THE highest general of the Serb-dominated Yugoslav Army is under investigation for alleged corruption and nepotism in an unprecedented scandal that is rocking the political and military hierarchies of the Serbia-Montenegro union.
Col. Gen. Zivota Panic, the Yugoslav Army chief of staff, denies the allegations, the most serious of which are that he arranged to have his son supply the military with potatoes, toilet paper, and other goods at prices higher than those set by the state.
Political analysts believe that whatever the veracity of the charges, deeper motives are at work in the case. The timing of the allegations, the extraordinary way in which they emerged, and the targeting of the chief of an officer corps in which corruption is reputedly rife leave no question that an intense power struggle is under way, analysts say.
With the rarified heights of the Yugoslav military still a highly secretive and privileged world, there is considerable disagreement over the precise alignment of the sides in contention.
The majority view is that President Slobodan Milosevic of Serbia is battling for political dominance with hard-line Serb nationalist generals angered by his decision to back the Vance-Owen peace plan for Bosnia-Herzegovina and shut off military aid to the Bosnian Serbs. "Milosevic has switched policy and the generals are not necessarily following him," says Stefan Niksic, a commentator. "He needs the Army to obey his rules and cut all relations with the Bosnian Serbs."
The hard-liners, most analysts say, are following Vojislav Seselj, a suspected war criminal and leader of the ultra-nationalist Serbian Radical Party, Serbia's number two party. Mr. Seselj has emerged as the main critic of Mr. Milosevic's "betrayal" of the Bosnian Serbs' goal of securing a self-declared state and merging it with the rump Yugoslav union of Serbia and Montenegro.
Seselj was the first to accuse General Panic, who backs the peace plan, of corruption. His persistent repetition of the charges forced the government last week to form a state investigation commission. "By attacking Panic, Seselj is attacking Milosevic and [Yugoslav President Dobrica] Cosic," says Aleksandar Vasevic, a reporter for independent B-92 Radio who maintains contacts in the Army.
Mihailo Markovic, a senior member of Milosevic's Socialist Party of Serbia (SPS), agrees that Seselj's allegations about Panic could only have been made with inside information from the highest ranks of the Army.
"Seselj probably already had some officers in the Army, at least some contact with them, because it is strange how he has some information which almost nobody else has," Mr. Markovic says.
He says a "considerable majority of generals" opposes Milosevic's new policy on Bosnia. But he denies that Milosevic faces an imminent threat to his grip on power because most people in Serbia support his apparent desire to end the economic drain resulting from UN sanctions.
Markovic says Seselj has not decided to withdraw the support his party provides to minority SPS governments at the Yugoslav federal and Serbian Republic levels. "But this might be a matter for the future. Mr. Milosevic and the socialists are not in such a stable situation now after accepting the Vance-Owen plan as they were before," he says.
Some analysts warned against accepting that contention.
They believe the conflict within the military is a consequence of natural rivalries between ambitious commanders seeking to move up in an Army still beset by turmoil from the collapse of former Yugoslavia.
Milosevic, these analysts say, is allowing the contest to rage to enhance the impression that he is under threat so that the international community does not press him to move too fast in coercing the Bosnian Serbs to end the war.
"I don't think we should go for the bait," a Western diplomat warns. "It would be better to let this play out so we could see who we are dealing with instead of this facade." Most observers speculate that senior generals, led by Gen. Bozidar Stefanovic, the airforce chief and a known nationalist, want to replace Panic with one of their own to force Milosevic to curtail his new policy.
ANALYSTS cite the chain of events that preceded the announcement of the investigation of Panic. Immediately after Milosevic endorsed the peace plan, two hard-line generals were forced to retire, including Gen. Nedeljko Boskovic, who headed military counter-intelligence, which is widely regarded as the coordinating center for aid to the Bosnian Serbs.
Seselj denounced the dismissals, saying they were ordered by the regime because General Boskovic was his prime source for confidential information inside the Army. Boskovic later said he had "no personal connections" with Seselj.
In an apparent counter-strike, Boskovic, General Stefanovic, and Branko Kostic, a former Yugoslav vice president who opposes the peace plan, were accused in a court suit of misusing their power, revealing military secrets, theft, and other charges.
The suit was filed by a group of senior military officers who were recently exonerated of espionage, sedition, and other charges in a case widely seen as a bid by Boskovic and Stefanovic to take unrivaled control of all military intelligence operations. That suit was quickly followed by Seselj's charges against Panic.
The Army general staff then issued a denial of the allegations in which it confirmed that Boskovic had been Seselj's mole and accused the radical leader of seeking to topple the leadership of the Army and the state.
The most probable outcome will be a stalemate, analysts say, now that the international community appears to be backing away from the Vance-Owen plan. Milosevic will almost certainly oust Panic to placate the hard-liners, they say.
"The top generals ... can threaten, but they can't do anything more in terms of endangering Milosevic," says Mr. Vasevic, the radio reporter. "The only force that could do that is the police, and they are with Milosevic."