Oligarchs everywhere in the West are buying political power and the politicians are only too happy to take their money.
Vladimir Radomirović is the editor-in-chief of Pištaljka, a whistleblowing platform in Serbia
Photo: Wikipedia
Wealthy people tend to influence government policies. This is as true for Serbia as for pretty much any country in the world. However, the Serbian experience may be just a little bit specific.
Quite like in Romania or Bulgaria, a class of former communist managers and intelligence officers acquired fortunes after the fall of communism by using state assets and connections. Unlike Romania and Bulgaria, however, Serbia was under UN economic sanctions and faced a series of wars in the 1990s, which meant that many of these oligarchs or tycoons had to look elsewhere to continue building their empires.
The minute Serbia’s socialist policies under Slobodan Milošević were defeated in 2000 the tycoons used their wealth to control the government and get even richer. Two of the country’s wealthiest businessmen – Philip Zepter and Miroslav Mišković – installed their cronies as right–hand men to the new prime minister Zoran Djindjić.
Zepter, who made his fortune in Austria and Eastern Europe, went so far as to pick up the tab for Djindić’s lobbyist in Washington. Both tycoons were looking to profit from Serbia’s imminent privatization spree. They both did.
Mišković, who once was a minister in Slobodan Milošević’s government, built his empire in Serbia, Cyprus and Russia. By the early 2000s he was the richest person in Serbia, with massive investments in retail, banking and real estate. However, the U.S. Embassy in Belgrade suspected that Mišković made his fortune through corruption under Milošević and in 2007 recommended that the State Department issue a visa ban on the tycoon. This significantly hampered his business prospects.
As things go, it was less than a year later that the U.S. needed Mišković’s help. After a snap election caused by the seccession of Kosovo, the U.S. wanted to have a pro-EU and pro-NATO government so that Serbia would accept the illegal status of its southern province or at least make no fuss about it. Over lunch hosted by Mišković at a posh Belgrade restaurant, Cameron Munter, the U.S. ambassador, nudged the tycoon and his fellow billionaires to support a coalition by the Democratic Party (once headed by Djindjić, who was assassinated in 2003 by rogue elements of the state security apparatus) and the Socialist Party founded by Slobodan Milošević. Mišković, who was rumored to fund several political parties, was the driving force behind support for the new government. He was also looking to get his visa ban lifted and to get his businesses back on track. And so, marking the culmination of tycoon power, a new government was formed.
All this changed in 2012 after the incumbent president Boris Tadić lost the election, bringing a new coalition into power. The new deputy prime minister, Aleksandar Vučić, launched an anti-corruption drive that saw Mišković arrested and tried over shady privatization deals. Mišković was eventually acquitted but has since refrained from politics.
Vučić was looking to sideline tycoons and he succeeded as Zepter and most billionaires followed Mišković’s lead. Some tycoons are now openly pro-government, some use the media they own to support the government but most are focused solely on their businesses.
Notably, there was a case of a tycoon entering the political arena. Bogoljub Karić, once a poster boy for self-made millionaires, formed his own party and ran for president of the country some 20 years ago. He was quickly booted out of it by the “democratic” forces and had his assests seized in a swift and shady corruption investigation. He was exiled for 10 years.
Yet, a big exception to the rule of Serbian tycoons not meddling in politics is Dragan Šolak. The billionaire, residing in Switzerland, has for years been using his media empire to influence the political scene in Serbia. A household name, Šolak is the favourite bogeyman of the Serbian government led by Aleksandar Vučić.
Dragan Šolak spent most of the 1990s abroad and has no connections to the late Slobodan Milošević and his class of tycoons. He started SBB (Serbian Broadband) in 2000 as a small cable TV operator in Kragujevac, the industrial heartland of Serbia and long the home of Yugoslavia’s most (in)famous export product – the Yugo car. Already in 2002, a fund managed by George Soros invested heavily in SBB, then followed by the European Bank for Reconstruction and Development (EBRD).
A 2007 U.S. Embassy cable released by Wikileaks has Šolak explaining to Embassy staff that his strategy was “to grow quietly“ and not confront the state-owned Telekom Srbije. In 2003, Šolak signed a deal with Telekom to use its infrastructure at what the American diplomats say were “agreed rates”. Presumably, these rates were significantly lower than what other operators were paying and SBB started growing not so quietly. By the time Telekom figured out what was going on, SBB had become the largest cable company in the country. Šolak used his Western investors’ financial and political clout to fight off attempts by Telekom to renegotiate the 2003 deal. He continued amassing his wealth and power.
In 2013, Cameron Munter, the former U.S. ambassador who cajoled Serbian tycoons five year earlier, started working for Šolak as a senior advisor to the board of what was now – following several big acquisitions in Bosnia and Slovenia – called the United Group.
Later that same year, KKR, an American investment fund, bought a majority stake at the United Group. In 2014, investigative reporter Bojana Barlovac uncovered how Šolak hired lobbyists in Brussels to fend off an attempt by the Serbian government to protect competition in the media. A draft law on the electronic media submitted to the EU for approval by the government of Aleksandar Vučić stated that cable operators could not own TV stations. The government backed down after the European Commission – prodded by lobbyists and the EBRD – said that this was unacceptable. Šolak could keep his sports channels and start news channels, which was his latest obsession.
“David Petraeus, a retired U.S. General and former director of the CIA, visited Belgrade twice on behalf of KKR, meeting all relevant media people in a bigger gathering at the residence of the U.S. Ambassador to Serbia, but also Serbian Prime Minister Aleksandar Vucic. In his second visit, on April 15, 2014, Vucic told Petraeus that KKR’s first direct Balkan investment – new cross-border TV station, N1, – was welcome in Serbia, according to a statement from Vucic’s cabinet“, wrote Barlovac in her expose that attracted much attention. (Following publication, SBB with a straight face stated that they are separate from N1, except that “we have the same investor”.)
In an interview with the Guardian in 2022, Dragan Šolak – speaking as the new owner of the Southampton football club in England – said that Vučić was a dictator but insisted that he has “no political agenda beyond wanting fair elections, and no links to political parties“. “My top priorities are my family and golf, and then I would say business. Politics is nowhere in the top 100. I don’t care about politics. I became a political figure only because I wouldn’t allow them to change the way we operate our news channels.”
He went on to explain that the idea for launching a news channel came to him while “visiting friends from Fox in the States, and they told me the most profitable part of Fox was Fox News. And I thought: ‘Wow.’”
That said, N1 and Šolak’s other news channels are far from turning profits. In fact, they lose tens of millions of euros each year. Yet, they are very profitable for his other businesses.
When anti-government protests erupted in Serbia last fall, after a canopy collapse killed 16 people at the newly-reconstructed train station in Novi Sad, Dragan Šolak’s media were out in force, providing almost 24/7 coverage. Their reporting has been extremely one-sided and arguably fuelled the discontent and the rioting. Recently, during a live broadcast, a TV reporter was saying protests were peaceful and quiet while behind her back – and in plain sight – protesters were demolishing the headquarters of the ruling party, once headed by Vučić.
Yet, it seems that this kind of journalism has paid off: in April, United Group, now under majority ownership of a British investment fund, BC Partners, announced it had sold off SBB, the cable operator, to an Emirati company and its sports rights to Telekom Srbija, the government-run telecommunications company, for 1.5 billion euros. Šolak is now in a tug of war with BC Partners because he has been removed from the board of the United Group and because he says BC Partners owe him 200 million euros as a bonus for the successful sale. And, arguably, for the role his media played in it. Šolak’s clique of managers is also putting up a fight and just last week they denied the new CEO entry into the company’s headquarters in Belgrade.
Full disclosure: I know what it is like to face the full wrath of Šolak’s media empire. In 2020, when I was president of the Journalists’ Association of Serbia (UNS), N1 published and heavily broadcast news that a court in Switzerland had found a pro-government tabloid and a couple of TVs guilty of smearing Dragan Šolak.
“The district court in Zurich reached a verdict that unequivocally states that Dragan Šolak’s personal rights had been breached by the defendants,” the news read.
This was an important matter for UNS as well and we wanted to do a bigger story. So, we asked N1 if we could have the verdict, please. (They hadn’t published the verdict in their original article, which sourced the story to N1.) They said we needed to go to their owner, the United Group. We did, and were told that they couldn’t help us and that we should ask the court in Zurich to release the verdict. So, how did N1 do their story if they hadn’t seen the verdict? They said in their news programs and on their website that the defendants had not proven their allegations against Šolak. After we started asking questions, N1 changed the lede to and the source of information to “this was stated by the United Group“. Where did editorial independence go?
The court in Zurich eventually refused to release the verdict to UNS, presumably after Šolak’s lawyers objected. It appears that there was no trial on merit and that the court simply decided to rule in Šolak’s favour after the defendants decided not to accept Swiss jurisdiction. This is an assumption, as the court documents are out of reach.
Šolak’s media conglomerate launched a week-long campaign against UNS and myself, portraying us as lapdogs to the government. Just for asking questions. It appears that anyone asking questions about Dragan Šolak is an enemy. And N1 will do anything for their owner.
I strongly believe I am blacklisted by N1. About a year ago, a producer called me to ask if I could come to their morning show to talk about whistleblowing. An hour later, she called back to apologize and say that, unfortunately, they don’t have time to do the segment. Whatever.
Still I hold that N1 has been doing a tremendous job in bringing to light the many misdeeds and crimes by the government. But their reporting of protests and of situation in Serbia these past few months is nothing short of propaganda.
For whatever reason, Dragan Šolak thinks the president of Serbia is a dictator. Fair enough. How come then that his media broadcast only this view and all other views are banned or silenced. Who is the dictator then?
In trying to unseat Vučić, the would-be Rupert Murdoch is undermining the rule of law and democracy in Serbia.
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Brilliant, thorough article. Is this not a case of capture, in and of itself, via Solak’s apparatus?