Municipality of Sofia - Embezzlement, Fraud and Corruption: notorious and exemplary cases 1998-2013 Background information for the

creation of anti-corruption guide for the municipal administration 1 Year The case in brief Source http://www.sofiansky.com/delata-sreshtu-stefan1998 "Centralni hali" case: On April 26 2004 the Supreme sofijanski [The official page of Mr Sofijanski] Prosecution of Cassation initiates a case after media publications: Municipality of Sofia creates joint company with the Ashtrom company (Cyprus). The municipality participates with land and market building in the city centre. The evaluation of the property is only 12500 leva (6250 Euros). The real price is 3,5 million dollars. The Municipality loses its propeprty since its share in the joint company is only 25% of all shares and all shares equal to 6250 Euros. The 25% are bought by the major shareholder. Mayor Sofijanski is temporarily suspended form office. http://www.sofiansky.com/delata-sreshtu-stefan1998 Business center "Gurko 1": Accusations that the mayor has sold municipality's shares in a joint enterprise sofijanski [The official page of Mr Sofijanski] at a price lower than the usual market prices. The enterprise was created to construct business center on municipal property. The deal benefitted the private company NIKMI, which bought out the shares from the other participants in the consortium: the Municipality and the Bulgarian Industrial Association. Later on instead of a business center construted a luxury private hotel was constructed. 1998 "Sofia Estates" /Sofijski Imoti/ Scandal: In 2004 Municipal council reports that in the period 1998-2003 the Municipal company "Sofijski Imoti" has made 926 sales of municipal properties. In 2010 only 210 estates remain in the company's possession. As a result the municipality suffered losses estimated at about 100 million leva (50 million Euros). Most significant deals refer to joint ventures with companies, notorious as hosting organized crime interests. The municipality participates with municipal land, which is subsequently bought out at lower than the market price ("Sofia City Company" Affair). Mayor Stefan Sofijanski Identifier municipal properties Additional info Case 2231/04: On July 21 2004 the Prosecution submits the case for trial. On June 14 2006 Sofia City Court acquits Sofijanski; On November 7, the Court of appeal confirms the acquittal Attachment Description of Court Case 2231/04 in a questionnaire by Prosecution for the EU commission (in Bulgarian)

Stefan Sofijanski

municipal properties

Case2986/04 in Sofia City Court. On February 28 2008 Sofijanski is acquitted.

Description of Court Case 2231/04 in a questionnaire by Prosecution for the EU commission (in Bulgarian)

Stefan Sofijanski http://www.temanews.com/index.php?p=tema&iid=648&aid=15041

municipal properties

Launched in 2006 cases are still in pre-trial phase; Procedural difficulties related to objections and complains against the prosecutor. The first court session is scheduled for January 2014. Cases threatened by negative perscription /time limitation 15 years and crime was commited in 1998/ On May 15 2002 the Prosecution terminated the case;

1999 "Euro bonds": Municipality of Sofia sells bonds for 50 http://www.sofiansky.com/delata-sreshtu-stefanmln. Euros - for underground and infrastructure. In 2001 sofijanski [The official page of Mr Sofijanski] The Supreme Prosecution of Cassation commences a case, based on a reader's letter in a national newspaper: Mayor Sofijanski contracted Standard and Poor's and Paris Bas bank to handle the emission without tender.

Stefan Sofijanski

consultancy on bonds /loan

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2002 "Milennium" Center Case: Municipality of Sofia participates in a joint venture with OBB bank and Investment Fund "Razvitie". The participation is in the form of 7000 sq. meters land. The municipality sells its share for the price of 876 326$. Sofijanski accused of benefitting the partners in the joint company.

http://www.sofiansky.com/delata-sreshtu-stefansofijanski [The official page of Mr Sofijanski]

Stefan Sofijanski

municipal properties

Case 3270/04 in Sofia Description of Court Case 2231/04 in a City Court. Sofijanski acquitted on Sept 24 2007 questionnaire by Prosecution for the EU commission (in Bulgarian)

http://www.sofia.bg/pressecentre/press.asp?open=9 Stefan 2003 "Toplofication" case: resources form the municipal &sub_open=34088&nxt=1890 [publication from the Sofijanski/Boyko company, managing the central heating system in the page of the municipality of Sofia] Borisov capital Sofia, have been systematically drained in the period 2003-2006. The municipal company bought equipment for the central heating system at prices much higher than the market. Example: the private company "Shibar" imported details that have been sold to the public "Toplofication" at prices that double the amounts filled in the customs' declarations. Prosecution claims the municipality suffers losses for 6 mln leva (3 mln. Euros). Valentin Dimitrov, director of Toplofication was arrested in 2006. His private message from the prison was intercepted and published. It hints the prominent socialist Rumen Ovcharov is involved in the case. 2005 "Tramcar" affair: In the period 2005-2007 the director http://www.mediapool.bg/deloto-tramkar-priklyuchi-s- Boyko Borisov 25-godini-zatvor-za-hristosko-vretenarovof the municipal tramway company "Tramcar", Mr news188853.html Hristosko Vretenarov, withdrew around 1 mln leva (500000 Euros) from the accounts of the company. Vretenarov claims guilty and declares he took the money "for others".

tenders for supplies and services Case 1068/08 in Sofia Decision of the supreme court from City Court. In 2009 Valentin Dimitrov and his 2013 (in Bulgarian) accomplices were convicted to different terms of prison (14 years for Dimitrov) and forfeiture. In 2012 the Sofia Court of Appeal acquitted him. In 2013 the Supreme court of Cassation returned the case to the Sofia Court of Appeal.

public transportation - tramway company

Vretenarov claimed guilty and was convicted by the Sofia City Court to 2,5 years and payment of a fine. The Court of Appeal decided a conditional sentence. The Supreme court decided an effective sentence of 2,5 years File 9882/2011 archived by prosecutor Arnaudova with no further actions

http://www.dnevnik.bg/bulgaria/2011/09/09/1153225 Boyko Borisov 2007 "The Brokers": In 2011 in an interview the interior _cvetanov_500_hil_evro_podkup_sa_poiskani_ot_pl minister Tsvetanov mentions that president Plevneliev complained about being blackmailed by members of the evneliev/?print=1 municipal council (called "the brokers") to obtain a land clearance for construction puroposes. Plevneliev rejected the claims. 2009 The "Novera" case#1: In 2009 the Novera company's concession to collect Sofia's garbage is terminated. One of the companies to 'inherit' it is AES-X OOD, owned by Ina Arsova, daughter of a former member of the municipal council and head of the municipal company "Cleanness", Krassimir Arsov. Arsov is also known as lobbyist for "Novera" at the end of the 90's http://www.dw.de/%D0%BA%D0%BE%D1%80%D1 Boyko Borisov %83%D0%BF%D1%86%D0%B8%D1%8F%D1%82 %D0%B0%D0%B7%D0%B0%D0%BC%D0%B8%D1%80%D 0%B8%D1%81%D0%B0/a-4095192

construction license

hygiene - garbage collection

No evidence for institutional reaction

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https://bivol.bg/diankov-bivol-novera.html [France 2012 The "Novera" case#2: The trial for the terminated concession ends with 57 millions paid by the municipality based investigative journalits about Bulgaria] to the funds Accession Eastern Europe Capital AB and Mezzanine Management Sweden AB (Creditors of "Novera"). Claims that the termination is just a pretext to pay the huge compensation for a company (Novera) which value is purposefully overestimated. 2012 Posters: Open letter of Evgeni Hristov, journalist: accuses the Inspectorate to the municipality of Sofia in favoring certain company engaged in distribution of bilboards on public places and obstructing others under formal reasons. http://afera.bg/pozitsia/27356.html

Yordanka Fandakova

hygiene - garbage collection

No evidence for institutional reaction

11

Yordanka Fandakova

posters and billboards

No evidence for institutional reaction

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http://www.24chasa.bg/Article.asp?ArticleId=161097 Yordanka 2012 Karat-S: Signal form the Socialists in the Municipal Fandakova council: Concession of municipal bus lines given to Karat 3 S and Union Ivkoni Companies, which funded the electoral campaign of the ruling GERB party. When terminating the contract with Karat-S, the municipality decides to pay compensation higher than the described in the contract. The latter decision was not implemented. http://www.duma.bg/node/30418 [Interview with 2012 Ekoravnovesie: Socialist Municipal councilor Georgi Kadiev claims in interview that public money is drained Georgi Kadiev] through the municipal company "Ekoravnovesie", repsonsible for the control on stray dogs in Sofia: 50 Euros paid only to catch a dog, apart from the castration procedure. 2012 Loan for the chair of the municipal council: Socialist http://www.duma.bg/node/30418 [Interview with Municipal councilor Georgi Kadiev accuses the cahirman Georgi Kadiev] of the Municipal council Andery Ivanov in conflict of interests. His son, Branimir Mirchev, received 6 million leva (3 million Euros) loan from the Municipal bank, the guarantee being land, estimated at 20000 leva (10000 Euros) Duma, 31, February 2012, Available at: 2012 The excessive fee: In 2012 Sofia Municipality hires a http://82.103.69.26/node/26486 lawyer - Mr Valeri Kolev to represent it in a case with "Diris" company. Meanwhile "Diris" withdraws the claim. The lawyer however is paid a fee of 250 000 leva (125 000 Euros). Later on, when pleading to qualify the amount as "expenses" /to avoid taxes/, the Supreme Administrative Court declares that expenses for such a case could not exceed 450 leva (225 Euros) and the fee was excessive. The lawyer Kolev is former officer of the Secret service and colleague of the Chairman of the Municipal council Andrey Ivanov Yordanka Fandukova

public transportation - bus lines

Signal form municipal Text of the official councilor Georgi Kadiev to letter from Mr Kadiev the Prosecution. to the Prosecution File 8930/2012 archived by prosecutor Arnaudova with no further actions (official letter to Mr Kadiev).

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hygiene - stray dogs

14

Yordanka Fandukova

(municipal bank) loan

15

Yordanka Fandukova

consultancy

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2013 Billboards tender: Socialist Municipal councilor Georgi http://www.kadiev.bg/2013/07/ Kadiev accuses the municipal administration in wrigging the tender procedure for outdoor billboards: According to the protocol of the selection committee "Sofia Outdoor" company wins the tender. Later on in the Order of the mayor to appoint the service provider, the score of "Sofia Outdoor" is amended and another candidate ("K out of Home") wins the contract.

Yordanka Fandukova

posters and billboards

Copy of the Protocol and the Mayor's order where tender winners differ

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