Hadžić was involved in the Plitvice Lakes incident in late March 1991, beginning the Croatian War of Independence. On 25 June 1991, a group of eastern Slavonian Serbs organized a congress ("Velika narodna skupština Slavonije Baranje i Zapadnog Srema") where they decided to constitute a "Serb Autonomous Oblast" (SAO) of the region, the SAO Eastern Slavonia, Baranja and Western Syrmia, and also to separate the region from the Republic of Croatia, which was still part of Yugoslavia. Hadžić was elected as a candidate to lead the entity's government.