The strangest scandal ever is unwrapping in Serbia and Montenegro, connected with the huge and totally unneeded purchase of military equipment for millions of euros, approved by the local Defense Minister. The deal is so outrageous that obviously it is not a corruption case, but something much more serious. But NOBODY can explain what has really happened…
The One for the Price of Two, or The Army of Bullet-Proof Vests
Everything started when on August 25, 2005, the Minister of Defense of Serbia and Montenegro Prvoslav Davinic
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Serbia-Montenegro Defence Minister Prvoslav Davinic(AP) |
signed an enormous, worth 300 million euro deal with "Proizvodnja Mile Dragic" for the period 2006-2010 for purchase of military equipment. Since 1985 this firm, headed by local businessman Mile Dragic specializes in manufacture of functional and modern designed anti-ballistic vests, minery suits, anti-ballistic plates, helmets and all kind of military and police equipment. It was one of the major suppliers of the uniforms and light equipment of the Serbia-Montenegrin Armed Forces (SMAF). To understand how huge, excessive and plainly spendthrift is the deal with "Proizvodnja Mile Dragic" it is necessary to review certain numbers and figures. First of all the AIA sources noted that the military budget of the SMAF for this year is 629 million euro. For the next year even less - 594 million. And the tendency is for reducing the number of the servicemen drastically: by 2010, the size of the Serbia-Montenegro Army will be slashed from 77,900 to 39,722. And the Minister of Defense is the one leading this reduction process as part of efforts to adjust to NATO standards. He is supposed to downsize the army by 9,300 people till the end of this year. So it is more than strange that he authorized a purchase of about 74,000 helmets and 69,000 flack jackets, 70,000 bullet-proof vests and 30,000 uniforms. It is also odd that for the air force of less than 30 planes 500 pilot jackets were purchased.
And these are not all the oddities of the deal. The Serbia-Montenegrian Armed Forces already have in its warehouses a full stocks of the same equipment as purchased by Prvoslav Davinic!
Helmets, uniforms and bullet-proof vests enough to equip 50,000 soldiers had been purchased between 1999 and 2003 for almost 100 million euro from the same Mile Dragic's company! Why to buy more?
A strange coincidence – less than a week from this huge deal, Army Chief-of-Staff Dragan Paskas received ordered previously 380 sets of bullet-proof equipment, worth close to million euro. A week later Defense Minister Prvoslav Davinic ordered 70,000 bullet-proof vests over the period from 2006 and 2010.
And as for the prices, they were almost doubled, and no regular discount for the huge numbers of the purchased equipment reaching sometimes over 20 per cent was made. The prices for bulletproof vests, for example, were between 1,664 euro and 1,928 euro per piece, while they could be obtained for between 490 and 800 euro on the European market. Serbia would also have to pay Mile Dragic's company 250 euro per helmet, while it could buy it from neighboring Macedonia for only 150 euro a piece. So, it was not only a purchase of the already owned equipment, but also it was overpriced.
The Robber of the Century?
Serbian President and Premier, Boris Tadic and Vojislav Kostunica, called on Serbia-Montenegro Defense Minister Prvoslav Davinic to submit his resignation because of that deal.
Serbian Finance Minister
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| Serbian Finance Minister Mladjan Dinkic (L) addresses the Parliament Finance Committee meeting to review budget control of military financing (Beta) |
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Mladjan Dinkic accused Davinic of being responsible for signing contracts with the Mile Dragic's company. Dinkic was outraged by the deal, calling it "the robbery of the century" and claiming on the basis of report made by the tax police that the country suffered and will suffer total damage of at least 80 million euro for this deal. “I’ve never seen anything like this in my career. I think these prices have been inflated by more than double, the quantities are enormous, far beyond any kind of needs of the Army,” said Mladjan Dinkic. “This only goes to show that the Army needs not just one Radovic but control finances but at least twenty Radovices,” the finance minister added, referring to his earlier insistence that former Taxation Services director Aleksandar Radovic be appointed to manage Defense Ministry finances.
Mladjan Dinkic, being one of the leaders of the G17 Plus party - a member of the ruling coalition, to which Davinic also belonged, had a part in expelling the Minister of Defense from its ranks for this scandal. "By the abuses and offences he has committed, Prvoslav Davinic has disqualified himself as a person capable of carrying out any duty in a serious and democratic state," the party said in a statement.
The Serbian Ministry of Interior was asked by the Special Prosecutor for organized crime to start getting relevant paperwork concerning the closing of the contract between the Ministry of Defense and the Mile Dragic company, and getting statements from persons directly involved in the process of closing the deal.
The Serbian Interior Minister Dragan Jocic said that the Crime Investigation Police Department, the Department for Combating Organized Crime, and the Intelligence Service of the Serbia-Montenegro Army were working together to solve the case.
But Finance Minister Dinkic claims that financial inspectors had been obstructed in the Defense Ministry while attempting to obtain information about who had authorized the contracts with Mile Dragic. He said that Defense Ministry had not allowed the budget commission to get insight in the documents that would show who had ordered the equipment and who had given approval for the prices. According to his opinion Defense Minister Prvoslav Davinic is the one responsible for the affair. "However, we are not talking here about one man, but about an organized group", Dinkic said.
The Ignoramus Army?
Interestingly enough, the Army General Staff Headquarters cannot give a simple answer, whether its highest officers new about the deal. One day it was acknowledged that neither the Serbian President, Prime Minister, Deputy Prime Minister, nor the Army Chief of Staff were familiar with the signing of this contract. Later, the Defense minister’s assistant for procurement issues, Milan Kokanovic, claimed that the General Staff Headquarters of the Serbia-Montenegro Army is aware of all Army procurement because purchases are initiated at its demand. “The contracts with Mile Dragic were concluded completely in accordance with the legal procedure, and Chief-of- Staff Dragan Paskas sent a memo to Defense Minister Prvoslav Davinic on August 16, seeking the provision of 30,000 uniforms and protective equipment from the company,” said Kokanovic.
The minister’s assistant also claimed that Paskas sent the same memo to the minister on August 19, adding that the uniforms had not been approved because they had not been fully tested.
As a proof he noted that the contract was signed on the basis of a five-year plan for equipment prepared by the General Staff Headquarters Development and Equipment Department.
The answer of the Army was that it did not ask the Defense Department to arrange contract for the supply of military equipment from any company and that it had learned of the Mile Dragic contract from the media. The Defense Ministry on its behalf again claimed categorically that the head of the General Staff had been informed of the contracts.
But when it was supposed to arrange a meeting of all the sides at the Supreme Defense Council session to find out who knew and who didn't, Serbian President Boris Tadic suddenly has called off the meeting of which had been called to discuss this procurement scam in the army.
Belgrade media reported that he has sought the postponement of the meeting because investigations are still not complete.
Finance Minister Dinkic commented that decision saying that the investigation is being delayed by deliberate obstruction in the Defense Ministry…
The Reign of Absurdity
The described above situation is very odd. Or better to say it is totally crazy, for nobody in the whole country is not asking the right questions and all the versions - speculations around this deal are overwhelmingly lame.
No, it is not a scam or a case of corruption. This is not how it is done unless the scammers are amazingly stupid. You don’t steal HALF of annual military budget under everybody's nose. This sounds more as a set up, also very obvious and stupid. But the Minister of Defense is not denying his part in the deal! The blowing up of the prices, the quantities – everything seems bluntly exaggerated.
Or lets take another version of the alleged attempt to hamper the introduction of Serbia to the EU. It is claimed that a scam of such dimensions would make Europeans wary about Serbia and Montenegro, which, allegedly the EU wants to use as its southern border guards, for blocking the Muslim illegal emigrants' flow through Albania. This corruption scandal supposedly will show the complete chaos in the SMAF, proving that it is unable to fulfill the task planned for it, claim the apologists of this version. But it is also lame, for Serbia and Montenegro will become a member of the EU not in a year or two, but in six-seven years!
Feeling that he is missing something, the author of this article tried to receive some authentic data or at least an insider's view from Serbian journalists and officials.
Strangely enough the representatives of the official news agencies from Serbia refused to answer my questions on the phone. "We have all the relevant materials on the sites of our agency, so please read it there," their replies sounded. Only one analyst of the non-official Serbian agency "Beta" (who asked to remain anonymous) was happy to assist me. To his mind all the scandal is just a part of the interior political struggle between the Finance Minister Dinkic and the Defense Minister Davinic. As he said the conducted reduction of the SMAF is accompanied by selling of the facilities and resources, which are not required anymore. As the Army will be slashed by 50 percent – the revenues from these transactions will be enormous. And all the deals are going over the head of the Finance Ministry, which is dying to put its hands on the deals. How it is all connected with the huge purchases of the military equipment he couldn't explain. As he could not answer the question "Does the Serbia-Montenegrin Army needs such amounts of equipment?" Frankly, he even didn't think about such a question, though this is the most natural to arise. The answer to this question will solve the mystery, or at least will eliminate the element of absurdity in the whole affair. But for week or so no one can get the answer.
Being unsatisfied with the answers of the media, I've decided to talk to the officials. I have called the Serbian Foreign Ministry, Ministry of Defense, Ministry of Finance and even the Assembly of Serbia and Montenegro… As for the Ministries, calling them was fun – I was transferred from office to office at least a dozen times. Foreign Ministry, being a PR device of the country offered "no comments – call the military department". The press-service of the Defense Ministry was very polite, but its employee had no authority to answer my
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| Milos Todorovic - the parliamentary adviser of the Serbian oppositional Democratic Party |
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abovementioned question, for it was "out of her league." She offered to write an e-mail, which will be transferred to those who have the authority over such questions and I will receive an answer, if it is not classified, of course. As for the press-service of the Serbian Minister of Finance Dinkic, who is the main accuser of the Defense Minister, its head press-secretary is… ill. Till next Monday…
Calling the deputies groups of the Assembly of Serbia and Montenegro was also entertaining. The only available English-speaking representative of the G17 Plus party didn't answer his cell-phone. Finally I managed to reach Milos Todorovic – the parliamentary adviser of the oppositional Democratic Party. While speaking to him I understood that the same feeling of the absurdity of this equipment affair reigns even in the Assembly. The reason that nobody is asking the question I've mentioned is simple – nobody is hoping to get an answer. "Nobody controls the military, nobody can pressure it to get an answer, so we just wait," he said. And Milos knew about the purchase affair as much as I did…And he had no versions available for me, besides a hint that people are saying that the owner of the "Proizvodnja Mile Dragic" was connected to the local radicals. But the Minister of Defense, who purchased the equipment is not – he is a well know liberal of pro-Western orientation! So I remained as puzzled as my interlocutor, who happens to work on the highest levels of the Serbian-Montenegrin politics.
It is hard to predict when and what we shall learn about the strangest arms deal ever in the history of Serbia-Montenegro. But the only thing that we can learn now is that something rotten in this kingdom of SMAF and the country as a whole, if for more than a week the military can withhold crucial information over a scandal, worth half of its annual budget…
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