Given the scope of the business done between Plinacro and CKT Zagreb, as vice-president of the supervisory board Drazen Bosnjakovic can hardly claim that he was not in the knowThe company Centre for Combined Transport of Zagreb (CKT Zagreb), in which future Croatian justice minister Drazen Bosnjakovic holds an ownership stake, earned some 42 million kuna over the past two years on jobs it was awarded by Plinacro, a state-owned gas distribution firm in which Bosnjakovic serves as vice-president of the supervisory board. Investigators with the State Attorney's Office and USKOK (Office for the Prevention of Corruption and Organized Crime) discovered this in the frame of an investigation, ongoing for weeks now at Plinacro, into alleged violations of the law in its affairs with the Fimi-media marketing company. So far, Bosnjakovic has only been one of the witnesses in the investigation, but given the new information it could turn out that he himself becomes a target of the investigation.

Based on information Nacional has, the State Attorney's Office could soon launch an investigation that would look into whether Bosnjakovic used his position at Plinacro to favour and secure contracts for a company in which he is a shareholder. The investigation could also be widened if currently unconfirmed information that the same company also works with HEP, another state-owned firm in which Bosnjakovic serves as a member of the supervisory board, is verified. In this context it is clear how the entire affair could prove to be very embarrassing for Drazen Bosnjakovic, who has been tapped to replace Ivan Simonovic at the post of justice minister in a few months time.

And while he owns only a minority stake of 2 percent of the company in question, duly registered in his declaration of assets, there is no doubt that his position in Plinacro represents a significant conflict of interest. According to his declaration of assets Bosnjakovic and his wife purchased the ownership stake in CKT Zagreb in 1993. They bought 180 shares, a 2 percent stake in the company's equity capital. It is unclear what the price of these shares was, as differing data is cited in two parts of the declaration of assets, so that in one version the shares were paid 10 thousand euro, and in another version twice as much.

But, regardless of the price, there is no doubt that it was a good investment given that the Centre for Combined Transport of Zagreb has over the past fifteen years grown into one of the most successful logistics companies in this part of Europe. The company is specialised in international freight forwarding and combined transport by rail and road, oriented towards industry, in particular the oil and gas sectors. Just over the past two years CKT Zagreb has earned revenues of 650 million kuna and 12 million kuna in profits. And while the company's entire ownership structure is not publicly known, the word is that the reticent businessman Ivan Stih, who serves as the president of the firm's supervisory board, holds the majority stake.

And it was to him, in fact, that Bosnjakovic transferred his shareholder management rights following his appointment to the post of State Secretary at the Justice Ministry. But, although he does not formally manage his shares, Bosnjakovic remains their owner, i.e. a stakeholder in the company. On the other hand, he was appointed to the supervisory board of Plinacro in 2008 by a decision of Government, i.e. of the Plinacro general assembly, whose sole member is Minister of Environmental Protection, Physical Planning and Construction, Marina Matulovic-Dropulic. He thereby gained the possibility of exercising direct control and of indirectly approving contracts worth millions that the state-owned firm closed with the company in which he was a minority stakeholder.

At issue concretely are for the most part contracts to transport imported steel pipes to various locations across Croatia at which Plinacro is building new gas pipelines. The total value of the contracts over the past two years is about 42 million kuna, and given that this is a significant sum Bosnjakovic can hardly claim that he was not informed of the business done between Plinacro and CKT Zagreb. What is more, it is to be presumed that he, as a member of the supervisory board, on several occasions gave his opinion on the reports submitted by management in which this business relationship was cited. That is why it is to be expected that the investigation will endeavour to ascertain whether Bosnjakovic in any way used his position to favour CKT Zagreb, i.e. whether Plinacro awarded the contracts to the company in line with existing legislation.

On the other hand, regardless of the outcome of the investigation, Bosnjakovic will be hard pressed to defend himself from accusations that he was in a significant conflict of interest. What is more, according to conflict of interest legislation the custodian of a state official's shares, in this case Stih, was obliged to notify Parliament's special conflict of interest commission before concluding every contract with Plinacro and seek its opinion. If it established that these deals were concluded without notifying the commission, Bosnjakovic's responsibility will be undeniably established.

He will also have to explain why he accepted a post on the supervisory board of a state-owned firm that is a major partner of a company he is an owner of, because as a lawyer and a state secretary at the Justice Ministry he must have known that his engagement in Plinacro was legally questionable. Had he done so, Bosnjakovic would have avoided a conflict of interest, and the move would also have been a logical one, because it is hard to fathom based on what grounds he was ever, as State Secretary for Justice, appointed to the supervisory board of an energy company like Plinacro.

Besides at Plinacro, Bosnjakovic is also a member of the supervisory board of electric power authority HEP, and it is not to hard to see that this 49-year-old lawyer from Ivanic Grad has made himself one of the most powerful figures on the Croatian energy scene. Bosnjakovic's intensive political rise started in 2008 when he was appointed State Secretary at the Ministry of Justice during Ana Lovrin's term as Minister. Prior to that, Bosnjakovic spent four years as a Member of Parliament for the HDZ (Croatian Democratic Union), and given his profession and the fact that he had many years of work experience as a lawyer, he quickly gained affirmation as one of the HDZ's leading legal and constitutional experts. Only a month after being appointed State Secretary, Bosnjakovic was appointed by Government to fill one of the five seats on a commission that was to have led the negotiations with Hungarian-based oil company MOL on a new shareholder's agreement at the Croatian oil company INA. The commission stopped meeting after a few session - the negotiations were entirely taken over by former Deputy Prime Minister Damir Polancec - but the testimony of its members, including that of Bosnjakovic, could prove crucial in the investigation into possible lawbreaking in the second round of the privatisation of INA.

BRANKO RADOSEVIC, the former Plinacro CEO, is under investigation by USKOK over the Fimi-media affair — the investigation revealed contracts between Plinacro and CKT ZagrebSix months later Bosnjakovic was appointed to the Plinacro supervisory board. He replaced Leo Begovic, State Secretary at the Economy Ministry at the post, which at the time was seen by experts as a big surprise, as it was customary that the Economy Ministry control the operations of energy companies. What is more, information surfaced behind the scenes that Plinacro was one of the top clients of Bosnjakovic's legal office in Ivanic Grad, and that he was well informed about the company's operations and a personal friend of then top man at Plinacro, Branko Radosevic.

But it was not long before Bosnjakovic and the other members of the supervisory board decided to sack Radosevic, who is currently under investigation by USKOK for contracts worth millions that he, under the veil of trade secrets, awarded to the Fimi-media marketing firm in direct deals without public tenders. Bosnjakovic could be a witness in the judicial proceedings. His rise to the top of the Croatian energy sector was completed in October of last year when he was appointed to the supervisory board of electric power authority HEP. This happened after the sacking of the company's management under Ivan Mravak, who was recently accused for millions in losses in illicit deals, and Bosnjakovic may wind up being exempt from testifying in the frame of the criminal investigation.

But along with the fact that he may appear as a witness in court in two major corruption cases, evidence that he is in a conflict of interest is a major blow to Bosnjakovic's ambitions to succeed Ivan Simonovic at the post of Justice Minister. The post is, namely, considered key in Croatian Government's intention to successfully wind up the accession negotiations with the European Union in the first quarter of next year.

The key condition for the completion of the negotiations in the chapter on the judiciary will be the evaluation of the member states of the European Union that Croatia is leading a successful war on corruption. It is hard to imagine this struggle being presented in Europe by a man facing allegations of a conflict of interest, and it is certain that Bosnjakovic, if the allegations are shown to be grounded, will lack the credibility to take on the ministerial appointment.

Given that there are not many lining up to take on the post it would certainly not suit Prime Minister Jadranka Kosor if things turn out that way at this juncture. The reason is understandable, as the length of the mandate is limited to the year and a half before the elections for Parliament, and the fact that this period if rife with hazards. The new minister risks being fingered as the person to blame if the negotiations with the EU slow down, while on the other hand, there is the danger that the credit for success would go to the former minister, Simonovic. In a nutshell, the post is all but appealing, with little to gain and plenty to lose, and it comes then as no surprise that there are not many pretenders to the post in the ruling coalition. In these circumstances Prime Minister Kosor, based on the recommendation of former Minister Simonovic, has opted for Bosnjakovic, counting on his experience at the Ministry, and the fact that he has spent almost his entire career in the judiciary. It was also felt that the fact that he has a relatively low public profile could be his advantage, given that he is not burdened by any skeletons in his closet. But the revelations concerning the operations of his company with Plinacro change this significantly and Drazen Bosnjakovic might find himself dismissed from the post of Justice Minister before even being officially appointed to it.