Did Subotic Smuggled Cigarettes?

The trial of a criminal group accused of cigarette smuggling during the 1990's and headed by one of the wealthiest individuals in the region, Stanko "Cane" Subotic, began on May 19 before Belgrade's Special Court.

The hearing opened without Subotic, the prime defendant, being absent. Due to his arrest on April 28 at Moscow's Shermeteyevo airport and current detention in extradition custody in Russia, the court has launched separate proceedings against him. Also absent from the courtroom was Subotic's nephew Nikola Milosevic, who is on the run.

The group of 15 is accused of using Subotic's Ub-based company Mia to import cigarettes without paying customs fees from 1995 until the end of 1996. The goods were brought into the country either on fake documentation or on papers stating they were only in transit, after which they were stored in unregistered warehouses and sold tax-free. In this way, the indictment claims, the group managed to garner a total of 56.2 million German marks and about eight million U.S. dollars in two years. Such an operation could not have succeeded had it not been supported by people from state security bodies, which is why Mihalj Kertes, the former chief of the Federal Customs Directorate, is also among the defendants. According to the Special Prosecutor's Office, Kertes sent people of trust to border crossings in customs vehicles with police license plates to help the cigarette convoys enter the country and to escort them to Mia warehouses. Standing charges of preventing any police or financial police inspection of Subotic's company are former Novi Sad State Security Center Chief Milovan Popivoda, and former Novi Sad Police Chief Miodrag Zavisic.

One of the founders of the notorious Scorpions unit and former Republic of Serb Krajina Assistant Defense Minister Milan "Mrgud" Milanovic has been charged with providing the convoys with an armed escort, while singer Ivana "Oluja" Olujic stands accused of helping the group acquire its storage space in Novi Sad. Luka Nenadovic and Subotic's driver Milan "Pekin" Rankovic have been charged with beating a financial police officer who attempted to inspect a warehouse containing smuggled cigarettes in Rumenica.

Lawyers vs. Prosecutor

The accused group was discovered in police operation Mreza (Network), launched in mid-2003. The defendants were taken into custody in July last year, while the Special Prosecutor's Office filed charges in November. Three days prior to his Moscow arrest, Subotic's attorneys offered EUR700,000 in bail, while three days before the trial commenced they raised the stakes to two million. If the court accepts bail, Subotic would be released from Russian custody pending trial.

Simultaneously with this, the prime defendant's lawyers have launched nothing short of a media campaign, giving daily statements on how their client is the victim of political scheming, and even publishing a full-page ad in daily newspapers claiming they were forced to appeal to the European Human Rights Court because Subotic's right to defend himself had been violated.

All this has prompted acting State Prosecutor Slobodan Radovanovic to demand that the Lawyers' Chamber launch disciplinary measures against Subotic's attorneys -- headed by Vlado Pavicevic and Radoslav Tadic -- which is a request the Chamber is obliged to fulfill. Tadic and Pavicevic have stricken back by claiming Radovanovic is trying to intimidate them and have reported him to the Serbian Prosecutors' Association's Ethical Committee.

Subotic's Operation Legal?

At the trial, Subotic's representatives claimed he would have surely appeared before the court, where he would have had the opportunity to name politicians he had paid, those who had blackmailed him, those who had threatened him, and describe what kind of persecution he had been subject to. They also claimed that, despite Subotic's business venture being legal, he was set up by "the real cigarette smugglers" who -- protected while Subotic is standing trial -- are waiting for 2010 when the statute of limitations on the case runs out, and a legally binding verdict may not even be passed.

According to the media, police have also linked Miroslav Mitrovic, the president of the company Delta, former State Security Chief Jovica Stanisic, businessman Mirko Vucurevic, former Serbian Radio and TV Station Director Milorad Vucelic, MPS company owner Desimir Zabunovic, businessman and MP of Velimir Ilic's New Serbia party Mladen Grujic, and owner of the company Interspid, Petar Komljenovic, to the case -- which is considered the most profitable scam of the decade, having brought in up to 400,000 German marks in profits per truckload of cigarettes. None of the above-mentioned, however, have seen charges lain against them.

The public has been subject to similar announcements of an upcoming "whole truth which will rock the country's foundations" following the surrender of former State Security Agency Col. Milorad Ulemek, who was later sentenced for the murder of Serbian Premier Zoran Djindjic and numerous other murders and abductions. Ulemek's claims that he swam across the Danube and Drina rivers in diving gear to deliver, on orders of then government officials Cedomir Jovanovic and Vladimir Popovic, 600 kilograms of heroin to Croatia and Bosnia amused the public for a few days, but in the end did not protect him from receiving a maximum sentence of 40 years in prison. Defendants, it should be noted, are not obliged to speak the truth in their own defense, so it remains to be seen whether, perhaps, Subotic, too, dove through the Drina and Danube with loads of cigarettes, and, if so, on whose orders.

Were Subotic to Talk...

Independent analysts who favor the businessman, a native of Ub's village of Kalinovac, however, stand convinced that "Subotic's defense has many strong arguments," while dependent tabloids are more specific, claiming that Subotic could screen a video recording for the court, which shows him, in his summer cottage in Marbella, Spain, giving money to former Interior Minister Dusan Mihajlovic.

In the meantime, accused former Novi Sad Police Chief Miodrag Zavisic has said in his defense that top police officials requested he cease his investigation into cigarette smuggling, that then-Interior Minister Zoran Sokolovic explained to him that the "State Security [Agency] was doing a job for the government," and that the minister's deputy Radovan "Badza" Stojicic told him that cigarette smuggling was a way to penetrate the economic sanctions imposed against Serbia, which is why he should release Mirko Vucurevic, who had been taken into custody. Zavisic also said that Stojicic's wife told him she heard rumors that her husband's murder was organized by Subotic. Stojicic was murdered in April 1997, while his brother Sinisa is currently standing trial before the Special Court, accused of organizing another cigarette smuggling operation.

In related Subotic-case defense speeches, defendant Popivoda claimed he met Subotic at a Novi Sad restaurant over a dinner which was also attended by Vucelic and TV Pink owner Zeljko Mitrovic, and where guests were entertained by well-known new-wave folk singers Dzej and Aca Lukas. The former Novi Sad State Security Center chief says he clearly remembers this took place in April 1997, because it was the same night Deputy Interior Minister Stojicic was murdered.

Subotic's lawyers have, in their numerous public addresses, frequently mentioned the pressures and persecution their client was subject to after 1997. That was the year Subotic transferred all his business operations to Montenegro, despite never being officially accused in the Stojicic killing. The year 1997 also saw a fierce clash break out between then Serbian President Slobodan Milosevic and then and now Montenegrin Premier Milo Djukanovic. The argument publicly centered around democracy and patriotism, but the media were quick to speculate that the real reason was Milosevic's son Marko entering the cigarette business and, thus, usurping Subotic's position in Serbia.

A third investigation into another large-scale cigarette smuggling operation is currently revolving around Marko Milosevic and his mother Mirjana Markovic, both of whom are now living in Russia. No charges have yet been filed, however, nor will this necessarily happen given that one of the conditions laid out by the "reformed" Socialist Party of Serbia in current negotiations over the new cabinet is that all "political persecution of the Milosevic family" cease. Interestingly, both Subotic's defense and the "young, reformed" followers of late Slobodan Milosevic agree that overall political persecution is taking place, despite the fact that Subotic's attorneys also claim their client was persecuted during Milosevic's reign as well.

Following his move to Montenegro, Subotic grew close to Djukanovic, whom, in a TV interview, he claimed to know well, having also mentioned helping the Montenegrin government buy an airplane. Djukanovic's possible involvement in cigarette smuggling was investigated by Italian police, although no indictment was raised. However, Montenegrin opposition parties claim that Djukanovic resumed the office of Prime Minister and with new-found zeal undertook leading Montenegro toward Euro-Atlantic integration precisely to gain immunity before the Italian authorities

Scandals, Scandals...

In the meantime, from 1999 to 2000, Subotic was also a citizen of Croatia, while living in Switzerland until his recent arrest. Even during the war in Croatia was he drawn to the country -- or at least a part of it then called the Republic of Serb Krajina -- for, according to the defense of his servant and driver Milan "Pekin" Rankovic, he lavished the Croatian Serb region with financial aid, only to receive a mere two or three thank-you certificates from fellow-defendant, then-Krajina Assistant Defense Minister Milan "Mrgud" Milanovic. The driver further claims that such ingratitude deeply hurt Subotic.

The name Stanko "Cane" Subotic became known to the wider public only in 2003, after Croatian columnist Ivo Pukanic wrote for the paper Nacional that Serbian Premier Zoran Djindjic, murdered that same year, was involved in cigarette smuggling. The case went to Croatian courts, where Subotic won libel suits filed against Nacional. What remains beyond a doubt is that Djindjic was not involved in any shady deals with Subotic, who would have certainly used such an affiliation, if it existed, to realize his most ambitious business operation in Serbia -- the announced construction of a British American Tobacco cigarette factory. This, however, never transpired, while tabloids used the fact that Djindjic flew on Subotic's private jet to construct a story of the premier's corruptness.

Although Subotic made a fortune during the rule of Slobodan Milosevic, his defense claims he participated in abolishing the Milosevic regime by aiding then-opposition parties. Perhaps the trial will shed some light on the true nature of Subotic's contacts with some of Djindjic's associates, such as former Interior Minister Dusan Mihajlovic and Vladimir Popovic, who used to be in charge of the government information bureau. The latter two presented the public with quite a spectacular clash last summer, on occasion of Subotic's claims that Mihajlovic acquainted him with the details of police operation "Mreza" and informed him he was "clean." Mihajlovic denied the statement saying that it would have been impossible for him to even show the report to his "rich countryman," as it was not finished during his mandate, and added that he met Subotic at Vladimir Popovic's insistence.

On the other hand, Popovic maintained Mihajlovic did show Subotic the report, to which the former interior minister retorted that it was Popovic's parallel reign in the country that led to the Djindjic murder. The summer storm of accusations ended soon after, and it remains to be seen whether the all-female Special Court trial chamber -- consisting of judges Biljana Sinanovic, Snezana Jovanovic, and presided over by Milena Rasic -- will bring any new outbreaks.