“Respirator Scandal Vol.2”: A New Indictment is Being Prepared, Targeting the Health Insurance Fund of Republika Srpska

The Public Prosecutor’s Office of Republika Srpska is intensively investigating the procurement of 165 respirators purchased by Republika Srpska for 12.9 million KM excluding VAT during the COVID-19 pandemic, according to eTrafika.

Written by: eTrafika Investigative Team; Cover photo: Ajdin Kamber

As confirmed to eTrafika, Dejan Kusturić, the acting director of the Health Insurance Fund (FZO) of Republika Srpska, is under investigation by the prosecutor’s office. In accordance with the decision of the Republic Emergency Situations Headquarters on March 24, 2020, he was authorized to conclude contracts with suppliers for the procurement of respirators, medical supplies, and equipment needed for the healthcare system due to the COVID-19 pandemic.

Contracts with the Company “Medietik”

The initiation of the investigation is mentioned in the 2023 annual report of the Republic Prosecutor’s Office. It emphasizes that the Special Department for the Suppression of Corruption, Organized Crime, and the Most Severe Forms of Economic Crime has been actively working on uncovering and prosecuting individuals connected to corruption-related crimes committed during the pandemic. Special attention has been given to cases involving public procurement processes from the same period.

 Part of the 2023 Annual Report of the Republic Prosecutor’s Office

“Investigations have been opened against the responsible person in the Health Insurance Fund regarding the procurement of respirators and other medical equipment”, the report states.

In response to an inquiry from eTrafika, the secretary of the Republic Public Prosecutor’s Office, Dragica Tojagić, confirmed that the investigation is being conducted against Dejan Kusturić, without specifying the criminal offenses he is suspected of.

“I inform you that the case is in the investigation phase and that intensive work is being done to reach a prosecutorial decision, which the public will be timely informed about. A large number of witnesses have been heard so far, and certain expert examinations have been ordered, the results of which are awaited. Given the current phase of the case, it is not possible to disclose more information at this time”, Tojagić emphasized.

The Health Insurance Fund concluded contracts for the procurement of respirators with the company “Medietik” Ltd. Banjaluka and its director, Željko Babić. He is the husband of Ana Trišić Babić, an advisor to the President of Republika Srpska and the leader of SNSD, Milorad Dodik.

Contract between the Health Insurance Fund of Republika Srpska and the Company Medietik Ltd. Banjaluka

A total of 165 respirators and ventilators were procured, specifically:

— 85 portable respirators with accompanying carts JX100 at a price of 49,500 KM each without VAT (totaling 4,207,500 KM),

— 30 pneumatic electric respirators Boaray 5000 D at a price of 66,700 KM each without VAT (totaling 2,001,000 KM),

— 50 intensive care ventilators VG 70 at a price of 134,455.12 KM each without VAT (totaling 6,722,756 KM).

Procurements by the Health Insurance Fund of Republika Srpska (FZO RS)

In June 2020, Branislav Borenović, President of the PDP, along with opposition politicians in Republika Srpska, pointed out that the prices of respirators were unrealistically high and that these devices were paid for at triple the usual prices. The Health Insurance Fund responded that it was impossible to compare the prices of respirators and medical equipment before the pandemic with those during the explosive spread of the coronavirus, when the entire world was procuring the same goods. They also emphasized that an additional complicating factor was the European Union’s export ban on medical equipment to non-EU countries.

Despite acknowledging the Fund’s argument, opposition parties maintained that the prices were excessively high even under those circumstances, a claim supported by the ongoing investigation.

Other Contracts Under Investigation

However, as eTrafika has learned, the prices of the respirators are only one aspect of the investigation being conducted by the Prosecutor’s Office. Other contracts for the procurement of medical supplies and equipment signed by the Health Insurance Fund (FZO) are also being examined, particularly those related to the transportation of the procured respirators. Specifically, the contracts stipulated that suppliers were required to deliver the goods within a certain timeframe, yet despite this, the FZO also signed contracts for the transportation of medical goods and air freight, which was additionally paid for with citizens’ money. Regarding transportation, the FZO previously announced that contracts were signed with “Air Srbija”, “Milšped BH Ltd.” from Sarajevo, and “Balkan Global” from Bijeljina.

Perhaps the most crucial aspect of the investigation concerns the quality and intended use of the procured respirators. The FZO previously stated that all contracted respirators were recommended by healthcare professionals, specifically the opinion of the University Clinical Center of Republika Srpska, which indicated that these were medical devices meeting all quality standards and intended for the treatment of patients in intensive care.

Signing Contracts (Photo: Illustration/Source: Pixabay)

After procurement, the respirators were distributed to all hospitals in Republika Srpska according to their needs, where they remain to this day. Recently, at the prosecutor’s order, investigators conducted an inventory and verification of all delivered respirators to determine if they have the necessary certificates and meet required standards and minimum conditions. On-site investigations revealed that certain hospitals did not use some respirators or ventilators for treating COVID-19 patients during the pandemic. These expensive devices, which were not utilized, are currently gathering dust in storage facilities.

Due to this discovery, the prosecutor’s office decided to request expert evaluation of the respirators acquired by the Health Insurance Fund (FZO) of Republika Srpska. However, a shortage of experts in this field slowed down the investigation. The prosecutor’s office sought an opinion from Leandro Pecchia, a world-renowned biomedical engineering expert who holds a doctorate in the evaluation of medical devices and serves as a professor at a university in Italy. Pecchia is also a consultant to the Italian Ministry of Health for assessing medical equipment. He had previously been engaged by the Prosecutor’s Office of Bosnia and Herzegovina in the “Respirators” case involving former Prime Minister of the Federation of Bosnia and Herzegovina Fadil Novalić and others. Despite months of consideration and multiple urgencies from the Republic Prosecutor’s Office, Pecchia declined to conduct the evaluation of the respirators procured by the FZO. As a result, the prosecutor’s office has pursued alternative solutions outside of Bosnia and Herzegovina.

A source close to the prosecutor’s office revealed that this is essentially the final investigative step needed to make a definitive prosecutorial decision in the “Respirator Scandal Vol.2” affair. Based on the current results of the investigation, this is likely to lead to the indictment of Dejan Kusturić.

Dejan Kusturić (Photo: FZO RS)

Kusturić’s Response

Director of the Health Insurance Fund of Republika Srpska Dejan Kusturić told eTrafika that he is aware of certain criminal reports being filed, but he cannot comment on these allegations until he knows specifics.

“I am not fully informed about these matters. If the competent authorities are doing their job, then they are doing their job, and that’s it. Until I am presented with exactly what this is about, I have nothing to comment on”, Kusturić stated briefly.

Srđan Traljić from “Transparency International” Bosnia and Herzegovina expressed surprise that the investigation in this case has moved forward. He emphasized the need to clarify all details regarding the procurement of the mentioned respirators.

“We pointed out issues related to the procurement of these respirators at the time because the entire process unfolded similarly to the scenario in the Federation of Bosnia and Herzegovina. It’s important to uncover what happened behind the scenes and whether there is criminal responsibility for those who procured the respirators”, Traljić told eTrafika.

15 Years in Prison for Procurement of 100 Respirators

The “Respirator Scandal” in the Federation of Bosnia and Herzegovina was uncovered in April 2020, shortly after the company “Srebrena malina” from China procured 100 respirators at a price of 10.5 million KM. An investigation was launched the following month, and on December 30, 2020, the Court of Bosnia and Herzegovina confirmed the indictment.

Fadil Novalić Faces Trial; Photo: Mirko Slavković – Fotobaza.ba

The case concluded with a final verdict on January 26, 2024, sentencing former Prime Minister of the Federation of Bosnia and Herzegovina Fadil Novalić to four years in prison. Former Director of the Federal Civil Protection Administration Fahrudin Solak was sentenced to six years in prison, and the owner of “Srebrena malina”, Fikret Hodžić, received a five-year prison term. The legal entity “Srebrena malina” was fined 200,000 KM. They were found guilty of abuse of office or authority, with Solak also convicted of document forgery. They were acquitted of charges related to organized crime, money laundering, and falsifying or destroying business records.

Former Minister of Finance of the Federation of Bosnia and Herzegovina Jelka Miličević was acquitted of charges related to negligent work in public service.

The verdict noted the “highly questionable quality of the respirators” in this particular case, although the issue of quality was not decisive. The court emphasized that the crucial factor in the verdict was the unlawful path to procuring the contested respirators.

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