Cable by Dazzlepod US Embassy Diplomatic Cables from WikiLeaks Released 251287 Cables (Sep 2, 2012)
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CONFIDENTIAL (97070)
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Reference ID 06SARAJEVO1664 (original text)
SubjectBOSNIA: ORGANIZED CRIME AND CORRUPTION
OriginEmbassy Sarajevo
ClassificationSECRET//NOFORN
ReleasedAug 30, 2011 01:44
CreatedJul 25, 2006 10:47
VZCZCXYZ0000
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DE RUEHVJ #1664/01 2061047
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O 251047Z JUL 06
FM AMEMBASSY SARAJEVO
TO RUEHBW/AMEMBASSY BELGRADE IMMEDIATE 0219
RUEHSQ/AMEMBASSY SKOPJE IMMEDIATE 0193
RUEHVB/AMEMBASSY ZAGREB IMMEDIATE 0207
RUEHC/SECSTATE WASHDC IMMEDIATE 4015
INFO RUCNIFO/IFOR COLLECTIVE IMMEDIATE
RUEHTC/AMEMBASSY THE HAGUE IMMEDIATE 0084
RUEAIIA/CIA WASHDC IMMEDIATE
RUEAWJA/DEPT OF JUSTICE WASHDC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE S E C R E T SARAJEVO 001664 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
STATE FOR EUR (DICARLO), D (SMITH), P (BAME), EUR/SCE (HOH, 
SAINZ, FOOKS), EUR/ACE (VISOCAN, LONGI), INL (MAKALOU), 
DS/ITA, S/CT (BLACK), S/WCI (HODGKINSON), INR, THE HAGUE 
(JOHNSON), NSC FOR BRAUN, VIENNA FOR LEGATT (DIETDERICH), 
OSD FOR FLORY, USDOJ FOR CRIMINAL DIVISION - ICITAP 
(DELCORE) 
 
E.O. 12958: DECL: 07/15/2016 
TAGS:                
SUBJECT: BOSNIA: ORGANIZED CRIME AND CORRUPTION 
 
REF: A. 05 SARAJEVO 2954 
      B. 05 SARAJEVO 2324 
      C. 05 SARAJEVO 2352 
      D. 05 SARAJEVO 1177 
      E. 05 SARAJEVO 2848 
 
Classified By: CDA JUDITH CEFKIN FOR REASONS 1.4 (B), (D) 
 
 1. (C)  SUMMARY:  Ten years after the war, Bosnia remains in 
many ways a traumatized, post-Communist, post-war society. 
Crime and corruption are serious problems and touch nearly 
every aspect of life.  Criminal clans aligned with 
politicians and political parties are still prospering and 
are described as a major obstacle to EU accession.  The nexus 
between organized crime and the war criminal support networks 
is also clear.  Money laundering, tax evasion, corrupt 
privatization schemes, narcotics trafficking, trafficking in 
persons, and smuggling of cars, oil, lumber, and cigarettes 
all provide sources of illicit income.  This is not 
surprising given the still limited economic opportunities and 
high unemployment rate.   This report is broken down into the 
following sections: 
 
 I.   CORRUPTION 
II.  ORGANIZED CRIME 
III. MAJOR TYPES OF ORGANIZED CRIME GROUPS 
IV.  POSSIBLE LINKS BETWEEN OC GROUPS AND TERRORIST 
ORGANIZATIONS 
 V.   LEADING OC FIGURES AND GROUPS 
VI.  COMMENT 
(End Summary) 
 
 I.  CORRUPTION 
 
 2. (U)  According to a March 2006 report published by the BiH 
Ministry of Security --  Strategy for Combating Organized 
Crime and Corruption in BiH -- 84% of Bosnians believe it is 
necessary of offer bribes to officials to get them to do 
their jobs.  Administrative delays and paperwork also 
contribute to this atmosphere.  The average period in the 
Balkans required to register a company is about 30 days, but 
in the Federation it is 124 days and in the Republika Srpska 
(RS) it is 56 days.  In 2005 Bosnia was ranked 88 out of 158 
countries rated by Transparency International (TI) in its 
corruption index, but with a score of only 2.9, placing it 
below Romania and Mexico but above Serbia.   TI considers 
anything below 5.0 an indication of "serious corruption 
problems." 
 
 3. (S/NF)  A number of leaders of the major political parties 
have had criminal charges filed against them and/or are 
widely believed to participate in corrupt activities.  Among 
them are former BiH Tri-Presidency member Dragan Covic (HDZ), 
current RS President Dragan Cavic (SDS), former RS PM Dragan 
Mikerevic (SDS) current BiH Foreign Minister Mladen Ivanic 
(PDP) current RS PM Milorad Dodik (SNSD), Branko Dokic 
(PDP), Hasan Cengic (SDA), Ante Jelavic (HDZ), an President 
of the BiH Constitutional Court Mato adic. 
 
 4. (S/NF)  Leading nationalist parties in BiH -- the SDA 
(Bosniak), SDS (Serb), and HDZ (Croat) -- have for years 
abused their positions in senior government institutions, 
state-owned firms, and private companies to gain profits for 
personal and political gain.  Local OC groups in both the 
Federation and the RS use connections to these 
ethnically-based ruling nationalist parties (along with other 
parties such as the RS-based PDP) and their representatives 
in virtually all levels of government.  Much of the 
corruption at the political level is focused on the abuse of 
such institutions as the customs agency, tax administration, 
wood processing sector, and the energy sector.  It is within 
these key moneymaking ventures that the prospects are best 
for the intermingling between organized crime and politics. 
Politically connected individuals also have the ability to 
manipulate government institutions, law enforcement and 
judiciary.  This involves application of legal provisions to 
slow down investigations, stalling court procedures, and 
obstructing enforcement of criminal statutes.  They are also 
involved in the issuance and forgery of travel papers (ID 
cards, passports, visas) which enable criminals to travel 
freely. 
 
 5. (U)  A good example is the recent case of the Bosanski 
Brod Oil Refinery where fraud charges have been filed against 
27 persons involving USD 75 million.  Included in the group 
is former RS PM Dragan Mikerevic. 
 
 
II.  ORGANIZED CRIME 
 
NARCOTICS 
 
 6. (U)  The "Balkan Route" for drug smuggling into Europe is 
reportedly still very much in use.  Bosnia occupies a 
strategic position along the historic Balkan smuggling routes 
between drug production centers in South Asia and markets in 
Western Europe.  One of the main Balkan trafficking routes 
begins in Albania, continues into Montenegro and enters BiH 
through a border point close to Trebinje.  From BiH the drugs 
pass to Croatia and Slovenia and then on to Central Europe. 
BiH is also a small but growing destination for drugs (reftel 
A). 
 
ILLICIT ARMS TRADE 
 
 7. (S/NF)  Trade in arms mostly involves residual arms left 
over from the war, often stolen from military warehouses. 
Many weapons remain in the country, posing an internal 
security threat while arms from BiH are also smuggled to 
Albania, Kosovo, and EU countries. 
 
HUMAN TRAFFICKING 
 
 8. (U)  While the situation has improved, and BiH has moved 
up from Tier Three to Tier Two, the problem continues to 
exist.  Most trafficking victims are women and teenage girls, 
although there are some reports of trafficking in children, 
especially Romani children, for forced labor.  A number of 
Chinese nationals (men and women) who have transited through 
BiH may have been trafficked for forced labor.  In 2005, the 
majority of prostitution-related trafficking cases involved 
either local women or women from the Ukraine, Moldova, 
Romania, Serbia and Montenegro. 
 
ILLEGAL IMMIGRATION 
 
 9. (U)  BiH is largely a conduit to Western Europe with a 
majority of illegals coming from Serbia, Montenegro, Kosovo, 
and Albania.  The strengthening of the State Border Service 
and security at the Sarajevo and Tuzla airports (through U.S. 
assistance) has led to a reduction in the number of illegals 
entering the country.  However, once in the country, it is 
difficult to track foreigners.  There is no integrated 
information system or alien detention center.  In 2005, 465 
persons were arrested for immigration violations and most 
were simply released pending status adjudication.  Only 60 
were actually deported.  In 2005 BiH created a new 
state-level immigration service and plans to build a 
much-needed 60-bed alien detention center by the end of the 
year. 
 
MONEY LAUNDERING 
 
 10. (C)  OC groups attempt to "launder" or recycle money 
gained from illicit activities through legitimate businesses 
as quickly as possible.  The recycling of illegal funds is 
suspected to have played a role in inflated real estate 
prices in certain parts of the country.  Virtually all OC 
groups are believed to have front companies including: 
banks, gas stations, restaurants/bars, betting parlors, 
jewelry stores, security firms, demining companies, 
construction companies, energy and petroleum companies, 
forestry companies, telecom companies, and import/export 
firms.  Momcilo Mandic, for example, currently in custody 
charged with war crimes, embezzlement to aid war crime 
fugitives, and bank fraud in the Privredna Banka Srpska 
Sarajevo case, is suspected of using his chain of Mandic Fuel 
gas stations in the Republika Srpska to launder funds. 
 
 
III.  MAJOR TYPES OF ORGANIZED CRIME GROUPS 
 
FEDERATION 
 
 11. (C)  Sandzak Clan.  The Clan is highly organized, locally 
influential and internationally connected.  Sandzak is a 
region between Serbia, Montenegro and Kosovo mostly populated 
by Serbian Muslims.  Most of the clan's members have ties to 
the region and began moving into Sarajevo in the 1970s.  The 
numbers started increasing significantly in the 1990s when a 
large number of "new businessmen" originally from Sandzak 
started investing in privatizations of profitable public 
companies, major construction projects (malls, hotels) and 
real estate.  Much of the money came from illegal activities, 
such as narcotics trafficking and the smuggling of arms and 
otherwise legal goods such as lumber and cigarettes.  Over 
the years the Clan has been able to infiltrate 
administrative,  political and law enforcement circles, and 
has close links to the dominant Muslim party in BiH, SDA. 
 
 12. (C)  Albanian Clan.  Albanians started moving to the 
Sarajevo region and BiH in the second half of the 1990,s. 
Their numbers significantly increased after the 1999 war in 
Kosovo. Upon arrival, many started traditional small 
businesses such as grills, bakeries, candy/cake shops, and 
bars.  These businesses were often funded through loans 
provided by OC groups.  This enabled the Clan to create 
networks for money laundering, smuggling, and distribution of 
various illegal goods.  Albanian OC groups are also involved 
in extortion rackets, prostitution, and human trafficking. 
In the last few years they have started developing legitimate 
businesses and buying political protection from the SDA, 
which is part of the governing coalition at the national 
level. 
 
 13. (C)  Herzegovina Clan.  Clans in largely Croatian Western 
Herzegovina are involved in money laundering, fraud, tax 
evasion, and are linked to the dominant Croatian party HDZ, 
which has received millions of off-the-books contributions 
from Bosnian Croat diaspora in Croatia.  Narcotics also pass 
freely from Montenegro through Western Herzegovina to the 
Croatian coast. 
 
REPUBLIKA SRPSKA 
 
 14. (S/NF)  There also are important Serbian OC groups, 
controlled by both Bosnian Serbs and Serbs from Serbia, often 
with connections to Russia.  There is a great deal of overlap 
between the Serbian war criminal support network, nationalist 
Serbian politicians, RS police, the SDS party, and Serbian 
OC.  Money from state-run enterprises in the RS is diverted 
to off-shore accounts for the personal gain of individual 
party members, to party coffers to support political 
activities, and to the support networks of PIFWCs such as 
Radovan Karadzic.  In the RS, such activities have involved 
organized criminal groups from Serbia and Montenegro such as 
the Zemun Clan, associated with the assassination of Serbian 
PM Djindjic in 2003.  A good example is Momcilo Mandic, 
former Justice Minister in the wartime RS government (see 
paragraph 10) who was designated by the U.S. Treasury 
Department as a key financial supporter of ICTY fugitive 
Radovan Karadzic.  Similarly, recently arrested ICTY indictee 
Milan Lukic was reported in the media to be part of the war 
criminal support network for Karadzic, and was once a major 
heroin trafficker. 
 
 15. (C) A particularly egregious example is former Republika 
Srpska (RS) Police Director Dragomir Andan, who resigned in 
April 2006 under pressure from ICTY Chief Prosecutor Carla 
del Ponte.  In a letter to RS PM Dodik del Ponte states:  "We 
have an extensive and detailed profile of Andan whose record 
includes numerous allegations of criminal conduct before, 
during and after the war.  He was undoubtedly in close 
relationship (including personal) with ICTY fugitive Ratko 
Mladic." 
 
 
IV.  POSSIBLE LINKS BETWEEN OC GROUPS AND TERRORIST 
ORGANIZATIONS 
 
 16. (S/NF)  Islamic non-governmental organizations (NGOs) in 
Bosnia, while not openly advocating violence, have made some 
progress in radicalizing small segments of the population and 
providing support networks to foreign Mujahideen who remained 
in Bosnia after the war in the 1990s (reftel B).  Some 
Bosniak firms (e.g. security companies, import/export firms) 
have been linked to Mujahideen in Bosnia, and, via those 
individuals, to groups involved in terrorist financing. 
However, there is no hard evidence of systematic linkages 
between organized crime groups and terrorist organizations. 
There are some reports that Mohamed Ali Gasi, a well-known 
ethnic Albanian OC figure, has ties to Albanian arms dealers. 
 It has been reported that Hasan Cengic, one the founders of 
SDA and a prominent Muslim member of parliament, is also an 
OC ringleader who has ties to Muslim terrorist elements and 
to TWRA (Third World Relief Agency).  TWRA, a Muslim NGO, was 
operational in BiH during the war and is reportedly linked to 
al-Qaeda.  Though Cengic was recently acquitted of corruption 
charges in the BiH State Court, the prosecution has appealed 
the verdict. 
 
 
 V.  LEADING OC FIGURES AND GROUPS 
 
 17. (S/NF)  The profiles below are of active OC organizations 
and individuals.  Some of this information is in the public 
domain, some not.  Much of the information was provided by 
contacts in law enforcement institutions at the state, entity 
and cantonal level.  Of particular help (strictly protect) 
were Dragan Lukac, Director of the Criminal Investigations 
Department at the State Investigation and Protection Agency 
(SIPA), Vahid Alagic, Deputy Director State Border Service, 
Ljiljana Trisic, Ministry of Security, Zoran Mandic, new 
Director of the East Sarajevo Public Security Center in Pale, 
and a number of former U.S. police officials embedded with 
local law enforcement agencies under the U.S. Department of 
Justice (ICITAP) program.  Still, due to the nefarious and 
shadowy nature of the individuals and their activities, some 
of this information must be characterized as no more than 
intelligent speculation. 
 
SIPA TARGETING SEVEN OC GROUPS 
 
 18. (S/NF)  Jahorina/Pale East Sarajevo Group 
 
This group has over 100 people, half of whom are current RS 
police officers.  The SDS is believed to have originally 
established the group to raise money to support PIFWCs, 
including Radovan Karadzic.  Momcilo Mandic, Milovan 
Bjeljica, and Mirko Sarovic, all of whom are in jail awaiting 
trial for bank fraud and money laundering, once directed the 
group. 
 
 
All of the following are believed to have links to the 
Jahorina/Pale East Sarajevo Group. 
 
Radomir Kojic, former police officer, launders money through 
his Crystal Hotel in Jahorina.  Reportedly runs Zdrale and 
Elez (see below). 
 
Dorde "Dzoka" Zdrale group - former police officer linked to 
14 unsolved murders, protection rackets, murder for hire, 
drugs.  Linked to Sarajevo OC figure Remiz "Celo" Delalic 
(from the Sandzak area of Montenegro) in trafficking 
narcotics to Sarajevo.  Reportedly (with Slaven Vukajlovic, 
Jovan Skobo) had killed OC figure Milorad Todorovic (2005) 
and his brother Zeljiko and sister-in-law (2004) because 
Milorad refused to pay protection money.  Police consider him 
to be a typical muscle man, hot-tempered, not too bright. 
Has been seen recently in Trebinje.  Zdrale is also linked to 
Belgrade-based Rakovicki Clan and their leader Nebojsa 
Stojkovic who has sent professional killers to BiH. 
 
Darko Elez group - involved in armed robbery and murder for 
hire (USD 20,000/murder).  He fell out with Zdrale and Skobo, 
and is now in Serbia.  On June 29, 2006, he allegedly stopped 
a Privredna Bank Sarajevo cash truck and stole 2.2 million 
Euros.  On July 10, the Sarajevo Prosecutors office issued a 
warrant for his arrest.  This is the sixth major bank robbery 
in 2006 in the Federation.  Police consider him smart, 
tactical, and well organized.  Elez recently contacted SIPA 
looking for a deal, claiming he has information on the Rato 
Spajic murder.  Spajic, a Pale OC figure, was murdered in 
March 2005 reportedly for defying the Pale mafia by refusing 
to pay protection money (SIPA tells us Spajic held a BiH 
diplomatic passport). 
 
Elez and Zdrale were close (Elez was Zdrale's best man) 
although recently they have become bitter rivals. In fact, in 
July 2006 Elez reportedly tried to kill Zdrale by planting 
three anti-personnel mines on the side of the road in East 
Sarajevo. 
 
Jovan Skobo is a former Pale Police commander and linked to 
war crimes, Karadzic's support network, drugs, money 
laundering, and racketeering.  His son, Miroslav, is part of 
his group. 
 
Mirko Subotic, currently East Sarajevo Public Security Center 
Uniformed Police Chief, is reportedly connected to Jovan 
Skobo. 
 
Ljuban Ecim is a leading East Sarajevo crime figure and 
former chief of Banja Luka State Security.  He was for many 
years an important link in the protection of PIFWC indictee 
Radovan Karadzic. 
 
 19. (S/NF)  Igman Group 
 
Bosniak Ismet "Celo" Bajramovic was a wartime commander of a 
Bosnian special army unit and has good connections with 
Sarajevo police.  He has reportedly been involved in 
extortion, blackmail, kidnapping, theft, and murder for hire. 
 
Muhamed Ali Gasi is a well-known ethnic Albanian OC figure 
and a suspect in a number of crimes including car-bombings, 
narcotics trafficking, and has ties to Albanian arms dealers. 
 
 
Nasar Kalemidre is a very visible ethnic Albanian who owns 
the Casa Grande hotel in Sarajevo and drives a red Ferrari. 
In 2005 he applied for an export license in the U.S. in order 
to buy two armored vehicles (his request was denied, of 
course).  He is connected to former Kosovo military commander 
and PM Ramus Haradinaj.  He is involved in drugs and arms 
trading, with possible terrorist connections.  There is also 
a possible Hasan Cengic/SDA connection.  Also connected to 
Kalemidre is Acik Kan, a Turkish member of the SDA. 
 
Brothers Haris and Hamdo Dacic.  Sandzak connection, 
reportedly laundered USD 12 million through hotels owned in 
Sarajevo. 
 
 20. (S/NF)  Sava Group 
 
Ramo Kujovic (currently in pretrial custody), Sead Causevic, 
and Sadik Kevric.  Operate in the Tuzla/Brcko corridor, 
involved in drugs and TIP (Serbian, Ukrainian, Moldovian 
women).  Initially involved in trafficking Kurds.  Connected 
to Ferid Okic who was sentenced to 22 years in 2006 for 
murder, kidnapping and robbery.  He reportedly is stll 
involved with running the organization from pison. 
 
 21. (S/NF)  Trebinje Groups 
Slaven Vukajlvic, involved in narcotics, murder for hire, car 
theft, linked to Trebinje bombings (see below). Also 
implicated - Drazen Sinikovic, Velibor Alesic, and Drazen 
Radic. 
 
Zeljko Tasovac was arrested by SIPA on June 29, 2006, along 
with six other individuals, including Nebojsa Vukoje.  The 
so-called Tasovac group is implicated in 11 bombings in 
Trebinje over the last year, targeting cars belonging to a 
judge's son and law enforcement personnel.  They have been 
linked to car thefts, forgery of official documents, drug 
running, and interfering with judicial processes.  They are 
reportedly linked to SDS and used RS power company trucks 
(Electropriveda) to transport drugs and turn off power during 
drug transit runs.  These individuals will likely be charged 
with murder, OC, and interfering with judicial processes. 
 
 22. (S/NF)  Bijelina Group 
 
Ugljesa Aranitovic (aka Goran Petrovic DOB 6/26/76, POB 
Sarajevo) is involved in drugs, arms trafficking, 
racketeering, and protection.  Associated with Zemun Clan in 
Serbia, which was responsible for the assassination of 
Serbian PM.  Also implicated - Veljko Dosic, Mile Lakic. 
Aranitovic reportedly was connected to PIFWC Zeljko "Arkan" 
Raznativoc, who was murdered in 2002. 
 
 23. (S/NF)  Mostar/Herzegovina Group 
 
Ante Jelavic allegedly funneled millions of dollars illegally 
to the HDZ through Hercegovacka Banka.  In October 2005, he 
was convicted of bank fraud and sentenced to ten years, but 
he escaped to Croatia, which has refused to extradite him. 
 
Mladen Dzidic, Almir Serdarevic, Denis Cetialovic, said to be 
involved in drugs, TIP, and prostitution. 
 
 24. (S/NF)  Bihac Group 
 
Hot Velia, Zijan Muratovic, and Muso Mujkle purportedly 
involved in TIP and document forgeries. 
 
 
VI.  COMMENT 
 
 25. (C)  While this report paints a grim picture, the news is 
not all bad.  The U.S. and the international community have 
invested millions of dollars over the years to establish 
viable rule of law institutions and we can point to many 
successes.  We helped create and stand up the State Border 
Service, the FBI-like State Investigation and Protection 
Agency (SIPA), the state-level Ministry of Security, and the 
BiH State Court and Prosecutor's Office (reftels C, D). 
Bosnia has moved from Tier Three to Tier Two status as a 
result of progress addressing the problem of trafficking in 
persons.  Post, in conjunction with the Department of Justice 
(reftel E), will continue to provide funding, technical 
assistance, and training aimed at developing state-level law 
enforcement capacities.  We will continue to assist SIPA's 
CT, OC, and financial crime units develop, and help establish 
administrative procedures for seizing and forfeiting assets 
of criminal enterprises.  We will assist the new immigration 
service (Foreigners Affairs Service) get off the ground, and 
continue working with the State Prosecutor,s office and the 
Ministry of Security to improve organized crime, financial 
crime, narcotics trafficking, and TIP prosecutions.  End 
Comment. 
CEFKIN