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Fraud charges filed against employees of Soros-backed group

January 2, 1997

ZAGREB, Croatia (AP) _ The government on Thursday filed fraud charges against three employees of group backed by U.S. billionaire financier George Soros for allegedly trying to evade taxes, the state news agency HINA said.

The three are employed by the Open Society Institute, which finances projects to promote what the group describes as a more democratic society. It also has financed some independent media critical of President Franjo Tudjman’s authoritarian government.

The institute is among several organizations that have been targeted by Tudjman, who accuses them of trying to destabilize Croatia. The organization denies that.

HINA said the three employees were the managing director, whom it identified by the initials K.B.; the executive director, identified as S.D.; and an accountant with the initials I.M.

The organization’s managing director is Karmen Basic and the executive director is Srdjan Dvornik. The identity of the accountant was unclear.

Arhey Neier, president of The Soros Foundations, parent of the Open Society Institute, said it believes the institute’s financial and accounting practices were lawful and proper.

``Accordingly, we look to the Croatian legal system to exonerate the personnel of the Foundation of the charges that are being made against them,″ Neier said in a statement.

Last week, officials alleged police had discovered a double set of wage sheets in the organization’s books. The Interior Ministry charged that taxes were paid only on a low wage listed in the local currency, the kuna, but not for foreign currency payments.

Officials allege that total evaded taxes amount to $485,000.

In early December, Tudjman accused the institute of trying to destabilize Croatia, and vowed to use all legal means to halt ``foundations, organizations and individuals″ funded by foreign sources that have ``often illegal and subversive intentions.″

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