Money for Nothing: Veterans Paid for Undocumented Expenses

Tens of thousands of KM have been withdrawn from several veterans' organization accounts in Sarajevo without ever accounting for the money. The FBiH Financial Police’s investigation into five veterans’ organizations and their two firms found that most of the money was spent for the material expenses, paying employees and fees to the members of the management and supervisory boards.

Officials of the Organization of the Demobilized Soldiers (ODB) of the Centar Municipalities and its firm Uzrab did not explain why they withdrew 223,000 KM from the organizations’ accounts between 2006 and 2008.

The Financial Police of the Federation of Bosnia and Herzegovina (FBiH) filed criminal complaints against Zlatan Kovačić, president of the ODB Centar’s Managing Board, and against Ibrahim Šarić, former director of Uzrab a year ago. They were charged with misconduct in office and damaging the organizations.

Inspectors found from bank statements that money was taken for fees and expenses of the members of the Managing Board, assistance to veterans and various smaller payments. However, there is no such record in the business books of ODB Centar and Uzrab.

Zlatan Kovačić, president of ODB Borough Centar, withdrew 160,000 KM from the veterans’ organization accounts without accounting for the money.
Photo by CIN

The police also filed complaints with the Sarajevo Canton Prosecutor’s Office against another two board members Elmedin Lakača and Hamdo Ćurovac because they did not check why money was withdrawn or how it was spent. Kovačić also got charged for the same offence, but this time as the president of Uzrab’s Supervisory Board.

Prosecutors say that the complaints are still being investigated.

Money Paid, Kindergarten Not Built

ODB Centar was founded in April 2004. The organization’s paperwork was fine in 2005 when it had 22,000 KM at its disposal.

Between 2006 and 2008, ODB Centar got 405,000 KM, mainly from government coffers. More than half that amount or 225,000 KM was to be used to reconstruct a Sarajevo kindergarten “Razigrani Dani” in the Jezero part of town, a project backed by the Centar borough, Sarajevo Canton and the Federation of BiH. The kindergarten has never opened.

Plaque with the name of the contractor in the abandoned kindergarten ”Razigrani Dani”.
Photo by CIN

The ODB Centar contracted Uzrab to do the job. The ODB Centar founded Uzrab in 2006 to hire veterans. The organization paid 154,000 KM on the accounts of the firm.

Šarić, Uzrab’s director until 2007, explains that too much money was spent on the roof, access roads, installations and other rough work,and it ran out.

Financial police established that during Šarić’s mandate 63,000 KM was withdrawn from Uzrab’s accounts and never accounted for.

He left the firm, he says, because of disagreements with the organization’s board over business ideas. Lejla Nuaj succeeded Šarić. She said that over the past four years she was manager in name only and did not deal with finances or have access to the accounts.

Nuaj said that Kovačić had access to money which also confirmed Financial police’s 2008 report.

In the same year, the FBiH Ministry of Education and Science wired 30,000 KM for the kindergarten. However, since ODB Centar had not filed any reports about the work, the ministry sent in members of the Commission for the Accountability of Spending in the inspection. They found that “the value of the work done on the facilities does not come even close to the value of donated money.“ The ministry still got no report from the organization even after its commission established the facts. Officials could not get in touch with Kovačić either, so the Ministry turned to the FBiH Attorney General.

The Attorney General’s Office filed a lawsuit in November 2010 against ODB-a Centar on charges of unjust enrichment, and by the end of last year, the Sarajevo Municipal Court ruled that ODB had to return 30,000 KM, plus interest from July 30, 2008. until the date of return. The ruling to collect the funds was passed last August, but the money has not yet been paid.

Kovačić said that he would not return money and that he was negotiating with the Ministry that it drops the charges.

Ibrahim Šarić, former Uzrab’s director says that this firm scrambled to get projects which did not pay off.
Photo by CIN

According to the records of the Agency for Financial, IT and Consulting services (AFIP), Uzrab had no income or employees in 2009 and 2010.

Reporters from the Center for Investigative Reporting in Sarajevo (CIN) found that the Federal Ministry of Energy, Mining and Industry gave Uzrab a 40,000 KM grant in 2010. The organization says that with this money they bought a vehicle for transport of workers and a construction pump. However, in a report filed by the Commission for Oversight of Grant Accountability at the end of October 2011, Uzrab did not account for the grant not even after it had been served a warning to do so.

The revenue Uzrab reported to AFIP in 2008 was 25,000 KM less than the amount wired to its account that year, according to the Financial Police’s findings.

The police said that Kovačić provided no receipts or other documents to explain why he withdrew 160,000 KM from ODB Centar over three years. He denied embezzling.

Inspection of Five Organizations and Five Firms

FBiH Financial Police also inspected ODBs in Novo Sarajevo, Vogošća and Ilijaš, the Association of Disabled Veterans of the City of Sarajevo, and a Sarajevo veteran-owned firm BH Appeal. BH Appeal could not account for 17,000 KM, but the inspectors found no major irregularities with other organizations.

Fadil Bašić, the head of Tuzla office of FBiH Financial Police, said that they filed reports with the prosecutor’s office regarding the inspections of all these organizations and the reports of committed criminal offence in the case of ODB Centar and Uzrab. He added that the report on the irregularities in other organizations has been forwarded to the prosecutor’s office which will decide if an investigation should be brought about.

Lejla Nuaj, Uzrab’s director won a lawsuit against this firm for 1,500 KM for unpaid salaries and contributions.
Photo by CIN

The request to audit the veteran organizations was sent by the Association of Demobilized Veterans of Sarajevo Canton. Association President Emir Pljevljaković says that they took this step because of the members’ complaints and because these organizations were not filing their program reports.

Officials in ODB Centar say that they filed program reports with the Centar Borough’s Commission for Veterans’ Affairs. Based on these reports of basic information on activities and expenses, the Commission made conclusions on the organization’s work and forwarded them to the Borough’s Council for approval.

Sevdalija Hasanović, the current president of the Management Board of ODB Centar, said that the municipality would not be giving them money had they not accounted for it.

However, Sevdalija and Hamdija Hasanović, his neighbor and cousin who was a councilman of the Party of Democratic Action and a member of Uzrab’s supervisory board from June 2006 to November 2007, were the ones who decided on the ODB Centar’s reports.

Hamdija was a member of the Commission for Veterans’ Affairs from 2006, and since 2009 its president. Sevdalija joined the commission three years ago. He said that he did not take part in the commission’s work when the organizations’ reports were discussed. Records CIN has obtained show Hamdija did.

CIN also found that Zlatan Kovačić, while president of ODB Centar’s Management Board, presented information about the purchase of the land in Hadžići in his work reports during 2007 and 2008 that does not appear to be supported by documentation.

In his 2007 work report he informed the municipality about the purchase of the land which was fully owned by the organization that was to be used for a tourism and rehabilitation center. Yet, he concluded the bill of sale with the land’s owner only the following year. Moreover, the land has not yet been titled in the name of ODB Centar, according to the Sarajevo Municipal Court records.

Sevdalija Hasanović, president of the Managing board of ODB Centar, said he did not tell his members who to vote for.
Photo by CIN

According to the contract, ODB Centar bought 3,700 square meters of land in Žunovnica near Hadžići, for which Mladen Todorović was to receive 32,000 KM.

Todorović said that he was still owned 2.000 KM, but he was not going to approve deeds on the land in the name of the buyers even if they were to pay the remaining amount, because the price of the land had increased in the meantime.

Kovačić said that the land was not titled in the name of the organization because it did not pay 4,000 KM in title fees.

At least 150 veterans organizations in Sarajevo Canton

Cantonal and municipal authorities in Sarajevo have on average spent 2.5 million KM a year financing veterans’ associations’ activities. In the cantonal registry of non-governmental organization at least 150 veterans organizations are listed, but the bulk of them do not receive regular funding from the government.

The Audit Office for the Institutions of the FBiH in its 2009 Report on the Spending of Funds in Canton of Sarajevo stated that the Ministry for Veterans’ Affairs does not oversee sufficiently the way in which money intended for veterans is being spent. The auditors state that organizations often do not report on their spending or only present calculations from which it cannot be established for what purpose money has been spent.

Elvir Ribica, disabled war veteran from Sarajevo, said veterans associations do little.
Photo by CIN

According to data CIN collected, the Sarajevo Canton Ministry for Veterans Affairs finances on average 30 organizations a year, while eight Sarajevo boroughs finance around 70 organizations. Some groups get support from the canton and a borough.

The money is being spent on the employees’ salaries and contributions, for events, for assistance to families of poor veterans and hospital treatment, for purchases of wood and winter stores, for summer vacations and scholarships for children of veterans.

Veterans say that they are not satisfied with the work of the veteran organizations.

‘If someone asked me, I would close all those veterans’ organizations, because there is no use for the veterans’ population’ said Elvir Ribica, former member of the BiH Army and a disabled veteran from Sarajevo.

Financial police reports show that through the accounts of five organizations and its two companies 960,000 KM flowed from 2005 to 2008, out of which,one-time handouts to veterans accounted for only 72,000 KM. Most of the money was spent for the material expenses of the organizations, paying employees and fees to the members of the management and supervisory boards.

ODB Novo Sarajevo accounts show a flow of 63,000 KM for the same time, from which almost 38,000 KM was spent on the organization officials’ salaries. Naser Islamović and his wife Aida, director of BH Appeal, were withdrawing money.

Islamović said ODB Novo Sarajevo nowadays has an 8,000 KM budget that is spent paying the minimum wage and monthly contributions totaling 650 KM and utility bills.

ODB Vogošća received 29,500 KM in 2007 and 2008. Of this 11,000 KM was spent on material expenses, per diems and contributions. Veterans received no assistance money.