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Cablegate: Bulgaria Rocked by Interior Ministry Scandal

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OO RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
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INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

id: 148101
date: 4/1/2008 15:42
refid: 08SOFIA192
origin: Embassy Sofia
classification: CONFIDENTIAL
destination:
header:
VZCZCXRO0156
OO RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHSF #0192/01 0921542
ZNY CCCCC ZZH
O 011542Z APR 08
FM AMEMBASSY SOFIA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4890
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

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C O N F I D E N T I A L SECTION 01 OF 03 SOFIA 000192

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: DECL: 04/01/2018
TAGS: PGOV KCRM KCOR BU
SUBJECT: BULGARIA ROCKED BY INTERIOR MINISTRY SCANDAL

Classified By: Ambassador John Beyrle for reasons 1.4 (b) and (d).

1. (C) SUMMARY: Bulgaria has been shaken by a snowballing
Interior Ministry scandal that involves top Ministry
officials and threatens to destabilize the Socialist-led
government of PM Stanishev. The high-profile controversy has
already led to the arrest of two top MOI officials and
triggered mounting calls for the dismissal of Interior
Minister Petkov, one of the most influential figures in the
ruling Socialist Party (BSP). The scandal has escalated in
the past week, revealing more and more unsavory ties between
senior Interior Ministry officials and shadowy businessmen,
including Minister Petkov's contacts with well-known
organized crime figures. The scandal has further blackened
the government's image at home and Bulgaria's already
tattered reputation in Brussels, and could lead to Petkov's
ouster and a cabinet reshuffle. Now all eyes are on PM
Stanishev, who is under intense pressure to sack his party's
most powerful minister. END SUMMARY

UNSAVORY CONNECTIONS
--------------------

2. (SBU) The scandal has created by far the greatest
turbulence in the Ministry of Interior (MOI) since the end of
the communist period. It started two weeks ago when
opposition MP Atanas Atanassov (a former domestic
intelligence chief) disclosed the contents of an unsigned
disk with intercepted conversations between senior MOI
criminal investigators and persons under investigation. The
wiretapped conversations implicated the deputy head of the
MOI's organized crime unit, Ivan Ivanov, in leaking
information to gray economy businessmen involved with
manufacture and distribution of alcohol in order to thwart
investigations against them. Ivanov's March 18 arrest
unleashed an avalanche of further revelations within the MOI.
A week later, the MOI's former number two, Gen. Ilia Iliev,
was also detained for abuse of power and obstruction of
justice while in office. In the course of Ivanov's
investigation, according to prosecutors, Iliev was discovered
to have authorized unlawful wiretappings. Iliev's arrest
came four months after he quit the Ministry, claiming he had
been "tricked" into allowing the issuance of Bulgarian
identity documents to notorious Serbian drug dealer Budimir
Kujovich. The controversy over Iliev's resignation, dubbed
the "Kujovich affair", made front-page headlines in the local
press, triggering accusations about MOI officials' protecting
organized crime figures.

3. (SBU) The ongoing investigations against the two
arrestees, led by the recently established State Agency for
National Security (DANS), have revealed more and more
unsavory connections between shadowy businesses and politics.
The scandal reached new heights when DANS' Chairman
confirmed leaked reports of Interior Minister Petkov's own
meetings with alleged criminals. Petkov, who was summoned
twice to testify before Parliament's Domestic Security
Committee, rejected claims by opposition MPs that he was the
subject of an investigation codenamed "the Cigarette
lighter" (for someone in the Ministry who was tipping off
criminals about investigations) but admitted having
"sanctioned" contact with key suspects in special police
investigations. According to MP Atanassov, Petkov had met
with the notorious Galevi brothers, alleged to be among the
country's drug trafficking bosses. Another controversial
figure, Alexei Petrov, a former commando and an insurance
company owner, purportedly served as the middle man for the
meeting. Petkov said the meeting was "necessary in order to
protect public interests" which, according to media
speculation, involved brokering a peace deal between warring
organized crime groups on the eve of Bulgaria's EU accession
in January 2007. In a dramatic twist, Petkov also revealed
that Petrov had actually served as an MOI undercover agent.
Both the Chairman of DANS and the Prosecutor General told the
Embassy separately that Petkov's disclosure of this name
could constitute an indictable offense.

POWERFUL MINISTER UNDER FIRE
----------------------------

4. (SBU) The revelations about Petkov pose a serious test
for Prime Minister (and Socialist Party Chairman) Sergei
Stanishev, who has come under increasing pressure to part
with one of the most influential figures in the government
and the BSP. Dismissing Petkov will not be an easy move,
given his powerful influence within the Socialist apparatus.
According to party insiders, Petkov's ties with controversial
businessmen date back from the time when he served as BSP
deputy chair in charge of party financing and arranged
funding from shadowy groups, including the organized crime
group SIC. Petkov's political skills, coupled with close
ties to President Georgi Parvanov, have helped him accumulate

SOFIA 00000192 002 OF 003


significant authority in the BSP and earn his ministerial
seat. Previously called "the Regent" because of his close
ties with the less-experienced Stanishev, Petkov still enjoys
strong influence in the party local branches. Relations
between Stanishev and Petkov, however, have significantly
deteriorated since last May when the PM launched a plan to
bring the domestic intelligence service under the PM as part
of DANS -- an unconcealed effort to curb Petkov's powers
without firing him from the government, which would have
gained the PM a powerful enemy inside the party.

POLITICAL TENSIONS MOUNT
------------------------

5. (SBU) In a statement on March 28 the PM put on a brave
face and said the developments at the MOI could hardly be
termed "scandal" as they actually helped "clean house," and
blamed former Generals affiliated with the opposition for
orchestrating a smear campaign against MOI's top officials.
At the same time, the PM vowed that "there will be no
political umbrella over anybody," and pledged that "everyone
caught in wrongdoing will bear legal responsibility, but on
the basis of clear evidence by the prosecution, not
speculation." Stanishev said he had ordered an investigation
of the past 10 years of the performance of the MOI's
anti-organized crime unit, which was most shaken by the
scandal. The PM did not mention Petkov, and blasted the
center-right opposition for seeking to gain political
dividends from the scandal.

ROLLING HEADS?
--------------

6. (SBU) Socialist MPs and party insiders tell us there is
growing sentiment within the BSP and coalition for parting
with Petkov, who has become a huge liability for both the
Socialists and the government. BSP MP Tatyana Doncheva
openly called on the PM to get rid of Petkov, "otherwise the
scandal will snowball and sweep away the whole government."
An advisor to Stanishev told us the PM himself has been
seriously considering Petkov's dismissal, either as a
separate act or as part of a long-planned government
reshuffle that has been mulled for some time by the ruling
coalition. Stanishev's confidant told us the PM planned to
discuss the matter with the other two party leaders of the
coalition, which also includes the ethnic Turkish Movement
for Rights and Freedoms and ex-PM Simeon Saxe-Coburg Gotha's
NMSS party. Our contact said Petkov's ouster seemed likely
but noted the PM's apprehensions that if removed, Petkov may
seek revenge and destabilize the BSP ahead of the 2009
general elections.

7. (SBU) Stanishev's camp seemed also to be concerned by
the reaction of President Georgi Parvanov. Petkov managed
Parvanov's successful election campaign in 2001 and the two
are considered close. Parvanov has appeared uneasy about the
growing independence of Stanishev, his political protege, and
has relied strongly on Petkov for enforcing his influence
within the government. Nonetheless, the President, who
enjoys considerable influence within the Socialist ranks,
broke his silence March 28 to say that the continued MOI
scandals were seriously damaging the country's image in the
EU.

RISING EU PRESSURE
------------------

8. (SBU) During his March 28 visit, EU President Barroso
gave voice to Parvanov's concerns, criticizing Bulgarian
authorities' tolerance of corruption and organized crime.
After meeting with PM Stanishev, Barroso commented that "it
remains a source of frustration that some Bulgarians are
undermining the reform process." The EC -- which has already
frozen some structural funding because of corruption concerns
-- is due to release in July a report on Sofia's overall
progress in fighting crime and high-level corruption.
Barroso said the report will be "fair and objective," but
strongly warned it was impossible to constantly repeat to
Bulgaria that "more has to be done in the fight against crime
and corruption."

COMMENT
-------

9. (C) The escalating scandal poses the biggest challenge
to the Socialist-led government since it took over in 2005.
The investigation is also the first major test for the new
domestic intelligence service DANS to prove its political
independence and effectiveness. In separate discussions with
the PM's National Security Advisor and the Prosecutor
General, the Ambassador stressed the serious erosion of
confidence the government faces in U.S. and European eyes the

SOFIA 00000192 003 OF 003


longer Petkov remains in charge of his compromised ministry.
Both readily acknowledged that Petkov must go, but stressed
the need for the PM to first build sufficient support for the
move within his Socialist Party. The speed and skill with
which PM Stanishev manages this will be another indication of
his independence from President Parvanov, his former mentor,
as well as his ability to lead the Socialist Party away from
the web of corrupt relationships that are at the very core of
the current scandal. End Comment.
Beyrle

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