In Debt Up to the Ears

Perhaps there is no significance in all this beyond the purely symbolic, but it happened all the same: in the same week that it was announced that the Karic Brothers are not in the best financial shape (that is to say that they are being aggressively sought after by people whom they are trying to avoid, while they themselves are chasing after people who are persistently trying to avoid them), it was also made public that what used to be financially the soundest company in Serbia, the Socialist Party of Serbia, is now finding itself in virtually the same position.  Dimitar Segrt, former high official with the Socialist Party of Serbia (SPS), announced that "the shadow of bankruptcy looms over the SPS," because the Socialists presently owe around nine million German marks.  The difference between these two enterprises appears to lie in the fact that the Socialists have been left without their "financial skimming" in October of last year, with only interest to pay, obviously believing that they will remain in power forever, that they will always spend other people's money and that they will never get served the final bill.  The Karic Brothers are getting served this bill one year after the Socialists, even though they realized a lot sooner, by contrast with the Socialists, that no government can last forever, but that every government can bring you wealth.

Although Mr. Segrt spent more time in recent weeks and months speaking about the bankruptcy direction the SPS is heading in (bad leadership, lack of readiness for reforms, too much loyalty to their party's chief who is spending time in the Hague these days), he explained on this occasion that the frozen bank account of the Socialist Party of Serbia and the nine million German marks of debt do not mean that the end has come, although he pointed out that his party is still using many buildings and facilities which could soon be found on the list for denationalization.

NINE MILLION, MORE OR LESS:  According to the new law regulating the financing of political parties and their property holdings, an inventory of everything that was left after the Communist Alliance of Yugoslavia (SKJ) and which was handed down without any proper testament to the Socialist Party of Serbia, was supposed to have been completed by the end of June of this year.  The state committee making this inventory and the one body which should suggest what finally should be given back to the state, and what should be divided between parliamentary parties, has evidently prolonged its job without having informed anyone (at least not publicly) of this.  It is not improbable that this committee hit a dead end in trying to decide what belongs to whom.  The communists and after them the socialists took over the property which used to belong, a long time ago to declared enemies of the state whose offspring and inheritors live all across the globe.  What belongs to whom and is listed under whose name cannot be ascertained all that easily.  When this committee finally completes its job, the Socialist Party of Serbia will become far poorer than the party that is already burdened by large debts.

The leadership of that party which trembles at every mention of Segrt is not denying that the party has substantial financial problems, but they are unwilling to admit to the enormous debt of nine million German marks and which suggests bankruptcy.  As VREME's sources indicate, Segrt is only right in theory.  (Otherwise, Segrt is said to have been in the committee in charge of party finances and is criticized today for taking greater care of Football Club "Radnicki" from Obrenovac, a group that is very close to the Demo-Christian Party of Serbia, DHSS, led by Serbian Minister of Justice, Vladan Batic.)  SPS really owes this much money if all the companies who are its creditors are accounted for.  However, in the majority of cases, at issue are court suits in which the creditors of the Socialist Party of Serbia have just begun court proceedings which could last a very long time and in which the amounts owed could be reduced.

For instance, Radio Television Serbia claims that the Socialist Party of Serbia owes it around hundred million dinars for last year's election commercials (approx. three million German marks).  The Socialists do not deny the fact that they never paid Radio Television Serbia, explaining that the management of the state television at the time seemed to consider it an honor to air commercials for the Socialist Party of Yugoslavia.  However, the Socialist Party of Serbia is contesting the fact that election commercials were aired quite as often as Radio Television Serbia claims, for if that were the case, all that was aired in that period were Socialists Party of Serbia election commercials round the clock.  To some degree that is not entirely untrue, even though the news program was never accounted for as official Socialist Party of Serbia election campaign material.  Another of the former pillars of SPS propaganda, the publishing house Politika, is demanding that the Socialists pay their debt to this enterprise which could amount to tens of millions of dinars.

The political party which could get a lot done just over the telephone does not appear to have paid its phone bills regularly, either.  Another of its creditors is the Koling construction company which renovated the JUBMES Bank building for offices for the Socialist Party of Serbia.  The renovation was completed a little before the election and was never paid, with the Socialists having to vacate this building several months ago because it does not belong to them.  We were told at the Socialist Party of Serbia that this, like many other deals, was made by Dragan Tomic, former director of Jugopetrol.  "All the deals he made are coming back to us for payment, down to the last cent.  While we were in power, no one had the gall to ask us for money, but now everyone wants their pound of flesh," an SPS official told VREME who admits that his party's finances are far from optimistic, with the situation being worrisome, to say the least; although, according to him, Segrt is slightly exaggerating.

POWER AS WEALTH:  Judging by the experiences of political parties with similar communist backgrounds, it is hard to believe that the SPS piggy bank does not have hidden crevices which could at least protect the SPS from bankruptcy and ensure normal operations.  The PDP which replaced Honneker's JSPN in East Germany secretly deposited 107 million German marks in Norwegian and Dutch banks.  These funds were discovered, even though it is suspected that they represent only a portion of illegally obtained and concealed funds.  At the time when it was still not clear what belongs to the party state and what to the state party (that is to say when it was ill advised to pose questions along those lines), many prominent members of the Socialist Party of Serbia dabbled in gasoline, cigarettes, lumber, and many other commercial activities which one could only get access to through politics.  A portion of that wealth used to pass through JUL, a political party whose unofficial slogan used to be "we are building capitalism, capitalism is building us," although it seems naïve to imagine that SPS looked on with disgust at what JUL was doing.

A member of this party who spoke with VREME does not deny that large amounts of money were in the hands of the Socialists, but admits to a strong impression that a lot of money that was made through politics ended up in the private bank accounts of party sheiks who were the first to turn their backs to their party comrades once the winds changed.  "We created a system in which the greatest wealth was political power, and when that broke down, our party's finances also broke down," this Socialist told us.  "As a political party we do not have notable companies, hotels, papers or other hidden sources of financing.  We lived for years exploiting power, leaning on the large systems that we controlled - EPS (Serbian Electrical Utility), Telecom, Sartid, Simpo, various mines.  We lived on rackets, we appointed our directors everywhere and they financed us in turn, and it was known very precisely how much each one of them had to funnel into the party piggy bank."

Loss of power also meant losing the right to rackets.  The greatest majority of company directors, members of the Socialist Party of Serbia, have been laid off, while those who still hold onto their old jobs do not even dare think of "channeling" any funds to their long-loved party.  That is why at the Socialist Party of Serbia people have been aware for some time that perhaps the toughest times are yet to come.  The party infrastructure is being radically reduced in recent weeks.  SPS community committees in Belgrade, which used to have up to ten members before October 5 have now been reduced to a single professional who is in charge of picking up the phone, assuming the phone bill has been paid.  The Socialist Party of Serbia committee for Belgrade will most probably have only two to three paid officials, whereas before October 5 they used to have some forty members.  Many members who used to manage large SPS community committees have found other employment and only come to party headquarters in the evening hours.  All prominent members who get parliamentary salaries have been weaned off the party budget.  Many of them will have to purchase their own cellular phones in the future and will have to pay the phone bills themselves.  The Head Committee of the Socialist Party of Serbia meets at its facilities at the Student's Square in downtown Belgrade.  The new facilities at the JUBMES bank have been definitely lost, while the old facilities at the war damaged high-rise "Usce" in New Belgrade (some 20,000 square meters of office space with 11 acres of land) will most likely go into state hands.  The majority of community committees of the SPS have changed or are changing their addresses - they are moving from luxury facilities into ones that are far more modest.  Once again the long forgotten party membership is being reinstituted in order to take care of pressing costs.  At the time when directors of companies were paying out "rackets", justifying thereby the old SPS slogan "we are all Socialists at heart", the party leadership insisted on ignoring the issue of party membership in order not to antagonize good standing members.

The most difficult thing to face for many Socialists is the memory of the times when they were in power and everything that went with it.  One former SPS official described for VREME how life was while in power: officials salaries were not too height, but I used to go to work for years in an air-conditioned party vehicle, I don't remember having paid a restaurant tab or having bought cigarettes more than twice in the past five years.  I had the power to get a job for someone with a single phone call, to improve someone's grade at school, to enroll someone at university, to help those in need of medical help, to ensure that medical drugs in short supply be promptly delivered, and to supply our people in the military frontlines with everything they needed...  All that was perfectly legal and arose out of the fact that you are in power and that the system is functioning.  It seems to me that the Democratic Opposition of Serbia learned the ropes in this regard with record speed."

Without power, money, obedient company directors and with property that is slowly crumbling and enormous deficits in the party budget that suggest bankruptcy several times over, Serbian Socialists today are seriously risking to damage their own party infrastructure.  In many communities their network of organizations is falling apart or is holding together by the skin of the teeth.  However, serious politics require serious money, which by definition constitutes the sustenance of every political party.

In the past, communists faced "moral crises" with campaigns like "if you have a house, give back your apartment", which ended up with some members returning a tent, a shed or a dog house.  Today some Socialists are coming up with similar ideas and think that the several million German marks in the red for the Socialists Party of Serbia could be easily erased if several of the party "sheiks" were to donate back to the Party what the party gave to them in real estate in Belgrade's exclusive Dedinje of Senjak districts.  This would be a sort of internal, party "financial skimming" of party "sheiks" before they manage to get too friendly with the present government, or before they forget altogether that they were ever members of the Socialist Party of Serbia.  They might even find in themselves the generosity to give back a dog house or too.