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DUTCH AMBASSADOR DIMS FURTHER BULGARIA’S SCHENGEN HOPES
Karel van Kesteren, Dutch Ambassador to Bulgaria, confirmed Monday his country’s position and intentions to block Bulgaria’s joining of the Schengen zone.
After a meeting with the candidates for president and vice president from the ruling Citizens for European Development of Bulgaria, GERB, party, Rosen Plevneliev, and Margarita Popova, the diplomat reiterated the Netherlands government would not agree on lifting border control on the grounds of the conclusions of the European Commission’s July report under the monitoring and verification mechanism in the area of justice and home affairs.
The Ambassador, however, stressed the issue with Bulgaria’s Schengen membership should not, in any way, be tied with the upcoming local and presidential elections on October 23.
“This is an assessment of Bulgaria, not only of the current cabinet, but of the previous one and the work of the Parliament. It would be wrong to say during the election campaign – this is your fault. It would be especially wrong regarding Margarita Popova, who in her capacity as Justice Minister applied significant effort. The Schengen issue should not become an election campaign issue,” Karel van Kesteren pointed out.
The diplomat’s words came in contradiction with Plevneliev’s statement that during the meeting Karel van Kesteren had said that the decision of the Dutch cabinet to veto the country’s Schengen membership is grounded in the actions of the previous Bulgarian cabinet, not the GERB one.
The reaction of the Bulgarian government came after Friday night the Dutch government decided that the Netherlands will veto Bulgaria and Romania’s accession to the Schengen Area at the meeting of the Council of the European Union on September 22, 2011.
The Dutch Ambassador stressed Monday that the Bulgarian government has achieved a lot, but not enough. He declined commenting on Tsvetanov’s words.
Migrant Remittances Still Lifeline to Bulgaria’s Economy
Remittances – money sent by Bulgarian migrants to family members back home – continue to increase slightly, but steadily despite the global downturn, data from the central bank shows. The net sum of the remittances from Bulgarians permanently working abroad totaled EUR 473 M during the first seven months of 2011, Novinite.com (Sofia News Agency) wrote.
Bulgarian immigrants sent home EUR 68.6 M in July alone, slightly down from EUR 77.4 in May, which was a record-high level of transfers since the Bulgarian National Bank started collecting data about remittances back in 2004, the bank said.
The increase in the amount of remittances from Bulgarians working abroad has been firm over the last few years. Total funds transferred to Bulgaria annually have gone up from EUR 693.90 M in 2008 to a whopping EUR 759.6 M in 2010. Studies show that the actual money sent home are about 30-40% higher that the official figures.
Pardew’s cable about Bulgarian Mafia 2005
C O N F I D E N T I A L SECTION 01 OF 09 SOFIA 001207
SIPDIS
HOMELAND SECURITY PLEASE PASS TO SECRET SERVICE
E.O. 12958: DECL: 07/07/2015
TAGS: PINR KCRM PGOV EINV ECON KCOR BU
SUBJECT: (U) BULGARIAN ORGANIZED CRIME (C-CN5-00054)
REF: A. A. STATE 99125 B. B. SOFIA 1046
Classified By: AMBASSADOR JAMES PARDEW, FOR REASON 1.4(C).
¶1. (U) This cable is in response to ref A request for information about organized crime in Bulgaria and the Balkans. Where direct sources are not cited, connections are largely based on information from operational contacts and open-source publications.
———————– OVERVIEW AND ACTIVITIES ———————–
¶2. (SBU) The strength and immunity from the law of organized crime (OC) groups is arguably the most serious problem in Bulgaria today. OC activities underlie corruption and the ineffectiveness of the legal system in Bulgaria, and inhibit the country’s economic development. Bulgarian OC is particularly involved in international money laundering, drug trafficking, and counterfeiting. OC groups range from local street thugs involved in extortion to sophisticated international narcotic dealers and money launderers. An estimated 118 organized crime groups were operating in Bulgaria at the end of 2004, according to the National Service for Combating Organized Crime (NSBOP) of the Bulgarian Ministry of Interior (MoI), though many of these groups are relatively small and the landscape is dominated by a handful of big players. Organized crime continues to be pervasive in many spheres of Bulgarian life, despite domestic and international efforts to combat it. To date, not a single major OC figure has been punished by the Bulgarian legal system, despite an on-going series of OC-related assassinations. U.S. law enforcement agencies with offices in Sofia are supporting the effort to reduce OC in Bulgaria. The Fraud Prevention Unit in Embassy Sofia’s Consular Section maintains a list of known and suspected major organized crime figures, and Embassy Sofia has an aggressive policy of preventing OC figures from traveling to the United States.
¶3. (SBU) OC groups are known to be involved in narcotics trafficking, prostitution, extortion and racketeering, various financial crimes, car theft, and trafficking in stolen automobiles. Human trafficking for sexual exploitation, counterfeiting, and debit and credit card fraud also are some of the most common criminal activities engaged in by Bulgarian organized crime. Crime groups involved in human trafficking are extremely mobile, and victims are often sold or traded amongst various groups. Many groups use a host of legitimate businesses domestically and abroad to launder the proceeds of their illegal activities. Several well-known businessmen linked to organized crime have parlayed their wealth into ownership of sports teams, property developments, and financial institutions. (An organized crime activity that received special attention due to its growth in 2004 was VAT (value-added tax) fraud. The Ministry of Finance estimated that VAT fraud cost the Bulgarian treasury over $700 million in losses annually.)
¶4. (SBU) Counterfeit currency — both U.S. dollar and, increasingly, Euro banknotes — is produced in Bulgaria and distributed primarily in France, Greece, Italy, and Spain by small groups of Bulgarians who return to Bulgaria immediately after making delivery. While there is thought to be cooperation between Bulgarian groups and other international organized crime groups, the couriers, middlemen and distributors are predominantly Bulgarian. The quality of counterfeit currency is continuously improving due to increasingly sophisticated printing facilities and the involvement of professional individuals with considerable printing skills. A June 2005 raid in northeast Bulgaria — part of a joint operation between Bulgarian law enforcement and the U.S. Secret Service — netted more than $3 million in high-quality counterfeit $100 banknotes (ref B). This was the second largest counterfeit seizure in European history.
¶5. (C) U.S.-based investigations of transnational crime groups have dismantled significant drug trafficking organizations run by Bulgarian nationals in Los Angeles and Tampa. These groups imported multi-kilo quantities of cocaine and multi-thousand doses of ecstasy into the United States. They had drug connections through Amsterdam and some financial backing of an Israeli national. While most members of these groups were convicted and imprisoned in the U.S., three who were charged in California and Florida are still wanted international fugitives who may have returned to Bulgaria to exploit the country’s current policy of not extraditing its citizens. The three fugitives are IVAYLO ANGELOV PETKOV (Bulgarian citizen born 18 May 1965), IVAN DOBREV (Bulgarian citizen born 25 May 1959), and STEFAN TZVETANOV STOYANOV (Bulgarian citizen born 9 January 1966).
¶6. (SBU) Other investigations in the U.S. have identified Bulgarian nationals manufacturing and selling false identity documents for use in organized bank fraud, mortgage fraud, credit card fraud, and alien smuggling.
————————————– WHO’S WHO IN BULGARIAN ORGANIZED CRIME ————————————–
¶7. (C) Since the fall of Communism in 1989 and the turbulent 1990s, Bulgaria’s organized crime scene has undergone major changes, much like the rest of Bulgaria’s economic, political, and social landscape. Once the doyen of Bulgarian organized crime, MULTIGRUP’s (MG) prominence has dramatically declined following the assassination of its leader, Iliya Pavlov in 2003. MG has actively tried to transform some activities into a legitimate business group focused on managing the vast assets it acquired during its heyday. The group hired a U.S. lobbyist to focus on legitimate enterprises and to improve MG’s image. Former Multigrup operatives went on to found Bulgaria’s two other major organized crime groupings, VIS and SIC. Both have since disbanded, but their remnants are still actively involved in organized criminal activity. However, the presence and clout of their remnants/successors appears to be in decline as members continually switch allegiances between groupings, depending on their personal economic interests.
The up-and-coming star of Bulgarian organized crime, the Varna-based TIM group, is increasingly resembling MULTIGRUP in its successful efforts to permeate as many legal and illegal sectors as possible; currently, TIM and its subsidiary business empire is one of the largest and most serious economic concerns in Bulgaria.
¶A. (C) TIM — The New Leader in Bulgarian OC Founded in Varna in 1993, TIM is thought to have been set up by about ten former marines who had been part of an elite military unit before it was disbanded in the early 1990s. TIM has filled the vacuum created by MG’s decline following Iliya Pavlov’s killing in 2003. The name of the grouping is thought to be derived from the first initials of its three main figures: TIHOMIR IVANOV MITEV (Bulgarian citizen born 10 October 1958), IVO KAMENOV GEORGIEV (Bulgarian citizen born 22 September 1969), and MARIN VELIKOV MITEV (Bulgarian citizen born 5 October 1957). It is believed that 12 people control all of TIM’s companies — which in 2003 were estimated to number over 150 and include over 10,000 employees — with each of the 12 holding fixed shares in the assets and running separate sectors of the group’s business empire. Despite trying to portray itself as a purely legitimate business grouping, TIM remains very secretive about its corporate structure and ownership, and its companies and divisions are entangled in a complex set of relationships. As an organized crime group, TIM is involved in a wide range of criminal activities, including extortion and racketeering, intimidation, prostitution, gambling, narcotics trafficking, car theft, and trafficking in stolen automobiles. TIM’s home base of Varna has a large Russian population, and TIM is thought to have connections to Russian organized crime, including the notorious Russian crime figure, MICHAEL CHORNY (see RUSSIAN INFLUENCE). Tihomir Mitev oversees TIM’s industrial operations. His older brother, Marin, controls TIM’s core business interests in Varna and the surrounding region, while Ivo Georgiev oversees TIM’s Sofia operations and the group’s financial interests. Other notable members of the group include MIROSLAV PETROV NESTOROV (Bulgarian citizen born 12 March 1964), who is in charge of the group’s strategic planning and also is director of TIM’s large service sector subsidiary MUSTANG HOLDINGS; YORDAN DIMITROV YORDANOV (Bulgarian citizen born 24 November 1974), who oversees most of TIM’s media interests and also sits on Mustang’s board; and Nikolai Bozhidarov Nikolov (Bulgarian citizen born 28 August 1949), Mustang’s CEO and husband of Varna’s chief architect and city planner. TIM’s initial activities involved collecting bad debts — a line of business that has contributed to the group’s negative public image but which still remains one of its main activities — and providing security services in the Varna region. In the mid-1990s, the group branched out to agriculture and foodstuffs, and its current interests include grain storage and poultry farming, as well as the SUHINDOL winery (through the SEVERCO-GAMZA company), which predominantly produces red wines for both domestic consumption and export. In Varna, TIM’s presence is seen and felt everywhere. Its media interests include M-SAT television (a Varna-based broadcaster available nationally by cable and satellite), five other cable television stations, two cable television operators, Alpha Radio (also available nationally), “Cherno More” newspaper (the largest circulation newspaper in Varna and its surrounding region), and the advertising agency servicing these media interests. TIM also owns a chain of restaurants, cinemas, video rental shops, sports clubs, Internet gaming clubs, and bingo halls. The recently-launched, large-scale ALLEY ONE project plans to build seven hotels, 500 eating and entertainment facilities, and 300 shops on a 250-acre tract on the Black Sea coast near Varna. TIM controls some of the largest quarries of inert materials in Bulgaria, and through its trading company, CHIMIMPORT, it also has a significant share of the production and trade in fertilizers, petroleum products, and chemicals. TIM’s takeover of CENTRAL COOPERATIVE BANK (CCB), the group’s largest acquisition to date, was facilitated through Chimimport. After acquiring CCB, TIM continued to expand its financial sector operations by acquiring specialized financial service companies, including the insurance company ARMEETS. Again going through Chimimport, in 2002, TIM acquired a majority stake in Newton Financial Management BG, owner of the Bulgarian pension insurance company SILA. Newton Financial Management BG has since been renamed CCB GROUP ASSETS MANAGEMENT. TIM has used its substantial financial sector presence to offer one-stop shopping of combined banking, insurance, and pension services. In 2003, Chimimport bought 49 percent of Bulgaria’s second-largest air carrier, HEMUS AIR, later taking over 100 percent ownership of Hemus. In 2004, Chimimport also acquired 100 percent of a smaller airline, VIAGGIO; the takeover was approved by Viaggio’s largest shareholder, TODOR BATKOV (see RUSSIAN INFLUENCE), Michael Chorny’s lawyer and personal representative. With its combined interests in Hemus and Viaggio, TIM is thought to have its sights set on Bulgaria’s soon-to-be-privatized flag carrier, BULGARIA AIR.
¶B. (C) VAI HOLDINGS (formerly VIS and VIS 2) Founded in 1991 by a former wrestler, Vasil Iliev, the group’s initial name, VIS, was an acronym for Vasil Iliev Security. After the group’s license to carry out security services was revoked, the group was renamed VIS 2. In 1994, Iliev set up the IMPERIAL brokerage company in Vratsa. In 1995, Iliev was shot dead, and his younger brother, GEORGI ANDREEV ILIEV (Bulgarian citizen born 22 July 1966, also known as “JORO”), took over the leadership of VIS 2, which has since been renamed VAI HOLDINGS. While “Joro” Iliev is the recognized leader of VAI, his lieutenant, NIKOLAI MIRCHOV TSVETIN (Bulgarian citizen born 27 February 1965, also known as “THE TWIN” and “KOKO”), is thought to be in charge of most of the group’s companies and activities. Other high-ranking members of VAI include ANTON BOYANOV and PLAMEN VASILEV TIMEV (Bulgarian citizen born 2 March 1952, also known as “GANDI”). In November 2003, another high-ranking member of VAI, METODI ZLATANOV METODIEV (Bulgarian citizen born 12 October 1965, also known as “METO ILIYANSKI”), disappeared; while police believe he was kidnapped and possibly killed, it is also possible he is in hiding. Before he was shot dead in Amsterdam in December 2003, KONSTANTIN DIMITROV (Bulgarian citizen born 21 November 1970, also known as “SAMOKOVETSA”) was one of the biggest smugglers in Bulgaria and the country’s top drug lord. Georgi Iliev, a relative of Dimitrov’s, was also his best man. After Dimitrov’s murder, VAI retained control of the drug market through ANTON PETROV MILTENOV (Bulgarian citizen born 28 October 1973, also known as “THE BEAK”), who is thought to have inherited Dimitrov’s smuggling and drugs operations. Another of Georgi Iliev’s close friends, DIMITAR ILIEV DZHAMOV (Bulgarian citizen born 15 July 1960), is involved in local drug dealing in central and southern Bulgaria. Dzhamov, an importer of Russian natural gas, is also thought to be involved in money laundering and to have ties to Turkish organized crime through the Turkish businessman YAMAN HAKI NAMLY. A former wrestler, Dzhamov started out in organized crime as the driver of the late ILIYA PAVLOV (see MULTIGRUP). As the largest player in the drugs market, VAI controls trafficking routes, production facilities, and distribution networks. The group is also involved in trafficking stolen automobiles from Western Europe to the former Soviet Union. Its other criminal activities include extortion and racketeering, illegal arms trading, gambling, prostitution, and smuggling.VAI has extensive business interests in tourism, finance, entertainment, and manufacturing. It controls JUPITER insurance company, as well as SUNNY BEACH, one of Bulgaria’s largest resorts on the Black Sea coast north of Burgas. The group also owns a number of local soccer teams, and the XGROUND MODELING AGENCY is controlled by VAI through Georgi Iliev’s wife, MARIA DELCHEVA ILIEVA[1] (Bulgarian citizen born 25 May 1973, also known as MARIA DELCHEVA PENELOVA).
¶C. (C) INTERGROUP (formerly SIC) KRASIMIR ANDREEV MARINOV (Bulgarian citizen born 6 May 1964, also known as “THE BIG MARGIN”), the group’s current president and another former wrestler, founded SIC (and later INTERGROUP) with MLADEN MIHALEV (Bulgarian citizen born 13 October 1964, also known as “MADJO”), also a former wrestler, and RUMEN GOTZOV NIKOLOV (Bulgarian citizen born 26 May 1962, also known as “THE PASHA”). Nikolov is also connected to the UNION OF FORMER COMMANDOS (see below). The reported mastermind behind the group’s operations is VENTSISLAV DIMITROV STEFANOV (Bulgarian citizen born 28 November 1949). In April 2004, his son, DIMITAR VENTSISLAVOV DIMITROV (Bulgarian citizen born 15 September 1980) was kidnapped and has not been recovered. Intergroup’s illegal activities include narcotics (especially heroin), financial fraud (through its ties with the AMIGOS financial guarantee company), car thefts and trafficking in stolen automobiles, smuggling, extortion and racketeering, and prostitution. The group’s narcotics interests are handled mostly through its connections with IVAN TODOROV (see AMIGOS), who is thought to be one of the largest drug traffickers in the Balkans. KIRIL SOTIROV KIROV (Bulgarian citizen born 10 December 1953, also known as “THE JAPANESE”), known as the Roma drug baron, is connected to INTERGROUP and is also closely connected to IVAN TODOROV (see AMIGOS). Kirov, who is also involved in human trafficking and alien smuggling, barely survived a second assassination attempt in April 2005. Intergroup’s legal business interests range from sport teams (SLAVIA) to banking (FIRST EAST INTERNATIONAL BANK) and insurance to petroleum and metals trading to construction and real estate (SOFISKI IMOTI) to modeling (VISAGES). Ventsislav is the manager of the Slavia soccer team in Sofia. GEORGI LIALEV also serves on Slavia’s managing board. Lialev’s father, Traian Lialev, is Dean of the Law Faculty of Southwestern University in Blagoevgrad; through Lialev, Rumen Nikolov and Mladen Mihalev received law degrees. Georgi Lialev is also a business partner with RUMEN GAITANSKI (Bulgarian citizen, also known as “THE WOLF”), whose company, WOLF 96, also has connections with Intergroup. The Visages modeling agency was founded in 1994 by EVGENIYA GEORGIEVA KALKANDZHIEVA (Bulgarian citizen born 20 February 1975); she is believed to have close ties to Krasimir Marinov. The group’s insurance company, BUL INS, is the largest insurer in Bulgaria. One area where the group’s legal and illegal activities coalesced is in car theft and automobile insurance. Automobiles insured by Bul Ins display special identity stickers meant to protect them from being stolen; cars not insured by Bul Ins are considered fair game. Intergroup also controls UNION INSURANCE.
¶D. (C) MULTIGRUP (also known as Multigroup and MG) MG’s founder and president, ILIYA PAVLOV (Bulgarian-born, naturalized American citizen born 6 August 1960) was shot dead in Sofia on 7 March 2003. Once the largest organized crime group in Bulgaria, Pavlov started to move MG into legitimate businesses, comprised of hundreds of subsidiary companies with interests in natural resources and mining, finance, tourism, manufacturing, and food commodities. In 2001, Pavlov and his deputy, BOYANA GEORGIEVA POPOVA (Bulgarian citizen born 17 October 1960) established MG ASSET MANAGEMENT COMPANY (MG AM) to take over all of MG’s assets and adopt a legitimate, internationally-acceptable management structure. MG AM’s parent company, MG VENTURES (registered and headquartered in Delaware) was owned in equal parts by Pavlov and Popova. Following Pavlov’s murder, Popova became the group’s CEO and Pavlov’s 50 percent stake in MG Ventures was transferred to his widow, DARINA PAVLOVA (Bulgarian-born, naturalized American citizen), and children through the Pavlovi Trust. Pavlov’s father, PAVEL NAYDENOV (Bulgarian citizen born 16 June 1936), was once very active in MG’s management. However, following his son’s death and subsequent disputes with Popova and Pavlova, Naydenov resigned from his positions in MG and set up his own holding company, KREPOST 2002. In 2004, Popova announced that MG would start selling a large number of its assets in order to focus primarily on investment projects and tourism. There were also reports that Popova preferred to re-direct the group’s efforts from the Balkans to U.S.-based activities. While MG’s activities in the Balkans have significantly declined, one of its highest profile subsidiaries remains BALKANTOURIST, the largest tour operator in Bulgaria, catering especially to tourists from Western Europe. DIMITAR HRISTOV IVANOV (Bulgarian citizen born 19 April 1951) was the president of MG’s first subsidiary (MULTIART) in the early 1990s before becoming a vice president of MG under Pavlov. Since leaving MG, Ivanov is now the director of EVROPA HOLDINGS. Another former MG employee, SASHO GEORGIEV DONCHEV (Bulgarian citizen born 7 September 1953), is the executive director of OVERGAS (also known as OVERGAZ). Overgas was established in 1992 as a joint venture between MG and the Russian state-owned GAZPROM; the company quickly became the largest private importer and provider of natural gas in Bulgaria. Overgas is also involved in constructing and managing gas pipelines and other infrastructure. The company has links to VAI HOLDINGS through JUPITER INSURANCE, of which Overgas has a 35 percent stake; Jupiter’s activities include insurance for financial risk, cargo, and gas pipelines. YURI VYAKHIREV, the son of a former Gazprom director, REM VYAKHIREV, is a close associate of Donchev and also a partner in Overgas.
¶E. (C) UNION OF FORMER COMMANDOS (also known as SPARTAK) ALEXEI ILIEV PETROV (Bulgarian citizen born 23 April 1962) is a former officer in the elite special unit for combating terrorism. He and his grouping of former military commandos (also known as “berets”) are most actively involved in the insurance sector through LEVSKI SPARTAK INSURANCE (previously known as “APOLLO & BOLKAN” and “SPARTAK”). Petrov also owns the largest taxi company in Sofia, TAXI S EXPRESS, which has more than 3500 cars. It is believed that Petrov’s involvement in Taxi S Express, Levski Spartak, and other companies bearing the Spartak name have been disguised as Israeli investment; Petrov is closely linked to former Israeli ambassador to Sofia, DAVID KOEN. Another member of the group, ZLATOMIR IVANOV (Bulgarian citizen, also known as “THE BERET”) was a former director of APOLLO & BOLKAN and is currently director of ARKUS SECURITY. Ivanov oversees the group’s smuggling, extortion, and racketeering activities, among other illegal activities. The group is thought to have the largest share in Sofia’s escort and intimate services businesses, which are used as fronts for prostitution and trafficking in women for sexual exploitation.
¶F. (C) NOVE HOLDINGS VASIL KRUMOV BOZHKOV (Bulgarian citizen born 29 July 1956, also known as “THE SKULL”) founded his first company in 1990, before expanding to his current business empire, NOVE HOLDINGS, comprising over 30 companies and numerous subsidiaries. NOVE’s primary legal business interests include gambling (bingo halls, casinos, and the popular EUROFOOTBALL lottery) and duty free shops. Bozhkov also owns the CSKA soccer team in Sofia and the J MODELS modeling agency. He is also believed to control RISK ENGINEERING, which was originally part of the MG empire. Bozhkov’s numerous media connections include TOSHO TOSHEV (chief editor and managing director of TRUD, the largest-circulation daily newspaper in Bulgaria), KEVORK KEVORKIAN (popular television show host on state-owned BNT), and RADOSVET RADEV (owner of DARIK RADIO). In 2002, NOVE sold the majority share of Eurofootball lottery to the Greek billionaire SOKRATIS KOKALIS, reducing the holding’s share to 49 percent. Bozhkov publicly thanked prominent businessman SPAS RUSEV for facilitating the deal. Rusev is closely linked to the NMSS; as a close friend and personal advisor of Prime Minister Simeon Saxe-Coburg Gotha, Rusev is credited with putting together the NMSS economic team, including Milen Velchev (Finance Minister) and Nikolai Vassilev (Deputy Prime Minister and Minister for Transportation). NOVE’s casinos include the LONDON CASINO at the Radisson SAS Hotel in Sofia and the RILA CASINO at the Rila Hotel, also in Sofia. Bozhkov is thought to control the Rila Hotel, both through IRENA MARINOVA (director of the hotel’s owner, RIEL 99, and board member of the hotel’s management company), and through ANTONI NAUMOV (director of the hotel’s management company). Marinova is also a shareholder in BUL INS (see INTERGROUP), along with Bozhkov (through NOVE). Naumov and Bozhkov are partners in several companies, including CSKA basketball team. Bozhkov has used his influence to block the transfer of the approximately 49 percent of the Rila Hotel, subject of long-running property restitution case, claimed by Bulgaria’s Jewish community. Bozhkov’s illegal activities include money laundering, privatization fraud, intimidation, and extortion and racketeering. Bozhkov is also connected to INTERGROUP (through the company IGM, which he owns jointly with MLADEN MIHALEV, and NOVE’s shares in BUL INS) and to IVAN TODOROV (see INTERGROUP and AMIGOS).
¶G. (C) DZI (formerly Rosexim Bank) EMIL ALEXANDROV KYULEV (Bulgarian citizen born 5 June 1957) made his fortune through Tourist Sports Bank (also known as TS Bank), which went bankrupt under his leadership. In 1995, SIPDIS he founded the BULGARIAN-RUSSIAN INVESTMENT BANK (also known as BRI BANK), and, after leaving BRI Bank in 1997, Kyulev joined the board of directors of BULSTRAD INSURANCE. In 1998, Kyulev bought the Plovdiv-based Trakia Bank, which he re-registered as ROSEXIM BANK. Rosexim Bank’s largest client is the Bulgarian government, which channels all tax, customs, and excise payments through the bank. The bank also provides financial services to Russia’s LUKOIL and MOBILTEL (the largest mobile telephone operator in Bulgaria, also known as MTEL). In addition to Kyulev’s connections to MICHAEL CHORNY (see RUSSIAN INFLUENCE) through MTEL, TODOR BATKOV (Michael Chorny’s lawyer and personal representative), served on Rosexim Bank’s board of directors until 2003. In 2004, Rosexim Bank was renamed DZI BANK, finalizing the merger between Rosexim Bank and DZI, the former state-owned insurance company, which Kyulev acquired in 2002. Kyulev’s criminal activities include fraud and money laundering. Kyulev has recently employed a U.S. lobby group and public relations agency to clean up and manage his image. As part of his campaign to gain credibility and legitimacy, he has also recently established the DZI Foundation to combat human trafficking; Kyulev is suspected of using the foundation as a channel to launder money.
¶H. (C) LITEX COMMERCE Again a former wrestler and current member of the Bulgarian Wrestling Federation, GRISHNA DANAELOV[2] GANCHEV (Bulgarian citizen born 10 December 1962) owns a chain of gas stations and is one of the top three petroleum importers in Bulgaria. His company, LITEX COMMERCE, also owns the QUEEN brand of fruit juices. Ganchev was one of the first organized crime leaders to use a sports team to launder money, through the LITEX soccer team in Lovech. Litex also owns the Lovech-based VINAL winery, which produces wine for domestic consumption and export to Europe, as well as vodka for export. Litex’s illegal activities include petroleum smuggling, financial fraud and money laundering, and extortion and racketeering.
¶I. (C) MIG GROUP (also known as COOL PASS[3]) The MIG GROUP, headed by SLAVCHO PENCHEV BINEV (Bulgarian citizen born 10 December 1965, also known as “SLAVY”), owns more than 30 nightclubs, bars, and restaurants in Sofia, including the popular nightclubs BIAD, DALI, and BIBLIOTEKA. GEORGI STOYANOV (Bulgarian citizen) and MIHAIL STEFANOV (Bulgarian citizen) are “Slavy” Binev’s two deputies. The group’s business interests also include construction and tourism; it operates a travel agency as part of its COOL PLACE entertainment complex. The group’s criminal activities include prostitution, narcotics, and trafficking stolen automobiles.
¶J. (C) AMIGOS IVAN TODOROV (Bulgarian citizen born 27 December 1964, also known as “THE DOCTOR”) is no longer part of Amigos but still maintains close ties to group, especially for money laundering and other financial services. PETAR HRISTOV PETROV (Bulgarian citizen born 15 September 1969), a cousin of MLADEN MIHALEV (see INTERGROUP), is a close associate of Todorov, and is also actively involved in money laundering and other financial crimes.
¶K. (C) VUZRAZHDANE BUSINESS CLUB VUZRAZHDANE Business Club was founded in 2001 jointly by VASIL BOZHKOV (see NOVE HOLDINGS), EMIL KYULEV (see DZI), ILIYA PAVLOV (see MULTIGRUP), BORISLAV DIONISIEV, DOBROMIR GUSHTEROV, PETIO BLASKEV[4] (owner of the weekly newspaper 168 HOURS), TOSHO TOSHEV (chief editor and managing director of TRUD, the largest-circulation daily newspaper in Bulgaria), and RADOSVET RADEV (owner of DARIK RADIO). With Pavlov’s death in 2003, and the departure of Gushterov and Dionosiev in 2004, the business club does not maintain the same importance it once did, but it still serves as a forum for cooperation between a number of economic interests. Gushterov, the owner of OREL G insurance company, and Dionisiev left the club in 2004 when Gushterov and PETAR MANDJUKOV founded a rival club of entrepreneurs, also called Vuzrazhdane. Mandjukov, an arms trader, owns PM GROUP, the parent company of INFOMEDIA, PM PRESS (the publisher of the Socialist daily newspaper DUMA), and BALKAN BULGARIAN TELEVISION (BBT). MACHINEXPORT, a company owned by Mandjukov and Dionisiev, was named in the Duelfer Report for its connections to Saddam Hussein’s regime in Iraq.
¶L. (C) RUSSIAN INFLUENCE Russia continues to exercise significant influence over the Bulgarian economy through energy imports, including crude oil, natural gas and nuclear fuel. When Bulgaria’s only retail gas distributor, PETROL AD, was privatized, it came under the control of Russian businessman DENIS ERSHOV. ERSHOV was banned from entering Bulgaria in August 2000, having been cited as a threat to the country’s national security; however the ban was lifted in 2004 on Ershov’s appeal. Ershov, once vice president of one of the biggest exporters of Russian crude oil, established the NAFTEX group in 1991, of which PETROL AD became a part. Ershov was a member of the NAFTEX BULGARIA HOLDING (now PETROL HOLDING), and is a member of the PETROL AD Supervisory Board. Despite the fact that he is no longer the owner of Bulgarian telephone operator MOBILTEL (MTEL), Russian mobster MICHAEL CHORNY is thought to retain influence over the company through his ties to members of Austrian Mobiltel Holding. Acquired from Chorny by Austrian Mobiltel Holding and Austrian Bank BAWAG in 2002, MTEL was sold in July 2004 in the largest-ever leveraged buy-out in Central and Eastern Europe. The takeover was engineered through the Bulgarian joint stock company BIDCO. BIDCO shares the same office building with Chorny’s lawyer, TODOR BATKOV, who is still a member of MTEL’s board. Batkov and other representatives of Chorny allegedly put pressure on the Bulgarian Government to delay the issuing of the third GSM license to BTC in July 2004. Indeed, the Supreme Administrative Court decided 15 July 15 2004 to postpone the launch of the BTC GSM license. The court decision suggests that Chorny is still in control of MTEL, as the judge presiding over the Supreme Administrative Court panel for the BTC case also revoked the Government’s decision banning Chorny from entering the country. In addition, Chorny has connections to EMIL KYULEV (see DZI) through his interests in DZI BANK (formerly Rosexim Bank), which is owned by Kyulev. Todor Batkov served on Rosexim’s board of directors until 2003. CHORNY has also maintained influence over a number of companies by transferring ownership to Batkov. These entities include the LEVSKI football team, STANDARDT newspaper, and BANKYA PALACE hotel. LUKOIL’s representative in Bulgaria is VALENTIN ZLATEV. The Russian petroleum company is estimated to be the largest corporate taxpayer in Bulgaria. It also controls Russian oil exports to Bulgaria. Lukoil’s Bulgarian operations, through Zlatev, are suspected of strong ties to Russian intelligence and organized crime.
¶M. (C) AKB CORPORATION. The AKB CORPORATION, headed by NIKOLAI YORDANOV BANEV (Bulgarian citizen born 16 August 1959), was involved mainly in privatizing state-owned industries. Its primary illegal activities include privatization fraud and corruption.
—————————————- POLITICS: THE NEXUS WITH ORGANIZED CRIME —————————————-
¶8. (C) Organized crime has a corrupting influence on all Bulgarian institutions, including the government, parliament and judiciary. In an attempt to maintain their influence regardless of who is in power, OC figures donate to all the major political parties. As these figures have expanded into legitimate businesses, they have attempted — with some success — to buy their way into the corridors of power. During the 2001 general elections, a number of influential “businessmen,” including VASIL BOZHKOV and EMIL KYULEV, heavily financed and otherwise supported the NMSS campaign. At the beginning of his term in office in 2001, Prime Minister Simeon Saxe-Coburg Gotha held a high-profile meeting with members of Vuzrazhdane in which he invited Iliya Pavlov, Vasil Bozhkov, et al, to become part of a “business consultative council” advising the government. Later that year, Kyulev helped finance the successful presidential campaign of BSP leader Georgi Purvanov.
¶9. (C) Ahmed Dogan, the leader of the government’s junior coalition partner, attended Iliya Pavlov’s funeral in 2003, making no attempt to conceal his close relationship with the slain Multigrup chairman. During the 2005 election campaign, business interests with connections to OC (including LUKOIL and Sasho Donchev’s OVERGAS), Bozhkov, Kyulev, and others spread their support and money across the political spectrum, focusing primarily on the NMSS and the BSP, in an effort to ensure that their interests were protected whatever the outcome of the vote.
¶10. (C) Below the level of the national government and the leadership of the major political parties, OC “owns” a number of municipalities and individual members of parliament. This direct participation in politics — as opposed to bribery — is a relatively new development for Bulgarian OC. DOBROMIR GUSHTEROV, a founding member of Vuzrazhdane a major BSP sponsor, won a seat in parliament on the BSP ticket this year. Gushterov’s was one of several “insurance” companies engaged in extortion and racketeering in the years immediately following the collapse of communism. At the municipal level, a by-election earlier this year in the town of Svilingrad, on the Bulgarian-Turkish border, resulted in the complete takeover of the municipal government by figures who have made little attempt to conceal their links to powerful smuggling interests. Similarly in the regional center of Velingrad, OC figures control the municipal council and the mayor’s office. Nearly identical scenarios have played out in half a dozen smaller towns and villages across Bulgaria.
——- COMMENT ——-
¶11. (C) Despite continuing pressure from the U.S. and the EU, past Bulgarian governments have done little to reduce the presence of organized crime. As a result, OC has increased its influence and is able to operate with virtual impunity. The Bulgarian public recognizes OC’s corrupting influence, and people are clearly frustrated by the government’s inability or unwillingness to deal with the problem. We continue to provide technical assistance to reform-minded elements of the Bulgarian government and judiciary — and to speak out on the need to fight corruption and organized crime — but real political leverage on this issue lies with the EU. A delay in Bulgaria’s accession would be politically disastrous for the incoming government. If the EU uses this leverage to demand not only far-reaching judicial reform but effective implementation as well, there is reason to hope that the tide will slowly begin to turn against organized crime in the coming years.
PARDEW
Bulgaria’s Kaliakra boycott Levski game over referee appointment
Bulgaria’s Kaliakra boycotted their league match with Levski Sofia on Saturday in protest over the appointment of a referee for another weekend game.
Relegation-threatened Kaliakra were furious when Ivaylo Stoyanov was put in charge of the game between ninth-placed Cherno More Varna and CSKA Sofia, who are third, on Sunday.
Kaliakra complained about Stoyanov’s refereeing of their 1-0 home defeat by Slavia Sofia at the end of February and called for him to be punished by the Bulgarian federation.
“Instead of imposing a heavy ban on Stoyanov, the Bulgarian Football Union (BFU) “rewards” him with the appointment for such a crucial match,” Kaliakra boss Tsonko Tsonev said.
The BFU refereeing commission refused to replace Stoyanov.
Tsonev, who is also mayor of the Black sea town of Kavarna, informed match officials that the lack of ambulances available for the game was the formal reason for Saturday’s cancellation.
“I’m saddened to announce that there’s no ambulance at the stadium due to technical reasons,” Tsonev told the local bTV Action station that broadcasts Bulgarian league games.
Kaliakra instead organised an unofficial ‘friendly’ in which Levski midfielder Daniel Dimov suffered an ankle injury and had to be taken to hospital in a security car.
CLUBS REVOLT
Six top-flight teams, including Kaliakra, gathered in the capital city Sofia on Wednesday to express their opposition to the way they claim to have been treated by the BFU with local media calling the meeting “a revolt of the small clubs”.
“They should stop mocking us,” Tsonev said. “Basta (Enough) — as they say in Italian. We have to react in some way.”
Pirin Blagoevgrad and Vidima-Rakovski, the bottom two sides in the 16-team standings, supported Kaliakra’s boycott by delaying their league matches by several minutes on Saturday.
Earlier this week, referee Nikolay Yordanov was banned for two months after making mistakes in champions Litex Lovech’s 2-1 win at relegation-threatened Pirin.
“We’ll continue our protest if the BFU continues with their outrages,” Pirin president Emil Nakov said.
The BFU will discuss possible sanctions against Kaliakra next week and Levski are likely to be awarded a 3-0 win.
Kaliakra are 14th with 16 points from 18 matches. Levski are second on 38, eight points behind leaders Litex.
http://uk.eurosport.yahoo.com/19032011/2/bulgaria-kaliakra-boycott-game-referee-appointment.html
BULGARIA CURRENCY BOARD ARCHITECT SLAMS EURO AS ‘CREATURE OF POLITICS’
Steve Hanke, the architect of Bulgaria’s currency regime and one of the opponents of its eurozone aspirations, has slammed the single currency as ‘a creature of politics, not economics and finance’.
Steve Hanke, the architect of Bulgaria’s currency regime and one of the opponents of its eurozone aspirations, has slammed the single currency as ‘a creature of politics, not economics and finance’.
“The euro remains a creature of politics, not economics and finance. The hallmarks of this project have been more politicization, more centralization and more “harmonization”, Steve Hanke wrote in an article, which was published as part of a Wall Street Journal symposium on the future of the euro.
According to Hanke, who is a professor of applied economics at the Johns Hopkins University in Baltimore, the future of the single currency will depend on Europe’s avatars, but there are good reasons for the skeptics to remain skeptical.
Hanke has repeatedly argued that Bulgaria shouldn’t rush to adopt Europe’s common currency given the euro- region’s turmoil and the limited benefits of the switch.
The narrow technical benefits the country will receive will be very small, if any at all, and those can all be accommodated by just making the currency board even more orthodox and tighter than it is, Hanke claims.
Instead of a rush on the euro adoption, the renowned economist has recommended that the country focuses its efforts on improving competitiveness.
Public support for Bulgaria’s eurozone membership has been seriously dented following the troubling developments in the monetary union, brand new surveys has shown.
While several months before the end of last year the Bulgarian society was cut in two over calls for immediate introduction of the European single currency, a recent survey by the Open Society Institute has found out that those who oppose euro adoption now are majority.
The Currency Board regime in which Bulgaria operates, pegging the lev to the euro, enjoys great public support, according to the polls.
Bulgaria’s Finance Minister Simeon Djankov recently said that proposed constitutional amendments designed to bolster and guarantee Bulgaria’s financial stability will pave the way to the euro adoption.
He conceded however that euro adoption is no longer on top of his agenda and all efforts will be focused on maintaining the country’s financial stability.
Bulgaria’s center-right government revived at the end of last year its plans to apply to join the bloc’s exchange-rate mechanism, the so-called eurozone waiting room, after it was forced to drop the euro bid in April over a larger than expected 2009 deficit.
The government hopes to apply to join ERM II in the second half of 2011 after it has demonstrated that next year’s budget deficit will fall below the European Union’s ceiling of 3% of gross domestic product in line with the Maastricht criteria.
Joining the exchange-rate mechanism was assigned top priority for 2010 by the new Bulgarian center-right government, which was the reason why it stuck to tight financial policy at the end of 2009 and delayed payments to businesses in a bid to keep low the budget deficit.
Countries must be members of ERM II for two years before they can formally join the eurozone.
novinite.com
US Embassy Cables: Brussels Says Only Sticks Work with Bulgaria
Fresh diplomatic cables of the US Embassy in Sofia on WikiLeaks as published by theEl Pais newspaper
C O N F I D E N T I A L SECTION 01 OF 02 SOFIA 000325
SENSITIVE
SIPDIS
E.O. 12958: DECL: 06/22/2019
TAGS: PGOV, PREL, ECON, BU
SUBJECT: BULGARIA/EC MONITORING TEAM: “HOW DO YOU MAKE
THEM REFORM WHEN THEY DON’T WANT TO?”
REF: A. SOFIA 0225
B. 08 SOFIA 0365
C. 08 SOFIA 0499
Classified By: DCM Alex Karagiannis for reasons 1.4 (b) and (d).
1. (C) SUMMARY: XXXXXXXXXXXX (please strictly protect) confided that the Julyreport on Bulgaria‘s anti-crime and corruption efforts would be negative, but the EU political level would “water down” the tone of the final version. The report‘s release might be delayed until September because of the formation of a newCommission. In contrast to previous conversations, XXXXXXXXXXXX emotionally reflected Brussels, growing and by now extreme frustration with Sofia’s cosmetic fixes to get a “good report” while failing to undertake real reforms. He confirmed that the Dutch want to invoke the safeguard clause when the report is released and that others, including the Swedes who hold the next presidency, favor extending the Mechanism beyond its three-year mandate.
END SUMMARY.
2. (C) XXXXXXXXXXXX
——————————————
Judicial Reform — Fatigue and Frustration
——————————————
3. (C) XXXXXXXXXXXX said the monitors raised key issues with the GOB such as the appointment procedure for top judicial officials, vote buying, and progress in organized crime and high-level corruption cases. XXXXXXXXXXXX called the appointment/nomination procedure for the top judicial officials “non-transparent” because the vote on the nominees is secret and does not take into full account disciplinary actions against the nominees.
Furthermore, the process lacks real debate among the Supreme Judicial Council (SJC) members on the nominees’ qualifications and does not allow the members to release “opinions” on why they voted for or against a nominee. The non-transparent procedure permits the selection of corrupt and/or incompetent judges and prosecutors to the higher courts, perpetuating the cycle of incompetence and corruption in the Bulgarian judiciary.
XXXXXXXXXXXX said the entire team believes the Bulgarians only address issues in theCommission‘s report to get a “good report,” not to create a better judicial system.
For example, Prosecutor General Boris Velchev asked if his nomination of a certain person for a position in the prosecutor’s office would be recorded negatively in the upcoming Commission report. They replied to Velchev that if he thinks the nomination would be reported negatively, then it is a “good sign that it probably would be.”
XXXXXXXXXXXX added that Velchev often asks how he is perceived in Brussels when they discuss reforms in the prosecution service. Another example is that Sofia City Court has two courtrooms specifically available for hearing EU funds fraud cases, while available courtrooms for other cases are hard to come by.
4. (C) The Bulgarian government — especially PG Velchev and European Minister Passy — are lobbying heavily for a positive monitoring report, magnifying modest progress. The government keeps presenting the Commission a list of on-going high profile organized crime and corruption court cases (the number has grown from 30 to 52 over the last two and a half years) as “successes.” Incredibly, several of the “success” cases have been suspended. Several other cases, against notorious shady businessmen Angel Khristov and Plamen Galev AKA the Galevi brothers, and others can hardly be calledsuccesses as these defendants gained immunity by running for parliament. XXXXXXXXXXXX said the team found this “loophole” quite disturbing, along with how some Bulgarian officials vehemently defend the law that permits this phenomenon. Along with the “Galevization” of politics (referring to the Galevi brothers election campaign), Brussels is also concerned with vote buying and general election fraud.
————————
Only Sticks Seem to Work
————————
5. (C) XXXXXXXXXXXX told us that the Commission feels they have “tried everything” to make the Bulgarians reform their judicial system, but concluded “how do you make them reform when they do not want to?” The government‘s defensive arrogance — and lack of political will — is intensifying enlargement fatigue in Brussels. He underscored that EC pressure via the monitoring reports and withholding EU funds are the only ways to produce results. He confirmed media reports that Dutch Minister of European Affairs Franz Timmermans requested the Commission to consider activating the safeguard clause against Bulgaria and Romania when the EC releases both reports. (Activating the safeguard clause in Justice and Home Affairs would mean that the European Union would not recognize Bulgaria‘s legal decisions and exclude Bulgaria from legal and police cooperation.) XXXXXXXXXXXX said currently only The Netherlands is demanding the safeguard clause, but others are increasingly fed-up with Bulgaria (and Romania’s) lack of progress. There is talk within the Commission about extending the Monitoring and Verification Mechanism beyond the three years stated in Bulgaria‘s and Romania’s EU Accession Acquis. Sweden, which holds the next EU presidency, favors extending the monitoring mechanism and is committed to pursue “rule of law issues” in both countries.
6. (C) The report‘s release date hinges on EU internal political maneuvering for the formation and nomination of the new Commission and the election of its next president – a process that begins in July. XXXXXXXXXXXX told us that the team is preparing the report to be released the last week of July, but it may be published the second half of September if the new Commission formation is drawn out. The team’s report will be critical, saying overall reform has stopped, but likely the final ECreport will be “watered down” as in the past for political reasons.
7. (C) COMMENT:
XXXXXXXXXXXX’s frustration with the Bulgarian government‘s lame and insincere reform efforts was striking. It appears to be spreading in Brussels where at least the working level appears to be feeling “buyers remorse” over letting Bulgaria and Romania into the club too early. According to reliable contacts, Brussels Eurocrats have dubbed enlargement fatigue the “Bulgarian Break,” further tarnishingBulgaria‘s bad image within the EU (REFTEL A).
END COMMENT.
McEldowney
A Case of Self-Destructive Behavior? – Bulgaria and Its Academy of Sciences
Don’t let yourself be fooled! – The government of Bulgaria is actually bent on destroying the country’s best research institution, no matter all protestations that it intends nothing of the sort.
A string of attacks stretched over more than a year is now coming to its crucial point. The law on the destruction of the Bulgarian Academy of Sciences (BAS) has been tabled to Parliament and is currently under review.
The draft bill is officially labeled an act of amendment of the previous Law on BAS and nowhere posits the explicit closure of the Academy. Although submitted under a thin disguise by ruling GERB party back-bench MP Rumen Stoilov, it reproduces intentions voiced over 2010 in turn by Minister of Finance Simeon Djankov, Minister of Education Sergei Ignatov, PM Boyko Borisov and Speaker of Parliament Tsetska Tsacheva. And those intentions were precisely radically dismember BAS and put it under the direct control of the central government.
The literal wording of the draft act may be consistent with the persistent assurances of the likes of Borisov and Ignatov that their proposals do not include closing down BAS. Once you throw a glance at the bill, however, you realize that those assurances are definitely not true. The bill involves the removal of the central governing body of BAS and the splitting of its many institutes into “independent” units. The latter are so independent as to be placed under the auspices of the Ministry of Education, with their fate being sealed by a decision of the Council of Ministers.
The funding for those institutes and other bodies deriving from the former Academy is to be also set at the mercy of the Ministry, and is not decided upon by Parliament as part of the official Bulgarian state budget (thus turning the remains of BAS into so-called second-level spending units).
Talk about state-directed science. Talk about academic freedom and freedom of research. But that is not the worst. For unlike Nazi Germany or Stalin’s USSR – where science misshapenly suffered state control – the current Bulgarian center-right GERB cabinet doesn’t care much about knowledge.
Apart from the general worry of placing science under the inadequate (mis)management by bureaucrats, in this case we are facing a far more imminent life threat. The passing of BAS institutes under government authority means certain closure of a sizeable part of them. This is no scaremongering, if we bear in mind (1) the glee with which the GERB cabinet has been expending less and less funds for education and research, (2) the inexplicable hate-campaign against BAS carried out by the government since assuming power. Consider the following.
In the mid-year revision of the state budget for 2010 – the failure of a budget heralded by finmin Simeon Djankov as Europe’s best – education and research suffered a cut of some staggering 40%. In public statements, both Djankov and education minister Ignatov have been persistently seeking ways to argue for disburdening the state from the need to finance education and science.
More particularly, Simeon Djankov, that esteemed researcher of World Bank fame, is perhaps the most obvious reason for accusing the cabinet of BAS-hatred. In his loathing for the institution, the finance minister has not been shy to use expressions that hardly befit a senior statesman. Characterizing the country’s best research institution as a bunch of “feudal dotards” (whatever that meant) is sufficient ground for ensuing resignation.
As things stand, Djankov’s remarks have found resonance with a certain feeling of resentment among segments of the Bulgarian population. Overwhelmed by an ill-functioning quasi-capitalist climate that they still feel alien, many Bulgarians have formed equally ill-functioning notions of such things as “the market”, “the role of the state”, “individual initiative,” and “responsibility for the public good.” Faced with their meager salaries and hobbling businesses, they don’t see the need to finance an institution that they do not feel as contributing. Everybody wants use and profit – now. Science doesn’t work that way.
Add to that the wide misperception that the Academy is a creature of the Commies – one of the lasts behemoths remaining from the era of a regime allegedly responsible for Bulgaria’s present woes – and you have a feeling of what kind of attitudes the cabinet and its finance minister are exploiting.
Face it – BAS is Bulgaria’s top research institution. Period. The Academy is putting out 60% of the scientific production of the country. Closing the Academy means obliterating those 60%. And we’re not speaking only quantity here. At least as per the leading global scientometric rankings, such as those of Thomson Reuters or Scimago, BAS is by far the top research institution in the country in terms of the quality of its work.
Those facts notwithstanding, the powers that be have been trying to trick people into believing that the Academy is working at a tremendous cost to the state (the taxpayer!) and is not willing to reform. False again! In 2009-10 BAS staged a sweeping internal reorganization, reducing the number of its institutes from 69 to 42, which led to significant reductions in staff. And it has been continually introducing heroic steps to cut spending, such as asking workers to go for unpaid leave and similar measures unbefitting an EU member state.
In the “updated” 2010 budget BAS had EUR 30 M, against EUR 48 M in 2009. That is some 0.4% of Bulgaria’s GDP and won’t be any different in 2011 (in times when countries like e.g. Austria boosted funding for research as a strategic anti-crisis investment). Balancing off the meager financial input and the substantial research output, the Bulgarian Academy of Sciences might well be the most cost-effective institution in the country.
Of course, this is not all. Research and learning boost economic development. The phrase “knowledge-based economy” is not the less apt for all its triteness. Some people seem to be unable to get across their minds that even non-applied, fundamental research boosts economic development. Science and culture are very much like wealth – like Adam Smith observed about the latter, it eventually “trickles down” to benefit all.
Such strategic thinking has never been a strength of recent Bulgarian rulers. But now we have what appears to be a concerted effort to achieve results counter to all strategic thinking. Bulgaria is attempting to cut off itself what little remains of its vital brains. Why, you might ask?
The reasons can be grouped into three. First, BAS’s assets. Second, an ideological motivation of sorts. Third, an effort to replace Bulgarian academia, as it exists now, with something else.
The first is the most obvious and widely discussed. Simeon Djankov is popular not only with his insulting statements about the Academy. He has also a strong record of speculating about the benefits of selling BAS’s many properties. This is put down in print, in Bulgarian newspapers, even before Djankov assumed the position of Minister of Finance. He has even estimated their worth – some USD 250 M. A tiny amount, you may think, for dooming Bulgaria to intellectual and economic backwardness.
And the World Bank guru has expertise in that field. As an advisor to the government of Georgia, he had proposed exactly the same scenario for the country’s Academy of Sciences, ostensibly to optimize spending. Academy was split, assets were sold. Georgia’s scientific production dropped tremendously.
Then we have the ideological motivation, which, being a matter of principles, is the most contentious. Some would rather think that the state should not be in support of research and education, which must rather be placed on a so-called “market principle.” This type of thinking can be seen as gaining strength not only in backward post-Communist Balkan countries, but also in strongholds of knowledge as Germany, the UK and the US.
But then think again. Think of the commitment that the US government has always been having towards research, development, and fundamental science, including humanities. Think of the level of donorship to educational and research institutions that the German businesses have always had. For them, this is a matter not only of supporting developments that might benefit them commercially – it is much more a matter of prestige and responsibility for the common good.
Then think about the level of commitment Bulgarian businesses, as they exist now, can be expected to allot to independent research.
This second argument is nevertheless tightly bound with the third. Circles around Minister of Education Sergei Ignatov have been pressing for an increased role of private education in Bulgaria. What’s wrong with that, you might ask. But then consider that Ignatov is not only a former president of, but has also retained strong ties to the New Bulgarian University – the country’s major private university. And that he has been pressing for the introduction of the unheard-of idea of support for private educational institutions with state funds.
To boot you have the Minister of Education’s attempts to implode the university system by introducing ill-advised legislative acts modeled on his NBU inner regulations, but that is another matter.
If state-fostered education is no longer a priority for Bulgaria’s rulers, then what can we say about an allegedly old-fashioned and rigid research institution that is educating no one, but is just producing science.
Fortunately, the political climate or just the general sense of rationality among other political parties in Bulgaria is not entirely unfavorable to BAS. Up to now, all parties represented in Parliament other than the ruling GERB have spoken up quite strongly against the legislative proposal. This includes not only the opposition Bulgarian Socialist Party and Movement of Rights and Freedoms, but also the rightist Blue Coalition and the nationalist Ataka, as well as non-aligned MPs.
This is something remarkable, as it is the first time both the official opposition (BSP and MRF), and parties that usually support GERB have united against GERB, who have a large minority of 117 MPs out of 240 and have to rely on support from the Blues and Ataka.
While there are signals that reason may prevail this time over, yet we should not be overly optimistic. For instance, the Blue Coalition have tabled an alternative amendment bill that does not include the dismantling of BAS – but yet once again includes putting its financing in the hands of the Ministry of Education, instead of Parliament as it is up to now. MPs from the Bulgarian Socialist Party have proposed yet another draft bill that introduces greater financial accountability, but does not make the Academy dependent on the government.
In the meanwhile, the Bulgarian Academy of Sciences is suffering a string of paralyzing months. Researchers are facing the fact that no one might care much about their work. Already meager salaries are not paid in full. Uncertainty lingers.
Yet the situation raises depressing thoughts not only for researchers. Bulgaria is on its way of making one major step further in its lasting, self-imposed, deep economic and intellectual marginalization.
By Ognian Kassabov – novinite.com
Nazi butcher Klaus Barbie hands out luxury mobile phones, valued at over €3,000 to corrupt Bulgarian politicians.
A total of 16 Bulgarian Members of Parliament succumbed to a trick designed by two media in order to expose their greediness and prevalence of personal interests over legislative responsibilities.
The joint operation between the bTV private channel and the “168 Chasa” weekly consisted in offering luxurious cell phones, worth over BGN 6000 to 42 Bulgarian MPs. An expensive party was “organized” on Wednesday at a hotel in downtown Sofia , on which the phones were supposed to be handed out to them.
The party coincided with a Parliamentary session. Only 26 of the invited MPs stayed, 16 of their colleagues skipped work to get hold of the nice “gifts”.
The members of the parliament did not realize they were being tricked, even though the invitations were signed with the name of Klaus Barbie, a notorious Gestapo member and war criminal, known as the Butcher of Lyon.
“You are abusing the name of a respected cell phone company. This is illegal,” ruling centrist GERB MP declared before the journalists upon being “caught in action”.
—
Bulgaria’s Prime Minister Boyko Borisov condemned the 22 MPs, who skipped work due to a media hoax offering them “free luxurious cell phones.”
“I am ashamed by their behavior,” Borisov admitted, but still pointed out that his ruling centrist GERB’s MPs have been less greedy in comparison to their colleagues.
Parliamentary Speaker Tsetska Tsatseva, who was one of the invited but did not attend the fake event, also expressed her dissatissfaction
The joint operation between the bTV private channel and the “168 Chasa” weekly consisted in offering luxurious cell phones, worth over BGN 6000 to 42 Bulgarian MPs. An expensive party was “organized” on Wednesday at a hotel inSofia , on which the phones were supposed to be handed out to them.
The party coincided with a Parliamentary session. Only 26 of the invited MPs stayed, 16 of their colleagues skipped work to get hold of the nice “gifts”.
The members of the parliament did not realize they were being tricked, even though the invitations were signed with the name of Klaus Barbie, a notorious Gestapo member and war criminal, known as the Butcher of Lyon.
novinite.com
BRITISH ACADEMY, ROYAL SOCIETY BACK BULGARIAN TOP SCI BODY AMID ATTACKS
The presidents of UK’s leading research institutions are among those who have sent letters of support to the Bulgarian Academy of Science, which has been facing extreme budget cuts and likely closure forced from the government.
Sir Adam Roberts, President of the British Academy – UK’s leading center for humanities and social sciences – has sent out an official letter to senior Bulgarian officials, including PM Boyko Borisov, in which he calls for a strong committment on the part of the state for science and research.
“It is a striking fact that in these very difficult economic times, many countries are making investment in knowledge and research a priority, and are even increasing their investment at a time of cuts elsewhere. They do so because they know that research contributes to innovation and economic growth, and helps build social stability,” writes Sir Roberts.
The letter concludes asking senior Bulgarian officials to “reconsider the cuts to a vital part of Bulgarian national life and of the Bulgarian economy.”
Lord Martin Rees of Ludlow, President of the UK Royal Society – one of the oldest and most prestigious research institutions in the world – has on his part sent a letter of support to the BAS President Nikola Sabotinov, expressing his “concern” at Bulgarian budget cuts for research, calling that science be “at the heart of European countries’ plans for future prosperity.”
Lord Rees of Ludlow has asked Sabotinov to forward his letter to all Bulgarian senior officials he is in contact with.
He further states that the Royal Society is “proud of its links with BAS” and speaks highly of the Academy’s plans for development and already instituted reforms.
The presidents of Britain’s top research institutions are just some of the international research leaders who have already sent out letters in support of BAS.
The messages include a strong-worded letter to PM Borisov from Prof. Jüri Engelbrecht – President of ALLEA, the umbrella organization of Europe’s science academies.
Further letters of support have been sent out by the presidents of the Serbian and Turkish of science, as well as by a number of Bulgarian researchers working abroad.
In the meanwhile, the Bulgarian Parliament is set to review Wednesday a controversial legislative amendment which envisions dismantling BAS into separate institutes under the direct jurisdiction of the Minister of Education and the Council of Ministers.
novinite.com
BULGARIAN GOVT STRIKES TO DEMOLISH TOP RESEARCH INSTITUTION
Authorities have taken up specific measures to make possible demolishing the Bulgarian Academy of Sciences with an urgent legislative amendment currently under review by Parliament.
This development comes after November 15 Bulgarian PM Boyko Borisov and Parliament Speaker Tsetska Tsacheva announced the Academy of Sciences (BAS) will be split into self-standing institutes and its central organs abolished.
Researchers alarmed that would mean an end to the Academy, and went out on a string of protests, after which PM Borisov and Minister of Education Sergei Ignatov announced that they have no plans whatsoever to demolish Bulgaria’s oldest science institution.
Nevertheless, last Thursday Rumen Stoilov, a back-bench MP from the ruling GERB party, tabled a legislative amendment to the Law on BAS which mandates precisely the splitting of the academy into self-standing institutes and the founding of a separate, largely ceremonial body of academicians.
The Parliamentary Education and Research Committee has deemed it worthwhile to urgently vote on the legislative proposal and has included it into its Wednesday agenda.
What is most alarming, the amendment forsees that the newly-created institutes would be under the direct jurisdiction of the Ministry of Education and will be subject to merging or closing down by the Council of Ministers at the proposal of the education minister.
This would expressly eliminate BAS as a self-standing entity and will put in the hands of the central goverment the power to eliminate institutes at will – something that BAS researchers have been consistently alarming against.
Thus, although the letter of the legislative amendment is consistent with the statement that BAS will not be shut down, the new law would put all its units at the self-willed mercy of a government that has proven hostile not only to investment in research and education, but also to the Academy as an institution.
Researchers have claimed that in particular the government wants not only to disburden itself from the need to sponsor science and research, but what is more – to lay hands on BAS’s many properties.
Bulgarian Minister of Finance Simeon Djankov is a self-confessed BAS-hater. What is more, in interviews he has given to the Bulgarian press before assuming office, he has suggested the idea of selling out BAS’s assets, even mentioning specific figures of their worth.
BAS researchers and leadership have alarmed that Djankov has already effected the dismantling of the Georgian Academy of Science during his stint as a World Bank expert in the country.
They have protested the bill for amendment of the Law on BAS and have called a fresh protest Wednesday.
novinite.com
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