Bulgaria aims to overtake Romanian anti-corruption efforts

By bne IntelliNews April 6, 2015

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Bulgaria has announced plans to set up a single authority to tackle corruption, following criticism from the European Commission. Prime Minister Boyko Borissov said on April 3 that within four months Bulgaria is aiming to overtake Romania, where a series of high-profile corruption probes have been launched recently.

The main step under the government’s new National Strategy for Prevention and Combating of Corruption will be to set up a single body taking over the operations of existing anti-corruption agencies, Bulgaria’s Deputy Prime Minister, Meglena Kuneva, told journalists on April 3, according to a government statement.

The new agency will be responsible for investigations into over 7,600 senior government officials and magistrates, said Kuneva, a former European Commissioner. It will take over from the existing Commission for Prevention and Ascertainment of Conflict of Interest, the Centre for Prevention and Suppression of Corruption and Organised Crime (BORKOR) and National Audit Office units.

Six priority areas have been identified, including countering top-level corruption, reducing petty corruption and building a climate of public intolerance to corruption. Changes to the law to protect whistleblowers are also planned.

The strategy “foresees the creation of a single unit for analysis and investigation of assets and conflict of interest of persons occupying high state positions", said a statement posted on the government’s website.

“The aim of the strategy is to turn Bulgaria into a country where petty corruption is limited largely to average EU levels, high-level corruption is not left unpunished, anti-corruption institutions work efficiently and have a real deterrent effect on corruption, and perceptions and experiences of individuals and companies of corruption levels in Bulgaria are significantly reduced. The document recognizes the crucial importance of policies in other areas that have an overall impact on the fight against corruption, namely: the judicial reform, the administrative reform, e-governance, and public procurement,” it adds.

The proposed strategy needs to be approved by both the cabinet and the parliament. Sofia aims to put it into operation by January 1, 2016.

Launch of the single agency would represent a considerable change in Bulgaria, which until now has had “no independent institution to focus efforts, make proposals and drive action against corruption,” according to a November 2014 report by regional anti-corruption and good governance initiative Southeast Europe Leadership for Development and Integrity (SELDI).

This has had a damaging effect on business. 51% of companies consider corruption to be a problem, while 94% believe close links between business and politics lead to corruption, and 66% say the only way to succeed in business is to have political connections, the report says.

Stepping up anti-corruption efforts was one of Borisov’s promises in the run-up to the October 2014 parliamentary election.

The mass protests that forced out both Borissov’s previous centre-right government, which held power from 2009 to 2013, and its successor under Plamen Oresharski, show that Bulgarians are becoming increasingly intolerant of official corruption.

Borissov was forced to resign after mass protests over corruption, austerity measures and falling living standards in early 2013. It was replaced by a Socialist government under technocrat Plamen Oresharski, but the new government’s reputation was immediately tarnished when the prime minister appointed 32-year-old media tycoon Delyan Peevski as head of the State Agency for National Security. An MP with the ruling Socialist Party’s junior coalition party with no experience in security, Peevski’s appointment sparked mass protests.

This set the pattern for anti-corruption demonstrations throughout the Oresharski government’s 15 months in office. Corruption accusations were later levelled at the government in connection to procurement for the planned South Stream gas pipeline, which has since been scrapped. Adding to pressure on the government, Bulgaria’s fourth largest bank, Corporate Commercial Bank, collapsed in mid-2014. Sofia is now trying to extradite the bank’s largest shareholder Tsvetan Vassilev from Serbia.

The decision to launch the new body also follows criticism from the European Commission. Bulgaria made slow progress on judicial reform and tackling corruption and organised crime in the last year, according to the European Commission’s January 2015 report on progress under the Co-operation and Verification Mechanism (CVM), a tool created to assess steps taken in Bulgaria and Romania in these areas.

This has been primarily attributed to political turmoil in the country in 2014. “The fact that the period covered by this report saw three different governments and a deadlocked parliamentary situation has clearly contributed to a lack of resolve to reform.” the report said.

Commission First Vice-President Frans Timmermans said in a statement that, “in a number of areas, problems have been acknowledged and solutions are being identified". However, overall the report was less positive, pointing out that, “responses to the well-known problems in area of corruption and organised crime have remained piecemeal and lacking in overall strategic direction. There are very few examples where high-level cases of corruption or organised crime have been brought to conclusion in court.”

Surveys have also shown a mixed picture in terms of Bulgarian attitudes towards corruption. A Eurobarometer survey published immediately before the CVM report found that a strong majority of Bulgarians saw judicial reform, the fight against corruption and tackling organised crime as serious problems for the country, and they had a high level of concern that the situation had deteriorated.

The SELDI report finds that corruption pressure - measured by the percentage of the population who had been asked for a bribe - was among the highest in the region; however, Bulgarians also demonstrated a high level of resistance to demands for bribes.

The report also points out that while the size of Bulgaria’s informal economy has shrunk in the last decade, according to the Bulgarian Center for the Study of Democracy’s 2013 Hidden Economy Index, “the share of the hidden economy in Bulgaria increased in 2013 among both businesses and the population. The main reasons behind this development can be sought in low income, harsh labour market conditions, the decline in the economic outlook, as well as the overall political instability in 2013.”

The relative lack of progress in Bulgaria compared to its neighbour and fellow EU member state Romania appears to be one of the main motivations for the new strategy.

Speaking during a visit to Varna on March 3, Borissov claimed that Bulgaria would draw ahead of its neighbour within four months.

“In a sense, they were trying to catch up with us ... What has happened in a year and a half is that Romanians are now given to us as an example. Four years ago they were behind us,” he said, Bulgarian news agency Novinite reported.

Bulgaria was in 69th place on Transparency International’s 2014 Corruption Perceptions Index, tied with Greece, Italy and Romania. The four countries were rated the most corrupt within the EU.

However, Romanian prosecutors, in particular the National Anticorruption Directorate (DNA) have been extremely active in their attempts to bring high-level officials to justice, resulting in a series of investigations and arrests affecting former ministers and top businesspeople. Chief prosecutor Laura Kovesi said on February 24 that 2014 had been a record year with the largest ever number of indictments, convictions in investigated cases, and investigations into high-level public officials.

Most recently, on April 3, Romania’s richest businessman Ioan Niculae was sentenced to 30 months in prison after being found guilty of bribery. The same day, the high court ruled that Darius Valcov, who resigned as finance minister in March after a corruption probe was launched, could be taken into custody.

Other influential politicians to have become the target of corruption investigations include former presidential candidate Elena Udrea, and former minister for large projects Dan Sova.

Romania’s latest CVM report was considerably more positive than Bulgaria’s, noting “a number of areas of continued progress ... The action taken by the key judicial and integrity institutions to address high-level corruption has maintained an impressive momentum.”

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