A lucky real estate deal

Vlada FBiH je 2000. godine kupila stan koji je potom dan na korištenje budućem premijeru Nedžadu Brankoviću. Tadašnjem direktoru Energoinvesta trebalo je samo sedam dana da otkupi stan na temelju stanarskog prava kojeg mu je dodijelio stranački kolega Edhem Bičakčić.

Nedžad Branković (Foto: CIN)

In the spring of 2000, future Prime Minister Nedžad Branković got some bad news. The apartment in Ciglane where he was living had to be returned to its former owner. That started a chain of events that led to the government of the Federation of Bosnia and Herzegovina (FBiH) buying an apartment for a political insider.

Seven years later, Prime Minister Branković owns an apartment currently worth nearly 500,000 KM in one of the most sought-after locations in Sarajevo . What did it cost him? The equivalent of 900 KM.

In other countries, a revelation like that might destroy a politician’s career. But not in BiH.

The Center for Investigative Reporting in Sarajevo (CIN) wanted to know how it happened. While some participants in the deal withheld records, CIN was able to track down dozens of land records, contracts, payment records and government decisions from multiple sources to put together a detailed look at the agreement.

Nedžad Branković
Nedžad Branković (Photo: CIN)

Ultimately, it will be officials in the Department for Organized Crime, Economic Crime and Corruption in the Prosecutor’s Office of BiH who will determine if the transaction was legal. They are looking at former FBiH Prime Minister Edhem Bičakčić and his Deputy Prime Minister Dragan Čović, who are accused of giving away apartments– including this one– to selected high-ranking politicians.

In May of 2000, Nada Ludvig Pećar was living in a beautiful 132-square meter apartment in Ciglane, but needed to go to the United States for medical treatment. She said that when she showed Branković her apartment, he told her he preferred it to the others in Ciglane he had looked at. Branković refutes her account.

Still, that same month the board of directors of Energoinvest decided that Branković was a valuable enough executive that he deserved an apartment. Energoinvest did not provide documentation why this was the case. Rather than giving him an apartment that the firm, unprofitable at the time, already owned, it decided to buy him a new one.

At the same time, the FBiH government also determined that Branković was a valuable enough member of parliament that he deserved an apartment. Records do not say exactly why. Energoinvest and the government agreed to jointly buy an apartment and on May 22 signed a deal. That same day, Pećar sold her apartment to the government.

The document the government and Energoinvest signed is interesting. First, the representative for Energoinvest was Branković himself, an apparent conflict of interest, although the document never says that the apartment is for him. It is not clear who actually signed the document because no name is given except Branković’s. Second, the document lists the price of the apartment as ‘about 150,000 KM’ an imprecise value for a legally binding document, which was to cover Energoinvest’s 50 percent share.

Third, an article in the agreement asserts that the apartment is listed in the register of occupancy rights at Sarajevostan, a Sarajevo public housing enterprise, and that the FBiH government would decide future occupancy rights. Because the government bought this apartment from a private owner, it would not normally have been listed on the Sarajevostan register.

Why the government and Energoinvest would spend a large sum of money on an apartment, only to make it eligible for give-away is not clear. Most apartments on the list were apartments the state already owned.

When asked about the contract that listed him as a Energoinvest representative, Branković said, ‘I don’t know all the details. It is a contract between Energoinvest and the government.’

Branković picked an expensive place. According to records of the sale with Pećar, the apartment cost 264,000 KM plus taxes. That is about 2,000 KM per square meter, or 30 to 50 percent more than the going rate, according to the real estate agents CIN asked. Another apartment the government bought the same day a few blocks away sold for 1,265 KM per square meter.

On May 26, just four days after the government and Energoinvest agreed to buy the apartment together, Bičakčić awarded Branković use of that same Ciglane apartment.

Three days later, the government paid the owner for the apartment.

Nedžad Branković
FBiH Prime Minister Nedžad Branković says he cannot remember the details of his real estate dealings seven years ago but he does know everything was handled legally.

It took until July 4 for the government to send a request to the court to register the property in the state’s name. On July 6, Branković signed an agreement with Sarajevostan to use the apartment and a week later he was the official owner.

Buying an apartment based on your occupancy rights, as many Bosnians know, can take up to a year of hunting down bureaucrats and signatures.

It took Branković and his wife, Suada, a week.

It was so fast that he had his place before the government’s brief ownership had even been registered .

According to the court records, Branković acquired the apartment for 46,000 KM in ‘certificates’, a form of voucher all residents received after the war. Their value in 2000 was 2 percent of their face value, or about 900 KM.

CIN could find no record of Energoinvest having paid its share of the apartment. While it has asked for documentation from the company, officials say it must wait some time for approval from its board of directors.

CIN did find a payment receipt by the government for 264,000 KM, plus 26,400 KM in taxes. Thus the Bosnian taxpayers paid at least 150,000 KM and maybe as much as 300,000 KM for an apartment they owned for one month only to have it sold to a politically powerful man for about 900 KM.

After the hurried sale and resale, the FBiH defense office in August 2000 officially signed off that everything had been done legally.

Branković said he doesn’t remember much of the details. He does remember that everything was done legally.

This is not the first time Branković has been involved in a real estate deal that has later raised questions.

The Poljine settlement in Sarajevo turned into the BiH equivalent of Beverly Hills after the war, filled with luxury villas custom-built for the rich. Centar municipality land records show that Suada Branković, bought a near-acre lot in Poljine in 2005 that was worth 62,000 KM at the time. Branković was then minister of Communications and Transportation.

Nedžad Branković
FBiH Prime Minister Nedžad Branković says there is a good explanation for why his house in Poljine doesn’t appear in court records. It was a reconstruction of two existing buildings on the property, he says. Those buildings are not in court records either.

The couple built a comfortable house there in 2005 with an orchard and garden. The house was built using two existing structures as a base. The problem is that none of the structures show up on the official court records.

Branković said he didn’t need a permit because he was reconstructing a house.

‘That house has an address, number….It’s a reconstruction of a building,” Branković said. “How could have a municipality put a number on the door? No house in that area had a construction permit.’

The illegality of the Poljine properties was taken care of last year.

Besim Mehmedić, the director of the Construction Institute of the Sarajevo Canton explained that the Cantonal Assembly allowed a blanket legalization of all construction in Sarajevo . He said he objected to the action. Officials, he said, should have demolished all illegal construction and required building licenses. ‘However’ he said, ‘nobody had the courage for something like that, and now it’s over.’

Minister of Planning of Sarajevo Canton Abid Jusić said the law is not being enforced.

‘Yes, by the law (construction without a permit) is a punishable act, but it is not enforced. I don’t know why. Inspectors make reports and nobody knows where they end up’ he said.

Jusić said the Assembly’s decision didn’t give amnesty to illegal builders, but it did limit the fines they were subject to. The fine for illegal construction? Between 20 and 100 KM.