The fourth episode transcript

All important politicians, representatives of the Serbian Police, State Security Service and military have served in managing boards of the two football clubs. Consequently, they so protected the clubs. At that time, football clubs were the major exporters in the country. Partizan and Red Star, despite the sanctions, sold altogether several teams. Money made in these multi-million worth transfers usually did not enter the country, but ended on secret accounts somewhere abroad. In spite of such successful business deals, both clubs were void of income tax until 2003, when the law changed.

In those years, while the inflation magnified, making Serbia poorer, Red Star and Partizan made altogether according to the available data, from the players’ transfers solely, more than 300 million euros. At the same time, both clubs had negative or balanced balance sheets.

Ivan Ćurković, Partizan football club president from 1989-2006: Well, we respected the law, there were some small omissions, but those were given by all, but these large issues talked about, they never were.

B92: In those past then and more years, Partizan sold several team players, altogether. Where’s the money from so many transfers?

Ivan Ćurković, Partizan football club president from 1989-2006: You should know this: Partizan had a particular sports politics. Money foremost goes to improving working conditions- the club was the only one to invest since we haven’t had subventions. We made a sports center, we mention this often, and everybody admires the centre whether they are from Real Madrid or Bayern, all of them. We take them there. It’s a place on 12 hectares, we have football fields, ranging from from plastic to grass, buildings, absolutely everything. It was a big investment.

B92: That cost around seven and a half million?

Ivan Ćurković, Partizan football club president from 1989-2006: The cost was a lot more, but that’s not important. I am not sure how much it cost us, but it did cost a lot, hence, it did cost and it was build from that money. Another thing: we remodeled our stadium, from one relatively old we have made a functional one. Also, as I said, we have professionals, football players, their salaries are very interesting, you know. Not one of them plays for free. No one. And we have, I think around 45 professional players, then interns, young players who also get paid. We of course, pay for their apartments, lodgings. We have around, I think, 70, 80, 100 apartments that we rent, which we give to the players to live in. So, those are great expenses. In addition, Partizan has, with the players, has more than…almost 250 people are employed in Partizan. And of course, there are travel expenses, hotels, expenses such as food, and etc. gear, also, these all make huge expenses. Huge expenses. Of course, the easiest is to say “thieves, mafia” etc. That’s a common thing to say today.

Ivan Ćurković, who served as a Partizan president until 2006, is the only club official who accepted an interview with Insider. He says he has nothing to hide, because he has French citizenship and he never took a dime out of Partizan.

“I did all on a voluntary basis, I was never given a salary nor I was interested in receiving one”, emphasizes Ćurković. Žarko Zečević, Partizan long term Secretary General, refused several times to be interviewed. Nenad Bjeković, who was the club’s director, said he is not in Belgrade at the moment, so he cannot give an interview. Interestingly, no one from the former or current Red Star officials wanted to discuss or answer questions regarding the negative events in the Serbian football during the last fifteen years.

Dragiša Binić, Red Star former player: The state is always behind Red Star and Partizan, there are always people, ruling politicians behind. Hence, it’s normal that Red Star and Partizan have the most powerful people in the state. They are not private clubs, nor Red Star not Partizan. Even though a certain number of players, after playing in the club who won European and world championships, go to play abroad, and certain money is gained there, the next year there is not enough money to pay off salaries. Something is not right, isn’t it?

B92: How’s that possible?

Dragiša Binić: Well, as you can see, it’s possible.

Dragiša Binić, Red Star former player, publicly claimed that the state in 1992 arrogated the club’s transfer money. In 1992, the club sold the most successful generation of players, who won the title in Bari and Tokyo. The Red Star players: Dejan Savičević, Darko Pančev, Vladimir Jugović, and Siniša Mihajlović transferred to foreign clubs for multiple million amounts. At that time, Binić argued that by the order of Slobodan Milošević, and through Vladimir Cvetković, at least 50 million German marks left the club to be invested in factories.

Dragiša Binić: The time has come…? For salary, either there’s a salary or not. If there isn’t, why is this so? This question was rarely asked, we always waited, and it was always late…

Božidar Cerović, Red Star Board member from 2001-2005: Well, I cannot testify with certainty, I was not following it so closely, but I know that the club lived from those transfers for several years since there were no other income at that time. So, those transfers kept the club going, maybe for the whole decade. You know what we say: sold, money received. Well, often, money does not come in one payment, so for some players, as I recall…I cannot say for which one with certainty, but I know there were some which sold good, for some even 10 million euros. This amount didn’t come at once, but…in several years payment, so that every year the club gets some amount, which at the end is not so bad. Maybe the club would spend more if that money came in one payment. So, this kept the club going during the 1990’s and that’s why it didn’t fall apart like industry in this country, for instance.

According to the documents Insider obtained, it is clear that the clubs have found their ways around to earn money, that is, in spite that the money from transfers went to fulfill someone’s private needs, in their accounting books, no trace can be found. Termination of contract by mutual agreement between a club and player was one of the ways the clubs used for this purpose. Namely, shortly before the contract between a club and player is to expire, a club sells the player and then makes a mutual agreement of the contract termination. For instance, Red Star, in the transfer sale of the player Goran Drulić, made a contract showing what allegedly, out of the club’s income, belongs to the player. Partizan did not leave such written traces.

The termination of contract by mutual agreement between Red Star and Goran Drulić shows that the total amount of transfer sale was 27 million German marks. The player and football club Red Star agreed that nine million would go to the club while eighteen million would go to the player. It turned out, however, as cited in the police criminal charge, that the officials of Red Star have opened an account in Komercijalna Bank on behalf of Drulić, forging his signature, and that they have withdrawn the money using also the forged signature. So, after the withdrawal, no trace was left to account for those 18 million German marks, which supposedly, according to the contract, belonged to Drulić.

Another example is a transfer of Zoran Njeguš from Red Star to Atletico Madrid in 1998. This case shown another mechanism of money usurping that left no traces. However, this was aided by Atletico Madrid. Namely, Jesus Hill, a mayor of Marbella, led the club in that year. He was in good friendly terms with Željko Ražnatović Arkan. The two had met at the UEFA match between Obilić and Atletico. Media reported Arkan managed to charm Hill.

In 1998, the football club Atletico Madrid, through its off shore agency, bought from Red Star the player Zoran Njeguš for seven and a half million German marks. Several days later, Atletico Madrid bought off the same player from is own agency, but for the three times higher price- 24 million German marks. On one hand, Atletico obtained cash in order to pay for various things void of tax, for instance, bonuses and premiums to its players. On the other hand, the player Njeguš, who left Red Star, charged Atletico with an additional amount, unrelated to the sales contract between the two clubs. This is where the claims should be settled, regarding the player’s claims. However, Red Star has found ways to obtain more profits not shown in the club’s total income. This was all done by a termination of contract by mutual agreement. Namely, the management of Red Star made an alleged termination of contract by mutual agreement with Zoran Njeguš. According to this contract, he has rights to three and a half million, out of seven and a half million, the amount the club earned from his transfer sale. This contract was made, according to Insider information, without the knowledge of the player, Zoran Njeguš, while his signature was forged. Njeguš did not know he allegedly got additional several million German marks, and the contract with his forged signature was registered in Belgrade Football Association. This was approved, without controlling it for, by both First league Association and Serbian Football Association. In this way, Red Star officially presented earnings of only four million German marks from the player’s transfer, not seven and a half, the real profit amount obtained.

Transfer contracts are suppose to be controlled by Belgrade Football Association; irregularities should be reported to the authorized institutions. However, this was not respected, so Belgrade Football Association, without verification, approved a certificate of transfer sale for the player Zoran Njeguš and also verified for the forged signature. The record says “this record is signed in person by authorized representatives of the club and the player, confirmed and attested by Belgrade Football Association”. This record was approved and verified by the then Yugoslav Football Association.

Lenard Johanson, UEFA president from 1990-2007: This is the clubs’ matter, foremost. If they are proven guilty, I assume your Association will investigate the case. If someone wants to cross you over, to make a forgery, he has it much easier. There is a lot of tax hidden money today, but it only becomes a problem when the public finds about it.

Božidar Cerović, Red Star Board member from 2001-2005: I don’t really know what was happening in the 1990’s. As far as I know, Red Star mostly, I don’t claim for every dinar, mostly all money that came in here was converted into dinars, needed for everyday life .Of course, this was done in banks under more favorable conditions, than if I were to go out in the streets to convert a foreign currency. That is all possible, but generally, money came here.

At that time, partisan operates differently than Red Star. The club sold it players through Karan LTD agency, with the head office in Luxemburg, and representatives in Humska Street, Belgrade, seated also by the Partizan head office. Mostly, money did not come into the country. Still, the leaders of Partizan claim Karan LTD is not their agency, but an agency that has won Partizan contest some 18 years ago. At the meeting of Partizan Executive Board, held on May 29th 1989, chaired by president Mirko Marjanović, the Board decided to sign a contract on transfer sales with foreign Karan LTD agency. The working group who elected Karan agency among four agencies, was made of Ivan Ćurković, Mirko Marjanović and Žarko Zečević, authorized to sign a contract with Karan agency.

Ivan Ćurković, Partizan football club president from 1989-2006: We had the agency working for us, made up of lawyers and others, because due to inflation we simply couldn’t bring money in here, some we brought in though, transferred, of course, but that was a period when we had to keep, ‘cause you know, inflation was eating everything and then we had to…

B92: So, you had money in the accounts abroad?

Ivan Ćurković: Well, yes, but that was transparent and known.

B92: How transparent it was?

Ivan Ćurković: Well, because it was…They usually found someone, at that period, I suggested, among other things, when I came, that was the first thing I suggested, the first thing to find several agencies to work for us. And then we negotiated with them…What did they do in reality? We found clubs, and they assisted us, so that contracts are made in the right way, because before there was a lot of omission in those contracts, so that the contracts are absolutely correct.

B92: Have you made double-contracts? Do you know anything about it?

Ivan Ćurković: Double contracts were not made, not that I know of. Regarding partisan, we never had double contracts because we had those people who didn’t want to, since that was not their only duty. They did other things too. We had an agency in Luxemburg, which was very…

B92: Karan agency?

Ivan Ćurković: Well, that was since I, from 1989 until 1995.

B92: Karan agency, is that right? Karan trade?

Ivan Ćurković: Karan, Karan, yes.

B92: And whose was that agency?

Ivan Ćurković: Well. That’s the agency, in fact, Karan got its name. The agency was “Fiducija”, it was…People who worked there, I think…A lawyer’s office, that is an office engaged in this kind, not so much with sports…

B92: They were managers, right?

Ivan Ćurković: Well, they were not managers. They took a small percentage from those…But, this was very important to us, that they assisted in contract signing, they monitored the contracts, that the negotiated amount of money is paid.

B92: But you had an authority over Karan trade account in Luxemburg, Zečević had the same in Switzerland, before that agency.

Ivan Ćurković: We,, I think…in Switzerland I don’t know what, in Switzerland we had, OK, there was always a bank etc, I think there’s like million things…I’m speaking generally now.

B92: But why is that agency associated with the two of you? If you remember, Aleksandar Radović also…

Ivan Ćurković: Well, that’s because…Yes, Radović was, of course, I visited him and he told me, we gave him all the necessary documentations and he said there’s nothing in there, since he has heard something about it, he didn’t know everything. Then I said: here you are, here you are etc. Then he got everything he was interested in and that was one of the first major inspections, which was…There was nothing suspicious.

B92: That wasn’t your agency?

Ivan Ćurković: That’s not our agency, absolutely. That’s not connected with ours.

B92: How come you had the authority over the account?

Ivan Ćurković: Well, you know what, someone had to have an authority to sign. Of course, the cub, the club, I had…

B92: But you had the authority over their account, to withdraw money?

Ivan Ćurković: No, no, the account was there. They were…We, that is, they transferred the account to us…No, no, I had not have signatures, I had an option to say: transfer this or that amount of money, we need this or that amount, I had that option as the club’s president. However, I didn’t have, I didn’t have a disposal over the account which was Karan’s…that is, there was this man, a lawyer, who ran this office…he was the only one with the right to sign, I haven’t had that right.

Aleksandar Radović, the former president of Investigation Committee, is known in public as a man “without a face”, since he never appeared in public. In 2002, in an interview for Antena, he said that Ivan Ćurković, Partizan president and Žarko Zečević, secretary general, should provide information about endeavors with Rothschild Bank and Karan agency, and to answer the questions why several tens of million of German marks are posited on the accounts of the Luxemburg company, and how is that beneficial for football development.

B92: You claimed no one from the Partizan officials have taken a percentage for himself.

Ivan Ćurković: No one, ever. No one ever.

B92: But, if Karan trade, the agency, takes a percent of 7-10% from all…

Ivan Ćurković: No, no, I don’t think they did so, who told you so? I think the percentage was a lot less.

B92: There are official data showing this, 10% was taken for…well, for Spasić it was 7%, you negotiated this.

Ivan Ćurković: It was less, less than that…It depends, I mean, depends…well, it depends off…I cannot recall right now, but it’s possible it was 7%, sometimes it goes up to 15%, depending of the amount of transfer, but I think it was a relatively small sum.

B92: And if, Aleksandar Radović, who was then a head of Investigation Committee, says publicly that you and Zečević have a direct connection with that agency, it’s logical for everyone to assume that in this way you actually take percentage, that is, that you stand behind this…

Ivan Ćurković: There’s no connection, no connection whatsoever. Well, Zečević was a professional in the club. He had a salary. Zečević had his bonuses, from the club. So, what this implies? How can he take a percentage? It’s different for that man and those people working in those agencies, they are not employed by us. They don’t want to, hence someone controls them. It’s not an anonymous issue, not know. They are also…How is that Radović knows there was Karan- that company?

B92: Well, probably because it had an address in Humska Street.

Ivan Ćurković: Well, it wasn’t at that address. Humska Street was…We had a contact with them, it wasn’t Karan who could chose…Karan was in Luxemburg, located there, in that Fiducija….

B92: They had a representative office here.

Ivan Ćurković: Well, yes. So, it is not connected, that was also transparent.

B92: I’m asking you all these questions because many are accusing you and Zečević, that no one could control what you were doing with the players, what were their amounts of transfer sales etc. The assembly was not informed about these issues.

Ivan Ćurković: No, the assembly was, you know what? An assembly is something different, an extended working body. It is concerned with the general plan, however, the managerial board knew absolutely…Everything was known, all was known, how much money comes in, well, those players were not paid by, you know, there was always…there was always a president of the club, secretary general, technical director, and secretariat, a smaller working body, then managerial board, an extended body, then there was an assembly. However, on those…Absolutely everything was known. We had people in the board, also, who were knowledgeable about these things, who knew…There was Mirko Marjanović, who was a director of Progres, he was a president of the board, a member of the executive board. So, he knew absolutely everything.

After October 5th, the authorized institutions in the country knew that the foreign transfer sales money of the Partizan players had been transferred to private accounts held in Rothschild bank in Luxemburg. According to an assumption of the justice officials, the total amount in question was 15 million German marks. Namely, Insider obtained a request sent to the Swiss government in November 2001, by District Public Prosecutor Rade Terzić; this request asked for blockage of Mirko Marjanović’s accounts and an insight into the past balance of the accounts. In the request, Terzić cited 15 accounts showing malversations in gas procurement and business endeavors of Progres company, as well as those of the football club Partizan.

Mirko Marjanović was a president of football club Partizan. This request cites that Marjanović, from the presidential position illegally transferred the assets from the players’ transfers abroad- 15 million of German marks- to the account in Luxemburg.

Insider had an insight into the whole case against Mirko Marjanović, former president of Partizan and former Serbian Prime minister, but in addition to this request, the rest of the charges do not mention misusages related to football club Partizan. No one knows why that part is omitted. Investigation against Marjanović lasted until his death, in 2006, while indictment was never filed.

Ivan Ćurković: That’s not connected at all. I mean, this is the first time I heard about it.

B92: These are old criminal charges.

Ivan Ćurković: Well, the criminal charges against Mirko Marjanović…No connection at all.

B92: So, the Swiss government simply…

Ivan Ćurković: Well, he had his own large company etc. That’s not connected.

B92: He hadn’t any percentage of the sales?

Ivan Ćurković: Not at all, none of us had any percentage from the sales. Absolutely no one, a confirmation to this is when I say that I am very proud of that period. No one was ever arrested in Partizan, or detained. No one was processed. No one was sued nor indicted.

B92: And isn’t this so perhaps because in the boards you always have people from politics or police?

Ivan Ćurković: That’s a good question, an excellent question. So, we are accused that in that time period, we were the favorite of the state. Of the state from the 1990’s, and that’s why we allegedly won the titles, that’s why no one dare to question us, but I think the opposite, there were things going after us, we went through…financial inspections etc. And we were…Partizan won the championships because the club was the state favorite. However, 2000 came and Partizan was…When you look at 2000, Partizan was the most successful club. And we were again the favorite of some government. No. We had…Our sports politics was very good and we were, so to say, absolutely, nothing is absolute, but we were very, very transparent.

Božidar Cerović, member of Red Star Board from 2001-2005, says that Red Star also operated in accordance to laws and regulations.

Božidar Cerović, member of Red Star Board from 2001-2005: I think that, in general, already at the end of 1980’s, the situation about managing money in football became a lot clearer. In fact, in the past we had a problem due to restrictive regulation, that you couldn’t pay for a player more than certain amount etc. It was necessary to have cash on a side, so you could supersede the difference. Of course, the 1990’s are the years without clear cut rules and regulations but in general…These regulations were left in effect so you could normally run the business without hiding anything, for instance, 10.000 euros or something as a reward or something, or as an incentive to work. Hence, as far as I know, those things didn’t have to be done in Red Star, and mostly they weren’t.

Dragiša Binić, Red Star former player: But, there is one thing you do not understand- the amount of money that the foreign club takes, that one which buys a player. I’ll give you an example: there is for instance a football club abroad, has a president and four or five stockholders, including the president. And then he wants to buy a player, costing…The transfer sale price for our player is 2 million. The president wants to buy that player and wants to give 10 million. We, as the club, are satisfied with 2 million, while the president asks from his colleagues, the stockholders in the board or however it is called, they each give 2 million, and then he comes, a manager does the deal, comes and says: you will get three million, you’ve asked for 2, now you have three, and seven you will return. So, what is going on? We now have to make contracts. We are satisfied because we got a million more than we originally asked for. Those seven million, you have to return to him. From his own, he divide two each, he has his 2 million back and have earned five more. Well, how can you explain this to our financial police or to someone who comes to the club. Tell me now, how can we explain this? It’s impossible to explain because we got what we got.

In 1998, Red Star sold the player Saša Marković. He claims he doesn’t know the exact amount the club got out of his transfer, except that the price ranged, as he heard, between four and 12 million German marks.

Saša Marković, former football player of Železnik and Red Star: At that particular moment, I was the best shooter in the former Yugoslavia, and I think, the seventh shooter in Europe. At 27 matches I scored 27 goals, 13 wearing the dress of Železnik and 14 in the dress of Red Star. The transfer contract was done correctly. What happens between the two clubs, that cannot…I don’t believe any player can tell you that. In general, the player signs the contract with the owner, president, sponsor of the club. Everything else is agreed upon by presidents- for instance, the president of Red Star and the president of Stuttgart, as was the case with my transfer. Was there a double-contract, or not…I’ve heard the price ranged between…It ranged between four and 12 million German marks.

After the transfer sale of Mateja Kežman into PSV, daily journals reported the transfer was not clear. The guess was the price ranged between 20-30 million German marks. Weekly journal Vreme reported that the investigation against the club was initiated by Kežman’s father, who was dissatisfied with incorrect relationship and unpaid dues towards his son. However, nor Kežman or the club, nor the representatives of the government commission did reveal possible irregularities regarding the transfer. The transfer is not special in any way, and does not differ from the recent transfers of Red Star players, Drulić and Bunjevčević.

“We don’t want to raise alert around this case, but it needs to be explained especially since in the case of Kežman, there are no secrets”, stated a spokesperson for Partizan.

B92: And what was the problem with Kežman’s transfer?

Ivan Ćurković: Well, there wasn’t a problem at all. Not a problem at ll. Kežman was one of the best.

B92: He’s angry with Partizan.

Ivan Ćurković: He’s not angry at all. No, I don’t think he’s angry. On the contrary. Kežman’s contract, that transfer was very clean and one of the largest transfers…

B92: How much was the transfer?

Ivan Ćurković: 28 million German marks, 28 million German marks.

B92: Did Partizan get that money?

Ivan Ćurković: Partizan got the money. I think that a condition for the last three million, that was discussed, if we take it earlier, if we don’t take it, we probably needed it, so we took it…I think, earlier etc. Not so important. So, we got somewhat less. That was in the contract, clearly written. That contract is absolutely transparent.

B92: No, but you first…After the transfer, journals reported that partisan will not get the money, bit it would be paid in reflector lights, something…

Ivan Ćurković: No, not reflector lights. That was a story…because Phillips was Phillips.

B92: But you said so.

Ivan Ćurković: No, there was a discussing about it, but that’s not connected. That’s not connected with the contract. That with the contract, reflector lights, they are not connected in any way. There was a possibility, we discussed that option, during our negotiation there, then we said it would perhaps be good for those reflectors to be new etc, but that’s nowhere in the contract. There’s nothing such in there. Not connected. It was this story about reflectors, then no reflectors after all…not connected again. Well, 28 million in 2000, for that was, that was huge amount of money. Out of which we…

B92: Is that taxable?

Ivan Ćurković: Of course it is. I think, there is…I mean, whatever there is to be paid is paid. I don’t want now to go into those laws etc.

B92: But a club from such income…that is, income tax has to be paid.

Ivan Ćurković: Of course, it goes successively, not all at once etc. You know, no one pays everything at once but annually…in payments etc, I mean, I cannot remember now, but…

B92: And how did you pay taxes during the sanction, when money didn’t enter the country?

Ivan Ćurković: Well, I don’t know, those are technical details, that I didn’t…That wasn’t my part. Of course, we had our accounting department, they took care of it, so it wasn’t my job to do so. I am not an accountant.

During the sanctions and wars, the two biggest football clubs could smoothly and without control sell their players and so earn hundreds of millions of German marks; in addition, the state protection overstrained even further. Hence, from the beginning of the 1990’s, first Partizan, and then Red Star, organized sweepstakes, overtaking so profit businesses of the state companies. At the time of general poverty, the citizens were offered a chance to earn, over a phone, millions overnight. Behind this organization was a mechanism wherein the state and citizens were losers, while the organizers made money out of this game. The magnitude of this ripe-off is evident from the fact that in the 1990’s all sports organizations were exempted from paying taxes on humanitarian purposes which included sweepstakes. For instance, Bingo, Olympic Lotto, Fonto, Euro bingo, and Belgrade lottery originated in this way. The income of these sweepstakes equaled the number of phone calls; the key protector role for Red Star in this business was played by Milorad Jakšić, former director of Post Office (PTT), while for Partizan, that role was played by Predrag Manojlović, secretary general of the club, and in 1997, appointed as deputy to director of PTT.

Ivan Ćurković, Partizan football club president from 1989-2006: Partizan had several companies. They were founded in order to acquire some extra income. However, the benefit from those companies was small. We shared losses with those companies. We had, yes, two in fact…

B92: What about Bingo?

Ivan Ćurković, Partizan football club president from 1989-2006: We had Bingo and we had a similar game, popular at one time, hot line, together with PTT. That was official, it wasn’t us, but with one of…PTT. So we…Bingo we had, of course, it was a matter of the state. So, we had a percentage of it and that was the most interesting income coming….

At the end of 1990’s, sports organizations went even further, organizing hot line chats. This business was given to the privileged ones, and the chats, from January 1999 until January 2002, brought an income between 30 and 40 million German marks.

Ivan Ćurković: Well, OK, we had privileges, but also other had privileges too…

B92: Not that much.

Ivan Ćurković: You know, someone gets sponsors someone does not get sponsors. Some has major sponsors, Telekom, then DDOR (insurance company), then insurance, then…However, we never had those major sponsors. We never had large sponsors.

B92: Right, but in this business you’ve managed to earn millions…

Ivan Ćurković: We… those were not so large amounts…That can be checked, I cannot…

B92: They were, according to the official data.

Ivan Ćurković: Well, OK, according to the official…It was shared, I mean, but that’s known. If that was known, than it’s not a secret. I mean, it’s not a secret, it’s then transparent, so they have checked that, I think it was…

B92: Did you build Teleoptik from that money?

Ivan Ćurković: No, it wasn’t like that. We needed and still need, on everyday basis, so much more money.

An idea about Teleoptik construction originated in the beginning of the 1990’s. The construction of Sports Centre Partizan Teleoptik was finished in 2004. The centre ranges over on more than 10 hectare .in the western part of Zemun. It is a centre for practice and preparation of all Partizan teams. At that time, the representatives of partisan said that the investment was worth more than 1 million euros, the largest investment in sports that year.

Slobodan Lalović, Commission for investigation of misusages 2001-2002: I have to say this: when I said that certain investigations are needed in sports, certain people warned me about, saying this was perhaps the most dangerous spheres of all. Why and how this was so, that’s another question. An answer why some people thought of this as dangerous, is partially, in what I have found out. There is no need for name-naming here, and I don’t want to mention that certain name, but I know that at the end of the 1990’s Mira Marković tried to take over of certain two clubs, that is, certain sports associations, and she failed. So, there are two messages: one is that it was certain that enough financial assets were available, for she never bothered to deal if money was not involved. And secondly, this implies they were strong enough to set themselves against one of the strongest politician in Serbia. This indirectly implies also about the position of the two clubs or management of these clubs.

Božidar Cerović, Red Star Board member from 2001-2005: This should be emphasized, not because we want so, but because UEFA enforced that in all leagues, for instance, all clubs have to undergo through independent revision of bills. Hence, something would come up…I suppose those independent auditors would come up with something, if something was wrong, right? I’m not arguing this is a total protection, but it certainly is a mean of control and protection from irregular endeavors.

In financial reports filed by both Red Star and Partizan, the only regularity appears to be their spending habit- both spent the exact amount they have earned. In the financial report for 2003, Partizan reported to the state an income of more than 10.5 million euros. However, according to the estimates for that year, the club had an income of 18.9 million euros.

The report presented to the state shows the club earned 8.9 million euros, 1.6 million from the sales and the rest coming from other incomes. Partizan bookkeeping also shows 2.2 million euros from business - unrelated and extra income, while more than 80%, according to the financial report, were remunerations made for businesses done in 2002. The reported income amount of 10.5 million euros is almost twice as less from the income the club made in 2003. In 2003, Partizan played in Champion league. In September that year, UEFA paid to Partizan 1.6 million euros for participation in the league. Every match played and all earned points bring additional money; Partizan participated in six rounds and won three points, and in this way earned additionally around four million euros. The stadium in Humska Street was full during the matches with Spanish Real, French Olympic and Portuguese Porto. 30.000 sold tickets per each match brought to the club three times 300.000 euros; if a qualification match with British Newcastle is taken into account as well, from the tickets solely, Partizan made at least 1 million euros. UEFA paid remunerations for television rights in 2004, but Partizan had an additional income from television rights for qualification matches in three rounds. Due to the attractiveness of Newcastle, an estimate is that Partizan could have earned additional 200.000 euros from the television rights. Sponsorship contracts are a top secret in Partizan for years. However, according to the experts’ estimates, sponsorship income for participation of the champion of Yugoslavia in Champion league could not have been less than 2 million euros. In July 2003, the club sold the attacker Danko Lazović for seven million to a Dutch club, Feyenoord; Zvonimir Vukić also left the club, paid by a club from Ukraina, Shakhtar 7 million euros. Interestingly, the club’s financial report shows expenditures almost equal to the generated income. The club presented to the state as having a profit of 13 million 235.000 dinars, hence the club under 10% tax rate, paid taxes of only 1.3 million dinars even though the real income of the club was 18.9 million euros.

Red Star, after Dragan Stojković became the club’s president in 2006, sold almost every player from the first team for more than 24 million euros. Nevertheless, the club’s financial report for 2006 shows the club allegedly earned only around 16.5 million euros.

In 2006, a club from Germany, Hertha paid to the club 1.5 million euros for Marko Pantelić transfer. Additionally, Nantes, a club from France, paid 2.5 million euros for Vladimir Stojković. Saltsburg bought Milan Dudić for 1 million euros. Aleksandar Luković transferred to Udinese for 3 million euros. Boško Janković went to Majorca for another 3 million euros. A Spanish club, Santander paid for Nikola Žugić 6 million and 250.000 euros. Nenad Kovačević went to Lans for 3.5 million while Milan Biševac went also to Lans for 2.5 million euros. Dragan Mladenović was sold for 1 million euros and Hamin Draman for 350.000 euros.

In 2006, the total transfer earnings were 24 million and 600.000 euros. In August 2006 Red Star played against Milan from Italy in qualifications for Champion League; the club earned 1.2 million euros: 1 million in ticket-sale and 200.000 euros from selling television rights. The club’s sponsors included Delta, Telekom, and Apatin brewery. In 2006, an announcement was made that Delta Sport, as a sponsor of Red Star, contributed to the club with 1 million and 200.000 euros. Hence, the total club’s income in 2006 was at least 27 million euros; nevertheless, the club’s expenditures presented to the state are almost identical as the profit. Hence the club’s financial report for 2006 shows the expenditures of 1 billion 309 million and 806.000 dinars. It however remained unclear what those expenditures were for in the first place, since in 2006, the club didn’t spend more than 1 million euros for players purchase nor it had, after failing in qualifications, organized any matches in UEFA league, which would generally require expenditures. The club hence presented as having only 100.000 euros in positive balance, albeit the real income was 27 million euros. The club so paid only 10.000 euros in taxes.

Aleksandar Vlahović, Sport Association Red Star assembly president and former minister for privatization: When you say “it’s a responsibility of the state”, that is a broad term. What I consider important, as every other citizen, is an establishment of uniform value system, law system in general. Since 2002, things are moving in that direction gradually, for you cannot accomplish it in one day, in one moment. In 2001 and 2002 it was unthinkable to have cross-tax control, while tax evasions were regular especially among those who…wealthy citizens who evaded taxes on their respective total incomes.

At the end of 2003, when the financial police initiated a routine control of Partizan endeavors, the club management called tax officials “unwelcome guests”, this negative attitude resulting in verbal conflict between the state representatives and the club. “Partizan is a large club, and we aren’t afraid of anything, however, it’s a bit tacky the way it is all done. This is all sad and ugly”, said a club’s sports director, Nenad Bjeković. The former secretary of Commission for investigation of misusages in the government of Serbia, Slobodan Lalović says that the state had planned to investigate all misusages in football clubs, but due to unknown reason, it never did so.

Slobodan Lalović, 2001-2002: Well, I have to say it was present. It was present as an idea and awareness that even sports is a subject to misusages, foremost referring in regards to this matter to our two largest sports associations, the football clubs, Red Star and Partizan. In the course of the committee investigation, this came up as a subject, but I would argue, as an oral subject. I’ve tried several times to discuss this subject, argued we should perhaps inquire, perceive what was happening in there, especially since the awareness was present, as you say, implying there were certain misusages. However, unfortunately, as far as I know, no one investigated business endeavors of the two sports associations, that is, their alleged malversations and misusages in sports in Serbia.

Aleksandar Vlahović, Sport Association Red Star assembly president and former minister for privatization: Of course, everything is a subject to misuse, every part of the system. It is very important to establish a control. I assume a control should come from UEFA, to be registered somewhere. At the end, there is a control from the other side. In every sale there are two parties. And if you are selling a player, to for instance, England Premier League, surely the one who is a buyer, from England Premier League, has to provide to his own tax authorities all the data regarding money paid for a player. That’s also a means of control.

UEFA and FIFA representatives say a control over transfers and contracts is under jurisdiction of national associations, which in this case is Serbian Football Association. However, this association does not control anything since they claim they have no right to. Lack of control facilitates in number of ways various misusages. A reply sent to Insider’s crew by Serbian Football Association serves as a proof to support this thesis. Namely, several months ago, based on FOIL, we asked Serbian Football Association to provide contract copies on transfers of Mateja Kežman, Danko Lazović, Sava Milošević, Vladimir Stojković, Nikola Žigić, Goran Drulić, Zoran Njeguš and Siniša Mihajlović. The reply was there aren’t such things: these kinds of contracts and their copies are not filed with Serbian Football Association. They are filed in archives of the clubs which signed the deals about the players’ transfers. FIFA regulation book on status and transfers of players determines jurisdictions of national associations. Serbian Football Association does not have an insight in the contract deal of transfer sales. These contracts are agreed upon and signed by the clubs involved.

Lenard Johanson, as a representative of UEFA and vice president of FIFA, says that Serbian Football Association has an obligation to control all transfers. He claims to be surprised by the fact that Serbian Football Association argues it has no right to control.

Lenard Johanson, UEFA president from 1990-2007: This is news to me. I didn’t know that. Of course, they can decide for themselves how they will issue international certificates for contracts, and to claim they have trust in those contract parties. If FIFA told them to do something, and they are not doing it, someone has to call FIFA attention to this matter, and it will take certain measures, of course. I think they should be checking. If they are issuing certificates, they have to check if the background is true and genuine. I cannot think of any reason not to do so.

The financial reports by Red Star and Partizan, obtained by Insider, show the two of our largest clubs from 2002-2006 have operated with small positive balance, having earned small profit. The financial reports of both clubs show the expenditures almost equal to income. However, this simply cannot be true, since a club’s income include players’ transfers, sponsorship contracts, television rights, commercials on stadiums. Partizan has several connected companies, sweepstakes and a casino, while Red Star, besides regular football income, earns by renting office space. In spite of all these, the two clubs presented that millions from their respective incomes are used for “expenditures for material, personal salaries, production services, amortization and non-material expenses”. In this way, the taxes paid to the state from 2003 are only symbolical. At the same time, none of the authorized institutions investigated if these two clubs forged the income and expenditures.

Altogether, Red Star and Partizan presented alleged income of 97 million and 426.887 euros for the period of 2002-2006. Red Star allegedly had an income of 47 million and Partizan somewhat more than 50 million euros for these five years. However, based on multiple millions transfers, profits from international matches and numerous other sources of income, these number are reduced in some years for even 50%. At the same time, according to limited data available in their financial reports, expenditures rise in accordance with income increase, hence salaries increased almost double, and it happened that the clubs registered hundreds millions dinars as non-material expenditures. Until 2003, football clubs were void of income taxes hence they only paid salary taxes. The profit from players transfer sales was so void of taxes. This was the state decision since the clubs were registered as association of citizens and hence, by law, considered non-profit. This decision has damaged the state budget for several hundreds millions euros. The law in effect from January 1st 2003, introduced an article initiating football clubs income taxing, but state has found ways again to enforce tax relief to football clubs. Hence, while companies in Serbia are obliged to pay 20% taxes, football clubs pay only 10% income tax. At the same time, football clubs expenditures are conveniently in accordance with generated income making the profit so negligible: the amounts paid to the state in the name of taxes are very small. It is interesting to note that, for instance, in 2005, Red Star paid taxes in the total of 5.508 euros, while Partizan, based on the reported profit and expenditure, paid 163.268 euros in taxes. Hence, for the four year period since they have started paying taxes, the two largest football clubs have paid altogether only 800.000 euros- the amount worth of an average football player in the clubs. If we take into account the fact that these two clubs annually sell several players worth millions, it is clear then the state loses annually hundreds thousands of euros, since it accepts as reliable what the clubs present as the respective income and expenditures.

Aleksandar Radović, Tax Administration director, journal Antena, August 2002: The public know that football, in the past ten years, was a black hole for all kinds of malversations. We have solid data about accounts and banks, wherein the leaders of Partizan, Red Star and Yugoslav Football Association keep money. We know also about double-contracts, one for the domestic usage and the other, the real one, abroad. We want to return to this country the assets certain individuals ruthlessly subtracted in the past ten years. I have a full support from the government of Serbia, I have opened Pandora’s Box and it cannot be closed.

Several months later, in February 2003, Radović, at his own request, resigned from the directorship of Commission for investigation of misusages.

Slobodan Lalović, Commission for investigation of misusages 2001-2002: Let me remind you, especially those two associations, they were always connected with ruling parties ever since the time of communism. Just recall who served in managerial boards of for instance, Red Star and Partizan. Hence, simply, there’s this, I would say, negative tradition. And that’s a real problem.

Recently, an investigation was initiated about malversations in the Serbian football. The former officials of Red Star Dragan Đajić, Vladimir Cvetković and Miloš Marinković were arrested, handcuffed by police in front of police cameras. This method of arrest was condemned by the public, since these people could be simply called for an informative interrogation, without cameras and handcuffs. At the same time, District Courts argued there is no need to detain a singer and Arkan’s widow Svetlana Ražnatović, since she presents herself regularly at the Court. In 2003, in the operation “Saber”, the police had gathered all evidence against Svetlana Ražnatović regarding illegal transfer sale of 15 Obilić players. These illegal sales have damaged the state for 11 million euros. The investigation is lasting for years.