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RAAUZYUW RUEHPOD0226 1801531-UUUU--RHMCSUU.
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R 291531Z JUN 07
FM AMEMBASSY PODGORICA
TO RUEHC/SECSTATE WASHDC
INFO EUROPEAN POLITICAL COLLECTIVE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RUEHPOD/AMEMBASSY PODGORICA
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UNCLAS SECTION 01 OF 02 PODGORICA 000226 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT ALSO FOR INR/B 
 
E.O. 12958: N/A 
TAGS: PGOV KCRM PINR MW
SUBJECT: FORMER PM DJUKANOVIC AGAIN IMPLICATED IN 1990S CIGARETTE 
SMUGGLING 
 
 
PODGORICA 00000226  001.3 OF 002 
 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE HANDLE ACCORDINGLY 
 
 
 
¶1. (SBU) SUMMARY: FORMER PM MILO DJUKANOVIC AGAIN FACES THE 
PROSPECT OF INDICTMENT IN BARI, ITALY, ON CHARGES OF CIGARETTE 
SMUGGLING AND MONEY LAUNDERING, ACCORDING TO ACCOUNTS FROM THE 
ITALIAN NEWS AGENCY ANSA. THE SMUGGLING, ALLEGEDLY UNDER COLOR 
OF GOM PERMISSION, BEGAN IN THE 1990S WHEN THE FEDERAL REPUBLIC 
OF YUGOSLAVIA, OF WHICH MONTENEGRO WAS A PART, WAS UNDER UN AND 
OTHER INTERNATIONAL SANCTIONS.  THE ALLEGATIONS HAVE LONG BEEN 
PART OF THE POLITICAL ENVIRONMENT IN MONTENEGRO, DISMISSED AS 
POLITICALLY MOTIVATED BY DJUKANOVIC'S DEMOCRATIC PARTY OF 
SOCIALISTS (DPS), AND EQUALLY EMBRACED BY THE OPPOSITION. THE 
AFFAIR, WHILE SEEMINGLY SCANDALOUS, HAS LONG AGO BEEN FACTORED 
INTO POLITICAL CALCULATIONS BY PARTIES AND VOTERS ALIKE IN 
MONTENEGRO.  AN INDICTMENT MAY CAUSE DJUKANOVIC TO TAKE A LOWER 
PROFILE IN HIS PARTY, BUT WOULD NOT BY ITSELF SERIOUSLY AFFECT 
THE BALANCE OF POLITICAL POWER IN MONTENEGRO, BARRING THE 
UNLIKELY CHANCE THAT THE DPS'S JUNIOR COALITION PARTNER CHOSE TO 
LEAVE THE GOM IN RESPONSE TO DJUKANOVIC'S INDICTMENT.  END 
SUMMARY. 
 
 
 
SMUGGLING AND MONEY LAUNDERING 
 
------------------------------ 
 
 
 
¶2. (U) IN 1999, ITALIAN PROSECUTORS IN NAPLES AND BARI BEGAN 
INVESTIGATIONS IN CIGARETTE SMUGGLING ACROSS THE ADRIATIC FROM 
MONTENEGRO AND ALBANIA.  INTERROGATED BY PROSECUTORS IN 2000 AND 
2001, ITALIAN ORGANIZED CRIME FIGURES STATED THAT THEY HAD HAD 
MEETINGS WITH PM DJUKANOVIC AND OTHER SENIOR GOM OFFICIALS 
BETWEEN 1993 AND 1996. IT IS ALLEGED THAT IN THOSE MEETINGS, 
DJUKANOVIC AND OTHER GOVERNMENT OFFICIALS GAVE THE CAMORRA 
(NEAPOLITAN ORGANIZED CRIME ORGANIZATION) PERMISSION TO USE 
MONTENEGRIN TERRITORY AS A BASE FOR SMUGGLING CIGARETTES BY 
SPEEDBOAT INTO ITALY. STORIES THAT RUSSIAN PLANES HAD BEEN 
BRINGING IN CIGARETTES TO PODGORICA, AND THAT THE GOM HAD 
EXACTED "TRANSIT FEES" OF US$30 MILLION A MONTH, HAD BEEN IN 
WIDE CIRCULATION THROUGHOUT THE 1990S. 
 
 
 
¶3. (U) DJUKANOVIC HAS ROUTINELY DENIED THAT HE DID ANYTHING 
ILLEGAL IN CONNECTION WITH THE CIGARETTE TRADE, OR THAT HE EVER 
MET WITH ITALIAN ORGANIZED CRIME FIGURES.  OTHER FORMER 
OFFICIALS IN THE GOM FROM THE 1990S HAVE SAID THAT THE "TRANSIT 
FEES" WERE A NECESSARY RESPONSE TO UN AND INTERNATIONAL 
SANCTIONS THAT WERE STARVING THE GOVERNMENT OF REVENUE. THE 
DEMOCRATIC PARTY OF SOCIALISTS (DPS), OF WHICH DJUKANOVIC IS 
PRESIDENT, HAS ROUTINELY RESPONDED THAT THE ITALIAN 
INVESTIGATIONS ARE POLITICALLY MOTIVATED. THE OPPOSITION HAS 
JUST AS ROUTINELY USED THE INVESTIGATION TO PAINT THE DPS AS A 
CORRUPT ORGANIZATION. (POST NOTES THAT THE INVESTIGATOR IN 
NAPLES ENDED HIS INVESTIGATION IN 2005, WITHOUT BRINGING 
INDICTMENTS.) 
 
 
 
IN CASE OF INDICTMENT 
 
--------------------- 
 
 
 
¶4. (SBU) MOST PARTIES AND VOTERS IN MONTENEGRO HAVE ALREADY 
FACTORED IN THE DRAWN-OUT ITALIAN INVESTIGATION INTO THEIR 
POLITICAL CALCULATIONS.  THE MATTER IS NOW BEFORE AN 
INVESTIGATIVE JUDGE, AND THOSE NAMED HAVE TWENTY DAYS TO SUBMIT 
EVIDENCE, SO IT IS NOT CLEAR THAT INDICTMENTS ARE IMMINENT. AN 
INDICTMENT OF DJUKANOVIC'S ASSOCIATES IS UNLIKELY TO HAVE A 
SIGNIFICANT EFFECT ON THE DPSS STANDING IN THE LOCAL POLITICAL 
MARKET.  POLITICALLY, AN INDICTMENT OF MILO DJUKANOVIC HIMSELF 
WOULD CREATE A PRESS FRENZY, BUT WOULD NOT NECESSARILY AFFECT 
VOTERS' SUPPORT FOR THE PARTY. DEPENDING ON THE TIMING, IT COULD 
HOWEVER RAISE HURDLES TO COOPERATION FROM OTHER PARTIES WITH THE 
DPS ON FINALIZING THE CONSTITUTION, AND REINVIGORATING ECONOMIC 
REFORMS AND PRIVATIZATION. 
 
 
 
¶5. (SBU) THE RULING COALITION OF THE DPS AND THE MUCH SMALLER 
SOCIALIST DEMOCRATIC PARTY (SDP) HAS FRACTURED OF LATE, OVER THE 
DPS'S COMMITMENT TO ECONOMIC REFORM. AN INDICTMENT OF 
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PODGORICA 00000226  002.3 OF 002 
 
 
DJUKANOVIC, FOR ACTIONS THE GOM TOOK BEFORE THE PRESENT 
COALITION FIRST TOOK FORM IN JUNE 1998, MAY PROMPT SOME IN THE 
SDP TO CALL FOR FURTHER WIDEN THE FRACTURE, BUT ABANDONING THE 
COALITION AND FORCING NEW ELECTIONS WOULD BE ALMOST SUICIDAL 
GIVEN THE SDP'S LOW POLLING NUMBERS. HAVING "WON" ON ITS 
ECONOMIC AGENDA, MANY IN THE SDP ARE NOW LOOKING TO FINALIZE THE 
CONSTITUTION, AND SHARE THE DPS VIEW THAT THE COALITION NEEDS TO 
STAY TOGETHER AT LEAST UNTIL THE CONSTITUTION IS ADOPTED AND THE 
MANTLE OF "FOUNDING FATHER" CAN BE BESTOWED. 
 
 
 
¶6. (SBU) FOR THE FORMER PM HIMSELF, IT IS UNLIKELY THAT HE WOULD 
ACTUALLY STAND TRIAL, AT LEAST NOT ANYTIME SOON, EVEN IF 
INDICTED BY THE COURTS IN BARI.  THE MONTENEGRIN CONSTITUTION 
FLATLY FORBIDS THE EXTRADITION OF ITS CITIZENS. WHILE THE BARI 
PROSECUTOR COULD ASK THAT A CASE AGAINST DJUKANOVIC TO BE 
TRANSFERRED TO MONTENEGRO, THERE ARE MANY DIFFICULTIES TO BE 
SURMOUNTED BEFORE SUCH A TRIAL BEGAN.  FIRST, POST ASSUMES THE 
ITALIAN FOREIGN MINISTRY WOULD HAVE TO CONSENT TO TRANSFERRING 
THE CASE.  AT THAT POINT, THE MONTENEGRIN STATE PROSECUTOR WOULD 
HAVE TO AGREE THAT A CASE FACTUALLY AND LEGALLY EXISTS - WHILE 
THE PROSECUTOR IS INDEPENDENT, SHE DOES ALSO HAVE ROOTS IN THE 
DPS.  AT THAT POINT, THE MONTENEGRIN PARLIAMENT WOULD HAVE TO 
VOTE TO LIFT DJUKANOVIC'S IMMUNITY AS AN MP TO LOCAL 
PROSECUTION, A DUBIOUS PROPOSITION AT BEST, WITH THE DPS LIKELY 
CLOSING RANKS, AND EVEN THE OPPOSITION LEERY OF A TRIAL IN A 
LOCAL COURT WHERE THE FORMER PM COULD EXPECT A FAVORABLY BIASED 
HEARING. 
 
 
 
¶7. (SBU) THE ITALIAN AMBASSADOR TO MONTENEGRO HAS TOLD POST THAT 
THE LEGAL PROCESS COULD TAKE YEARS, AND THAT HE DOUBTS THAT 
EXTRADITION WOULD BE SOUGHT IN THIS WHITE COLLAR CASE, UNLESS 
DJUKANOVIC WERE CONVICTED IN ABSENTIA AND SENTENCED TO PRISON. 
HE ADDED THAT PLANS ARE GOING AHEAD FOR FM ROCEN TO VISIT ROME, 
AND THE GOI CONTINUES TO STRENGTHEN ITS COOPERATION WITH THE GOM. 
BARNES 
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