Bulgarian Connection: high-scale cigarette contraband destabilises Bulgarian corruption

Delyan Peevski and its former banker Tsvetan Vassilev with a black car in the foreground

Bulgaria, new president of the Council of Europe, is hit by a corruption and contraband scandal: the one of the company Bulgartabac, reveals French media 8e-etage.fr. In November 2017, the company’s name was mentioned for the first time in a report by the Turkish services combating organised crime and contraband, regarding the smuggling of Bulgarian cigarettes to Ankara. The number of cigarettes passed illegally would represent over the half of the contraband in Turkey, another report says. And it seems that there is a lot more behind this tobacco contraband.

Scandals, corruption and smuggling. That’s what Bulgartabac is there for. That’s not new – it’s been going on since Bulgartabac was officially in the hands of the state” says Tzvetan Vassilev to 8e-etage. He is an ex-banker who used to work for Bulgartabac for several years. As for him, the person responsible for all these crimes is Bulgarian politician Delyan Peevski. The two men worked together for several years but, after a feud in 2014, Vassilev’s bank, at the time the 4th most powerful bank in Sofia, suddenly went bankrupt. Tzvetan is now sought by the Bulgarian justice and by Interpol for embezzlement. Now a refugee in Belgrade, he gathers evidence and plays the whistle blower.

Bulgartabac’s money-laundering system, described by investigative media Bivol, streches from Liechtenstein to Switzerland, Austria or Cyprus, but all these meet in Dubai, in a company called TGI Middle-East, that owns close to 80% of Bulgartabac and several other companies in Bulgaria” reports 8e-etage. Behind which, Delyan Peevski is hiding, claim Bulgarian investigative journalists.

Plan of Bulgartabac's organisation

                    Diagram of the complex structure of Bulgatabac’s companies

 

A country ruled by corrupt politicians
Delyan Peevski, a Bulgarian oligarch, is at the centre of most corruption scandals in Sofia. Already denounced by Der Spiegel in 2015, 8e-etage describes his resume, a pretty impressive one for a 37-year-old man. “In 2001, at the age of 21, while not yet finishing law school, Peevski is already a board member of Bulgaria’s largest port. Four years later, aged 25, he becomes the youngest vice-minister in charge of disasters and emergencies. He was elected deputy in 2009, and a second time in 2013, despite repeated absences at parliamentary sessions. On June 14, 2013, when he was appointed head of the national security agency, the DNS, more than 10,000 people marched the streets of Sofia demanding greater transparency in political life. Peevski was forced to resign the next day, but that did not mean he was out of the politics. Still in office a year later in the MRF party, there was concern he could become a member of the European Parliament. His companies won over 90% of public tenders between 2007 and 2015. His mother, Irena Krasteva, owns almost half of the media in the country.“ Yet, despite countless public denunciations, Delyan Peevski has never had a penalty.” He owes his immunity, says the journalist, to the General Prosecutor Sotir Tsatsarov, a man so powerful that “only God is above him”.

Since joining the European Union on January 1st 2007, Bulgaria has been committed to reforming its judicial system and ending high-scale corruption. Each year since then, a monitoring report is published by the European Commission to guide the country on its road to progress. The last report states that “the fight against corruption was pointed out in the January report as the area in which the least progress has been made in the last decade.” In fact, in 2016, Transparency International officially ranked Bulgaria as the most corrupt country in the EU. And it doesn’t seem to get any better: on the 2nd of January, the new Bulgarian President Rumen Radev vetoed an anti-corruption law.

 

Financing a terrorist group
This explains why the shady Bulgartabac system could last for so long. But why is this scandal coming out now? According to Bulgarian newspaper Dvenik, to understand, you have to look at Bulgaria’s neighbour: Turkey. The main problem of Turkish authorities is not the treasury’s loss from unpaid duties and taxes. It is the fact that Kurdish rebels control the contraband channels and make solid incomes from charging smugglers’ fees to allow their goods to pass to third countries. Thus, smuggling Bulgarian cigarettes provides financial injections for Erdogan’s enemies, the PKK, a Kurdish group fighting Ankara since 1984, that was listed as a terrorist organisation by NATO.

8e-etage underlines that this last Turkish report could be fatal to this already weakened company: in 2016, Bulgartabac had to close two of its fabrics, fire dozens of employees and sell many of its brands to British American Tobacco. The same year, after being accused of financing terrorism, Peevski announced that Bulgartabac would stop selling to the Middle East, its main client. In January, General prosecutor Sotir Tsatsarov, under civilians and anti-corruption’s pressures, announced that a judicial inquiry would be opened on Bulgartabac. This could be the end of Bulgartabac – but could it also be the end for the reign of these corrupt politicians? 8e-etage concludes that “If the investigation on Bulgartabac is seriously made, Tsatsarov will shed light on a system that he has been protecting for years – and would lose his best business partner, Delyan Peevski.

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