Oct 16 2008
Mob Muscles Its Way Into Politics in Bulgaria
But when he made those comments, it was not known that he met in 2005 with Mr. Nikolov. A five-minute video obtained from Sofia’s mayor shows Mr. Stanishev greeting Mr. Nikolov at his meat factory, inspecting equipment and a table laden with goose liver sausages before sitting down to lunch with white wine.
A few weeks later, according to deposit slips handed to prosecutors by Mr. Borisov, Sofia’s mayor, contributions to Mr. Stanishev’s party started to flow. One Western European diplomat, who spoke anonymously because of being involved in sensitive negotiations in Bulgaria, said that copies of the contractual agreements on donations appeared authentic: “It means they know they won’t be prosecuted, so why not have secret contracts?”
A summary agreement was addressed to Rumen Petkov, who headed the Socialists’ campaign at the time and resigned as interior minister a few months ago amid revelations that he had met organized crime figures.
Origins of Crime
Bulgaria’s gray economy is looped around disparate politically connected companies that shift in and out of business as opportunities and legal obstacles arise, according to a report from the Center for the Study of Democracy, an anticorruption group in Sofia.
According to the center and other anticorruption activists, bosses typically enlist longtime employees to register companies in their names; if there are legal problems, the companies cease functioning without being linked to the actual leaders. Meanwhile, profits from sources like cigarette or alcohol smuggling are plowed into legal front companies, like soccer clubs, where money can be laundered through huge fees paid for transfers of players.
The competition is brutal: all three past chairmen of the soccer club Lokomotiv Plovdiv have been killed, one by a sniper by the Black Sea. Seventy-five percent of Bulgarian businesses have security protection, far more than in other countries in Eastern Europe, according to Enterprise Surveys, analysts for the World Bank.
As in Russia and some other Balkan nations, corruption has seeped into the fabric of life. Sofia has a thriving black market for blood outside hospitals, where patients’ families haggle over purchases with dealers, according to Bulgarian news reports that track the prices.
The roots of this organized crime date to the collapse of Communism in the early 1990s. Thousands of secret agents and athletes, including wrestlers once supported and coddled by the state, were cast onto the street. During the United Nations embargo of warring Serbia in the 1990s, they seized smuggling opportunities and solidified their networks.
The wrestlers, in particular, developed private security forces and insurance companies that were little more than shakedown protection rackets. Other men became shadowy entrepreneurs with close ties to the government.
In the past five years, Bulgaria has weathered machine gun assassinations and inventive daylight attacks. Hitmen disguised themselves as drunks and Orthodox priests. In 2004, a bomb planted atop an elevator in central Sofia was detonated by cellphone, killing a businessman and three bodyguards.
The toll now tops more than 125 contract killings since 1993, according to a list compiled by the United States Embassy in Sofia, which does not include at least four people killed this year, including the head of an energy company. Most of the killings are unsolved.
A Power Grab Begins
Admission to the European Union did not halt the carnage, but emboldened a power grab. According to corruption fighters and election observers, votes can be traded, depending on the town, for marijuana cigarettes or sold for up to 100 leva, or $69. People document their votes by taking pictures of their ballots with their cellphone cameras, according to Iva Pushkarova, executive director of the Bulgarian Judges Association.
“They trade votes freely on the streets, kill and threaten people with no shame,” Ms. Pushkarova said.
While corruption affects many corners of society, the impact is particularly stark in the legal system, where some people without political connections have resorted to hiring decoy lawyers, for fear that their legal documents would vanish if presented to particular clerks by lawyers recognized as working for them.
Kremikovtzi, an insolvent Communist-era steel plant and one of Bulgaria’s largest companies, has become a test case. Foreign creditors — many of them American hedge funds — are pursuing a $474 million claim against Kremikovtzi, whose former chief executive is under investigation by the Bulgarian authorities for fraud and embezzlement.
“When your law enforcement system isn’t cleaning up the corruption in the legal system, who do we go to?” asked Justin Holland, an adviser to the Kremikovtzi investors committee, “Literally, we cannot go to anybody in Bulgaria.”
Among Western nations, impatience is growing, particularly at the lack of trials of high-level government officials accused of corruption. As Frans Timmermans, the Dutch minister for European affairs, argued, “What we need to see is real people put before real judges, convicted and put in jail.”
Meglena Pluchieva, Bulgaria’s newly appointed deputy prime minister for oversight of European government funding, said she believed that the nation was making headway similar to that of nations that joined the European Union a few years earlier, in 2004. The difference is that then there was enthusiasm for union expansion, but today “the situation is entirely different,” she said. She also accused wealthier nations of double standards, citing a scandal over rotten meat in Germany last year.
Some European countries have simply given up on Bulgarian justice.
Germany complained of getting little local help in its effort to prosecute Konstantin Hadjivanov, a wealthy businessman and a member of the City Council in Petrich, Bulgaria, who is known as “the Kitty.”
So the Germans waited until he had stepped into Greece to serve their warrant. Now he sits in a jail cell on cigarette smuggling charges while facing another fraud inquiry.
But it is only a matter of time before he returns home to resume his political career, say his supporters and wife, a former Mrs. Bulgaria.
City elections, canceled once because of irregularities, took place on Saturday. From his Greek jail cell, Mr. Hadjivanov gamely ran for re-election, but the voters finally rebelled: He won less than 1 percent of Petrich’s vote.
Mob Muscles Its Way Into Politics in Bulgaria – By DOREEN CARVAJAL and STEPHEN CASTLE – October 16, 2008 – The New York Times Company – This story was found at: http://www.nytimes.com/2008/10/16/world/europe/16bulgaria.html?hp
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