Croatia’s leader resigns

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Croatian Prime Minister Ivo Sanader unexpectedly resigned Wednesday. The news shook Croatia’s political class to its very foundations.

Mr. Sanader ruled the small Balkan country with a heavy hand. Elected in 2003 and re-elected in 2007, he has transformed the former Yugoslav republic into a gangster state. He and the ruling Croatian Democratic Union (HDZ) gradually have dismantled the country’s fledgling democratic institutions.

Mr. Sanader’s regime has controlled much of the media, including state television and Croatia’s major newspapers. The few remaining independent voices and journalists have been systematically intimidated or murdered.

Taking a page from Russian strongman Vladimir Putin, Mr. Sanader has publicly - and privately - threatened journalists and businessmen who have denounced the regime’s cronyism and rampant corruption. Last fall, well-known publisher and journalist Ivo Pukanic was assassinated in a car-bombing. Other opposition journalists, editors and politicians have been killed, beaten or threatened.

One of the most prominent is Natasha Srdoc, the co-founder and president of the Adriatic Institute for Public Policy, Croatia’s finest independent policy institute. She dared to criticize Mr. Sanader’s assault on the rule of law, his unexplained wealth and his failure to carry out real economic reforms.

For this, Ms. Srdoc was subjected to threats and harassment from HDZ officials, and the government ordered an audit seeking to find out the Adriatic Institute’s activities, members and sources of funding.

Mr. Sanader’s most consequential - and disastrous - legacy is the massive corruption that has crippled Croatia’s economy. He and the HDZ elite have plundered the country’s public assets, enriching themselves through shady privatization deals, embezzlement of treasury funds and large-scale bribery.

There are more than 80 secret HDZ-held foreign bank accounts in Austria containing more than $500 million in stolen money. During his tenure, Mr. Sanader amassed a vast fortune - including illegally seizing lucrative personal properties, a swanky villa and a luxury watch collection worth more than $200,000.

The more money siphoned into Mr. Sanader’s pockets (and those of his cronies), the less there has been for schools, hospitals and roads. Ms. Srdoc estimates corruption has cost the Croatian taxpayers at least $1 billion - a significant amount in a country with a gross domestic product of just $23 billion. Moreover, the HDZ’s economic mismanagement has resulted in skyrocketing deficits, a crushing public debt, anemic growth, lack of foreign investment and confiscatory taxes that discourage entrepreneurship and job creation.

“We urgently need to deal with the unexplained wealth of high government officials by bringing visiting judges and prosecutors from nations with a strong rule-of-law tradition to work with Croatian judges and the reformers,” Ms. Srdoc said. “The absence of an independent judiciary and rampant political corruption in Croatia has blocked real reforms - and this void has provided fertile soil for organized crime to flourish. Effective economic and structural reforms would lead to the [corruption]-ridden HDZ loosening its political grip on the economy, judiciary and the media.”

Mr. Sanader claimed he was resigning for “personal reasons.” However, the Croatian media are speculating that his true motive may be to run as a candidate in presidential elections later this year.

The deeper reason is more sordid: He is a political failure and is jumping ship before Croatia crashes onto the economic rocks of the global recession. During the first quarter, the economy contracted by 6.7 percent. The tourism industry, the country’s main source of foreign currency, is moribund. Unemployment is rising. The possibility of massive labor strikes is growing. Croatia’s bid to enter the European Union by 2011 is stalled. This is partly because of a border dispute with neighboring Slovenia, but also because of the HDZ’s dismal economic record.

Vain, venal and volatile, Mr. Sanader used his office in the ruthless pursuit of power, wealth and self-interest. Having bled Croatia white, he is leaving office just before the corpse can be pronounced dead. This is not leadership; it is cowardice.

He betrayed almost every segment of Croatian society. His European Union fast-track policy failed and betrayed Croatia’s fishing and agricultural sectors. He failed to uphold the Croatian Catholic Church’s social teachings on life and gay marriage. He degraded Croatia’s democracy by allowing foreigners, such as German Chancellor Angela Merkel and former Irish Prime Minister Bertie Ahern, to meddle openly in Croatian elections.

He assaulted Croatia’s youth and struggling middle class by burying the country under a mountain of debt that will take generations to pay off. Finally, he was unfaithful to his country - and its proud veterans - in sending Gen. Ante Gotovina to The Hague war-crimes tribunal on trumped-up, bogus charges, which threaten to undermine the legitimacy of Croatia’s 1991 war for independence and its territorial integrity.

Mr. Sanader presented himself as a conservative patriot and economic modernizer. Instead, these were ideological veneers for an insular, authoritarian kleptocracy. Even his single accomplishment, Croatia’s entry into NATO, was ham-handed: The majority of the electorate opposed it.

Some states have a mafia; the Croatian mafia has a state. Under Mr. Sanader, the regime consolidated its links with the murky Balkan underworld of organized crime, nefarious entrepreneurs, shadowy intelligence services and the former communist nomenklatura. The result is a criminal state capitalism that privileges the ruling elite while exploiting and degrading most Croatians.

Mr. Sanader’s resignation should trigger not only early parliamentary elections, but an independent prosecution of his criminal activities. In America, Bernard Madoff was sentenced recently to 150 years in prison for defrauding investors. Mr. Sanader has defrauded Croatia’s taxpayers. He - and all of his accomplices - also should be sent to jail. That would be a fitting end to his disastrous tenure.

Jeffrey T. Kuhner is a columnist at The Washington Times and president of the Edmund Burke Institute, a Washington think tank.

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