Europe

Washington zeroes in on corrupt Bulgarian officials

On June 2, the US Department of State announced the designation of four former Bulgarian public officials as well as one current official for involvement in corrupt activities.  This designation is based on the same legal framework the State Department used in its May 19 designation of Albania’s former Prime Minister Sali Berisha for similar large-scale corrupt activities.  It is unclear at this time if Washington is applying a special regional focus or if these cases were simply processed in consecutive months. 

The State Department designated former Bulgarian public officials Alexander Manolev, Petar Haralampiev, Krasimir Tomov, Delyan Slavchev Peevski as well as current Bulgarian public official Ilko Dimitrov Zhelyazkov, due to their involvement in significant corruption.  

In their official capacities as Deputy Minister of the Economy, Director of the State Agency for Bulgarians Abroad, and Chief Secretary of the State Agency for Bulgarians Abroad, respectively, Manolev, Haralampiev, and Tomov were involved in corrupt acts that undermined the rule of law and the Bulgarian public’s faith in their government’s democratic institutions and public processes, including by using their political influence and official power for personal benefit.  

In his capacity as a member of parliament, Peevski used Zhelyazkov, an official in the National Bureau for Control on Special Intelligence-Gathering Devices, as an intermediary and accomplice to peddle influence and pay bribes both to protect himself from public scrutiny and also to exert influence over key institutions and sectors in Bulgarian society.

Treasury Department plays strong supporting role

In addition to the State Department’s designations, the Department of the Treasury also has designated Peevski, Zhelyazkov and Bulgarian oligarch Vassil Bojkov, along with 64 entities said to be owned and controlled by Bojkov and Peevski, for their roles in public corruption, pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act.  

These sanctions are being managed by the Treasury Department’s Office of Foreign Assets Control (OFAC), an organization with decades of experience in economic sanctions.  OFAC-sanctioned properties in the US have been frozen and all transactions by US entities involving these assets require special OFAC licenses.  OFAC has added all of them to its list of “Specially Designated Nationals” (SDNs), roughly equivalent to OFAC’s public “Hall of Shame.” 

Designees ineligible to travel to the US

The State Department designations are made under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2021, the same provision used in the Albania case last month.  The designation renders Manolev, Haralampiev, Tomov, Zhelyazkov, and Peevski, and each of their immediate families, ineligible for entry into the United States.

Taken together, these actions reaffirm Washington’s commitment to supporting rule of law and strengthening democratic institutions in Bulgaria.  In the State Department’s public announcement, it noted “The United States stands with all Bulgarians whose work drives reforms forward, and the Department will continue to use its authorities to promote accountability for corrupt actors in the region and globally.”

Political fallout in Bulgaria

Washington’s sanctions come a little more than a month before snap parliamentary elections scheduled for July 11 and could potentially hurt the image of Bulgaria’s former ruling GERB party.  As was expected, opposition leaders have already seized on the US announcements to criticize GERB and former Prime Minister Boyko Borisov, and a demonstration in Sofia on June 2 called for the resignation of the top state prosecutor.

The sanctions will undoubtedly impact the July elections, which were called after the parties that entered parliament in April failed to form a new government.  How that plays out and impacts Bulgaria’s dispute with neighboring North Macedonia over language and history remains to be seen.  Conspiracy theorists will however see the timing of Washington’s move as much more than coincidental even though overt election interventions through such sanctions are not currently in vogue.  

Hitting the oligarchs

Delyan Peevski is a powerful businessman, media mogul, and lawmaker from Bulgaria’s opposition Movement for Rights and Freedom (DPS), a party mostly made up of ethnic Turks. He controlled large swaths of the Bulgarian media landscape, including newspapers and television stations, and is considered one of the most powerful people in the country.  Labeled by one analyst as “oligarch in chief,” Peevski sought to influence municipal elections in 2019 by providing politicians with positive media coverage in exchange for protection from criminal investigations, one of the oldest tricks in any oligarch’s political playbook.

He is reportedly now living in Dubai.  In late 2020 Peevski hired a large Washington lobbying firm to help him with “issues in the U.S.” according to lobbying registration documents seen by various media outlets.  His case was being managed at that firm by a retired former FBI official. 

In a possible sign he expected Washington to eventually place sanctions on him, Peevski sold off his media assets, dropped off DPS’s list for the April 2021 parliamentary elections, and disappeared from the Bulgarian political scene. 

Also now based in Dubai, Vassil Bojkov, is a more traditional Bulgarian business tycoon, having amassed his fortune in the gambling sector.  His corrupt business activities focused on controlling the industry using outright bribery of government regulators as his primary tool.  

In politics, this year he funded and created the new “Bulgaria Summer” political party, which received nearly 3 percent in the April elections but failed to hit the threshold needed to receive a seat in parliament.   The Bulgaria Summer party is one of the 64 Bulgarian entities sanctioned by the Treasury Department’s OFAC unit.   

On a more disturbing note, in designating Bojkov for sanctions, Treasury’s OFAC said that Bojkov also planned to provide a sum of money to a former Bulgarian official and a Bulgarian politician earlier in 2021 to help Bojkov “create a channel for Russian political leaders to influence Bulgarian government officials.”

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