Introduction: The Rise of ‘state capture’ and large scale corruption
Large-scale and systemic state capture,
which is the root of widespread corruption, is acquiring such
The Extent of the Problem:
During the first two transition years
after the overthrow of Milosevic in 2000, political corruption in
The Serbian citizens’ perceptions of
corruption coincide with the WB research results and the TI CPI rank.
The data of the survey conducted for this policy paper (see Annex I)
Following the transition in government,
there was a change in priorities leading to a more old-styled manner of
governance, expressed in the political/party control of the police, the
security intelligence agency, the media, and the judiciary, bringing
back the old cadres to positions in state organs. Whereas the first
ambitiously and enthusiastically concentrated on enabling
The second transition government continued
with the passing of a number of anti-corruption laws,
contributing to a trend towards improvement in Serbia’s position on the
TI rate score during the period of 2003-2006 (before
Serbia was not measured). The most-recent publication of the TI
Corruption Perception Index (CPI) for 2006 shows that Serbia has
slightly improved its position, rising from a 97-103 ranking to a 90-92
ranking (together with Suriname and Gabon), with a CPI of 3.0 (it was
2.7 for 2004 and 2.8 for 2005) among 163 countries. This grade is still
very low and signifies endemic corruption (5.0 means that corruption
has been reduced to a somewhat bearable level). A comparison with the
ex-socialist countries shows that the best are
Although Kostunica’s government has passed a number of laws which have had some effect on the country’s rating, adequate institutional reforms have not been established to ensure accountability, transparency, rule of law, public sector effectiveness and merit-based public office appointments. The implementation of some laws was postponed or had no great consequence. Rather, the government has focused on reviving nationalist values, resolving the “Serbian national issue” and preserving the staff and corruptive institutional structures that better serve such objectives. Reforms of the state institutions have merely been rhetorical. Insufficient encouragement has been given to the competitiveness of the economic and political systems. New decrees have extended discretionary decision-making methods. The privatization of the big public companies has not yet begun. The effectiveness of regulatory institutions has been sabotaged and the implementation of the Law on Auditing State Institutions and the Ombudsperson Law has been delayed. The Anti-Corruption National Strategy passed in December 2005 still lacks an institutional framework; specific action plans have not yet been drafted.
The weakening of the European orientation
of the Serbian transition has been accompanied by the rebuilding by the
political and business elite of ’state capture’ mechanisms. They have been
able to “seize control” of state institutions, exercise excessive
influence and amass considerable wealth. The phenomenon of state
capture has been responsible for growing large-scale corruption and has
seriously jeopardized public interest and transition in
The visible consequence of the deficiencies described above has been the continual on-going corruption affairs appearing in the news during the past three years. All cases have been at the ministry level. The greatest number has been connected with the “finance party” (G17 Plus). Scandals have included: the privatization procedure of the National Savings Bank; a bribery situation publicly known as the “Brief Case Affaire” involving the vice governor of the National Bank of Serbia; the gross manipulation of a mineral water company privatization; graft in army procurement and the unauthorized commitment for the purchase of a satellite for monitoring security zones around Kosovo. Other cases of suspected corruption having potential million-dollar damages for society involve the import of electricity (owners of the import company are said in public to be financiers of the biggest political parties), the import of petroleum from Syria and the buying of railway cars without tender and procurement procedures. 
None of these affairs has been resolved by
legal process and the government “reacted” with silence. The president
of the Anticorruption Council of the Government of Serbia, the advisory
body founded by the Djindjic government to deal with this problem, has
estimated recently that the level of corruption in
Recent events related to the preparation,
approval process and content of the new Constitution of Serbia confirm
my initial hypothesis about ’capture state’ by the political/party
elite. In mid September 2006, leaders of the four biggest parties agreed literally over night
about their Constitution Proposal.
Without one day of public debate, based on the decisions of the party
leaders, Parliament passed the Proposal and called for a referendum for
its approval. Even the members of the Parliament never received the
Proposal, nor did they have a chance to discuss it in session when
adopted. Citizens and their organizations did not have a chance to
debate it either. Among items that reinforce capture state mechanisms
of the political parties in the Constitution, MP mandates belong to the
parties. In Article 102 it is stated that “the MP is free to (…)
irrevocably put his mandate at the disposal of the party on whose list
he was elected as MP”.
In addition, the immunity rights for the MPs have been broadened. These
changes will strengthen the political power of the party elite and its
interests (i.e. executive power) and additionally degrade Parliament
and the MPs’ responsibility to the constituent’s interests by
re-confirming their impunity. The public has given the new Constitution
the name “The Functionary’s Constitution”. The legitimacy of this
public reputation of the Constitution was soon demonstrated when the
Basic Law on the Implementation of the Constitution was on the
Parliament’s agenda. The parties made a “deal” that they would vote for
the Law only if, during the first session of the new Parliament (after
the January elections), the heads of the two independent institutions
would be replaced: the Governor of the National Bank of
The new Constitution will not help curb
‘capture state’ and its damaging consequences. It will not make
political leadership accountable to the public. Even worse, judicial
independence is not guaranteed by preventing party/political influence
over the courts, the police and public prosecution. Getting to the roots of corruptive
practices in governance is crucial to
From the point of view of system theory,
capture state is caused by a weak functional differentiation of the
social system. Boundaries between the subsystems do not exist or are
porous. Power and goods from the economic sub-system are convertible
for influence and goods from the political sub-system and vice versa,
depending on where the dominant power of the social system lies. The
dominant power in
The most important ’capturing’ agents are
the political party leaderships who have seized huge state property
including public companies, public offices and institutions for their
own interest. The second important agent is the 10-15 richest tycoons
of the country who finance all the relevant parties, thereby becoming
part of the system.
Both elites, in collusion with each other, have established a system of
integrating their influences, interests, and services for mutual gain.
This collusion has created an oligarchy social structure in
Picture 1: Model
of State Capture in
Picture 1 above shows the mutual dependence between the political and business elite and how the tycoons help sustain their political positioning by financing all of the relevant parties; in return, the ruling parties protect economic markets, fix tenders and auctions, and pass favorable legislation for the tycoons. It also shows how Government, Parliament and Parties are connected with public companies and public institutions as their own shares of power. The (black) links which go from the government to the parties show that the position of the ruling parties in the described context has a feedback effect on the parties, making their decision-making more centralized, oligarchic, and located practically in the hands of the president of the party.
The Mechanisms Used:
The following analysis will concentrate on ’state capture’ as a specific process in which political elites gain control of public offices, enterprises, utilities, and resources through a mingling of state, political party, and economic power. Emphasis is placed on the concrete mechanisms which explain how political parties impose their own benefits over public interests, how these mechanisms are incorporated in the multy-party system and how the party-state amalgamation has been achieved.
I have selected the following six interconnected mechanisms of state capture:
1) Division, of the government and the entire public sector into a feudal type system whereby each party in the ruling coalition is given control over the portion it receives (based roughly on the number of MPs it has in parliament) as if it were its own private fief.  “Vertical Partition” of the Government, as it is called in public, has eliminated the mutual political control of the coalition partners.
2) Connected with the first, the second mechanism entails appointing leading party officials (presidents, their deputies, etc) to manage the ’fiefs’ although they are simultaneously actively discharging their party offices. Because the party leader – feudalist has MPs in the Parliament providing majority support to the Government, corruption is practically incorporated into the manner in which the government operates. If a minister were to be dismissed for corruption, he would withdraw his MPs and the Government would lose the parliamentary majority and fall.
3) Degradation of the Parliament and the mechanism used for bribing MPs assuring their loyalty. Obedience is obtained by offering the MPs multiple functions such as being appointed to the managing boards of the public companies or being appointed to perform executive functions in local and regional governments, enabling them to receive several sources of income.
4) Parties in the ruling coalition have the exclusive ’right’ to make appointments in state administration, public companies, utilities, institutes, agencies, funds, health, social and cultural centers, dormitories, veterinarian stations, schools, theatres, hospitals, libraries, monuments and memorial parks maintenance services – all of which belong to the public and are supported from the public budget. Management positions are not advertised and based on merit, which additionally damages public interests and constitutes widespread discrimination of citizens on the basis of party affiliations. 
5) The relationship between parties (government) and business is not regulated in a transparent manner because the Law on the Funding of Political Parties, passed in 2003, is deficient in its controlling mechanisms and was not strictly and effectively implemented in practice. The effectiveness of this law is the same as that of other similar laws for which “political will” is needed. There is a tacit agreement between the parties not to implement the law strictly. As a result, corruption in this area has not diminished. The parties have remained the center of the corruption.
6) Political influence over the judicial system is excessive, and there is a lack of checks and balances between the three main state powers. The executive branch (which again means party influence) has gained control over the Parliament, the courts and public prosecution. This key mechanism is an extremely-extensive, separate topic which must be investigated in-depth independently, and it will therefore not be part of this research.
II. How the Government Functions as a Confederation of Party „Fiefs“
I will analyze
the party feudal system at the national level by presenting details
about the cases of the Ministry of Finance and the Ministry of
Education and Sport. I will then describe how the “party state”
functions at the local level by presenting the case of
Political System and What the Parties in the Ruling Coalitions Own.
The Feudal/Party System at the National Level: The Cases of the Ministry of Finance and the Ministry of Education and Sport
At present, in
The striking fact is that institutions,
like the tax and customs administrations, the National Bank of
Apart from the horizontal (at the national
level) party rule, this party also rules vertically by appointing the
heads of local tax administrations, customs boards and other local
administration units. Procedures for local
appointments include proposals from the local party units.
In practice, employment opportunities for the heads of local tax
administrations, customs, etc. are not publicly advertised or discussed
officially; local party boards recruit the heads of the local
administration units all over
The case of the Ministry of Education and Sport (MES)
The next analysis shows the comparison
between the first and second post-Milosevic governments related to the
party membership of the Ministry itself, appointed Heads of the County
Educational Departments and the appointments in institutions, companies
and commissions dealing with education in
Party Membership of the Ministry in the
First and Second Governments:
|Positions||I Government||II Government|
|Deputy Minister||Non- party||DPS|
|Deputy Minister||Non- party||DPS|
|Deputy Minister||Non- party||DPS coalition party|
Composition of the Heads of County Educational Departments, by party affiliation:
Minister/ CAS Heads 2004/
Minster/ DPS Heads
2000/ Minister/ CAS
2004/ Minster/ DPS
When the new government came into
the Heads of County Educational Departments appointed in 2000 were all
dismissed (except one in Kosovo); the turnover at this middle rank
position was one hundred per cent. All new appointments were
exclusively selected from the dominant party for this party fief (the
Minister’s Party is the Democratic Party of Serbia - DPS). Since their
professional reputations were much lower, this turnover meant that
more-qualified people were replaced with less-professional directors.
This change reflected the changes in the Ministry itself: the best
experts available in
The same type of one-party control criteria can be found in all other educational institutions: The Centers as well as the semi-independent institutions (founded by the Ministry) devoted to development and evaluation of the quality of education, professional training of teachers, etc.) were reorganized. The directors of the Centers (experts and non-party people) were dismissed and replaced with less qualified people from the DPS. Public companies founded by the Ministry such as the very profitable Text Book Publishing Company, were given to the DPS.
The same party (DPS) got the position of
President of the Commission for Education in the Parliament. On the lower side of the hierarchy, going down
to the directors of the schools, the official procedure theoretically
empowers the schools boards composed of 9 people (3 parents, 3 school
employees, and 3 from the local government) to elect the director and
send the elected candidate to be approved by the Minister. But in
practice it is not so, because the 3 people from the local government
who are from the party, impose the selection of the school director in
The forging of party criteria for appointing directors of the primary
and secondary schools all over
The analyzed pattern of “party recruitments” is not specific only for the Ministry of Education, or for the Ministry of Finance. Upon investigating the individual appointments of directors at the local level, in schools, libraries, cultural centers and etc., and noting the number that were appointed by the central government, it was evident that non-party candidates have had almost no chance to get a director position in local-level institutions. The analysis of some individual cases has shown that at the very moment when one party “conquers” a ministry, the local party functionaries start insisting to party headquarters that they get the leading position against other candidates in the competition. The party administration prepares the case for the Presidency of the Party to influence their ministers to appoint “our people”.
The described widespread practice to give almost absolute advantage to a “party candidate” has marginalized both fair competition and professionalism for the managing positions. By preventing competition and weakening professionalism, corruption has become protected within the political/party hierarchy and has been influenced from the top positions of the government. This is a general rule that is being applied in all ministries and middle administration positions in the county institutions and companies - down to the local level offices.
The most important aspect of state capture is the ‘seizure’ of the public companies. Parties in the ruling coalition exclusively manage them. Public property has thereby effectively been converted into “party property” and is managed in its interests. And it is a huge amount of assets that has been captured. The 17 biggest companies founded by the government of Serbia are managed by the parties that comprise the ruling coalition at the National level: - the managing boards, presidents, and directors - are compiled and by a quota system are divided up among each of the parties of the ruling coalition which appoint the management positions as if the companies were their own property. All other public companies – about 500 – are in the hands of the ruling coalitions at the local levels (see the quadrant, below).
There are many indicators that management hiring decisions in the public companies do not follow the criteria of merit, experience and qualifications. Nor are managers held responsible for results. If the government wants to keep low prices, producing losses, the managers appointed by the parties must comply. This is the case with electricity prices that are lower than in the rest of the region. Justification for controlling prices in electricity (or other prices) is the socially- based argument of subsidizing the low salaries of the population; it also serves to present inflation nominally lower. But the low prices have also provided substantial real benefits to the private interests of the party-related firms that are selling electricity abroad. Such discretional decisions about prices in public companies can bring enormous profit to the tycoons who are financing the parties of the ruling coalition.
Since public companies are the
political-power stronghold of the ruling parties, they are used in many
different ways. Benefits for the party include the companies being used
for the employment of party members and for rewarding party
functionaries for their loyalty with the extra incomes of
directorships. Parties may also get free direct services such as
publicity for their campaigns, the publishing of journals and
advertising materials, the delivering of presents to the socially
deprived in the name of the party, etc. They even serve to control
media: the biggest public company, Electro-distribution of
The ‘right’ to appoint directors, as well as managing boards, is not subject to any public control regarding the use of resources or salaries for the management board. Nor is there any independent external auditing of the real situation in the company. When asked about the salaries of the top management, the directors of the public companies chose not to answer, saying that it is a “secret”. Detailed research on salaries in public companies shows that the average income of the employees is not significantly higher that in other enterprises. Income is much higher only for the top-management boards who, in individual cases, receive more than 500.000 dinars per month (6 thousands euros, in a country where the average salary is 200 -250 euros). Incomes for the members of the managing boards vary from company to company but they can be two or three times the average managerial salary. The true benefit is even much greater because it is not a job, but a position that can be held in addition to regular jobs or other positions.
Party-nominated management boards are not
there to control and supervise the business results of the company and
work for the public interest, but to “close the eyes” for their own and
party interests. Public companies are the nest of corruption and the
loss of public money. This can be changed only by the process of
privatization. The IMF suggests that real reforms will start when
public companies, (most often monopolies) enter an adequately-designed
and controlled privatization process.
Only then will the real reforms in
The Case of the City of
The city of
As has been demonstrated at the national level, state capture of all positions in public offices is the model operating at the local level as well. On the local level it is more visible how elected people get jobs in public companies, and how nepotism operates together with cronyism.
The Structure of the City Authority
|Government/Secretariats||City Council 2004-*||City Council 2000-2004|
|Mayor (directly elected)||SRP||LSV|
|City Architect/Urbanism||Quota of SRP||LSV|
|Budget and finances||SRP||DP|
|Administration and legal affairs||SPS||DP|
|Information||-||Social democratic party (SDP)|
The table shows the government structure by the party-related distribution of the “ministries” and positions in the local government. It shows that there was a 100% turnover after the local elections: one party (coalition) enters the local government and takes over all public positions; after the next election, another army comes to take their positions. It also demonstrates that no professionalism is needed.
The cost in terms of managerial capacity
is enormous. As soon as one group of managers gets the knowledge and
experience to lead health or education etc. it may be thrown out and
replaced after the next elections. Hundreds of people who were
appointed by the Democratic Party before the last elections had to find
and it will be the same with Radicals when they lose the elections and
a new coalition comes into power in
The “turnover” of power is used in several different ways for the benefit of the party cronies, families and friends against the citizens and the public interest:
1) To get leading positions in the public companies. Of the 42 members of the Assembly who were elected, 24 got jobs in public companies in the positions of directors and professional posts. Three members of the City Assembly elected from the DP list, left their party and joined the Radicals majority for family reasons (to protect their husbands from losing director positions which they had in the previous distribution of managing positions in the public companies).
2) More than 1000 people got jobs without
public advertisement and competition in the city administration and
public companies. During the first 13 months of the rule of the
Radicals, 965 people from their party were employed in the public
companies and utilities (while the DP employed 654 people during the 8
years of their rule). Many of the
employments were based on nepotism (family and friendship ties),
creating numerous public scandals. The mayor of
3) More than 30 people without the required educational qualifications, via family and party ties, got jobs in the city administration, in leading positions. The jobs were in the public companies and utilities (there are 15 such companies under the rule of the city and they are in the hands of the ruling coalition) and in institutions of culture, urbanism, museums, school boards and directors and etc.
4) The Radicals and their coalition partners (DPS and SPS), who divided the public companies, have ignored the previous practice that the presidents of the managing boards of the public companies (and institutions) and the presidents of the monitoring boards must be from different parties. This practice had enabled some elementary internal control to be established. Now both the president of the managing boards and the presidents of the monitoring bodies are from the same party.
5) The dramatic lowering of the qualifications of the appointees in the local government and companies, has led to huge losses which must be covered by the city budget (which is created from the money of the citizen tax payers). The financial reports of the city companies have shown that they have been making less and less profit; the city transportation company has had a five-times bigger loss (deficit) than it had in 2004 (when the Radicals came to power) while the biggest company (The Sport Center of Novi Sad – SPENS) has suffered losses for the first time in its history. The City Assembly passed a revision of the budget by which an additional 750 million dinars in subsidies was approved for the city companies. This means that more than half of the city budget is being used to subsidize public companies.
6) The salaries of the directors in the
public companies have been raised to such an extent, that 44 of the
directors of the public companies and institutions (as well as their
advisors and deputies), were on the list of millionaires of
data for the City of
III. Degradation of the Serbian Parliament and Multiple Functions of MPs
In trying to eliminate the corruptive mechanisms in the Serbian Parliament, the Venetian Commission on Serbian Electoral Legislation has suggested that the electoral legislation in Serbia has to be changed to make clear that (a) mandates belong to the individual MPs, and (b) parties and coalitions must announce in advance the numerical order of the candidates who will enter the parliament from the lists instead of being allowed to choose after the elections which candidates will get the mandates. Under current practice, citizens never know who they are voting for. But instead of enacting the suggested reforms of the Electoral Legislation, the new Constitution, created by the agreement of the four leaders of the parties, clearly states that the mandates belong to the parties. The ratification of the new Constitution made it more difficult to eliminate corruptive mechanisms from the Parliament.
To cement their obedience, MPs are corrupted by being given money for trips they never made and for Parliament committee sessions they never attended. But the main bribery mechanism lies in the opportunity of the MPs to accumulate offices: MPs can simultaneously be mayors of cities (or municipalities), president of the regional government, or members of the local governments (“councils”) and be on the managing boards of funds or agencies, They can be elected as assembly members on all other local levels (city and province).They can be business advisers, city land bureau directors and members of the managing boards, presidents or directors of public companies. The only limitation for MPs imposed by the Law on the Conflict of Interests (passed in April, 2004) is that they may not have a managerial position in more than one public company at a time. By the same law, MPs explicitly have the right “to keep their managing rights in other business enterprises, if that does not influence their public functioning and their impartial and independent performance”.
Holding multiple functions allows MPs to
have several sources of income (see Chart 1). It is shown in Chart 1
that 61% of MPs have other functions, of which 44%
have one more function and 17% hold two or more functions.
Getting the most lucrative functions in a public company is
possible only by decision of the president of the party. This gives the
party presidents great power by allowing them to deliver ‘rewards’ to
other party functionaries. The richer the public company one gets, the
more he/she will gain by sitting on the managing board.
Chart 1: MPs multi-functions - Total MPs=246
I have identified 23 individual MPs who have 4 public functions; 17 mayors of the cities are MPs.  When some of the party leaders were interviewed about the reasons for the accumulation of functions, the answer was that the mayors of the cities and municipalities, and the directors of city land bureaus and other institutions want to be MPs for the immunity they enjoy. Another reason for function-accumulation in few hands comes from the oligarchic structures in the parties: it is easier to control a small number of people than a wider group in the case of the dispersion of functions. Some MPs hold all representative roles (cities, provinces) below the National Parliament. Being liberated from the restrictions of the Law on the Conflict of Interests (which is tightly controlled by their parties), and enjoying a widely-defined immunity, the MPs can provide ‘state capture ’ in a literal sense as the ‘seizure’ of laws to the advantage of corporate business via influential political links in the Parliament. They have the privilege to be “legally bribed”.
Regulations on conflict of interests serve
to set standards for public office performance, build citizen
confidence in state institutions, and prevent multiple functions and
corruption. In essence, these regulations put limits on the
accumulation of functions by public officials, which always leads to
the concentration of power in a society and the degradation of public
interest. If public officials are acting in many public roles, they can
not comply with the requirements of any of the roles, thus damaging
public interest. The Law on the Conflict of Interests passed in
1) Many public functions were not embraced by this law, including roles most likely to be exposed to corruption, such as positions in the courts, prosecution offices, police, customs, tax administration, intelligence and security organs, jails, health and social funds and many other important functions;
2) The law allows the accumulation of functions;
3) The Republican Board for Preventing the Conflict of Interests is not professionalized. It does not set criteria for the election of its members (even education requirements do not exist) and their competences are not defined (except for the three members elected by the Supreme Court). Members of the Board have other jobs in the private and public sectors and they make decisions ad hoc (they meet from time to time, the Law does not say how often the Board will meet and according to what procedure). How they are elected is also questionable ( the Supreme Court elects 3 members, the Bar Association 1 and the National Parliament 5 on the proposal of the Serbian Academy of Sciences and Art), giving SASA a de facto majority on the Board;
4) The Law does not contain sanctions for the conflict of interest. The Board can only give non-public warnings followed by public recommendations for resignation if the non-public warning does not have an effect on violators of the law. The property of the functionaries is a secret not available to the public, etc.
IV. Regulatory Institutions, Laws and
Anticorruption Policies in
From the point of the ’state capture’
problem, we will see what
I will now give a brief overview of some of the anticorruption institutions and laws that exist, giving special attention to the Law on the Financing of Political Parties because of its key role in curbing state capture and the links between political party leadership and the economic elite (tycoons).
1) Almost nothing has been done to
introduce professional requirements for appointed positions. An
improvement was made in the state administration, by passing the Law on
State Administration (it came into effect starting in July, 2006).
According to this Law, deputy ministers will be professionalized and
positions will be advertised. But, as
always, the problem is implementation. Contrary to the declared
intentions of the Law, the Government has begun organizing an almost
total politization of staffing from the top to the lowest positions of
the administration. The staffing initiative started when new elections
were announced (for January 21, 2007). All of a sudden, in November
a large number of advertisements for “deputy ministers” appeared in the
newspapers. The intention is to transform their party cadres into
“professional civil servants” and entrench them in the government
administration after the elections. Along with this typical “political”
implementation, the Law also has other deficiencies because it does not
cover public servants in the police, the customs, security, tax
administration etc. Experts say that there is no “political will” in
our politicians to give up party influence over state administration.
Such a change can only happen if
2) In 2005,
3) The Ombudsperson Law was passed but no
one has yet been appointed to that position. In Vojvodina an “Advocate
for the Citizens” exists, and a similar position was recently created
in the City of
4) Anticorruption agencies and commissions have not yet been formed although the National Anticorruption Strategy was passed in the Parliament in December, 2005. What still exists is the Anticorruption Council, a body, comprised of civil society representatives, which was formed during the first transitional government, and which will be dismissed since the new Agency just mentioned will take its place. There are a couple of NGO organizations that are dealing with corruption. The most prominent and active is Transparency Serbia;
5) Regulatory institutions are being
Because of the huge domination of
6) The latest draft law on foreign investments included the concept of One Stop Shop and it is another example of grave distortion of a good idea. The World Bank gave very serious remarks on how the law will open wide the door to corruption because of its deficiencies. In the law, the One Stop Shop will be virtual; it will not be an actual office. Each municipality (there are almost 160 in all) will be a One Stop Shop. The actual shop will simply be the discretional judgment of the mayor, and, for larger investment – the Minister of Economy. The One Stop Shop can be at the service of an investor, or he can be deprived of it, depending on the discretional decision of the mayor or the Minister, independently of what the law says. Discretional decision-making provides an open invitation to pay-off requests.
The Law on the Financing of Political Parties
The Law was passed in 2003 but it did not
meet the expectations to prevent secret, under the table, party
financing, which has become a tradition in
What is needed is a transparent model for
financing the parties and an efficient control mechanism.
The main problem of the existing Law is that it does not provide for the establishment of a separate institution to monitor the funding of parties nor a separate body charged with supervision. There now exist two control bodies which should not be connected with each other: the Republic Electoral Commission for the campaigns; and the Parliament Board of Finance for controlling regular party activities and financing. This supposed control body is composed of party members who submit the financial report. This means that the parties control themselves. Although these organs can employ professional reviewers, they abstain from doing it for two reasons: first, they lack the political will to really control the party financing; second, these two bodies (the REC and PBF) do not have a budget to pay reviewers. Furthermore, these two bodies do not have the legal authority to start procedures against a party that violates the law; they can only initiate a process that must be carried out by other organs. This practically renders inexistent the control of the parties by the law. The law suffers from other deficiencies, such as the stipulation that 20 percent of the money from the budget set aside for party financing should be distributed to the parties at the beginning of the campaign, and 80 percent at the end of the campaign (according to success in elections). This means that parties have to find money from other sources, because they need money at the beginning of the campaign. Uncertainties in the Law and especially its weak control, have paved the way for the undisciplined behavior of the parties. The majority do not respect the law, and do not submit complete financial reports in due time. No parties have published their financial reports and made them available to the public, although it is required by law.
Despite the parties having avoided transparent financial operations by taking advantage of the weak control mechanisms of the law; they have nevertheless been able to receive between 5 and 7 million euros a year provided by law from the state budget. There are many indications that politicians have systematically been creating loops of companies through which they have acquired a lot of that money. Under the same political influence the supposedly independent, regulatory institutions (commercial courts, enterprise registries, the stock market and the media) have compromised their ability to control corruption.
The delay of the government to form a specialized Anticorruption Agency which would effectively control party financing (together with the Institution for State Audit), means that the coming elections will be carried out under the existing highly-deficient control mechanisms.
The preceding analysis confirms that Serbian anticorruption policies are weak, and as such, contribute to state capture and corruption. It also confirms that if there is no political will to curb the corrupt state, no law is good enough. The law can be perfect but it will still not function if there is no will for it to be implemented and enforced.
V. Survey on public opinion on corruption and state capture
I have analyzed objective data on state capture as a ’framework’ to show that there is ongoing large-scale corruption. But for anticorruption policies it is essential to know what the citizens, as the principle stakeholders, think about the mechanisms of state capture, how much they trust state institutions, how they judge “party“ job allocation in the public sector, what they think of the multi functions held by the politicians and how they think corruption should be fought. I have divided the survey data on the public opinion of the citizens of Serbia into three sections: (1) concerns of the public about corruption and public confidence in the main state institutions and party leaderships; (2) judgment about the existing criteria for job allocation for the leading positions in public offices and what the criteria should be, including the approval/disapproval on holding multi functions by the politicians; (3) tolerance to and awareness about corruption in public offices, and what citizens think the most efficient strategy to fight corruption in Serbia should be.
Concerns about corruption and confidence in institutions
The citizens of
For whose interests are these institutions and organizations working? Using a scale from 1- 5, for each selected state office, the results are extremely worrying. A great majority of the people, 71%, think that state offices work in their own interests, 70% say that they work for their parties, 69% say they work for their relatives and friends, and the same amount think that they work for “powerful people and businessmen”. Only 13% said that state offices work in the interests of the citizens!
In response to direct questions about the
public organization or office in which corruption is the most
widespread (using a scale of 1-5 for each institution), 77% think that
the political parties are the most corrupted, tied for second with 75%
were doctors and MPs, and so on (see Chart
Job appointments for public offices
Citizens have a realistic perception about
how positions in public offices are filled, confirming my research
data. When asked about how appointments should be made, the response
was almost totally opposite to the practice in reality. The
citizens indicated that merit-based appointments should be the most
important criteria used. More than 90% said that it should be the first
criteria taken into account (Chart 6). A dramatically different picture
was given about how they view the practice to be in reality. Citizen
responses estimated that party membership and family/ friendship ties
are the most used criteria (77% and 76%, Chart 5), while merit and
qualifications play a much lesser role in the selection process.
Perceptions about the procedures for recruiting for jobs in public offices show that 49% of the citizens think that advertisements for public office positions do not exist, and that the parties independently allocate these positions to their own people within party coalition agreements. A total of 40% think that when positions are advertised, the competition is fixed in advance. Only 8% percent of the interviewed citizens think that public advertisements of positions and the opportunity to apply are accessible to everyone.
The general public perceives the holding of multiple functions by politicians to be a negative practice and a problem. Over 90% of the total sample of citizens had this point of view. Among responses regarding multiple functions, 27% said that this phenomenon was caused by greed for money (to have many sources of income); 24% said that it is a problem because it is not possible to exercise so many functions and to perform them properly and in the interest of citizens; 20% estimated that multiple functions mean a concentration of power in fewer hands and that it is not democratic; 19% estimated that multiple functions give too much power to the parties. Only 9% said that having multiple functions is not a problem if someone is sufficiently capable to fulfill them all in a proper way.
Citizens, as well, disapprove of the practice that highly-positioned statesmen/women are simultaneously playing active, high-level roles in their respective parties. Fifty-four percent of the sample disapproved of the practice, 29% expressed their disapproval only for the highest positions (Prime Minster, President of Serbia and ministers) and 15% think that having both an active party function and a state duty or duties does not influence the effectiveness of their performances of both roles.
Tolerance to corruption in public offices and the efficient anticorruption strategy
The citizens of
Other indicators on the same issue once again demonstrated a high sensitivity and intolerance for corruption. Citizens claimed that they would immediately denounce someone who would ask for a bribe, but my opinion is that this is an overestimated expression of action that would not really be carried out when faced with bribery. In response to a question about the relative corruption of political bodies (saying that political corruption is the same in developed countries but did not prevent them from developing), 45% strongly disagreed with such a statement, while only 13% agreed (the others did not express an opinion).
Concerning why corruption is not being eradicated, 46% of the respondents expressed the view that the state is doing little to curb corruption because corruption is located in the state organs, while 21% felt that the institutions such as the courts, inspections and budget controlling mechanisms are not working and a lesser number that said that there was no money to fight corruption, that political parties are not giving enough support and citizens are not supportive.
What do citizens think would be the most efficient policy to fight corruption? They gave three main and mostly supported answers. First, special and independent bodies must be created to fight corruption as the only focus; second, the rule of law and independent courts must be strengthened, and third, internal and external controls must be established for all public institutions together with sanctions for those who violate the rules and standards in the public sector. A small amount, about 5% each, mentioned the need to increase the involvement of all citizens, the need to prohibit multiple functions, the need to introduce obligatory standards of behavior for all public servants, and the need to develop investigative journalism.
Conclusions and Policy Recommendations
The complex transition process in
Accompanying these typical
“transitional” problems are the specific difficulties that
In summary, the results of my research on state capture and my survey of public opinion have demonstrated the following practical problems relevant for policy options:
1) Tycoons have become part of the system (government) by buying political influence to ensure their monopolies (which keep prices higher), getting favorable laws and various privileges;
2) There has been an increase in discretional decision-making of the ministers and government;
3) The administration of tax, customs, police, services and utilities etc. has become highly politicized;
4) Multiple functions, exaggerated immunity, throwing out MPs from the Parliament, mingling of the highest party and state functions, ownership of the mandates by the parties all indicate the formation of an oligarchic political structure;
5) Political/party influence over the new regulatory institutions has been expanded by corrupting their control mechanisms, their selection processes, or simply, by delaying their establishment;
6) Power has been concentrated in the executive branch enabling it to subjugate the Parliament and the judiciary system to such a degree that there is no effective control mechanism over government;
7) Citizens have lost their confidence in all public institutions and in politicians because of state capture mechanisms i.e. their imposing their own interests over public interests.
Policy options and recommendations
The main policy problem is: How can legal limits and effective control be established over the currently-unrestrained party leaderships in managing the public sector and public interests? The policy should constructively lead to the creation of good governance institutions and a supportive legal environment rather than focus entirely on the negative consequences of the system’s illness. To investigate these opportunities, I will mention the positive elements of the changes that have occurred in the post-Milosevic era and point out public actors who could implement new policies to curb state capture. These positive elements for policy changes are:
- Economic reforms have not been discontinued during these 6 years (a short break was visible during 2004, especially in privatization), which leaves the door open to the development of liberal, competitive markets and the completion of the privatization process. Progress in this area will reduce the extensive state interference in the economy, diminish the power of monopolies and the seeking of “favors” for business, and will augment the shift towards a new style of entrepreneurship and corporate business based on law and markets;
- Political competitiveness has not been completely eliminated; there is still room for new political alternatives. There are important differences in the main political orientations of existing parties, giving citizens the opportunity to vote for those which are reformist and EU oriented;
- Despite some negative actions of the government against the NGOs, they are growing stronger, raising their leadership capacities and strengthening their potential for influence by forming coalitions, engaging in joint actions, and cooperating with the new control institutions such as the Ombudsman for Information. Investigative journalism is at its beginning, but it has already produced some positive results;
- Institution-building and the development of a legal framework in the area of good governance is under way, it needs to be continued, improved, implemented and monitored;
awareness about corruption and state capture mechanisms is growing.
They are the most important stakeholders and they need to establish
alliances for combating extreme party/government power so that more-
accountable and transparent governance can be established in
Based on the findings of the research and
the positive tendencies that now exist for combating state capture, it
is evident that if policy strategy is to be effective, it must be
simultaneously carried out on three different policy levels. The first refers to the international level. In the context
On the first
level policy, to break
through the political stalemate of
1. Actively support the pro-European democratic forces and the civil sector, aiming at marginalizing the old nationalistic forces, which are the anchor of the state capture system and anti-European values and institutions;
2. Urgently demand that the new Serbian Government, which will be formed after the upcoming elections (January 2007), extradite Ratko Mladic and other accused Serbs to the ICTY, in order to continue the negotiation process with the EU. The fulfillment of the obligation to the ITCY would give enormous potential to Serbia to eradicate the secretive state bodies of the old regime in the police and military, which are the true stakeholders of state capture, nationalistic manipulation and anti-European policies;
Second level polices, refer to the institution building of good governance, derived from the analysis of state capture mechanisms and consequences. The following policies are recommended:
4. Establish without delay control mechanisms in all areas of public and private sectors where they are missing. This includes the implementation of already-existing laws. The State Audit Institution must be established and given real authority to audit all public budgets. The Agency for Fighting Corruption, the Ombudsperson, and the Civil Service Agency must also be implemented. The latter is provisioned by the Law on State Administration. It will promote professionalism and the complete de-politization of state administration on all levels and sectors, requiring that all appointments be advertised and presented to the public;
5. Introduce an Ethics Code in all public institutions, especially giving weight to the ethical behavior of MPs, government officials, judges, prosecutors, presidents of controlling boards of the regulatory institutions etc. The purpose is to raise the consciousness of ethical standards and increase the effectiveness of the public sector. It is needed to introduce the permanent education of public functionaries and civil servants in the domain of good governance. Themes covered should include the prevention of conflict of interests and the obligation to inform the public about topics of public interest, and about the need for citizens and professionals to participate in the drafting of new legislation;
6. Eliminate the possibility of lobbying the government regarding customs taxes, petroleum excise taxes, transfers to municipalities, credits etc. Eliminate the discretional decision-making of ministries and governments and base them on law;
7. Improve the already-existing laws and their regulatory bodies and adapt them to EU standards so that they may be more effective in their control of executive/political influences and may prevent their collusion with private business. In particular, the new Law on Financing Political Parties should be drawn up and submitted to the Parliament and an effective control body should be set up for its implementation;
8. Advocate improvements in the Law on Conflict of Interests which was passed with many defects. It must cover all functionaries, it must prohibit multiple public functions for the MPs and other government officials and it has to professionalize the Board for the Prevention of the Conflict of Interests;
9. Improve competition policy and eliminate monopolies and privileges in the Serbian economy by introducing more effective “anti monopoly” control bodies, by expediting privatization procedures, by legislating free trade policies and by signing free-trade agreements;
10. Develop effective strategies for selling the shares of public companies (which do not deal with natural recourses), in order to introduce responsible, efficient, and merit-based management instead of present party cronyism and nepotism.
The third level policies emanate from the survey data I have presented showing the dissatisfaction of citizens with public-sector ineffectiveness and wide spread corruption. They include:
11. Build up civil society’s capacities and promote NGOs alliances to organize public debates about party-conditioned distributions of leading positions in the public sector and discrimination on the basis of political convictions;
12. Organize campaigns against multiple functions. Advocate eliminating the mingling of state and party functions at the highest levels. Prohibit the “feudal division” of the executive power in the new government which will be formed after elections;
13. Initiate public dialogues with the more open-minded political parties about changes in election laws, in order to strengthen the role of the Parliament, increase the responsibility and professionalization of the MPs, reduce the scope of their immunity, and enhance citizen-MP relations in proposing, implementing and monitoring the laws in the area of good governance and corruption prevention;
14. Enhance investigative journalism and public dialogues about state capture and good governance topics, as well as about corruption. Support the journalist profession in defense of the freedom of expression. Advocate real independence of the news media, TV and radio public services. Do not allow them to be an extended hand of the government;
15. Make alliances between the independent regulatory bodies (agencies) and NGOs. Facilitate their joint role as strategic partners in fulfilling their social roles including their providing education and training and their monitoring of the effectiveness of the new institutions.
research and survey data will hopefully serve to convince politicians
and government officials to take into account public opinion and the
almost total distrust that citizens have towards political institutions
and political leaderships that is leading to an alarming alienation of
the citizens from the political system. The systematic and sustainable
external influence of the civic organizations and NGOs can bring about
the changes that are needed in the leadership style in
Realization: research was conducted during the period of July 20-24 2006.
Sample size: 1027
Sample type: Three stage random representative stratified sample
Primary stage units: Polling stations territories
Secondary stage units: Households (SRSWoR – random walk)
Tertiary stage units: Respondents within the household (Kish tables)
Research sites: 67 municipalities in
Stratification: gender, age and region
±1.23% for incidence 5%
±2.45% for incidence 25%
±2.82% for incidence 50% (marginal error)
 More about this concept of state capture, see Nemanja Nenadic: “Tycoons and Corruption”, in Politika,12 November, 2006.
 The beginning of the
 After the assassination, the government remained the same, only the Prime Minister was elected. It was Zoran Zivkovic, the Vice-President of the Democratic Party and Djindjic’s close collaborator.
 This is not to say that
there was significantly less corruption in
 Anticorruption in Transition 3, Who is Succeeding…and Why? Authors: James H. Anderson & Cheryl W. Gray, WB, 2006
 This research has also shown one positive trend: there was a reduction in the percentage of profit given to bribery. It was reported that this was due to smaller amounts being asked for bribery. Although the requests are becoming more-frequent, the total amount of corruption was lower.
 I count only two governments after Milosevic: one of Djindjic, and the other of Kostunica. Some people count that there were three governments. They include the Zivkovic government as a separate one. Since Zivkovic as Prime Minister did not change the Djindjic government from the personnel point of view, nor did he introduce changes in policy and since it only lasted from March to November 2003, I have not treated it separately.
 In the Serbian Public,
the assassination of Zoran Djindjic was understood to be the resistance
of the old cadres in security institutions to his intention to
 It is the Democratic
Party of Serbia (DPS) whose president is Vojislav Kostunica, presently
Prime Minister of Serbia, and ex- President of the
 This proves that the EU
has stopped negotiations with
 The Law on the Prevention of Conflict of Interests was passed in April, 2004; The Law on Free Access to Information, November 2004, The Law on the State Auditing Institution, at the end of 2005; The Law on the Protection of Competition - the “Anti-Monopoly law,” September, 2005, while the Ombudsman Law, and the Anticorruption Strategy was passed by Parliament in December, 2005.
 Ex-minister of Finance,
Bozidar Djelic, says that the new wave of politization of public
institutions has led
to the unilateral increase in discretional decision-making by the Government (unsupported by law or
Parliamentary decision) regarding different types of taxes (excise tax
on petroleum, customs tariffs, etc.). These were previously regulated
by law. See: Kada cemo ziveti bolje (When We Will
Live Better), Sluzbeni Glasnik at al.,
 After considerable pressure by the International Monetary Fund to start the privatization of the public companies, the Serbian Government strategized to begin with the partial privatization of the Serbian Petroleum Industry (Naftna industrija Srbije – NIS), which will take place in 2007.
 Research into the origin of the present-day economic elite indicates that it has been recruited from socialist companies beginning in 1989. Their former directors, experts and managers, once part of nomenclature, are the ‘tycoons’ of today. Mladen Lazic, “Recruitment of the New Economic and Political Elites”, Republika,, June 2006.
 The whole case, in
detail, was presented and published by the Council Against Corruption
of the Government of the
 For a description of the
corruption affairs, see Okupacija u 26 meseci 2004-2006
(Occupation in 26 Months, 2004-2006). Centar za Modernu politiku
(Center for Modern Politics),
 These four parties are: the Democratic Party of Serbia (DPS) of Vojislav Kostunica, the Democratic Party ( DP) of Boris Tadic who is also President of Serbia, the Serbian Radical Party (SRP) of Vojislav Seselj (which is the biggest inidividual party in the Parliament), and G 17 Plus of Mladjan Dinkic, presently Minister of Finance.
 The official
justification for such a hasty adoption of the new Constitution was to
“preserve Kosovo in
 The president of
Transparency Serbia, Vladimir Goati, commented that Article 102 of the
new Constitution (which gave mandates to the parties) singled out
 The mandate of the Governor of the NBS does not coincide with the elections or changes in the Parliament or Government. The same refers to the Ombudsman for Information whose work became influential and highly appreciated by the public. The impression is that somebody from the Government asked for his removal because he performed his public role in a proper and independent way (he caught the Minister of Police in a lie).
 To protect the parties’ interest in having control of the mandates in the Serbian Parliament, the three main parties (the DPS of Kostunica, DP of Tadic, and SRP of Seselj/Nikolic) decided to disengage the sovereignty of the people by giving the ownership of all mandates to the parties. The real user of sovereignty (which should stem from the citizens) will be the parties’ leaderships, enabling them to exercise state authority, if not directly, then indirectly by owning the MPs’ mandates. See: Aleksandar Molnar, Republika, October 24, 2006, page, XXII, XXII.
 In a recent Interview, the former vice-president of the Serbian Government, Miroljub Labus, said that “the tycoons cooperate perfectly with all parties – from the Radicals to the Democratic Party of Serbia; they have become part of the system”. Daily Danas, 11-12 November, 2006.
 Given the current constellation of political forces and the proportional election system, no party can win a majority. Therefore, coalitions are formed at all levels of authority. At the local government level, coalitions are broader and their clashes over the division of power are the cause of constant decompositions of the local governments.
 For instance, the Capital Investments Minister publicly admitted that the public company “Serbia Railways”, which is under the control of his party (the director of the company is from his party) had not respected the procurement procedure when buying Swedish railway cars. Despite the confession, nobody suffered any consequences because if the Minister and the Director of the public company were to have been made responsible and subject to legal proceedings, it could have prompted the withdrawal of support to the government of his MPs' and the Government would have fallen. In fact, the person who disclosed the irregularities was dismissed from his post. The Finance Minister found himself to be in a similar situation, when the case of the National Saving Banks was once again opened to the public. This case connects the Minister with the corruption that was discovered. The accusations against the Minister were disclosed on a TV show by the President of the Anticorruption Council of the Government of Serbia, Verica Barac, but to no avail because the same mechanism of protection was applied.
 The implementation of the new Law on State Administration took effect in July, 2006. Along with the many problems involved in its application and the usual deficiencies of the law itself, it has been reported that many advertisements began to appear in the newspapers for the positions of deputy-ministers. See: Ana Trbovic, Blic (daily newspapers), November 25, 2006.
3 parties (there are about 39 active parties and a total of more than
400 registered parties) submitted on time their complete annual
financial and activity report to the Financial Board of the Assembly.
This shows that the parties do not respect their obligations
established by law. For greater detail about this problem see: Vladimir
Goati, Partijske borbe u Srbiji u
postoktobarskom razdoblju (Struggles among Parties in
 The source for
determining the number of schools in
 The DPS (Democratic Party of Serbia) president is Vojislav Kostunica who is also Prime minister of Serbia; G 17 Plus president Mladjan Dinkic is Minister of Finance; SRM (Serbian Renewal Movement of Vuk Draskovic President of the Party is Minister of Foreign Affairs, and NS (New Serbia), President Velimir Ilic is Minister of Capital Investments. The government thus composed, still did not have a majority in the Parliament, and as a minority government, it is supported by the SPS (Socialist Party of Serbia of Slobodan Milosevic, presently led by Ivica Dacic).
 The first post-Miloševic government was formed by 18 parties, but it avoided the 'feudal' division of portfolios. The first government (2001-2003) had two parts: one composed of experts and non-party personalities who got their positions on merit and, the second part was political, composed of numerous political leaders of the parties who participated in the grand coalition against the Milosevice regime and who got the positions of vice prime minister. The composition of each ministry was a mixture of different parties, so effective control was achieved even without strong and strict instittutional rules of control.
 This coalition does not exist any more. After the ruling coalition was formed, some parties and coalitions split. Details about the consequences of these new divisions on the pubic sector are not provided.
 The Intelligence Service was used last year to spy on the MPs about their intentions to vote for the Budget of 2006. Two people were expelled from the Parliament overnight because they said that they would not vote for the Budget.
 The non-transparent approval of credits to the farmers by the Ministry of Agriculture, was denounced most often in public by the Radicals, since farmers are their main constituency.
 Data about both ministries and their party appointments have been obtained with the help of journalists and insiders who are previous and present holders of high senior positions in the Ministries.
 For example the Director of the Tax Administration of Serbia was a member of G 17 Plus; advancing politically, he became a member of the G 17 Plus Executive Board; recently he was transferred to the position of State Secretary in the Ministry of Finance, while his position in the Tax Administration was given to another member of the same party.
 Ex-Minister of Finance, Bozidar Djelic, in his recently-published book said, that he was under pressure from the local party boards of the DOS coalition who “suggested” to him who the heads in the Tax Administration should be. He complains that he became very unpopular among DOS local activists because he refused to let them impose personnel in Tax Administration. However, he estimates that during the last two years, the situation has changed in the opposite direction; some people without professional references have received positions in the Tax Administration, while some with established professional reputations have lost their positions at the request of the local party boards, or because there were doubts about their “party loyalty”.
 Two Parties in the first government - The Civic Alliance of Serbia (CAS) and the Democratic Center (DC) are small liberal parties with many professionals and experts. Both joined the big coalition against Milosevic.
 One MP in the Parliament said that we can “speak about the terror of government and politics over professionalism and qualifications in the state administration”.
 One candidate for school
director in the city of
 The most striking case, when the school choice for the director won, was in the Economic (secondary) School in Cacak.
case refers to the selection of the heads of libraries which the
 The Police Minister has replaced all 16 Heads of Police Districts, and in total, he replaced about 700 senior policemen since he took over the office. There is no audit or supervision of budget spending in the Police, nor civilian control of the police and intelligence. Police procurements are a “state secret“ exempt from monitoring.
 “Public companies” in
 Data about public
companies are taken from articles published in July, 2006 issues of the
 Politika is the oldest and the most influential of Serbian newspapers. Traditionally it has been controlled by the government. At present, half of it is owned by the German company Vac and half by small domestic share holders. In order to help the papers pay its debt (6 million euros) and to retain control of 50 percent of shareholder equity, the Electric Company Electro-Distribution invested the money and became a 14% owner of Politika.
 The first thing that Kostunica’s Government did was to illegally appoint the new director of the State TV. Citizens are required by law to pay for this TV service together with their electricity bill, although the RTS is not really an independent public service, since it is controlled by the government and the ruling parties.
 Justification for the dismissal was that an editorial written about Ratko Mladic was not a ‘local topic”. I should be mentioned that the newspapers were very successful financially and were widely read by the people of Zrenjanin.
 Although the Commissar for the Free Access to Information reacted, and requested that the companies respond as required by law, there has been no answer.
 Under the pressure of the
IMF, the Serbian Government hired a foreign privatization advisor to
assist privatization of Naftna industrija
Srbija (NIS) – the Serbian Petrol Industry
– which is one of the largest public companies of
exact number is available as to how many appointed positions (jobs)
there are in the city of
will not present in this paper the multiple functions of the Government
officials; they can be seen in the
 Vladimir Goati, Politicke borbe u Srbiji u postoktobarskom razdoblju, op. cit. pp. 108-109. Goati has shown the changing practice of parties’ control over the mandates in the Serbian Parliament during the 15 years of the multy party system.
 Two MPs of the G 17 Plus said that they would not vote for the 2006 state budget just before the vote was taken for the Budget in the Parliament. They were excluded from the Parliament the very next day, by illegal activation of their “blank resignations”.
 See more about the misdoings of the Administrative Board, and the illegal use of the “blank resignations” in Goati, op. cit, pp. 109-110. In regard to the government’s method to create its majority, Goati concluded that it “mutated from government de jure into government de facto, which has maintained its position via usurpation”.
 This is the case of the president of the Vojvodina Government, who is at the same time an MP, a vice- president of the Democratic party and a member of the Fund for Development.
 It was denied in public that a politician, who is directly elected, can have another public office at the same time, referring to the widespread practice of city mayors simultaneously holding MP positions. See Nemanja Nenadic (Transparentnost – Srbija): “Sprecavanje i razresavanje sukoba javnog i privatnog interesa” (“Preventing and Resolving Conflicts between Public and Private Interest”), in Konflit interesa kod javnih funkcionera i javnih sluzbenika u Srbiji (Conflict of Interests of Public Functionaries and Public officers), Transparentnost – Srbija, 2006 pp. 89- 106
 In the interview of one MP, a well-informed person, the following accusation was made during a Parliament session urgently called to strip the immunity of the State Prosecutor who was already arrested: “This session was called because one businessman ordered the government to arrest all his rivals. This businessman gave them a lot of money. This supposed justification for stripping the Prosecutor’s immunity was more than ridiculous. The real reason was that he prevented Merkator from buying C market. I will leave it to the reader to guess the name of the businessman who was bothered by this decision of the Prosecutor. The comment was made during the interview “He gives them (to the ruling parties in the government so much money that he can order them to do what he wants”. Skupstinska mreza, October 2006, address:
 An unusual haste was reported in the press. Crowds lined up in the ministries created by the desire of the ruling parties to maintain their political appointees in the government as if they were professionals. In great haste, exams for civil servants (professional status) were organized, and passing grades were required to retain the positions held. It is reported that some parties are revenging against the others so that the other parties’ people do not pass the exams. It has also been reported that some people with secondary education are passing the exams, while others with PhDs are failing. Blic, daily newspapers, , December 19, 2006.
 Ljubisa Stanojevic, professor for accounting and auditing, in Politika, November 20, 2006.
 According to the
Transitional Report of the EBRD for 2005; only two ex-communist
 Monitoring of the
presidential campaign in 2004 demonstrated that all candidates spent
more money than permitted, but nothing happened, no sanctions took
place. To learn more about the problems of
the controlling mechanisms set up by law, see the excellent monograph:
Vladimir Goati, Nemanja Nenadic, Predrag Jovanovic: Finansiranje
predsednicke izborne kampanja 2004 u Srbiji (Financing Presidential
Election Campaign 2004 in
 The detailed reports about such cases were submitted to the Government by the Anti-Corruption Council but they have never been reviewed.
 Due to the new form prepared by Transparency Serbia to be used for the report of money collecting and spending during the January 2007 elections, more transparent reports are expected to be submitted 10 days after the elections are held.
 The higher percentage of
concern about corruption than about Kosovo was due to the ongoing
corruption affairs that were being aired in public when the survey was
going on; other survey data shows that concern about Kosovo is higher
than about corruption, but it does not change the estimation that
corruption is among the four biggest problems of
paper Politika made
an experiment comparing basic food prices in
 For just this reason, the President of the Anticorruption Council, Verica Barac, in her last announcement said that the Government became “the center of power and corruption”, quoted from Republika, December, 2006.
 As has been shown, there
is a substantive difference between the way the Democratic Party and
the Democratic party of
 Some NGOs protested against the replacement of the Ombudsman for Information during the first session of the new Parliament. They have had a very fruitful cooperation with the Ombudsman on several occasions.