The Scandal of Serbian Government U.S. Lobbying Deals

http://www.balkanstudies.org/articles/scandal-serbian-government-us-lobbying-deals

The Scandal of Serbian Government U.S. Lobbying Deals

by Srdja Trifkovic

Two articles published on this site recently have prompted inquiries from different quarters regarding the lobbying deal between the Government of Serbia and Mr. Milan Petrovic and his Chicago-based APS Inc. In view of the seriousness of the matter and its potential legal implications we feel obliged to acquaint the public with the known facts of this case, which has all the makings of a political scandal in Serbia itself.

Who Is Milan Petrovic? – As the Chicago Sun-Times reported on April 10, 2008, Petrovic was then-Governor Rod Blagojevich's top fundraiser: over the years, Petrovic had raised over $1.9 million for the Governor, or half a million more than Tony Rezko, convicted on several counts of fraud and bribery in 2008. To be precise, during Rezko's trial, FBI Special Agent William Willenborg testified that Petrovic raised $1,963,485 for Blagojevich, outpacing Rezko, who raised a mere $1,437,350

 

According to the Chicago Tribune, "By the time Blagojevich came to power in 2003, lobbying the hospital board had grown into a fertile business… the field was also saturated with lobbyists from Blagojevich's orbit [including] Milan Petrovic, a friend and fundraiser of the governor." Illinois Issues magazine, published by the Center for State Policy and Leadership at the University of Illinois at Springfield, noted that "Gov. Rod Blagojevich's main re-election platform made the spotlight again when the Sun-Times reported the state's new All Kids health insurance program awarded a major contract to McKesson Health Solutions. The company is reportedly represented by a Chicago lobbying firm, Advanced Practical Solutions, led by Blagojevich's top political fund-raiser, Milan Petrovic."

 

The Belgrade daily Borba reported on August 13, 2009, that Milan Petrovic was „involved in numerous affairs and in the state of Indiana he was even disbarred":

 

„A great unknown in the career of Milan Petrovic is the deal he signed with the international giant CH2M Hill which earned $11 million from a contract with the State of Illinois. CH2M Hill suddenly decided in 2004 to become an APS client, although Petrovic's firm APS was founded only a year earlier, as a beginner lobbying group. Why the giant... firm chose Petrovic as an intermediary, although he was drowning in debt, remains unknown to this day. It is noteworthy that Petrovic sought bankruptcy protection on April 5, 2001, and on May 23 of that year he surrendered his law licence to the Indiana Bar because he was under investigation by the Indiana Supreme Court. He admitted knowing of the investigation and that he 'acknowledges the material facts so alleged are true' and b that he would not be able to launch a successful defense if he was indicted. The facts of that case were sealed by the Indiana court and they are not known to the public... Blagojevich's 'money man' donated $20,000 in 2006 to New Mexico Gov. Bill Richardson's reelection campaign."

 

As Bloomberg reported on April 24 of last year („Blagojevich Fundraiser Represented Firm in New Mexico Probe") a client of Petrovic, CDR Financial Products Inc., was under investigation in a federal pay-to-play probe in New Mexico.

 

"Milan Petrovic, who raised $1.96 million for Blagojevich, introduced CDR to Illinois budget and debt officials, according to e-mails obtained under a public records request. He and his lobbying firm also donated $20,000 to New Mexico Governor Bill Richardson, a one-time Democratic presidential candidate who withdrew from consideration as U.S. Commerce Secretary following disclosure of the CDR probe. Richardson 'is a public official I admire,' Petrovic, 43, said in a telephone interview, declining to comment further… In Illinois, Petrovic has also represented Stratton & Associates, a Denver-based consulting firm run by a senior political adviser to Richardson, state lobbying records show. Stratton lobbied on CDR's behalf in New Mexico, according to William Sisneros, chief executive officer of the New Mexico Finance Authority… Petrovic and his firm, Chicago-based Advanced Practical Solutions, contributed $20,000 to Richardson's campaign and political action committees in 2004 and 2005, New Mexico political finance records show. Petrovic's friends, business associates and clients donated at least $50,500 to Richardson."

 

Regarding that CH2M Hill contract, there is no mystery. In a detailed report on Petrovic („A Closer Look at Blagojevich's Top Money Man"), NWI.com reported on December 21, 2008, that on Nov. 30, 2006, the Illinois Toll Highway Authority gave CH2M Hill a $2.26 million contract to do a master plan development for the Northwest Tollway, and in 2007, the Chicago Tribune reported the firm got $11 million in tollway contracts.

 

The Plus Side – To his credit, Milan Petrovic appears to be a strong proponent of ethnic diversity. In 2008 one Shquipe Osmani, of Advanced Practical Solutions, was listed as making a donation of $2,300 to Hillary Clinton. This clearly indicates that, whatever Petrovic may be accused of, he should not be accused of any Serbian nationalist bias, not only in his hiring practices but also in support for the woman who boasts of having nagged her husband into bombing Serbia in 1999.

 

The Reaction in Serbia – According to the Belgrade daily Borba, „Serbia's lobbying in America is in reality a well developed scheme for private misappropriation of money which belongs to the citizens of Serbia." The paper commented the deal with Petrovic on July 27 of last year by saying that the Government of Serbia was paying „obscure firms and second-rate politicians, and that at the same time the public in Serbia knows nothing about the activities of these so-called lobbyists, or their results, and especially not about the way in which huge sums of money are being spent":

 

„Two main outfits for this deal are the above-mentioned firm of... Milan Petrović and '30 Point Strategies LLC,' which taken together cost Serbia $145.000 each month, or $1.74 million a year. To make it all even more suspicious, through those agencies other firms are paid too, such as 'Prairie Avenue Advisers LLC,' which cannot be found on the Internet, with one interesting detail: when its name is entered on... Google, it automatically corrects the last word to advisors, instead of advisers, which merely shows that the person creating this firm in Chicago even does not speak good English."

 

The paper added that Serbian taxpayers' money has been paid to „candidates" from Illinois, including one Footlik Jay (ed.: defeated by Dan Seals in the 2008 Democratic primary in the 10th District). It pointed out that the contract with Petrovic's firm was signet by Tamara Stojčević, secretary-general of the Government of Serbia, on 30 April 2009, on the same day when the Government approved it. The first payment was made and the contract registered with the U.S. Department of Justice (No. 5933) already the following day, „while the gullible citizens of Serbia were firing their grills for the long May Day weekend." According to the paper, the deal with Petrovic was arranged in 2008 at the Democratic Party Convention in Denver by Srdjan Šaper, a trusted member of President Boris Tadic's inner circle, who represented Serbia's ruling Democratic Party at the Convention.

 

Serbia's opposition politicians were outraged. Nenad Prokić, a deputy of the pro-Western Liberal Democratic Party of Serbia, said that the decision of the Government of Serbia to designate the contract with Petrovic as „Secret" (even though it is a matter of public record in the United States) aroused suspicion:

 

„Lobbying is desirable and useful, but the secrecy of the contract may indicate the desire to conceal some aspects of the truth about it. If it is to be legitimate, it has to be transparent... It is necessary to verify whether this is a method of passing money through the window into a family firm."

 

Dušan Janjić, Director of the Forum for Ethnic Relations in Belgrade, has expressed surprise that the Government of Serbia had signed the contract with the firm of Petrovic which is implicated in the affair of Rod Blagojević: „Since that agency is compromised, I think that the Government has made a perillous choice." According to Janjić, this contract shows the extent to which its signers fail to understand the importance of lobbying.

 

Biljana Kovačević Vučo, President of the Lawyers' Committee for Human Rights YUCOM in Belgrade, has expressed indignation at the lack of transparency: „The members of the Government use taxpayers' money as if it was their own, and violate the first principle of democracy that nothing should be clandestine".

 

Vesna Pešić, a member of Serbia's parliament, had tabled a Deputy's Question to the Government asking it to reveal the details of the contract, disputing its „Top Secret" designation on a contract which will inflict a multi-million damage on the taxpayers:

 

„The main problem in this whole story is that the public has not been informed on what the people elected to lead us are doing. Since when is the secretary of the Government authorized to sugn such a non-transparent contract, for which all government ministers claim that they had never seen it in their lives. I have asked the Government about it... but I expect them to remain silent, as they had done before... (President Boris) Tadić certainly knew about this contract, because (Foreign Minister Vuk)  Jeremić knew about it."

 

The story does not end there. It will continue. Watch this space.