The Song of the Insider

At the heart of every great criminal enterprise, prosecutors will tell you, is an insider willing to sing. In Slobodan Milosevic’s Yugoslavia, potential informers were terrorized into silence by some of the most expert hit men in Europe. But with the ex-President behind bars, one man has emerged as stool pigeon No. 1. Mihalj Kertes, an unctuous 53-year-old of Hungarian descent, was head of the federal customs bureau in Belgrade — an unremarkable post in a normal country, but one that in Serbia placed him at the heart of an illegal network that extended to Milosevic, his inner circle and as far as Bosnia and Croatia.

By imposing a variety of quasi-legal levies at Serbia’s borders, Kertes amassed billions of dollars in cash and confiscated property, which he then redistributed to Milosevic and his top aides for use in whatever project the regime had going — from electoral campaigns to, allegedly, ethnic cleansing in Bosnia. Significantly, he kept receipts. “Kertes was the second-most important man in the country,” recalls Dragan Vasiljkovic, a former paramilitary trainer from the Balkan wars who led the armed squad that detained the customs chief on the day after Serbia’s October revolution as he frantically shredded documents in his office. “I knew that if you arrested him then Milosevic was gone.”

It took a few months, but that hasn’t proved an exaggeration. Last week, Milosevic’s lawyer Toma Fila told Time that most of the evidence in charges against Milosevic came in signed testimony from Kertes over the past several months. “They would hardly have a case without him,” he said. On the surface those charges may seem trifling. Milosevic is accused of embezzlement, abuse of office and defrauding his government of $100 million.

But the indictment addresses the lifeblood of a uniquely corrupt regime. By shedding light on the Byzantine sources of support for a government whose workings have long remained mysterious to the outside world, it may help the country unravel responsibility for the crimes of the past decade, not only in Serbia but everywhere the wars of the former Yugoslavia were fought.

There is the larger question of Milosevic’s role in war crimes. The ex-President’s startling admission — made last week in a written response to the charges — that the money from Kertes’ office was used not for personal gain but to fund Serb rebel armies in Croatia and Bosnia was the first time that the strongman had acknowledged Belgrade’s financial role in fomenting the Balkan wars.

Once one of Milosevic’s closest confidants, Kertes swore in 1991 that he “was ready to fight for the President until the last drop of my Hungarian blood.” Later, he reportedly helped organize several groups of Serb paramilitaries, including the notorious Red Berets, that spearheaded ethnic cleansing campaigns in Croatia and Bosnia.

As a reward for his staunch support, Milosevic installed Kertes as customs chief at the height of the Bosnian war in 1994. “The customs service was a crucial part of Milosevic’s system, almost as important as the police,” recalls Mladjan Dinkic, recently appointed head of the Yugoslav Central Bank and the author of a book on the regime’s financial improprieties. “It was Milosevic’s primary source of cash, and it never ran dry.” Last week, investigators estimated that between 1994 and 2000 as much as $4 billion passed through Kertes’ hands to Milosevic’s inner circle.

One of the last receipts was written out to a favorite of Milosevic’s wife, Mira, for 2 million deutsche marks ($900,000) on Oct. 4, 2000 — the day before the revolution. When Dragan and his armed men raided Kertes’ offices two days later, they found a trove that included $1.3 million in deutsche marks and Yugoslav dinars, 15 sniper rifles, 10 bulletproof luxury cars, and, in a safe, 7 kg of high-grade heroin.

Kertes and the people around him profited immensely from his position. In his home town of Backa Palanka on the Croatian border, he made sure his friends got jobs and even doled out gifts to kindergarten children from vast warehouses built in town to house confiscated goods. The pork barrel paid off. In last September’s elections, Backa Palanka was one of the only districts in the country to vote Milosevic.

Kertes claims that all the perks came with a price. In the only interview he has given since his removal from office, he told Belgrade’s weekly Nedeljni Telegraf that as customs chief he could never step down for fear of recriminations from former associates: “I knew that there were only two ways out of that office,” he said, “to prison or to the loony bin.”

In the end, he got a little of both. Shortly after his arrest last year, police say he suffered a nervous breakdown and was hospitalized. One suspected cause, an insider told Time: clinical claustrophobia. Like others close to Milosevic, he also feared for his own and his family’s safety and may have calculated that he would be better off with the new powers than prey to hired hit teams on the streets of Belgrade. He remains the only ex-official to have been charged but not yet jailed. There are other canaries that may be ready to sing. Last week, Prime Minister Zoran Djindjic said that Rade Markovic, former chief of the security services arrested in February, was cooperating with investigators.

Kertes may have helped with Markovic’s arrest, since both appear to have been involved in different capacities in an assassination attempt on opposition leader Vuk Draskovic in 1999. Police are attempting to document who ordered that hit — in which a truck slammed into Draskovic’s convoy on a Serbian highway, killing four in his entourage — as well as several other notable assassinations which occurred during the panicky last months of the regime. Milosevic’s role in those killings has long been suspected but never confirmed. If convicted on those more serious charges Milosevic and others could face the death penalty, though Djindjic last week said that in the ex-President’s case he thought execution unlikely.

U.N. prosecutors, meanwhile, have renewed their insistence that Milosevic be handed over immediately to the Hague to be tried for war crimes. A second indictment, for crimes committed in Bosnia, is now being prepared and will probably be completed by summer. While court spokesman and political adviser Jean-Jacques Joris refused to comment on an ongoing investigation, he did say that Kertes’ public testimony so far had been noted. “Obviously, Kertes is someone who would be in a position to give interesting information,” he said.

Kertes, for his part, remains under heavy police guard at an undisclosed location somewhere in Belgrade. He continues to testify for local investigators and is reportedly suffering from nervous exhaustion. His anxiety is understandable. Only 15 ex-officials have been arrested thus far. The rest would pay dearly to know where he is.