," he says, his voice breaking with emotion.

"I wish they had killed me."

This is not the picture postcard Croatia familiar to visitors to the Dalmatian coast. The latest advice from the British Foreign Office warns of "an underlying threat from terrorism and organised crime in Croatia".

Murky past

We like to say that where Italy is a state with a mafia, Croatia is a mafia with a state Goran Flauder Journalist

The murders of Ivo Pukanic and Ivana Hodak, together with a spate of attacks on journalists and businessmen, have confirmed a belief in the minds of many Croats that their country is in the grip of powerful mafia whose roots lie in the international embargo against Yugoslavia in the early 1990s.

Robbed of trade revenue and legitimate supplies of weapons, the constituent republics, including Croatia, turned to smuggling. Those criminals of yesteryear became the powerful businessmen of today.

In Vukovar I met respected journalist Goran Flauder, who has written investigative articles about some these men - and been physically attacked six times.

"We like to say that where Italy is a state with a mafia, Croatia is a mafia with a state," he says.

"Nobody asks these businessmen how they earned their first million. But this first million is the key to their social position and their success. They didn't break their connection with organised crime."

He says that a state prosecutor to whom he took his findings refused to pursue the cases for fear of being killed himself.

Gordan Malic is another journalist who now relies on police protection.

"Organised crime has become part of the establishment," he says.

"It's a problem to recognise it, to see what makes it different from the other parts of the establishment.

"And it organises itself far better than the country, than the government, and the society."

Car bombs are one thing, corruption another, and you do not have to go far to find it. The newspapers are full of stories of dodgy dealings and prominent figures with unexplained wealth.

The deputy head of Croatia's privatisation fund is currently on trial after he was secretly filmed by prosecutors apparently stuffing a brown envelope filled with money into his pocket. The pictures were all over the newspapers, the film is on YouTube (in Croatian).

The Index of Economic Freedom recently ranked Croatia below several African states in one of its corruption measurements.

Crackdown

"You can see corruption with government officials and practically ministerial-level people with wealth that cannot be explained," says Natasha Srdoc from the anti-corruption think tank the Adriatic Institute for Public Policy.

We are all equal under the law Ivan Simonovic Justice Minister

"So the question is - how did they amass such huge amounts of wealth in Croatia? And that's our problem in Croatia because these things we cannot deal with from within. You know, you really need external pressure.

"Croatia needs to put an independent judiciary, the rule of law, and protection of property rights in place before it gets into the EU, because if it is allowed to get in before then it will not reform - it won't do anything."

Croatian police recently arrested a number of suspects in a mafia crackdown.

Justice Minister Ivan Simonovic has vowed to confiscate criminal assets, step up witness protection and fast track corruption cases.

When I interviewed him he rejected claims that there was a glass ceiling above which senior politicians and officials need not fear prosecution.

"We are all equal under the law," he said.

The crackdown has been prompted by Croatia's desire to join the European Union (on 1 April Croatia became a member of Nato). But some here, like politics professor Zarko Puhovski of Zagreb University, complain of double standards.

"If you have Bulgaria and Romania in the European Union, if you have a divided Cyprus, if you have Greece with all the corruption and problems with its judiciary, if you have Baltic states with catastrophic minority politics and so on, then you can't see why Croatia has to commit itself to all these reforms before being accepted."

Others suggest that some EU member states opposed to further expansion have exaggerated Croatia's problems with organised crime and corruption in order to damage its accession prospects.

If Croatia is to become a member of the EU within the next two years, as it hopes, it has been told it will have put its house in order first. The question is: does it have the time, or ability, to do so?

Matt Prodger's report for Crossing Continents can be heard on Thursday 16 April 2009 at 1100 BST, on BBC Radio 4, or on Monday, 20 April at 2030 BST.