Serbian Deputy PM resigns over US espionage affair

Serbia's deputy prime minister, Momcilo Perisic, resigned yesterday over allegations that he spied for the US. The saga has bolstered the popularity of President Vojislav Kostunica and army hardliners loyal to former President Slobodan Milosevic.

The affair unfolded amid increasing tension between Yugoslavia and the US, which has voiced concern over Belgrade's lack of cooperation with the International War Crimes Tribunal, currently trying Milosevic on genocide and other charges.

Yugoslavia faces a March 31 deadline set by Washington to cooperate with the West and the tribunal, or risk forfeiting up to $40 million in American aid.

The Serbian prime minister, Zoran Djindjic, at first sought to defend General Perisic, a former Yugoslav army chief-of-staff, after military intelligence agents arrested him Thursday together with John Neighbor, the US Embassy first secretary in Belgrade, whom Yugoslav officials have accused of working for the CIA.

But under pressure from Kostunica, Djindjic Monday asked his deputy to quit "so that his personal responsibility if any can be determined in a court procedure."

Perisic resigned, maintaining that he is innocent and the victim of a "monstrous" plot.

Army prosecutors believe that Perisic was passing documents or transcripts that may have established Milosevic's responsibility in the command structure of conflicts in wars in Bosnia and Croatia, intelligence sources say. He also is suspected of disclosing Yugoslav Army codes to crack signals communications used during the wars. Intelligence sources in Belgrade claimed that Perisic had received illicit payments of up to $250,000.

The Yugoslav foreign ministry apologized to Washington Saturday over the incident, during which Neighbor was roughed up, and detained for 15 hours.

During a meeting Monday with Djindjic and defense and foreign ministers from Serbia and the Yugoslav federation, President Kostunica presented videotaped evidence of Perisic's meetings with the American diplomat that convinced Djindjic that the Yugoslav intelligence service had sufficient evidence to convict his deputy, and that he would have to be sacrificed to avoid the Serbian government falling, political sources say.

The case was "an espionage scandal of enormous proportions that has shaken the very foundations of the state," Kostunica said. "So far the Serbian government has suffered no consequences and I expect Perisic to resign."

Political analysts said the affair was a severe blow to Djindjic in a long power struggle with Kostunica that began almost immediately after Mr. Milosevic was overthrown in a popular uprising in October 2000. Kostunica, a moderate nationalist, has sought to capitalize on support for Milosevic in Yugoslavia that has surged since the former president went on trial last month.

Djindjic's Democratic Party called for the dismissal of President Kostunica's national security advisor, Rade Bulatovic, and of the head of army intelligence, Gen. Aca Tomic, who it says ordered the surveillance of Neighbor and Perisic, who fell out with Milosevic in late 1998 when he refused to take the army into war with NATO. Djindjic said the incident shows that army intelligence is "out of control" and must be purged of hardliners loyal to Milosevic.

Bulatovic is a reported former member of the Yugoslav Left (JUL) party, founded by Milosevic's wife Mira Markovic. "Bulatovic and Tomic unlawfully organized the surveillance and monitoring of Perisic for several months, which no state body, no state official were informed about," a Democratic Party statement said.

Kostunica's staff is known to be concerned that the conviction of Milosevic for war crimes could lead to hefty war reparations claims from Bosnia and Croatia. Diplomatic sources dismiss suggestions that members of the Yugoslav presidential entourage are directly assisting Milosevic with intelligence for his defense, however. The US Embassy denies reports that Neighbor had received confidential documents from Perisic.

Kostunica said he wants to maintain good relations with Washington and expressed regret that the diplomat's nationality and name became public.