Volume 9 Numbers 1/2

Winter/Spring 2000

Constitutional Watch
     A country-by-country update on constitutional politics in Eastern Europe and the ex-USSR

Croatia - On December 11, at two in the morning, Croatian television broad-cast the news of President Franjo Tudjman's death in Zagreb. Tudjman was 77 years old and had been seriously ill. The funeral took place on December 13. Despite the momentousness of the occa-sion- Tudjman had led the country since independence with a nationalistic and authoritarian flair-the funeral was overshadowed by the upcoming parliamentary (and, thereafter, presidential) elections, which had been scheduled for January 3. Believing that the reformed communist party, the Social Democratic Party (SDP), would be the most dangerous opponent, Tudjman's party, the ruling Croatian Democratic Union (CDU), directed most of its propaganda against SDP. In its campaign materials, it claimed "SDP will endanger the possibility of having religion classes in schools; it will support atheism and agnosticism and instead promote abortion and sexual liberties; SDP will suppress all expressions of national pride; and it will advocate legal-izing the trade and use of drugs."

CDU's scare tactics failed. On January 3, 70 percent of the electorate went to the polls, and CDU suffered a humiliating defeat. A coalition of SDP and the Croatian Social Liberal Party (CSLP) received 51 percent of the vote; CDU, 29 percent; a coalition of four parties (the Croatian Peasants' Party [CPeP], the Croatian People's Party [CPP], the Istrian Democratic Party [IDP], and the Liberal Party [LP]), 17 percent; and the coalition of the Croatian Party of Rights and the Croatian Christian Democratic Union (CPR-CCDU), 3 percent. CDU won in only one electoral district, in East Slavonia, the area most heavily damaged by the war.

The results were a marked display of popular rage fed by dissatisfaction with a low standard of living, frus-tration with the misuse of political power and growing corruption, and anger at government policies that had brought about the country's complete international isolation. CDU's propagation of a monolithic ideology of nationalism, in a fashion reminiscent of communism, may also explain its popular decline. Surprisingly, CDU continued to trumpet its upcoming victory even though opinion polls and every other indicator pointed to its imminent defeat. CDU focused its campaign around the dead Tudjman, hoping his memory would attract voters; this ploy did not seem to draw many votes. The party's standing was further eroded by infighting, most notably the struggle between Foreign Minister Mate Granic and Vladimir Seks, CDU vice president and vice president of parliament, over who would be CDU's eventual presidential candidate. A majority of voters saw the SDP-CSLP coalition as the only viable option. The coalition was seen in general as serious, trust-worthy, and sufficiently nationally oriented. It was not its political platform so much as its proclaimed moral principles that attracted votes, providing a relief from the morally and politically decaying CDU.

Ivica Racan, president of SDP, was named prime minister on January 27 and received a mandate to select the future government. Following a preelection agree-ment, he invited members of all six former opposition parties (the SDP-CSLP coalition and the coalition of four parties) to form a multiparty coalition government. Racan also named independents to his cabinet. Zlatko Tomcic (CPeP) is the new president of parliament. Croatia must now face a difficult economic period with a complex coalition government, something it has never experienced before.

What the elections mean for CDU is still unclear. In the wake of Tudjman's death, factional wars burst into the open. The party's first difficult test was to select its candidate for the presidency-this election, sched-uled for January 24, was to take place in the new and disorienting post-Tudjman context. On January 5, CDU met to decide between Granic and Seks. At the meeting, Seks decided to withdraw his candidacy but asked instead to be named acting president of CDU (the most powerful office in the party). This was Tudjman's old position and a position that Ivic Pasalic, a former Tudjman adviser and the leader of the party's hard-liners, had thought reserved for him. But Seks threatened to destabilize and possibly even destroy the party (with the help of his followers) if not elected. Finally, Pasalic withdrew, Seks was elected acting presi-dent of the party, and Granic was chosen as CDU's candidate in the presidential election.

The solution was temporary; and it is uncertain whether the party will either manage to regroup around one of these three figures-Seks, Pasalic, or Granic-or splinter three ways. Granic is a committed Christian democrat, while Seks and Pasalic are more interested in power than ideology. Afraid that Granic might become president and thus prove the strongest figure in CDU, the two others disrupted Granic's campaign with constant quarrels that affected the CDU rank-and-file.

It was hardly surprising, therefore, that Granic was knocked out in the first round of the election, after receiving only 22 percent of the vote. Stjepan Mesic (CPP), candidate of the four-party coalition, won 41 percent, and Drazen Budisa, the president of CSLP and the SDP-CSLP coalition's candidate, 28 percent. Since no candidate won more than 50 percent, a second round was called for February 7. At this point, Mesic Croatia.won 56 percent, and Budisa 44 percent of the vote. (Sixty-five percent of the electorate turned out for the first round; 60 percent for the second.)

For many, Stjepan Mesic's victory came as some-thing of a surprise. Although a member of CPP and a candidate of the four-party coalition, Mesic did not really enjoy their full support during the campaign, and the public perceived him as an independent. His victory came despite, or perhaps because of, Budisa's election committee's public warnings that Mesic's victory would "slow down or even disable the necessary changes and destroy the Racan-Budisa joint partnership, which is the only one capable of reconstructing society." In fact, the SDP-CSLP coalition was firmly convinced that its parliamentary triumph would be followed by a presiden-tial victory. After the first round, when it awoke to the threat posed by Mesic, the coalition unleashed a dirty campaign. Mesic was maligned for marrying a Serbian Orthodox woman (How could the first lady of Croatia be Serbian? Mesic's enemies asked) and accused of having collaborated with Yugoslav secret police during the communist regime, a charge Mesic repudiated.

The claIm that Mesic will block reform is not necessarily well founded. His political program differs little from Budisa's, and, in fact, his calls for change were and are far more forceful. Of all the candidates, Mesic offered the most stinging criticism of CDU's autocratic rule. During the campaign, he announced he would imprison tycoons with criminal records as well as CDU members who had been involved in wrongdoing; named Ivic Pasalic the most hated person in Croatia; called for an end of the dependence of ethnic Croats in Bosnia and Herzegovina on Croatia; and explained that The Hague Tribunal was not demanding extradition of Croatian war heroes but of those indicted for war crimes.

Mesic, incidentally, had originally been one of Tudjman's principal allies. On May 5, 1990, he was named Croatian president, and a year later became pres-ident of Yugoslavia. He was its last president before the country broke up. After the parliamentary elections in Croatia in August 1992, Mesic became president of the Croatian parliament. He left CDU at the peak of his power in April 1994, because of disagreements with Tudjman over events in Bosnia. In May 1997, he testi-fied voluntarily before The Hague Tribunal about Croatian policies in Bosnia and Herzegovina.

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Croatia has also witnessed major judicial changes. On December 6, the terms of eight judges of the Constitutional Court expired, including that of its pres-ident, Jadranko Crnic. (The Court has eleven members; three of whom-Milan Vukovic, Jurica Malcic, and Velimir Belajec-have yet to serve out their eight-year terms. For further background, see Croatia Update, EECR, Vol. 8, No. 3, Summer 1999.) The election of the eight new members generated a great deal of confu-sion and controversy. It appears that there had been a backroom agreement (made before the recent elections) between CDU and the opposition parties to nominate six CDU candidates and two opposition candidates. On October 20, parliament approved all eight candidates, despite questions about their integrity and qualifica-tions. The crucial criteria for appointment seemed to be party affiliation and party loyalty.

It is apparent that the deal was arranged purely by the opposition leadership, without consulting their own party members or officials. Leading SDP and LP politi-cians have not hid their disappointment with party leaders Ivica Racan and Vlado Gotovac. According to Nacional, an independent weekly, extensive and intricate negotiations had evidently begun in the late summer of 1999 and were initiated by Smiljko Sokol, a professor at the Faculty of Law in Zagreb and an adviser to Tudjman on constitutional and legal issues. At the time, Sokol was already a CDU candidate for the Court, but he wanted to secure the support of other judges-to-be for his election as Court president. Sokol, therefore, gave the nod to the LP candidate, Jasna Omejec, a junior professor at the Faculty of Law, and to the SDP candidate, Ivan Matija, who is an MP and a lawyer. To push through their appointments, some articles of the Law on the Constitutional Court needed revision. Article 5 of the law required that Court members be "practicing lawyers with 15 years of work experience or university professors in law." On September 29, this requirement was reformulated, and the remodeled Art. 5 now stipulates that "members of the Constitutional Court can be all persons who have earned a Ph.D. in law if they have 12 years of work experience or who work as university teachers" (thus one no longer needs to be a full professor-a much higher position in the univer-sity hierarchy). This change was necessary so that Omejec could be elected.

By giving the opposition two positions (which bring a monthly salary of more than 5,000 deutsche marks and a monthly retirement pension of 4,000), Smiljko Sokol and Vladimir Seks, the key CDU negotia-tors, apparently earned CDU the right to appoint its own favored candidates for the other positions. These included Vice Vukojevic (one of the most forceful Croatian rightists, notorious for his xenophobic public outbursts and, most recently, accused of involvement in a 1993 rape of a 22-year-old Bosnian woman impris-oned by the Croatian Council of Defense in the Mostar area); Emilija Rajic (a lawyer in the trade conglomerate NAMA, who became prominent only after joining CDU and transferring into the Fund for Privatization); Marijan Hranjski (former procurator general nominated by CDU and self-proclaimed dissident under the communist regime); and Ivan Mrkonjic (former presi-dent of the Administrative Court, known for covering up the tangled financial dealings of certain persons close to CDU). These unsavory appointments have cast a shadow over the Court's future work.

On December 7, as he doubtless expected, Smiljko Sokol was elected president of the Constitutional Court during its first session. Petar Klaric (an independent legal expert nominated by the ruling parties), and Jurica Malcic were elected vice pres-idents. The new Court has promised to keep its work open to the public. Optimists are hoping the Court will divide into two factions. According to this scenario, the liberal wing would consist of two judges already sitting on the bench-Jurica Malcic and Velimir Belajec-as well as Petar Klaric, Jasna Omejec, and Ivan Matija. The opposing side would feature Milan Vukovic, Vice Vukojevic, Emilija Rajic, Marijan Hranjski, and Ivan Mrkonjic. If Sokol changes his allegiance to the liberal wing, it would have a narrow majority. Such a develop-ment is certainly possible, given the recent changes in Croatia's politics. Sokol is known for switching sides- he was a member of the Communist Party during the previous regime and worked on the communist consti-tution. After the system change, he joined CDU and worked on the new democratic constitution. His friends say jokingly (and with perhaps characteristic sensitivity) that if tomorrow Croatia were occupied by China, Sokol would turn yellow.

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On February 2, Miroslav Kutle, Croatia's most noto-rious tycoon, was arrested on the Croatian-Slovenian border. (For more on Kutle, see Croatia Update, EECR, Vol. 8, Nos. 1/2, Winter/Spring 1999.) A police inves-tigation revealed that Tisak (a company Kutle controls) had been pumped dry of its funds through a series of machinations involving shell companies and fictitious contracts. Tisak is the country's largest newspaper distributor, with daily receipts estimated at 1.5 million deutsche marks. A few years ago, Tisak was the second most profitable company in the country, right behind the national oil company INA. Kutle's financial reck-lessness had pushed Tisak to the verge of bankruptcy from which it was saved only by renationalization. If this step had not been taken, Tisak and a majority of newspaper publishers-to whom Tisak owed enor-mous sums-would have been bankrupted, and tens of thousands would have lost their jobs.

Some bank managers, foreseeing Kutle's fall, had demanded collateral guarantees from Tisak for all of Kutle's loans. Thus, Kutle's loans began to be paid off from Tisak's earnings, which, over time, created a debt estimated at 160 million deutsche marks. Tisak took out loans from all major Croatian banks and then trans-ferred the funds to the accounts of Kutle's other companies in his Globus Grupa. At the peak of Kutle's power, Globus Grupa held some 170 companies, only 20 to 30 of which actually functioned. The others were shells, formed to cover the traces of stolen capital and to enable the transfer of money from one account to another. Kutle is being held in custody, pending further investigation. Some analysts believe Kutle has already sent the bulk of his financial resources to Austria.

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