I GIVE YOU A TENDER – YOU GIVE ME A THREE BEDROOM APARTMENT: Ministerial Affairs of Milutin Simovic and Businessman Tomislav Celebic

The suspicious connection between a million-dollar tender and the purchase of a three-room apartment

Departing the president of the Municipality of Niksic and the former Minister of Agriculture and at the same time, the Deputy Prime Minister for the financial system Milutin Simovic bought property worth 242,000 euros in September 2019. However, the reported income of the high state official and his family at that time was not enough to justify such an expense. Moreover, there is no evidence that Simovic paid that money at all. Data collected by the Crime and Corruption Reporting Network – LUPA (LOUPE) and Monitor indicate so. According to the Real Estate Administration, on 30 September 2019, Simović bought a three-room apartment (150m2) and a parking space (32m2) from the company “Čelebić”, which is owned by businessman Tomislav Celebic, a business partner and friend of President Milo Đukanovic. It is interesting that at the time when the purchase of the apartment was being prepared, a million-dollar tender of the Ministry of Agriculture was realized, which Simović awarded to Čelebić’s other company – “Čelebić Agrar”, which became a 30-year tenant of over 156 hectares of state land at a price of only 1.01 cents/m2 per year.

Mentioned land is located not far from the coast, with a sea view and the attractive bay Bigovo where the construction of a luxury tourist resort Bigovo Bay with two hotels, 357 apartments, and 230 villas with a total investment of about 300 million euros is already planned. Another friend of President Đukanovic – former Palestinian minister and MP Mohamed Dahlan through a network of offshore companies from Cyprus and the United Arab Emirates is behind the Bigovo Bay project. He was sentenced to three years in prison in his country for corruption and abuse of office. Dahlan’s arrest and extradition of the Palestinian Authority have been demanded since 2015, and Turkey has been demanding him since 2019 for his alleged participation in a bloody attempt to overthrow President Recep Tayyip Erdogan three years earlier. Turkey has also announced a $700,000 reward for information leading to Dahlan’s arrest.
According to official data from the portal of the Agency for Prevention of Corruption (APC), Simović, as the then, Deputy Prime Minister, earned a total annual income of 21,363 euros in 2019, as well as another 6,420 euros of other income, which is a total of 27,783 euros. He provided the representatives of the Agency with the information that in the same year, his wife Ljiljana Simovic earned a total of 31,156 euros (salary and rent). The Simović couple did not have any reported savings that year, as they did last year. In addition to regular income, the Simović couple has reported funds from three housing loans, the first two of which were used to buy the said apartment, according to Simović himself. The main one of 120,000 euros was obtained on 21 November 2017 from Hipotekarna bank, which registered the burden on a house of 214 square meters in the Podgorica settlement of Zlatica, which is today owned by Simović’s daughter. Milutin Simovic reported this loan to APC in March 2018 and is repaying it in monthly installments of 855 euros. The second loan is of 40,000 euros from May 2019, which his wife took out and for which she pays a monthly installment of 40 euros, and the third of 3,500 euros from October 2015.
However, in March 2018, when Simovic applied for a housing loan, the purchase of an apartment was not recorded, which he confirmed to the daily newspaper “Dan” in May of the same year, saying that he would report the property “after concluding a contract on real estate purchase and registration in the real estate cadaster”. To make things weirder, Simović reported the three-room apartment and parking lot in the asset declaration in March 2019, which is half a year earlier than the apartment was bought (30 September 2019, according to the documentation of the Real Estate Administration).
When everything is added up, and the realized income and funds from the loan, until 30 September 2019, the Simovic family (when the Sale Agreement was signed with the establishment of a mortgage in favor of the seller) owned a maximum of about 201,000 euros (total income generated in the first three quarters that year), or more precisely, 192,945 when they deduct installments for loans of 855 euros and 40 euros for the first 9 months of that year.
However, according to the documentation we received from the Real Estate Administration, there is no evidence that Simović gave money for the apartment to the company “Čelebić” at all. Namely, the record of the contract UZZ No. 1245/2019made by the notary Tanja Cepic states that Simović paid the amount of 210,000 euros before the conclusion of the contract. So, that money was not recorded and paid in the presence of the notary who made the record of the contract. Even if he did pay the money, the question arises as to how Simović could have paid so much money with only 192,945 euros of income and credit, excluding the still unaccounted installment for the third and smallest loan and without any reported savings for him and his wife.

In addition, the Simović family household had to spend money on food, drinks, bills, taxes, maintenance of the registered vehicle fleet in 2019… which is an additional burden for the purchase of such valuable property and which the then Minister of Agriculture and Deputy Prime Minister did not explain to APC.
In the contract for the sale of a three-room apartment of 242,000 euros with the company of Tomislav Celebic, the amount of 32,000 euros is stated as the remaining debt (after payment of 210,000 euros), which Simovic undertook to pay by 3 November 2020 at the latest. That deadline was later extended until 3 November 2022, based on the signed annex to the Contract on the sale of UZZ 776/2020 from 21 September 2020.
The journalists tried to get an answer from the notary Čepić about her failure to comply with the legal obligation to ask Simović for proof of payment to the company “Čelebić” the amount of 210,000 euros for the apartment. The answer to this question was not received prior to the publication of the research. On the other hand, a valuable tender contract with another Čelebić ‘s company “Čelebić agrar” was signed by the then Simovic’s ministry a little over a year before the purchase of the apartment and parking space was officially registered.
At the beginning of December 2017, the Government of Montenegro, headed by the then Prime Minister Dusko Markovic, formed the Commission for Valorization of Agricultural Land in State Ownership, headed by Simovic, who on 18 December 2017 announced a public invitation to participate in the tender for leasing real estate on the state site Vranovići in the Municipality of Kotor.
The state land in the total area of 1,564,477 square meters, whose value is estimated at tens of millions of euros, was then given in a 30-year lease for the establishment of olive groves, with the bidder committing that at least 80 percent of the total leased area will be under plantations. A water spring was also found on the land, which will greatly solve the problem of irrigating olive groves. The tender documentation was purchased by three companies from Podgorica – “Montenegro Travel Router”, “Pierbes” and “Čelebić Agrar”. In March 2018, offers from the companies “Čelebić agrar” and “Montenegro Travel Router” arrived. The commission headed by Simović assessed that the offer of the company “Montenegro Travel Router” was incorrect, while the offer of the company “Čelebić agrar” was characterized as correct, after which negotiations on harmonization of the lease agreement began.

“The Commission for Valorization of Agricultural Land in State Ownership, at its session held on 19 April 2018, adopted the Report on Negotiations Results on the Basis of Tenders for Leasing Real Estate at Vranovići, Kotor Municipality, with a draft contract”, reads one of the Government documents, which LUPA had access to. It was agreed that the rental price is 101 euros per hectare (€ 101/10,000 m2) or 1.01 cents per square meter (1.01c/m2) on an annual basis. This means that for 30 years of proprietorships over the valuable assets on the coast, Čelebić’s company should pay a total of about 474 thousand euros or 15,801 euros per year and implement the promised investment program to raise olive groves worth about 7.9 million euros by 2022 with expert supervision of the Ministry of Agriculture and Rural Development.
However, that is not all. Although the agricultural land was leased for agricultural valorization, the investor was subsequently allowed to use part of the land for tourism purposes “type T4 ethno villages, catering and tourism” in addition to olive groves, which “allows the allocate a plot for a tourism facility (from 2500 m2 to max 5000 m2) for the needs of new construction. It is possible to build more buildings on the plots until occupancy is achieved”. This is shown on the document of the Secretariat for Urbanism, Construction and Spatial Planning in Kotor from 28 December 2020, and Čelebić received all that from Simović for the annual lease price of 1.01 cents/m2.

Journalists of the LUPA Network and Monitor tried to get an answer from Simović to the observed illogicalities and contradictions regarding his reported income, expenses, uncoordinated time of real estate purchase, and possible conflict of interest due to the tender process. However, Simović did not answer the questions sent on January 5^th this year.

The non-governmental organization Action for Social Justice announced that, in relation to the specific case, it will send the initiative to the Agency for Prevention of Corruption.

“The Agency should conduct adequate control and determine from which sources the former Deputy Prime Minister bought the apartment, as well as whether there was a violation of the Law on Prevention of Corruption in this particular case and take concrete measures accordingly”. Such cases only further confirm the justification of the request to legally regulate the issue of acquiring the property of public officials as soon as possible, which should be one of the priorities of the new ruling majority”, the Action for Social Justice announced.

Authors: Vladimir Otasevic i Jovo Martinovic

(This text was created within the project “Data journalism in the function of the rule of law”)