The Dangers of Lending Money to Croatian Consulate Staff

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Corruption and low ethical and moral standards survive and thrive when people do not talk about what has happened to them. People keep quiet about how they got cheated (or swindled or conned or exploited) because they feel embarrassed. When noone speaks about how they got cheated we do not know how widespread the problems are. The wrongdoers can go from victim to victim with impunity. Only when we know how widespread problems are we can allocate time and resources to fixing the problems.

I will publicly admit that I lost money on a loan made to a Consul First Class. I am embarrassed about it, but I will talk about it so that this might spark further discussion. I admit that I was a chump (part fool and part idiot). When I lent the money I drafted a loan agreement but never had it signed because I felt that it would be insulting to the Consul as a representative of Croatia and embarrassing for me because I was showing that I did not trust someone who would hopefully be a business partner in the future. I made a mistake in trusting someone.

My story - I lent money, $1,600 in total in November 2010, to a Consul First Class and the individual did not repay the loan, in full, as promised before returning to Croatia. The loan was supposed to be repaid in four monthly instalments of $400 with the final payment being made in April 2011. Unfortunately the loan was not repaid, in full, ten months later in October with $300 still unpaid. Over the ten months, other small debt obligations and loan interest accrued and the total owed was $534. I admit that this is not about a large sum of money, it is about a matter of principle.

One thing that I feel fortunate about is that I did not lend this individual $8,000 in March when she needed money to pay off her maxed out credit cards. The Consul told me that she had tried to get a line of credit at her bank, but couldn't due to her status in Canada.

The following are issues that you need to take into consideration, when asked to lend money to someone in the Consular system:

  1. The Ministry can’t help you. The Consular system does not have any internal mediation processes to help resolve problems (financial or others) between staff and local citizens.
  2. You have to go through civil court to resolve the problem. The first problem is to determine whether you sue them in your home country or in Croatia? Even if you win, it will be very difficult to collect your money.
  3. The time and cost associated with civil court decrease the economic viability of this option. There is a danger you might end up spending more money on court costs than the amount of the original loan. You can demand court costs, but there is no guarantee that the judge will award you court costs if you win.
  4. You do not know when the Consulate employee will return to Croatia. The person that owes you money could return to Croatia, with impunity, without you even knowing that they have returned to Croatia. One day you might call and the phone number will no longer be in service.
  5. The Consulate staff can hide behind a myriad of diplomatic bureaucracy to evade the issue and attempts at problem resolution.
  6. Depending on how vindictive the diplomat is, they can potentially cause you problems through misuse of the bureaucratic resources available to them.

How many bad apples are there in the Consular system? Hopefully very few, but it is the bad apples that are most active in taking advantage of people and that is why you should be careful when asked for a loan. It is these bad apples that give the whole Consular system a black eye.

My warning to others is to be careful about lending money to Consulate staff. Just because they are diplomats does not necessarily mean that they are good people that can be trusted. They are, after all, just Croatian government employees and we all know the sad state of ethics and morals in the Croatian government. My recommendation is that you do not lend money to Consul employees without taking into consideration the issues I address above.

In my opinion, make loans only if you can afford losing the money and you do not mind losing the money - because you might lose it and there might be very little you can do about it!

Have you had an experience you would like to share?
Add your story so that we can discover how big this problem might be.

Is this the first time that a Consular employee had problems with money? No.
Here are some stories about another diplomat that had money problems:

The following is a copy of the letter that I sent to the Minister Jandrokovic with recommendations that might help prevent this sort of money related issue from recurring and others being taken advantage of.

In my opinion, MVPEI staff working outside of Croatia should only be taking loans from commercial lending institutions either in the country they are working in or in Croatia.

Željko Zidarić
Mississauga Ontario

September 30, 2011

Ministar Gordan Jandroković
Ministarstvo vanjskih poslova i europskih integracija Republike Hrvatske
Trg Nikole Šubića Zrinskog 7 - 8
10000 Zagreb

Dear Ministar Jandroković,

Over the course of the last few months I suffered a financial loss, due to debts which were not repaid by a consular staff member. I have identified potentially embarrassing weaknesses in the Croatian consular system. With the goal of helping improve the integrity of the consular system (and our faith in the system) I submit to you recommendations for small improvements, which can make a big difference in the moral and ethical standards of the Consular system.

The weakness: I understand that there is a Code of Ethics in the Croatian Ministry of Foreign Affairs that sets broad standards for employees of the Ministry to adhere to (ex: they can't misuse their office or damage the reputation of the Ministry), however, it does not go into details such as borrowing money.

Based on my experience I recommend that MVPEI implement the following in order to protect other potential victims from financial abuse by consulate staff;
• a regulation to prevent Consular staff from soliciting or taking monetary loans from private citizens in the country in which they are working,
• a mediation process to resolve problems involving Consular staff, and
• optional, guidelines on acceptable debt levels.

Loan Regulation: Consular employees should receive monetary loans only from banks, either in the country they are working or in Croatia. Private individuals should not be solicited for loans by consul staff. Banks have the capability to deal with bad debt far better than do private individuals. It is embarrassing for the consular system when private individuals are asked to help consular staff solve financial problems.

Consular Mediation Process: It would be in the best interest of the consular system to solve problems between consular staff and private citizens expeditiously and confidentially through a consular mediation process. Quite often, as illustrated in my case, problem resolution with consular staff through the Canadian civil court system is not a viable option. Consular staff can hide behind a myriad of diplomatic bureaucracy and if they can leave the country before the case is heard in court the problem goes unresolved.

Personal Debt Levels: Only those individuals that are financially stable should represent Croatia in other countries. The financial status of consular employees

should be reviewed periodically and used as a vetting factor to determine who can work in the consular system around the world. Consulate employees with high debt levels have the potential to be a security risk in that they are open to corruption, influence and blackmail.

I base these recommendations on my unfortunate experience over the last year. I made a monetary loan to a Consul First Class based in the Consulate in Mississauga Canada. The original loan for $1,600, given in November 2010, was made primarily on the assumption that the individual in need of money was a Consul First Class and would be a low credit risk. In March 2011 the consul made a loan request for $8,000 to pay off credit cards, which were at their limit and the interest payments were very high, at almost 29%. I declined to provide the consul with the larger loan. Over the course of the last nine months, loan interest accrued and two smaller amounts of money were added to the total debt.

The debt, which was supposed to be repaid in four payments over four months, now ten months later, has not been repaid in full. After seeking advice from the Consulate I learned that there is nothing the consular system can do to help me resolve the problem and recover my money. The consul can return to Croatia with impunity.

During numerous attempts at setting up a time to meet for the final loan repayment, the consul appeared to me to be evasive. My initial assumption and fear was that the consul did not have the money and was going to return to Croatia without repaying me. When we finally met the consul, through a representative, refused to repay the full remaining amount of money owed and made an offer to settle for a low amount that I did not find reasonable and I did not accept. During the subsequent week I made communication attempts to settle the debt with a counter offer but the consul refused to acknowledge and discuss the loan settlement offer.

I believe that in the consular system there should be zero tolerance for any sort of low moral or ethical behavior, financial impropriety or opportunism of any sort. My loss, in the hundreds of dollars, is relatively low, but if someone can escape a $500 debt they can just as easily escape much larger debt obligations. I submit this, as a matter of principle. The amount, be it $5, $500 or $50,000 is irrelevant.

If we can’t trust the consular system and diplomats whom can we trust? I hope that my recommendations help improve the moral and ethical standards of the consular system and prevent other private individuals from being taken advantage of in the future. If the Ministry decides to investigate this issue feel free to contact me and I will answer any questions and provide further details.


Željko Zidarić

cc: Veselko Grubišić, Ambassador, Ottawa
cc: Ljubinko Matešić, Consul General, Mississauga
Željko Zidarić