On 11 December 2014 the Center for the Study of Democracy organized the Eleventh Anti-Corruption Policy Forum. During the event CSD presented and discussed the Bulgarian Corruption Assessment Report: Anti-Corruption Policies against State Capture. In the tenth Corruption Assessment Report, the Center for the Study of Democracy provides an overview of the state of corruption and anticorruption in Bulgaria in 2013 – 2014. The report is produced within the framework of the Southeast Europe Leadership for Development and Integrity initiative (SELDI), which provides a comparative perspective for nine countries in Southeast Europe (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Macedonia, Montenegro, Serbia and Turkey). The report’s findings are based on the state-of-the-art Corruption Monitoring System, and are complemented with recommendations on anti-corruption policies. The report argues that Bulgaria needs bold institutional anti-corruption reforms and personal commitment at the highest level in the judiciary and the executive to tackle state capture and wide-spread administrative corruption.
Dr. Ognian Shentov, Chairman of the Board of the Center for the Study of Democracy, opened the discussion by pointing out that political corruption had reached its peak, and it went beyond the corruption scandals associated with the judicial system. He put an emphasis on the alarming statistics from 2014 which had measured the highest levels of corruption in the country for the past 15 years. Dr. Shentov pointed the management of large infrastructure projects such as Belene and South Stream as an example of state capture by foreign and local private interests.
Ms. Roumyana Bachvarova, Deputy Prime Minister, congratulated the Center for the Study of Democracy for its efforts in preparing the Corruption Assessment Report, describing it as highly argumentative, having the potential to at least partially end the speculations associated with the corruption topic, and also due to be actively publicized. Ms. Bachvarova admitted that there were no actual results in the fight against corruption, that the authorities did not function properly and that sanctions were ineffective. She pointed out the main subjects of corruption – on one hand these are the civil servants who are the so-called “active environment” of corruption, and on the other – the politicians, who are characterized as “equally guilty and involved”. According to Ms. Bachvarova firm political action is the only solution that can help in the fight against corruption. Bulgaria needs a new anti-corruption action plan, which has to present a true perspective for the country. She stated that when developing the action plan, the conclusions and recommendations given by the Center for the Study of Democracy would be taken into account. She continued by saying that transparency at all government levels was a necessity and could be used as a preventive measure. Ms. Bachvarova also discussed the issue of corruption in public procurement, noting that the data on products paid with public funds should be part of the public domain. Ms. Bachvarova discussed the necessity of further measures, such as the adoption of ethical standards for different occupations, the regulation of lobbying and the amendments in NGO registration. She announced the government plans for creation of a centralized authority or portal, which would collect corruption signals at the central level. Ms. Bachvarova underlined that the government must immediately begin to reform the judicial system, although this may take more than one political term.
Mr. Ruslan Stefanov, Director of the Economic Program at the Center for the Study of Democracy, presented the main conclusions of the Corruption Assessment Report for 2014. He pointed out that Bulgaria was the only country in Southeast Europe, which showed corruption increase for the period 2001 – 2014, according to the Corruption Monitoring System (CMS) data. Nevertheless, corruption remains a systemic problem for the other countries of the region. He noted the positive developments in Bulgaria, characteristic of the EU Member States, such as high awareness of the problem and increasing intolerance towards corruption. At the same time, almost every second Bulgarian is subject to corruption pressure, and every third citizen was forced to participate in corruption transactions. Mr. Stefanov underlined that corruption had become an additional cost for access to administrative services. CMS data show that about 158,000 corruption transactions per month have been realized during the previous year. Mr. Stefanov provided examples of state capture, where private interests undermine the public ones – the “South Stream” saga, the “Corporate Commercial Bank (CCB)” affair and the excise coalitions. He pointed out that the problems extended in all areas – security sector, the judiciary, the police. The lack of independence of the state regulators is of particular significance. He noted that in this context using only criminal law instruments would not be effective. According to the survey more than half of the Bulgarians do not believe that corruption can be eradicated. In this respect, systemic measures, synchronized work of the institutions and increase of the confidence in the state are needed to tackle the problem. Numerous recommendations are already available in the Cooperation and Verification Mechanism reports, the EU Anti-Corruption report and the reports of the Center for the Study of Democracy. He noted that it was time they were put into practice, including through personal example at the highest political level.
Mr. Konstantin Penchev, Ombudsman of the Republic of Bulgaria, noted that he was proud to attend the discussion of CSD’s Corruption Assessment Report. Mr. Penchev shared two examples which related to the work of the Ombudsman. The first example concerned the case of Corporate Commercial Bank (CCB). He started with making an overview of the facts which led to the current state of the bank. According to Mr. Penchev all developments were deliberate, aiming to bankrupt the bank so that its assets could be purchased at an unreasonably low price. It is still unclear if this will happen as the revocation of the license of the bank is being appealed. The second example, which Mr Penchev provided, concerned the reform of the judicial system. He highlighted the recent issue with the software used for random distribution of court cases and the possibility for its manipulation. According to him, the real problem is not in the software, but rather the existence of corrupt judges and court presidents. He recommended particular attention to the integrity of the staff, the way in which they are appointed and promoted. In conclusion, Mr. Penchev emphasized the need of reform and urged for its decisive and effective implementation.
Mr. Andrei Yankulov, Deputy Minister of Justice, shared one of his first impressions from the Ministry of Justice, concerning the types of crimes of the prisoners that are effectively serving time. He expressed his surprise that corruption offences are not present in the statistics and concluded that the number of persons sentenced and effectively serving prison time for corruption was negligible, and for that reason they were not included in the data. Mr. Yankulov noted that the criminal law of Bulgaria was in accordance with the international anti-corruption standards, however, the link between the law and the effective convictions is not only broken but non-existing. In conclusion, Mr. Yankulov noted that the problems Bulgaria was facing in the fight against corruption were numerous and they could be solved only with persistence.
Mr. Delyan Dobrev, Chairman of the Energy Committee of the National Assembly, discussed the serious problems in the Bulgarian energy sector. He described the tender procedure for South Stream gas pipeline as an outrageous case. Mr. Dobrev emphasized on the additional costs of the project, giving it as an example of bad governance. He also talked about the issue of public procurement and in particular the corruption practices at the state-owned mining company Mini Maritsa Iztok related to contracting the transport of workers to the mines. According to Mr. Dobrev, amendments in legislation are of crucial importance, an annual auditing of both public and private companies in the energy sector is a necessity and the staff of the Inspectorate at the Bulgarian Energy Holding (BEH) must be expanded.
During the discussion, Mr. Ilian Vassilev, Honorary Chairman of the Bulgarian Economic Forum, pointed out that when major projects such as South Stream are contracted, there should be a practice of benchmarking the prices and costs to the ones in other countries or in similar sectors. According to him, any increase in the cost of a project or product must be justified to the public. He also confirmed that there is state capture in Bulgaria and provided as example the nontransparent and uncontrolled formation of the price of gasoline, natural gas and diesel.
Mr. Philip Gounev, Deputy Minister of Interior, noted that the capacity of the State Agency for National Security (SANS) and the Ministry of Interior was so low that only one of the cases mentioned during the discussion would fully employ the available resources. In the absence of adequate funding and due to the understaffing, the local authorities, such as mayors, remain untouchable. The problem is exacerbated by the existing links between the local authorities and the oligarchs, which leaves few opportunities for criminal investigations. According to him, there is need of massive and long-term investment in people and time, and better prioritization of the critical areas. As an example, SANS employs more people investigating drug offences, than investigating corruption. Mr. Gounev concluded by assuring that the Ministry of Interior has political will and had planned to increase the capacity of the Inspectorate.
Mr. Metodi Mitev, representative of civic organization, proposed the introduction of anti-corruption strategies in all institutions and municipalities. Mr. Stamen Tassev, Manager of the Bulgarian Center of Training Firms, presented his work on training of entrepreneurs in business skills and corporate social responsibility. He noted that during the event he also identified the need for the future entrepreneurs to be trained in anticorruption.
Associate Professor Christian Takov, law professor at Sofia University and Chairman of the Arbitration Court at the Bulgarian Chamber of Commerce and Industry (BCCI) said that the problems in the judicial system were result of the absence of an uniform solution and approach. According to him, it is important for the corruption cores at every single level to be identified and outlined. He also recommended the implementation of practices, tailored specifically to the needs of each institution. Mr. Takov stressed on the fact that it was impossible to achieve significant results, if one solely relied on a constitutional amendment, initiated by the National Assembly. He advocated for the increased involvement of civil law tools in the fight against corruption, and suggested the return of the state resources, taken away by corrupt practices.
Justice Pavlina Panova, Deputy Chair of the Supreme Court of Cassation and Chair of the Criminal Division of the Court noted that Bulgaria had a modern Criminal Code, which met the requirements of the Group of States against corruption (GRECO). The problem, however, is the imperfect criminal procedure tools applied in the investigation of corruption crimes. The current tools used are making the proof of corruption-related crimes a difficult task. In general, suspects are unwilling to make confessions, while key witnesses are usually placed in a state of dependence on those charged with corruption crimes. According to her, an example of good practice is the use of special investigative means, but a successful strategy requires milder means.
Ms Nelly Koutskova, judge at the Sofia Court of Appeal, pointed out that there were a lot of honest employees both in the administration and in the judiciary. She stressed that these employees must be supported and protected. In many cases, however, these people are being punished or intentionally compromised just because they have tried to fulfill their professional duty to expose corrupt practices. Mrs. Koutskova stressed that criminal measures against corruption were needed, but a parallel framework that encouraged freedom of civic initiative was also necessary.
Presentation by Mr. Ruslan Stefanov, Director of the Economic Program at the Center for the Study of Democracy (Adobe PDF, 746 KB, in Bulgarian)
Bulgarian Corruption Assessment Report: Anti-Corruption Policies against State Capture
Press Release (Adobe PDF, 655 KB, in Bulgarian)
Previous Anti-Corruption Policy Forums
Previous Corruption Assessment Reports