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Will Lukashenka's 'Outrageous' Conduct Hit Wealth Of Serbian Brothers Once Close To Milosevic?

Belarusian leader Alyaksandr Lukashenka (right) meets with Bogoljub and Dragomir Karic in Minsk in June 2015.

A $3.5 billion residential and commercial real-estate project being developed on the site of a former aerodrome in Minsk is expected to change the face of the Belarusian capital.

Minsk World, as the project is known, is to feature a modern financial center with glass-facade skyscrapers surrounded by dozens of high-rise apartment buildings and villas containing 30,000 residential units.

Dana Holdings, which has been developing the site, bills it as a "city-within-a-city" and one of the largest real-estate projects in Europe.

Minsk World is just one of several Belarusian projects awarded to Dana Holdings, a Cyprus-based firm founded by the Karics -- a family that was one of the wealthiest and most influential in Serbia in the 1990s, under Slobodan Milosevic, but has since seen its star in Belgrade wane.

The Karics have catapulted to the top of the Belarusian property industry over the past decade, raking in huge profits in the process, according to company filings.

Critics charge that it is in large part thanks to their close ties to strongman Alyaksandr Lukashenka, who has ruled Belarus with an iron fist for 27 years and has cracked down hard on protests over an August 2020 presidential election opponents say he stole. The family denies this.

Bogoljub Karic (left), Minsk City Executive Committee Chairman Uladzimer Shorats (second from left), and Dragomir Karic (second from right) attend the opening of the Dana Mall Trade Center in Minsk in January 2017.
Bogoljub Karic (left), Minsk City Executive Committee Chairman Uladzimer Shorats (second from left), and Dragomir Karic (second from right) attend the opening of the Dana Mall Trade Center in Minsk in January 2017.

Lilia Lukashenka, the wife of the Belarusian ruler's eldest son, Viktar, was listed in 2017 as one of 13 deputy directors of Dana Astra, the holding's main subsidiary in Belarus, though she no longer works there. She currently runs an art gallery in a mall owned by Dana Holdings.

Meanwhile, Lukashenka picked Dragomir Karic, one of the family patriarchs, to be honorary consul of Belarus in Belgrade.

These ties now threaten to cripple the Karic real-estate empire, which at the start of 2020 had more than 7 million square meters of projects in development in Belarus and Kazakhstan, including Minsk World. The market value of those projects upon completion has been estimated at $13 billion, according to Dana Holdings' website.

Amid Lukashenka's relentless clampdown against peaceful demonstrators protesting the election, in which he claimed a landslide victory and a sixth term in a vote that opponents and Western governments said was blatantly rigged, the family's fortunes are under threat.

The European Union imposed sanctions on Dana Holdings and one of its Belarusian subsidiaries in December 2020, accusing it of "benefiting from and/or supporting the regime" of Lukashenka.

Feel 'The Hurt'

The United States could follow suit and slap sanctions on family members, making it tougher for them to get around the penalties by shutting one company and registering another.

At a hearing on March 24, U.S. Representative Chris Smith (Republican-New Jersey) called on the Treasury and State departments to consider imposing sanctions on several tycoons under the Global Magnitsky Act for supporting Lukashenka, including Dragomir Karic, 71, and his younger brother, Bogoljub Karic, 67.

The Global Magnitsky Act targets people accused of gross corruption and human rights abuses.

Smith doubled down on his calls for U.S. sanctions against those close to Lukashenka after the Belarusian authorities diverted a passenger jet on an Athens-Vilnius flight to the Minsk airport on May 23 and arrested an opposition journalist and his girlfriend after it landed.

"After this very brazen incident...we have to just manifestly increase the number of people on that list," he told RFE/RL in an interview later that day, referring to those hit with sanctions for backing Lukashenka. "Many people have to feel the economic hurt."

On May 24, U.S. President Joe Biden said he asked his administration to "develop appropriate options to hold accountable those responsible" for the "outrageous" plane incident in close coordination with the European Union, other allies and partners, and international organizations.

Prior to the plane diversion, the United States had been rolling out punishments against Lukashenka and his backers over the political crackdown, which has resulted in 30,000 arrests, including the incarceration of more than 400 people considered political prisoners, widespread allegations of torture and abuse, and several deaths.

The United States announced two rounds of sanctions in late 2020 against nearly 50 officials and a few government entities. And in April, the Treasury Department reimposed sanctions on nine Belarusian state-owned enterprises that it said "finance and support" Lukashenka's government.

In a statement to RFE/RL on May 7, Dragomir Karic denied that the family business received any special treatment in Belarus. He asserted that the country is a market economy with a competitive construction industry, despite a widely held view that it retains elements of a Soviet-style command economy.

He also suggested that industry competitors might be pushing allegations of ties to Lukashenka to hurt his business, and claimed to have not won any more Belarusian contracts despite the family's decades-long industry experience.

The Minsk World residential complex is seen under construction in Minsk in July 2020.
The Minsk World residential complex is seen under construction in Minsk in July 2020.

Dragomir and Bogoljub Karic have met with Lukashenka, who has called their projects "works of wonder" despite some public criticism that they build bland, high-rise ghettos.

The imposition of U.S. sanctions against the Karics might give them a bitter sense of deja vu.


The Karics were hit with sanctions in the 1990s and early 2000s by the United States and the European Union for their perceived ties to Serbian leader Milosevic, who was tried on war crimes charges in The Hague but died in his cell in 2006.

The Karics emerged as one of the wealthiest families in Serbia following the collapse of communism. They owned assets in various industries including banking, insurance, manufacturing, telecommunications, media, and real estate. Media reports at the time put the value of their assets in the billions of dollars.

However, the combination of Western sanctions and Milosevic's eventual overthrow in 2000 squeezed the family's fortunes. Bogoljub Karic eventually fled to Russia in 2006 to avoid corruption charges he called politically motivated.

The brothers have sought for years to clear their names in the West and receive visas or passports, hiring lawyers and lobbyists for hundreds of thousands of dollars to press their cases in Washington and Ottawa, the Canadian capital.

In 2009-10, in one of the family's last known public attempts to restore their reputation in the United States, Bogoljub and Dragomir Karic -- through Washington lobbyists -- presented themselves to U.S. policymakers as "pro-Western" figures who "embrace Western democracy, capitalism, and economic development" for Serbia and were outraged by what they called Belgrade's "anti-democratic abuses."

As their lobbyists were making that pitch on Capitol Hill, the brothers were embracing Lukashenka, the authoritarian leader some Western officials had deemed "Europe's last dictator."

Belarusian Fortunes

With their Serbian businesses under pressure in the 2000s, the brothers looked to expand in the former Soviet Union, where they had been active since the 1980s.

Dragomir Karic, who ran the family's operations in Russia, reportedly invited Lukashenka to attend a Serbian economic forum in March 2009 and spent two evenings in the Belarusian leader's company.

Since then, the Karics' real-estate business in Belarus has skyrocketed, becoming the new center of their business empire.

Lukashenka -- who supported Milosevic with arms sales despite a UN embargo and was the only foreign leader to visit the besieged Yugoslav leader during the 78-day NATO bombing campaign in 1999 -- has awarded the rights to major real-estate projects to the Karics by presidential decree.

Valer Tsapkala, a Belarusian businessman and opposition politician now in exile who previously served as ambassador to the United States, contends that this amounts to preferential treatment for the Karics and believes that they have earned a windfall as a result.

Valer Tsapkala (file photo)
Valer Tsapkala (file photo)

Two subsidiaries of Dana Holdings -- Dana Astra and Emirates Blue Sky -- earned at least $175 million over a four-year period from 2017 and 2020, according to their Belarusian financial statements.

Vibor Mulic, the president of Dana Holdings, told RFE/RL in a statement that the company was fighting back against the sanctions and had launched an appeal with the European Council of Justice.

"In the history of sanctions, it has never happened that a company was included in the sanctions list only on the basis of several articles by certain irrelevant opposition media," he said, referring to previous reports in Belarusian and Western media alleging ties between the company and Lukashenka.

Mulic said that Dana Holdings would continue its work on Minsk World and expected to complete it by 2024, but that it had put projects in which it has recently invested in the EU on hold until the company's appeal is heard.

In the meantime, the Karics have exited Belarus -- at least on paper.

In early December, shortly before the European sanctions were announced, ownership of Dana Holdings was transferred from the Karic family to Cyprus resident Marinos Stylianides, according to the Sarajevo-based Organized Crime and Corruption Reporting Project (OCCRP) and Belsat, a Poland-based media outlet focusing on Belarus. Dana Holdings' subsidiaries in Belarus have also changed ownership, OCCRP and Belsat reported.

Tsapkala doesn't think that the Karics are going to stop operating in Belarus due to the European sanctions.

"It is pretty easy to leave Dana Holdings and start a new company, especially if Lukashenka knows who is behind it," the opposition leader said, adding it was critical to place sanctions on the family itself.

Fairy-Tale Rise From Communist Ashes?

The Karics give a fairy-tale description of their improbable rise to massive wealth in the late 20th century. Bogoljub and Dragomir Karic, along with brothers Zoran and Sretan and sister Olivera, grew up in Kosovo, one of the poorest regions in communist Yugoslavia. The five were a folk-music ensemble that performed at weddings and other events before launching a private enterprise in the late 1970s making tools and farm equipment.

Yugoslav dictator Josef Broz Tito politically intervened to help them with their initiative, Bogoljub Karic told The New York Times in 1988, and a decade later they were racking up as much as $20 million in annual revenue, a phenomenal amount for a private company in Eastern Europe at the time.

The development of political ties would go hand-in-hand with their business rise over the next four decades.

"There is no question that [the] Karics' resourcefulness is one of the key elements behind the family's business success," Biljana Jovic, a Washington-based Balkan analyst, told RFE/RL in an e-mail. "However, from the very beginning, the principal foundation of this success has been currying favors with politicians, from the local administrators and apparatchiks in Kosovo, where their business was launched, through Slobodan Milosevic and, more importantly, his wife, to [President Aleksandar Vucic's] Serbian Progressive Party and political leaders of the countries of the former Soviet Union, where they expanded their business operations.

"This behavioral pattern has generously yielded fruit for four decades and it is unlikely that there is any intention to abandon it," Jovic said.

Bogoljub Karic, the youngest of the four brothers, ran the business -- known as Brothers Karic -- which soon expanded into the Soviet Union after developing contacts with government officials during the perestroika era, in the years before the Soviet collapse of 1991.

The rise to power of Milosevic in Yugoslavia in the late 1980s and the coming collapse of communism opened the door to enormous wealth for the family. According to a 2001 biography on the couple by Slavoljub Djukic, Bogoljub Karic early on won the trust of Milosevic's influential wife, Mira Markovic, in part through their shared respect for Tito.

The Karics were among the first to receive a license to open a private bank in Yugoslavia and in 1994 won a controlling stake in the monopoly provider of mobile service in the country. Djukic wrote that the Karics had no trouble securing minor business contracts in Serbia on their own, but major contracts were obtained at the time "through government intervention" and Milosevic was the gatekeeper.

Home Near Capitol Hill

The Karics used their fortune to set up the Karic Foundation, with an annual awards ceremony and a private university in Belgrade. Critics say they have since used the charity to flatter domestic and foreign officials and distribute favors. "There is absolutely no doubt that it is a part of [the] Karics' broader business agenda," Jovic said of their philanthropic prizes.

Like many other East European families that amassed a fortune after the fall of communism, they swiftly sought residency and legitimacy in the West, scooping up expensive homes in the United Kingdom and Canada, applying for citizenship, mingling with high society, and registering companies, including one in Florida.

The Karics were first hit with sanctions in the early 1990s for their ties to Milosevic, and their assets in the West were frozen as the United States sought to pressure his government to end the war in Bosnia-Herzegovina.

In response, they hired Washington lobbyists in 1995 and 1996 to organize meetings with officials from the Clinton administration and Congress to discuss peace, the lifting of sanctions, the unfreezing of their funds, and democracy promotion. Bogoljub Karic even floated the idea of coming to the United States with Markovic.

Though the sanctions were lifted after the Bosnian War ended in 1995, Bogoljub Karic was later hit with entry bans and economic sanctions by the EU and the United States for his ties to Milosevic during and after the 1998-99 Kosovo War.

Karic served as a minister without portfolio in Milosevic's government in 1998-99 but claims he resigned after Milosevic failed to move ahead with promised reforms.

Djukic said Bogoljub Karic's relationship with Milosevic was "complicated," and that the businessman financed other parties as an insurance policy should the leader lose power. Some in the West allege he actively helped Milosevic circumvent sanctions and sought to launder money through Cyprus, which he has denied.

While Washington removed economic sanctions against the Karics around 2003, it has refused to issue the brothers visas to enter the United States. Canada rejected their request for citizenship.

Therefore, the Karics again hired Washington lobbying firms in the 2000s -- each tied to relatives of U.S. lawmakers they previously met -- and their foundation bought a home in 2003 for $885,000 2 kilometers from Capitol Hill, which they called Serbia House.

Bogoljub Karic at a political rally in downtown Belgrade in January 2006.
Bogoljub Karic at a political rally in downtown Belgrade in January 2006.

Putin Peace Award

Meanwhile, the Karics were facing consequences at home for their ties to Milosevic once he was pushed out in 2000. The family was forced to pay an "excess profit" tax of about $30 million for the alleged benefits they received from Milosevic.

In what some considered a move to protect his family's assets, Bogoljub Karic created a party called Strength of Serbia and ran for president in 2004, coming in third with 18 percent of the vote. He threw his weight behind Boris Tadic from the Democratic Party, who won the second round.

However, that did not stop the new Serbian government from launching investigations into fraud by the Karics. Bogoljub lost his TV station and sold the stake in his mobile business -- possibly worth hundreds of millions of dollars -- before fleeing to Russia in 2006.

In his final public lobbying attempt in 2009-10 to get the United States to lift its entry ban, he asked Washington to pressure the Western-leaning Serbian government to drop the fraud charges against him, claiming innocence and bemoaning the "current political and human rights situation" in the country.

When that failed, he appeared to strengthen ties with authoritarian leaders in the former Soviet Union. His Karic Foundation recognized Russian President Vladimir Putin for a peace award in 2014, when the Kremlin seized Crimea and backed separatists in eastern Ukraine, triggering a war that has killed more than 13,000 people.

A year later, the foundation recognized Nursultan Nazarbaev, the authoritarian leader who ruled Kazakhstan for more than a quarter-century and still wields power despite stepping down in 2019. The Karic Foundation has recently published flattering books on Putin, Nazarbaev, and Chinese President Xi Jinping.

The Karics have had major development projects in Russia and currently have one in Kazakhstan.

Bogoljub Karic, who returned to Belgrade in 2016 when all the fraud cases against him were dropped, has praised Serbia's current president. "Serbia has its own Putin, and it is Aleksandar Vucic," he told a crowd during Vucic's successful campaign in 2017.

Bogoljub Karic celebrates Aleksandar Vucic's victory in the presidential election at his campaign headquarters in Belgrade in April 2017.
Bogoljub Karic celebrates Aleksandar Vucic's victory in the presidential election at his campaign headquarters in Belgrade in April 2017.

Vucic has been accused by critics of rolling back democracy, including clamping down on media.

Karic's Strength of Serbia party, which currently has four seats in parliament, including one held by Dragomir Karic, is in a coalition with Vucic's ruling Serbian Progressive Party.

Bogoljub Karic and Vucic served at the same time in the Milosevic government and have met a few times in recent years, most notably at ground-breaking ceremonies for Karic real-estate projects in Serbia and Kazakhstan.

However, there is no sign the family's business in Serbia is growing under Vucic.