In 1961 the outgoing US president Dwight Eisenhower warned against the rise of the military-industrial complex and its possible unwarranted influence on the American democracy. Fifty years later and eight thousand kilometers to the East another type of complex - media-industrial, took over Bulgaria and, for more than a decade, has been exercising unwarranted influence over its democracy and society.
Just as Eisenhower predicted that US politicians could have became addicted to their military establishment if it was left unchecked, Bulgarian politicians first boosted the firepower of tabloid media, and then fell in love with it. As a result, they have now become its hostage.
Starting around 2007, the then little-known politician Delyan Peevski began to put together a media empire that gradually engulfed Bulgaria's public sphere. As a result, Mr Peevski who at the beginning looked like a tabloid media pawn of his political masters, started using his media prowess to promote politicians who offer best returns in terms of access to public procurement, or who promised to fight smugglers in order to secure the market share of Bulgartabac, the cigarette business he used to own. When Mr Peevski got involved in big energy projects backed by Russia or the US, his media tried to sway Bulgaria's foreign policy orientation. In the last ten years he and his media hand have helped form and dissolve governments, kill banks and conquer valuable business assets.
How it works
In March 2010 several newspapers then formally controlled by Mr Peevski's mother, Irena Krasteva, published a series of articles claiming that insurance company Allianz-Bulgaria, majority owned by Germany's Allianz SE, had "bite into 200 million levs of the energy sector". Allegedly, the company had monopolized the insurance market in the energy sector, charging companies higher than market rates.
The campaign ran a day before one of the biggest power plants in Bulgaria was to open bidders' documents in its tender for insurance services. The winning bid was offered by Victoria, a small insurer without much experience in the market. Surprisingly, the tender disqualified on technical grounds Energy (a company majority owned by Allianz Bulgaria) which had been insuring the power plant for years. The choice caused a scandal but instead of opening a new tender the power plant chose Victoria straight away, citing emergency reasons.
Victoria was controlled by Corporate Commercial Bank's (Corpbank) owner Tsvetan Vassilev, who sat on its board of directors. By that time he was already Delyan Peevski's main financial donor. Since 2007 Mr Vassilev had bankrolled the expansion of Mr Peevski's businesses, first in the media sector and latter in construction, retail, tobacco. In return, the media conglomerate, consisting of several newspapers, distribution companies, a printing house, websites, a TV station started serving the destruction of Mr Vassilev's competitors with no mercy.
Allianz was one of the main targets, but later many others joined Mr Peevski's and Mr Vassilev's target list. One of the most prominent of all of them has been Ivo Prokopiev. Mr Prokopiev together with Teo Zahov publishes Capital and Dnevnik (KQ as well), which exposed the model as early as in 2008 when its was still in its infancy.
Corpbank, ironically, went bankrupt in 2014, following an attack from media outlets controlled by Mr. Peevski. By that time Mr Peevski and Mr Tsvetanov were no longer business partners.
Mr Peevski's unique charms
Although Bulgarian media has never been free from political and business influences (to put it mildly), the model changed dramatically around 2008. The global economic crisis that began that year in the US soon hit Bulgaria, investments into the country declined, consumption dropped and local media lost a big chunk of their advertisement revenue. At the same time assurgent online news formats began eating into their readers and subscribers. Using the weakness of media publishers, Mr Vassilev and Mr Peevski went on a shopping spree, buying off every media outlet that was on the market, starting with the tabloids. Most of the remaining print media were subversively captured using cheap loans from Corpbank and, by 2012 very few media outlets remained that had managed to escape the control of the duo.
At its height, their media empire spread over eight daily newspapers three of which they they controlled indirectly, two weeklies, a TV station and an indirect influence over the two biggest private TV stations, newspaper distribution companies, a digital radio and TV distribution network, a printing house and a vast network of online trolls. It was claimed, including in a European Parliament 2017 study, that they controlled 80% of the national print media.
It was the then prime minister Sergei Stanishev (2005-2009) who propelled the process. His Socialist party has always complained that it lacks media backing to survive in power. Socialist president Georgi Parvanov even complained in 2006 to Russian president Vladimir Putin that the small independent Bulgarian daily Sega was criticizing him (Sega is owned by a Bulgarian businessman who used to run Gazprom's Bulgarian business).
Mr Stanishev thought he could do it better. As of 2005, slowly but steadily state-owned enterprises and particularly those in the energy sector concentrated their deposits in accounts with Corpbank. Part of this money bankrolled Mr Peevski's media acquisitions. The politicians behind the scheme (some of them personal advisors to Mr Stanishev) thought that they have total control over it, because they could always pull the plug.
Ironically, Mr Stanishev lost the 2009 general election to GERB party led by Boyko Borissov. Mr Peevski's media outlets, which had thus far relentlessly bashed the opposition calling Mr Borissov, a "criminal", "pumpkin" and the like, swithched their position overnight. Mr Peevski and Mr Vassilev calculated that they could extract more favors from a new government which would need to have the media at its side. If in 2008 30% of the deposits of the state-owned enterprises were concentrated in Corpbank, only two years later they topped 50%. As a result, Corpbank, which by the end of 2004 was a small boutique bank, became the fourth biggest bank in Bulgaria in terms of assets a decade later.
It was a good tactic. At the beginning Mr Peevski even tried to stay anonymous and all of his holdings were registered off-shore or in the name of his mother. This gave him plausible deniability when switching sides. Every new government gave away something to Mr Peevski and Mr Vassilev. In the period of 2010 - 2013, during the then government led by the current prime minister Boyko Borissov, they not only consolidated their media power, privatized key assets (while foreign companies were prevented from competing for them), but became heavily invested in the Bulgarian judicial system.
Mr Peevski's membership of the Movement of Rights and Freedoms (MRF) party was crucial for the whole scheme. The small party derives its support predominantly from Bulgarian Muslims and ethnic Turks, which ensures its stable representation in parliament. Approximately 10% of Bulgarian voters always support MRF and never question the authority of its leader Ahmed Dogan who has been in that position (in a formal or informal role) since 1989. In the fragmented Bulgarian politics, and particularly since 2001, MRF has always played the role of a power broker, even when it seemed to be in deep opposition. More importantly, its guaranteed presence in parliament has allowed it to establish a vast political patronage.
The greatest manifestation of the way the media-industrial complex created by Mr Peevski operates came in 2013. A day before the parliamentary elections оn May 12, TV7 (owned indirectly by Mr Vassilev) run a live footage claiming that a printing house related to a politician from the ruling GERB party was allegedly printing more ballot papers that were to be used to stuff the ballot boxes and forge the election results. The Bulgarian prosecution office, which typically not known for swift reaction to media investigations, intervened immediately, creating a public psychosis.
While it is difficult to say whether the plot cost GERB the victory, it definitely helped the Socialist party form a government coalition with MRF and uber-nationalist party Ataka. The three-party government was under the heavy influence of Mr Peevski and Mr Vassilev who practically appointed ministers and steered government policies in one direction or another. They were so sure of their power that Mr Peevski did not hesitate to run for head of the National Security Agency (DANS). That was the straw that broke the camel's back.Mass protests in the streets of Sofia, which became popular as DANSwithME, forced Mr Peevski to step down. The downfall was accelerated by the government's incapability to rule effectively and guarantee the flow of new financial streams towards Mr Peevski's and Mr Vassilev's businesses. For example, the government botched the construction of the South Stream gas pipeline that was supposed to be built by a Russian-Bulgarian consortium in which Mr Peevski had a significant stake. He knew perfectly well that without a constant inflow of government cash their model would soon run dry. Mr Peevski decided he didn't need Mr Vassilev anymore and orchestrated an attack against Corpbank. The media under his control spread rumors about its instability, causing a bank run, while the Prosecutor's Office indicted Mr Vassilev for an alleged assassination attempt against Mr Peevski.
Since the fall of the Socialist-led government, Mr Borissov has formed two coalition governments - with a reformist coalition and with a neo-nationalist alliance. Yet, Mr Borissov and his closest allies seem to be immune from the attacks of Mr Peevski's media outlets, while his opponents and inconvenient allies are their primary targets. It is unclear for how long this unholy symbiosis will hold, but now at least it seems to be working rather well for all sides.
In the past months, the media mogul came under a rarely seen attack from President Rumen Radev. This was yet another call for him to underground, as he used to be several years ago. Mr Peevski made a new attempt to distance himself from his media empire, announcing the sale of half of his business to the Bulgarian subsidiary of US company Nu Image Inc. and launching a legislative proposal to "clear up" the issue of external financing of Bulgarian media outlets, which has so far drawn support from politicians across the board in Parliament.
The parasitic symbiosis of media power and politics is nothing new and definitely not a Bulgarian invention. In recent years the infection has spread all over Eastern Europe. What makes Bulgaria unique are the strength and the dynamics of the symbiosis. It's not media groups and their financial backers vying for access to politicians, neither is it a political strongman building a media and business empire to perpetuate his rule. In Bulgaria, it is politicians jostling for Mr Peevski's blessing.
In 1961 the outgoing US president Dwight Eisenhower warned against the rise of the military-industrial complex and its possible unwarranted influence on the American democracy. Fifty years later and eight thousand kilometers to the East another type of complex - media-industrial, took over Bulgaria and, for more than a decade, has been exercising unwarranted influence over its democracy and society.
Just as Eisenhower predicted that US politicians could have became addicted to their military establishment if it was left unchecked, Bulgarian politicians first boosted the firepower of tabloid media, and then fell in love with it. As a result, they have now become its hostage.
