MRF Corporation

The Revival Process

It all started with the attempts of the leadership of communist Bulgaria to assimilate Bulgarian ethnic Turks and Muslims throughout the 1970s and 1980s. This process peaked in the 1984-1985 period with the forced change of Turkish and Arabic names of most of the 900,000 Bulgarian Muslims of Turkish and other minority descent for Bulgarian ones. Violent repressions against dissenters continued throughout the decade, with hundreds incarcerated. The escalating tensions culminated in the 'Great Excursion' of the summer of 1989, just a few months before the fall of the regime, when up to 360,000 people were forced out of the country to Turkey, with most of their belongings and real estate expropriated by the authorities.

Although most of those recent emigres were free to come back just a few months later once the Zhivkov regime was toppled, the wound of the attempted forced assimilation remained.

It was in this atmosphere that the MRF rose to prominence as a political force seeking to represent the interests and protect the rights of the ethnic Turkish minority. With most of its leadership - including Mr Dogan - having links to secret organizations that opposed the assimilation policies of the previous decades, the party was recognized by the majority of ethnic Turkish voters as their legitimate representative for the years to come. Ironically, by the time dossiers of former agents of Communist-era State Security service started getting released in the mid-2000s, exposing Mr Dogan as its operative, he had already established himself as a formidable charismatic leader and had entrenched the political positions of the MRF among the insular, mostly rural Bulgarian ethnic Turks.

Kingmaker in Parliament

The loyalty of these core voters, numbering about 200,000-400,000 throughout the years, has always shored up MRF's position as a third or, at worst, fourth largest political force in Parliament. Also, despite professing to be a centrist liberal party accepted by the European liberal family, its reliance on the backing of mostly undereducated rural voters who have very little notion of the doctrine of liberalism means that the MRF leadership can practically do whatever it wants nationally - as long as it maintains its dominance of local politics.

The MRF has managed to strike this balance - almost no party has ever even tried to contest its positions in its heartlands, allowing it to keep its grip over ethnic Turks while simultaneously backing the power of the moment overtly or more secretively. Thus, in its 30-year history, the MRF has become a key actor in Bulgarian politics, capable of overthrowing and installing governments. It has been in power several times, sometimes informally, for example as a supporter of the anti-Communist government of Filip Dimitrov (1991-1992). This reformist cabinet was brought down with the votes of the movement, which withdrew its support in order to back, alongside the Communist Party transformed into Bulgarian Socialist Party (BSP), a nominally technocrat government led by Prof. Lyuben Berov.

The MRF then stayed in opposition until the quick ascent to power of Bulgaria's last King Simeon Saxe-Coburg-Gotha, who had formed the NDSV liberal party that won the 2001 elections. The MRF joined a government coalition with NDSV that served until 2005. Later, the MRF formed a coalition government with the BSP and NDSV under Socialist Prime Minister Sergei Stanishev that was in power until 2009. Most recently, the MRF was a coalition partner of the BSP in the government of Plamen Oresharski (2013-2014).

Prospering in power, prospering in opposition

The MRF has managed to prosper even when the right-wing GERB party is in power in coalition with far-right partners. It has become the new normal that the party of Prime Minister Boyko Borissov uses the votes of MRF members of Parliament to pass legislation opposed by its nationalist sidekicks. Laws ranging from legislation benefiting large fuel companies like Lukoil to changes strengthening even further the hand of the Prosecutor's Office have been backed by the MRF, even when nationalists protested against them. Pro-Euro-Atlantic legislation such as the ratification of the free-trade agreement between the EU and Canada (CETA) or the approval of the acquisition of new F-16 fighter jets for the Bulgarian Air Force would never have passed without the MRF's backing.

This does not come cheap. Municipalities run by the MRF consistently get far more cash subsidies per capita from the central government compared to those governed by Socialists. For example, 36 municipalities run by the MRF received 13 million levs (6.5 million euro) in subsidies in 2018, while six comparable municipalities governed by the BSP only got one million levs - less than half.

MRF-linked firms have been some of the largest beneficiaries of road construction projects and other public procurement tenders, both at a local and national scale. In 2005 Ahmed Dogan, then still MRF leader, declared that his party has "a whole orbit of companies" that depend on him. "In the last fifteen years maybe half of the businessmen above the average level got there with my help, or at least with my nod," Mr Dogan said, causing a widespread backlash that tainted Mr Stanishev's government for four years and in 2009 probably blew the Socialists' chances of winning a new term of office. It opened the door for Boyko Borissov whose GERB party came to power on a largely anti-graft platform.

This process of merging corporate with party interests happened gradually. First, during the 1990s, the MRF offered protection and patronage to business people in the localities it controlled. Later, as it proved itself to be an enduring and stable political party, many large-scale businessmen started relying on it at a national level. The most notorious of all business groups that relied on the MRF in Parliament was Multigroup, a corporation linked to ex-State Security officials that took control of large swaths of Bulgaria's rapidly privatized economy.

In all cases, relying on the MRF was the safest bet for business people and oligarchs - they knew it would always be an active kingmaker in Parliament and could easily pass any piece of legislation without fearing repercussions from its voters. As years passed by, it turned out that the party could also easily be used to capture the nominally independent judiciary by appointing loyal magistrates to key positions in the justice system.

The glorious leader

There are several reasons for the MRF's success, apart from its reliance on its hardcore electorate. First of all, comes the iron grip of Ahmed Dogan as leader over the local party structures, the businesses linked to them and the MRF parliamentarians. For over two decades Mr Dogan has managed to take total control of the workings of the party, ousting opponents at the first sign of disloyalty. Several politicians who were initially MRF members have tried to stand up to Mr Dogan, but to no avail - not a single alternative party that sought to attract the votes of ethnic Turks have ever succeeded.

Delyan Peevski, who until recently was one of Mr Dogan‘s closest lieutenants, has become the personification of high-level corruption and state capture by shady oligarchic circles for an entire generation

Photographer: Aneliya Nikolova

The most well-known case is that of Lyutvi Mestan, who allegedly tried to steer the party towards closer links to Ankara. The attempt was at odds with the interests of Mr Dogan who had already retired to the position of honorary leader and led to the ousting of Mr Mestan as party leader in a matter of days at the end of December 2015. Formally, the sin committed by Mr Mestan was that he urged Bulgaria's parliament to back Turkey - a NATO ally - in the aftermath of the downing of a Russian warplane by the Turkish Air Force over Syria in December 2015. Informally, however, it was the growing boldness of Mr Mestan, who had taken the reins of the party in 2013 after an attempt on the life of Mr Dogan.

Later, an attempt by Mr Mestan to create an alternative ethnic Turkish party with liberal aspirations was short-lived and completely unsuccessful - just as all other attempts before his had been. Mr Dogan's full domination of the MRF has worked for so long not only because he has been good at wrong-footing his internal opponents and making strategic coalitions with key people outside the party. He also pretends to be a Platonic "philosopher-king" pulling wisely, albeit ruthlessly, the strings of the party - and the state. "I am the instrument of power that allocates the portions for the companies in this country," he was recorded as saying at a party rally in 2009 - a confession that might have cost the career of any politician in the West, but only served to fortify the image of Mr Dogan as a grey eminence in Bulgarian politics that cannot be ignored.

Enter Peevski

A notorious figure personifying the full-fledged corporatization emerged in the mid-2000s. This was Delyan Peevski whose appointment as head of the State Agency for National Security (known by its Bulgarian acronym DANS) in June 2013 sparked the largest post-1997 protests in Bulgaria's democratic history.

Before that summer, Mr Peevski was a little-known MRF backbencher with vast business interests and few assets listed in his public statement of conflict of interest. He was kicked out as deputy minister in charge of disaster response in the Stanishev government in 2008 for alleged extortion of the CEO of a state-owned company but was later reinstated after pressure from the MRF. Despite his young age at the time (he was born in 1980), Mr Peevski had forged a whirlwind career spanning from the directorship of the Port of Varna when he was 21 to a stint as a crime investigator at the Sofia Investigation Service of the Interior Ministry. In the meantime, his mother - Irena Krasteva, who was heading the National Lottery during the Simeon Saxe-Coburg-Gotha government, started buying off bankrupting media outlets in the aftermath of the global financial crisis with credits from Corporate Commercial Bank (Corpbank) of Tsvetan Vassilev.

While the New Bulgarian Media Group publishing company - the media conglomerate controlled by Ms Krasteva and later by her son - backed GERB during the party's first three years in power, they made a U-turn in a matter of weeks in the spring of 2013 - just like they did in 2009 when they shunned the Socialists. It was Mr Peevski's media outlets that fuelled a public scandal later dubbed The Kostinbrod Scam, an alleged vote-rigging attempt by a GERB loyalist. It is debatable whether the scandal tipped the election results, but it shows the might of NBG not only to cause a public scare but also to mobilize prosecutors to chase ghosts.

The scandalous appointment as head of DANS of the then 33-year-old "young and successful businessman", as Mr Peevski described himself in an interview for one of his own media outlets, turned out to be a step too far and caused the #DANSwithMe protests of the summer of 2013. And while it was the Socialist Party and technocrat Prime Minister Plamen Oresharski who took the brunt of public outrage at Mr Peevski's appointment, his instalment at the helm of DANS served to expose the extent of MRF's growing prowess and highlight the importance, ambition and audacity of the young media mogul. In Bulgaria, Mr Peevski has become the personification of high-level corruption and state capture by shady oligarchic circles for an entire generation.

The Corpbank-Peevski axis

The media empire that Mr Peevski built using credits from Corpbank is just the tip of the iceberg of his business interests. They peaked in 2014 when companies related to him were selected to build the 4-billion euro Bulgarian section of Gazprom's South Stream gas pipeline, a project that was subsequently abandoned. By that time Mr Peevski controlled an empire valued at more than 500 million euro, spanning from retail and food to construction and real estate.

After Mr Peevski and Mr Vassilev fell out in 2014, which led to the collapse of Corpbank, the state-owned Bulgarian Development Bank became the lender of last resort for the mogul's businesses. This is yet another proof of how a state structure captured by MRF interests is financing the exploits of their most prominent member, and of these there are many.

In another twist, after decades in which Mr Dogan preferred to indirectly manage his money, in 2018 he acquired the mothballed Varna thermal power plant (TPP), on the Black Sea coast. Miraculously, the new owner restarted the power plant and received tens of millions of levs in contracts to keep it in cold reserve. The business of staying idle was so profitable that the company that owns the power plant now consolidates under its umbrella all real estate properties owned by Mr Dogan. In addition, Bulgarian authorities issued a number of decisions and licenses to the small seaport adjacent to the TPP and which is used for unloading of coal deliveries that may make it a full-fledged operating port. This would, in practice, divert part of the cargo business of state-owned Port of Varna into the hands of Mr Dogan's private holding.

The acquisition of Varna TPP and its operations is just one of the examples of how Mr Dogan has been using his political influence for personal gain. And this is just an example visible on the surface because it is directly linked to the MRF strongman. One can spend a lifetime untangling how the informal network of patronage and favouritism established by the MRF and Mr Dogan in the past decades works in the public administration and political parties connected to specific business circles. The MRF has proved that you need not be the biggest fish in the pond if you are a strong, centralized, non-ideological organization serving a single purpose - to perpetuate itself and the well-being of its leadership.