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Bosnian Official Denies Corruption

November 2, 1997

SARAJEVO, Bosnia-Herzegovina (AP) _ A Bosnian official denied allegations Saturday that Muslim and Croat officials in Bosnia used millions of dollars in taxes and fees to finance illegal institutions.

A report released Friday by the European Commission’s Customs and Fiscal Assistance Office alleged that Muslim and Croat officials have used government funds to finance ethnically exclusive institutions.

But Mirsad Kurtovic, director of the Sarajevo-based state stores of emergency goods, accused the European investigators of compiling their report hastily and not documenting their charges.

Some $13.5 million in taxes and customs fees never reached the federal budget from mid-1996 to mid-1997, said the report, which was made public by Carlos Westendorp, the Spanish diplomat charged with peace implementation in Bosnia.

The money is suspected to have been used by Muslim and Croat authorities to finance separate stores of emergency food and fuel, a violation of the Dayton peace accord.

Authorities suspect revenues from the sale of those reserves appear to have been used to finance separate Muslim and Croat authorities.

But Kurtovic said he has paperwork showing all funds went into the federal budget and insisted that his institution complies both with the Dayton peace accord and current laws.

``A problem for this country is that it doesn’t have exact borders with border police and common customs,″ Kurtovic said. ``When those are established, these deformations and problems will not be happening any more.″

According to the European report, another $11.8 million was withheld from federal funds since May, due to smuggling between all three groups _ Serbs, Croats and Muslims.

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