{"id":46961,"date":"2019-04-30T19:07:44","date_gmt":"2019-04-30T16:07:44","guid":{"rendered":"https:\/\/bivol.bg\/?p=46961"},"modified":"2019-05-02T11:36:18","modified_gmt":"2019-05-02T09:36:18","slug":"five-tales-of-guesthouses-financed-by-eu","status":"publish","type":"post","link":"https:\/\/bivol.bg\/en\/five-tales-of-guesthouses-financed-by-eu.html","title":{"rendered":"Five Tales of Guesthouses Financed by EU"},"content":{"rendered":"<p>The daughter-in-law of the Mayor of the town of Dolna Banya from the ruling party Citizens for European Development of Bulgaria (GERB), the two children of the Mayor of Mineralni bani (Mineral Baths) &#8211; Haskovo, a local party leader in the town of Harmanli, a businessman from the town of Velingrad, close to the local Mayor and to Tsvetan Tsvetanov, Deputy Chairman of GERB and former Interior Minister and a partner of drug trafficker <a href=\"https:\/\/en.wikipedia.org\/wiki\/Evelin_Banev\" rel=\"noopener noreferrer\" target=\"_blank\">Evelin \u201cBrendo\u201d Banev<\/a> are among the beneficiaries of European financing for guesthouses. The cases investigated by Bivol reveal different levels of conflict of interest, abuse of power and crimes against the financial interests of the European Union (EU) that Prime Minister Borisov ordered to be inspected.<\/p>\n<p>As early as 2016, Bivol <a href=\"https:\/\/bivol.bg\/en\/state-fund-agriculture-obvious-misuse-of-eu-funds-and-unexplained-wealth-of-officials.html\" rel=\"noopener noreferrer\" target=\"_blank\">investigated<\/a> the guesthouse scheme, financed under the EU Rural Development Program (RDP). After we revealed the \u201cguesthouse\u201d of the mother-in-law of <strong>Yanaki Chervenyakov<\/strong>, a senior employee of the State Fund Agriculture (SFA), the body in charge of distributing the EU funds, a number of these guesthouses also turned out to be houses and hotels of children, in-laws and other relatives of empowered persons. After our publication, Chervenyakov was fired and the National Security Agency (DANS) raided the SFA offices, but so far, there is no evidence of criminal proceedings for abuses in the Fund. Chervenyakov was not charged and was even reinstated in the Fund, but for a short time. He took a long forced leave following Borisov\u2019s order after his name appeared in the \u201cGP Gate\u201d <a href=\"https:\/\/bivol.bg\/en\/bulgarian-deputy-minister-and-civil-servants-on-forced-leave-over-gpgate.html\" rel=\"noopener noreferrer\" target=\"_blank\">scandal<\/a> as well.<\/p>\n<p>The mechanism and the tricks used by Bulgarian politicians to take hold of the coveted European financing are fairly clear. The candidates for the subsidies are straw persons who register sole proprietorship companies, prepare a business plan and submit documents to the SFA to develop rural tourism by building a guesthouse. The maximum amount they can hope for is EUR 200,000, which is substantial for Bulgaria. There is also the practice of inflating the cost of construction works in order to absorb the full amount of the subsidy.<\/p>\n<p>As a rule, the verification of the existence of connections between the bidders and politically exposed persons (PEPs) is formal and does not reveal the actual beneficiary of the project even when this is not particularly difficult. It is easy to find out whether the land on which the house is to be built has been or remains the property of a PEP. Such was <a href=\"https:\/\/bivol.bg\/en\/bulgarian-deputy-minister-uses-guest-house-built-with-eu-money-as-own-vacation-home.html\" rel=\"noopener noreferrer\" target=\"_blank\">the case<\/a> with the already charged Deputy Minister <strong>Alexander Manolev<\/strong>, who gave the right to build the daughter of his children\u2019s nanny. This was also <strong>Yanaki Chervenyakov<\/strong>\u2019s case as he acquired the land and then sold it to his mother-in-law. In these cases, the documentation itself exposes the true beneficiaries, but someone in the SFA has closed their eyes, and then-SFA Director and current Agriculture Minister <strong>Rumen Porozhanov<\/strong> has signed under the grants. As it will become clear below, his eyes and the eyes of many experts and supervisors have been closed for many other project irregularities as well.<\/p>\n<p><strong>Rural tourism in very popular SPA resorts<\/strong><a href=\"https:\/\/dfz.bivol.bg\/guesthouses\/?q=%D0%B2%D0%B5%D0%BB%D0%B8%D0%BD%D0%B3%D1%80%D0%B0%D0%B4\" rel=\"noopener noreferrer\" target=\"_blank\"> Velingrad<\/a>, <a href=\"https:\/\/dfz.bivol.bg\/guesthouses\/?q=%D0%94%D0%BE%D0%BB%D0%BD%D0%B0+%D0%B1%D0%B0%D0%BD%D1%8F\" rel=\"noopener noreferrer\" target=\"_blank\">Dolna Banya<\/a> and <a href=\"https:\/\/dfz.bivol.bg\/guesthouses\/?q=%D0%9C%D0%B8%D0%BD%D0%B5%D1%80%D0%B0%D0%BB%D0%BD%D0%B8+%D0%B1%D0%B0%D0%BD%D0%B8+%D0%A5%D0%B0%D1%81%D0%BA%D0%BE%D0%B2%D0%BE\" rel=\"noopener noreferrer\" target=\"_blank\">Mineralni bani<\/a> near the city of Haskovo are among Bulgaria\u2019s famous SPA resorts where livelihood is not a problem. In addition, these are towns, not rural areas. According to the rules of the RDP, there should not be any funding for guesthouse projects at all in such locations, but the SFA seems not to have been concerned about this striking inconsistency with the objectives of the Program.<\/p>\n<p>The reality now is that in all three SPA destinations, hotels financed with European money abound, with the term &#8220;guesthouse&#8221; being quite modest to describe the scale of this construction.<\/p>\n<p><strong>Dimitar Katrandzhiev<\/strong> from Velingrad is one of the most successful businesspersons in the hotel sector. His owns the \u201cAura\u201d and \u201c<a href=\"https:\/\/www.hotelelbrus.com\/\" rel=\"noopener noreferrer\" target=\"_blank\">Elbrus<\/a>\u201d hotels in Velingrad. It is alleged that he has shares in hotel &#8220;Tane&#8221; in the winter resort of Bansko.<\/p>\n<p>This, however, is not enough for the affluent businessman who, by education, is a vet. With such assets, he could receive a loan from any bank, but why not absorb several million from the European funds? His company \u201c<a href=\"https:\/\/isun.bivol.bg\/?q=131059318\" rel=\"noopener noreferrer\" target=\"_blank\">Elbrus Holidays<\/a>\u201d that owns the \u201cElbrus\u201d hotel has been padded with nearly EUR 500,000 granted for the three projects. \u201cElbrus\u201d has been erected on a landslide slope over which hundreds of tons of concrete have been poured to build underground garages. The view of the building hanging over the road is shocking even for someone who is not an expert of \u201cGeological Protection\u201d.<\/p>\n<p>Another company of Katrandzhiev &#8211; &#8220;Dixy-64&#8221; has absorbed more than BGN 800,000 under the RDP for <a href=\"https:\/\/dfz.bivol.bg\/?q=112582463\" rel=\"noopener noreferrer\" target=\"_blank\">the construction of a modern greenhouse complex for the production of organic cucumbers and tomatoes and another BGN 300,000 for guesthouses.<\/a><\/p>\n<p>The houses owned by \u201cDixy-64\u201d are functioning as intended and welcome guests, Bivol established. On the other hand, the house (or rather a <a href=\"https:\/\/en.wikipedia.org\/wiki\/Konak_(residence)\" rel=\"noopener noreferrer\" target=\"_blank\">konak<\/a>), built with BGN 389,982 from the European funds by a company of <strong>Diana Zashkeva<\/strong>, Kantardzhiev\u2019s life companion, does not accept guests and is locked. The size and scale of this house are impressive. It is not advertised on accommodation sites, and Zashkeva\u2019s company has no workers. When we visited the location during the Easter holiday, there was no one in the house, no signs and phone numbers to make a reservation. The mandatory sign for funding under a European project is not visible. There is a sign, but it is placed inside the yard, behind the high wall and it is not easy to find it. A check in the Property Register showed that Katrandzhiev himself has sold the property on which the imposing building is located to the company of Diana Zashkeva.<\/p>\n<p>Dimitar Katardjiev is known as a person close to <strong>Tsvetan Tsvetanov<\/strong> and he does not hide his friendship with the Mayor of Velingrad <strong>Kostadin Koev<\/strong> from GERB. The latter is also a veterinarian by profession, and there is talk in the town that Koev is &#8220;Katrandzhiev\u2019s appointment&#8221;. They are childhood friends as Dr. Katrandzhiev himself had asserted during the local election campaign in 2014. &#8220;<em>With Dinko (Kostadin &#8211; editor\u2019s note) we are childhood friends. We were together in both, school and college. Throughout all these years, he has stayed the same and therefore kept all his friendships. He is a very good person whom you can trust<\/em>,&#8221; Katrandzhiev said.<\/p>\n<p>The National Revenue Agency (NRA), however, cannot have full trust in Katrandzhiev, because, despite his great success in the hotel industry and in the absorption of EU funds, he had not always been a good taxpayer. His company, \u201cJVD Properties\u201d, has a debt of BGN 65,000 to the NRA, which has not yet been paid. Moreover, the company \u201cElbrus Holidays\u201d has debts to an offshore. Our attempt to contact Katrandzhiev for comment was unsuccessful and he did not respond to the short text messages sent to his cell phone.<\/p>\n<p>The problem with the house of Katrandzhiev&#8217;s wife is clear \u2013 it is not in operation, does not accept guests and the beneficiary should return the entire subsidy of BGN 389,982. Mrs. Zashkeva, in turn, should be investigated by the Prosecutor&#8217;s Office for abuse of European funds, just like Manolev.<\/p>\n<p><strong>A hotel made from two guesthouses<\/strong><\/p>\n<p>The SPA hotel in the Haskovo resort of Mineralni Bani is not actually a hotel, but two separate guesthouses named \u201cRoxana\u201d and \u201cOlympia\u201d. It is built under two separate projects with European funding, but the children of the <strong>Mayor Myumyun Ali Iskander<\/strong>, elected on the ticket of the party mostly representing the Muslim minority &#8211; Movement for Rights and Freedoms, (DPS), own both of them. Iskander also came in the crosshairs of investigative journalists over the affair with the cheap apartment of <a href=\"https:\/\/bivol.bg\/en\/lawmakers-shacks-in-sofia.html\" rel=\"noopener noreferrer\" target=\"_blank\">Delyan Dobrev<\/a> as his partner from Haskovo proved to be the builder.<\/p>\n<p><strong>Nasmie Myumyun Iskander<\/strong> has received BGN 391,160 for a <a href=\"https:\/\/dfz.bivol.bg\/guesthouses\/?q=%D1%80%D0%BE%D0%BA%D1%81%D0%B0%D0%BD%D0%B0\" rel=\"noopener noreferrer\" target=\"_blank\">Family Hotel for Rural Tourism \u201cRoxana\u201d, regulated plot IA, 56, Mineralni bani, Haskovo district<\/a>, and Ali Myumyun Ali &#8211; the same amount for a <a href=\"https:\/\/dfz.bivol.bg\/guesthouses\/?q=%D0%B0%D0%BB%D0%B8+%D0%BC%D1%8E%D0%BC%D1%8E%D0%BD\" rel=\"noopener noreferrer\" target=\"_blank\">Family Hotel for Rural Tourism &#8220;Olympia&#8221;, regulated plot I, 56, Mineralni bani village, Haskovo district<\/a>. As one can see, the difference between the two projects is one word and one letter, but they have passed the SFA oversight and have received funding and de facto, they now function as a medium-size hotel. Whether this corresponds to the idea and objectives of the RDP, which should support small rural businesses, is to be clarified after the probes.<\/p>\n<p>The Mineralni bani Town Hall did not respond to our request for comment from the Mayor, whose children are running such a successful business in the municipality that he manages. It is a fact that at least the criteria for the employment of staff and for a functioning accommodation facility are in place in this case. However, it is also a fact that other candidates from less favored with mineral waters rural areas have not received funding in order for the Mayor&#8217;s children to be able to build a hotel.<\/p>\n<p><strong>The SPA business of Dolna Banya Mayor\u2019s daughter-in-law<\/strong><\/p>\n<p>Another SPA hotel connected with PEPs and EU funds operates near Sofia, in the town of Dolna Banya. This is hotel \u201cNicol\u201d, which is run by the company of <a href=\"https:\/\/dfz.bivol.bg\/guesthouses\/?q=%D0%BD%D0%B8%D0%BA%D0%BE%D0%BB+%D0%B4%D0%BE%D0%BB%D0%BD%D0%B0+%D0%B1%D0%B0%D0%BD%D1%8F\" rel=\"noopener noreferrer\" target=\"_blank\">Ivelina Dzhambazova<\/a>. She is the daughter-in-law of local Mayor <strong>Vladimir Dzhambazov<\/strong> from GERB. Her company received BGN 391,160 for &#8220;reconstruction of an existing three-story building to build a family hotel with a restaurant and reconstruction of an existing power station and an aggregate room to a conference hall with a bar-buffet, regulated plot II-1444, 68\u0430, according to the plan of Dolna Banya.&#8221;<\/p>\n<p>This whole facility, along with the power station, is available and operates as intended, a check by Bivol on location established. Tourists soak in the pool, the restaurant offers food and drinks, and Ivelina Dzhambazova&#8217;s company provides health and social benefits to 16 people. However, here the question arises whether this investment is for rural tourism in an isolated area, or it is about easy money for the family business of a local bigwig from the ruling party.<\/p>\n<p>Asked about this on the phone, Mayor Dzhambazov replied with the usual talking point &#8211;<br \/>\n&#8220;<em>My children should not be working? Why shouldn\u2019t they benefit? Come and see, everything is legal and functioning<\/em>,&#8221; he said.<\/p>\n<p>Dzhambazov does not see a problem in the fact that hotel \u201cNicol\u201d and the improvements to it had been built on a plot owned by him that he lent to the company of his daughter-in-law. We also asked him why he is not the listed owner of the company that built the hotel and absorbed the EU subsidies. The answer again sounded familiar: &#8220;<em>Everything is legal<\/em>&#8220;.<\/p>\n<p><strong>The &#8220;perfect house&#8221; of a municipal councilor from the town of Harmanli<\/strong><\/p>\n<p>The only facility researched for this article, which meets the definition of a guesthouse, is the house in the village of Ostar Kamak near the southern town of Harmanli. Its financing is modest &#8211; only BGN 86,000 for the company &#8220;Agro Tour &#8211; Shirin Mustafa&#8221;. The &#8220;Perfect House&#8221;, as advertised online, is the only one of its kind in the village, dominated by modest and unpainted homes, typical of the Bulgarian pastoral landscape. However, we did not find a sign for a project funded by EU funds and a phone for reservations.<\/p>\n<p>Still, it is a fact that the guesthouse has a website and the phone numbers for contact are the ones of Sezgin Khalil Mustafa &#8211; the leader of the local DPS structure and municipal councilor. The project of his daughter Shirin under Measure 311 of the RDP is for &#8220;Diversification to non-agricultural activities&#8221; at the &#8220;Harmanli Local Initiative Group&#8221; and aims to &#8220;achieve growth in entrepreneurship and integrated tourism in rural areas&#8221;.<\/p>\n<p>The local initiative group in Harmanli is remarkable in that Sezgin Mustafa, himself, is a member, sits at meetings and decides which project will receive funding, as evidenced by <a href=\"https:\/\/www.mig-harmanli.org\/upload\/kip8a.pdf\" rel=\"noopener noreferrer\" target=\"_blank\">meeting protocols<\/a>, published on the website of the Harmanli Municipality. Yet another example that for there is no problem for people vested in power to achieve growth in entrepreneurship in their private business by using European money.<\/p>\n<p><strong>&#8220;The Swiss House&#8221; of a partner of Brendo with Bulgarian European funding<\/strong><\/p>\n<p>The remote village of Sakartzi, far away from highways and cells of mobile operators, is near the southern town of Topolovgrad, the hometown of Evelin \u201cBrendo\u201d Banev. It \u201chides\u201d one of the most fascinating guesthouses, which looks more like a medium-sized hotel against the backdrop of a breathtaking view of the soft peaks of the Sakar Mountain.<br \/>\nAccording to local people, the hotel was a &#8220;Swiss investment&#8221; and indeed, people living permanently in Switzerland are among the owners of the company that has won the European project. This in itself is a problem for the RDP, because European money is primarily slated for locals and not for Swiss people who are not even members of the EU.<\/p>\n<p>The house does not have a sign that it is financed by the EU. It looks empty, it is locked, the restaurant is not in operation, and no one appeared to tell us how to get a room there. The impressive villa that can accommodate 20 people is registered to the company <a href=\"http:\/\/dfz.bivol.bg\/guesthouses\/?q=202030364\" rel=\"noopener noreferrer\" target=\"_blank\">Interval Invest<\/a>, which has absorbed BGN 319,680 for &#8220;Integrated Tourism for Sport, Entertainment and Information Activities &#8211; Building a Guesthouse&#8221;. <\/p>\n<p>After we found the phone of the manager &#8211; Nikolay Karamanliev, we tried to make a reservation for May 24, but failed. According to him, the house is full for the whole month ahead and not only. This does not match the scene of the deserted house and the closed restaurant over the Easter holidays when there is a huge demand for tourist accommodations. The ongoing detailed inspections of the SFA, the NRA, and the Ministry of the Interior should reveal whether and how busy this place of accommodation is.<\/p>\n<p>Among the owners of Interval-Invest, however, there is an extremely intriguing person &#8211; <strong>Georgi Karamanliev<\/strong>. He is the brother of Nikolay Karamanliev and lives permanently in Switzerland. In 2011, his home <a href=\"https:\/\/www.168chasa.bg\/article\/5877408\" rel=\"noopener noreferrer\" target=\"_blank\">was searched<\/a> in connection with the Italian investigation against Bulgarian drug trafficker <strong>Evelin \u201cBrendo\u201d Banev<\/strong>. The authorities found key documents that led to Banev\u2019s conviction. Banev and Karamanliev <a href=\"https:\/\/www.bgdnes.bg\/Article\/7257818\" rel=\"noopener noreferrer\" target=\"_blank\">have been close friends<\/a> for a long time, since their college years, when both have attended the Sports Academy where they have trained in wrestling. Thus, it appears that persons close to serious organized crime also partake in the absorption of EU funds.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The daughter-in-law of the Mayor of the town of Dolna Banya from the ruling party Citizens for European Development of Bulgaria (GERB), the two children of the Mayor of 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illegally benefited from the guesthouse program funded with European money, will not be returning\u2026","rel":"","context":"In &quot;Comments&quot;","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\/2019\/05\/kushti-karadaya.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2019\/05\/kushti-karadaya.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2019\/05\/kushti-karadaya.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2019\/05\/kushti-karadaya.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2019\/05\/kushti-karadaya.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/bivol.bg\/wp-content\/uploads\/2019\/05\/kushti-karadaya.png?resize=1400%2C800&ssl=1 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Only one of them does not seem to be associated with persons who have political backing, according to Bivol\u2019s research. 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