In late 2006, a few months before Bulgaria's EU accession, the European Anti-Fraud Office (OLAF) tipped off Bulgaria's authorities about misappropriation of European funds from SAPARD agri-program. The nature of the source meant that the tip-off couldn't just be swept under the carpet and Bulgaria's General Directorate Combatting Organized Crime launched an investigation. Aside from some German citizens, some businessmen with close ties to then-president Georgi Parvanov and the Bulgarian Socialist Party were arrested in February 2007.
Twenty years later, those detained in Germany have long forgotten they were ever convicted. In Bulgaria, the prosecution messed up the case by splitting it in two. Last year, one of the cases ended with an acquittal, while the second is still dragging through the courts.
The SAPARD case is not only a key indictment of how Bulgaria's judiciary malfunctions. It also remains the only major investigation of fraud involving EU funds that Bulgaria has conducted since it joined the EU.
For more than ten years, the subject has remained taboo for both the executive and judicial branches. The ever-dwindling number of investigations into other cases of suspected fraud meant to allay EU concerns are invariably low-profile.
This contrasts starkly to the dozens of public allegations of marred procedures for alleged misappropriation of financial resources for EU-funded projects. The latest one - a document leak is known as #GPGate - made the state prosecution act but only after the arrest of two journalists exposing it became world news. (See additional text)
Every year, considerable financial resources (the grants which Bulgaria expects from different EU funds for 2017 total about 4.2 billion levs) are distributed without adequate control and disappear into murky projects, generating corruption. However, the government has no interest in confronting this scheme because it draws legitimacy from the same funds.
The disappearing investigations
According to statistics from the Interior Ministry's department in charge of protecting the EU's financial interests (AFCOS), the number of financial fraud cases involving EU funds that made it to court decreased nearly six-fold from 2010 to 2017. The number of pre-trial investigations has also fallen by half during the same period.
This could mean one of two things. Either Bulgaria has cleaned up its act regarding EU funds, and embezzlement and corruption are markedly less, or the will to investigate such cases is waning.
A prosecutor who has worked in a unit specialized in investigating these types of crime described the situation to Capital newspaper: "The statistics are commensurate with the attitude of the Bulgarian government toward the European Commission's monitoring reports." Hence investigations surge when the authorities need to feign activity to appease Brussels. Then the customary apathy returns once European institutions look away.
Our source explained that the absence of high profile investigations has been offset by sheer quantity - principally by prosecuting small farm owners purposefully overestimating the size of their holdings. "The investigations are conducted by only using documents and they end with a settlement. The court proposes an administrative penalty, which is effective immediately," our source explained.
No indications of a crime
Brussels couldn't fail to notice the conspicuous drop in the number of investigations and confronted Sofia. A government source told us that several years ago an OLAF director told the Bulgarian interior minister: "Give us something, at least."
An OLAF report about corruption at the Executive Agency of Fisheries and Aquaculture (IARA) is a typical example. Two independent sources - from the prosecutor general's office and the interior ministry - corroborated its existence. While the report didn't contain allegations of large-scale violations (the program mostly deals with small projects), it pointed to systemic corruption in the agency. In spite of irrefutable evidence, Bulgarian prosecutors were unable to uncover a single example of the schemes reported by OLAF.
In an attempt to satisfy OLAF, the authorities initiated two probes of IARA's activities, both of them billed as investigation of "corruption at the highest levels of government".
In one of them, the director of IARA Maydan Sakadzhiev was taken to court on charges of unlawfully awarding 3350 levs of bonuses to a manager at the agency over of several months. In May, the specialized criminal court acquitted Sakadzhiev on all charges.
The other case related to IARA started at the Specialized Criminal Court after a widely publicized operation by the prosecuting authorities. It concerned the alleged embezzlement of 60 thousand levs from a fund for scrapping old fishing trawlers.
What happens to the big cases?
If there's a sector where systemic corruption is especially apparent, it's in public infrastructure construction projects. At the end of 2016, the road construction sector, which is heavily dependent on European funding, was shaken by a large scandal.
For some time OLAF had been following a tip-off from a Bulgarian magistrate revealing mechanisms for rigging road construction tenders. In November 2016 the director of the government's Road Infrastructure Agency (RIA) Lazar Lazarov surprisingly resigned. Another surprise followed - regional development minister Liliana Pavlova did not keep her post in the new cabinet after the March 2017 early election, even though she was widely seen as a shoo-in for re-appointment. Instead, she was consoled with the position of minister of the Bulgarian presidency of the Council of the EU. Once again, the same method was at play - remove the person and you've removed the problem.
In June 2017 the prosecution brought criminal charges against Lazarov in connection with the construction of Maritza highway. At the same time, changes took place at the top level in the Prosecutor's Office. The head of the department overseeing high-profile corruption cases, Julia Chorbadzhieva, was replaced. Borislav Sarafov, deputy to prosecutor general Sotir Tsatsarov, was isolated from Tsatsarov's inner circle. A source in the judiciary explained: "OLAF's tip-off was quashed by splitting it in two. Lazarov was charged for the sake of appearance, while the main information - about the way the agency functions - was snuffed out."
The charges against Lazarov were submitted to court in April. He was accused of gross neglect of duty during August 7, 2014 - June 30, 2015 for purposefully failing to properly administer the project entrusted to him - the construction of Lot 1 of Maritza highway, which resulted in a 41.6 million levs loss for API. The case was dismissed by the Sofia city court but the charges were reinstated on appeal.
To ignore the obvious
The procedure goes like this: quench the fire by replacing the individual, press unsubstantial and partial charges, then crush them after a certain period while disregarding the systemic problems. And if this means foul play in large public government contracts is hard to investigate, simpler cases just fly under the radar altogether. Tihomir Bezlov from the Sofia-based think-tank Center for the Study of Democracy cited a specific and revealing example - the manipulations surrounding agricultural subsidy limits capped at 300,000 euro per entity.
With the agricultural subsidies for Bulgaria for 2018 set at 2.91 billion levs or 69% of all EU funding, the prospect of deja-vu emerges.
"We can actually see from previous program periods that 75% of direct payments and 67% of measure-related payments from the rural development fund went to 3700 companies and individuals, all connected to one and the same 100 entities," said Bezlov.
It's an open secret that big landowners split their estates into smaller companies in order to circumvent the limit. It's clear that the State Fund Agriculture (the paying agency) and the prosecutor's office don't see, or turn a blind eye to, this easily spotted ruse. In this context, the SAPARD investigation from 12 years ago seems like an attempt to build a space rocket. And the actual prospects of a serious probe into the allegations of investigative journalism website Bivol related to what they called #GPGate are astronomically remote.