{"id":30246,"date":"2016-04-03T13:32:03","date_gmt":"2016-04-03T11:32:03","guid":{"rendered":"https:\/\/bivol.bg\/en\/?p=30246"},"modified":"2016-04-04T11:23:12","modified_gmt":"2016-04-04T11:23:12","slug":"state-fund-agriculture-obvious-misuse-of-eu-funds-and-unexplained-wealth-of-officials","status":"publish","type":"post","link":"https:\/\/bivol.bg\/en\/state-fund-agriculture-obvious-misuse-of-eu-funds-and-unexplained-wealth-of-officials.html","title":{"rendered":"State Fund Agriculture: Obvious Misuse of EU funds and Unexplained Wealth of Officials"},"content":{"rendered":"

Do you know what it is to be hit with a correction in a European project? This means receiving some millions for a European project, calculating them three times higher than the real coast, allocating them and spending the money, including for kickbacks, and then be asked to return half of this money because you have been caught with incorrect estimates. What are you going to do? A. Return the money, repent for the fraudulent BoQ and face the Court? B. Look for a way to undo the correction or at least decrease it with appropriate incentives to those who have the power to do so?<\/p>\n

The Bulgarian State Fund Agriculture (SFA) is one of the institutions most actively distributing European funds. In a series of publications, Bivol exposed gross violations in the activities of the Fund (see here <\/a>and here<\/a>). We also discovered schemes to inflate prices and to have the right companies absorbing the money from the EU projects under the Programme for Rural Development (PSRS). Most often this is done with inflating the BoQ of the projects.<\/p>\n

For the first time, a SFA official stood, though with a hidden identity, before Bivol\u2019s camera and spoke about the corruption which he witnesses daily. He pointed to specific schemes and projects and named the “protagonists” in the corrupt deals.<\/p>\n

In SFA, there is a reigning omerta on these issues. According to our source, the SFA boss Rumen Porozhanov ordered all employees who drive flashy cars to come to work with more modest vehicles. Why, if they have nothing to hide?<\/p>\n

\u0410 team of Bivol examined the property and asset status of Yanaki Chervenyakov, the “right hand” of the Executive Director of the Fund, Rumen Porozhanov. He started working in the fund ten years ago. At various stages of his career, he held various positions in the SFA – from ordinary expert to Department Director. He drives flashy limousines and SUVs and lives in a luxury gated community at the foot of the Vitosha Mountain \u2013 a living standard that cannot be achieved with a salary of a civil servant.<\/p>\n

In the name of the father<\/strong><\/p>\n

Within the course of about 30 days, a team of Bivol spotted Chervenyakov with two different limousines Audi. Both are A8 models. The first is a 2011 model \u2013 with four liters gas engine, imported from Italy. We spotted it parked in front of the SFA. In Bulgaria such a vehicle is traded for between 70,000 and 100,000 levs, depending on how it has been maintained.<\/p>\n

Later, we found out that Chervenyakov drove another Audi A8, this time with a 4.2 liter diesel engine – the largest available for this model.<\/p>\n

Both cars are registered to the father of the State servant – Dr. Nanko Chervenyakov. He is a pediatric surgeon, had practiced in the emergency hospital Pirogov in the capital Sofia, and is currently an employee of the hospital in the Danube town of Lom. Neither the salary from Pirogov nor that in Lom suggest that the doctor is able to afford such luxury vehicles.<\/p>\n

Before Bivol, Dr. Chervenyakov explained that the car had a much lower value since it was hit in an accident and the dents were fixed in a body shop. He refused to name the sum for which he acquired the vehicle. The first registration of the car is from November 15, 2013. According to insurance experts, the value of the policy for such vehicle is 138,000 levs. In Germany, where the limo was purchased, its current price is between 50,000 and 60,000 euro. A check in specialized sites showed that in Bulgaria the car\u2019s sale price now is between 130,000 and 150,000 levs.<\/p>\n

In addition to the two Audi A8, our investigation revealed that Dr. Chervenyakov owns a Honda SUV and a Hyundai coupe. The doctor previously owned the first Audi A8 that we spotted, a Land Rover SUV and four other cars.<\/p>\n

And an apartment from the mother-in-law<\/strong><\/p>\n

Yanaki Chervenyakov lives in a luxury apartment in the prestigious Sofia suburb Dragalevtsi. We wanted to meet with him and ask him a few questions. There are serious concerns due to the fact that while he worked in the SFA, the Fund has awarded two EU financed projects to two companies of his mother-in-law Tsetsa Petrova Krasteva. The first is a guesthouse in the village of Popina Luka, in the municipality of Sandanski, funded under the Programme for Rural Development. The second project was funded under Programme for the Fisheries Sector Development.<\/p>\n

When we introduced ourselves to Yanaki Chervenyakov, confronting him in front of his luxury car, he acted like the main character from the movie “The Transporter”. He declared that we were talking to the wrong guy and have confused his identity. Then he sped away from the parking lot of the Fund.<\/p>\n

Still, we managed later to catch up with Chervenyakov, who explained that he passed an inspection of his properties with flying colors. The Commission for Conflict of Interest has not found anything wrong in the fact that his wife’s mother won projects with the SFA, and she bought for him an apartment in Dragalevtsi<\/strong>. According to the Property Registry, the declared value of the property is about 100,000 levs. It seems that this price is manipulated as properties in this community are selling for no less than 1,000 euro per square meter.<\/p>\n

The witness told us how Chervenyakov was pressuring SFA experts not to impose financial corrections in the projects of certain municipalities<\/strong>. Such pressure, however, is rarely free of charge. The words of the employee of the SFA paint a more probable picture of how the money to buy such luxuries is \u201cearned\u201d.<\/p>\n

The “Zemen” Affair<\/strong><\/p>\n

Chervenyakov\u2019s name appears in the approved projects of the municipality of Zemen in which Bivol conducted a thorough investigation<\/a>. Investor Simeon Daskalov has submitted bills of quantities for the sports field in Zemen. According to them, the value of construction works for this site is between 760,000 and 1 million levs. SFA, however, financed the field with over 3.4 million levs, VAT excluded.<\/p>\n

In 2012, experts of the SFA from the department, which was then led by Yanaki Chervenyakov, have committed serious shortcomings in the bills of quantities of the contract. The Fund has prepared an annex to the contract to reduce the details in the construction of the sports field in Zemen, but has funded the project with the full amount. In this situation, however, the documentation for participation in the tender for the stadium becomes null and void because the applied bills of quantities do not correspond to those in the contract. The contract itself is missing signatures. It was signed by Yanaki Chervenyakov, as Head of Department and by Georgi Tanchev, as Director of Contracting.<\/p>\n

However, the document is missing two required signatures \u2013 of the Director of the Legal Directorate – then Ivan Boyanov, and the Deputy Director of the Fund Dessislava Todorova. The contract is signed last by Rumen Porozhanov, Executive Director of the Fund. About a year later, the requirement of coordination with the Legal Department was dropped, but even under the current requirements in order to have a valid contract, it must be signed by the SFA Deputy and this one does not bear such signature.<\/p>\n

SFA as a system for theft; European institutions turn a blind eye<\/strong><\/p>\n

The most important detail that emerges from the story of the insider about individual cases that are just the tip of the iceberg is the common practice in the absorption of EU funds in Bulgaria. Besides the witness accounts, Bivol has an array of documents that the team is analyzing in order to paint a detailed and documented true picture of the abuses of EU financing. More specifically, we are analyzing the BoQs of projects for which there is evidence that they have been inflated, but the corrections have been canceled or reduced later. If what the witness said – that over 90% of projects have irregularities proves true, than this comes to fraud in the amount hundreds of millions committed by just one institution – SFA.<\/p>\n

Despite the insistent calls of Bivol to the Director of the SFA, Rumen Porozhanov, he refused to answer questions on the information we are disclosing here. Bivol also sent questions to\u00a0the European Commissioner for Budget and Human Resources Kristalina Georgieva, whose portfolio, in addition\u00a0to overseeing the EU budget, includes prevention of abuse. She in turn forwarded them to OLAF. The office to combat fraud with EU funds replied in the traditional bureaucratic language, saying that European institutions carefully monitored and analyzed possible abuses:<\/p>\n

OLAF continuously analyses data received from the Member States, in particular under their reporting obligations with view to irregularities and suspected fraud, and from the other Commission services as well as from its own investigations and, where appropriate, makes recommendations. The results of this analysis are mainly published in the annual report on the Protection of the Financial Interests of the European Union.<\/em><\/p>\n

The full answer of OLAF can be seen here<\/a>. On the backdrop of this \u201cpowerful fight against corruption\u201d in Bulgaria and Europe, it is more and more obvious why the Head of the Friedrich Naumann Foundation, Daniel Kaddik said several days ago that there were new reasons to stop the cash flow from the funds for Bulgaria.<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Do you know what it is to be hit with a correction in a European project? This means receiving some millions for a European project, calculating them three times higher…<\/p>\n","protected":false},"author":1,"featured_media":30238,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"give_campaign_id":0,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","kia_subtitle":"Corrections in projects with inflated bills of quantities (BoQ) are an indicator of fraud and factor for corrupt behavior","_lmt_disableupdate":"","_lmt_disable":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"{title}\n\n{excerpt}\n\n{url}","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false,"jetpack_post_was_ever_published":false},"categories":[7468,5542,5806],"tags":[5127],"class_list":["post-30246","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-dfz-en","category-investigations-en","category-leading-en","tag-corruption-en"],"yoast_head":"\nState Fund Agriculture: Obvious Misuse of EU funds and Unexplained Wealth of Officials - Bivol!<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/bivol.bg\/en\/state-fund-agriculture-obvious-misuse-of-eu-funds-and-unexplained-wealth-of-officials.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"State Fund Agriculture: Obvious Misuse of EU funds and Unexplained Wealth of Officials\" \/>\n<meta property=\"og:description\" content=\"Do you know what it is to be hit with a correction in a European project? 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The heavy measure\u2026","rel":"","context":"In "Investigations"","block_context":{"text":"Investigations","link":"https:\/\/bivol.bg\/en\/category\/investigations-en"},"img":{"alt_text":"dfz2","src":"https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2015\/08\/dfz2-746x1024.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2015\/08\/dfz2-746x1024.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2015\/08\/dfz2-746x1024.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2015\/08\/dfz2-746x1024.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":30771,"url":"https:\/\/bivol.bg\/en\/state-fund-agriculture-asks-sapard-fraudster-to-return-millions-in-eu-financing.html","url_meta":{"origin":30246,"position":4},"title":"State Fund Agriculture Asks SAPARD Fraudster to Return Millions in EU Financing","author":"\u0415\u043a\u0438\u043f \u043d\u0430 \u0411\u0438\u0432\u043e\u043b\u044a","date":"19 May 2016","format":false,"excerpt":"The State Fund Agriculture has carried out probes and found \"proven lack of operation at the existing investment and breach of commitments for the required number of animals\" under four projects for \u201cModernization of agricultural holdings\u201d \u2013 this is what is said in a SFA press release, published today. \"There\u2026","rel":"","context":"In "Comments"","block_context":{"text":"Comments","link":"https:\/\/bivol.bg\/en\/category\/comments-en"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2015\/10\/mario-nikolov.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2015\/10\/mario-nikolov.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2015\/10\/mario-nikolov.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":29716,"url":"https:\/\/bivol.bg\/en\/how-to-steal-from-bulgarian-state-fund-agriculture.html","url_meta":{"origin":30246,"position":5},"title":"How to Steal from Bulgarian State Fund Agriculture","author":"\u0415\u043a\u0438\u043f \u043d\u0430 \u0411\u0438\u0432\u043e\u043b\u044a","date":"20 February 2016","format":false,"excerpt":"An expert report that Bivol has examined exposes evidence of a criminal corruption scheme and colossal abuse of European Union (EU) money in the Bulgarian State Fund \"Agriculture\" (SFA) which is responsible for the diversion of millions of euros from the Program for Rural Development 2007-2013. 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