Bosnia: The donation sieve

Bosnia has received, since the end of the war, more financial donations from foreign donors for reconstruction than was pumped into 18 Western European countries under the post-World War II external page Marshall Plan.

But in the case of Bosnia, the results of that major infusion of cash are less than clear. The misuse of foreign donations indirectly led to creation of some 50 wealthy businessmen, who before the war worked as fruit sellers in the outdoors markets, preachers, police officers, journalists, gas station workers and the like.   

In late January, the Bosnian Parliament agreed to form a commission to investigate the use of donations, credits and budget funds given to the Bosnian authorities by foreign donors for post-war reconstruction.

The purpose of the commission is to establish exactly how much money was donated to Bosnia and Herzegovina from 1996 to the present day, and how of that money was spent.

The newly formed commission - the third in 11 years - has until August this year to conclude the preliminary report. The commission's members hope to finish their work and to finalize the report on donations spending by that deadline. Furthermore, they will recommend measures to move forward and will name those involved in the misuse of donations and recommend their prosecution.

"If all donated money was used where it supposed to be, we would be like Switzerland now, but we are not. It is clear that a huge portion of the money disappeared and it is up to us to establish exactly how much was donated, how much was spent without authorization and finally to name the persons who took the money meant for our citizens," Commission President Sefer Halilovic, a wartime Bosnian Army general, told a press conference in Sarajevo.

Still, many doubt that the commission will be able to complete its task in an atmosphere of massive political pressure; many of the same politicians are still in office and have been so for the past decade. Even the formation of the commission, at Halilovic's initiative, was delayed for months because lawmakers from the Bosniak (Bosnian Muslim) ruling Party of Democratic Action (SDA) were against its establishment from the onset.

"I find the reason in that lack of political will because they know very well where that money went," Halilovic, leader of the opposition Bosnia-Herzegovina Patriotic Party (BPS), said, announcing that the commission's first move would be to send the data it had so far collected to the Prosecutor's Office and the State Investigation and Protection Agency (SIPA).

Sealed fate?

Experts believe that the new commission will meet the fate of its two predecessors, which were formed with the same goals and whose members, after finding and publishing their first evidence of the unauthorized use of donations were pressured, blackmailed, fired and, in some cases, victims of massive nervous breakdowns.  

No one knows for sure exactly how much international donation money was spent without authorization. One of the earlier commissions established that from 1996 to 2005, Bosnia received between €7 and €10 billion (US$8.8 billion), donated by Western European countries, the US, the UN, Muslim countries and various worldwide aid organizations.

The Bosnian Foreign Trade Ministry completed the same report in which it said that the country had received €7.5 billion in donations from foreign countries and organizations, but only €3.7 billion had been accounted for - meaning that the Bosnian government had proper paperwork for that amount only.

The first such commission to investigate the foreign donations and spending was formed in 1996, shortly after the war ended. The commission completed its work in late 1997. According to the commission's findings, in just one year, between 1996 and 1997, more than US$600 million in foreign donations were spent without authorization.

Stanko Sliskovic, the former president of that commission, said in a report (that has since disappeared mysteriously, with government institutions claiming they have no knowledge of its whereabouts) that the commission's work was never really completed. Half of the foreign donors failed to respond to the commission's request for certain documentation necessary to establish exactly how much money arrived in Bosnia between 1996 and 1997.

Sliskovic told ISN Security Watch that the commission's members were under constant pressure from government officials not to investigate the misuse of donations.

"We were asked by several senior government officials to announce that everything was fine, and that there was no corruption and that it will be fine for us. But we refused because we owed it to our poor people," Sliskovic said.

Asked by ISN Security Watch why he failed to go public with this information at the time, Sliskovic said that he "didn't have firm evidence for the official complaint and that those were turbulent and dangerous times."

As such, Sliskovic remains skeptical about the new commission, and does not believe
that Halilovic's commission will have any more success, especially since many of the
same politicians remain in government. Out of eight members of the commission,
Sliskovic said, only Halilovic and other two others were from opposition parties, while
five were from the ruling parties, and obstruction is to be expected.    
 
"After all, the commission is not an independent body but a political organization comprised of politicians who answer only to their parties and I don't believe that they will manage to achieve any results," Sliskovic said, stressing that members of the newly formed commission should expect various forms of pressure.

Indeed, one lawmaker, a member of the new commission who asked to remain anonymous, told ISN Security Watch that the day after he was appointed to the commission he received several phone calls from politicians, all members of the ruling nationalist coalition. They did not threaten him, the lawmaker said, but offered him some "friendly advice against digging to deeply [into the issue] because the commission would not achieve anything anyway."

The lawmaker refused to name names, calling them only "advisers," fearing the repercussions should they be named in the commission's eventual report as those involved in misusing the foreign donations. 

The second such commission, formed in 2003, took the task to another level, but was constantly obstructed by the parliament and government. The commission's work was shot down two years later when the first results on donation misuse were revealed.

The commission sent its preliminary report to the parliament, where it said that from 1996 until early 2005 Bosnia had received a total of €7.5 billion while its institutions registered only €3.5 billion.

Before issuing a final report, the commission recommended that the Bosnian parliament order the inspection of donation spending in all its agencies in an attempt to involve all relevant institutions, including police and the Prosecutor's Office. They also urged that the findings be published and accessible to the public and the donors.

However, this internet database intended to track all donations operated on a software program purchased by the Bosnian government from the United Nations Development Program (UNDP) for €920,000 in 1998. It appears that the program and the database is no longer available, nor is there any evidence that it was ever operational.

Furthermore, in what appears to have been a fatal move, the commission had asked parliament and government to secure some €150,000 in order to create a new database to track donations.

The commission's plan was to send an inquiry to relevant institutions and nongovernmental organizations (NGOs) that received the donations between 1996 and 2005. The same inquiry was to be sent to the donors. The gathered information would collected using a new software program worth some €92,000, which was to be donated by the Norwegian government.

However, the parliament responded by saying it had no jurisdiction to approve the cost of creating a new database and transferred the task to the government, which said it could not earmark the expenditures for the project. Under pressure from NGOs, the media and the public, government officials did eventually vow to find the money to finance the commission's project, but soon afterward the commission was disbanded by parliament and the issue dropped.        

"When I think about it now, at it was pretty much clear to me even then, transferring the task to the government represented a well thought out plan by the parliamentary majority to prevent the commission from collecting the information and presenting it to the public," a former member of the commission told ISN Security Watch on condition of anonymity.

The commission concluded that billions of euros intended for economic development and refugee returns ended up in the hands of some 50 politicians and businessmen. 

"After our two years work, followed by frequent pressure and obstruction, we concluded that billions of euros sent to Bosnia and Herzegovina for reconstruction, construction and development had disappeared into the pockets of government officials, mobsters and criminals," the commission source told ISN Security Watch.

Latent accountability

It is possible that regardless of the newest commission's findings, this time around, someone will be prosecuted for the massive donation misuse, and that those suspected of wrongdoing - particularly those still in power - may eventually face justice.

Though the reports from both previous commissions were delivered to parliament, they have never reached the police or Prosecutor's Office. And though the Bosnian State Prosecutor's Office says it is still waiting for the last commission's report, parliament claims that the report was not delivered because the commission never completed its work.

So far, the major suspects have managed to avoid the short-arm of the commission, while one scapegoat has been charged and indicted for unauthorized use of foreign donations. One local Roma leader form the central city of Zenica was charged with misuse of donation funds for selling wood stoves donated by a foreign aid organization to members of his community.