Clues led to a cave: Milo lectures the prosecution, interlocutors claim there are no ambiguities in the Telekom affair

Although many clues in numerous scandals over the last three decades have led to the former long-serving head of state, the government and the Democratic Party of Socialists (DPS) Milo Đukanović and people close to him, the prosecution's responses were regularly absent. The fact that 20 years after the opening of the "Telekom" case, Đukanović can say that there was no criminal act in that affair shows that the institutions have not been reformed and that he is using this situation to strengthen his position.

Thus, the interlocutors of "Vijesti" comment on the messages of the recently first man on the Montenegrin political scene, that the complaint in the "Telekom" affair against him, his sister Ane Djukanovic and several other individuals filed a complaint with the Special State Prosecutor's Office (SDT) in 2019. The Network for the Affirmation of the Non-Governmental Sector (MANS) was not dismissed due to the statute of limitations, but rather that the criminal offense in that case never existed, and that the authorities were not allowed to dismiss the report out of fear.

President of the Board of Directors of the Institute Alternative and former member of the Prosecutorial Council Stevo Muk, assessed that the prosecution owes the public answers about which prosecutors worked on the case, what actions they took, why they were on the case for so long, why a prosecutorial decision was not made before the case became statute-barred...

"In the end, is anyone responsible for this epilogue?" he said.

Chief and responsible editor of the weekly "Monitor" Milena Perović, she said that Đukanović is using the state of the institutions, as well as the fact that the new authorities, after the fall of the DPS, took over the "matrices" of that party instead of systemic reforms, to strengthen his own position.

"If he had nothing to fear, he would have left politics a long time ago, as he has announced many times. He would not continue to hold DPS or this society hostage. The fact that two decades after the "Telekom" affair, Đukanović can publicly claim that 'there is no criminal act' in this case, unfortunately, says the most about us. About the institutions here that, although the country is supposedly on the doorstep of the European Union (EU), have not yet been reformed," she told "Vijesti".

US Embassy: Decision to be reviewed by authorities

Đukanović told “Pobjeda” yesterday that he does not believe that the statute of limitations is the reason for the dismissal of the complaint, but rather that the crime does not exist. He also stated that the initiation of the procedure in the “Telekom” affair was “politically engineered by a person who once had a signed contract with the European Commission”, who, he claims, “encouraged and very generously financially rewarded” the filing of criminal charges against public office holders in Montenegro, stating that this is a “disgusting, essentially neocolonial and arrogant practice of the EU”.

He added that the "unquestionably decisive argument" for his guilt was the statement of the former diplomatic representative of the state, "our important partner, who never makes mistakes and with whom it is not wise to confront," alluding to the former ambassador of the United States of America (USA) to Montenegro. Sue Kay Brown.

The US Embassy announced at the end of March 2014 that its Securities and Exchange Commission (SEC) had found evidence that corrupt practices had occurred in the "Telekom" affair, and a few days later, Brown clarified that this was the official position of the State Department.

The SEC lawsuit does not mention names, but uses the phrase “sister of a senior Montenegrin government official,” who was an intermediary in concluding a contract between Magyar Telekom and a fictitious consulting firm (“Sigma”). Although the US documents do not mention the name, Montenegrin and international media later speculated, citing sources and documentation, that it was the sister of then-Prime Minister Đukanović, Ana Đukanović. She has denied since the beginning of the affair that she is one of those mentioned in the lawsuit.

When asked by "Vijesti" how they viewed the dismissal of the application and Đukanović's statement in which he alluded to Brown, the US Embassy responded that they did not believe it was necessary to comment on the prosecutors' decision, but that it should be "subject to review by the competent authorities, experts and the wider public."

"The US Embassy does not consider it necessary to comment on the decision of the Montenegrin prosecutors, nor on subsequent individual interpretations of that decision in the case known to the public as the 'Telekom' affair. Decisions of the Montenegrin judicial institutions should, above all, be subject to review and consideration by the country's competent authorities, legal experts, and the wider interested public," they said.

The honorary president of the DPS stated, speaking about the prosecutor's decision, that the reason why a number of state functionaries are not making "decisions based on the Constitution and laws" is the fear of unfulfilled expectations of a part of the public, of resisting the "unscrupulous pressure of Greater Serbian nationalism and its church, political and media servants in our country", and of "mentors of democracy" in the region, calling the "Telekom", "Prvi milion" and "Pandora papers" scandals "pamphlets" and "nonsense".

Đukanović's office did not respond to "Vijesti"'s questions about why he thinks the prosecution is afraid to decide in his favor if every decision the prosecution made in which he was the subject of an investigation was in his favor, whether he has evidence that the European Commission financially rewarded the filing of criminal charges against public office holders in Montenegro, and why he claims that Brown's statement was a "crucial argument" for his guilt, when the US Embassy's statement (dated March 19, 2014) clearly stated that there was corruption in the "Telekom" affair.

"Vijesti" is awaiting a response from the European Commission regarding Đukanović's claims regarding the award of prizes for submitting applications.

There is no reason to be dissatisfied.

Stevo Muk believes that Đukanović is the last person who should be dissatisfied with the work of the prosecution.

"Many clues have 'led to one cave' over the past three decades. However, no indictments have been filed against him, against the closest members of his family, or his closest business and party circle. To this should be added the no less important fact that in the part of the 'Telekom' affair for which two people were accused, acquittals were rendered twice," he reminded.

In February of this year, the Higher Court in Podgorica, in a repeated court proceeding, issued a first-instance verdict by which the former leaders of Telekom Oleg Obradovic i Miodrag Ivanovic acquitted of charges that, as co-perpetrators, they obtained a benefit of 2,3 million euros from the company "Rawleigh Trading" from London by abusing their position under a fictitious contract for consulting services for researching the telecommunications market, to the detriment of Monet (the former mobile operator owned by Telekom) and Telekom.

The previous verdict, delivered in June 2022, was acquittal, but the Court of Appeal overturned it and remanded the case for a new trial.

Muk states that the public is increasingly asking questions, and rightly so, while the prosecution's answers are chronically lacking. He warns that public trust in the work of the state prosecution cannot be maintained indefinitely without a transparent, comprehensive and credible answer and explanation from that institution.

"This way, one part of the public remains to believe, and the other does not believe, Djukanovic's interpretation of his own case. It was the prosecution that left Djukanovic room to explain to the public the reasons why the prosecutor's decision was not made for so long, and the case was archived," he points out.

MANS announced that it would file a complaint with the Supreme State Prosecutor's Office with a request to determine all the circumstances that led to the case becoming statute-barred.

The facts speak for themselves.

Milena Perović said that the facts simply do not support Đukanović's claims about the "Telekom" affair.

"The US Securities and Exchange Commission has indisputably established corruption during the privatization of Telekom from Magyar Telekom. According to this American institution, a bribe in the amount of 7,35 million euros went, through fictitious contracts, to local government officials and the 'sister of a high-ranking official'. That it was the sister of the then Prime Minister, Ana Đukanović, was confirmed by Đukanović himself, who then, as now, denied the accusations of corruption," she explains.

Perović claims that it is also indisputable that Đukanović's government, which, he says, was also indicated by SEC documents, enabled the Hungarian company to purchase an additional 21,92 percent of shares from minority shareholders at a favorable price, after purchasing the majority stake in Telekom - 2,2 euros per share.

"Our budget 'made an additional payment of 30 cents for each sold share'. Thus, the Hungarians paid almost half as much per share for the minority stake as for the majority stake. Since the corruption was definitively proven, Deutsche Telekom, the majority owner of 'Matava', or rather, Hungarian Telekom, paid $95,2 million to avoid the process," the interviewee recalls.

She noted that the "Telekom" affair in Montenegro, however, has not moved from its place, and that the prosecution, led by the former head of the Montenegrin judiciary, now accused of membership in a criminal organization, Vesna Medenica, did not see any corruption in the disputed contracts.

"And that is the story of our judiciary," Perović concluded.

Djukanovic, on the other hand, claims that his government, after selling the state-owned stake to the Hungarian company "Matav" for 114 million euros, learned "from communication with the new majority owner" that the Hungarian company was interested in buying the minority shareholders' stake.

"And we calculated that this would certainly mean an inflow of another 40 million euros into Montenegro's payment system. We conveyed this idea to some of the minority shareholders with whom we had contact. We realized that they saw their interest in this, but that there was a risk that this part of the deal would fail due to, in essence, the minimal difference in price between the seller and the potential buyer," said Đukanović.

He added that the Government then, in his opinion, "responsibly estimated" that it would allocate "less than 2,5 million" from its revenue so that Montenegro would receive an additional 40 million euros.

"In total, our state earned not 114, but about 150 million euros," says Đukanović's calculation.

How Telekom was sold

MANS filed a complaint against Đukanović, his sister and several individuals on suspicion of abuse of official position and accepting bribes.

The complaint states that they are charged with "organizing a criminal group, using the economic and business structures of Montenegro, and influencing the executive branch to ensure that the government allowed Hungarian Telecom to purchase minority shareholders' shares on more favorable terms and thus acquire two-thirds of Telekom's shares, which was a condition for purchasing the state's share package in the company."

"They then created false contracts through which the reported Milo Đukanović and other currently unidentified persons were paid a bribe in the amount of 7,4 million euros, which they acquired, held and used with the knowledge at the time of receipt that the money originated from a criminal offense, while simultaneously falsely presenting the facts about the nature of the money paid as a bribe and falsely presenting that it was money paid for services performed," the report states.

The majority stake in Montenegrin Telecom (51 percent) was sold to Hungarian Telecom in 2005 for 114 million euros, of which three million were allocated for a subsidy to buy out shares of minority shareholders of the telecommunications company.

The government of then Prime Minister Đukanović decided to pay each minority shareholder of Telekom 30 cents from the budget for each share offered to Hungarian Telekom. Thus, the Hungarians bought minority shares at a price of 2,2 euros, as they had proposed, but the shareholders, thanks to the government's contribution, received 2,5 euros for each share sold. The minority shareholders, however, were left short, because even the "subsidized" price was significantly lower than the price that Hungarian Telekom paid for the state-owned package of shares, i.e. 4,7 euros per share.

Thanks to the government's help, Hungarian Telecom acquired a 76,5 percent ownership stake and established full control over the company just two months after privatization.

In December 2011, Magyar Telekom paid a $95 million fine to settle civil and criminal charges with the SEC that the company bribed officials in North Macedonia and Montenegro to win business and eliminate competition in the telecommunications sector. The SEC charges allege that Deutsche Telekom, through its subsidiary, paid multimillion-dollar bribes to Montenegrin officials.

In January 2014, the SEC dropped its investigation into the alleged corruption in Montenegro in order to “streamline” the proceedings, and instead sought to pursue similar corruption in North Macedonia, which it believed would be easier to prove. In April 2017, the US government commission announced that two former directors of Magyar Telekom had agreed to pay $400.000 and accept a ban on doing business to settle charges of corrupt privatization in Montenegro and North Macedonia.

Former CEO of Magyar Telekom Elek Straub he agreed to pay $250.000, and Andras Balog, former chief strategy officer $150.000, and both agreed to refrain from serving as officers or directors of any publicly traded company under the jurisdiction of the SEC for five years.

A New York court has indicted the third Hungarian Telecom official in the case, Tamasha Marvaia (former director of acquisitions and business development), sentenced in February under an agreement with the SEC to pay a fine of $60.000 for falsifying company books and records in connection with a corruption scheme.

In April 2015, the Montenegrin prosecutor's office received documentation on the "Telekom" affair from the US. From that year until early 2019, special prosecutors explained that they were waiting for the translation of the documentation... Former Chief Special Prosecutor Milivoje Katnic, now charged with the crimes of creating a criminal organization and abuse of official position, claimed in early 2019 that Milo and Ana Đukanović were not involved in the fraud surrounding the sale of Telekom.

Djukanovic distorts the facts again

Milo Đukanović told "Pobjeda" that the US SEC's opinion referred to the privatization of Telecom of North Macedonia, not Montenegro.

"... But unfortunately, a number of us had the opportunity to read the opinion of the US Securities and Exchange Commission and to see for ourselves that its assessment of the corruption of the privatization arrangement referred to the privatization of Telekom Macedonia, not Montenegro," said Đukanović.

However, a statement from the SA Embassy in March 2014 refutes Đukanović's claims. It states that the SEC has found evidence of bribery in Montenegro, but that due to the rationalization of the factual allegations, in the further legal proceedings against the three former directors of Magyar Telekom, it will continue its lawsuit entirely on the allegations related to Macedonia.

"Assistant Chief Counsel Robert I. Dodge informed the defense counsel that the Securities and Exchange Commission will not pursue its factual allegations of corruption in Montenegro and that, in order to rationalize its factual allegations, it will base its claim entirely on the allegations related to Macedonia in the continuation of the proceedings in this case. The Securities and Exchange Commission, however, has obtained evidence of bribery in Montenegro," the Embassy said in a statement at the time.

Ana Đukanović: "I'm the best, and you hate me"

On January 4, 2012, "Vijesti" published an article titled "'Sister of the Highest Official' Received a Bribe Too", with a photo of Ana Đukanović on the front page, citing SEC documents, which identified the names of three people who were bribed by Hungarian Telecom in order to obtain 76 percent of the shares of the state-owned Telekom.

She then told "Vijesti" that she had nothing to do with the sale of Telekom, and the next day (January 5, 2012) she reacted to the article, stating that Vijesti "spiced up" the newspaper's issue at the time with her picture and "serious accusations of accepting bribes."

She also said that, "in the opinion of relevant institutions," she is one of the best lawyers in this region.

"You continue to live with hatred and in hatred," Ana Đukanović said at the time.

Urošević: We will form an inquiry committee for Telekom

MP from the Europe Now Movement (PES) and President of the Commission for Monitoring and Controlling the Privatization Process, Uglješa Urošević, announced yesterday that the party will initiate the formation of an Inquiry Committee in order to clarify all important facts in the "Telekom" case.

"The professional and lay public of Montenegro was quite shocked to hear that the statute of limitations was the reason for the dismissal of the criminal charges in the 'Telekom' case against Đukanović and his sister. Although the same case before the competent court in the USA received its epilogue in the form of a final verdict for corruption, in Montenegro it was deliberately buried in the prosecutor's drawer with layers of time and obvious negligence until it completely expired," said Urošević.

DPS MP and spokesperson Sonja Popović announced last night that the announcement of the formation of the inquiry committee is a cheap media spin and a continuation of attempts to consolidate PES and the parliamentary majority "after the debacle they experienced at the last session (of parliament)."

The draft laws on the National Security Agency and on internal affairs were withdrawn from the agenda of that session, following friction between the constituents of the ruling majority over their failure to vote on the amnesty act.