Gabrijela Žalac, Croatia’s former regional development and European Union funds minister, has been sentenced to two years in prison for abuse of office and trafficking influence.
She was indicted by the European Public Prosecutor’s Office (EPPO) in Zagreb, where the verdict was handed down on June 12.
In a press statement, the EPPO said the former minister and ex-director of Croatia’s Central Finance and Contracting Agency (SAFU) alongside two business owners were accused of trading in influence and abuse of office and authority.
According to the EPPO, Žalac launched a public procurement procedure for a software system for her ministry in 2017 and acted to ensure a privileged position for a business owner and his companies.
She inflated the estimated value of the deal and conducted a negotiated procurement procedure without publishing a public invitation to tender. The business owner’s companies were then invited to submit their bids and the contract was eventually awarded to them at what was described as an “unrealistically high price of €1.73 million”.
Croatian news outlet Telegram reported in late 2021 the actual value of the software system was €400,000.
In the course of its investigation, the EPPO established that the former minister and the business owners continued to take action to award the contract to the companies, despite the procedure being annulled due to a breach of the law on public procurement.
Žalac, a prominent Croatian Democratic Union, HDZ, member who served as minister from 2016 to 2019, admitted guilt and repaid €200,000 in damages.
HDZ is part of the European People’s Party in the European Parliament.
The scandal involved a €2.1 million contract awarded to Ampelos, a company with minimal credentials, for an IT system in 2018.
Investigations revealed that Žalac, alongside Tomislav Petric, former director of the Central Finance and Contracting Agency (SAFU) and two entrepreneurs, manipulated the procurement process to favour Ampelos without a public tender.
They inflated costs and caused an estimated €1 million loss for the EU budget and €300,000 for Croatia’s State budget.
Beyond the financial misconduct, the case exposed Žalac’s broader pattern of questionable behaviour.
Previous scandals included allegations of using EU funds to cover personal expenses including her birthday celebrations. Her alleged involvement in the “Wind Power Affair”, where she allegedly pushed for a suspicious €130,000 loan approval, for many painted a picture of systemic abuse.
The police have also announced an investigation into threats allegedly made by Mario Žalac, the husband of the former minister, against journalist Drago Hedl, who wrote for Telegram. He is a recipient of numerous awards for his work.
That alleged incident occurred on June 11, coinciding with a police search of the Žalac home residence.
The alleged confrontation took place in Vinkovci, where authorities were inspecting two vehicles parked outside the former minister’s home.
The Croatian Journalists’ Association (HND) has called upon the relevant institutions to address what it said was overt threats directed at journalists.
In 2019, Gabrijela Žalac collided with a nine-year-old child in Vinkovci while driving on an invalid licence. She was fined 500 Croatian kuna (€65). The child was seriously injured.
Croatia’s upcoming elections pit a resurgent, Eurosceptic opposition against a governing party increasingly mired in corruption scandals. Our reporter Paddy Belton delved into the political landscape as two heavyweights battle it out. ⬇️ https://t.co/2LeFK8295a
— Brussels Signal (@brusselssignal) April 16, 2024
