Serbia: Silence Over Anti-Corruption Council’s Report on State Advertising

The Anti-Corruption Council of the Government of Serbia, an advisory body, published in December 2015 the findings of yet another probe into key media issues in the country.

The report, which highlighted alarming practices in the area of the so-called state advertising, has so far been ignored by the government, which perhaps is no surprise given that the council’s previous reports on important media issues, such as transparency of ownership, attracted no meaningful response from the government.

The report on potential influence of public sector institutions on the media through payments for advertising and marketing services shows that advertising and marketing can be significant channels through which the state influences editorial policies of media outlets.

The report found that state institutions and state-owned companies spent EUR 60,9 million between 2011 and 2014 on advertising, marketing and donations to the media. The council also estimated that the real figure could be as high as EUR 840 million had the Serbian government and the largest public companies provided complete information on this type of expenditure to the council.

State Spends More Than Coca-Cola

“The state is the biggest source of funds on the media market. It spends some EUR 210 million of public money [annually] on buying commercial advertising space, while the entire commercial advertising market is worth EUR 160 million. This means that the state gives more for advertising than Coca-Cola and other large companies,” commented media expert Snježana Milivojević following the release of the report.

The council warned that advertising and marketing is used to create close ties between the media and the authorities, whereby the media gains financially while the authorities get servile coverage, a clientelist relationship in which media outlets are in effect blackmailed.

The council’s vice-president Miroslav Milićević pointed out problems identified on the sample of 124 public companies and institutions. Some public competitions were decided on an arbitrary basis. There are also indications that fictitious services were paid in some cases, with contracts signed with companies that do not have advertising as their primary activity. The report found that companies working for state institutions often also work for political parties. In some instances, public procurement procedures were made to look competitive and transparent whereas in reality they were anything but.

“Media that receive sponsorship funds report affirmatively on the sponsors. A blatant example of media control by means of financial sponsorships is the Electric Power Company of Serbia with its dependent companies,” Milićević said.

Asked whether the Government responded to the proposals submitted by the Council, Milićević said that “it is customary that (the Council) does not get responses and that the Government continues this tradition uninterruptedly.”

The situation on the media scene is worrying, according to the Council members, particularly in the view of the forthcoming early parliamentary elections, scheduled for April.

The new set of media laws adopted in 2014 has not achieved what was expected from them, commented Miroslava Milenović, a member of the council. She said that the council already voiced its concern that the privatization of state-owned outlets, stipulated by law, would not of itself solve media problems as the primary problem is non-transparent financing.

Assault on the Council Member

The government also ignored a damning 2015 council report on the non-transparent practices of a state-owned company in charge of exclusive public real estate. The report, however, triggered criminal charges against the council’s president.

In addition, police is yet to provide information on the physical assault on the council member Miroslava Milenović in November 2015 in the lobby of the building where she lives. Milenović believes that the attack was linked with the then forthcoming publication of the council’s report on the media in December.

The problems faced by the media sector in Serbia were also analysed in an extensive February 2015 report by the council on transparency of media ownership.

In this report, the council singled out five systematic problems that have paralyzed the system of public information in Serbia for years: non-transparency of media ownership; non-transparency of financing, economic influence through budget, tax reliefs and other indirect forms of public funding; problems in media privatisation and uncertain status of public services; censorship and self-censorship; and tabloidization. Except for a brief attempt by the minister of culture to discredit the report by implying it was “full of mistakes,” the government ignored the report’s findings.

Silent Treatment by Serbian Media

The two 2015 council reports on media issues followed a similarly alarming probe by the council in 2011 which established that 18 out of 30 most important outlets had unknown owners hidden behind off-shore companies. The findings were given a largely silent treatment by the Serbian media. The report was published when the now opposition Democratic Party led the government.

The council also found in 2011 that state institutions in Serbia used public budget to pay significant sums for advertising with the aim of personal and political party promotion, and that almost a quarter of the media income originated from the state sources.

As the 2011 report stated, marketing and PR agencies and production firms, mainly owned by party activists, high-ranking politicians and related persons, had a special role in media financing and keeping media dependent on political and commercial interest groups.