The string of arrests and tax evasion charges in recent months gives the impression that the Bulgarian law enforcement authorities might have finally cracked how to tackle corruption. Due to the lack of convictions on charges of high-level graft, Bulgaria has been the black sheep of the EU ever since its accession in 2007. This isn't just a blemish; it creates a serious reputational problem for both Bulgarian citizens and businesses.
September saw the much-publicized arrests of hotel owners Vetko and Marinela Arabadzhiev, as well as alcohol producer Minyu Staykov. At the end of October, the prosecution announced an investigation into the dealings of another notoriously rich family who made their first million during the murky 1990s - Nikolay and Evgenia Banev. They were arrested in Nice at the request of the Bulgarian authorities. Shortly afterwards, the prosecution and the anti-corruption commission created at the start of the year conducted an operation against the State Agency for Bulgarians Abroad, and a week later the prosecutor general requested the lifting of the immunity from prosecution of six members of parliament.
This burst of activity would have been welcomed wholeheartedly had it not been all too tangibly sporadic. Allegations of wrongdoing against those arrested have been surfacing for years, yet the evidence collected seems weak. For years, there have been media reports about malpractices in the procedure for granting Bulgarian citizenship. The prosecution itself received multiple signals, yet it has remained inactive until now.
The campaign appears to have two goals.
First, to serve as an alibi for the European Commission, which is preparing to discontinue its ineffective monitoring of Bulgarian judicial and law enforcement authorities. For more than 12 years, the Cooperation and Verification Mechanism (CVM) - a procedure initially expected to provide considerable impetus to reform in EU newcomer Bulgaria, has proved singularly useless. For instance, a recent Transparency International poll reveals that Bulgarians continue to perceive their country as the most corrupt in the EU - a view that hasn't changed much since 2007 (the points scored by Bulgaria rank it alongside Burkina Faso and Lesotho). Nonetheless, the European Commission declared in November that it plans to end the procedure in 2019 because of its "considerable" success in the fight against high level corruption in Bulgaria.
Second, the noisy actions against individuals of profoundly dubious reputation are a convenient smokescreen for attacks against the free press and the last remaining bastions of reform in the judiciary.
In a country where the rule of law runs at a deficit, the questions "Why did they bust him?", "Who's behind it?" and "Why now?" are completely legitimate after every high profile display of activity by law enforcement and prosecution authorities.
The operations against hotel owners Vetko and Marinela Arabadzhiev, and alcohol boss Minyu Staykov, are no exception. More than a week after the arrests, these questions were posed by both the accused and those around them, and the suppositions were mixed with conspiracy theories.
Aside from a family connection and their presence in the yellow press, the investigations of the Arabadzhievs and Minyu Staykov have something else in common: the prosecution's approach.
In both cases, it's about conducting the so-called bucket investigation. It isn't focused on investigating a particular crime, but instead pours all the information that law enforcement and the prosecution have collected about someone into one place - the "bucket". This type of investigation can later include further testimony and files and can be used to authorize surveillance, or even additionally the prosecution can attach some unrelated activities. At the appropriate moment, the content of the bucket is poured out.
One classic example of this is the Octopus operation against Aleksey Petrov from about ten years ago, which marked Boyko Borissov's first term as prime minister. A mega-case with multiple arrests, a whole panoply of indictments (some of them for 15-year-old events), few will recall it today. Not long ago it ended with first instance acquittals.
Another common feature of the investigations of the Banev and Arabadjiev families and Mr Staykov is the intentional overexposure. After both operations, the Interior Ministry released footage stylistically reminiscent of the times when Borissov's right hand man and present leader of the parliamentary group of his GERB party, Tsvetan Tsvetanov, was interior minister. The footage highlighted the mansion interiors and the car fleets of the defendants, and close-ups of hands counting wads of money.
After the collapse of Corporate Commercial Bank (Corpbank) in 2014, it became evident that it was possible to launch a second wave of plundering of the bank's assets. This was enabled under the guise of criminal proceedings against the defendants, the action or inaction of the trustees, the prosecution and the commission for forfeiture of illegally acquired assets. Large portions of Corpbank's viable assets were looted by the same people who had hastened its demise. This appropriation of assets reduced the insolvency mass and the taxpayers who paid the failed bank's debts ended up losing money. All of this, however, went under the prosecution's radar.
The financial interests of Nikolay Banev and Vetko Arabadzhiev are in tourism and it's more than likely that their properties will change hands after the prosecution blitz. Right after the prosecution announced its operation against Arabadzhiev, other institutions began to investigate him and uncovered, for example, that a water treatment plant in one of his resorts was operating illegally. Or, to put it another way, up to this point someone had deliberately overlooked those irregularities. Yet now, after the whistle was blown on this particular "inconvenient" businessman, the problems quickly surfaced.
The intervention against Minyu Staykov has certainly included his direct competitors since the functioning of his enterprises was severely disrupted by the raid.
The government as a mace
As the prosecution showed footage of the wardrobes of the suspects, KPKONPI (the Commission for fighting corruption and forfeiture of illegally acquired assets, or the anti-corruption commission for short), decided to tackle what it saw as much bigger problems for Bulgaria -freedom of speech and the desire for judicial reform.
At the beginning of November, the chair of the Supreme Court of Cassation (VKS) Lozan Panov received a subpoena from KPKONPI to report to the Anti-corruption Directorate to give a statement concerning one of the commission's investigations. Panov's summons was related to a tax audit of his personal income initiated in the spring. According to the tax inspection report published on September 18th, he owes 16 000 levs in income tax, even though another audit conducted three months earlier concluded that he didn't owe any tax.
Tax inspectors' conclusion that Mr Panov had allegedly withheld taxes is based on a tendentious distortion of evidence collected during the investigation and is unlikely to stand in court. In one example, tax inspectors claim he broke the law by not declaring a reimbursement wired to him by a tenant as payment for an electricity bill. According to the inspectors, income tax is due on this amount.
While the evidence is inconclusive, the investigation still gives the anti-corruption commission a chance to freeze Mr Panov's assets. It can go as far as requesting their seizure on the grounds that they have been illegally obtained, even before the court has considered Mr Panov's appeal.
Why can this happen? Precisely because Mr Panov and the court he is heading are in charge of supervising the anti-corruption commission. A judge with an asset freeze hanging over his head could be a lot more amenable. In spite of that, at the end of November, the Supreme Court of Cassation upheld the decision which the anti-corruption commission was trying to stop - that it's illegal to forfeit the assets of an individual who has been acquitted of wrongdoing.
Panov has been under a full-blown attack ever since he was elected to the post. The reason is clear - his public activities in defence of the judiciary's independence and his insistence on objectively investigating corruption scandals. But if until recently this was confined to the realm of daily harassment and smear tactics, this is the first time that state institutions have joined the offensive.
The mechanism of this combined attack - by the media conglomerate around MP Delyan Peevski, which always serves the powers that be, and by the Peevski loyalists in the prosecution and the anti-corruption commission - is often deployed against those whom the government deems "inconvenient". This well-oiled juggernaut delivers blows to judges, businessmen, organizations. And only because they don't toe the line.
Another example is the onslaught against Capital's and KQ's co-publisher Ivo Prokopiev. First, he was personally identified as an archenemy by prosecutor-general Sotir Tsatsarov. The reason is rather prosaic - articles critical of Mr Tsatsarov's work. As a consequence, Mr Prokopiev was, together with former government ministers Simeon Dyankov and Traycho Traykov, absurdly accused of wrongdoing in connection to the sale of the state-owned stake in a power distribution company. In short, the prosecution accused the three of them of fraud in the sale of the shares at an open auction on the stock exchange in Sofia.
The accusation was used as a formal justification for the launch of an investigation by the anti-corruption commission, which froze Mr Prokopiev's assets at the end of 2017. To this day, the court keeps returning the indictment to the prosecution with the reasoning that it doesn't understand the nature of the crime, how the defendants committed it, and how they benefited from the alleged crime. Yet this doesn't prevent the commission from freezing the defendants' assets, and this could continue for as long as the prosecution continues its investigation.
At the beginning of the summer, Mr Prokopiev was charged once again. But on this occasion, the prosecution didn't announce this but instead waited to package the accusation together with the charges against the Banevs - another instance of the arbitrariness of the prosecution's actions.
To Mihail Ekimjiev, a Plovdiv-based lawyer and specialist in EU and Human Rights Law, the recent moves of the prosecution are politically motivated. He describes them as the 'modus operandi' of the Bulgarian authorities in the decade since Boyko Borissov's GERB party has been in power, calling it the 'Putinisation' of Bulgarian politics.
"In the past nine years of almost perpetual Borissov rule, he grew fond of the Russian model of controlled oligarchy whereby large-scale businessmen who play along with the GERB model are treated well, while those who go against it for one reason or another are being pressured," Mr Ekimjiev says.
Tsvetomir Todorov, the researcher at the Bulgarian Institute for Legal Initiatives, also questions the motives of the prosecution and the state for their latest actions. "We can only assume those attacks are an attempt to redistribute the economic influence within the state, and thus sway the political outcome, as both are interconnected in Bulgaria. These operations are, in a way, signals to other business actors that they should know their place," Mr Todorov says.
Mr Ekimjiev and Mr Todorov agree that the effects would be catastrophic - both to the state institutions themselves and to the already scarce public trust they enjoy.
"Overdramatized operations, followed by no court decisions, is breaking trust in the institutions," Mr Ekimjiev warns, adding that the public has become so strongly desensitized to such high-profile actions that it does not think about the legal grounds on which the prosecution works but rather in terms of "why they attack these people exactly now".
"When businessmen are being acquitted by courts, the general public is left with the impression that either they have been targeted without justification by the state, or that there is no way some rich people can be prosecuted and tried successfully by the Bulgarian judiciary," the lawyer concludes.
The operation of this high-handed mechanism of coercion is only made possible by the utter unaccountability of the prosecutor general (and the entire institution he represents) and the anti-corruption commission. Combined with the restricted media freedom environment, it turns the law enforcement authorities into their own antithesis.