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What is behind the smear campaign against Stanko Subotic (9)

Fantasy: Cane’s arrest, deal with Putin

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All that has been the focus of public attention during the past few weeks: charges by Srdja Popovic in the political background of the assassination of Zoran Djindjic, the misplaced and lost charges filed by Vladimir Popovic against Legija’s lawyers, articles by Jasna Babic about an organized campaign by the weekly Nacional against Zoran Djindjic, Milo Djukanovic and Stanko Subotic, as well as articles about the role of former US ambassador William Montgomery take us back to the unprecedented media campaign which has been going on for years against the same individuals, mainly against Stanko Subotic, for the sole reason that he was a friend of Zoran Djindjic. From the vast volume of media documents which Serbialeaks has at its disposal, in a series of articles, we will present to our readers the methods, style, structure and motives behind this shocking smear campaign against Stanko Subotic, run in the same way in which Kostunica’s machinery had dealt with Vladimir Beba Popovic or the late Prime Minister for years. Articles from print media will be presented in their original form without comments, simply as proof of the pattern behind this political confrontation

Fall of October 5 Financier (Standard, 08.05.2008; by: N.N)

The passing of time in a transitional Serbia does not account for much. Just when you think you have left your past behind you, there it is… While waiting in extradition detention in Moscow, Stanko Subotic (49), charged in Serbia with smuggling tobacco worth millions, might very well be thinking of such things. Known as the product of Serbia’s intelligence bodies headed by Jovica Stanisic in the first half of the 90s, Subotic was forced out of state run tobacco smuggling in 1998 after the fall of this mighty head of the Serbian secret police. The business was inherited from Stanisic by Rade Markovic and then Marko Milosevic. At that point Subotic left Belgrade, but quickly got back into the tobacco game through Milo Djukanovic and Montenegro, which had inherited part of Stanisic’s collapsed smuggling network. However, a far bigger role was waiting for this network in the time to come than just the sale of cigarettes without excise stamps.  

As an important part of this team, supported by Western intelligence agencies (above all British) and tobacco companies, Subotic played an important financial role in Djukanovic’s parting ways with Milosevic and later in October 5 events and the fall of Milosevic. Djindjic’s government inherited many who had brought about October 5, but had been created by Milosevic’s regime. It also inherited Subotic together with his connections and contacts from business to agential. This increased his sphere of influence in the first years of Serbia’s transition, when he appeared as the financier of certain individuals within the government of that time. He was also a representative and distributor of the multinational company British American Tobacco (BAT), which was planning to build a tobacco factory in Kragujevac. At that point Subotic had already become one of the richest and most influential Serbs. But the fall of the first post October government and particularly the exit from power of some of its most controversial figures, such as Vladimir Beba Popovic and Cedomir Jovanovic, reduced his influence considerably.

Media tales: Marko Milosevic, vengeful
Photo: seebiz.eu

A new phase of Subotic’s life began then, which ended on 28 April with his arrest at Moscow’s Sheremetyevo Airport, where two Russian policemen checked his identification papers and informed him that he was being placed under arrest as the result of a Red Notice issued by Interpol. Detained in Moscow, where he is being treated not just as a controversial tobacco dealer, but also as an individual linked to Western intelligence bodies, Subotic is probably thinking that he could have gotten away with smuggling in the 90s had he not later been rather close to Milo Djukanovic and the first government of Serbia in transition. And he would be right to think so. After all, he is only one of the many identified as guilty of masterminding huge tobacco smuggling operations in the Mreza (Net) police investigation, which started in 2003. Several others, including Marko Milosevic, basically got away and managed to stay out of the investigation.

The fact that Subotic is anything but your ordinary cigarette smuggler, will be one of the arguments used in his defense. The action for his defense and acquittal began immediately after his arrest in Moscow and it includes besides his lawyers, a number of politicians and businesspeople in Podgorica, Belgrade, Zurich, Paris and Moscow. This initiative has resulted in secret negotiations being held mainly without Serbia’s participation as well as an announcement that Switzerland plans to seek his extradition. His lawyer Vlada Pavicevic has also announced that he has filed a lawsuit against Serbia in the European Court of Human Rights in Strasbourg “because of the violation of the right to legal counsel” in the case of Subotic and other members of his group.

“The lawsuit was filed on the basis of the European Convention on Human Rights even before Subotic was erroneously put in extradition detention in Moscow,” said Pavicevic.

Last year Interpol issued a Red Notice for Subotic’s arrest when he was in Montenegro, under Djukanovic’s protection. Suddenly the number of countries he could travel to without problems shrank. Standard sources close to the Serbian police say that Subotic was able to move around freely in Switzerland, where he lived, and in France and Russia. He visited Russia once after the issuance of the warrant for him and safely returned to Geneva.

Sources say that in Russia, Subotic had some kind of informal guarantees that he would not be arrested. These guarantees were provided to him by former ambassador of the state union of Serbia and Montenegro Milan Rocen through his contacts in the Russian police and political circles. Rocen is currently serving as Montenegro’s Foreign Minister. Subotic’s first ten day visit to Moscow last year did not go unnoticed by Russian intelligence departments. They reported this visit to their counterparts in Belgrade after his departure. As a result Serbia demanded Subotic’s arrest from Russia and at the end of his next visit to Moscow he was placed under detention. Sources tell Standard that the decision to arrest Subotic was made by Kremlin therefore claims by his lawyers that the arrest was a mistake are simply part of ordinary lawyer rhetoric and have nothing to do with reality.

Dark side of the police: Dragan Jocic, Minister
Photo: Stock

In other words, the arrest of Stanko Subotic is the result of closer ties between outgoing Russian President Vladimir Putin and Serbian Prime Minister Vojislav Kostunica. Last year Kostunica personally gave the green light to Dragan Jocic for activating the Mreza operation, which Jocic had inherited from his predecessor Dusan Mihajlovic. The Russian newspaper Kommersant writes that it is difficult to say if by arresting Subotic Putin intended to help Kostunica with his electoral campaign, particularly because Kostunica has not exploited the arrest in Moscow at all. It is more likely that the matter between Kostunica and Subotic goes far deeper. Subotic’s name must have cropped up far too many times before Kostunica as an opponent, from the conflict with Zoran Djindjic, in which Subotic was involved, to the political battle with Milo Djukanovic, who is some sort of a confidant of Subotic, to the story of funding for Kostunica’s political rival from the Liberal Democratic Party Cedomir Jovanovic, in which Subotic’s name comes up yet again.

Subotic had seriously big business concerns in Serbia including ownership in the Futura distribution network, interests in D Trade and Famis, real estate and property on strategic locations along the Belgrade – Nikola Tesla Airport route. He also knew that he ranked high on the list of Kostunica’s political and financial opponents, so by the end of 2004, Subotic decided to whitewash his biography.

Part of this effort was his idea that he had to at any cost bury the political and business hatchet. Through a major domestic marketing agency, Subotic made a plan for starting his new life in the Serbian media. This was his way of trying to blot out years of controversy and of being linked to the tobacco scandal. The tobacco scandal had been launched through former US Ambassador William Montgomery in May 2002 by the Zagreb weekly magazine Nacional. At the same time, through a well known Belgrade journalist, reputed to have been close to Kostunica, Subotic attempted to lobby for his new position, hoping that the Prime Minister would at least not consider him evil incarnate.

However, Subotic made an irremediable mistake at the very first serious step. In his effort to explain that he had not taken part in tobacco smuggling, he appeared on the TV B92 show Insajder in May 2006. Even though this appearance was the first major attempt to whitewash Subotic’s image, it only resulted in Jocic demanding forgotten dossiers from the time of his predecessor Mihajlovic. Subotic, who was still being advised by people from Zoran Djindjic’s government, accused Mihajlovic of having included him in the Mreza investigation only to blackmail him. This second mistake by Subotic created another scandal. Arrests of his people, an investigation, and then charges filed by the special prosecution for organized crime, were the logical result of these mistakes. All those who were attempting to improve his image in Kostunica’s eyes gave up this futile task and Subotic found refuge with Djukanovic, avoiding Serbia altogether. He was under Djukanovic’s protection until 28 April, when he was detained at Sheremetyevo, just as he was about to leave Russia.

Just five days before the arrest of Subotic in Moscow, Stevan Banovic (54) from Backa Palanka, the right hand man of former head of customs Mihalj Kertes, gave himself up to the Serbian police at the airport in Belgrade.

Charges against Banovic say he was the liaison between Kertes and Subotic. He was detained at his arrival from Brazil, where he had been in hiding since June last year, when as part of the Mreza police operation eight of the 15 members of a tobacco mafia group were arrested.

Even though Banovic’s arrest gave rise to doubts that he had made a deal with the prosecution and would appear at the trial as a protected witness, the truth is that Banovic gave himself up because serious threats were made against his family, which had remained in Serbia.

Cane in Cell with 50 Prisoners (Glas Javnosti, 10.05.2008; by: D.C.)

Stanko Subotic Cane (49), who was arrested on 28 April in Moscow on a warrant issued by authorities in Serbia, on charges of tobacco smuggling, spent his first two days in detention in a cell with 50 other prisoners and did not have his own bed because of overcrowding.

“The conditions were terrible. There were 50 prisoners in the cell and only 20 beds. He couldn’t lie down. Later he was transferred to a better cell,” says a Glas source.

The Moscow experience: Stanko Subotic
Photo: Stock
Stanko Subotic’s team of lawyers believes that Serbia’s demand for Subotic’s extradition will not produce any result. They state that under a valid international agreement, Russia should deny the extradition request, because the limitation period in the case has expired.

“The legal aid agreement signed by the Federal People’s Republic of Yugoslavia and the USSR on 24 February 1962 is still valid. Under this agreement in a number of cases, signatory countries cannot extradite individuals against whom charges have been filed or who are wanted for serving prison terms, as in the case when under the law of the country to which the request has been made it is impossible to carry out criminal proceedings or enforce a verdict because of the expiry of the limitation period prior to receiving the extradition request,” reads the statement issued by the lawyers.

The lawyers state that the Russian penal code defines one crime which fits the crime of abuse of office listed under article 359 of Serbia’s penal code, with which Subotic has been charged.

“This is the abuse of authority (article 201 of the Russian penal code) in which most serious offenses are punishable with a maximum of five years in prison and it is defined as a crime of medium severity. Article 78, item 1, clause 3 of the Russian penal code pertaining to crimes of medium severity envisages a limitation period of six years, which under item 1 of the same article, begins the day the crime is committed.

“Bearing in mind the fact that the extradition request for Stanko Subotic concerns  offenses committed in 1995 and at the end of 1996, the limitation period in the case under Russian law, expired at the end of 2002,” say Subotic’s lawyers.

Cane versus Marko (Glas Javnosti, 11.05.2008; by: Marija M.Zaric)

Stanko Subotic Cane is a victim of the joint interest of the real tobacco mafia and the surviving structures of the Milosevic-Markovic family, claims one of Subotic’s lawyers, Radoslav Tadic. He believes that Marko Milosevic, son of the late Yugoslav President Slobodan Milosevic, is suspected to be the real head of the tobacco mafia in the Balkans.

The lawyer supports his claims with the fact that Interpol issued a Red Notice for the arrest of Milosevic junior for tobacco smuggling from 1996 to 2001. He was suspected of having defrauded the state of several million Deutsche Marks. Subotic’s lawyer says that Milosevic had absolute monopoly over the market during the 90s and today he is at large. It is supposed that he is in Russia, where his asylee status protects him from extradition to Serbia.

Tadic goes on to say that during the Sablja police operation, carried out after the assassination of Prime Minister Zoran Djindjic, former head of customs Mihalj Kertes told investigators that the widow of the former president, Mira Markovic, had frequently contacted him by telephone and had ordered him to let goods being imported by Tref Rent a Car into the country without customs control. According to police intelligence, this was one of the companies doing tobacco business for their son Marko.

“Subotic was a legal distributor for three well known tobacco companies. He signed exclusive contracts with these companies in 1995. These companies were BAT, Philip Morris and Makedonija Tabak. Considering the fact that he was supplying a big part of the market legally, he was a threat to the Milosevic family,” insists the lawyer from Ub.

“At the beginning of the 90s cigarette manufacturer Tvornica Duvana Rovinj (TDR) strengthened its position in Serbia through cooperation with Marko Milosevic and Tref, and also through the companies Rovita and Feroglas from Lichtenstein, owned by none other than Marko. During the Milosevic regime, Rovinj was in a privileged position in Serbia, because a law was adopted which gave TDR cigarettes the same status as domestically produced cigarettes.”

Tadic says the regime change also created an upheaval in the tobacco black market. On 8 March 2001, Zoran Djindjic’s government passed a decree on limiting the commerce of goods, which kicked off an intensive campaign against organized cigarette smuggling. “Djindjic, at that point, clamped down on the cigarette black market, to the horror of Ante Vlahovic, director of the TDR. The government also revoked the company’s privileges. It annulled Milosevic’s law under which TDR cigarettes had been treated the same as cigarettes manufactured in Nis or Vranje. This reduced the Croatian tobacco cartel’s profits,” explains Tadic.

Mafia boss: Hrvoje Petrac
Photo: jutarnji.hr

Hrvoje Petrac, one of the most controversial figures in Croatia, attempted to enter the tobacco business through Stanko Subotic. Subotic refused saying “he did not work with gangsters.”

“It was then that the “tobacco scandal” began. Petrac, through his friend Pukanic, owner of the Zagreb weekly magazine Nacional, embarked on a campaign against Subotic and Djindjic. While court proceedings were going on against Petrac in Croatia, where he was identified as a mafia boss, Nacional obstructed the course of justice for two years with its numerous articles. The tobacco scandal which made allegations against the Serbian government and Stanko Subotic was designed to shift the focus to Serbia. Nacional began with its scandals in Croatia at a time when a determined fight against the tobacco mafia had begun in Serbia, and it also came right when Zoran Djindjic’s government was about to sign an agreement on the construction of a factory with BAT, a company which was represented in Serbia by Subotic,” says the lawyer.

The lawyer thinks that from that moment on Djindjic’s government had to fight against the “negative, criminal image imposed on it through this campaign, which his political opponents continued to build up.” He explains that Subotic was also marked as a criminal in the eyes of the public and the BAT factory was never built.

“A DSS (Democratic Party of Serbia) parliamentary group sought the formation of a parliamentary committee to investigate allegations made by Nacional. This shows that the interests of the family and various business structures associated with them were being seriously threatened by the plans for building the BAT factory and by Subotic’s position. The proposal to form the committee was supported by the SRS (Serbian Radical Party) and the SPS (Socialist Party of Serbia). This was the first time that a demand had been made for the formation of a committee on the basis of unverified and unfounded accusations made in the media, foreign media to top it all,” he says.

“Zoran Djindjic’s action against the tobacco mafia was not just action against Milosevic. It also affected many far more powerful. But in this case the interests of the TDR, the JTI and the family were the very same. They wanted to retain the tobacco black market and daily profits of €2 million and to tackle those who were planning to frustrate their ambitions,” asserts Tadic.

Cane under Threat (Kurir, 18.05.2008; by: D.M.)

Stanko Subotic Cane’s life will be in danger if he were to be extradited to Serbia, claim the lawyers of the businessman, while he waits in detention in Moscow for a decision regarding his extradition or, as Kurir finds out, a response to his request for asylum. Apparently he has offered $1.5 million to the Russian authorities in exchange for asylee status! Meanwhile Cane has made a €2 million bail petition to the Serbian judiciary, which is €1,300,000 more than his initial offer!

“There are serious indications that Subotic will not be safe in Serbia. His human and civil rights have already been grossly violated in the political battle being fought against him,” says Subotic’s lawyer Radoslav Tadic for Kurir, but does not reveal if Cane has already received threats or not.

He does, however, explain that the motive for a possible attempt on his life would be the evidence that he has gathered.

“For years already Subotic has been collecting evidence and putting together comprehensive documentation regarding all the attempts at extortion, threats and political bargaining made to obtain large sums of money from him. Many of those responsible know about this and this is the reason why Subotic must never return to Serbia,” says Tadic.

Luckily, I don’t smoke: Vojislav Kostunica, benchmark of Serbian virtues
Photo: EPA

The trial of the tobacco smuggling group, which was allegedly headed by Subotic, is scheduled to begin on Monday at the special court for organized crime. However, there is not much chance of Subotic being extradited to Serbia by tomorrow. Even if it were to happen by some miracle, the trial would have to be postponed for procedural reasons.

Tadic tells Kurir he and his colleagues will use all legal means to prevent Cane’s extradition to Serbia, because this would put his life in jeopardy!

“During the 90s Subotic was targeted by the regime of Slobodan Milosevic. An attempt was made on his life and he was forced to leave the country. He did not want to join them in tobacco smuggling and wanted to protect his legal business. This led to him being targeted by criminals and the state was neither in the position to nor wished to protect him,” claims Tadic.

He says Subotic was exposed to similar treatment even after the regime change in October 2000.

“Yet again he was blackmailed, demonized and framed for crimes, both within the country and the region. The motive was to stop the building of a British American Tobacco factory. Subotic was their distributor. Once again he was forced to leave this market because the structures from the 90s were still in charge of the tobacco black market. Who is going to guarantee us that it will not happen again?” asks Cane’s lawyer.

He says he is convinced that Subotic’s rights will be violated during the trial in Serbia.

“We have approached a number of international institutions, including the European Court for Human Rights, to ensure that he gets a just trial. We will prove that he is innocent and the victim of a particular regime. We do not have any guarantee that he will be protected if he returns to Serbia and we will make every effort to ensure his safety,” concludes Tadic.

Besides Subotic, another 14 individuals have been indicted. Charges made last year in December say that they earned RSD 174 million or 56 million in Deutsch Marks, and $8 million from 1995 to 1996, through the illegal import and sale of cigarettes on the territory of Serbia.

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