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Belgrade Doles Out Deals To Firms Despite U.S. Sanctions For Alleged Crime Ties

Investigation: Belgrade Doles Out Deals To Firms Despite U.S. Sanctions For Alleged Crime Ties

Companies linked to Serbian nationals who have been blacklisted by Washington for alleged organized-crime ties and activities continued to win the equivalent of millions of dollars in state contracts by Belgrade, an investigation by RFE/RL’s Balkan Service has found.

Firms registered to Radule Stevic, Zvonko Veselinovic, and Milan Radoicic won construction contracts in Serb-dominated northern Kosovo as well as inside Serbia, RFE/RL reported.

Those deals were inked after the three were named among a group of 13 Serbian nationals sanctioned by the U.S. Treasury Department in December 2021 for their alleged ties to organized crime and corruption.

The United States imposed the sanctions under the Magnitsky Act, which enables Washington to impose sanctions on individuals and entities responsible for human rights abuses.

Stevic, Radoicic, and Veselinovic did not respond to requests for comment from RFE/RL. Serbian government officials also did not provide comment on the contracts.

Corruption has long been linked to construction work in Serbia, with such contracts a "significant sources of illicit money,” according to a January 2022 report by the Global Initiative Against Transnational Organized Crime.

That corruption comes against what the U.S. government-funded nonprofit Freedom House said in its latest annual report on Serbia was a backdrop of a steady erosion of political rights and civil liberties under President Aleksandar Vucic’s ruling Serbian Progressive Party.

Vucic is a former ultranationalist who solidified his grip on power by reinventing himself as a reformer committed to Serbia's drive toward European Union membership.

Veselinovic is a reputed organized-crime kingpin in northern Kosovo who “is engaged in a large-scale bribery scheme with Kosovar and Serbian security officials who facilitate the group’s illicit trafficking of goods, money, narcotics, and weapons between Kosovo and Serbia,” the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) said in a December 2021 press release announcing the sanctions action.

Along with Veselinovic, Radoicic is suspected of leading a criminal group responsible for the 2018 assassination of the Kosovar Serb politician Oliver Ivanovic. Neither has been formally indicted as they are reported to be on the run from Kosovar law enforcement authorities.

Radoicic and Veselinovic are widely seen as wielding powerful behind-the-scenes influence in the Serb-controlled areas of northern Kosovo.

Radoicic is the vice president of the main Belgrade-backed Serbian political party in Kosovo, Srpska Lista.

Stevic is also reported to be associated with Veselinovic and is said to have parlayed those ties to win multiple tenders for his construction firm in northern Kosovo, including a major makeover of the university in North Mitrovica.

Contruction on a makeover of a university building in North Mitrovica.
Contruction on a makeover of a university building in North Mitrovica.

The Ibar River cuts through Mitrovica, dividing ethnic Albanians to the south and ethnic Serbs who have clustered together to the north since the end of the Kosovo war in 1999.

About 40,000 ethnic Serbs live in Kosovo to the north of the river. Political leaders of northern Kosovo's Serbs refuse to recognize Pristina's 2008 declaration of independence. They insist that Kosovo will always be part of Serbia. Belgrade provides financing to four mainly ethnic Serb districts inside Kosovo, despite objections from Pristina.

Stevic’s construction company is reported to have secured construction work worth 7.5 million euros since being sanctioned by Washington in December.

Veselinovic and Radoicic are also active in construction and have won lucrative contracts, including for highway construction in southwestern Serbia and transmission line work with the state-run Electric Power Industry of Serbia.

Modest Beginnings

With an initial reported investment of the equivalent of 10 euros, Stevic established his construction firm Rad 028 Zvecan in Serbia in 2014. Soon afterward, the contracts came rolling in. In 2015 alone, his company made the equivalent of 1 million euros. In many cases, Rad 028 Zvecan was the sole bidder, records show.

The fortunes of Rad 028 Zvecan rose as the years passed. Between 2016 and 2019, the company inked deals for work in Serb-controlled areas of northern Kosovo worth at least 8.5 million euros, according to a review by RFE/RL.

An especially lucrative deal during those four years was for a student center in North Mitrovica worth more than 685,000 euros.

The student dormitory building in North Mitrovica.
The student dormitory building in North Mitrovica.

In 2019, Stevic’s company won a tender to build a soccer stadium in North Mitrovica worth 1.3 million euros for a local team headed at the time by Radoicic.

The stadium was due to be completed in the first half of this year, but a visit to the site earlier in July by RFE/RL turned up little activity. A mini-digger stood near a few mounds of earth surrounded by a parched patch of land.

The football stadium construction site in northern Mitrovica earlier this month showed no evidence of activity.
The football stadium construction site in northern Mitrovica earlier this month showed no evidence of activity.

Stevic also established two branches of his company in Kosovo, where he secured some 70 contracts worth some 7 million euros between 2018 and 2021 with Pristina for projects mostly in Serb-populated areas in the north. That work, including a contract to maintain road networks in Kosovo, was terminated by the government in Pristina after the U.S. sanction action.

From Bankruptcy To Boom

In Serbia, Radoicic and Veselinovic also have made a mint in construction. In October 2019, they bought out Betonjerka Aleksinac, a heavily indebted stated-owned construction company that had filed for bankruptcy.

Betonjerka Aleksinac quickly saw its fortunes reversed after it was purchased by Inkop, a company owned by Veselinovic, his brother Zarko -- also sanctioned by the United States -- and Radoicic. It concluded hefty contracts with the Serbian state, many in which it was the sole company participating in the tender.

Over the last two years, Betonjerka Aleksinac has won contracts with the Electric Power Industry of Serbia worth more than 20 million euros to provide concrete utility poles, documents obtained by RFE/RL’s Balkan Service show.

Radoicic and Veselinovic have a stake in other construction companies as well. In January 2020, the two acquired Novi Pazar Roads.

Soon thereafter, the contracts started to pile up, amounting to 27.4 million euros in 2020, 50 percent higher than the previous year, records show.

The most valuable contract was with the city of Kraljevo -- worth 2.6 million euros -- for road construction work in the settlement of Vocareve Livade, where apartments are being built for members of the security forces.

The new digs for security force members are deemed "important for strengthening the national security system," as described in specific legislation on housing for such security personnel.

Since the announcement of the U.S. sanctions, Novi Pazar Roads has won at least five contracts -- in Novi Pazar, Tutin, Vrnjacka Banja, and Kraljevo -- with the most lucrative -- valued at 1.8 million euros -- being for a road construction project in Novi Pazar.

Serbian officials did not respond to RFE/RL requests for comment on why companies blacklisted by Washington were still being granted government contracts.

Written by Tony Wesolowsky based on reporting by RFE/RL Balkan Service correspondent Nevena Bogdanovic. With reporting by Sandra Cvetkovic in Kosovo.

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