Op-Ed: Is This Mafia State Joining NATO?

By The Honorable Maurice McTigue, QSO; Natasha Srdoc; Joel Anand Samy; and Boris Divjak. April 25, 2014 at 3:54pm

U.S. Vice President Joe Biden met with Montenegro’s Prime Minister Milo Djukanovic in Washington, D.C., on April 8, 2014. The purpose was to address Montenegro’s interest in joining NATO.

The people of the Balkans depend on countries like America and officials like Biden to communicate to individuals like Djukanovic that corruption and international money laundering are major concerns, and that they expect to see measures put in place to stamp out this illegal activity.

As America has put enormous resources toward work to identify and prosecute those involved in money laundering, it expects its friends in the international community to help in this war against illicit transactions. Since 1995, Western taxpayers have sent over $100 billion in aid to Balkan nations.

Djukanovic’s leading role in Montenegro’s Communist Party (and its successor, the Democratic Party of Socialists) and his 20-year reign as president or prime minister of Montenegro are riddled with allegations of corruption, physical attacks on journalists, and ties to organized crime.

According to D.C.-based Global Financial Integrity, Montenegro’s $6.2 billion in illicit financial outflows (138 percent of GDP) via crime and corruption from 2001 to 2010 has hemorrhaged the economy. Around 40 percent of Montenegrin youth are unemployed.

Montenegro’s War on Journalists

Global media and anti-corruption groups continue to express concern over Montenegro’s unrelenting war on journalists.

The assassination of a media editor in 2004, the recent bomb explosion at print media outlet Vijesti on Dec. 26 of last year, beatings of journalists, and the brutal attack on Lidija Nikcevic of daily newspaper Dan (Today) in January 2014 demonstrate a disturbing pattern.

On Sept. 6, 2013, the Southeast European Times reported on Montenegro’s government being behind the attacks of critics: “A former member of the police’s special anti-terrorist unit told reporters on August 21st that his colleagues were involved in organized beatings of journalists, writers and opposition figures for years.”

A U.S. Embassy cable sent on July 3, 2007, describes in detail the reported illegal trafficking of drugs, arms and humans through Montenegro: “The ‘secret’ [Agency for National Security] register … said several groups in Montenegro that deal mainly in drugs and arms smuggling are connected with criminals from neighboring countries, Western Europe and South America.”

The Balkan Route

Montenegro lies on the Balkan Route. The route into Europe serves as a corridor for over $20 billion per year in heroin originating in Afghanistan and for the trafficking of drugs, arms, human beings and organs. Organized crime and corruption have fueled the Balkans’ illicit trade, financing terrorist groups including al-Qaida and Hezbollah.

The Carnegie Endowment’s Moises Naim calls Montenegro a “mafia state.” He explains, “In a mafia state, high government officials actually become integral players in, if not the leaders of, criminal enterprises, and the defense and promotion of those enterprises’ businesses become official priorities.”

Naim warns of mafia state officials “exploiting the money, muscle, political influence, and global connections of criminal syndicates to cement and expand their own power.”

Alleged Banking Corruption

According to the BBC, PricewaterhouseCoopers’s audit of Prva Banka, controlled by Djukanovic’s family, suggested “most of the money deposited at the bank came from public funds, while two thirds of the loans it made went to the Djukanovics and their close associates.”

According to a cable sent by former U.S. Ambassador to Montenegro Roderick Moore:

“Djukanovic himself owns just under three percent of shares in the prominent local bank, Prva Banka. His brother has a nearly 47 percent stake in the bank, and his sister has a one percent stake, giving the family controlling interest. Prva Banka was the only Montenegrin bank to benefit from a government bailout package (40 million Euros total) as a result of the global economic crisis.”

Based on research by the Organized Crime and Corruption Reporting Project published by the BBC, among the recipients of Prva Banka’s loans was Darko Saric, a convicted drug smuggler.

On March 18, 2014, “Balkan Cocaine King” Darko Saric, who allegedly possessed official Croatian, Serbian and Montenegrin passports, was arrested in Serbia. Canada’s government report on money laundering relays Serbian authorities’ claim that “Šarić used offshore companies to invest 100 million euros in Hypo Alpe Adria Group’s bank accounts, primarily located in Liechtenstein, between 2007 and 2009.”

In Italy, Bari prosecutor Giuseppe Scelsi accused Djukanovic of “having promoted, run, set up, and participated in a mafia-type association.” The Center for Public Integrity reported on the money trail reconstructed by Italian investigators: “From 1997 to 2000, the smugglers flew planeloads, literally, of banknotes in foreign currencies: 1.2 billion German Deutsche marks, 726,000 U.S. dollars, 136,000 Swiss Francs, and some 65,000 Austrian Shillings.”

Fifteen couriers flew 178 times from Montenegro to Cyprus. The monies were further distributed to pay some tobacco makers, “but the bulk of it allegedly disappeared in at least two obscure companies with accounts in Liechtenstein banks.”

The International Consortium of Investigative Journalists reported on seven murders surrounding the “Montenegro Connection,” which shocked even Italian investigators. Among those killed were Croatia’s editor of Nacional, Ivo Pukanic, and Dusko Jovanovic, editor of Dan. Both were witnesses against Djukanovic in Italy’s anti-mafia trial.

Principle, Not Political Expediency

The U.S. should take a leading role in verifying the implementation of defense, security and rule of law reforms as well as the establishment of an independent judiciary and a free press as a precondition for Montenegro to join NATO. These freedoms are required by NATO’s charter.

Strong rule of law nations must oppose the coexistence of organized crime and rampant corruption. These undermine freedom and human rights.

With unreformed Croatia and Albania having become NATO members, America’s taxpayers ought to be deeply troubled by another corrupt Balkan state joining the organization. Political expediency will weaken America’s economic and security interests.

Principled leadership is essential. The U.S. and NATO cannot stand up to Russia’s brazen encroachment and the mafia state model by lowering their own guard and removing the vital principles of the rule of law. Instead, they should implement the planned review of NATO’s members from post-communist Eastern Europe.

President Ronald Reagan’s resounding words are a reminder for today’s elected leaders: “Trust, but verify.”

The minimum requirement to preserving the alliance is fundamental: strengthening the rule of law and protecting individual liberty at home and abroad.

The Honorable Maurice McTigue, QSO is a former New Zealand Cabinet member and co-chair of the executive advisory board of the Adriatic Institute for Public Policy. Natasha Srdoc and Joel Anand Samy are co-founders of the Adriatic Institute for Public Policy and International Leaders Summit. Boris Divjak is a member of Transparency International in Berlin, co-founder of Transparency International Bosnia-Herzegovina, and a distinguished senior fellow at the Adriatic Institute for Public Policy.

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