Highly ranked sources close to the Croatian authorities have forwarded official documents to Nacional proving that the companies co-owned by Radimir Čačić won jobs from the state totaling over 244,000,000 kuna from 2000 to 2003. It is important to note that Aurum Insurance, also owned by Čačić, picked up on an unknown percentage of insuring the works and property of the construction of the Zagreb-Split highway, worth 1.192 billion kuna. In any case, the former Public Works Minister earned a lot of money during his mandate in Ivica Račan’s government, and HDZ is planning to use that fact in order to subdue one of their fiercest critics.

“In his recent public appearances, Čačić has accused us of corruption in the Bechtel case, and has overstepped all bounds. He is the last person who has any right to comment, as his companies blossomed while he was a minister in Račan’s government, and they earned hundreds of millions of kunas from his ministry. No one has anything against a competent businessman, but people such as Čačić need to be held accountable for their actions and it will not be a surprise if the entire case ends up in court,” explained one of the cabinet members, who requested to remain anonymous, for Nacional last week.

Though he refused to say what exactly he was referring to, other state officials have confirmed that Čačić is seriously compromised by the 2003 State Audit.
Officials under State Auditor Šime Krašić completed their hundred page report at the end of May, and this report allegedly contains allegations of several suspicious deals in his ministry during the final year of his mandate. For the time being, this document has been filed with the State Audit Office where it will remain until the autumn parliamentary session. Judging by the mood of the leading HDZers, it should be no surprise if attempts to prosecute Čačić are revived again in a few months time.

The State Audit stated that in 2003, Čačić’s ministry signed POS contracts (Subsidized housing construction) worth 1.3 billion kuna, and that subsidy money for that was not secured from the budget. Also, government consent was not obtained, thus violated in the Budget Act. The former minister has also been incriminated for the way the renovations to the former military hospital on Vlaška Street in Zagreb was carried out, in which an unknown law firm was hired in a direct deal and was paid 345,000 kuna. “The State Audit Office holds that legal services were not required for this job,” reads the report which also mentions the 4,075,000 kuna spent for the adaptation of the military hospital.

When the MPs begin debating on the State Audit this fall, Čačić is sure to be among the top themes of the HDZ attacks, and as such, his newly formed coalition HNS-Libra-LS. The authorities are already well aware that it will be exceptionally difficult to prove any criminal responsibility of their greatest critics, and therefore they will attempt to use the parliamentary debates to compromise HNS’s claims that the leading HDZers are corrupt. True, similar accusations about Čačić have been many over the past decade, however, they did not politically destroy him. However, at the last elections, HNS lost a great deal of support in Zagreb and other cities, which is to a great extent due to the created opinion that this is a clientelistic party. HDZ desperately wants to win at the local elections, thereby strengthening Sanader’s government, and one of the ways to accomplish this is to weaken the opposition block lead by the people’s party.

In as much, it is interesting that HDZ for months has had documents on Čačić’s deals, but until the Bechtel affair erupted, only a few state officials knew about them. No one wanted to make them public, and they only dared to do so after Čačić accused Sanader’s government of corruption. These are some twenty documents and contracts which show that the companies Coning, Congrama, Aurum and Coneco received massive contracts and profits in the period that one of their owners was minister. That is not a completely unknown piece of information, as in April 2003, Jutarnji List published that Čačić’s companies had received 58.5 million kuna from the state, and Marina Matulović-Dropulić recently made a similar accusation.

However, these newest documents delivered to Nacional show that this amount is at least five times that amount, which is a handsome profit in Croatia.

The largest valued documents – worth 160,000,000 kuna – are contracts signed between the Public Works, Reconstruction and Construction Ministry with Coning from Varaždin. This was for the “key in hand” project of subsidized housing construction (POS), with Coning receiving a total of six contracts for the construction of flats and other buildings. Two contracts worth a total of 22,692,000 kuna went to Congama, and the entire total, divided among various companies in this sector was 2,488,000,000 kuna. Coning Engineering earned 6,165,000 kuna for the POS contracts and Congama received 305,000 for a single contract. For control and consulting over the past four years, Coning received 10 contracts worth 2,829,000 kuna and Congama 489,000 kuna. The government investigative team also discovered that the company Capital Ing., whose minority shareholder is HSS President Zlatko Tomčić, also operated well on the POS contracts. In a total of 13 contracts, Capital Ing. Earned 2,495,000 kuna.

The government source also revealed that they know of several examples of direct corruption in which Čačić’s companies were involved, however only the financial police can uncover the true extent. Allegedly, the ministry also handed out jobs to companies who have nothing to do with the former minister, but their owners were informally informed that in order to return the favour, they would have to subcontract various portions of the project to Coning. If HDZ decides to take on Čačić, one of their primary goals will be to find those willing to talk about those deals. Of course, if there were any.

Čačić’s opponents also believe that a lot of money was earned for projects to reconstruct and equip those buildings damaged in the war as well as flats for handicapped war veterans. Congam d.d. from Varaždin fared best here, receiving a total of 67,696,000 kuna, while in 2003, Coning received 368,000 kuna and Coneco received 460,000 kuna in 2000. Coning Engineering d.o.o. earned 4,150,000 in 2003 in contracts with the ministry, while they earned only 50,000 kuna this year, after the change in government. Business is not going so well when you consider that HDZ owes Čačić’s companies 80,000 kuna for this year’s projects. According to the available documentation, Aurum Insurance also operated well, earning 1,344,000 kuna in 2003 – four times more than the largest domestic insurer Croatia Insurance – on the insurance premiums for vehicles used to construct the Zagreb-Split highway. According to the documents, the total value for insuring all the contracted works on the highway was 4,676,329,067 kuna. The first two places with about 1.4 billion kuna went to Euroherc and Croatia Insurance, while Aurum was third with 1.192 billion kuna. Those well acquainted with the insurance situation hold this to be unrealistic, as Aurum is only the tenth largest insurance company in Croatia.

Last year, Aurum’s revenues totaled about 120,000,000 kuna, and it is illogical that it should, without reason, be so interesting to the road builders. In any case, insuring such grand projects is more than profitable, as even though the premiums are less than 1%, the profit is at least 10 million kuna. “There is no doubt that Čačić personally intervened for some of the companies involved in building the highway to take out insurance at Aurum, and hence he earned big money,” warned our source in the government. Sanader’s men believe that the former minister also participated in what they believe to be an unethical land-financial transaction, from which he came out significantly wealthier than when he went in. On 16 September 2003, the government Clearing and Assets Management Agency (APN) signed a pre-contract with Coning Engineering and Zagorje Tehnobeton on the construction of a POS project in Varaždin. These two companies were joint owners of 38,500 square metres of land, and this contract bound them to prepare the land for the construction of housing units. Only six days later, Zagorje Tehnobeton and Coning Engineering sold the land to the Agency, earning 2,260,316 Euro, which they split 50:50. The sales contract was signed by Davor Rajčić on behalf of the state and Miroslav Bunić and Marija Čačić, president of the board of Coning Engineering and wife of Radimir Čačić.

The government also suspects the legality of the contract between APN and Congama dated 26 September 2002 on the construction of 37 flats, 29 garages, 2 commercial units and a warehouse in the town Brajda on the island of Cres. Congama was to receive 13,455,894 kuna for construction and equipping the units, and the job was to be completed within one year of signing. However, on 20 April 2003, an annex to the contract was signed, stated that APN gave Congama all 29 garages, the warehouse and commercial units as part of their expenses. Lightly put, this contract is very interesting, in which the state pays its expenses in the form of garages and a warehouse, as it was signed by Alenka Košiša Čičin-Šain, then Čačić’s assistant and today a HNS MP.

The documents show that Čačić wisely took advantage of his ministerial position in order to ensure the prosperity of his election district, which includes the Krapina-Zagorje, Varaždin and Medjimurje Counties. Though they are not among the poorest in Croatia, these counties received 77,000,000 of the total 175,000,000 kuna the state invested in regional development projects. For the sake of comparison, Varaždin County received 36.8 million kuna, Krapina-Zagorje County 22.5 million, Medjimurje County 17.8, while at the same time, war devastated Osijek-Baranje County received 5 million and the poor Lika-Senj County received only 3 million kuna. The money was invested not only in infrastructure, but also in local associations and firefighting units, but the investments proved to be successful as Čačić’s party fared very well in those districts.

It is certain that this affair will not cause a split within the opposition. That was confirmed for Nacional by one of the leading SDPers when asked what SDP would do if it was proven that Čačić’s company earned a great deal of money while he was minister. The answer was firm, “Nothing will happen, as Čačić likely earned very well, but his companies won all their contracts in public bids. For us, that is proof of his innocence and you can be certain that we will not end our cooperation with HNS. Furthermore, with what right does HDZ have to criticize anyone after the Bechtel affair, which is a classic example of how the state should not operate. They attack Čačić, but no one has asked Miomir Žužul how he managed to buy a 2 million dollar home in Washington from the state salary he has had his entire life. Čačić was wealthy back in 1990, and now moral standards are being set by those who got rich in the past decade in much more suspicious ways.”

His comments prove that the parties have definitely taken their positions for the upcoming elections. The SDP leaders have no intention of entering into conflict with HNS. Even Milan Bandić is keeping quiet, and the most likely outcome will be one in which the Social Democrats will not try to take advantage of the attacks against Čačić in order to take a portion of the people’s party votes, and in return, HNS will not attack Bandić who is the favourite candidate for future Zagreb mayor. On the other hand, we can be sure that HDZ will continue its attempts to discredit the opposition leaders before the elections, and that this October could mean the beginning of both the election campaigns and a judicial campaign.

‘Different kinds of vermin are attacking me’

Čačić claims that he began to withdraw from the management of his companies in the late 1990s, and in 2000 he transferred all his ownership shares to a law firm and since then has not participated in any of the decision making. He sees these attacks as an attempt by HDZ to fog up the Bechtel affair, which he calls a “notorious crime concerning hundreds of millions of kunas”. He also commented on the role of Miomir Žužul. “He did not bring in the Bechtel representatives, instead they came to Zagreb on my invitation. At those meetings, they wanted to win the bids without going through a public tender, but I did not permit such a scenario and that was the end of it. Now I see that all that was simply an introduction to making the decision in which Bechtel receives an excellent job in an ultimately illegal way,” Čačić said.