SURPRISE RAID BY INVESTIGATORS On Thursday investigators of the Sonderkommando Hypo Austrian special police unit stormed the bank, confiscating documents, computer files and hardware An important international meeting of representatives from the state prosecutor's offices of Austria, Germany, Liechtenstein and Croatia, was held at the offices of the state prosecutor in Klagenfurt last Friday. This working meeting was attended by high ranking officials from the state prosecutor's offices, effectively the highest ranking officials from these judicial institutions, and they were discussing a very important topic - crimes that almost brought the Hypo Alpe Adria Group to its knees, and which at the end of last year was bailed out by German and Austrian taxpayers, and was then transferred into Austrian state ownership.

As of late December of 2009 the SoKo Hypo unit, also known as Sonderkommando or special assignment unit, has investigated these crimes. Sonderkommando is investigating literally all business transactions by the Hypo Group Alpe Adria bank over the past 15 years, specifically any connections between the bank and former Prime Minister Ivo Sanader, Ivic Pasalic, once a powerful advisor to the first Croatian President Franjo Tudjman, and retired General Vladimir Zagorec. The goal of the investigators is to reconstruct the backdrop and uncover the logic behind all of the so-called cross-border financing cases. These financial transactions in reality went directly from the bank's headquarters in Klagenfurt into Croatia, bypassing the bank's offices in Croatia.

This was done partly because it was cheaper thanks to Croatian National Bank regulations, but primarily because these arrangements guaranteed that no one from the competent state institutions in Croatia would be able to have any insight into the structure of these transactions, which for the most part involved privileged individuals. What is actually being investigated are all suspicious arrangements that the Hypo bank was financing in Croatia directly from Klagenfurt.

Austria, Germany, Liechtenstein and Croatia have been cooperating in the investigation from the very beginning. Germany, among other things, wants to shed some light on why the Bayerische Landesbank so naively entered into co-ownership of the Hypo bank a few years ago. Austria, because the operation to save the bank was a burden carried primarily by Austrian taxpayers, but also because it is suspected that the point of origin for the illegalities within the bank was in fact in Austria.

Liechtenstein is participating in an effort to discover if anyone from that country had committed any crimes by assisting in covering up murky financial transactions, while Croatia wants to uncover who lined their pockets with money collected for Croatia's defence effort - funds that ended up on secret accounts in Austria. Lazo Pajic, deputy to the chief state prosecutor, led the three-member Croatian delegation.

It was definitely agreed at the meeting that all of the countries would continue their cooperation. Besides this, all of the participants discussed who was interested in what, reached an agreement on the exchange of information and were provided an update as to the current status of the investigation. The Croatian representatives requested information pertaining to suspicious loans and possible kickbacks for those who intervened to ensure that the suspicious loans were approved. They were particularly interested in whether or not Austrian investigators had officially named any Croatian nationals or legal entities as being among those suspected of wrongdoing. Also initiated was the exchange of some sensitive information.

The Austrian side is in a hurry. It is definitely not a coincidence that the important Klagenfurt meeting took place only one day after the SoKo Hypo unit raided the offices of the Hypo Alpe Adria Group in Klagenfurt. All of the participants of the meeting knew about the raid and were in Klagenfurt while it was taking place, gathering the following day to hold a formal meeting. Last Thursday afternoon Sonderkommando Hypo, or abbreviated SoKo Hypo, a special investigations unit of the Austrian police, conducted a surprise raid of the Hypo Alpe Adria Group in Klagenfurt, with only one goal in mind - to find incriminating evidence against Ivo Sanader, Vladimir Zagorec and Ivic Pasalic.

During the bank's entry into the Croatian market in the 1990's they were influential officials within the HDZ government. Later they parted ways politically, but until recently each in his own way, through private contacts with high-ranking bank officials, maintained their influence over the bank's dealings. They were in effect informal allies interested in the bank's expansion in Croatia. The investigator's raid of the Hypo Alpe Adria Group headquarters could be a watershed moment in the investigation of the Croatian branch of the criminal activity that is being carefully investigated after the Hypo bank collapsed at the end of last year and was transferred into Austrian state ownership.

Among investigators it is expected that last week's raid on Hypo bank headquarters in Klagenfurt should shed some light on up to now strictly guarded bank secrets on why and how, and under what conditions, Pasalic and Zagorec received massive loans from that bank for construction projects, but also background information into Sanader's thirteen interventions into various projects being financed by the bank. Austrian investigators believe that they will find evidence for at least four cases in which, based on their suspicions, money was laundered following Sanader's intervention.

Forty-seven agents were involved in the raid on the Hypo bank headquarters. Nacional's sources in Austria claim that along with the members of the Sonderkommando unit, an additional thirty police officers, three to four officials from the state prosecutor's office and at least three bank documentation analysis experts were present during the raid. During the raid, which lasted several hours, the investigators thoroughly searched every office on the Hypo bank headquarters in Klagenfurt.

VLADIMIR ZAGOREC The State Prosecutor's Office believes that the former general received 260 million euro in loans from the Hypo bank thanks to his connections with the bank's previous management Technically speaking, they were seeking documentation on a total of five different companies within the Hypo Group in the area of southeast Europe, and along with the raid on the bank's headquarters, they also raided the bank's offices at another location in Klagenfurt. The raid was conducted in the style of a first rate thriller. After they stormed the bank's headquarters unannounced, the investigators searched the building office by office. While the raid was being conducted additional police officers were placed in front of the closed door to each office. Nacional's source, who knows every detail of the raid stated that, "the situation was not in the least a pleasant one."

Swaths of documentation, computer files, software and even hardware, specifically some of the banks computers, were confiscated. The investigation was launched at the end of December, but as the bank made no effort to cooperate, and made bashful efforts to present itself as the victim of white-collar crime, greedy managers and corrupt politicians, the Sonderkommando unit decided on an unannounced raid and the confiscation of documentation. Informed Austrian sources revealed to Nacional that the unit specifically focused on thirteen cases in which Sanader intervened in the Hypo Alpe Adria bank in Austria for various loans.

This was revealed when the bank's top officials were forced to submit a report on the bank's situation to the Austrian National Bank. Activities surrounding the bank, following various scandals and years of agony, led to an unbelievable drama in Austria at the end of last year. In the end it was decided that the bank would be returned to state ownership, and that prior to this all co-owners would have to deposit hundreds of millions of euro on the bank's accounts, but also that a part of the losses would be covered by Austrian taxpayers through the state budget. This was the primary reason for forming the SoKo Hypo investigative unit, which is comprised of ten finance and economy experts. It could finally shed some light on the many suspicious business transactions carried out by the Hypo Alpe Adria bank, in which numerous influential Croatians, led by former Prime Minister Ivo Sanader, Ivic Pasalic and Vladimir Zagorec, were involved in various ways. The Austrian press has adopted a fitting abbreviation when reporting on the issue: K.u.K. - Kroatien und Korruption (Croatia & Corruption).

The dramatic unravelling of the Hypo Alpe Adria bank crisis in Austria has created an altogether new environment which could help Croatian authorities find money stolen from the funds gathered for Croatia's defence effort. As a result of huge losses investigations into the bank had been conducted previously, but the circumstances were somewhat different then. Informed financial circles in Austria confirmed for Nacional that there might have been some calculating during those investigations, proceeding with some reserve so as to not harm Austrian interests or the Hypo Alpe Adria bank's operations in Austria or Croatia for that matter.

An Austrian political source confirmed for Nacional that those circumstances are now different. It is expected that the investigating team will not calculate in the least in its investigation of any illicit activity, especially those pertaining to the bank's dealings with Croatia. This is best confirmed by last week's raid. The investigation being conducted by the Sonderkommando unit is into the activities of "Gunter Striedinger and others". Striedinger is accused of abuse of office to the detriment of the bank, as well as for various financial transgressions. The names of the others that the investigation encompasses are for now not being revealed, but there is no doubt that among them are, besides some of Striedinger's Austrian colleagues, very likely also some privileged recipients of loans in Croatia. As early as 2007 the Austrian authorities suspected Striedinger of laundering money with Vladimir Zagorec.

Striedinger was the individual who approved the bulk of Zagorec's multi-million euro loans for real estate projects in Croatia. The Croatian State Prosecutor's Office believes that Zagorec, thanks to his relationship with Striedinger, received 260 million euro in loans, which were used as cover for the laundering of money stolen from the defence effort, which had previously been transferred to Austrian accounts where it served as collateral for those loans. Striedinger always publicly maintained that Zagorec was approved loans solely on the basis of the quality of his projects in Croatia, but in the end failed to convince anyone of this.

Last week's surprise raid by the Sonderkommando unit in Austria could be of use in finally shedding some light on this secret as well. If these suspicions are well founded, the trail of these secret collateral payments could be revealed soon. It is especially interesting to note that the Croatian representatives who attended last week's meeting in Klagenfurt stated that they do not consider that the loans approved to Zagorec were necessarily risky for the Hypo bank, especially if it is revealed that they were covered by secret collateral, which was in fact money intended for Croatia's defence that wound up in secret Austrian accounts.

Likewise, it could be uncovered how and under what terms Miroslav Kutle was receiving loans from the bank, which could revive the oft-mentioned case of how Sanader received 700 thousand Deutsche Marks in the 1990s as a commission for allegedly intervening to ensure that the loan be approved for Kutle. It could also uncover some other carefully guarded secrets. All of this could cause serious tension among the once privileged Croatian clients of the Hypo bank.