Serbian Progressive Party’s Mysterious 3-Million-Euro Purchase

In early 2022, three planes carrying goods worth nearly 3 million EUR landed in Belgrade. The ruling Serbian Progressive Party imported this merchandise, despite Serbian parties typically not importing goods from abroad. CINS and OCCRP uncover what lies behind this unusual import as well as ties between a controversial Romanian businessman and the company that exported the goods.

Around 2 a.m., a cargo plane of the state-owned Uzbekistan Airways took off from the capital of this Asian country – Tashkent. After just under six hours of flight, the plane arrived at its destination – Nikola Tesla Airport in Belgrade.

It was January 28, 2022.

Upon landing, Serbian customs officers recorded that it was carrying cups, vests, aprons, and back scratchers, among other things. In the days that followed, two other planes with similar cargo landed at Belgrade airport.

According to customs data obtained by the Center for Investigative Journalism of Serbia (CINS), SNS imported more than a million items that year – scarves, vests, bags, ice scrapers, cups, and back scratchers. Although these products originated from China and cost around 1.1 million EUR, SNS paid almost double that amount just for their import into Serbia.

Including their transportation on flights from Uzbekistan, Turkey, and China via Russia, SNS allocated roughly 2.9 million EUR for the materials.

It is unclear from the data we obtained whether the goods were branded prior to import. Also, we do not know whether they were used for the 2022 election campaign, although similar items were later used in the campaign.

Romanian company Ridzone Creative is listed as the exporter, but SNS did not report any payment to this company in the financial statements it submitted to the Anti-Corruption Agency

This firm primarily engages in TV program production and was part of a corruption case initiated in 2019 by Romania’s National Anticorruption Directorate (DNA).

The owner of Ridzone Creative also owned companies suspected by Romanian institutions to be controlled by Sebastian Ghiță, a Romanian businessman and former politician who was granted asylum in Serbia while fleeing corruption charges in his home country.

Neither the Serbian Progressive Party nor Ridzone Creative responded to questions about this transaction, and journalists were unable to reach Ghiță. 

CINS journalists have requested access to public information for documents related to this import, but the Customs Administration has not yet provided them. 

Experts told CINS that the case raises questions over what was delivered, who was paid, and the true purpose of the transaction. 

Nemanja Nenadić from Transparency Serbia says the case showed that despite state authorities publishing financial reports about the party’s spending, the public essentially doesn’t have information about the exact purpose of the most financially significant expense of the largest party.

“According to your data, there is a suspicion that the goods were overpaid, and this may indicate that some other goods or services that are not listed in the financial report were actually paid through this payment,” Nenadić said.

Vladimir Tupanjac, a lawyer and former employee at the Anti-Corruption Agency’s Sector for Oversight of Financing Political Activities, says the findings raise doubts about what was actually imported.

“In any case, the question can be raised whether this was a misallocation of funds for regular operations. The Anti-Corruption Agency could and should have tried to determine whether this was actually used for regular operations or for campaign purposes.”

Nearly three million euros for promotional material

On February 15, 2022, presidential, parliamentary, and some local elections were called. 

Shortly before that, between January 28 and February 11, promotional materials intended for SNS arrived in Serbia on three separate flights from Uzbekistan, Turkey, and China via Russia, according to the customs data we obtained.

However, SNS’s election campaign expense reports submitted to the Anti-Corruption Agency after the elections mention no imported promotional material or any cost associated with it. 

For that year’s campaign, SNS reported spending around 658,500 EUR on all promotional materials, including billboards, brochures, and leaflets. Only 38,000 EUR of that amount went towards materials similar to the imported goods.

Nemanja Nenadić states that because the shipments arrived a few days before the campaign began, SNS was only obligated to report that expense in its annual financial report, which is not as detailed as the report on campaign expenses.

“If their goal was to not have to show exactly what was paid and to whom, then importing advertising material before the election campaign was a good way to do it,” he said. 

In its annual financial report, the party reported a payment of 3 million EUR to the company Milšped under the section of advertising material and publication expenses. These services were listed as part of SNS’s regular operations (under other expenses), and not their election campaign. The report does not mention the Romanian company Ridzone Creative, despite customs data indicating its exporter status.

According to the data, Milšped is listed as an intermediary and as the company that provided storage for the materials during customs checks.

The funds paid to Milšped constitute two-thirds of SNS’s total advertising spend for that year. This is the largest single expense for promotional materials that SNS has ever had, according to their financial reports. 

Previously, the largest total expenditure for advertising material and publications was in 2020, when the party spent about 1.3 million EUR for these purposes.

Milšped did not respond to questions about this transaction, including whether part of the payment they received from SNS was forwarded to the company Ridzone Creative

Serbia’s State Audit Institution (DRI) also noted in its audit of SNS’s financial report that the party paid Milšped for the transport of goods from China, their storage, and the cost of domestic transport. The audit report also notes that the party possesses over 24,000 vests in stock, but fails to mention any other promotional materials.

When we requested more information and documents from the DRI, they referred us to their publicly available report and stated that the documents submitted by SNS during audit proceedings are kept confidential.

In response to CINS’s question about whether it investigated the payment to Milšped, the Anti-Corruption Agency stated that they reviewed SNS’s entire annual financial report for that year and found no irregularities, so they did not request additional information from the party. 

“The audit has determined that all expenses from the supplier Milšped were reflected in the report of the political entity, that they were paid from the current account of the political party, and that there were no discrepancies in the data presented in the political party’s report with turnover per account,” the agency said. 

Lawyer Tupanjac says the party’s declarations raise questions over whether they were trying to hide firms in their supply chain.

“Such a high payment to Milšped, which is not normally involved in sales of promotional material but in transport, should have been an indicator for the Agency to investigate in more detail,” he told CINS. 

He also said that he doesn’t recall political parties in Serbia ever importing anything.

Ridzone Creative and the Romanian businessman

Ridzone Creative is listed as the exporter of the promotional material, but the company’s actual operations casts doubt on this claim. According to Romania’s business register, the firm’s primary activity since its establishment in 2015 has been producing television programs. 

According to media reports, Ridzone Creative has also been named as a company of interest in a wide-ranging corruption case launched in 2019 by the National Anti-Corruption Directorate (DNA), which is investigating the relationship between commercial firms and the Romanian Social Democratic Party, currently governing as part of a coalition. 

The DNA told a journalist from the Romanian Public Record, part of the international journalism network OCCRP, that the investigation is ongoing and no one has been formally charged yet.

Ridzone Creative is owned by Catrinel Maria Gheorghe. Public Record obtained information tying her to companies associated with Romanian businessman and former Social Democratic Party MP Sebastian Ghiță. Ghiță was granted asylum in Serbia while fleeing corruption charges in his country.

Ridzone Creative’s address, located in the Romanian city of Ploiești, north of the capital Bucharest, suggests further connections between Ghiță and Catrinel. 

Companies where Ghiță previously had an ownership stake have used this address, and three other firms in which Catrinel had shares have also listed this as their address.

 

The building at this address, which was previously owned by companies linked to Ghiță, was seized in 2013 by the Office of the European Public Prosecutor’s Office (EPPO) in Romania as part of an investigation into a possible 16-million-dollar fraud related to six EU-funded IT projects. The prosecution has not named the specific firms involved in this case.

In 2015, Catrinel became the owner of another similarly named company, Ridzone Computers, which owns Romania TV, suspected to be under Ghiță’s control. 

During that year, he was officially charged in a fraud case involving European Union funds. In the document presenting charges against Ghiță, Romanian prosecutors stated that in August 2012, when he was running for an MP seat, he transferred all his company shares to relatives or other people close to him. Ridzone Computers was one of 54 companies that Romanian institutions claimed were directly or indirectly controlled by Ghiță.

Romania’s prosecution confirmed that the case is ongoing, but it is unclear whether Ghiță is still a suspect. 

After fleeing Romania to Serbia in 2017, Ghiță himself suggested in a YouTube video that he was connected to the television company, saying he “refused to hand it over” to authorities.

Catrinel Maria Gheorghe did not respond to requests for comment. 

Ghiță was arrested in Belgrade in 2017 when he was wanted by Romanian authorities on charges including bribery, extortion, and buying influence, for which he was later acquitted.

He was also under investigation over allegations that former prime minister Victor Ponta had helped him become an MP in exchange for paying 220,000 EUR to cover the costs of a visit by former British prime minister Tony Blair. That case was later dismissed.

While Serbian institutions were deciding on Ghiță’s extradition, Victor Ponta received Serbian citizenship in early January 2018. He told Romanian news agency Agerpres that since 2016, he had been an honorary adviser to the President of Serbia and the then president of the Serbian Progressive Party, Aleksandar Vučić.

Shortly after, in June 2018, the Asylum Office of the Ministry of Internal Affairs granted Ghiță asylum. The Higher Court in Belgrade subsequently refused his extradition.

Ghiță has successfully challenged Romania’s extradition requests, and the last one was dropped in 2019, although he still faces active cases in Romania related to money laundering and bribery.

In court in Belgrade, he stated that he plans to do business in Serbia if granted asylum. Since then, he has rarely appeared in the media.

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