Prosecutor’s Office to Investigate Bulgarian Deputy Minister’s ‘Guest House’

According to an announcement by the press office of the Supreme Prosecutor’s Office of Cassations, the latter has launched a probe on grounds of media reports about a guesthouse built on property owned by the Bulgarian Deputy Minister of Economy Alexander Manolev. The existence of such “fake” guesthouses has been known for years, and their number exceeds 300, but so far, OLAF and the prosecution have not conducted a probe into the entire program.

The Prosecutor’s Office decided to launch the investigation several days after Bivol’s disclosure that Alexander Manolev has built a guesthouse with European Union (EU) financing, but it is only used by him and his family. The public also learned that the State Fund Agriculture (SFA), the body in charge of distributing the EU money, has also launched a check on grounds of a journalistic inquiry by Bivol from April 11, 2019.

Porozhanov consents to give 400,000 to his colleague Manolev

The SFA did not give a precise answer to the specific question which one of its employees has approved Manolev’s project, but explained the procedure in detail:

According to the ascribed procedures of the Paying Agency, upon receipt of a payment application in the territorial structure of the SFA, the head of the respective department allocates it randomly to a first and second expert who will be responsible for the processing of the file. After conducting all administrative checks, including a visit on location, and in case the payment request meets the funding criteria, the first expert draws a letter authorizing the payment request. The second expert verifies it and signs the letter of authorization. This is followed by a verification by the head of the department who also signs the letter. A designated employee from the Directorate Payment Authorization for the Implementation of Rural Development Measures (DPAIRDM) prepares on a weekly basis a report on the payments authorization letters. The drafted documents are provided for coordination to the Director of the DPAIRDM and the Deputy Executive Director. Then the report is submitted for decision and signature to the Executive Director. The Executive Director issues an order based on the documents provided to him. The signed order, together with the report, is submitted to the Financial Directorate for the execution of the payment.

When the guesthouse project received approval and funding of BGN 391,160 from the Rural Development Program (RDP), the Executive Director of the SFA was the current Minister of Agriculture Rumen Porozhanov. He had actually approved this amount for a colleague from the government because Manolev was appointed Deputy Minister of Tourism in November 2015.

There have been no advance payments for the project, which means that the company “Agrotrade – Ana Dimitrova” has financed the whole construction with more than BGN half a million of unknown origin since there is no bank mortgage for the property and there is no data about a bank loan.

Loophole: The SFA has no way of detecting politicians’ involvement in the projects

Another response of the SFA reveals that land ownership documents and the right to build on it are not subject to verification for said payments:

One of the required documents at the application stage (in this case, Mat 13, 2013) is a copy of a land and/or buildings ownership document or a registered right to build of not less than 6 (six) years from the date of filing of the application for assistance (when carrying out construction and assembly works, for which a building permit is required under the Territorial Development Act.

The cited above documents are attached to the application form. We inform you that the documents you are interested in are not required for the payment application and, respectively, they are not attached to the payment request and are not subject to verification, according to the procedures.

In Manolev’s case, he obtained the right to build a “residential building – guesthouse” with a total area of 530.47 square meters for the company “Agrotrade – Ana Dimitrova” before becoming Deputy Minister of Tourism. The SFA made the payment when he was already a member of the government, but since the documents were not subject to verification, he had not been detected – this is the SFA’s attempt to justify its actions. However, it is naïve to think that the SFA bosses had not been aware of what project and person they were dealing with. The information on how many politicians have benefited from this loophole is still forthcoming.

As Free Europe reminds, Bivol revealed in a series of investigations hundreds of guesthouses built with European money, which do not function as such but are used as private villas. For this purpose, we have also developed a special interactive map with a search engine through which the sites in question can be found – sites with no employees or no categorization or just removed from the lists published by the SFA.

Hired workers and categorization are mandatory for these projects and their lack is grounds to launch a probe. Despite the publications that received large public resonance, OLAF and the prosecution have so far completely ignored evidence of irregularities and criminal diversion of European funds for personal needs. The only known investigation is the one into the emblematic guesthouses listed to the name of the mother in law of the former senior SFA employee Yanaki Cherveniakov, but it is obviously at a dead end.

There is no such guesthouse

Our attempt to obtain from the institutions the contacts for the guesthouse on Manolev’s property hit a wall. The SFA replied that the Fund does not maintain a registry of phone numbers to be used to make a reservation for staying in the projects financed by the RDP.

The Ministry of Tourism also failed to find an address or phone number and explained that they categorize Class A accommodations – four or five stars. Class B accommodation places – such as guesthouses – are categorized by the mayor of the respective municipality.

A check by our colleagues from the site Blagoevgrad News also failed to find information in the Municipality of the southern resort town of Sandanski on how to book this guesthouse. No information is available on any of the online reservation platforms, and there is no phone billboard on the spot. The mandatory sign that this is a site funded by European taxpayers’ money is also missing.

For now, the only person who has managed to get in touch with the owners of the guesthouse is the very same Manolev, who claims to have stayed there for a fee and to have invoices for that.

Update 1: The following answer was received from the Ministry of Tourism to a second request to find an address and a phone to contact the guesthouse:

The Ministry of Tourism carried out a check, which showed that there is no phone number for contacts and e-mail address for a guesthouse in Sandanski with owner and manager “AGROTRADE-ANA DIMITROVA”. According to Article 166 of the Tourism Act, it is the duty of the mayor of the municipality to list the address of the site, the phone and the fax number.

The Mayor of Sandanski has certified the guesthouse in question with a certificate for category number 650, issued in 2015. “AGROTRADE-ANA DIMITROVA” with address Sandanski, 10 “Daskal Kozarev” Street is listed as the owner.

The address 10 “Daskal Kozarev” Street in Sandanski coincides with the address of Raya Dimitrova Manoleva – the sister of Deputy Economy Minister Alexander Manolev. Manoleva is a judge in the Sandanski District Court.

Update 2: On Wednesday, April 17, Manolev resigned from the post of Deputy Economy Minister.


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