Croatia's Sanader Faces New Corruption Probe

USKOK, the country's anti-corruption body, suspects that in 1994 and 1995, when Sanader was deputy foreign minister, he agreed with Hypo Bank to take commission in the amount of seven million Austrian schillings in exchange for facilitating a 140 million schillings loan the bank granted to the Croatian government.

USKOK suspects Sanader of abusing his powers between autumn 1994 and spring 1995, when he negotiated with Hypo Bank officials a loan for Croatia which, USKOK investigators say, during the 1991-1995 war had difficulties finding banks willing to give it loans.

Investigators allege that Sanader was paid commission in the amount of at least HRK 3.5 million (about €473,000) after the Croatian government and Hypo Bank signed a loan agreement.

Sanader's Zagreb defence attorneys, Goran Suic and Ivan Lovric, said they had no information about the new investigation.

Suic said he hoped that he would have information after he visited his client in a Salzburg prison on Friday, where he is in custody after he was arrested in Austria on a Croatian warrant in December. He is suspected of conspiracy to commit crime and abuse of office, and Croatia has requested his extradition.

Sanader has denied all allegations against him.

The two attorneys again expressed dissatisfaction with the fact that they still had not been allowed to see USKOK's file on their client.

The new investigation into Sanader was launched after the prosecutors in Klagenfurt, acting on a request from Croatia's chief state prosecutor, provided documents taken from Hypo Bank on possible abuse of powers during the negotiations on the loan and the conclusion of the loan agreement.

USKOK officials say that inquiries conducted so far provided grounds to suspect that the former PM had abused his powers.

Since Sanader is in extradition custody in Austria, a request has been sent to hand Sanader the necessary documents and allow for his questioning, as well as to extradite him to Croatia, USKOK said on its web site on Thursday afternoon.

Sanader is already under investigation because USKOK suspects him of abusing his powers as prime minister to help Dioki, the company owned by his friend Robert Jezic, to buy cheaper electricity from the state-owned power supplier HEP. In yet another case, he is charged with having conspired with other suspects to syphon money from ministries and public companies.

He is the highest-ranking person in Croatia to face corruption allegations as the country struggles to clamp down on rampant corruption that the EU has insisted must be stamped out before it joins the bloc.