$1 Billion in Bosnia Aid Stolen

Foreign Affairs Front Page News Keywords: BOSNIA, KOSOVO, FOREIGN AID
Source: New York Times
Published: 8/17/99 Author: CHRIS HEDGES
Posted on 08/16/1999 21:04:51 PDT by Antiwar Republican

Leaders in Bosnia Are Said to Steal Up to $1 Billion

August 17, 1999 Leaders in Bosnia Are Said to Steal Up to $1 Billion Related Articles Sarajevo Is at Peace, but Its Old Zest Is Lost (Aug. 10, 1999) Nations Agree Bosnia Needs Continued International Support (Dec. 16, 1998) Bosnia Economy Still at Mercy of Political Leaders (Nov. 22, 1998) Map Bosnia and Herzegovina from Microsoft Encarta Concise Encyclopedia By CHRIS HEDGES ARAJEVO, Bosnia-Herzegovina -- As much as a billion dollars has disappeared from public funds or been stolen from international aid projects through fraud carried out by the Muslim, Croatian and Serbian nationalist leaders who keep Bosnia rigidly partitioned into three ethnic enclaves, according to an exhaustive investigation by an American-led antifraud unit. The antifraud unit, set up by the Office of the High Representative, the international agency responsible for carrying out the civilian aspects of the Dayton peace agreement, has exposed so much corruption that relief agencies and embassies are reluctant to publicize the thefts for fear of frightening away international donors. The report names several officials linked to the governing nationalist parties that it says profited from the fraud. Even though the Office of the High Representative has dismissed 15 officials or prevented them from holding office, most retain authority. In one incident cited in the report, 10 foreign embassies and international aid agencies lost over $20 million deposited in a Bosnian bank, but only the Swiss embassy has publicly acknowledged its losses. The antifraud unit, which requires special security measures and does not make public who is working for the organization in Bosnia, is now investigating 220 cases of fraud and corruption. It documents the current cases in a 4,000-page report that has not been released to the public. Its contents were made available to The New York Times. Organizations as diverse at the Office of the High Representative, the United Nations and the United States Agency for International Development, all dedicated to rebuilding the country, have lost tens of millions of dollars, the report says. The widespread corruption is viewed by many here as a severe blow in the long, frustrating struggle to build a democratic Bosnia, a country that has received $5.1 billion in international aid since the end of the war in 1995. The corruption has also played a pivotal role in driving away foreign investment, seen as the only way to free Bosnia from dependence on foreign assistance. The missing funds were supposed to have been used to rebuild Bosnia's roads, buildings and schools, as well as to provide municipal services in towns throughout Bosnia. Alija Izetbegovic, the Bosnian President, along with other senior nationalist leaders, has dismissed the allegations of official corruption made by the international investigators. While conceding that corruption takes place, the President disputes the scale of the charges, denying that as much as a billion dollars has been misappropriated as stated in the long and detailed report. Izetbegovic has repeatedly denied these charges, most recently in a local press interview. "It would be nonsense to claim that there is no corruption, or that it is irrelevant, in a country that has just come out of the war," he said, adding that Bosnia is a country "which does not have established borders, where joint institutions are still not functioning, and which has at least two armies and two police forces." The Dayton agreement, which was signed by Muslim, Croatian and Serbian warring factions in 1995, called for the creation of a single state and the return of two million refugees and displaced people to their homes. But Bosnia remains partitioned into three antagonistic ethnic enclaves. Serb-held Bosnia continues to operate as a separate entity. The internationally created Muslim-Croat Federation has no authority and has been unable to raise revenues. The two million refugees and displaced people have not gone back to their homes. And the Office of the High Representative has been reduced to promising money and aid projects to towns and cities that say they will allow some refugees to return, promises that are usually never kept. "Dayton stopped the violence, but it did not end the war," said Jacques P. Klein, the chief United Nations representative here, "and the war is still being fought bureaucratically through obfuscation, delay and avoidance by a group of leaders who do not want to lose power. Bosnia and Herzegovina is a patient on life support assistance -- political, military and economic." International donors say the endemic fraud is making it harder to justify continued aid levels. Without the huge infusions of money, it is unlikely that the Muslim, Croatian and Serbian enclaves will be able to continue to pay pensions and salaries and reconstruct the country. The Sarajevo Government, for instance, has asked the World Bank for loans to make pension payments. "Time is running out," said James Lyon, the director of the international Crisis Group, an independent research organization. "The international community has no enforcement mechanism. The international administrators beg, plead, cajole and in some case engage in what looks like bribery, promising cities infrastructure projects if they allow some refugees to return. This tactic might work if we continue the present aid levels, about a billion dollars a year, over the next 20 years. But as aid declines, what will make these people even promise to comply?" Tuzla, a Muslim city. is one case study of widespread corruption that infects many local governments, the report says. The investigators' report charges that $200 million was missing from this year's budget, in addition to $300 million missing over the last two years. Tuzla's schools were painted four times last year alone by the city government, although they were rebuilt and painted by international aid organizations as well. Tuzla officials paid two or three times the normal price for such work and sold many of the cans of paint on the local market, the auditors found. Many of the schools, meanwhile, still lack heat, and students must wear their coats to class in the winter. In the town of Sanski Most, heavily damaged during the war, municipal funds are being used to build a horse racing track, much to the consternation of aid agencies, the report said. The report charges the town's Mayor, Mehmed Alagic, with 358 counts of corruption. The charges include the theft of $450,000 in relief aid from Saudi Arabia. That money was supposed to be used to provide feed and farm equipment, but the report alleges that the Mayor gave the money instead to his brother to start a bank. The Mayor has denied the charges and accused the Office of the High Representative of mounting a campaign against him. The most sensitive case under investigation by the antifraud unit concerns the Bosnia and Herzegovina Bank, or BiH, in Sarajevo. The bank took in tens of millions of dollars from international agencies and 10 foreign embassies. The money, the investigators say, was lent to fictional businesses or given as personal loans to friends by the two owners. The bank has now collapsed. The collapse underscores a near-total failure to establish a viable banking industry. Of the some 50 banks in Bosnia, Western diplomats say, only six are solvent. The Agency for International Development, which has not made its losses public, had at least $4 million in the BiH bank, according to Western diplomats. At least half of the $20 million lost by international organizations deposited in the bank was to have been used for reconstruction projects, the investigators said. "Our fear is that once the extent of the theft is known, international donors will get disgusted and walk away," said an official at the Office of the High Representative, who asked not to be identified. AID has also filed suit in Bosnian courts against 19 Bosnian companies, which have failed to repay loans worth more than $10 million. The loans, ranging from $100,000 to $1 million, are part of a $278 million revolving credit established in 1996 by AID to help kick-start the economy. The agency, unable to collect $1 million in loans from Hidrogradnja, one of Bosnia's largest companies, is trying to seize its assets. The rampant corruption has discouraged foreign investment. Most foreign companies, including McDonald's, have refused to set up operations after demands by officials to pay bribes and do business exclusively with local party officials. Other companies -- like the Italian construction company Aluveneto and Gluck Norm, Germany's largest maker of door and window frames -- have pulled out with heavy losses, complaining of interference from the state, an inability to collect debts and demands by officials for kickbacks and bribes to stay in business. Volkswagen is also considering pulling out of Bosnia, according to European diplomats. Volkswagen officials would not comment. The German Government pushed hard to get the company to reopen its heavily damaged plant in the Sarajevo suburb of Vogosca. Volkswagen did so on condition that the Bosnian Government buy official cars from the plant. Not only has the Government reneged on its promise, forcing Volkswagen to go to court, but the state company in partnership has refused to pay the $1 million it promised to invest. The money-losing Volkswagen plant does only final assembly on car bodies shipped from the Skoda auto works in the Czech Republic. Sixty workers assemble about six cars a day from the kits. Few sell, in part because of the thousands of stolen cars brought into the country from Europe by local gangsters. The used car market in Stolac, which convenes every Sunday in the Croat-controlled part of Bosnia, has one of the largest collections of stolen vehicles in Europe, according to the international police. On one recent Sunday, some 400 cars, most with forged registration papers and German, Swiss and Italian license plates, were being sold for large wads of German marks. The gangs that bring the cars into Bosnia oversee the sales. The Office of the High Representative has outlawed the market. It pressed in January to have the market's organizer, Jozo Peric, arrested. But the local Croatian court released him a few days later and dismissed the charges. Now Peric is in hiding. When federal tax officials showed up last year to try carry out an audit, they were beaten so badly they were hospitalized. Officials of the Office of the High Representative and Western diplomats say one of the wealthiest and most powerful men in Bosnia is Bakir Izetbegovic, the son of President Izetbegovic. He controls The City Development Institute, in charge of determining the occupancy rights of 80,000 publicly owned apartments in Sarajevo. The apartments, many of which belonged to Serbs or Croats before the war, have been given to members of the governing Muslim-led Social Democratic Party. Others who want occupancy rights must pay Izetbegovic $2,000, said several Bosnians who have paid the fee. Izetbegovic owns 15 percent of Bosnia Air, the state airline, and takes a cut of the extortion money paid out by local shopkeepers to Sarajevo gangsters, these diplomats said. Izetbegovic has consistently denied any involvement in such activities. When foreign aid agencies or even the Office of the High Representative try to turn to Bosnian courts for redress, they run up against an overwhelmed and corrupt system. The Agency for International Development is moving against several large state-owned companies. But creditors are rarely able to collect. The Tuzla courts, for instance, have a backlog of more than 30,000 cases of organized and violent crime. There were 1,050 convictions last year, and in most of the cases, those convicted were released on parole. Even when laws are passed to try to contain the fraud, politicians have blocked or ignored them. For instance, last year the Bosnian Assembly passed a law to allow the Government to tax the oil and gas trucked in from Croatia. The revenue was expected to be in the hundreds of millions of dollars. But when the law appeared in the official gazette, the articles stipulating the taxation were inexplicably missing. The Croatian mafia that brings in the oil and gas continues to pay no taxes. Although the case is in a Sarajevo court, diplomats say the judges, fearing retribution, are afraid to try it. 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"Although the case is in a Sarajevo court, diplomats say the judges, fearing retribution, are afraid to try it."

2 Posted on 08/16/1999 21:11:40 PDT by Joe Montana
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"Officials of the Office of the High Representative and Western diplomats say one of the wealthiest and most powerful men in Bosnia is Bakir Izetbegovic, the son of President Izetbegovic. He controls The City Development Institute, in charge of determining the occupancy rights of 80,000 publicly owned apartments in Sarajevo. The apartments, many of which belonged to Serbs or Croats before the war, have been given to members of the governing Muslim-led Social Democratic Party. "
**********
This Muslim monopoly on power is what the Serbs were trying to warn about before the First NATO War of Aggression against Serbia.

On the bright side, every American military member stuck in the morass in Bosnia won't be at risk of life and limb defending Taiwan whenever Communist-controlled China makes its move.

3 Posted on 08/16/1999 21:23:28 PDT by wildandcrazyrussian
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I wonder if any of that money makes its way back to the DNC/RNC.

4 Posted on 08/16/1999 21:27:48 PDT by arcane
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I wonder if any of that money makes its way back to the DNC/RNC.

Need you ask...?

The Gangsters in the Dumb-ass-ocrat party, weren't stupid when they decided to make war on the Serbs. They saw a kindred spirit and teamed up to justify sending Billions of Taypayer money to that morass - knowing they would get their cut...

The Chinese connection was drawing too much heat...had to find another way..

Semper Fi

5 Posted on 08/16/1999 22:56:17 PDT by river rat
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I wonder if any of that money makes its way back to the DNC/RNC.

Same thought went through my mind when i read this post...I would not be surprised..

6 Posted on 08/16/1999 23:05:51 PDT by Cool Guy
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Clinton's legacy:

Arkansas, criminal enterprise
Bosnia, criminal enterprise
Kosovo, criminal enteprise

Watch out NY

7 Posted on 08/17/1999 00:08:02 PDT by Joe Miner
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I am really sick and tired of the medias use of the Serbian name when anything negative occurs. No matter if a Serb is not involved and it is obvious that it is the fault of another party, Croatian or Muslim, the name "Serbian" has to be placed into the article.. Here is an article regarding the theft of a billion dollars and the Serbs are named as though they were equal conspiritors along with the Croats and Muslim. Yet, in the article every town or name that was mentioned was either Croat or Muslim or a town populated by either of the two parties.
Izetbegovich was in jail from 1949 to '57 for crimes against the yugoslav govt. and the Serbs. He was in jail for approximately the same amount of time in the 80's for the same reason. His people, for all their wisdom, elected him president. Any Serb could have told you what was going to happen after the "allies" backed the desolution of Yugoslavia in favor of the Muslims and Croats.
Now, the theft of monies going into the Nazi country of Croation and the Muhajadeen backed Muslims is still being blamed on the Serbs.....Grow up, and look beyond the guy in the black suit watching over your shoulder. Print the truth. The Croats use the same flag as the Croatian Nazi fighting Ustasha. They use the same currency that the Nazi Croatian used during the Second World War. They are naming streets after Ustasha war heros. They are permitting the return of the Ustasha soldies who fled to other countries after the war. Tudjeman is a Theif, Izetbegovich is a theif. To be truthful, for that I am Happy!! It serves their backer right. I hope they keep sending them money. I will surly aid to the distruction of all moral fiber that the Serbs planted in those countries.
If you're going to go after someone, then go after bill-Bomber Boy-clinton, or toni-Rocketman-blair. Two hundred grade schools, and hundreds of Churches, some dating as far back as the tenth century, destroyed by those - men? They destroyed the entire structure of a country and now the Serbs are being driven out by the Terrorist(up until they siged the treaty in March)kla, as well as the U.N.. You can bet that those two and the germans are drooling to see whose going to get what in regards to the THREE BILLION DOLLARS in Lignite, Cadmium, Lead, Gold and Silver that is under Kosovo. Not to mention the annual Three Billion in drug traffic along the "BALKAN ROUTE" generated by the Albanians.(clinton will love that money-it'll remind him of home....) The Balkan Route is between the Muslim country of Turky, thru Bulgaria and parts of Macedonia into Albania and then thru Bosnia, Croata to Austria and Germany..All this when the Serbs did not break one nato rule! Shame on you writers who can do nothing more than write what is placed in front of you by the boys in the black suits. You must be proud and honored to be so pleasing to such people. The Serbians have been denigrated and lied about in regards to the 1st World War, Second World War, and for the last eight years. Place the blame where it belongs... There's a heck of alot more...but I'm quite sure that you don't want to hear it..

8 Posted on 08/17/1999 00:44:12 PDT by beau (nikola@dreamsoft.com)
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I share your dismay at watching the Serbs get the blame for everything that goes wrong around there and I would like to cheer you up with the following. First, with regards to the missing money you may be assured that the Swiss have been managing the computerized movement of money using a piece of software originally designed by a firm called Inslaw and consequently stolen from Inslaw by the U.S. government. This software was then modified by the CIA to include back doors built into the software for the purpose of spying on anyone that used it, mostly banks. Here comes the fun part, some private citizens have access to the back door codes and are quietly pulling out files and banking records from Swiss and off-shore bank accounts that belong to....you guessed it, prominent American politicians. Sooner or later the missing money in this article will be credited to the appropriate individuals and they will be made to suffer the consequences of their objectionable behaviour. Second, did you know that a very jewish Miss Madeleine Albright and her parents were protected from Nazi persecution during WWII by the Serbs. Today she is in such denial and spearheading the cruelest and cowardly assault on her former benefactors in her role as Secretary of State. I have written this before and I will write it again, the Serb people are no better or no worst than the rest of us its just that the world we live in respects and bows to what is vile and repulsive. People that are good, compassionate and generous are generally viewed as weak and incapable. Cheer-up.

9 Posted on 08/17/1999 01:55:11 PDT by Stay'n Alive
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Thanks, I needed that! I'd never thought of that aspect. Another fact, albright was gilted by a serb that she cared about very much. That, also, is part of her excuse to help billi clinton and toni blair destroy a country. My only wish is that they and their German faction that have been supporting the kla since 96(Germany had 400,000 plus Albanians in their country prior to the war) are charged with war crimes-and throw in the queen of England and the queen of Spain, the rothchilds and david rockefeller.

Thanks again

10 Posted on 08/17/1999 10:53:57 PDT by beau (nikola@dreamsoft.com)
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