FORMER HEAD OF DEFENSE ADMINISTRATION OF MONTENEGRO BROKE LAWS: He hid company and millions in France with son-in-law from “Satellite” affair

The former head of the Defense Administration of Montenegro and an official of the until recently ruling Democratic Party of Socialists (DPS) Borislav Lalevic and his son-in-law – football manager Milan Mile Calasan founded a company CSI SWI in Paris, France, in June 2005, with capital worth 350,000 euros and planned investment in real estate worth about 3.2m euros. It would not be strange if Lalevic did not hide the company from the Commission for Prevention of Conflicts of Interest and the Agency for Prevention of Corruption more than a decade after its establishment, and if it was not established in the same month when the controversial, harmful for the state contract related to the “Satellite” affair, in which Milan Ćalasan played an active role as stated by the Serbian Public Prosecutor’s Office.

The Crime and Corruption Reporting Network – LUPA (LOUPE) has obtained documentation that confirms that Lalević owns a 30% stake in the company SCI CWI, which is still active today. At the time when the company was founded, Lalevic was covering the function of the head of the Defense Administration of Montenegro. It is a function that was then equivalent to today’s rank of Minister of Defense.

The first Law on Determining Conflicts of Interest was adopted by the Parliament of Montenegro in mid-2004, after which the Commission for Identifying Conflicts of Interest was appointed. Although Lalevic was a public official in 2005, when the company SCI CWI was founded, there is no information that he handed over assets declaration forms until 2010 when he handed over the first assets declaration to the former Commission for Prevention of Conflicts of Interest. He was an official of the then ruling DPS appointed by the Government and covered the function of the director of the Primary Health Care Center in Bar. The existence of SCI CWI has never been reported in his assets declaration from 2010 to 2021. Lalević handed over the last first assets declaration on 24 February this year, after the termination of his function as the director of the Primary Health Care Center in Bar on 23 September 2020.

Article 19 of the then Law on Prevention of Conflicts of Interest, among other things, set forth: “Public official shall give accurate and complete data in the Report”, which Lalevic did not do, and according to Article 20 of the same law he was also obliged to state “stocks and shares in legal entities”. He reported that during the first nine months of last year he received a salary of 910 euros and that he owned a house of 85 square meters and a meadow of 985 m². He stated that he is the owner of the Peugeot 308 car, which was produced in 2012. Lalević also reported that his wife Biserka Lalevic received a salary of 330 euros in an unnamed company in 2020. If you look at Lalevic’s official property records from 2011 with the reported income, then a legitimate question arises about the origin of the money recorded in his company in France.

The journalists contacted Lalević, who said in the first telephone conversation that he did not even know that he had a company in France, and then in the same conversation, he recalled that he gave his son-in-law – football manager Mile Ćalasan, who married his sister Vjera, personal information to establish a company. In the documents possession by the LUPA Network, it can be seen that Mile (Milan) Ćalasan owns 55% of the shares of SCI CWI, while Vjera Ćalasan owns 5% of that company, and Vasilije Ćalasan 10%.

“Mile Ćalasan is my son-in-law. I, as said, lent him a name so that he could do some work in France. I have no idea about that company, nor do I know what he traded there and what he did. He had that money and he asked me, and I did a favor to my son-in-law. So as far as the material part is concerned it has nothing to do with me but my name. I have just recalled about that because I was surprised about having a company in France”, said Lalević. He added that Calasan “has two or three of his own companies and is engaged in management and has been living there (in France) for more than 30 years”.

However, a few hours later Lalević changed his mind and called a journalist, saying: “Firstly, I have never had a company in Paris and France. Secondly, Milan Calasan has never opened a company in my name, that is, I have never authorized him. He sold a house in Paris and bought an apartment. I talked to him”.

However, according to documents from the French company register, Lalevic signed a document on 10 June 2005, handing over his powers to Calasan to dispose of 1,050 of his shares in SCI CWI, worth a total of 105,000 euros. The company is headquartered at Avenue Peter I – King of Serbia, No. 6 in Paris. Mile (Milan) Calasan owns a 55 percent stake in SCI CWI, Vjera Calasan owns 5 percent of the company, Vasilije Calasan 10 percent, and Borislav Lalevic 30 percent. The total capital of the company is 350,000 euros and it deals with construction and purchase and sale. According to the document, Lalevic also authorized the purchase of real estate worth an average of 3.2m euros. Of that, 150,000 euros are planned for furniture and 120,000 for costs.

Football manager Milan Mile Calasan is known in this area for the “Satellite” affair and his unwillingness to talk about this topic at all, despite persistent calls from the media. It is a controversial deal concluded in Paris in June 2005, the same month that Calasan and Lalevic’s company SCI CWI was founded. In that deal, the state of Serbia had to pay a million in damages to the Israeli company Image Sat International NV, due to a contract on the lease of a satellite worth 45 million euros, which was not respected.

Through that satellite, the then joint state of Serbia and Montenegro (SCG) was supposed to carry out intelligence surveillance of the territory of Kosovo, which was under the administration of the United Nations (UN). The Israeli side has committed to renting Eros A and Eros B spy satellites for six years and to install a control station.

Former Minister of Defense in the state union Prvoslav Davinic was indicted ten years ago, as the public prosecutor’s office claimed, for the abuse of official position because he concluded a contract harmful to the state and because he exceeded his competencies. The prosecution charged Davinic with concluding a contract in Paris on 4 June 2005, without the approval of the competent bodies of the state union of Serbia and Montenegro – the Supreme Defense Council and the Council of Ministers.

After the state union of Serbia and Montenegro ceased to exist, the company from Israel did not receive most of the money according to the contract, which was marked as a state secret, after which they initiated arbitration in London and received compensation of as much as 37 million euros. Only after negotiations between the Serbian authorities and the representatives of the Israeli company, at the end of 2010, it was agreed that the state of Serbia would pay them 27.8 million euros in compensation. The then ambassador of the state union in Israel, Miodrag Isakov, told the Serbian media that in all the talks he had with the Israelis, “offers that were around 22 million euros were mentioned, and the contract concluded in Serbia amounted to 45 million euros”. That means that half of the million was a surplus which should be directed to someone”.

In 2010, the Serbian prosecution claimed that Davinic, without authorization and without conducting a preliminary procedure, also gave authorization to the offshore company from the British Virgin Islands, Carmina Creek Corporation to negotiate with the Israelis on 2 February 2005. According to the Serbian media, which had an insight into the documentation of the Government of Serbia, the owner, and director of that company was Milan Ćalasan. Also, in some media reports, the now-deceased Jeffrey Steiner, who had good acquaintances in NATO, was mentioned as a co-owner of the company. Both were considered personal friends of Svetozar Marovic, the then president of Serbia-Montenegro and a high-ranking DPS official. According to media reports, Ćalasan and Steiner’s company should have received as much as eight million euros from that business in the name of the commission. Our journalistic team could not find a trace of Carmina Creek Corporation in the registers of companies in the British Virgin Islands.

Svetozar Marovic, as the main director of the business, avoided criminal responsibility. In an intercepted telephone conversation between Milan Roćen (then-ambassador to Moscow and current informal chief adviser to President Milo Đukanovic) and Vuk Jeremic (chief foreign policy adviser to then-Serbian President Boris Tadic), Jeremic told Milan Rocen that Marović told Boris Tadic that the “great crisis” and that he is “very concerned about this investigation (about satellites)”. Marovic added: “Dinkic (then Serbian Minister of Finance) is crazy, who knows what he can do”. According to Jeremic, his superior Tadic calmed Marovic down by saying: “I guarantee you, Sveto, that there will be nothing and that Dinkic is under control. I guarantee you that, I talked to Koštunica (then Serbian Prime Minister), there will be no s*it”. It was like he said; Marović was never responsible for the “Satellite” affair.

On the other hand, Davinić was tried for years because of that affair, far from the eyes of the public, due to the accusation of the criminal offense of abuse of position, until he was finally acquitted in October 2019. For the purposes of this research, he spoke about this controversial business.

“I only saw Calasan a few times. I met him as a man living in Paris and we met at a hotel when I was on an official visit to France. His role in the business was to introduce me to the representatives of the Israeli company. After that, negotiations began directly with the company from Israel. He was on the sidelines after that”, Davinić said. When asked by a journalist if and if so, when Ćalasan received money for mediation services in that business, the former Minister of Defense of Serbia and Montenegro answered: “Ćalasan could not ask for that money from Serbia, that is, the state union at that time, nor do I know that he asked anyone for anything regarding our side. Whether he asked anyone else, I do not know. In any case, the contract by Serbia did not provide for the payment of Čalasan or his company”. He also referred to 4 June 2005 when he signed the disputed contract.

“The media previously published incorrect information that I signed a contract with the Israelis in a hotel. In fact, the contract was signed at the official premises of the Israeli company in Paris. Milan Ćalasan drove me to those offices in his car”, said Davinić. He added that Ćalasan did not attend the very act of signing the contract, but that it was done in the presence of Svetozar Marović, the then President of the State of Serbia and Montenegro and the Council of Ministers of Serbia and Montenegro.

“It is true that Svetozar Marović was in France before the signing of the contract. As far as I remember, he came to Paris at that time for other reasons, namely for a health problem. He attended the signing of the contract with the representatives of the Israeli company in their office. Marović did not sign anything at the time, because I was authorized to do so on behalf of the state union. It is a contract that is still a state secret and the court barely received that document”, said Davinić. Subsequently, by checking, the journalist team could not determine whether the Israeli company had any official premises in Paris at all or whether they were rented for that purpose. The fact that Svetozar Marović was not called to testify during Davinic’s trial shows how well Tadic and Kostunica did the job of covering up Marović’s role in the affair. Davinić told us that the prosecution declaratively wanted to summon Ćalasan, which was also suggested by the defense.

“The court ruled that the prosecution should provide his address in order to be summoned, which they did not do. We then found his address on the internet and handed it over to the court, after which the prosecution reversed the decision and said there was no need to hear him because other witnesses were, in their opinion, sufficient. It is a very interesting thing, considering that his name was mentioned in various ways”, said Davinić, who did not explain in what ways, given the fact that the trial was closed to the public. Davinić said he did not know the relationship between Marovic and Calasan at the time. He pointed out that he did not know that Ćalasan founded the company CSI CWI in Paris in the month when the contract with the Israelis was signed, nor whether that newly established company had anything to do with the business with the Israelis. However, a former close associate of Marović and a senior DPS official who wished to remain anonymous told us, in an interview, that he met Calasan in 2004 on Svetozar Marović’s private estate in Grbalj and that Marović’s guests had fun playing headball, including Ćalasan as well. Our source told us that the money from the “Satellite” affair was the first big money that Svetozar allegedly acquired illegally. He added: “The money was later to be laundered through the Miramax company of Russian businessman Sergei Polonsky through a project of building villas in Zavala near Budva”.

Svetozar Marović is the first and last president of the state union of Serbia and Montenegro. After a settlement with the prosecution in September 2016, he was sentenced to three years and 10 months in prison as the head of an organized criminal group for a series of scandals that damaged the Municipality of Budva by tens and maybe hundreds of millions of euros. He found refuge in Serbia in which the leadership of the country cut him some slack this time and provided him with no justice served.

In May 2010, Marović answered the question of the Serbian media “Blic” about the basis on which “Carmina Creek Corporation” got the job and whether their only recommendation was the owner (Ćalasan) as his friend: “I do not know who the owner of the said company was. That is why he could not even be my friend”. For the purposes of this research, we tried to get in touch with Marović, through his former lawyer Zdravko Begović, but he could not give us Marović’s contact, because he had previously communicated with him exclusively through a protected number.

Legal Adviser of the Action for Social Justice (ASP) Ines Mrdovic said that there are literally no mechanisms for checking the property of public officials outside the borders of Montenegro by the current Agency for Prevention of Corruption, and especially the former Commission for Prevention of Conflicts of Interest and it is exclusively up to public officials whether to report any property or not.

“APC should establish cooperation with other countries in order to exchange information and establish appropriate interstate mechanisms for checking the property of public officials outside the borders of our country”, Mrdovic said.

Suspected of another affair

From 1997 to 2002, Borislav Lalevic served as the President of the Municipality of Bar. He was the head of the Defense Directorate of Montenegro from 2003 to 2007. Since 2008, Lalević has been the director of the PHI Health Center Bar. During 2017 and 2018, he was also the Deputy Chairman of the Board of Directors of the Port of Bar.

It is interesting that in 2011 the Network for Affirmation of NGO Sector (MANS) filed a criminal complaint against the then-mayor of Bar, Zarko Pavicevic, and several related persons on suspicion that they had created a criminal structure that was used to gain illegal financial benefits. Among them is Borislav Lalevic, who, together with Milan Martinovic, is accused by MANS of abusing his official position in relation to the commercial contracts that the Municipality of Bar, i.e. the Montenegro Post, had with the company ZIB owned by Zarko Pavicevic. In the end, Pavicevic was the only one prosecuted and convicted, while the others escaped criminal responsibility.

Authors: Marko Vesovic, Vladimir Otasevic and Jovo Martinovic

Atanas Tchobanov helped in the investigation.