PASALIC:OLD STORIES ON DIASPORA FUND- PART OF PREELECTION CAMPAIGN

ZAGREB, June 5 (Hina) - Bringing up old stories about the misuse of money collected by the diaspora is the start of a pre-election campaign launched by the ruling five-party coalition, as well as the continuation of a showdown between me and the authorities and some circles from the Croatian Democratic Union (HDZ), said Ivic Pasalic, the head of the HDZ's foundation accused of misuse of the said funds. #L# Pasalic held a news conference on Wednesday after it was announced that the Office for the Fight Against Corruption and Organised Crime (USKOK) launched an investigation to establish whether there was any wrong-doing in the use of funds which the Croatian diaspora deposited in foreign accounts for the defence of Croatia in the 1990s. The case refers to some three million German marks deposited in an account in Villach, Austria, until 1998 when a former high official, Hrvoje Sarinic, transferred them to the account of the then ruling party Croatian Democratic Union (HDZ)'s foundation. "No irregularities have ever been established in the business dealings of the foundation, and the reintroduction of this story is politically motivated," Pasalic claimed. Members of the ruling coalition are conducting a pre-election campaign, Pasalic said, referring to the accusations made against him. He claimed that the former Chief State Prosecutor Radovan Ortynski had been discharged after failing to prosecute him and it was obvious that now it was the task of Ortynsky's successor Mladen Bajic. "There are absolutely no irregularities in the work and business dealings of the foundation, and no objections were made against its work until May 2000 when the new authorities embarked on a showdown with the HDZ using the foundation," Pasalic said. In that period neither the Interior Ministry (MUP) nor the financial police established any wrongdoing after they had investigated the foundation's work for several weeks, he added. The foundation was acquainted with the donation worth three million German marks deposited into its account in Privredna Bank only in December 1999, Pasalic said adding that its regularity was not questioned by the police until yesterday. Hrvoje Sarinic recently said in an interview to the "Novi List" daily that he had transferred the money to the foundation's account in Privredna Banka following the order of former Croatian President Franjo Tudjman. "If there is anything suspicious in this donation, then my and the foundation's name are wrongly associated with it, as the money was transferred from the national fund in Villach, in compliance with the order from the President's Office, to accounts which Hrvoje Sarinic and Vesna Skare Ozbolt opened in the Privredna Bank," Pasalic said. He explained that the foundation's leadership had accepted the donation in June last year and that the money was placed on time deposit in the designated bank. The leadership also decided to use the funds for the restoration of the late President Tudjman's house in his hometown of Veliko Trgovisce and undergraduate scholarships, while interest drawn from the time deposit was to be used for the work of the endowment. Until this morning none of our accounts was blocked, Pasalic said adding that the media campaign levelled against him would return like a boomerang to those who started it. Pasalic declined to comment on speculation that the ruling coalition was assisted by the incumbent HDZ President Ivo Sanader in the showdown between Pasalic on one side and Sanader and the ruling coalition on the other. Pasalic, however, said there is a suspicious coincidence in the attacks made against him both by the authority and his party. He believes that those circles in the HDZ that advocate the showdown with him work in the interest of the ruling coalition, but he estimates that he enjoys the support of "a sensible majority" in his party and he predicts that his opponents will fail. (hina) ms