Washington Post - Croatian spy web alleged in Bosnia

By R. Jeffrey Smith

Friday, December 17, 1999

MOSTAR, Bosnia –– A wall plaque outside a compact two-story building in the Croat-administered half of this ethnically divided city says it houses the University of Mostar's Agronomic Institute and an import inspection firm. But NATO troops, who recently raided the building and three others here, say its employees are actually intelligence agents of a clandestine, illicit network run by neighboring Croatia.

NATO officials say they have clear evidence that the Croatian government of Franjo Tudjman, who died last Friday, has been secretly paying millions of dollars a month to fund this network. Its aim, they say, was to support Bosnian Croat nationalists who oppose the return of Bosnian Muslims to Croat-dominated areas of the country, and thus keep alive the possibility that Croatia might ultimately be able to annex Bosnian territory.

Some of the money also was used to promote criminal activity, including the apparent counterfeiting of credit cards and telephone debit cards, NATO officials say.

Tudjman's territorial aims dated from the 1991-1995 wars that followed the breakup of the old Yugoslav federation--wars in which Croatia first fought Serb separatists on its own territory, then closely supported Croat nationalists in a three-sided war in Bosnia with that republic's Muslims and Serbs. Although Tudjman signed the Dayton peace accords in 1995--which created a Muslim-Croat federation in one half of Bosnia and a Serb ministate in the other half--NATO officials and Western diplomats say he never accepted the idea that Bosnian territory dominated by Croats should be jointly ruled with Muslims.

The NATO search and seizure operation occurred Oct. 14. While U.S. attack helicopters hovered overhead, 1,500 American, French, Italian, Spanish and British troops cordoned off the Croat-held western section of the city and seized 42 computers, 10,000 documents and truckloads of spying equipment from four targeted buildings.

It was by far the boldest Western action taken against Croat nationalists in Mostar, a city 25 miles from the Croatian border that has been divided into Croat- and Muslim-run halves since 1993. The raid provoked a protest by thousands of Croat residents the next day at which U.S. Army Gen. Montgomery Meigs, then the top NATO official in Bosnia, was caricatured as Adolf Hitler.

But NATO officials say they were pleased with the seizures made in the raid, which included detailed payroll records and copies of letters to Tudjman from two feuding intelligence chiefs. "We found prima facie evidence of linkages" between the Croatian government and local intelligence officials that were designed to influence local politics and undermine the Dayton accords, a senior NATO official said in Sarajevo, the Bosnian capital. "That is illegal."

A small quantity of illegal weapons also was found in the search, including hand grenades, ammunition and an Uzi submachine gun equipped with a silencer. One of the raided sites, the top floor of a local police station, had been swept clean before NATO troops arrived.

Computers were confiscated from the purported agronomy institute, where a locked and guarded front door is monitored by a closed-circuit camera, and an armored Mercedes jeep is parked nearby. At the top of a building stairway, a photo of Tudjman now sits on a table, flanked by two lighted candles in memory of the late president.

Among the documents found there and in a building next door that ostensibly housed the offices of a war veterans' group and the municipal finance agency were memorandums spelling out joint responsibility of Croatian government agents and Bosnian Croats for surveillance and possible recruitment of employees of the United Nations, the Red Cross, NATO, the international High Representative in Bosnia and the U.N. war crimes tribunal in The Hague.

For example, the documents describe a Sept. 29 operation that involved breaking into rooms rented by tribunal officials at the Hotel Dinar in the nearby town of Livno, stealing some documents and planting surveillance equipment to determine whom the officials might be interviewing.

But some of the items seized seem to have more to do with illicit money-making than political skulduggery, suggesting ties between organized criminal groups and hard-line nationalists in the Croat-administered areas of Bosnia. The items included machinery for fabricating credit cards and phone cards and for duplicating pornographic videotapes.

While only 10 percent of the seized documents have been translated thus far, they "clearly show that senior officials have made great personal financial gain from these illegal operations," an internal NATO summary says.

"It reconfirms the existence of corrupt power linkages," a NATO officer said, including successful efforts to divert tax revenues to Croatia's ruling party and to pressure Croatian military officers into supporting the party's agenda. The documents also suggest that the flow of funds has been large enough to provoke squabbling between top officials in Zagreb, the Croatian capital, over where they were to be deposited and who would control them. "Ultimately," said one U.N. official, "it's not about nationalism; it's about power and the money it gets you."

NATO and diplomatic officials in Sarajevo say they still do not know the full scope of Zagreb's secret payments to Bosnian Croat hard-liners. They say they do know, however, that the funds are being used not only to pay for intelligence activities, but also the salaries of an estimated 10,000 Croats in the Bosnian army, as well as police officers working in the Mostar region.

Wolfgang Petritsch, the West's top representative in Bosnia, estimates that the total payments could amount to nearly $2 million a day and that most of it is meant to help preserve the eventual aim of partitioning Bosnia along ethnic lines. But with Tudjman gone, Petritsch said, the government in Zagreb may finally halt such payments, which have already provoked dissent among Croatian citizens suffering the hardships of economic recession. That in turn may ease tensions throughout the region, he said.

http://www.washingtonpost.com/wp-dyn/articles/A4306-1999Dec17.html

[URL may be different next day if article is archived]