WikiLeaks XXVIII: Organized Crime Squeezing the Life Out of Bulgaria

Bulgarian crime bosses the Galevi brothers(Pictured: Bulgarian crime bosses the Galevi brothers.)

We’re honored to have Michael Busch dissecting the latest WikiLeaks document dump for Focal Points. This is the twenty-eighth in the series.

A series of US cables WikiLeaked during the closing weeks of 2010 paint a discouraging portrait of the political economy in Bulgaria. In particular, the cables highlight the dispiriting degree to which organized crime has come to dominate the country, and the increasing frustration experienced by the country’s European neighbors with Bulgaria’s half-measure to combat mafia influence over society.

Crime’s grip over Bulgarian society is hardly news. Writing a decade ago, Robert Kaplan described the evolution of the country’s tradition of organized crime. Discussing former satellite states of Soviet Russia, Kaplan notes that

By the 1980s, communist parties had evolved largely into large-scale mafias which, when the system collapsed, simply divided into smaller mafias that purchased politicians in all those new and weak democracies…Nowhere, however, were such phenomena so transparent as in Bulgaria when I visited in 1998…Bulgarian crime has no centuries-old tradition like Italy’s, or even one of heroic thieves and warrior clans as in Russia, Serbia, or Albania. Nor is there the colorful ethnic ingredient here that distinguishes criminal circles in the Caucasus, particularly in Georgia and Chechnya, with their family mafias and highwaymen. The Bulgarian groupings essentially are the result of the transition from communist totalitarianism to parliamentary democracy.

But the cables released this past month reveal just how bad the mafias have headlocked the country’s economic and political development. The first cable, dating from 2005, plainly states that

The strength and immunity from the law of organized crime (OC) groups is arguably the most serious problem in Bulgaria today…OC groups range from local street thugs involved in extortion to sophisticated international narcotic dealers and money launderers. An estimated 118 organized crime groups were operating in Bulgaria at the end of 2004…though many of these groups are relatively small and the landscape is dominated by a handful of big players. Organized crime continues to be pervasive in many spheres of Bulgarian life, despite domestic and international efforts to combat it. To date, not a single major OC figure has been punished by the Bulgarian legal system, despite an on-going series of OC-related assassinations.

The scale and scope of mafia activity in Bulgaria is staggering.

OC groups are known to be involved in narcotics trafficking, prostitution, extortion and racketeering, various financial crimes, car theft, and trafficking in stolen automobiles. Human trafficking for sexual exploitation, counterfeiting, and debit and credit card fraud also are some of the most common criminal activities engaged in by Bulgarian organized crime. Crime groups involved in human trafficking are extremely mobile, and victims are often sold or traded amongst various groups. Many groups use a host of legitimate businesses domestically and abroad to launder the proceeds of their illegal activities. Several well-known businessmen linked to organized crime have parlayed their wealth into ownership of sports teams, property developments, and financial institutions. (An organized crime activity that received special attention due to its growth in 2004 was VAT (value-added tax) fraud. The Ministry of Finance estimated that VAT fraud cost the Bulgarian treasury over $700 million in losses annually.)

The seizure of Bulgaria’s political institutions by mafia groups, however, offers the most alarming evidence of Bulgaria’s troubles.

Organized crime has a corrupting influence on all Bulgarian institutions, including the government, parliament and judiciary. In an attempt to maintain their influence regardless of who is in power, OC figures donate to all the major political parties. As these figures have expanded into legitimate businesses, they have attempted — with some success — to buy their way into the corridors of power. During the 2001 general elections, a number of influential “businessmen,” including XXXXXXXXXXXX and XXXXXXXXXXXX, heavily financed and otherwise supported the XXXXXXXXXXXX campaign.

Below the level of the national government and the leadership of the major political parties, OC owns a number of municipalities and individual members of parliament. This direct participation in politics — as opposed to bribery — is a relatively new development for Bulgarian OC. XXXXXXXXXX Similarly in the regional center of XXXXXXXXXXX, OC figures control the municipal council and the mayor’s office. Nearly identical scenarios have played out in half a dozen smaller towns and villages across Bulgaria.

The problems with organized crime in Bulgaria have exacerbated Sofia’s relationship with Brussels, as a cable dating from mid-2009 and released this past week makes clear. Discussing the relationship between the European Commission and the Bulgarian government, the cable relates that a confidential source

told us that the Commission feels they have “tried everything” to make the Bulgarians reform their judicial system, but concluded “how do you make them reform when they do not want to?” The government’s defensive arrogance — and lack of political will — is intensifying enlargement fatigue in Brussels.

With respect to a commission report on Bulgaria’s efforts to combat the influence of crime in the country, the cable notes

The Bulgarian government — especially PG Velchev and European Minister Passy — are lobbying heavily for a positive monitoring report, magnifying modest progress. The government keeps presenting the Commission a list of on-going high profile organized crime and corruption court cases (the number has grown from 30 to 52 over the last two and a half years) as “successes.” Incredibly, several of the “success” cases have been suspended. Several other cases, against notorious shady businessmen Angel Khristov and Plamen Galev AKA the Galevi brothers, and others can hardly be called successes as these defendants gained immunity by running for parliament. XXXXXXXXXXXX said the team found this “loophole” quite disturbing, along with how some Bulgarian officials vehemently defend the law that permits this phenomenon. Along with the “Galevization” of politics (referring to the Galevi brothers election campaign), Brussels is also concerned with vote buying and general election fraud.

The cable concludes with the observation that their EU source’s

frustration with the Bulgarian government’s lame and insincere reform efforts was striking. It appears to be spreading in Brussels where at least the working level appears to be feeling “buyer’s remorse” over letting Bulgaria and Romania into the club too early. According to reliable contacts, Brussels Eurocrats have dubbed enlargement fatigue the “Bulgarian Break,” further tarnishing Bulgaria’s bad image within the EU.

Not only have crime groups infiltrated Bulgaria’s highest political institutions, but they have also effectively destroyed the country’s national pastime, according to a cable released this week that dates from January 2010.

Since the fall of Communism, Bulgarian soccer has become a symbol of organized crime’s corrupt influence on important institutions. Bulgarian soccer clubs are widely believed to be directly or indirectly controlled by organized crime figures who use their teams as way to legitimize themselves, launder money, and make a fast buck. Despite rampant rumors of match fixing, money laundering, and tax evasion, there have been few arrests or successful prosecutions. As a result, the public has lost faith in the legitimacy of the league as evidenced by the drop in television ratings and match attendance. Recent scandals involving the most popular teams and the mass firing of the referee selection commission for a second consecutive year have deepened the public’s disgust.

It isn’t only that the teams are controlled by the mafias; the games themselves are often rigged.

Long-standing allegations of match fixing have probably done the most to damage Bulgarian soccer’s reputation. According to the sports editor of the daily “Trud,” Vladimir Pamukov, and sports journalist, Krum Savov, the most common match fixing schemes are bribing referees and paying off players on the opposing club to insure a team loses by a certain score. They argue that thanks to organized crime influences and economic disparity between the teams, match fixing has become an extremely common practice. This has caused many Bulgarians to view the outcomes of soccer matches like Americans view the predetermined outcomes of professional wrestling.

It’s no wonder, then—given the country’s hopelessly corrupt political institutions, suffering economy, and fraudulent football leagues—that Bulgaria ranks dead last on a global happiness survey, according to the Economist, as the saddest place on earth.