Žalac was appointed Minister of Regional Development and EU funds on 19 October 2016 and was relieved of her duties on 19 July 2019 as part of a government reshuffle, when Tomislav Tolušić and Nada Murganić were also relieved of their ministerial duties.
In the meantime, the USKOK anti-corruption office started investigating Žalac for her possible involvement in several scandals, including one with a former state-secretary and party colleague, Josipa Rimac.
Žalac’s downfall began at the start of 2019 after her name was connected to several scandals. In March, she was caught driving without a valid driver’s licence and caused an accident in which a nine-year-old girl was injured. Then the media uncovered a scandal dubbed “Mercedes”.
A luxury Mercedes E Class with Zagreb number plates, owned by the Star rent-a-car company, which in turn is owned by Šibenik businessman Josip Stojanović Jolly, was seen parked in front of Žalac’s home in Vinkovci for a considerable time. At the time, Žalac stated that the vehicle was her parents’ and that she could not understand what all the fuss was about, and that she would register any vehicle she owned in her Declaration of Assets.
The media then found that Žalac had awarded a valuable contract to a company with just one employee, and in late August 2020 she came into the limelight again for her involvement in the windpark scandal, because she had allegedly urged Josipa Rimac to ‘fix’ her brother’s civil service exam.
In April this year, the USKOK anti-corruption office extended its investigation into Žalac, former state-secretary and one-time Knin mayor Josipa Rimac and six other accomplices suspected of receiving and offering bribes, influence peddling and abuse of position and power.
Presenting the details of the USKOK investigation, the media reported that Rimac and Žalac had pressured cabinet ministers and bankers to provide businessman Milenko Bašić with a state loan.
The former minister, who is still an active member of the HDZ presidency, was to have been employed in a state agency by the end of August, according to the media, but after USKOK launched the investigation, Žalac’s political career was pretty much over.
The media reported that in February this year Žalac started her own company for EU consulting and was awarded a grant from Vinkovci city authorities to start her business in the Business Incubator Centre.
In the latest scandal dubbed “Software”, Žalac was arrested under a warrant from the European Public Prosecutor’s Office in Croatia, together with the director of the Central Finance and Contracting Agency (SAFU) Tomislav Petric and two other suspects.
They are suspected of committing a crime related to the public procurement procedure for an IT system in the ministry, which was awarded to the Ampelos company while Žalac was the minister.
