"When we went out in the field in election campaigns to prepare mini-assemblies or other activities attended by the party leadership, we didn't take per diems but were paid lump sums for expenses. All bills were subsequently sent to the accounting office," Matkovic told the Zagreb County Court.

She is a former close associate of one of the defendants, former Prime Minister and HDZ (Croatian Democratic Union) president Ivo Sanader, who was mentioned in the case as one of the party officials who received money from the former ruling party's slush fund.

Matkovic said she did not take the lump sum every month but several times a year and that she spent her own money for party-related business many times, as she was president of the HDZ Women's Community, deputy director of the election headquarters involved in all campaigns, and secretary for political marketing.

When the prosecutor showed her a payment slip to the amount of HRK 16,000 with her signature, Matkovic said it was for the expenses of the HDZ Women's Community and that she did not recall the slip saying "fee for May and June."

Matkovic confirmed that compensation was paid to some HDZ female staff who were employed in the government after the party won the 2003 election, but mainly because the government salary was much lower than the HDZ salary and they often came to the party after hours to help the staff who had replaced them.

"After a while they asked if they would be paid for that. I thought their request was justified, asked the president, who said he agreed and that I should arrange everything with the secretary-general," Matkovic said, adding that she did not know what kind of contract those women had because the secretary-general's office was in charge of everything regarding payments.

Responding to questions from the prosecution, she confirmed that under a decision of the secretary-general's office, the HDZ bought clothes for its staff and later for some officials, including herself.

"They were work clothes and I suppose everything was paid from the giro account because the decision on the purchase was made by the party leadership."

Apart from refuting claims by witnesses and defendants who said that all of the above was paid from the party's slush fund, Matkovic said the party's presidency discussed business matters and the hiring of singers for election campaigns, contrary to what was recently said by former HDZ president Jadranka Kosor, but that there was no mention of their fees.

"All interested singers mainly came recommended by eminent party members and were sent to the secretary-general's office which was in charge of financial operations. I suppose some HDZ sympathisers performed for free."

Responding to a question from the HDZ's counsel, Matkovic said that as deputy director of the election headquarters she never contacted singer Marko Perkovic Thompson who, according to depositions made during investigation, received more than half a million euros before the 2007 election so as not to perform in the campaign.

"There was no talk of him performing for the HDZ or not performing," Matkovic said, adding that she first heard of the party's dealings with the Fimi Media private marketing agency when the media broke the story.

Apart from Sanader, the other defendants in the case are the HDZ, the first political party in Croatia accused of corruption, former HDZ treasurer Mladen Barisic, Sanader's spokesman Ratko Macek, former HDZ accountant Branka Pavosevic, and Fimi Media owner Nevenka Jurak.

All but Sanader and Macek pleaded guilty to siphoning about HRK 70 million from state institutions and companies for the HDZ's slush fund. The party's counsel claims the slush fund was created without the knowledge of the party's bodies.

The main hearing resumes on Tuesday with the testimony of former party accountant Marica Glavas.