Milosevic Says Diverted Funds Financed Ethnic Serb Armies

As the legal noose tightened around him, former Yugoslav President Slobodan Milosevic declared from jail Monday that he didn’t steal state funds but secretly used them to finance ethnic Serbian armies in Bosnia and Croatia.

Milosevic’s comments, made in an appeal against being imprisoned while authorities investigate him on corruption charges, came as the Serbian Interior Ministry broadened its case by accusing him of inciting his bodyguards to fire at police who were trying to arrest him early Saturday.

Authorities also filed charges Monday against the former president’s 35-year-old daughter, Marija, who is accused of firing shots as her father was being taken away from the family’s residential compound early Sunday.

Milosevic’s defense against the theft charges was unlikely to help him fend off charges from the U.N. war crimes tribunal in The Hague. The court said Monday that it was preparing indictments against Milosevic for crimes allegedly committed during the wars in Croatia and Bosnia-Herzegovina--in addition to charges stemming from alleged atrocities against ethnic Albanians in Kosovo.

The United States on Monday cleared the way for $50 million in aid to Yugoslavia but dampened hopes for an international donors conference to raise far more aid--unless Belgrade cooperates further with the international tribunal.

The State Department did not specifically link the donors conference to Milosevic’s fate. But it left little doubt that his hand-over to the Hague court would be the key to additional funds to rebuild the war-ravaged country. Although no date had been set, the conference is widely expected to be held in early summer.

More indictments against Milosevic will be ready “in a few weeks or months” for crimes allegedly committed in the early 1990s in Bosnia and Croatia, tribunal spokeswoman Florence Hartmann said Monday. Genocide was among the charges being investigated, she said. After years of hostile resistance, authorities in Croatia and Bosnia are now cooperating with the investigations, she said.

Yugoslav investigators are trying to establish a link between Milosevic and a series of killings, Predrag Simic, foreign policy advisor to President Vojislav Kostunica, said Monday. These include the 1999 deaths of four people in the attempted killing of opposition leader Vuk Draskovic, the disappearance last year of former Serbian President Ivan Stambolic and the slaying of journalist Slavko Curuvija, Simic said. Serbia is the dominant republic of Yugoslavia.

Former secret police chief Rade Markovic, who has been arrested in the deaths of the Draskovic aides, “was subordinate to Mr. Milosevic,” Simic said. “It’s under investigation to find out if there was a direct connection.

“Milosevic was not alone. He was a member of a repressive, dictatorial system that was responsible for many things. . . . At this moment, it’s very important that our police seize all responsible,” he added. If that happens, the chances of having witnesses testify against Milosevic about more serious crimes than corruption and abuse of power also will be strengthened, Simic said.

Sreten Lukic, head of the Interior Ministry’s Public Security Department, told a news conference that Sinisa Vucinic, who led Milosevic’s personal security detail in his Belgrade villa during the weekend standoff, is under investigation on suspicion of preparing an “armed rebellion.” Vucinic also was arrested Sunday morning.

Milosevic’s lawyer, Toma Fila, said the former president’s daughter was charged with illegal weapons possession, questioned Monday and allowed to go home.

Traces of gunpowder were found on her hands, police said. She is suspected of firing shots, at least some of which hit the car of a government negotiator who had come to the family compound.

Even if Yugoslav authorities charge Milosevic with murder for some of the political killings, that seems unlikely to end international pressure to send him to The Hague.

State Department spokesman Richard Boucher said in Washington that it is a “top priority” for the international community to see Milosevic brought to justice. The United States would not be satisfied with having Milosevic tried only on charges of corruption and political assassination in his own country, he said.

Tentative Steps Acknowledged by U.S.

In making its decision Monday, the State Department acknowledged that the government of Kostunica had taken tentative steps to cooperate with the war crimes tribunal. Secretary of State Colin L. Powell noted that authorities in Belgrade, the Yugoslav and Serbian capital, have drafted a new law making it legal to work with the international court, although parliament has yet to pass it.

Milosevic’s declaration that the state funds he secretly acquired were used to fund wars in Bosnia and Croatia represents a bid for public support that is unlikely to help with his defense.

It also could hurt Yugoslavia’s defense against charges that as a country it shares blame for genocide, Vojin Dimitrijevic, one of Yugoslavia’s leading international law experts, said in an interview.

Bosnia has brought such a case against Yugoslavia in The Hague, accusing it of aiding Bosnian Serbs in committing genocide, Dimitrijevic said. Previously, the Yugoslav government has maintained that it had nothing to do with the Bosnian conflict.

“Now it’s obvious he controlled certain accounts,” Dimitrijevic continued. “He is afraid of being reduced from a national hero and leader to a common criminal. He’s saying ‘OK, there was enormous money, but I couldn’t tell about it, because I was doing it for patriotic reasons.’ ”

In his appeal Monday, a copy of which Fila released to journalists, Milosevic declared that money used for weapons, ammunition and other needs of Serbs fighting in Croatia and Bosnia could not be revealed in the government budget because it was a state secret.

Fila said at a news conference that some of the fund transfers organized by Milosevic are continuing, a charge that, if true, could raise fresh questions about the actions of the new authorities in Belgrade.

“To this very day, the army of Republika Srpska is being paid,” Fila said. “It’s being paid by that money” that was set aside by Milosevic for that purpose.

If tried and convicted on all the domestic charges so far made against him, Milosevic would face five to 15 years in prison.

He is accused of stealing state funds worth between $100 million and $390 million, depending on whether the sums are calculated at current or mid-1990s exchange rates and whether calculations are made according to official or black-market rates.

In Yugoslav System, Judge Has First Say

The U.N. International Criminal Tribunal for the Former Yugoslavia has indicted Milosevic for crimes against humanity stemming from his brutal crackdown on ethnic Albanians in Kosovo, a province of Serbia.

Under the Yugoslav legal system, a criminal suspect is first brought before an investigative judge, who examines the charges drawn up by police and prosecutors, reviews the evidence and decides whether the accused should be detained.

The judge then has up to six months to seek additional information, question the suspect and witnesses, and examine additional evidence. The judge then must make a determination whether the suspect should go to trial.

Nikola Barovic, a prominent Belgrade lawyer handling the case of Stambolic, who disappeared Aug. 25 while jogging, said the detail shown in the corruption indictment against Milosevic indicates that there is considerable documentary evidence to support the charges.

Suspicions that Milosevic bears responsibility in high-profile murder cases, however, may be more difficult to prove, Barovic said. Authorities have yet to indicate that they have any documentary or physical evidence linking Milosevic to those crimes, and most likely the only witnesses would be former aides and allies, who may be unwilling to testify against him.

Convicting Milosevic on the corruption charges won’t be easy either, Barovic predicted. However, he added that it appeared authorities had collected solid documentary evidence.

Barovic said he is “frightened that it will be harder” to link Milosevic to any cases involving slayings or disappearances because Markovic, the former secret police chief, remained in power after Milosevic’s ouster long enough to destroy evidence.

Barovic predicted that Milosevic’s corruption trial would begin in about four to six months, if there are no unexpected delays.

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Times staff writer Robin Wright in Washington contributed to this report.