Several days ago, a meeting was held between the Management Board of Westdeutsche Allgemeine Zeitung (WAZ) and Europapress Holdings (EPH) with only one topic on the agenda – the strategy for WAZ’s continued business expansion, after their recent acquisition of 25% of shares of the German television station RTL. The main topic of the meeting was the “Grupo” affair and its consequences for WAZ operations, which has primarily impacted the developmental plan that WAZ outlined upon entering the Croatian market, that was supposed to have become a base for expansion throughout the whole of Southeastern Europe.

WAZ hires veteran intelligence WAZ has hired several veteran intelligence operatives to collect information to compromise the main ‘culprit’ for revealing the Grupo affair According to what Nacional has learned from sources close to the leadership of this German concern, the WAZ board is exceptionally concerned about new information that “certain investigative procedures are still ongoing into the Grupo affair”. WAZ has proclaimed Ivo Pukanić, majority shareholder of Nacional, to be the main culprit for all that has occurred since the affair came to light. And not just Pukanić. WAZ has proclaimed Nacional and “the group around the weekly which enjoys the active support of the President of Croatia, who participates in the whole situation”. At this meeting, it was not defined just who was part of this group around Ivo Pukanić and Nacional, nor was it made clear just how the President of Croatia was actively supporting Pukanić’s group, nonetheless, those to blame have been marked.

Further, at this meeting the WAZ Board stressed that Europapress Holding did not “respond in an effective manner” the entire affair, and thus to the effect of an effective manner, primarily the continuation of investigative processes, certain measures have already been taken, and others planned. Firstly, in order to access the necessary information, they have hired several intelligence operatives to collect information on activities in the justice system connected to any arm of the Grupo affair and its participants. In addition to the justice system, those operatives are responsible for carefully monitoring Ivo Pukanić, Nacional’s most prominent journalists and President Mesić. Their goal is to find weak points, to publicly compromise them and to reveal all their activities connected to the Grupo affair. According to available information, this intelligence group is composed of retired and some still active operatives of the security agencies.

Manipulations

The activities of WAZ and EPH will not stop here. By collecting this information, they wish to manipulate and prevent any further steps in the investigation and prosecution of individuals and companies connected to the Grupo affair. Unsatisfied with the work of their attorneys to date, members of the WAZ Board have decided to hire the best attorneys, and to give the entire case big media attention, particularly in Croatia, as well as on the international scene. As Nacional’s source claims, the key individuals in the announced media attacks will be the Croatian President and Ivo Pukanić, together with the rest of Nacional.

Even though it is difficult to assess the significance of this meeting and just how far reaching and catastrophic its conclusions and plans will be for the whole Croatian state, certain conclusions will be executable. In December 2000, the new daily newspaper Republika dedicated its first issue to releasing complete documentation about the Grupo clan. Nino Pavić, Miroslav Kutle, Vinko Grubišić and Ivić Pašalić signed partner contracts to form the company Grupo with one goal in mind – to take over the entire media in the country. With this contract, they precisely worked out their joint business plans, with the intention to fully take over the media. Proof that their intentions were suspicious was seen in the fact that all four actors signed the contract using pseudonyms, and in order to decipher the enigma of the media owners, a special code document was used, outlining the true identities behind the pen names (with the exception of Pašalić, who was marked “person known to the remaining signees”, and whose name was encoded as “Hrvoje Franjić”).

Criminal Media Empire

The result of their partner contract, which was top news in Zagreb for months even prior to the revelation in Republika, even at that time was catastrophic: dozens of local newspapers, over half the local televisions stations, including Zagreb’s OTV and the national Nova TV, Slobodna Dalmacija, all the EPH publications, led by Globus, Jutarnji List and Sportske Novosti, and many other papers and marketing agencies. It seemed as though the list of media owned by Grupo had no end. Feral Tribune, Novi List, Nacional and Radio 101 were the only media not mentioned in the partner contracts. The reason is clear: Pavić’s attempts to take over Radio 101 with the help of Ivić Pašalić in 1996 ended up in demonstrations of 100,000 people on Zagreb’s main square. Feral’s editors seemed too stubborn and had too much international support, and Nacional’s editors escaped from EPH after realizing that Nino Pavić was only the nominal owner and that behind him the worst part of the then governing HDZ, led by Ivić Pašalić, stood behind him.

Bribed Judges

After the police took action, arresting several of the actors in the Grupo affair, one of their primary legal arguments was that signing a partnership contract is not a criminal act. Without a doubt, signing a contract is not a criminal act, until that contract and those acts stemming from it, harm a third party. The contract, which created Grupo, is a criminal act since it was realized – in Croatia today there is a definite media monopoly, led by Nino Pavić and his EPH and WAZ, his business partner. In addition to the most important television and radio stations and several marketing agencies, another fifteen media, from women’s and children’s magazines to professional weeklies, have entered into Grupo, making EPH and its 50% owner WAZ the greatest media owners in Croatia today.

However, WAZ’s ambitions have not stopped there. In purchasing half of EPH, the WAZ Board knew exactly what they were doing: with the help of EPH, they could easily take over the entire media market in the former Yugoslavia. Recently, they began investing much effort in strengthening the Herzegovinian edition of Jutarnji List, with the goal of taking over as large a market share in Bosnia Herzegovina as possible. The recent purchase of 25% of Politika and all its publications (20 publications, radio, television…) and the appointment of Bodo Hombach as director of that company marked the beginning of a new expansion wave for WAZ and EPH in the former Yugoslavia. Recently Tomislav Marčinko began proceedings to purchase the Novi Sad paper Dnevnik for WAZ and EPH, and it is obviously just a question of time when the Vojvodinia media will also be under their control. Also under their control is the Slovenian edition of Playboy, which purchased the license for that publication from EPH.

Nino Pavić and his partners from WAZ believe that all this is not enough. WAZ’s flirting in a possible attempt to purchase Ljubljana’s Delo has been frequently mentioned in the press, however, the Slovenian anti-monopoly laws and agencies are clever enough to at least temporarily prevent their penetration onto the Slovenian market. Croatia has proven to be least clever here – our anti-monopoly agencies did not even react to the violation of a series of laws. Nor has the government succeeded in implementing the law by which all media are required to report their ownership structures, to not mention anti-monopoly laws. For example, today it is still unknown just who the nominal, let alone real owners of over one hundred radio stations, which are frequently mentioned to illustrate plurality in Croatia, even though most of them broadcast nothing other than music.

End of monopolization

WAZ and EPH have not hidden their interest in buying Slobodna Dalmacija and Vjesnik, as well as Vjesnik’s printing press. After the state gave EPH one third of shares in Tisak, the largest distribution chain in the country, the possible purchase of either of the above mentioned media would be a directly leap into the abyss. Slobodna Dalmacija is interesting to WAZ because of their distribution chain throughout Dalmatia, while with the help of Vjesnik’s printing press, Pavić would have the power to blackmail every independent publisher in Croatia.

Along with the distribution chain Tisak, EPH and WAZ have taken over control of Distrija, the second largest distribution network in the country, after purchasing 50% from Ivan Granić. The government and the anti-monopoly agency have not reacted in any of these cases, including the mysterious purchase of Sportske Novosti. Proof of how great WAZ’s influence already is in Croatia was seen in last week’s removal of the ban for newspaper lottery games. The new law was easily passed in the parliament, without much explanation as to why. The result of lobbying members of parliament and parties by Pavić and EPH has once again shown how pathetic the Croatian political “elite” is.

Such a concentration of media power has resulted in an abnormal situation in the profession. In the bodies of the Croatian Journalists Association, it is virtually impossible to avoid the fact that the majority of journalists are employed in one of EPH’s publications. At the time the Grupo affair came to light, not even the number one person in the association dared to openly speak his mind and pressures were mounted on him to push the entire scandal “under the carpet”. In the chaotic situation the state television (failing to respect the deadlines outlined in the law, HRT is currently reigned by complete illegality) and director Mirko Galić, who was appointed to that position by Nino Pavić, it is simply impossible to expect an objective information from the media controlled by one owner.

Watering down the Grupo affair

This impossibility has allowed the entire Grupo affair to be watered down, and from a case which should have seen its day in court, this ended with a typical investigative procedure, and after a few days in detention, the main actors were released from detention. The General Attorney’s Office played a significant, though negative role in the affair, and the extent of their instrumentalization today is seen in the public. Likely out of fear of the media and due to their own unclean conscious, the justice system failed and the media monopolists gathered together in Grupo was permitted to do whatever they pleased. The media that remained outside their clan was permitted only to survive.

Nacional is a specific example, and thus is the main target for Grupo. Mesić, the planned new media target, is a welcome opportunity that Grupo will not let slip by. Mesić and Nacional are the factors which contributed to the creation of a positive image of the society and supported cleaning up crime, which most bothers the EPH owners. In addition, EPH’s flirting with the rigid right wing, which through their publications and interviews are depicted to be an attractive political option, will have serious consequences for Croatia. It is not necessary to explain what it would mean for Croatia were the rigid right wing to return to power.

Rulers of Bulgaria

The activities of WAZ, which also rules the majority of the media in Bulgaria, have gone so far that neither the journalist’s association nor the journalist’s union were able to take even one step to liberate even a minimum of space for normal media functioning. The price of labor has collapsed. Manipulations with advertising space has brought the competition to their knees and the political power has moved from the parliament and government to the hands of the media, or rather, to WAZ. Such a scenario in Croatia, in spite of claims, is still not impossible and the “difficulties WAZ is experiencing in Croatia”, as mentioned at the meeting, could be exactly that: eroding the price of labour, stealing advertising and destroying the competition with the goal of maximizing profits, all with unsurmised political power, which they did not have to date. In order to realize that goal completely, they will have to bring down Mesić, Pukanić and Nacional. It was concluded at the WAZ meetings that this goal is to be realized, at any cost.