How Kosovo avoided losing €18 million

The first one was with the Eulex prosecutor who worked on the “American University in Kosovo” (AUK) deal. I had written about this transaction in the summer of 2011, on Koha Ditore, Kosovo’s main newspaper and the only genuinely independent one, and on Transitions Online(here, or here in PDF). In short, I said that through a series of illegal steps – the expropriation of a large tract of state-owned land near Pristina (a self-expropriation, in effect); the gross and conscious undervaluation of its market value; and its transfer to a private institution, the American University in Kosovo, which planned to build a new campus there – the government, the Privatization Agency of Kosovo (PAK), and AUK were about to make Kosovo about €18 million poorer.

Annual tuition fees at AUK were equivalent to about twenty average monthly salaries in Kosovo. So this deal, in essence, was a covert and illegal public subsidy to the (rich) university where the offspring of Kosovo’s elite studies (see pp. 17–19 of this paper, and pp. 201–2 of my book on Kosovo).

I denounced the deal publicly because in the preceding months I had unsuccessfully tried to persuade PAK, Eulex, and the mission where I then worked, the International Civilian Office (ICO), to stop it. I wrote a first letter to Eulex in September 2010 (here). I enclosed the official documents about the deal (here, starting from page 6 of the PDF file), which demonstrate that it was illegal. Eulex replied two weeks later (here), indicating no interest in investigating (I objected, and a long and unproductive exchange followed). As to the ICO, only after my articles were published did the mission, pressed by the media, say that before implementing the deal ‘the government needs to explain the public interests’ that would be served by it (the absence of a public interest is one of the many reasons why the deal was illegal).

Eulex’s prosecutors sat on those documents for a few years, until on 29 March 2014 one of them – the not-yet-famous Maria Bamieh – wrote to me asking for help on this case and a handful of other ones. During our exchanges she sent me the draft of the ruling opening the investigation (see pp. 11–12 of that same paper). The documents implicated two ministers and arguably the prime minister too, who signed the main decision (here, page 6 of the PDF file); senior and junior officials of PAK; the president and the deputy director of AUK; and the valuator of the land to be given to AUK. Less reliable information implicated also the then US ambassador: as I wrote in 2011, a colleague at the ICO sent me this email: ‘Be aware that this deal was negotiated in a number of Sunday walks between [US ambassador Christopher Dell and prime minister Hashim Thaci]. Might be difficult to fight.’

Yet, even though Ms Bamieh was using these same documents, her ruling targeted only the PAK officials (the main suspect had died in the meanwhile) and the valuator. My exchanges with her ended after I explained to her that it made no sense to investigate only these suspects, because the evidence against them was exactly the same as the evidence against the other, far more prominent, ones.

So I was glad to receive Eulex’s invitation for the interview on 30 January 2015. And it was a thorough, well-conducted interview, covering all suspects: small fish and big fish, so to speak.

Last November the investigation was terminated. The ruling is a public document, which I publishedhere. It describes the case entirely based on the documents I had provided to Eulex in September 2010 (which means that five years ago Eulex then had all the evidence it needed). And it confirms that the deal was illegal: the investigation was terminated because, and only because, the deal was not implemented. Let me quote directly from the ruling.

The prosecutor concludes his analysis of the deal with these words (§ 33 of the ruling):

‘It is therefore submitted that Kosovo Government, namely Ministries [sic] Ahmet Shala and Enver Hoxhaj, had a strong determination in offering the land parcels to AUK, as agreed with the institution itself and with the American Embassy. It is submitted that PAK and the Municipality undertook all the necessary steps to execute this decision, regardless of the legal obstacles, and with little or no attention to any of these, or to the objections coming mainly from Dr. Andrea Capussela.’

The prosecutor then considers whether all this means that the crime of ‘Abusing official position or authority’ (art. 422 of the criminal code) had been committed. His answer is positive (§ 36):

‘an offence under article 422 CCK has been committed because, in fact, the only requirement is “the intent to acquire any benefit for himself or another person […]”. In this case, although the benefit (to AUK) and the damage (to PAK and Kosovo in general) have not been caused, the intent – mens rea: dolus specialis – is recognizable.’

So, this prosecutor has established that those involved were planning to break the law, because theyintended to benefit AUK at Kosovo’s expense. But he concludes that as the deal was not implemented – the prosecutor writes (§ 34) that the procedures to implement the deal ‘were frozen after 2011, and annulled in 2014 after the investigation was disclosed’ – there was no damage. And without damage there is no crime.

I think that the government cancelled the deal for three reasons. First, my 2011 articles exposed the deal and forced the ICO to intervene, causing at least a delay. Second, in June 2014 I published a paper (quoted above) that describes my exchange with Ms Bamieh about this deal, and probably led the suspects to fear that the investigation could continue. And the third reason, certainly the main one, is that the suspects must have felt that the prosecutor who interviewed me was conducting the investigation with determination (the ruling mentions several requests for clarifications addressed by him to Kosovo’s authorities), and therefore chose to abandon their plans.

(So, eschewing all modesty, I suppose that we – Koha Ditore and Transitions Online, this prosecutor, and I – saved Kosovo’s budget from losing about €18 million.)

This story shows how the opening of an investigation can be an effective deterrent measure, as in the end no damage was inflicted on Kosovo’s citizens and no crime committed. And it demonstrates what Eulex could have achieved had it acted more like this prosecutor, and less like the prosecutors who sat on the documents for four years, or like Ms Bamieh, who seemed only interested in the small fish (which, incidentally, might explain why the President of Kosovo recently gave her a sort of ‘friend of Kosovo’ medal).

This brings me to my second interview on 30 January 2015. When the first one ended I was invited in the room of another Eulex prosecutor, who wanted to talk to me informally about some cases. He outlined only the issues involved, without identifying the cases. But I easily realised that they were, or at least included, the same cases – beyond the AUK one – on which Ms Bamieh wanted my assistance (assistance that she never sought, incidentally, after I criticised her apparent inclination for fishing only the small fish).

I told him that I had several documents that could be useful for his investigations. Having heard nothing from him, some weeks later I reminded him of my offer. He replied that he would have contacted me when his investigations would reach a stage at which my assistance could be useful. This answer seemed odd. Why not take my documents immediately, to read them when the time came? And how could he know when the documents will be useful if he didn’t know what they say?

So, after a warning to this prosecutor, I wrote to his superiors – Eulex’s chief prosecutor, and the head of Eulex’s executive division – saying that this prosecutor seemed very negligent. They thanked me and told me they had passed the information on to Eulex’s chief special prosecutor, who is Mr Jonathan Ratel (who had been given this position, incidentally, despite the indefensible way in which he handled the Medicus case). He did nothing. I can say this with some certainty because I had described the facts omitting the negligent prosecutor’s name, to protect his autonomy and the confidentiality of his investigations; but my email said also that his name was at Ratel’s and his superiors’ disposal, should they have felt that they needed to do something about that apparent negligence. As they never asked me for the name I infer that they did nothing. Indeed, this prosecutor is still with Eulex (and has never asked me for those documents, except maybe a couple of them through an assistant).

So these are the two faces of Eulex. That of the prosecutor who acted competently and loyally to his mandate, and closed the AUK case successfully. And that of the prosecutors and managers who are too negligent, lazy, incompetent, timid, docile, or subservient to perform their mandate properly (the prosecutors, for example, who first opened two investigations, based on serious suspicions, and then did nothing, as §§ 4 and 5 of the ruling mentioned above attests). In the Eulex of 2008–14, which I analysed in my book, the second face is predominant.

One last comment on the election of Kosovo’s next president. As the judicial system doesn’t function, in Kosovo there are many suspicions but few certainties about the misdeeds of prominent politicians. The Eulex ruling on the AUK deal tells us that, while he was prime minister, Hashim Thaci has either signed a document (here, at page 6 of the PDF file) he knew too little about, or was complicit in the criminal deal designed, among others, by his then cabinet colleagues Enver Hoxhaj and Ahmet Shala. Now, Thaci is the main candidate to the presidency and Hoxhaj a possible replacement as foreign minister: I hope that Kosovo’s parliament shall take this new information into account, in assessing whether these two politicians are fit for those positions.

Note: I warned the apparently negligent Eulex prosecutor and his superiors that I was about to publish this article, inviting them to let me know if this could damage their work, and I gave to the US embassy in Pristina the opportunity to comment on the former ambassador’s apparent involvement in the AUK deal. I received no reply.

Andrea Lorenzo Capussela has a PhD on competition policy. After a few years in the private sector, he served as the head of the economics unit of Kosovo’s international supervisor, the International Civilian Office, in 2008–11, and as the adviser to Moldova’s economy minister and deputy prime minister, on behalf of the EU. He then took a sabbatical period, during which he wrote one book (State-building in Kosovo: Democracy, EU Interests and US Influence in the Balkans, I.B. Tauris: London, is conducting research on another one, and is doing some voluntary work on the development of a district in Calabria, Italy’s most depressed region.

This article was originally published on the Osservatorio Balcani e Caucaso (OBC) websiete. Original article you can take a look here.