SOCIETAL CAPTURE I: USKOK and the County court of Zagreb allowed Bandić, Ljubičić and Pripuz to continue their lucrative business and 50 million HRK of income despite the spectacle arrests
Translation: Fairpress
Authors: M. Podumljak, A. Hećimović
Zagreb Holding continued to contract C.I.O.S. and its affiliated companies even after the spectacular arrests and the indictment against all responsible persons in the City of Zagreb, Zagreb Holding and C.I.O.S. and in a significantly greater value than in the case before they were arrested.

To recall, at the moment of the arrest USKOK issued official statement: “after a months-long complex criminal investigation regarding illegal actions in the City of Zagreb and Zagreb Holding which was conducted by the General Police Directorate and the Police National Office for the Suppression of Corruption and Organised Crime (PNUSKOK), and which was coordinated by the State Attorney’s Office of the Republic of Croatia and USKOK”, on 20 October 2014 Mayor of Zagreb Milan Bandić, president of the Management Board of Zagreb Holding Slobodan Ljubičić and president of the Management Board of C.I.O.S. Petar Pripuz were arrested along with additional thirteen people from the City Administrative Bodies of the City of Zagreb. Among other things, Bandić and Ljubičić were charged with favouring Petar Pripuz’s company C.I.O.S. related to waste disposal and thus impairing the City for 2 million HRK.

According to USKOK’s indictment from 11 December 2015, Mayor Milan Bandić and Slobodan Ljubičić, who was at the time president of the Management Board of the company Zagreb Holding (a company owned by the City of Zagreb), in abusing their position and influence which they formally had in the management bodies of the City of Zagreb and Zagreb Holding, they favoured the company CE-ZA-R, owned by the C.I.O.S. group, of which the Management Board president is Petar Pripuz; thus the C.I.O.S. group acquired unlawful material gain in the amount of 2.006.294,09 HRK, from which the CE-ZA-R company acquired unlawful material gain in the amount of 1.270.828,07 HRK. On that occasion the company Gradska Čistoća, owned by Zagreb Holding and thus also owned by the City of Zagreb, suffered damages in the amount of 2.006.294,09 HRK, as USKOK states.

Although in normal societies a corruption scandal usually ends with the arrest of the suspects, it seems that in this case it just began. Namely, at the moment in which USKOK was still writing the indictment against the suspects (about 6 months after the arrest), according to the data in the public procurement database Integrityobservers.eu, Zagreb Holding concluded three more public procurement contracts for waste treatment with the member of the C.I.O.S. group in a total value of 21.946.875,00 HRK!

According to the integrityobservers.eu data, the first contract registered under number N-3/15, was concluded on 8 May 2015 for “Waste treatment services KB 20 03 07, bulky waste via recycling processes R1-R12” in total final value of 16.5 million HRK. The second (N-7/15) and third (N-6/15) contract were concluded on the same day, 13 July 2015. The first one is related to services of “Waste treatment KB 20 03 03, remains of cleaning the streets via recycling processes R1-R12” and its value is 2.81 million HRK, and the second one is in the value of 2.63 million HRK for services of “Waste treatment KB 20 02 03, other non-biodegradable waste via recycling processes R1-R12”. All of the contracts were concluded with the company CE-ZA-R.

Encouraged by the sluggishness of the indictment process before the County court, on 16 November 2015, not even a full month before the indictment raised by USKOK, according to the integrityobservers.eu data, Zagreb Holding concluded a framework agreement with multiple tenderers for a period of two years (N-OS-129/15) titled – Waste treatment KB 20 01 38, wood not containing hazardous substances via recycling processes R1-R12.

The framework agreement was concluded with two companies – the company MULL-TRANS Ltd of a total value of 17.968.750,00 HRK, and with the already familiar company from the beginning of the article, CE-ZA-R of a total value of 18.437.500.00 HRK. The framework agreement is particularly strange because it was concluded with two companies which creates the impression of a competition, but the two companies essentially belong to the same owner group.

Namely, the company MULL TRANS d.o.o. (Ltd) from Oroslavlje is owned by the company EKO-FLOR, which is, again, owned by the C.I.O.S. group (via the company Depos). So, in this case C.I.O.S. competed against itself and got both contracts, i.e. framework agreements. Although this fact alone is enough to suspect a cartel association, which is prohibited by law, and to which the competent institutions obviously didn’t react to, it is necessary to draw attention to a serious problem of the judiciary in this case.

The Public Procurement Act prohibits the participation in public procurement procedures of economic operators (companies) against which there is a final judgment from the jurisdiction of USKOK. The stated action is carried out by “proof of the tenderer’s competence”, i.e. statement of non-existence of reasons for exclusion at the beginning of the procedure (tender submission), and by the corresponding certificate that the subject wasn’t finally convicted before the contracting process. In this case, the companies owned by the C.I.O.S. group, as well as the person responsible could’ve acquired the above stated certificate thanks to the fact that not only was there no final judgment at the time the procurement was being contracted, in fact the indictment wasn’t even confirmed before the court (County court of Zagreb) at the time of concluding the stated contracts/framework agreements. Since the contracts are very similar to the ones for which the aforementioned actors were spectacularly arrested in 2014, a justified question is being raised as to whether these contracts were also included in the investigation, considering that they are very similar contracts to the ones which were described as a criminal offence in the previous case!? Namely, seeing as not even two years after the indictment by USKOK, and three years from the spectacular arrest, the indictment still hasn’t been confirmed before the County court of Zagreb, there is a real possibility of “prolonging” the stated framework agreements in the same value before the confirmation of the indictment at the County court of Zagreb; by this we will be forced to pay the C.I.O.S. group for services despite the indictment and/or possible court procedure. While we’re waiting for responses from the competent institutions, the citizens are left to think about whether their 50 million HRK was spent in the best possible way or not. To be continued!

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