EditFormer Croatian minister sentenced to two years of imprisonment for abuse of office
EPPO-led investigation uncovered over €1 million in damages to EU and Croatian budgets through rigged public procurement
A former Croatian Minister for Regional Development and EU Funds Gabrijela Zalac has been sentenced to two years of imprisonment by the County Court of Zagreb for abuse of office and trading in influence. The European Public Prosecutor’s Office (EPPO) that led the extensive criminal investigation announced the verdict.
The ruling stems from a plea agreement in which the former minister admitted guilt. As part of the agreement, she returned €200,000 as partial compensation for damages, although this does not preclude additional civil claims from affected institutions. Criminal proceedings against three co-defendants – including the former Director of Croatia’s Central Finance and Contracting Agency (SAFU) and two private business owners, are ongoing. Two companies directly involved in the fraud scheme are also under indictment.
The manipulated public procurement
The offences date back to 2017 and 2018, when the then-minister oversaw the launch of a public procurement procedure for the development of an information system related to strategic planning and development management. According to EPPO’s findings, she used her dual authority – both as Minister of Regional Development and President of SAFU’s Governing Board, to tilt the procurement process in favour of preselected companies linked to her associates.
EPPO established that the procurement procedure was manipulated in multiple ways. The project’s value was artificially raised to HRK 9.86 million (approx. €1.31 million), well above market rates for similar IT systems. The minister opted for a negotiated procurement procedure without prior public notice, effectively limiting competition. The technical requirements of the tender were adjusted to match the software already developed by the suspect companies.
The procurement documents were subject to ex-ante control by SAFU, an agency under the minister’s influence. The then-director of SAFU reportedly complied with the minister’s informal instruction not to challenge the procedure, despite clear violations of public procurement law.
In October 2017, the Croatian State Commission for the Supervision of Public Procurement Procedures annulled the irregular procedure, citing breaches of legal norms. Despite this, the minister and her associates continued to pursue the award of the contract in 2018 through an open procedure.
Eventually, the contract was awarded to a company linked to one of the two business suspects, a close associate of the original intended beneficiary. The contract was concluded at an inflated price of HRK 12.99 million (approx. €1.73 million), although the realistic cost of the system was later estimated at around HRK 2 million (€265,000).
Funds disbursed through this contract were partially financed (85%) by the EU’s Operational Programme Competitiveness and Cohesion. After the payments were made, significant portions were diverted to accounts held by the suspects or withdrawn in cash.
EPPO estimates the total financial damage at €1 million to the EU budget and €300,000 to the Croatian state.
The criminal proceedings were based on a joint investigation by EPPO, the European Anti-Fraud Office (OLAF), Croatia’s National Police Office for the Suppression of Corruption and Organised Crime, and the Tax Administration’s Financial Investigation Unit.
Caption: 7 June 2017. Gabrijela Zalac at the rostrum at the European Commission/EC – Audiovisual Service
Updated: June 13, 2025 - 05:24
