Telekom corruption case

[DedoAleko]

Former spy chief testifies for his role in the Telekom corruption case

Skopje, 23 September 2015 (MIA) - Macedonian Prosecutor's Office interrogated Slobodan Bogoevski, former head of the state security service UBK, for his role in the high profile corruption Telekom case, in which Deutsche Telekom and Magyar Telekom are suspected of bribing former Prime Minister Vlado Buckovski and leading officials of the ethnic Albanian coalition partner DUI Ali Ahmeti and Musa Xhaferi, in exchange for keeping the telecommunications market in Macedonia closed to additional competition.

Deutsche Telekom and Magyar Telekom bought little over half of the shares of Macedonian Telecommunications in 2000, in a joint bid with Greek businessman Dimitrios Kontominas and SEEF, a George Soros owned fund as smaller partners. The company, which was the only fixed line operator in Macedonia and was branching into mobile and internet services, remained the dominant telecom operator in the country even as Greek OTE established the smaller Kosmofon mobile operator in 2002, and other even smaller companies tried to offer internet and TV services.

The US Securities and Exchange Commission, which took Deutsche Telekom and Magyar Telekom to court in New York, where the companies settled in 2011 for 95 million USD, claiming they violated the Foreign Corrupt Practices Act. According to the allegations, Hungarian and German managers offered bribes to Buckovski through a number of his associates, as well as to Ahmeti and Xhaferi, again through intermediaries which included two managers working for Contominas. In exchange for bribes which amounted to estimated 12 million EUR, Buckovski, as Prime Minister and leader of the Social Democrat Union of Macedonia (SDSM) and the DUI officials agreed not to issue a bid for a third mobile phone operator, allowing the company to continue charging exorbitant sums from its customers who were left with no choice in the market. SDSM and DUI also gave a long list of regulatory concessions to the Macedonian Telecommunications company, in exchange for the bribes they received.

After successfully completing the case against Deutsche Telekom and Magyar Telekom, the SEC is now suing three Hungarians, managers of Magyar Telekom, using the same cache of evidence collected for the criminal suit, and calling dozens of Macedonian, Hungarian, German and Greek politicians and businessmen to testify. Bogoevski, who was appointed by SDSM as head of the UBK security service in the early 1990ies, and who is a eminence grise in the Macedonian secret police circles, was invited to testify as an additional witness, called up by the SEC afte an interview in which he claimed he played a part in organizing the entire bribery scheme. Bogoevski, questioned this Winter by the SEC and the legal counsel for the defendants, said that he was a key connection to Contominas and his two associates, Michail Kefaloyannis and Stavros Stavridis, and helped them organize a set of meetings with associates of Prime Minister Buckovski, his advisor and apparent bag-man Bekim Zemoski, with the Hungarian managers and especially with contacts in DUI and with Kosovan businessman Ekrem Lluka who, according to Bogoevski, was trying to join in on the deal. Money were drained from the Macedonian Telecommunications through bogus consulting contracts with a Cyprus based company controlled by Contominas called Chaptex, and were then, allegedly, returned to Macedonia and divided between SDSM and DUI.

Bogoevski claims that he held several incriminating documents, including a Protocol of cooperation signed by Prime Minister Buckovski and Transportation Minister Xhemali Mehazi (appointed by DUI) on one side and by Elek Straub, CEO of Magyar Telekom on the other, which provided that the Macedonian Government will not allow a third mobile operator into the country, keeping the near-monopoly Macedonian Telecommunications had in this area. It was only after the SDSM and DUI Government was defeated in the 2006 elections, the new Government, led by VMRO-DPMNE and its initial Albanian coalition partner DPA, issued a bid for a third mobile operator, bringing Telekom Austria into the country. A number of deregulation pushes also led to the introduction of competitors in landline and the growing internet market, and in 2009 Kosmofon was sold to the Telekom Slovenia, providing a third aggressive competitor in the mobile market. Prices dropped and internet penetration, which was among the lowest in Europe, has reached nearly 70 percent of all households today. With an on-going merger between the Telekom Austria and Telekom Slovenia mobile operators, Macedonian Telecommunications stand to drop to second place, with their mobile operator, now re-branded as T-Mobile, relegated to just 45 percent of the market it once dominated.

Macedonian Prosecutors have already initiated a case against several Hungarian, German and Greek managers of Macedonian Telecommunications over the Chaptex contracts and the alleged bribery of the former top Government officials, but as foreign citizens, they avoid appearing before the Macedonian court. The publication of the files presented before the court in New York opens the door to expand the case at home, and Bogoevski was called to testify behind closed doors for over four hours on Wednesday.

Bogoevski himself is sentenced to two years in prison over a money laundering case involving a failed attempt of the Slovenian Merkator retailer to open up a shopping mall in the capital Skopje. In his testimony before the SEC, Bogoevski also tried to spread the blame to the current VMRO-DPMNE leadership, claiming that they didn't push for prosecution of their predecessors in the Telekom corruption case, and that he was prosecuted for no reason in the money laundering case because he knew too much about the whole affair. Bogoevski claims that Saso Mijalkov, who until recently led the UBK secret service under the current VMRO-DPMNE administration, asked for bribes from a businessman close to Contominas in order to spare him from prosecution in the scandal.

During the Parliament question time on Wednesday, SDSM member of Parliament Hari Lokvenec repeated the claims Bogoevski has raised against VMRO-DPMNE, alleging that before the 2006 elections the Macedonian Telecommunications also gave a deal worth about 100.000 EUR to a company that at the time employed several former and current VMRO-DPMNE officials. Prime Minister Nikola Gruevski responded that at the time of the corruption scandal VMRO-DPMNE was deep in opposition, unable to influence the regulation of the telecom market.

"At the time of the bribery, Radmila Sekerinska and Vlado Buckovski held the reins and they prevented the introduction of a third mobile operator until their very last day. In our program, VMRO-DPMNE promised that in the first 60 days of our Government we will open a bid for a third mobile operator. We delivered on our promise, and on our watch, prices dropped by 70 percent", Gruevski responded.

Buckovski is currently out of SDSM politics, having in the meantime been sentenced for another corruption case. But, current deputy leader of SDSM Radmila Sekerinska, was involved in the Telekom affair. Sekerinska was deputy Prime Minister at the time of the alleged bribery and as the person in charge of starting Macedonia's EU integrations, she received requests from the European Commission to liberalize the market and open it to competition, requests which the Government ignored while taking bribes from the dominant market player. One of the documents filed in the court in New York informs that the charged Hungarian managers gave a copy of a draft telecommunications law containing clauses that would allow them to keep their monopoly personally to Sekerinska. In the same document, the Hungarian managers say that it will be easy for them to push their version of the law through the Government, implying they had control over the Government

izvor: http://www.mia.mk/en/Inside/RenderSi.../323/132816560

[Risto the Great]

Amazing and typically Macedonian. No doubt the backdoor deals are still continuing in much the same way right now.

[DedoAleko]

A must see video where the journalists Cvetin Cilimanov shows highly incriminating cables between the hungarians-macedonians-greeks-germans, involved in the Telekom scandal.

Video link:Milenko Nedelkovski Show 02.10.2015

Scans from some of the cables:

[DedoAleko]

Telekom Affair: Macedonian Customers Gauged with High Prices, Court Files Show

New court files about the Macedonian Telekom corruption affair show that the decade old scandal had cost the country over EUR 38mn over two years, MIA informs.

The calculation was apparently made by managers of Magyar Telekom, the Hungarian telecommunications company, which, as part of Deutsche Telekom, bought Macedonian Telecommunications in 2000. The company then lobbied the Macedonian Governemnt and regulatory authorities to delay further opening of the telecommunication market, and in 2005 paid up to EUR 12mn in bribes to top officials from the then ruling coalition formed by the Social Democrat Union (SDSM) and the Democratic Union for Integration (DUI) parties.
As MIA reports, the US Securities and Exchange Commission, which launched two cases against Deutsche Telekom and Magyar Telekom, and against three of their officials, on the basis of the Foreign Corrupt Practices Act, has published emails exchanged between Magyar Telekom top managers, discussing bribery and benefits they expect in Macedonia.

"Elek, FYI, the first quick and dirty calculation of the impact of the Protocol of Cooperation on the MakTel business plan has been completed. This reveals that we earned approximately 2m EUR in 2005. We therefore have all the resources for the necessary measures", an email sent in mid 2005 by Magyar Telekom manager Andras Balogh to the company's CEO Elek Straub informs.

The two million are apparently the money the company managers said in a different email they can use to bribe members of Parliament and Government to ensure that there is no attempt to add new, competitive mobile operators to the Macedonian market and to also have the Government sell a 10 percent stake in the company to Magyar Telekom, giving the Hungarian*-German owners greater control over decision making.

This email between Balogh and Straub contains two attachments, in English and in Hungarian, of a calculation that appears to show how much money the Macedonian Telecommunications (MakTel or MT) company will make in extra profits if the introduction of a third mobile operator is delayed by 2006 or 2007, and also, if there is a third operator, but a MVNO one * a company that will not be allowed to build its own infrastructure and will be forced to use the infrastructure set up by either MT or the much smaller, Greek owned competing Cosmofon operator.

The graph, published by the Republika news site, shows that the Magyar Telekom managers were expecting that the company will make EUR 38,4mn in extra profit if it delays having serious competition by 2007. The extra profit made by price gouging its customers would amout to 20,1 million EUR if the company faced only an additional MVNO competitor by 2007.

According to the emails published by the South District Court in New York, where the case against Straub, Balogh and a third manager Tamas Morvai takes place, this extra profit is one of the motives in the elaborate bribery scheme to company put in place. Magyar Telekom and Macedonian Telecommunications used intermediaries from the group of companies owned by Greek tycoon Dimitrios Contominas who operated off*shore companies in Cyprus.

These companies were allowed to sign contracts for sham consulting services with Macedonian Telecommunications, worth about EUR 4mn, on the understanding that the money will eventually be funneled to people close to then SDSM party leader and Prime Minister Vlado Buckovski and the leaders of his Albanian coalition partner DUI.

Additional payments were allegedly paid and delivered in cash, from Greece. Files published earlier show that Magyar Telekom and Macedonian Telecommunications formed a working group to prepare a draft telecommunications law that suited their business interests, and worked to introduce it through the Government. An email sent by MT CEO Attilla Szendrei informs that he gave a version of the law to then Deputy Prime Minister Radmila Sekerinska, who is currently the deputy leader of SDSM, and was in charge of communicating with the European Commission on the important issue of liberalizing the telecommunications market, MIA reads.

The email shows that on top of the price gouging, Macedonia faced a threat from the European Commission that its integrations will be delayed by three years if the market is not opened up for competition. Eventually a rival version of the law, prepared by consultants contracted by the United States USAID, was introduced in Parliament, which is when Magyar Telekom resorted to outright bribery of SDSM and DUI officials to amend the law and prevent the introduction of a competing mobile operator. The SDSM-*DUI Government never issued a tender to have a third mobile operator in Macedonia, which had to wait until a new governing coalition was formed by VMRO-*DPMNE and DPA in mid 2006.

izvor: http://www.independent.mk/articles/2...urt+Files+Show