Neither the President of Transparency International - Bulgaria, nor the Executive Director of the Civil Society Development Programme in Bulgaria, could provide specific information related to corruption in the privatization of the Bulgarian Telecommunications Company (BTC) or any other state-owned enterprise, although both stated that the BTC has not yet been privatized (25 Feb. 1999; 2 Mar. 1999). Nor could either source provide specific information on any involvement of organized crime in privatization activities.

The President of Transparency International provided the following information in response to written questions from the Research Directorate pertaining to allegations of corruption in privatization activities, the possible involvement of organized crime, and the accessibility of state protection:

- No one can be prosecuted legally in Bulgaria for reporting corruption cases.

- There is freedom of speech and free press in the country, which makes it absolutely possible to report corruption cases in public.

- There is still a possibility of persecuting a person who has reported a corruption case by vested interests involved or even on the part of some officials - members of public institutions who are violating the law by persecuting a corruption case reporter.

- The level of efficiency of prosecuting corrupt officials by the Executive and legal institutions is considerably low. This opens a significant space for illegitimate revenge or "punishment" operations against corruption cases reporters whenever significant group interests (public or private) are offended.

- Considering the opportunity of emigration from the country motivated by illegitimate persecution, based on corruption cases reporting, I would consider it possible and requiring serious attention (2 Mar. 1999).

In offering his personal observations on corruption in Bulgaria, the Executive Director of the Civil Society Development Programme in Bulgaria said that there have been allegations of corruption in "nearly every deal" involving "over 1,000 privatisation transactions [that] will be carried out. ...However, these types of crimes are very difficult to prove" (25 Feb. 1999). When asked about the possible involvement of organized crime in privatization ventures, the Executive Director claimed: "It is clear that different economic groups are having a lot of interests around the privatisation deals and for some of the groups there are allegations of relations with the organised crime groups." To a question about the availability of protection in these instances from the state, the police, or the courts the Executive Director said that in his opinion, "if there is protection it is inadequate in any case."

According to the Bureau of European and Canadian Affairs of the US Department of State: "mass privatization finally began [in Bulgaria] in January 1996 and auctions began toward the end of that year. The second and third rounds were conducted in spring 1997" (Oct. 1998). The US & Foreign Commercial Service of the Department of State stated in 1998 that "privatization of Bulgaria's economy continues to be a top priority of Bulgaria's government. Foreign investors are being actively sought to purchase and infuse technology and capital in enterprises that have a viable future with new investment." According to the National Trade Data Bank of the US Department of Commerce, in 1995 the Bulgarian Telecommunications Company was on a government list "of companies not available for privatization," but the Prime Minister had directed that a privatization strategy be developed for it (n.d.a). The same source states that, "one of the privatization transactions that started in 1997 was that of Bulgarian Telecommunications Company, for which the GOB chose Deutsche Morgan Grenfell as consultant (n.d.b). Please see the attached document from the National Trade Data Bank for further information on privatization in Bulgaria (ibid.).

There have been general reports of corruption in state-owned companies in Bulgaria (Sofia Kontinent 21 Feb. 1997; Sofia Standart News 25 Feb. 1997; Sofia Pari 3 Sept. 1998; National Trade Data Bank n.d.c). There have also been reports that "quasi-criminal groupings...control large sections of the economy and...milk the state for favours" (Reuters 13 May 1996) and that, according to Bulgaria's Interior Minister, "the ramifications of the mafia presence in Bulgaria are terrifying, and reach the highest spheres of power" (Business Day 10 Oct. 1997). However, according to the Bulgarian representative of an international security firm, members of organized crime "are concentrated in certain sectors, above all in prostitution, contraband goods and drugs, rather than (usually) legitimate business sectors (EIU 2 July 1998).

Bulgaria's President has acknowledged the existence of corruption and a slow pace of reform (Sofia Korizont Radio Network 26 Mar. 1997), and there have also been reports of government action including the dismissal of state officials, plans for arrests and prosecutions, and efforts to coordinate anti-organized crime activities with other European nations (ibid. 21 May 1997; ibid. 6 June 1997; Sofia Standart News 25 Feb. 1997; AP 21 July 1998). Furthermore, according to the National Trade Data Bank:

Bulgaria has laws, regulations, and penalties against corruption, including a 1996 Law for Measures against Money Laundering. Bulgaria became a signatory to the OECD Anti-Bribery Convention in December 1997. The government procurement system is far from transparent (the Government Procurement Law of January 1997 has yet to show a track record), some business decisions seem to be made partly on political grounds, and some courts and law enforcement officers may be susceptible to influence (political or economic), but large-scale corruption in government circles does not appear to be as much of a problem as are bureaucratic impediments and regulations. U.S. firms have suspicions of corruption as an obstacle to foreign direct investment. Bribery is a criminal act under Bulgarian law for both the giver and the receiver. Penalties range from three to fifteen years imprisonment, depending on the circumstances of the case, with confiscation of property added in more serious cases. In very grave cases, the Penal Code specifies prison terms of 10 to 30 years. The 1996 Money Laundering Law also applies to bribes. Bribing a foreign official is a criminal act. Bribes cannot be considered as business expenses for tax purposes. The Prosecutor, the National Investigative Service, and the police are responsible for combating corruption. There have been trials and convictions of enterprise managers, prosecutors, and officers in the Ministry of Internal Affairs for corruption.

A major priority of the new Bulgarian government is to fight organized crime and corruption in the public and private sphere. Changes in the Penal Code and the Criminal Procedures Code were enacted in July 1997. It remains to be seen whether these will have the desired effect. (n.d.d)

This Response was prepared after researching publicly accessible information currently available to the Research Directorate within time constraints. This Response is not, and does not purport to be, conclusive as to the merit of any particular claim to refugee status or asylum.

References

Associated Press 21 July 1998. "Bulgaria, Spain to Cooperate in Tourism and Against Organized Crime." (NEXIS)

Business Day [South Africa]. 10 October 1997. "Central Europe Held in Thrall by Mafia." (NEXIS)

Civil Society Development Programme, Sofia, Bulgaria. 25 February 1999. Correspondence from Executive Director.

Economist Intelligence Unit (EIU). 2 July 1998. "Bulgaria Company: Crime Takes Three Forms." (NEXIS)

Reuters. 13 May 1996. Gareth Jones. "Bulgaria Economic Crisis Pinpoints Lack of Reform." (NEXIS)

Sofia Kontinent [in Bulgarian]. 21 February 1997. "Bulgaria: BSP's Purvanov Views NATO Decision, Election Campaign." (FBIS-EEU-97-035 21 Feb. 1997/WNC)

Sofia Korizont Radio Network [in Bulgarian]. 6 June 1997. "Bulgaria: Customs Chief Reports Restructuring, Corruption Clampdown." (FBIS-EEU-97-157 6 June 1997/WNC)

_____. 21 May 1997. "Bulgaria: Kostov Announces Government's Priorities to Assembly." (FBIS-EEU-97-141 21 May 1997/WNC)

_____. 26 March 1997. "President Stoyanov Rejects BSP Complaints on Sackings." (FBIS-EEU-97-085 26 Mar. 1997/WNC)

Sofia Pari [in Bulgarian]. 3 September 1998. "Bulgaria: Commentary Views Stoyanov's Remarks on State Bureaucracy." (FBIS-EEU-98-246 3 Sept. 1998/WNC)

Sofia Standart News [in Bulgarian]. 25 February 1997. "Bulgaria: Prosecution of 'Corrupt' High-Ranking Officials Viewed." (FBIS-EEU-97-037 25 Feb. 1997/WNC)

Transparency International - Bulgaria. 2 March 1999. Correspondence from President.

US Department of Commerce, National Trade Data Bank. n.d.a "Bulgaria: Selling to Bulgarian Telecomm. Co." [Internet] http://:tradeport.org/ts/countries/bulgaria [Accessed 22 Feb. 1999]

_____. n.d.b. "Bulgaria: Economic Trends and Outlook." pp. 3-5. [Internet] http://:tradeport.org/ts/countries/bulgaria [Accessed 22 Feb. 1999]

_____. n.d.c. "Bulgaria: Political Environment." [Internet] http://:tradeport.org/ts/countries/bulgaria [Accessed 22 Feb. 1999]

_____. n.d.d. "Bulgaria: Investment Climate Statement." [Internet] http://:tradeport.org/ts/countries/bulgaria [Accessed 22 Feb. 1999]

US Department of State, Bureau of European and Canadian Affairs. October 1998. "Background Notes: Bulgaria." [Internet] http://:tradeport.org/ts/countries/bulgaria [Accessed 22 Feb. 1999]

US Department of State, US & Foreign Commercial Service. 1998. "Bulgaria Investment Forum." [Internet] http://:tradeport.org/ts/countries/bulgaria [Accessed 22 Feb. 1999]

Attachments

US Department of Commerce, National Trade Data Bank. n.d.b. "Bulgaria: Economic Trends and Outlook." pp. 3-5. [Internet] http://:tradeport.org/ts/countries/bulgaria [Accessed 22 Feb. 1999]