The European Commission last week imposed almost 6.7 million Euros in fines on the EU's poorest member state Bulgaria, in the latest in a string of similar measures designed to counter government corruption and cover-up allegations in dealing with certain businesses during 2007-2008, in contravention of EU recommendations to remedy the problem.
On accession to the European Union in January 2007, grants worth at least 11 billion euros in aid were earmarked for the country in the form of aid to improve infrastructure, and develop agricultural programmes. However, after widespread accusations of financial impropriety, mismanagement and corruption by Bulgarian aid management agencies, the European Commission withheld approximately 500 million euros.
In July 2008, a report by EU Anti-Fraud Office (OLAF) on the misappropriation of 7.5 million euros from Bulgaria's Special Accession Programme for Agriculture and Rural Development (SAPARD) reported major concerns in the country's political establishment. The report accused the former socialist government and President Georgi Parvanov of links with 'criminal network' the Nikolov-Stoykov group, and of being implicated in the group's misappropriation of millions of euros.
The group, after a series of trials in which Nikolov, his wife and a number of accomplices were found guilty of and sentenced for embezzlement, used EU funding to export old meat processing equipment from Bulgaria to Germany. The machinery was then dismantled and imported back to Bulgaria via Switzerland and Ireland, before being declared brand new. "Influential forces within the Bulgarian Government and/or state agencies do not have an interest in seeing the eventual punishment of anyone in the criminal gangs who has embezzled EU funds," the OLAF report found.
The report recommended that the State Agency for National Security be placed under parliamentary control and that recruiting policy for the police be improved so as to professionalise the service.
The European Commission's July 2010 report on Bulgaria's performance under the Co-operation and Verification Mechanism (CVM) on justice and home affairs recommended a shake up of the the public purchasing sector after Government checks showed an "irregularity rate of 60 per cent among all tenders verified. This rate reaches almost 100 per cent for large public infrastructure projects where the authorities have an obligation of ex-ante control."
In October 2008 Bulgaria's National Road Infrastructure Agency halted its entire development programme under the EU Regional Development Fund because of "too many irregularities with the paperwork." More than half the tenders went to companies belonging to the same businessman. A series of measures were recommended by the CVM, including systematic risk assessments, prevention measures and rigorous training of officials to unearth conflicts of interest, in an attempt to root out corruption, as well as improving efficiency.
The Director of SAPARD's 'agriculture' fund, Kalina Georgieva, said the previous cabinet is to blame for the fine imposed by the EC. The Government would be appealing for a reduction.
