Serbia, France arrest arms smugglers

French security services and their Serbian counterpart, the Security-Information Agency (BIA), worked together to break up the ring, an official told B92.

By Beth Kampschror

The operation was conducted in cooperation with the Special Prosecution for Organized Crime and police arrested seven suspects in Čačak and Kraljevo, while three persons were arrested in Paris.

“Large amount of automatic weapons have also been seized, both in France and in our country,” BIA Director Chief of Staff Jovan Stojić stated.

Authorities didn’t give details about the types of weaponry or the number of pieces found. Three suspects were arrested in Paris Friday; seven suspects were arrested in the central Serbian towns of Cacak and Kraljevo. One day later, police arrested four more people in Serbia.

Also last week, the Saric case got a lot weirder: You might recall Darko Saric, a fugitive wanted for allegedly masterminding the shipment of two tons of cocaine from South America to the Balkans. (The BIA and the US DEA disrupted the shipment last autumn; Serbia has been seeking Saric ever since.) Mr. Saric, through his lawyer, is now suing the country of Serbia because of the statements made over the past year by various Serbian officials. B92 reported:

He is requesting RSD 10mn (US $124,000) from the government, his lawyer Zdenko Tomanović said, adding that statements made by state officials “violated the presumption of innocence“.

Tomanović has filed the lawsuit on his client's behalf over the statements made by President Boris Tadić, Justice Minister Snežana Malović, Interior Minister Ivica Dačić and State Secretary in the Justice Ministy Slobodan Homen.

“Representatives of the state authorities must not publically judge and, before the trial even begins, pronounce anyone guilty, including Darko Šarić,“ the lawyer stated.

Perhaps Saric could end this supposed defamation if he showed up for the trial of his alleged drugs gang, which is slated to begin in Belgrade on Sept. 20. Only 13 of the 20 people who’ve been indicted will be at the trial later this month, because Saric and six other suspects remain on the run.

Bulgaria, Romania warned again

The European Union (EU) on Monday issued what seems like a perennial warning to new members Bulgaria and Romania: Do more to fight crime and corruption, and do it now. EU ministers noted that both countries need to clean up their courts, for example. The ministers also insisted that Bulgaria needs tougher penalties for organized crime, and pointed out conflicts of interest among Romanian government officials. The BBC had the details:

At their meeting in Brussels on Monday, the EU ministers praised Bulgaria for having stepped up penal reforms and indictments for high-level corruption and organised crime.

But they complained of "important deficiencies" in court procedures and inadequate judicial follow-up of organised crime cases, recommending the use of dissuasive sanctions and asset forfeiture.

In Romania, they said new legal codes set to take effect in October 2011 "will provide an important opportunity for a thorough reform of the Romanian judicial system".

But the EU statement said "little effective progress has been achieved as regards the efficiency of the judicial process, consistency of jurisprudence and the accountability of the judiciary".

"Human resources remain a major challenge. A co-ordinated anti-corruption policy across the different sectors of government is missing. Substantial improvements are required in the field of conflict of interest" in Romania, it said.

The EU and its executive arm, the European Commission, have recently backed off the tough love they administered to Bulgaria in 2008 – the freezing of hundreds of millions of euros in aid to the country. Much of the money has since been unfrozen. Mild tongue-lashings like these, however, are par for the course.

International

Cold War icon John Le Carre has a new book out, and the story – which apparently involves a dodgy Russian who launders money for his criminal friends on a grand scale – has roots in fact. The Guardian talked to Le Carre and noted the similarities between his story and the ill-gotten money that likely saved the world during the financial crisis in 2008 and 2009:

Now here's another storyline. Leading banks around the world, desperate for cash in the financial crisis, turn to the proceeds of organized crime as "the only liquid investment capital" available, eventually absorbing the greater part of a staggering $352bn of drugs profits into the global economic system, laundering that vast sum in the process.

Sounds far-fetched, but that's no fiction. That tale was published in the Observer in December 2009, when the head of the UN Office on Drugs and Crime admitted that colossal piles of drugs money had kept the world financial system afloat when it looked dangerously close to collapse.

The story broke long after Le Carré had finished Our Kind of Traitor, but it confirmed everything the new novel is saying: that a huge slice of the global economy, as much as a fifth on some estimates, is made up of the fruits of organised crime; that the criminals behind that money have found a thousand ingenious ways to disguise its origins – and those we might expect to stand in the way, including reputable banks and elected politicians, instead help smooth its path out of the black economy and into the white.

And speaking of intriguing Russians who run international business empires, Asia Times reported last week that Russian oligarch Oleg Deripaska will be making presentations to big investors in New York and Boston soon, with one of his company’s major creditor banks – BNP Paribas – in tow. He’s apparently trying to convince anyone who holds shares in Russia’s largest mining concern that they should support Deripaska’s bid to take over the company. (For background on Deripaska’s bid for the company, Norilsk Nickel, click here.) No mention of whether Deripaska plans to show up in person.

Corruption news from parts east

The CEO of a company that’s building infrastructure for the 2014 Olympics in the Russian resort town of Sochi was fired last week in a corruption scandal. Ivan Kuznetsov, who headed the Transstroi construction company, was fired for allegedly stealing tens of millions of dollars in shareholders’ money.

Transstroi belongs to the holding company Basic Element, which is owned by Oleg Deripaska. Basic Element officials gave a few broad brushstrokes of the case to AFP:

The assets were stolen during the period when Kuznetsov held the CEO post, deputy chief executive of Basic Element, Andrei Elinson, told the Interfax news agency.

"Fake deals were signed with firms that were consequently closed by fake documents," he said.

"For example, there were deals for amounts highly exceeding market prices on the provided works and services. We have one agreement of a consulting nature worth 100-150 million rubles (3.3-4.9 million dollars)," he said.

The company is building a cargo port and part of a 15-kilometer bypass of Sochi in the runup to the 2014 Olympics.

Also in the neighborhood last week, Ukrainian President Viktor Yanukovych told his Regions Party that anyone involved in corruption in the country – no matter who it is – will face the music.

Yanukovych said that those involved in shadow tenders, land fraud, the embezzlement of state property and budgetary funds would be held accountable regardless of their party affiliation or political beliefs. "By law, a criminal will be definitely punished. Everybody should understand this," the president warned.