Hrvoje Polan/AFP/Getty Images

Former Croatian prime minister Ivo Sanader at the Jasenovac Memorial Area, where, in April 2005, he gave a speech expressing regrets to the Serbian, Jewish, Roma, and Croatian victims of the mass killings carried out by the Ustasha during World War II. He was arrested on charges of corruption in December 2010 and is awaiting trial.

December 2010 was the stormiest month in Croatian public life since the war in Croatia and Bosnia ended fifteen years ago. Former prime minister Ivo Sanader learned on the morning of December 9 that judicial proceedings had been launched against him for major acts of corruption and that his parliamentary immunity would be revoked. He fled to Slovenia that afternoon and disappeared completely for twenty-four hours. The Croatian Ministry of Internal Affairs immediately issued an international arrest warrant for him. There were rumors that Sanader intended to fly from Munich to the United States, but the US government revoked his visa. The Austrian police arrested him on a highway not far from Salzburg in the early afternoon of December 10 and took him to a jail in Salzburg. There during Christmas and New Year’s he shared a cell with a notorious international swindler.

How had this happened? Sanader was a rising star in Croatian and European politics. For nine years he had been the president of Croatia’s strongest right-wing party, the Croatian Democratic Union, becoming prime minister in 2003. At one time opinion polls showed him to be the most popular Croatian politician, although he usually ranked behind the president, Stjepan Mesić.

Fluent in four European languages, Sanader was also a favorite among delegates to the European Parliament in Brussels and especially among the leaders of the international European Peoples’ Party, an alliance of center-right political parties from thirty-nine European countries. The heads of four member parties, Angela Merkel, Kostas Karamanlis, Bertie Ahern, and Jean-Claude Juncker, who at that time were the prime ministers of their respective countries—Germany, Greece, Ireland, and Luxembourg—went so far as to appear in a two-minute commercial that ran on television several times a day during Croatia’s parliamentary elections in 2007. They called Sanader “a great statesman” who had “done great things for Croatia,” is “esteemed in Europe and has great influence,” and “is our friend.”

In November 2010, when Sanader sent a desperate letter to these same leaders asking for help because he was being “subjected to political persecution,” not one of them responded. Then on May 9, 2011, a court in Salzburg accepted the Croatian government’s request for Sanader’s extradition to Croatia. However, the legal proceedings for his extradition will probably last several months to a year. Public expectation here is now very high that Sanader’s trial will take place in an open court in which a senior government official will reveal details about the scale and extent of official corruption in the country.

The explanation for Sanader’s fall lies in deeply embedded political traditions of southeastern Europe. Here corruption has a long history as an integral part of government administration. The novelist Ivo Andrić described in detail how corruption worked in Bosnia and other South Slav countries under the four-hundred-year rule of the Ottoman Empire: people knew exactly whom to pay, how much to pay, and what result would be achieved by paying. In the other South Slav countries that were under Austrian, Hungarian, or Venetian rule until the twentieth century—Slovenia, Croatia, and Dalmatia—bribery was considerably less widespread, but corruption in the form of conferred privileges and payoffs from official funds was more sophisticated. It was very much the same in the Kingdom of Yugoslavia between 1918 and 1941. Under the fascist and collaborationist regimes during World War II, corruption rapidly developed in all forms and at all levels. In more fortunate cases, bribery sometimes even saved lives. For example, half of the Alexander family, the wealthiest Jewish family in Zagreb, managed to obtain passports and go to Switzerland, where they survived the Holocaust.

In Communist Yugoslavia private businesses and ownership were reduced to a minimum and the accumulation of great wealth was not possible, but corruption became important throughout society. To its faithful officials, the ruling Communist Party granted better-paid jobs and numerous other privileges, which provided social power and such advantages as better housing. These privileges were not permanent, however, not even for Tito himself, and they could not be inherited. They were provisional compensation for loyalty or obedience that could be revoked at any moment. The best-known Yugoslav Communist dissident, Milovan Djilas, described this system of corruption in detail in his book The New Class and other writings, for which he was sentenced to prison.

Although Yugoslav communism under Tito’s regime was more bearable and to some extent more economically successful than the variants in countries occupied and dominated by the Soviet Union, its unique form of Party privilege undermined social life and contributed to the failure and dissolution of the country. Small-time opportunists and careerists had much success and those with independent ideas had a hard time surviving. After Tito’s death in 1980, and certainly as communism in general began to crumble in 1988 and 1989, there were no longer any leaders at the head of multinational Yugoslavia who could carry out a peaceful transition to a multiparty democracy. The unscrupulous and combative Slobodan Milošević, who in 1987 took complete control of the Serbian Communist Party and government, exploited an extreme form of Serbian nationalist sentiment in an attempt to impose a dictatorial regime on all of Yugoslavia. His actions encouraged separatist tendencies and extreme nationalism in the non-Serb populations of Yugoslavia.


When the process of secession started and Franjo Tudjman came to power in 1990, he instituted a policy of discrimination against Croatia’s ethnic Serbs, 12% of whom declared themselves as Serbs and more than 6% as Yugoslavs. Serbian judges were dismissed and Serbian TV journalists were fired. Serbs became even more concerned when the new Croatian constitution changed their legal status from a “constitutive nationality” as in the previous Yugoslav constitution to an “ethnic minority.”

Such events allowed Milošević to justify further aggressive action by claiming that he was defending Serbs in Croatia. Encouraged by Milošević, ethnic Serbs formed a separate state on Croatian territory and in 1991 war broke out between Croats and Serbs. It quickly spread to Bosnia and Herzegovina, where Serbs fought Bosnians and Croats, Croats fought Serbs and later Bosnians, and the Bosnians were forced to fight each of the other two. The consequences were catastrophic: members of all three nationalities were expelled from territories occupied or taken over by either of the other two, and there was a mass expulsion and exodus of Serbs from Croatia in 1995. The war ended with the Dayton Agreement of November 1995, an imperfect document that has served its immediate purpose to stop the fighting and to establish a constitution for Bosnia and Herzegovina, but that has not resolved the country’s long-term problems of ethnic coexistence.

The epilogue was the war in Kosovo and the bombing of Belgrade by NATO in 1999, followed a year later by the arrest and extradition of Milošević to the International Criminal Tribunal for the Former Yugoslavia, in The Hague, where he died during his detention. From these wars seven more or less devastated small countries emerged—Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Macedonia, Montenegro, and Kosovo.

Many of the troubles in Croatia today have their roots in the time of Franjo Tudjman, the first president of the independent Republic of Croatia that emerged in 1991 with a population of some 4.7 million people. During World War II he was a passionate Communist, fighting for four years in the ranks of the partisans and ascending to the Ministry of Defense and the General Staff of the Yugoslav Peoples’ Army (JNA) in Belgrade, where he became in 1960 the country’s youngest major general as well as a senior Party official inside the army. Stung by the pointed jests of his fellow army officers, who downplayed the role of Croatian partisans in winning the war, he became more nationalist during his last years in Belgrade and more willing to defend the accomplishments of Croatian partisans in his historical writings. Leading military historians and Montenegrin and Serbian generals complained with reason that his articles exaggerated the role of the Croatian partisans during World War II and diminished the contributions of the other peoples of Yugoslavia. Tudjman left the army in 1961 and moved from Belgrade to Zagreb, the Croatian capital, where he became director of the Institute of Croatian History. During a discussion there about a book that I had coauthored, I heard him very energetically put forth his guiding principle: “Of course one should write the truth, but only when it is not contrary to the national interest.”

In his nationalist writings Tudjman was very bold in criticizing the centralization of political power in Belgrade and calling for greater Croatian autonomy within Yugoslavia. Several times he crossed the boundary of what could and couldn’t be said under the Communist regime. In 1972 and in 1981 he was convicted of “subversive activities” and “spreading enemy propaganda,” and spent a total of three years in prison. He acquired the reputation of a courageous political dissident and a consistent fighter for Croatian rights. With this reputation and his intense ambition, and with weak competition, he won the first free election for president in 1990.

Tudjman’s wartime experience and military education helped him to lead the country successfully in the wars of secession, but his years spent in a party organized on Bolshevik principles and a military-style hierarchy left him unprepared for democracy. With his authoritarian tendencies and military and Party upbringing, Tudjman retained to the end a Bolshevik mentality; the first constitution of independent Croatia, adopted in the fall of 1990, was tailored to his wishes. The president of the republic was granted enormous authority. From the very beginning, Tudjman organized the government in two tracks—an institutional one and an extra-institutional one. A very peculiar system of corruption emerged in Croatia, coordinated from the top of the state.


In the first track, free elections with rival competing parties were routinely held, mostly with due respect to democratic process. The public was to some extent free to discuss issues and to voice political criticisms. There were some independent newspapers, although television remained under government control. Nevertheless, Croatia seemed, at least, to be a newborn democracy with all of the usual problems, including the need for many of the institutions of a civil society, particularly citizen groups concerned to limit authoritarian power.

In the other, extra-institutional track, Tudjman ruled as a dictator. When state property was privatized and denationalized, Tudjman and his close associates could decide who would get what and on what terms. By handing out land and properties, he ensured the fidelity of key officials, whom he had appointed and placed throughout government according to his will and needs. They were mainly trusted members of Tudjman’s own Croatian Democratic Union (HDZ), which was organized on hierarchical lines, with strict party discipline, very much like the organization of the Communist Party when it was in power. Many of its leading members became extremely rich, and many tycoons were created within a few years.


Nikola Solic/Reuters

Croatian President Franjo Tudjman at a military parade with his son and intelligence chief Miroslav Tudjman, Zagreb, May 1997

In addition, Tudjman directly paid people from other political parties to join the HDZ, or to do it favors. Croatian nationalists from the “diaspora” sent large sums of money, which Tudjman and his closest collaborator, Minister of Defense Gojko Šušak, drew on partly for their own political activities. Some of the “ethnic cleansing” and expansionist military operations against Bosnia and Herzegovina in the early 1990s were directed or covered up by means of this extra-institutional track. Those guilty of war crimes were not punished. If investigations were initiated, Tudjman’s unofficial system found ways to halt them and quietly remove the suspects and reassign them to less prominent positions.

Tudjman explained and justified his actions with nationalist rhetoric and historical mythomania. While the war in Croatia and in Bosnia lasted, a good portion of the Croatian public supported Tudjman as a successful military leader. The aggressively nationalistic mood began to subside in 1995, when the war ended and Croatian voters changed their priorities. According to polls and to experienced political observers, more citizens now wanted a democratic state, the rule of law, and economic improvement. Tudjman died in December 1999; just three weeks after his death his party suffered a major defeat in parliamentary elections for the first time.

In contrast to Tudjman, his successor as head of the HDZ, Ivo Sanader, was neither a former member of the Communist Party nor a hard-core nationalist. He was born in Split in 1953 into a strongly Catholic working-class family of modest means. With the assistance of the Church, Sanader was educated in Split, Rome, and Innsbruck, where he obtained his Ph.D. in 1982 in Romance languages with a dissertation on Jean Anouilh. In 1989, he joined Tudjman’s HDZ. He was introduced to Tudjman in 1991 and became director of the theater in Split. In 1992, Tudjman invited him to come to Zagreb, where he served as the deputy minister of foreign affairs and as Tudjman’s chief of staff for about eighteen months.

As president of the HDZ after Tudjman’s death, Sanader led the party in opposition for four years. His chief opponents were the Social Democrats led by Ivica Racˇan. In the 2003 parliamentary elections, Sanader led the HDZ to victory and a return to power. Ivica Racˇan had disappointed voters with his party’s indecisiveness and delay in introducing necessary reforms. As the newly elected prime minister, Sanader became the most powerful man in the government because constitutional reforms had in the meantime considerably reduced the powers of the president that Tudjman had so abused.

Sanader’s first public appearance as prime minister—January 6, 2004, Orthodox Christmas Eve—was spectacular. About a hundred guests were gathered in Zagreb at the customary celebration at Prosvjeta, the main Serbian cultural society in Croatia. The new prime minister arrived unannounced, with several of his closest advisers. He took the microphone and, speaking without a prepared text or notes, gave a short speech on the need for reconciliation between Orthodox and Catholics, Serbs and Croats. He concluded the speech with the customary Orthodox greeting, “Peace be to you, Christ is born.”

In the small room everyone simply held their breath, and then there was a roar of surprise, excitement, and approval. Everyone present felt that a moment had occurred that would be long remembered. For the first time after the interethnic war a leading Croatian politician, and a professed Catholic and the president of a Croatian nationalist party as well, had made an effort toward reconciliation with the defeated and marginalized Serbs of Croatia and begun what seemed a new era of cooperation.

As the then president of the council of the Jasenovac Memorial Area, the site of the largest death camps in Croatia during World War II, I was present at this event. Amid the general excitement, I went up to Sanader, whom at that time I knew only slightly, and congratulated him on his remarks. I asked him if he would like to come soon to Jasenovac and pay homage to the estimated 80,000 people, mostly Orthodox Serbs, and also many Jews, who were killed by the Croatian fascist government. He thought for a second and decisively agreed.

Beneath the monument at Jasenovac, he gave a commemorative speech in which he expressed deep regrets to the Serbian, Jewish, Roma, and Croatian victims of a camp in which mass genocide was mainly carried out by members of the Ustasha, the Croatian national extremist group that ruled the country as a puppet government of the Third Reich during World War II. With this gesture, Sanader parted ways with the not insignificant part of his HDZ whose members still flirted with the pro-Nazi Ustasha ideology and idealized the wartime puppet state that had been sponsored by Hitler and Mussolini.

Sanader’s ambition was to lead Croatia into Europe. In his first two or three years in office he was quite successful, but during the early negotiations with the EU obstacles soon arose. It became obvious that Sanader’s government was not able or not willing to carry out essential reforms—for instance, reform of the judicial system, in which many judges and officials had been appointed under Tudjman’s government on the basis of their loyalty to a nationalist policy and not because of their competence or merit.

Sanader inherited and accepted too many of Tudjman’s methods of ruling the country. The HDZ remained a party based on personal aggrandizement, as in Tudjman’s time. Most ministers in Sanader’s cabinet and other high officials in the government were appointed for their willingness to obey rather than for their professional competence. Sanader, it seems, took much satisfaction in behaving autocratically while appearing not to. He used the extra-institutional track of power almost as much as Tudjman had in his time, though to some extent he refined and modernized it. From the evidence and sentences in recent corruption cases it has now become clear that his ruling party was to a great extent financed by this second track.

Little of this was known to most Croatians when Sanader unexpectedly resigned as prime minister and head of his party in July 2009, without any public explanation, most likely because he had lost the support of his European protectors. How deeply Sanader himself is implicated in corruption will be established in the future proceedings of courts in Austria and Croatia.

For now, we are daily inundated with new allegations about Sanader’s illegitimate wealth. In the days after his arrest in December 2010, his assets and those of his family were frozen on suspicion that he had removed $8 million from state companies to enrich both himself and the ruling party. He is suspected of making other, much larger transfers of “black,” i.e., hidden, funds, especially from state highway construction projects and sales of state-owned natural gas to private users. It has been established that his wife and her father made deposits in an Austrian bank valued at about $1.7 million. (Mrs. Sanader’s father claims to know nothing about the deposits, but he signed power-of-attorney over to his son-in-law Ivo.)

An Austrian bank has filed charges against Sanader for money laundering. About three hundred works of art were confiscated from his apartment. He is also reported to have accepted very expensive private gifts for rendering services such as the award of state contracts.

The investigation is widening. About forty people are now under suspicion of withdrawing money from state companies; half of them have been detained. The newspapers speculate every day about who will be charged next. Even before Sanader’s arrest, a former deputy prime minister and a former minister of defense in his government were convicted on corruption charges and a former minister of the interior was indicted for embezzlement of public funds. Journalists following these cases have identified links among them indicating the former prime minister’s central involvement.

Croatians are asking themselves if it was really possible that uncontrolled greed could so overwhelm an apparently intelligent, civilized, and successful man. This will be the theme of several biographies of Sanader, one of which is already being written by three prominent Croatian journalists.

When Sanader resigned in 2009, he proposed as his successor Jadranka Kosor, who until then had been deputy prime minister and a longtime close collaborator. He was mistaken when he thought that she would remain as loyal to him as she had been in the past. Among her main goals, Kosor emphasized an “energetic fight against corruption in which no one is untouchable.” Events have shown that she meant this; she has encouraged the police and the state prosecutor not to stop their investigations in order to protect the former prime minister.

The arrest of Sanader has sparked a heated public debate about the general crisis in Croatia’s government. Croatia is one of the rare European countries in which a discernible recovery from the three-year recession has not yet begun. The unemployment rate, the most eloquent indicator of the country’s ills, is growing dangerously high—between 11.5 and 18.8 percent—while government revenues are falling. Budget cuts and structural reforms are needed, but the government dares not implement them for fear of alienating voters less than a year before scheduled elections. The standard of living of most Croatians has constantly declined for the last three years and many indicators suggest that conditions will continue to get worse.

No country in the world is completely immune to corruption, but where there is an increase in genuine democracy, with a free and inquisitive press, there is less and less room for corrupt practices. Most post-Communist countries have been confronting this problem and have had to get rid of corrupt politicians; the realization of this necessity is also now spreading dramatically through the Arab world.

Clearing up the “Sanader Affair” is likely to have a cathartic effect on Croatian society. It cannot eliminate corruption at a stroke, but it may make the most lethal form of it—an institutional network based on two tracks of governing—disappear. Only by killing off this strain of corruption will Croatia be able to make a genuine recovery, not only moral and political, but also economic. After ten years of being a candidate for the EU and six years of accession negotiations, Croatia is on the brink of becoming a full member state in 2013. It has the potential to exercise a positive influence on the entire region, especially on the remaining small states of former Yugoslavia. For them, Europe—notwithstanding its current difficulties—is now seen as the hope for salvation from long-standing backwardness and the current economic troubles, and for greater democratization.

—May 26, 2011