First Bank – First Family

First Bank had all the advantages. It was controlled by the Prime Ministers family. It got huge deposits including government money. That money was then loaned out to friends and business partners of the First Family. But it was poorly managed and when it wouldn't listen to regulators, it only made the situation worse. But in the end, it wasn't the First Family who paid. It was the people of Montenegro.

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Zavala: Cape Corruption New

First Bank loan funds were used in illegal construction on Cape Zavala and a waterpark that never happened. Both projects were linked to ruling party vice president and former President of Serbia and Montenegro Svetozar Marovic and members of his family.

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Saving the Bank at Any Cost

Despite the advice of the World Bank, the government of Montenegro refused to seize the bank controlled by the family of former Prime Minister Milo Djukanovic even though a low interest loan hung in the balance. Instead, it spent two years trying to remove government funds from the ailing bank. As a result, the government had to take high interest commercial loans. Again, the state chose the interests of First Bank over the interests of the people.

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Bailout: Protecting the First Family’s Investment

Then Finance Minister Igor Luksic promised that a bailout of First Bank would be overseen by regulators but instead, the first family’s bank was allowed to do whatever it wanted. And when it came time to pay back tax payers, the majority of the debt was simply switched to another governmental agency.

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Banking above the Law

An analysis of Central Bank reports shows that First Bank systematically broke a number of major laws and regulations governing the banking sector including banking law, anti-money laundering law, generally accepted accounting practices and reporting standards.

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Best Man, Best Loan Terms

Vuk Rajkovic was one of the people in charge of overseeing First Bank’s operations and ensuring it was compliant with banking regulations in 2007. But Central Bank documents show his case represents one of First Bank’s flagrant violations of the rules.

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First Bank: Let’s Make a Deal

Some of the loans given by First Bank were not issued according to proper banking practice, according to the Central Bank examiners.  A significant number of loans, maybe even two thirds, were approved to family members, shareholders, business partners, and other parties connected to the bank, according to PricewaterhouseCoopers.

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The Banking Clan

Former Prime Minister Milo Djukanovic hasn't been truthful about where his consulting firm Global Montenegro got its startup loan. It came from his family controlled First Bank, the same bank whose mismanagement led to a taxpayer bailout. Other family members also got great deals from the bank.

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First Bank Helped Micunovic Family

First Bank financed a huge €4.6 million line of credit in 2008 for Svetlana Micunovic, wife of controversial casino owner Branislav Micunovic, without checking her finances, without collateral and without paperwork.  They also gave Micunovic’s company Dzek Pot, which had posted significant losses for two years, a €200,000 loan guarantee without conducting any financial analysis or guaranteeing the credit.

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Paying for Madonna, Cheating Montenegrins

Montenegrin taxpayers wound up footing the €4.3 million bill for Madonna’s Balkan debut in 2008. And the real company behind the event was First Bank, according to documents obtained by OCCRP. The concert not only broke promises that no public money would be used, it also depleted First Bank’s resources at a time it was already unable to honor requests for money from its own depositors.

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