Published in Nacional number 583, 2007-01-16

Autor: Robert Bajruši


Sanader's Austrian Affairs

PRIME MINISTER Sanader was the co-owner in Austria of two companies with minimal initial capital, of which one was shut down in 1992 and the other in 2001

The university 5-a-side soccer team in Innsbruck: Sanader gained some business associates thanks to his soccer skillThe university 5-a-side soccer team in Innsbruck: Sanader gained some business associates thanks to his soccer skillIt really is questionable how Ivo Sanader came into his current wealth. Although the current Prime Minister asserts that he was a successful businessman in Austria, it appears that this does not fit with the real state of affairs. The complete truth is this: Sanader was the co-owner of two companies, founded with the lowest possible initial capital of which one was shut down in under three years, while the other lasted somewhat longer.

The first firm was called KCBS Bau-und Planungs-gessellschaft m.b.H., founded on 28 November 1989, and already liquidated by 27 March 1992 following a court ruling of "insufficient property". The name of the other company was WAPAGG-Handelsweren-Vertriebs-Gessellschaft m.b.H., founded on 23 May 1986, and shut down on 31 August 2001. Ivo Sanader went to Austria for the first time in 1978, immediately following his marriage to wife Mirjana. The young married couple lived in Innsbruck, where they went to the local university, where Sanader graduated in 1982. They lived modestly during that period, and the current Prime Minister worked part time reporting for Sportske novosti, a sports newspaper, and would later become acquainted with Hans Meyer, the owner of a press agency.

As far as the Meyer-press is concerned, Sanader was a kind of agent, who brought photos of nude models several times a year to the editorial staff of Start magazine, some of which ended up on the centrefold. He was remembered as elegant and refined, but there was not much money in these transactions. In those years Vjesnik's press agency paid the well-known Sipa and Gama agencies about 3,000 dollars a year for photos of pin-up models. Meyer press got less as it cooperated only with Start in which he would yearly publish only about ten centrefolds, and here and there he might succeed in selling photos in some other of the Yugoslav republics. Sanader only got a part of this money.

THE YOUNG SANADER also worked as a journalist: among other athletes he also interviewed Armin Kogler, the world record holder and several times champion ski jumper, born in InnsbruckTHE YOUNG SANADER also worked as a journalist: among other athletes he also interviewed Armin Kogler, the world record holder and several times champion ski jumper, born in InnsbruckAfter completing their university studies the couple returned to Split, and Ivo Sanader got his first job in the marketing department of Dalmacijaturist. He soon moved on to the Logos publishing house from where he was fired in 1988, after which he returned to Austria. He had maintained some acquaintances in Innsbruck, testified to by the fact that the WAPAGG Company was established in 1986, more precisely twenty months prior to his return to Austria. This marks the start of a very unclear three-year period in Sanader's Austrian career. And although he has often stated that he was the owner and founder of two successful companies, this is a story that has no basis. Sanader did not play a leading role in either of these two companies, the second-launched KCBS was shut down after 2 and a half years in business under suspicious circumstances, while in WAPAGG his superior partner was Michael Passer, and Austrian businessman involved in a business scandal that was debated even in parliament in Vienna.

Michael Passer is a bankrupted entrepreneur who for a time served as deputy mayor of Innsbruck and who was the subject of a judicial investigation, under suspicion that he had damaged the creditors of one of his companies of 60 million schillings. Nowadays he is involved in consultancy and keeps out of the public eye.

This is the data from the commercial court in Austria, where information on all business transactions in that country are sorted. Reputable Austrian businessmen who have seen the court documents claim that everything points to these not being companies that earned great profits. The chief argument is the exceptionally low initial capital of 500,000 schillings, about 36,000 euros. Sanader had a 20 percent stake in WAPAGG, that is to say somewhat over 7,000 euros, while in KCBS he was co-owner with a 60 percent stake.

If we take into consideration that Josef Baumann and Franc Sustersic were also in that 60 percent, it can be assumed that his capital here too was not in excess of some ten thousand euros. When it is known that both companies have been liquidated in the meantime, it becomes clear that one can hardly speak of a big business career the head of Croatian Government had while he lived in Austria.

WITH MILJENKO ZAGAR at an Innsbruck HDZ branch conventionWITH MILJENKO ZAGAR at an Innsbruck HDZ branch conventionDocuments indicate that Sanader in 1989, in Innsbruck, took part in founding the KCBS Ltd. construction and design company. Cited as managers are Josef Baumann, Ivica Sanader and Franc Sustersic, a representative of the Maribor-based Konstruktor Company. Sustersic is now a pensioner and lives in Maribor. On Monday morning, in a telephone conversation, he recalled his acquaintance with Sanader and Baumann, and the circumstances of their business association. It involved the construction of a building with 68 apartments near the border with Switzerland, with Konstruktor securing the workforce and machinery, Baumann organising the job and Sanader acting as a kind of manager. The building was constructed, the workers received their wages, but Sustersic recalls that KCBS was shut down under suspicious circumstances. Jozef Baumann clinched a deal to build hotels in Turkey and was no longer interested in continuing work in Austria, and the firm closed its doors. Ivo Sanader also no longer lived in Austria.

In the meantime a HDZ branch was founded in Tyrol, and in 1991 the ruling party appointed him intendant of the Croatian National Theatre in Split. During that time the Slovenes on two occasions sought the convening of the KCBS shareholder's meeting, but neither Baumann nor Sanader ever showed up. In the end the operations balance sheet was not drawn up, and Konstruktor lost a part of the equipment it had delivered to the construction site, while the other part was recovered with quite a bit of difficulty. This is confirmed by a document of the commercial court in which it is stated that the regional court in Innsbruck shut KCBS down because of a lack of property.

Franc Sustersic did not meet Ivo Sanader after that. "I see him on the television, but not in person. Many years have passed, but as far as I can remember some strange things happened on that job, but the most important thing is that all the workers were paid."

Equally bizarre is the story of the WAPAGG Company, the first company Sanader was a co-owner of, and was only shut down in 2001. An Austrian entrepreneur who has know Ivo Sanader for years, recalls that his company in Innsbruck was housed in a single room in a building owned by Michael Passer. The official title of the company is WAPAGG Commercial Goods Distribution Ltd. and it was also registered at the regional court in Innsbruck, on 23 May 1986. The managers of WAPAGG were Michael Passer and Günther Walser, and the partners in ownership cited along with Passer and Walser, are Wilhelm Grissemann and Dr. Ivica Sanader. The initial capital was 500,000 schillings of which Sanader invested 100,000 or twenty percent. The company was in operation up to 28 August 2001, when a motion to shut down WAPAGG was filed.

SUSANNA RIESSPASSER, the wife of Sanader's Austrian business partner, was vice chancellor in the Schüssel GovernmentSUSANNA RIESSPASSER, the wife of Sanader's Austrian business partner, was vice chancellor in the Schüssel GovernmentThe most intriguing person in Sanader's business history is in fact Michael Passer. In the past he was active in politics and made his way to the second most important position in Innsbruck, but after his bankruptcy and allegations that he had been responsible for the financial difficulties of his companies creditors, he withdrew completely from public life. In a short interview for Nacional, he explained that he is currently involved in providing business and political consultancy. He also confirmed his ties to the Croatian Prime Minister, but strictly avoided discussing joint business ventures.

"If my memory serves me, I think that I know Ivo Sanader around twenty years. He studied in Austria, and we were friends thanks to soccer as we were both recreational players. We met often, and have common acquaintances." He describes Ivo Sanader as an "intelligent person who speaks several languages", but added that their contacts have been rare in recent years. He managed to remember the last two times: when Sanader visited the former Austrian Chancellor Wolfgang Schüssel in Vienna, and in August of 2005 in Split at a friendly match between the Croatian and Brazilian national sides.

Unlike his excellent memory concerning their mutual penchant for soccer, Michael Passer has a much worse memory of his business association with Ivo Sanader. On Monday I spoke on three occasions with Passer, who gave very courteous answers to general questions concerning his relationship with Sanader, but when I would mention their work together and WAPAGG, literally each time Passer did not hear the question and would repeat the same sentence "Hello, hello, I cannot hear you. What business?" and then the line would get cut off.

The thing is that Sanader's friendship with Passer in later years acquired some political connotations. His wife is Susanne Riess-Passer, for years the closest associate of Austria's best-known right-winger Jörg Haider, the founder of the Freedom Party of Austrian (FPO). Her behaviour has earned her the nickname Cobra on the Austrian political scene. For a long time she was one of the leading women politicians and is a person who enjoys Haider's confidence, she became vice chancellor in the so-called brown & black coalition government of Wolfgang Schüssel. When a split emerged in the FPO and Haider set up a new party, Susanne Riess-Passer followed him and is now a deputy in the parliament in Vienna. Political analysts do not foresee a bright future for her as she is, like her husband, being investigated following allegations that she had embezzled 600,000 euros. The claim against her was filed by the FPO leadership who claim that Susanne Riess-Passer spent her former party's money on private expenses, among other things by organising lavish birthday parties. The court action has not yet been closed.

THE PASSER COUPLE at the Vienna Opernball in 2000: Michael Passer's phone would suddenly go dead every time we asked him about his business dealings with SanaderTHE PASSER COUPLE at the Vienna Opernball in 2000: Michael Passer's phone would suddenly go dead every time we asked him about his business dealings with SanaderWhile he lived in the Diaspora, Ivo Sanader was an associate of the Passer family. But when he came back from Austria and got involved in politics, Sanader was not wealthy say his associates at the time. He drove a used Mercedes and would mention that he had financial difficulties. When he established himself politically, he was known to confide in his friends that as an official he had not profited materially unlike Ivic Pasalic and other HDZ right-wingers. The returnee life really did not leave an impression of luxury. When he returned to Split in 1990 he and his wife and daughters lived with his wife's parents. They did not stand out from their neighbours and they are remembered as average middle-class citizens. In the first two years he was not even particularly enterprising in politics, and his only function was as a member of a local prisoner of war exchange team. His rise was ensured by his friendship with Josip Manolic, who became Ivo Sanader's political patron. When election lists were drawn up in August of 1992, Manolic was the chief proponent of putting Sanader high on the list in order to ensure him a seat in Parliament. There were proposals to run him as a candidate in the Split electoral riding but Boris Dvornik ended up being the candidate there.

Franjo Tudjman liked the new Split man, especially because of his ties to the Catholic Church and conservative circles. That is why he supported his advancement among top diplomats, and the close relationship lasted several years and culminated with Sanader's appointment to the position of chief of staff at the President's Office.

He did not stay on long there, as Tudjman caught on that Ivo Sanader does not have a very strict work ethic and would leave work long before his chief did so. Into all this came Sanader's quarrel with Gojko Susak and Ivic Pasalic, which lead to Tudjman's decision to relieve him of the post. Ivo Sanader continued to present himself as a trusted Tudjman aide, but that the then President in 1995 no longer spoke favourably of him has been cited in the memoirs, published over the past two years, of both Mate Granic and Ankica Tudjman. Sanader returned to the diplomatic service and became Mate Granic's deputy. A close cooperation and association with Miroslav Kutle began in this period. Foreign affairs ministry employees of the time confirm that Kutle visited Sanader's office on Zrinjevac Square at east once a week. Light was shed on a part of the possible details of the Sanader-Kutle connection in November of 2003 when a document came to the press from the state attorney's office that lists cash payments from Miroslav Kutle to top officials in the HDZ government. The document contains the official testimony of M. S., a former financial secretary at Kutle's Globus Group, data on cash payments the once leading national tycoon had made to the accounts of leading HDZ members. Among these is the name of Ivo Sanader to whom, according to the statement made by M. S., Kutle, on two occasions during 1995 and 1996, paid a total of 800 thousand German marks.

This statement was made before investigators back in August of 2000, but it was put among secret documents and procedures were never initiated. On the list of Kutle's payments under ordinal number 38 is the following code: "M. Kutle-Hypo", the handwritten initials I. S. and a sum of 750,000 marks. For 1996, under ordinal number 17 it reads: "M.K. - Hypo- Sa" and a figure of 50,000 marks. In her statement to investigators M. S. explained: "I am submitting cash payments to the amount of 800,000 DEM designated Hypo-Mr. Sanader. I must remark that we received at the time a loan of 4,000,000 DEM from the Hypo Bank of Austria. I know people at the Hypo Bank and think that it is not possible that they would take a provision of that magnitude to award a loan. There was talk in the office at the time about whom that money was for because that person had helped in getting the loan. You can see on the payment slip that it reads Hypo and SA. Later on only Hypo, and in the end Hypo S. I. I know personally that it was said then that payment was being made to Mr. Ivo Sanader. That is what I heard, but the cash payments in these amounts were truly made with the designation as I have already stated", reads the document that was for three years deposited at the state attorney's office, without anyone initiating an investigation. Not long after the publication of this document, Sanader took over the post of Prime Minister and the entire affair was taken off the agenda, and there is no longer any talk of Kutle's court cases.

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