Scandal in Montenegro

The European Youth Chess Championship were opened in Budva, Montenegro, on 28th September, and will continue until 9th October. In the same city the European Youth Rapid and Blitz Championships were held on 24-27th September.

It is a great honour for all chess players, and for the country itself, that the Montenegro Chess Federation was awarded with organization of the prestigious events.

The purpose of this letter, however, is not the promotion of the event, but rather an attempt to inform the public about a reasonable suspicion that the Championships are misused to provide financial benefit for NGO “Potez” from Niksic and NGO “Centar za razvoj šaha” from Belgrade, both being front for the incumbent Montenegro Chess Federation President Vladimir Sakotic.

(ed.Sakotic is also Executive Director in European Chess Union)

Instead of having the Federation securing considerable funds from the organization of these, highly profitable, events, the funds are being transferred in non-transparent and illegal manner to the mentioned NGOs.

Stunned and outraged members of the below-signed chess clubs are calling on state authorities to investigate the whole case, given that the Board of Directors and Supervisory Board of MCF did not react in time, although they were informed on all controversial aspects of the business and the obvious conflict of interest with the President Vladimir Sakotic and member of the Board Miodrag Prijovic who, along with the positions in the Federation and at the same time, the former informally, and the latter officially, run the NGO “Potez” (before the Championships virtually unknown to the public).

By the contract signed without decision of the Board and without open tender, all rights for the organization of both Championships were transferred from the MCF to NGO “Potez” for a fee of 25,000 EUR.

During the tournament close to 2,000 young chess players and their companions will stay in Budva, counting for more than 20,000 overnight stays at very high prices (from 46 to 69 euros), of which a significant portion goes to the organizer (the exact amount can not be determined without look at the contract with the hotel, which is not presented to the MCF Board). In addition, all participants pay a hefty entry fee, and there are other sources of income (transport, organizational dues, sponsors …), and the profit is likely to exceed the amount of EUR 200,000.

Having this information in mind, it is clear that the Federation will receive only a minor share of the profits, while most of the profits end up with NGO “Potez” and people associated with it. It is unacceptable that an NGO earns enormous funds, and that a large part of the profits remain unaccounted for, and therefore untaxed, while the Federation receives only 25,000 EUR by the letter of an illegal contract.

It is also controversial the fact that participants from Serbia made payments in RSD through the NGO “Centar za razvoj šaha” from Belgrade, where the executive director is wife of MCF President Sakotic (ed. Jasna Sakotic), which is another case of apparent conflict of interest. Part of this money will never get to Montenegro, and it is unclear who and when decided to involve the other NGO in the project.

We believe that these actions are illegal and immoral, and particularly unfair to the MCF, the Montenegrin young chess players and parents and after all to our country. It is well known that the financial situation of the Chess Federation is uncertain. With the organization of the European Youth we had a possibility to secure the Federation funding for the next couple of years.

These funds are spilling into private pockets in an impertinent manner in front of the public eyes. We call on the state authorities to investigate our suspicions and to prevent any illegal acts.