Private security firms in the Balkans harbor corruption, observers say | World| Breakings news and perspectives from around the globe | DW | 19.06.2010
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Private security firms in the Balkans harbor corruption, observers say

Organized crime in southeastern Europe often operates under cover of private security companies. International groups warn that the EU should be cautious about letting Balkan countries into the bloc too quickly.

drawing of man wearing glasses reflecting one hundred dollar bill

Many security firms in the Balkans are involved in corrupt dealings

Organized crime has infiltrated southeastern Europe, particularly Bosnia and Herzegovina and Serbia, and corrupted legitimate business in the region, according to a regional network of investigative journalists. The Sarajevo-based Organized Crime and Corruption Reporting Project (OCCRP) said this development put into question the ability and willingness of the region's governments to combat crime and detain war criminals.

It also cast doubt on whether the European Union will make the crackdown on corruption a key demand for these countries' eligibility for membership in the bloc.

"The EU will keep making demands and Eastern European countries will keep saying what the EU wants to hear - and do nothing," OCCRP'S Drew Sullivan told Deutsche Welle. "But we all know the EU will let everyone in. They showed that with Romania and Bulgaria, two nations still plagued by widespread corruption."

parliament in Sofia

Some criminal structures have even been able to influence MPs in Sofia, the report says.

Romania and Bulgaria joined the EU in 2007 and have subsequently been repeatedly criticized for their slow progress in fighting corruption. A recent EU-funded report "Examining the Links between Organized Crime and Corruption" ranks Bulgaria alongside Italy, Poland and Romania as the EU's most corrupt members.

"Organized crime networks have infiltrated most public institutions [in Bulgaria]," the report said. "This influence in the political and administrative structures allows companies to use corruption to win public tenders, avoid taxes and systematically break laws to gain competitive advantages."

The role of security companies

Private security firms played a pivotal role in the spread of organized crime in the region, said OCCRP, which recently concluded a three-month investigation into Southeast Europe's private security sector. Security companies maintained ties with organized crime, corrupt politicians and law enforcement elements throughout southeastern Europe. The region's weak legal infrastructure, lack of enforcement and widespread corruption had facilitated this development.

In Bulgaria, for example, security agencies constitute the country's largest private employer with 130,000 employees or one in 11 adult males, according to OCCRP estimates. The sector employs three times as many people as the Bulgarian military and five times that of the police.

Yugoslav army soldiers in 1991

Many former Yugoslav army soldiers have joined security firms

In the countries of the former Yugoslavia, the security sector began growing following the Yugoslav wars of the 1990s and the subsequent collapse of existing political systems.

"Trained professional soldiers simply switched to private security companies, protecting banks, schools, money transfers and important people," the OCCRP said. "The work fed their families and gave newly formed governments much needed jobs and security, at least in theory. In reality, the private security sector became its own political, criminal and social force."

The EU report on corruption blamed the nexus of private security and organized crime on UN sanctions imposed in the former Yugoslav states during the Yugoslav wars of the 1990s.

"The fact that smuggling various essential goods, such as oil, was necessary for surviving the UN-imposed embargo, and that money from illegal trade was also necessary for financing the waging of war and other state functions, facilitated the involvement of the security services in forging links with organized criminals who could supply the badly needed goods and/or funds," the report said. "After the wars, these links have endured and are still causing great harm to the quality of governance in the region."

Read more about corruption in the Balkans

ratko mladic

Mladic has yet to be captured

A hopeless battle?

The Office of the High Representative (OHR) in Bosnia and Herzegovina has been making efforts to battle the power structures held by security firms in the region. The EU-dominated OHR is responsible for implementing the 1995 Dayton agreement that ended the Bosnian war.

Raffi Gregorian, the OHR's principle deputy, has expressed concern about security companies in Republika Srpska, the Serb-dominated entity of Bosnia and Herzegovina. He said those companies belonged to the support network of fugitive war crimes suspect Ratko Mladic.

milorad dodik

Dodik's separatist tendencies are considered a threat to peace in the region

The Bosnian Serb military leader is being sought by the International Criminal Tribunal for the former Yugoslavia on charges of genocide in the Srebrenica massacre of 8,000 Muslim men and the 43-month siege of Sarajevo. The EU has made his arrest a key condition for further progress in joining the bloc.

In June 2009, Gregorian banned four Bosnian Serb private security companies from operating in Brcko, an autonomous region that spans the boundary between Republika Srpska and Bosnia. The ban was issued after EUFOR, the European military force in Bosnia, and the EU's Police Mission in Bosnia (EUPM) rejected requests to regulate the country's private security industry and crackdown on dubious companies. EUFOR and EUPM reportedly argued that private security was either a local issue or did not fall within their mandate.

"This is a glaring omission," a well-placed source in Sarajevo said. "The EU is not interested at all. They are not pushing it."

EUFOR spokesman Bruce Foster was evasive on the OHR concerns. But he told Deutsche Welle EUFOR had "a very clear UN mandate to contribute to the safe and secure environment for all of the people of Bosnia and Herzegovina." The force monitored "any activity" which could threaten this, Foster said.

EUPM spokeswoman Sladjana Lizdek said the European police mission was monitoring and advising the police in Bosnia and Herzegovina to support the fight against organized crime and corruption.

"The mission has established that the regulation of the private security sector needs to be enhanced and legislation harmonized across cantons, entities and the state," Lizdek told Deutsche Welle.

Before Gregorian banned the companies, OHR unsuccessfully urged Republika Srpska's Prime Minister Milorad Dodik to crack down on the company Alpha Security. It was founded by former Mladic bodyguard Velibor Sota. OHR said Alpha employed members of a Bosnian Serb military unit disbanded by NATO in 2003. It constituted a "clear and present danger … to the rule of law."

Dodik has granted Alpha contracts for the security of state-owned entities, such as the Banja Luka Tobacco Factory. Local newspaper reports said that Dodik's support of Alpha was part of an effort to create his own counter-intelligence and security service independent of that of Bosnia and Herzegovina. Well-placed sources said Western officials were concerned that Dodik was preparing to unilaterally declare Republika Srpska independent of Bosnia.

But the power of security companies in Serbia was also great. OCCRP said Serbia is the potential EU candidate with the least regulation of the security sector. An estimated 60,000 privately employed security personnel operate in Serbia. This trend began in the early 1990s through Serbia's most notorious paramilitary leader Zeljko Raznatovic, widely known as Arkan. At that time, he founded a security company that trafficked drugs, ran casinos and arranged assassinations.

Can global players help clean up?

Analysts hope that acquisitions by international firms may help clean up the security sector. So far, global players like Prosegur, Securitas and G4S have focused on Romania, where they together hold a 50 percent market share. G4S has also acquired a major Serb security company.

"Romania is the test case," one analyst said. Nevertheless, analysts concede that corruption and close ties between local firms, law enforcement and politicians have effectively excluded foreign companies from winning government contracts.

"The reason is simple," one analyst said. "Local bribery still works best."

Author: James M. Dorsey
Editor: Sabina Casagrande

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