Important figures from the ruling party Citizens for European Development of Bulgaria (GERB) and the party largely representing the Bulgarian Muslim minority, Movement for Rights and Freedoms (DPS), who are the most numerous people to have illegally benefited from the guesthouse program funded with European money, will not be returning their subsidies to the State Fund Agriculture (SFA). This transpires from a list of sanctioned projects published by the SFA after a journalistic inquiry by Bivol and after the initial refusal.
It turns out that the inspections had been limited to the sites subject to monitoring which is a period of up to five years after receiving the financing. This SFA decision to limit the scope of the inspections contradicts the order of Prime Minister Boyko Borisov from April 30, 2019. On that day, at a government meeting, he ordered the then-Agriculture Minister and former SFA Director Rumen Porozhanov to inspect all guesthouses and to refer any and all offenders to the Prosecutor’s Office.
Minister Porozhanov “cheerfully” reported that out of 746 houses, 110 have already been inspected and 32 of them have been sanctioned with BGN 10 million. A few days later, after Bivol’s revelation of his wife’s undeclared properties, Porozhanov resigned.
To date, the SFA has checked only 288 sites, limiting itself to projects for which the monitoring period of five years has not expired. This means that their owners have concluded subsidy contracts after mid-2014 because the checks started in the summer of 2019.
The remaining 458 guesthouses with earlier contracts have not been visited and checked, despite the Prime Minister’s vows that all guesthouses, without exception, will be inspected.
Out of the 288 sites, 253 have irregularities and proceedings for full or partial sanctions have been launched. This makes almost 90% of the projects against the backdrop of the 6% adequate irregularities. A full sanction (100%) for a total of BGN 43.1 million has been imposed on 158 projects. A partial sanction for a total of BGN 3.3 million involves 95 projects. Another 12 projects are being currently processed and the decision is pending. The non-sanctioned projects are only 23.
In addition, the SFA is not releasing the full list of sanctioned projects, but only those that will have to return 100% of the subsidy (158 sites).
Partial inspections – a blow to the taxpayer and cover-up for big shots from GERB and DPS
With such a huge rate of abuse, it is obvious that the entire European program had been discredited. According to the European Commission’s rules, a 100% sanction should be imposed and Bulgaria will have to pay back over BGN 300 million. Brussels will collect the money from the Bulgarian taxpayer for both the flawless guesthouses and the offenders.
The only way to get at least some of that money back into the Treasury is to fine the beneficiaries of the crooked projects. However, apparently the State has decided to forgive completely the likely “sins” of a total of 458 guesthouses!
There is no valid reason not to check all guesthouse projects that three-four years ago had been under the monitoring period. In fact, the monitoring period refers to the unplanned inspections of the SFA for the implementation of the business plan, but in the current situation, thorough scrutiny of all projects is required. The contracts with the beneficiaries also provide for such checks, while the beneficiaries are required to keep all documentation related to the project for at least ten years.
Among the offenders is the infamous “house of the mother-in-law” of the former senior SFA official Yanaki Chervenyakov – a private villa in the village of Lilyanovo on a plot that Chervenyakov sold to a company of his mother-in-law on which she built a guesthouse with European money. As an investigation by Bivol revealed back in 2016, the house had never functioned as a family hotel. However, the mother-in-law will not repay even a penny to the Treasury because the SFA has not checked this particular site.
The limitation of the inspections to the monitoring period also conceals the scandalous projects of individuals associated with GERB and DPS exposed in Bivol’s investigations. Here are some of the people who will escape sanctions if the current situation remains and there are no further checks:
The daughter of the Mayor of the town of Dolna Banya Vladimir Dzhambazov from GERB
Former GERB Municipal Councilor and former Mayor of the village of Borino, Jamal Assanov
The Mayor of the town of Lukovit Ivan Grancharov from GERB
The first cousin of the wife of the Regional Governor of Smolyan and former lawmaker Nedyalko Slavov from GERB
The first cousin of the Mayor of the town of Gorna Oryahovitsa Dobromir Dobrev from GERB
The GERB leader in the village of Sarnitsa Mustafa Alikanov
The wife of hotel owner Dimitar Katrandzhiev, a close friend of Kostadin Koev, the Mayor of the resort town of Velingrad from GERB
Two projects of relatives of the former GERB lawmaker Dimitar Gamishev
The lawmaker from the party National Front for Salvation of Bulgaria, part of the ruling coalition, Yordan Apostolov
The relatives of the leader of DPS Mustafa Karadayi, who have as many as five guesthouse projects in his home village of Borino – no sanctions for any of them
The wife of the Mayor of the village of Yundola Mehmed Mustafa Mestan from DPS
The daughter of the DPS Municipal Councilor in the town of Harmanli, Sezgin Mustafa
In addition, several persons associated with the so-called parliamentary opposition will also escape sanctions:
The daughter of the Mayor of the town of Hadzhidimovo Lyudmil Terziev (formerly supported by the Bulgarian Socialist Party, BSP, and now by the nearly extinct National Movement for Prosperity of Bulgarian of former King and Prime Minister Simeon Saxe- Coburg-Gotha)
The father-in-law of Elena Yoncheva, Bulgarian MEP from BSP
The son of the BSP lawmaker Vassil Milanov Antonov
The son of the Municipal Councilor from the Agricultural Peoples Union Alexander Daskalov
The former Municipal Councilor from BSP and son of the former First Secretary of the Bulgarian Communist Party Kostadin Shulev
In fact, there are sanctions for some people associated with the DPS. Two projects of the son and daughter of the Mayor of the SPA village of Mineralni Bani (Mineral Baths) Myumyun Ali Iskander receive a 100% sanction. There are also sanctions for the sister of Antoaneta Asenova, who was ninth on the DPS ballot for the European Parliament elections. The secretary of the Slivnitsa municipality, Ani Ivanova, from GERB is also sanctioned, as is the prosecutor in the city of Blagoevgrad Anna Avramova-Gradeva.
The full list of the sanctioned projects can be seen in the specialized Bivol “guesthouse” search engine HERE and the list of projects with a 100% sanction can be seen HERE.
Parallel with the SFA’s business plan and project objectives inspections, the Prosecutor’s Office also started guesthouse probes into potential conflicts of interest, origins of funds and influence peddling. For several months now, there is no information on the results of these probes.
So far, the only defendant in the guesthouse scandal is former Deputy Minister Alexander Manolev, for whom the Bivol and the site Blagoevgrad News revealed that he had built with European money a luxury villa with a mineral water pool for personal use. He is facing a full sanction in the amount of EUR 200,000.
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