Katarina Kresal Resigns Over Audit Reports

Interior minister and leader of the junior coalition partner Liberal Democrats Katarina Kresal resigned from her ministerial post earlier today, following two damning reports from the Court of Audit and the anti-corruption commission over the leasing of the building of the newly formed National Bureau of Investigation.

Katarina Kresal in a pensive mood (source)

Kresal was in plenty of hot water over the course of the last three years, some of the ordeals were quite brutal. But she always somehow survived and even fought back. But she has only herself to blame this time around. While she was viled by the opposition (primarily, but not exclusively by the SDS of Janez Janša) for finally righting the terrible wrong this country has done to “the Erased” and dragged through the mud vis-a-vis the Canine Affair where she was guilty-by-association although no accusation or insinuation against her or her partner Miro Senica (a stellar attorney) was ever proven, the president of the LDS seems to have tied her own noose.


Having made the establishment of the National Bureau of Investigation a top priority soon after she was sworn in as the minister of interior, Kresal tasked state secretary Goran Klemenčič, her right hand man and the person who initially broached the idea of NBI to the public with making it happen. (slightly OT: Klemenčič was equally instrumental in starting to clean up the mess with the Erased and now, ironically, leads the very commission whose report caused Kresal to resign). The NBI was to be comprised of top notch cops and other professionals, with above-average pay and state-of-the art equipment. In short, top shit. So, where to house these super-cops?

One option was the new building originally meant to serve as the new interior ministry. That particular project on the outskirts of Ljubljana was OK’d by Kresal’s predecessor Dragutin Mate (now Ljubljana city councilman and head of the local SDS branch) regardless of the fact that the building site was across the street of the largest gas storage facility in Ljubljana. It then also emerged that under Mate’s deal the ministry, which was to rent the new building for two decades (and thus pay it off), would be contractually obligated to buy additional real estate, driving the seemingly good price way up into the sky. Additionally, the rent apparently did not include equipment, which would have added substantially to the final amount of monies needed. But if this option was not good enough (or rational enough) for the ministry, then it certainly wasn’t good enough for the flag-ship anti-crime institution.

Enough blame to go around

So, Mate was unnecessarily spending away taxpayers’ money. The Court of Audit said as much in its report, saying that Mate did not follow proper procedures for public tenders and private-public partnerships. It should be an easy one for Katarina Kresal. By axing Mate’s pet project she definitely won some points on the transparency scale, only to lose them the very next instant. Namely, the ministry decided to house the NBI in a yet-to-be-finished building developed by Jurij Pogačar. The latter gained infamy in 2002 during the SIB Bank affair, when the city of Ljubljana (the mayor back then was Vika Potočnik) bought the SIB bank with assets of city-owned Energetika Ljubljana (the city energy company) headed by none other than Pogačar himself. I will not go into details, but the SIB affair was a huge thing back then which even helped bring about the dissolution of the LDS and after the bank tanked shortly after being bought by the city, Pogačar was under suspicion for abuse of office, but never saw trial.

Making a deal with Pogačar, who just happened to be her friend (or good acquaintance, if you will) was a bad call from the start. It was executed even worse. Both the Court and the Commission found that the building which now houses the NBI should have been leased-to-own rather than just rented, with the rent as high as to enable Pogačar to comfortably pay off his own leasing of the building and ensuring him a hefty profit to boot. Not only that. Turns out that the tender was virtually tailor-made to fit Pogačar and that (again) proper public tender procedures were not followed.


This thing happened in two waves. First, the Court published its findings on Tuesday, criticising both Mate and Kresal. Since Mate is long out of office, all eyes are on Kresal (although the SDS maintains Mate is in the report only to make Kresal not look that bad). The interior minister offers to resign, but prime minister Borut Pahor does not accept her resignation, instead instructing her to follow recommendations of the Court of Audit. However, by the time the anti-corruption commission published its findings, Kresal was out of ammo. The commission report was just as damning, if not more, for it officially found elements of corruption in the events around the NBI building and Katarina Kresal, having spent her ace in the sleeve (offer to resign), had no choice but to quit her post for real.

With this the political career of one of the few truly new faces of Slovene politics took a nose-dive. What transpired here was (yet again) lack of political mileage of the illustrious LDS leader who arguably did manage to stabilise the party’s ratings and even brought it back to power after only one opposition term (even though it was quite a fall from 30% to 5% of votes). When the canine affair broke out, Kresal went AWOL. She was nowhere to be seen or heard for almost ten days. By the time she finally got her act together, she was already tried and convicted by the public opinion with a little help of the opposition parties which helped fuel the mass hysteria. However, this time around LDS president should have done better to keep quiet for a day or so and – assuming she wanted to survive politically – deal with both reports simultaneously. Granted, it may not have been enough to just “offer to resign” in the light of two highly critical documents, but having played the card after the first report was published, she couldn’t have done it again only twenty-four hours later.

EDIT @ 11 August 0900 CET: The below should be taken with a pinch of salt as there’s one element pengovsky overlooked. For complete picture read the next post as well.

On the other hand, PM Pahor showed much more political skill than his soon-to-be-ex interior minister. Pengovsky is almost positive that the PM knew beforehand at least the contours of both reports and had therefore no problem with refusing Kresal’s resignation the first time around, knowing that she wouldn’t survive the next one. In fact, this is very much according to Pahor’s modus operandi. The PM always (at least) nominally supports his colleagues who in the end resign of their own free will rather than have the PM throw them out of the government. Even Karl Erjavec in the end resigned of his own accord, saying that the PM had suffered enough.

So, how does this play out?

With Katarina Kresal out of office, she will probably be returning to the parliament. She was, after all elected as an MP first. This means that LDS veteran Tone Anderlič, who served as MP in every parliament since 1990 will loose his seat as he was not elected directly, but got into the parliament only after Kresal was appointed minister and Draško Veselinovič (of NLB infamy, who was next in line for her seat) waived the position. This was, by the way, was a fact completely lost on Rosvita Pesek, the TV anchor on state television which interviewed Anderlič earlier tonight. More importantly, Anderlič is also the president of LDS party council, whom Kresal will ask for a vote of confidence to continue to lead the party. We’ll see if an old party hand like Anderlič will be able to look beyond his removal from the parliament or will he do everything in his power to ensure a no-confidence vote against Kresal who, ironically, was re-elected as party leader by a large majority during the recent LDS convention.

Even more ironically, the situation we have now is not very much unlike what Gregor Golobič of Zares proposed months ago: that coalition party leaders return to the parliament as MPs and let someone else run the government with full support of the coalition (hat tip to the good doctor). As of today (more precisely, as of mid September, when the parliament will officially take note of Kresal’s resignation) prime minister Borut Pahor is the only party leader to serve in the executive branch. Every single one of his counterparts in the legislative branch. Janša, Golobič, Kresal, Erjavec, Žerjav, Jelinčič and Žnidaršič (yes, there’s a new party in the works), they are all MPs. Which makes Pahor a bit alone in the government. This means that a year-or-so before the elections, the balance of power has tipped very much in the parliament’s favour and the PM might find himself in a position where others are dictating the terms, especially with him running a minority government and all.

Early elections still not an option

In fact, resignation of Katarina Kresal could very well turn out to have been her one saving grace. With her out of office, right-wing opposition lost an important target which they attacked every time they needed to paint the ruling coalition as a bunch of ruling and inept morons and especially trying to create a wedge between PM Pahor and the rest of the coalition. Just as Gregor Golobič was all over news ever since he re-entered the parliament (he was barely touched by the media unless it was about the Ultra affair), so will Katarina Kresal get the chance to speak on everything from budget rebalancing act to Palestinian declaration of sovereignty. And within a year, the NBI building might be just a faint memory, especially due to the fact that opposition leader Janez Janša himself is to stand trial in little less than a month’s time over Patria affair.

In the wake of today’s events most of the parliamentary parties called for early elections. Even the ruling Social Democrats hinted that maybe they could come to some sort of an agreement. But this is all bullshit. For the time being, LDS remains a part of what is left of the ruling coalition, unless there is a coup in the party. And – even more importantly – even though Kresal is out of office, priorities of individual parties are the same as they were two months ago.

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Agent provocateur and an occasional scribe.

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