Croatia Probes Ruling Party for Election-Campaign Corruption

Croatian prosecutors are investigating the ruling Croatian Democratic Union on suspicion of corruption and the illegal use of funds during previous election campaigns, Prime Minister Jadranka Kosor said.

Kosor, who will face voters on Dec. 4 in early elections, denied her party, in power for 17 of 21 years since the country’s independence, used “slush funds” to finance its campaigns, she told reporters in Zagreb today in comments broadcast on radio and TV.

“All election campaigns, including the one in which I ran for president, were financed legally,” Kosor said. She said she personally is not the target of an investigation and has “no intention” of resigning. Kosor lost to Stipe Mesic, a Social Democrat, in 2010 presidential elections.

The elections will pit the Social Democrats and three other parties that together form the Alliance for Change against Kosor’s Democratic Union. The Alliance had 37 percent support in a Oct. 26 IPSOS-Puls survey of 1,000 people, while the Kosor’s party had 20 percent.

Croatia has struggled since 2009 with a corruption scandal that led to the arrest of dozens of ruling-party officials including former Premier Ivo Sanader, who resigned in 2009 and handed the reins of government to Kosor.

Sanader is being investigated for channeling money from state companies into a fund used for party and personal needs. He was also indicted for corruption and abuse of power in cases related to INA Industrija Nafte d.d. and Hypo-Alpe-Adria-Bank International AG. He has repeatedly denied all wrongdoing.

Croatia is slated to join the European Union in July 2013 and is still being monitored for overhauling the judiciary and protection of fundamental rights.

“This is the hardest moment for the party,” Kosor said, adding she “continues to support” the work of the Prosecutor General. The Prosecutor General’s office today declined comment on any of its ongoing investigations.

To contact the reporter on this story: Jasmina Kuzmanovic in Zagreb at jkuzmanovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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