Saturday, 30 July 2022

Ex-Minister Released from Investigative Custody

ZAGREB, 30 July 2022 - Former HDZ minister Tomislav Tolušić, whom the European Public Prosecutor's Office (EPPO) suspects of misappropriating European funds to build a winery, was released from investigative custody on Friday.

Tolušić was released at the EPPO's request after all 16 witnesses who he could have tampered with were questioned.

The former minister was remanded in custody on 8 July, after he and Željko Ferenc, an employee at the Paying Agency for Agriculture, Fisheries and Rural Development, were arrested in Virovitica.

Ferenc was released from investigative custody on Thursday after having been previously suspended.

Following their arrest, the EPPO said, without revealing their identities, that Tolušić, as an owner of a family-run farm, submitted an application for a project for the construction and equipment of a winery, worth HRK 4.65 million, with the Paying Agency for Agriculture, Fisheries and Rural Development in early May 2020, and that the level of co-financing with European funds was 70%.

In the application, Tolušić falsely stated that the financing of the project would be secured with a loan from a financial institution. However, he did not apply for a loan, and he financed the project with money whose legal origin cannot be proved, the prosecutor's office said.

Moreover, he did not inform the agency about the change in the financing, and was granted HRK 2.92 million in aid.

Tolušić applied to another tender, advertised by the agency on 2 June 2021 for the construction of new vineyards and the reconstruction of existing ones.

For the second application, Tolušić reportedly incited Ferenc to give a positive opinion on his application for the grant, although the application falsely stated that the piece of land in question had no crops planted in it, when in fact he had previously planted a vineyard there.

However, the Ministry of Agriculture and the Croatian Agency for Agriculture and Food refused to issue a positive opinion on the submitted technological project due to knowledge of the existence of a vineyard already planted there and due to other observed irregularities, the EPPO said.

After the rejection, Tolušić removed the grapevine that had been planted, obtained a new technological project and submitted it with the application.

He expected to receive a grant of HRK 1.5 million, with 85% being co-financed by EU funds, that is, more than HRK 1.3 million. However, the agency established that he did not meet the conditions, so the funding was not granted, the EPPO said.

For more, check out our politics section.

Thursday, 14 July 2022

Božinović: We Are Prepared For Wildfire Season

ZAGREB, 14 July 2022 - Interior Minister Davor Božinović said on Thursday that we were ready for the wildfire season and the services did a good job at the site of Wdnesday's wildfire near Šibenik.

"We were prepared for the wildfire season and services did a good job. We have to be aware that climate change is the main change that is occurring and will continue in the years to come."

Božinović underscored that the Mediterranean, along with California, is one of the world's two biggest hotspots when it comes to global warming.

Speaking about the wildfires that hit the Šibenik area on Wednesday, Božinović said that forces in the Šibenik and Vodice hinterland gradually increased, depending on how the situation developed, primarily due to unexpected changes in wind directions.

The minister specified that a total of 350 firefighters were engaged on Wednesday, mostly from Šibenik-Knin County, and half of them from six other counties, as well as 50 members of the Croatian Army and 75 police officers.

Asked how many fire-fighting aircraft Croatia has at its disposal, Božinović replied that there are currently four Canadair planes and three air-tractors available.

"By 23 July, we will have one more air-tractor, and by 30 July, one more air-tractor and one Canadair aircraft." This means that as of 1 August, Croatia should have five Canadairs and five air-tractors at its disposal. Another Canadair, which is being overhauled, should be ready by the end of the year,'' he specified.

Božinović on EPPO action: I encourage the institutions to protect the interests of Croatia and the EU

Asked to comment on the latest action by the European Public Prosecutor's Office (EPPO) and the PNUSKOK - police anti-corruption office regarding alleged bribes and the rigging of the tender process for the extension and reconstruction of the wastewater treatment plant in Varaždin, Božinović said that all institutions have a free hand in enforcing the law.

For more, check out our politics section.

Monday, 11 July 2022

EPPO's First Croatian Indictee Makes Plea Deal

ZAGREB, 11 July 2022 - The first indictee of the European Public Prosecutor’s Office (EPPO) in Croatia, Danijel Vinković, on Monday pleaded guilty to subsidy fraud worth €1 million, settling for a ten-month prison sentence which was replaced with community service.

The Zagreb County Court was to have decided today on the EPPO's indictment against Vinković, who pleaded guilty before the indictment panel and reaching an agreement with the prosecution, Hina learned at the court.

The businessman from Međimurje was charged with applying to the Paying Agency for Agriculture, Fisheries and Rural Development for a HRK 7.4 million grant in 2020. Of that amount, 85% was from the European Agricultural Fund for Rural Development and the rest from the Croatian state budget.

According to the EPPO's indictment, Vinković falsified documents on his eligibility for the aid. His application was rejected because the Paying Agency noticed that he did not meet the eligibility criteria.

The Paying Agency said earlier it paid HRK 176,435 in direct aid to Vinković from 2018 to March 2021 and HRK 3.9 million to his father from 2012 to May this year for farming equipment.

Vinković was indicted this past May and the trial was held at the Zagreb County Court which, under the law, is the only court in Croatia with jurisdiction over trials initiated by the EPPO.

(€1 = HRK 7.5)

For more, check out our politics section.

Thursday, 7 July 2022

Ex-Minister, State Employee Behind Bars Awaiting Interrogation by EPPO

ZAGREB, 7 July 2022 - Former agriculture minister Tomislav Tolušić and Željko Ferenc, an employee of the Paying Agency for Agriculture, who were arrested on Thursday on suspicion of subsidy fraud and abuse of office in two wine sector tenders, are to be interrogated by European investigators.

Tolušić and Ferenc, who were apprehended in their homes in the eastern Croatian city of Virovitica on a warrant issued by the European Public Prosecutor's Office (EPPO), have been transferred to Zagreb for questioning.

A Zagreb County Court investigating judge will decide on their detention if the European investigators make such a request.

Media outlets say that Tolušić was granted HRK 2.5 million in aid for his winery project under the EU scheme in which half of the sum is covered by the non-repayable grant and the other half is provided by the business concerned.

However, it has turned out that Tolušić's putative sum of another HRK 2.5 million did not exist and that he provided false evidence to show that he met the requirements for the grant.

Tolušić reportedly incited Ferenc to give a positive opinion on his application for the grant, although the application falsely stated that the piece of land in question had no crops planted in it, when in fact he had previously planted a vineyard there.

For more, check out our politics section.

Wednesday, 25 May 2022

European Public Prosecutor's Office Indicts Ten Croatians for Bribery

ZAGREB, 25 May 2022 - The European Public Prosecutor's Office (EPPO) has indicted ten Croatians, including the Mayor of Nova Gradiška, Vinko Grgić, former Velika Gorica mayor Dražen Barišić and entrepreneur Krešo Petek.

The EPPO reported that the indictment was filed after an investigation of active and passive corruption and abuse of office between 2018 and 2021.

All four cases are related to construction projects with a total value of €22.6 million and the damage to the EU budget was largely prevented thanks to the efficacy of the investigators, the EPPO said in a statement.

Corruption in Nova Gradiška

Mayor Grgić is being charged with accepting two bribes amounting to €15,000 from the first accused Krešo Petek in order to secure the assignment of two construction projects.

The two projects were for a recycling centre and a solar power plant. The first project was valued at €900,000, of which the amount of €562,000 was financed by the European Union Cohesion Fund, and the value of the second project was €700,000, of which 85% was funded by the European Regional Development Fund.

Three other suspects were involved in these two corruption cases by helping Grgić and Petek in giving the bribes, abusing their office, and illegal favouritism in public procurement.

The recycling project was then awarded to companies connected to Petek who paid Grgić the agreed amount of the bribe.

This meant that the European Cohesion Fund was defrauded of €53,000 and the Town of Nova Gradiška of €32,500. 

The solar power plant project was not awarded as Petek and the others accused had already been arrested.

Abuse of office in Velika Gorica

Petek is also accused of arranging with former Velika Gorica mayor Barišić for the construction of a wastewater treatment plant and a supervisory management system as well as for the renovation of the public lighting system to be awarded to his companies.

The estimated value for the wastewater treatment plant project was €14 million, of which the European Union Cohesion Fund financed 67.34%. The value of the renovation project of the public lighting system was €7 million and it was co-financed by the European Regional Development Fund.

In these two cases, too, there were three accomplices who helped Barišić in abusing office and influence-peddling in public procurement procedures.

In both projects, although all necessary steps were taken in the public procurement process to select the companies connected to Petek, decisions to that effect were not made due to the arrest of all five accused persons, the EPPO reported.

For more, make sure to check out our dedicated business section.

Thursday, 11 November 2021

EPPO Accuses Ex-Minister, Agency’s Head, 2 Entrepreneurs of Embezzling €1.8M

ZAGREB, 11 Nov, 2021 - The European Public Prosecutor’s Office (EPPO) has launched a probe and proposed pre-trial detention against four suspects in Croatia: a former minister Gabriela Žalac, the SAFU Agency's director and two businessmen on suspicion that they embezzled €1.8 million from the EU and Croatian budgets.

The EPPO issued a statement on the matter on Thursday without revealing the identity of the four suspects.

The statement reads that the EPPO "has initiated an investigation against four Croatian citizens, as well as two companies, for the criminal offences of trading in influence and the abuse of office and official authority."

Among the suspects are the former minister of the Ministry of Regional Development and EU Funds (MRRFEU) and the Director of Croatia’s Central Finance and Contracting Agency (SAFU), Tomislav Petric and the businessmen Marko Jukić and Mladen Šimunac.

All four suspects were arrested on Wednesday at the request of the EPPO.

Based on the results of the preliminary investigative activities, carried out in cooperation with the European Anti-Fraud Office (OLAF), the Croatian National Police Office for the Suppression of Corruption and Organised Crime and the Independent Financial Investigation Sector of the Tax Administration of the Croatian Ministry of Finance, the EPPO has now officially initiated an investigation.

The Croatian police specify that the former minister is suspected of abuse of office and influence peddling, SAFU director Petric of abuse of office while the businessmen Šimunac and Jukić are suspected of having encouraged the office-holders to commit wrongdoings.

EPPO says in its press release that "it is alleged that the first suspect, in her joint capacity as Minister of the MRRFEU and President of the Governing Board of the SAFU, took actions aimed at ensuring a privileged position for the second and the third suspects, as well as the companies linked to them."

"These activities occurred in 2017 and 2018, in the process of the public procurement of an information system for strategic planning and development management. During this time, the former minister was responsible for both the lawful conduct of public procurement procedures at the MRRFEU, and for proposing the appointment and relieving of duties of the Director of the SAFU. "

Adjusting ministry's procurement plan to benefit suspects

"The privileged position of the second and the third suspects was ensured by: adjusting the MRRFEU Procurement Plans for 2017 and 2018 to benefit the second and third suspects and the companies linked to them; inflating the estimated value of the procurement of that information system; changing the type and manner of procurement; and adjusting the technical specifications of the software required for the MRRFEU’s purposes to the software that the suspects and their companies had at their disposal.

The former minister decided that the MRRFEU would make this purchase at a price much higher than the market price for the development of software with such technical specifications and functionalities.

It is alleged that, in order to carry out what was agreed, the former minister first decided, in 2017, to conduct a negotiated procurement procedure without prior publication of a public invitation to tender, with an overestimated procurement value of HRK 9,860,000.00 (EUR +/- 1.31 million); and in that process, the companies linked to the second suspect were invited to submit their bids.

"In order to ensure the continuation of the negotiated procurement procedure without prior publication of a public invitation to tender, and by using her joint authority as Minister of the MRRFEU and President of the Governing Board of the SAFU, the former minister requested that the fourth suspect, the Director of the SAFU (the agency responsible for the ex-ante control of EU-funded MRRFEU public procurement procedures) made sure that the SAFU, in the ex-ante control of the documentation of the procurement of software licences unduly estimated at HRK 9,860,000.00, did not dispute the negotiated procurement procedure."

As this request came from the President of the SAFU and the minister who was in a position to propose, to the Croatian government, the appointment and relieving of his duties, the director agreed, and instructed the SAFU administrative and professional services to be as lenient as possible in their comments referring to the procurement documentation.

"When, in October 2017, the Croatian State Commission for the Supervision of Public Procurement Procedures annulled the public procurement procedure due to the breach of the law on public procurement, the former minister and the second suspect continued, in 2018, to take action to award the contract to the companies of the second suspect.

"Finally, after having conducted an open public procurement procedure, the MRRFEU concluded a purchase contract for this information system with the companies linked to the third suspect, a business partner of the second suspect, with the price unrealistically set at HRK 12,991,000.00 (EUR 1.73 million) – although the realistic price of that system would have been approximately HRK 2,000,000.00 (EUR 265,000). "

As much as 85% of the procurement of that software was financed by the EU’s Operational Programme Competitiveness and Cohesion grant.

"The above amount, inclusive of VAT (HRK 16,238,750.00 in total, or EUR 2.16 million), was paid to the account of the company of the third suspect, after which a part of the money was transferred to the accounts of the companies of the second and third suspect, and a part was withdrawn in cash."

The EPPO concluded that "In the end, the financial interests of the European Union and the Republic of Croatia were damaged by the total amount of EUR 1.8 million."

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