Fellowship Programfor Media Professionals and Media Experts in 2001/2002

FINANCING ELECTION CAMPAIGNS.CONNECTION BETWEEN MONEY (BUSINESS) AND POLITICS. CASE STUDY:

SLOVENIA-BULGARIA-GREAT BRITAIN

By Zoya Dimitrova, investigative journalist, Sofia

I. The Party Funding regulations in UK, Slovenia and BulgariaLondon:

‘Accounts, however, have been a sore point between the Party and the press ever since. Personally, I do not think that we ever should have shown how we spend our money. The Conservative Central Office is not a charity dedicated to helping the sick and the suffering, it is a fighting machine dedicated to winning elections. I believe it to be the height of folly to expose how such a machine manages its resources, or indeed, how large or how small these resources are at any one time,’ Lord MacAlpine, Margaret Thatcher’s treasurer for many years, wrote in his memoirs. He travels back and forth between continental Europe, where he lives part of the year, and Great Britain and Australia, where he lives the rest of the year. Lord MacAlpine continues, ‘ The Treasurers had rules that any donation from an individual was a matter kept confidential between the donor and Treasurers. This was the rule long before I arrived at Central Office and I sincerely hope that rule will always be kept. A citizen in Britain is entitled to privacy as to which political party they support at the ballot box, so why should they declare which political party they support financially? As for the people who give away other people’s money, such as directors of companies who make donations to political parties from shareholders’ funds, the law says quite clearly that such a donation must be declared in the accounts of the company concerned. It is not the responsibility of the Treasurer of the Conservative Party, or any other political party to decide whether a donation should be declared.’

There are so many new things you can find in London if you are interested in the way the British have regulated the financing of their political parties. Some of these regulations are real wonders of the British democracy and the British political common sense. Any Bulgarian journalist could envy his British colleagues working on this issue in London.

Since 1992, when Lord MacAlpine, the longest-term treasurer of the Tories left his position, together with Margaret Thatcher, who resigned, the views of the two largest political parties - the Conservatives and the Labour Party - about their own finances have changed a lot. After the credibility crisis, the British parties have declared their wish for full transparency in this respect.

For the first time, after the parliamentary elections on 7 June last year (when Tony Blair’s Labour party won in the conditions of a record-low voters’ turnout) the names of the donors were put down in a special newly created register.

The information in this register is public: everyone can read, if they can read, the list of all private donors and companies who have made donations to parties, and the exact sums of the donations. “The only missing information in this list is the donors’ addresses, but this has been done for security reasons,’ Chris Welford, representative of the newly-established

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Election Committee, which registers revenues, monitors income and expenses, and investigates breaches of the law says for ‘168 Chassa’.

The parties send their quarterly accounts to Trivillian House, 30 Great Peter St., the seat of the Election Committee.

How did the British parties reach a consensus about making this information public, provided some of them (i.e. the Conservative Party) published their last report of their finances in 1960?

Background‘This was a fight which lasted for over 15 years,’ David McKee, political observer at

‘The Guardian’ says for ‘168 Chassa’‘The Committee on Standards in Public Life, named after its Chairperson Lord Neil

from Bladen, published the most radical report ever made on the financing of the political parties in Great Britain,’ says Prof. Dr. Justin Fisher from Brunell University. I am talking with them in a cafe near King’s Cross-Station, the station that became popular with its platform 9 3/4 in Harry Potter’s books. ‘After the report of the ‘Neil Committee’ all parties surprisingly backed up the proposals for the reform, and some of these proposals are quite radical.’

The story of the triumph of this publicity is the following:The former Prime Minister John Major created the Committee on Standards in Public

Life, comprising prominent public figures. He had personal interest in restricting political sleaze in Great Britain. In 1994 the Conservative government introduced some amendments to the legislation concerning the trade unions: they were made to declare the money they gave to the Labour Party. The Labour Party gets its financing mainly from the unions; in 1994 2/3 of the financing was provided by the unions, in the elections in 2001 this financing amounted to 35%.

The issue of the sources of this financing was raised, too. There are no illegal actions, but the parties have a large number of overseas sources that are quite dubious: from Greece, Cyprus, and Hong-Kong. In mid-1990s there were serious concerns about sleaze among the political elite; the prevalent opinion was that the politicians must be put beyond any doubt, or at least they should look pure.

In 1997 the Labour Party led by Tony Blair won a landslide victory. Its promise during the election campaign was for complete transparency in the power. ‘Purer than pure’, ‘Not a penny more, not a penny less’ - these are the slogans with which the Labour Party came into power.

Halting ‘the arms race’ between the Conservative and the Labour Party was one of the radical changes that had to be made. Both parties had just spent 66 million pounds for the election campaigns in 1997. This cannot go on like this, the Labour Party says, since this is an unhealthy practice from the point of view of the public interest.

Six months later the Labour government suffered its first scandal. The main participant was the multi-millionaire Bernie Ekelston, owner and president of ‘Formula 1’ car race.

When the Labour government was elected, it had plans to ban cigarette advertising. Cigarette companies sponsor many sports in Great Britain, e.g. cricket and car races. The government was of the opinion that cigarettes cannot be linked with sports events. However, the government lifted the taxes on advertisements at car races. Soon it became known that the owner of ‘Formula 1’ Bernie Ekelston donated 1 million pounds to the Labour Party. The controversial attitude of the government to ‘Formula 1’ is the result of this donation - these are the conclusions in the media.

Following the recommendations of the ‘Neil Committee’ the Labour Party returned the donated sum. Prime Minister Tony Blair had to give long explanations on how much more

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difficult it is to create internationally recognized sports than sports within the country.The case again started the argument about the connections between business and

politics.Radical recommendationsAt the end of October 1998, trying to overcome the credibility gap, the ‘Neil

Committee’ came out with a report containing 100 recommendations.Here are some of the most important ones:- announcing the donations for the political parties of sums above 5,000 pounds at

national level and above 1,000 pounds at local level;- limit of 20 million pounds for the election campaigns of the parties;- ban on financing by off-shore companies;- ban on foreign donations by non-British citizens;- ban on anonymous donations bigger than 50 pounds;- limit on corporate financing of up to 50,000 pounds.However, there are no limits on private donations. The political parties in Great

Britain are not financed by the state, but only by donations. They need this money not only for the election campaigns, but also for the normal functioning of their headquarters.

At this stage Premier Tony Blair agreed to have the names of the sponsors announced, but not the amounts of the donations.

In the letter enclosed to the report Lord Neil wrote to Tony Blair: ‘A lot of people are of the opinion that the policy of the big political parties is influenced by the big sponsors; the lack of information about the sources of financing becomes suspicious. We think we need a new basis to regain the trust of the people, to satisfy the demands of modern politics, so that Britain could become one of the democratic countries with the best practices in this sphere.’

The ‘Neil Committee’ set the task to refute the argument that money can buy influence. All major parties agreed that the names of the donors and the sums should be announced.

‘There is a big difference between donations of 5,000 pounds and of 1 million pounds,’ Lord Neil said during the debates in the British print media. ‘Completely different issues can be raised in each case.’ Lord Neil admits that the arguments against revealing the donors, including their right to privacy, are serious, the fears among the politicians that some of the donations may simply stop are well-founded, too. According to the Committee, however, the public interest is above the right to privacy. The need of the public for transparency has priority over the risk that the donations for the party safes will be reduced.

This has been the most fundamental reform in the financing of the British parties since the Law on Corruption and Illegal Practices was passed in 1883.

On 30 November 2000 the report of the ‘Neil Committee’ became a Law on Political Parties, Elections and Referendums 2000. To everybody’s surprise and contrary to previous failed attempts to reform the British system in this respect, this time all parties supported the recommendations of the Committee. The Labour Party had majority, so this law could be passed. However, the Conservatives also supported the recommendation for more transparency and cuts in expenditure.

The parliamentary elections on 7 June were held following new regulations.

Ljubliana:Like many other towns in Central Europe, Ljubljiana is a calm, peaceful town with

clean streets and freshly painted facades of the buildings. One can hardly feel any dynamics - the population is only 280,000 people and every place is within a ten-minute walk. A lot of young people, one or two beggars in the center, Bulgarian prices of foodstuff, high price of clothes, footwear and other goods.

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Tourists know that they are in Europe when the motorway across the former Yugoslavia crosses the border between Croatia and Slovenia. Although Slovenia is a transition country, the GNP is 9,800 Euro per capita, while in Bulgaria this figure is 1,600 Euro. The average salary is 800 Euro; pensioners receive about 450 Euro. Slovenia has a population of 2.5 million and is the most likely candidate to be accepted in NATO and the EU in the near future.

The Slovenians are going through the transition period in a clever, calm way, just like the Hungarians. With their rational thinking they resemble more the West Europeans than the Slavs. During the time when Slovenia was part of the Yugoslav federation, the country with a population of only 8% of the total population of Yugoslavia, produced 25% of the Yugoslav GDP, and 33% of the total export of Yugoslavia. In 1990, when Slovenia gained its independence, its position was quite good.

‘Nowadays the Slovenian society is not divided into left-wing and right-wing, but into wise and unwise people,’ says Zhivko Pregl, who was Chairman of the Open Society Foundation, Chief Executive of the biggest chain of stores for foodstuff ‘Merkator’ for many years, and now he is a business consultant.

The political life in Slovenia over the last ten years has been amazingly stable. The Slovenians did not try to destroy their past brutally - the Slovenian President Milan Kucan is a former First Secretary of the Central Committee of the Slovenian Communist Party (one can still remember the publications in the Western press at that time: ‘Slovenia - island of freedom’); the Prime Minister is a former representative of Slovenia in the Yugoslav Skupshtina.

Against the background of the stormy changes of governments in Bulgaria, in Slovenia one party - LDP (the Liberal Democratic Party) of Yanes Drnovshek has been in power since 1992, in different coalitions with an interruption of 6 months. ‘The people vote for us because they are pleased with the economic situation,’ Peter Yamnikar, Secretary General of LDP says. During the elections in 2000 LDP won 36.26% of the votes and 34 out of the 90 seats in parliament. The second largest party - the Social Democratic Party (SDP) won 15.81% and 14 seats. There are 7 parties, 1 coalition and 2 representatives of the minorities in the Parliament.

‘LDP has been in power for 10 years, this is boring and not very healthy for the political and economic system,’ says Ali Zerdin journalist from ‘Mladina’ newspaper. He is young and he misses dynamics in political life.

The Bulgarian type of privatization is not known in Slovenia; even nowadays the state has about 40% stake in the privatized enterprises through investment funds and banks. The foreign ownership in the Slovenian companies is less than 5%.

Low level of corruptionIn Slovenia the level of corruption is very low. Nobody in the country talks about

corrupted politicians; even the journalists, who are quite pessimistic because of their work, are of the opinion that the political elite is not corrupted. Some people think that this is due to the fact that the population is not big - people know one another, everybody is somebody’s relative, it is difficult to keep secrets. If there are some deals among politicians, this is just exchange of favors, in the style of the former socialist nomenklatura, not in the form of grafts. ‘ You cannot regard politicians as potential criminals,’ a colleague tells me.

‘The real story of Slovenia is that everybody knows everybody else, and this is the way the nomenklatura works,’ says Peter Frankl, editor-in-chief of ‘Finance’, the biggest financial daily in the country with 50% Swedish stake, and a circulation of 7,000. ‘This is a healthy way to govern the country, but in some respects it is quite slow, and we need a faster, more dynamic pace. To understand a Slovenian, you should imagine the following scene: a

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house, sea, people enjoying themselves, they do not work very hard, they are busy with some activities; we do not care when we will enter the EU, because then we will have to work harder, we will have to sell property to foreigners, and everybody is too skeptical. This is the idea about Slovenia’.

‘A MP’s salary is between 4,000 and 5,000 Euro per month. This is a good salary,’ adds Grega Repovs, home policy editor at the biggest newspaper ‘Delo’. She also explains the low level of corruption among politicians. ‘On the other hand this country is rich enough, you really cannot make comparisons. The number of the yachts along the coast is the same as 10 years ago. There is no big difference in the standard of living now and before. We had a good life before the change; we have a good life now, too. When I was at high school, I used to go to Paris every year for a month; we used to travel to Vienna every two months’,

Transparent lawContrary to the Bulgarian one, the law on financing political parties in Slovenia is

transparent and detailed; there are no possibilities for corruption in it. The Slovenian law has no provisions for anonymous donations; every donation of over 2,000 Euro must be entered in the accounts of the party; the accounts are submitted to the Parliament and to the Audit Office. These accounts are published in the Slovenian ‘State Gazette’ after the Parliament and the Audit Office have checked them. If the parties are late with the accounts, they can be fined with 1 million to 5 million tolars (BGL 10,000 to 50,000). If a party does not submit, within the specified term, a detailed account of its financing and the sources of this financing (these accounts can be expanded, if requested by the Chairman of the National Assembly), the monthly subsidy of the party can be stopped.

The Slovenian system guarantees that the big parties should have enough money for their functioning during their terms. ‘If this budget is well managed, it is enough for the election campaigns,’ Grega Repovsh says. Every year, each party, even those not represented in parliament, receives 60 tolars (about 6 levs) per vote every month. (Cf. the Bulgarian budget allocates a little more than 1 lev per vote). The Slovenian Parliament has voted for a total sum of 0.017% of the GDP, or 548 million tolars (BGL 5.48 million) per year.

Monthly the LDP receives 16.033 million tolars (BGL about 160,033 - NDSV receives BGL 200,000) for 390,797 votes; the SDP, the biggest opposition party receives 7.3 million tolars (BGL 73,000) for 170,541 votes, etc. The smallest party with seats in Parliament gets 2.4 million tolars (BGL 24,000). Even the parties that are not represented in Parliament receive money for each vote.

The parties also receive additional financing from the budget for two election campaigns - parliamentary and presidential, for their terms.

Officially and legally they are also financed by the Slovenian business (25% of the financing comes from companies), as well as by physical entities and party membership dues.

All information about the physical and legal entities, that have donated sums over three average salaries, is public. However, these lists do not contain the names of the largest companies, and when there are such names in the lists, e.g. the breweries ‘Lashko’ and ‘Union’, or the world-known cork house ‘Krka’, their donations are well below the allowed limit. ‘They do not want publicity, and that is why their donations are below the minimum limit, so that their names will not be included in the lists,’ Ali Serdin explains.

Sofia:On 28 March 2001 the Bulgarian Parliament passed the Law on Political Parties; the

majority party in Parliament at the time was that of UDF. The Law has several articles providing measures to fight corruption:

- the political parties cannot carry out commercial activities; they are not entitled to

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ownership of the capital of companies registered under the Commercial Law;- the Law provides for acceptable sources of party revenues; no donations can be made

by foreign physical and legal entities, by foreign governments and by foreign state-owned companies and organizations;

- there are regulations concerning state subsidy - each party is financed from the state budget according to the percentage of the votes they received in the previous elections;

- the Law limits the amount of money parties can spend during their election campaigns: up to BGL 2 million for a coalition, up to BGL 1 million for a party, up to BGL 10,000 for private donations and up to BGL 30,000 for donations made by companies;

- the Law bans party financing by companies with state majority stake;- the Law provides annual control of party revenues and expenses exercised by the

National Audit Office.Despite some of the serious weaknesses in this Law, which were pointed out during

the parliamentary debates, and the presidential veto on it, the Law was eventually passed.However, this Law legalizes a number of corruption practices both in raising money

for the election campaigns, and in the financing of the parties’ headquarters.The Bulgarian Law, despite its strong points, is controversial in its essence, and far

from the European regulations. It raises doubts about the motives of the party headquarters in Bulgaria, and about their democratic functioning.

What are these weak points?1. The Law has no provisions that the donors and the amounts of the donations must

be publicly announced. The arguments of the party treasurers are the following: the donors insist that their names and the sums they have donated to political parties should not be announced. Probably the concerns that donations will drop sharply, if they are announced, are well founded, too.

However, public interest has priority over the donors’ right to privacy; public interest covers things such as: how and to what extent big donations can influence the political reactions of the parties; whether there is a deal between the business and the party headquarters; what benefits the party that has won the elections provides to its donors. Full transparency of the donors and the amounts of the donations are the practice introduced during the parliamentary elections on 7 June 2001 in Great Britain - a country with long traditions in elections. However, the same practice has been adopted in Slovenia, which is a transition country. Financing in the dark in Bulgaria considerably weakens the trust in the political elite, and strengthens doubts about corruption practices.

2. The Bulgarian Law on Political Parties provides that parties can receive anonymous donations of up to 25% of their annual state subsidy. Since these provisions of the Law came into force this year, the anonymous donations for the year 2001, both for the parliamentary and the presidential elections remained without any control. For 2002 NDSV (King Simeon’s Movement), the party with the biggest state subsidy of 2,249,080 BGL, has the right to receive 562,270 BGL (approximately 280,000 Euro) from anonymous donors. You can see that this is a considerable sum, the source of which is not clear. This is also a legal form of money laundering. The Law has no provisions that oblige parties to reveal information about such donations to the authorized bodies.

There is no ban on donations from offshore companies and blind trusts.In 2001 the Bulgarian Financial Investigation Bureau identified cases of money

laundering totaling $ 96 million. Compared to the findings of the previous year, when this sum was $ 20.5 million, this means that the cases of money laundering of which the Prosecutor’s Office was informed increased five times last year. The investigators working at the Bureau expect a boom in money laundering in 2002. They claim that the ratio of laundered money to registered money in the country is 1:10; Interpol states that the ratio

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between seizures of drugs and drugs trafficked along the channels all over the world is the same - 1:10.

3. The provision in the Law for ‘full control over the financial income and expenditure of the political parties’ on behalf of the Audit Office is just an empty phrase. The Law does not provide for any mechanisms with which the Audit Office can check the accounts. The accounts do not comply with the European requirements for modern accounting. The Audit Office does not have the right, as there is no such article in the Law, to countercheck the reported expenses on the election campaigns.

The Audit Office states that there are 268 political parties registered in Bulgaria. 54 parties and coalitions registered for the general elections for the 39th National Assembly. 36 parties and coalitions, and 11 independent candidates participated in these elections.

The Law on Political Parties put the beginning of some sort of accounting, but it is far from being transparent, as required by the European democracies. In practice, no one can control the cash flow to the parties and their leaders. There are only rumors about the sums of money involved.

I’ll give an example. In the autumn of 2001 one of the leaders of the Movement for Rights and Freedoms (MRF), currently in coalition with NDSV, allegedly misappropriated USD 300,000 and DEM 80,000, allocated for the financing of the MRF’s election campaign. MRF did not have enough funds, it reported BGL 171,000 (85,000 Euro) for its election campaign. One donor gave these sums. The alleged leader of the movement was removed from the party and from the parliamentary group. He claims that was a set-up, because certain people wanted to remove him from power.

There are serious doubts about deals between the business and the political parties in power, but nothing can be proved. Since the elections, several amendments have been made to law intuito persone. Certain construction, transport, and petrol companies, banks and finance houses have received big orders; they are the favorites of the ruling parties.

I do not cherish any illusions that if the Law changes towards complete transparency of party financing, this will mean real transparency, that there will be no more slush funds, that the cash flow will stop. In Bulgaria the Grey economy represents 40% of the economy of the country. Its coming into the light is a long process. However, laws on party financing, that are in compliance with the European legislation, will be another step towards public control over the parties in power, a step towards regaining the public trust in the Bulgarian politicians.

II. Last elections. A) In UK

For their election campaigns in 2001, the major parties in UK spent the sum of 15,8 million pounds each; this sum is much smaller than the expenses in the previous elections. Although the Labour Party’s financial state was quite good, they spent less than the provisions in the law. The expected tendency of reduced donations became a fact.

The Conservatives raised most of their money from private donations, while the Labour Party got most of their money from the unions.

At the beginning of June the Conservatives received a donation of 5 million pounds from the multi-millionaire Paul Getty. The two other main sponsors for the Tories were Stuart Willer, boss of a gambling business, and Edward Haugui, Irish senator and businessman; they both contributed the sum of 6 million pounds. The Tories also received another 2 million pounds from other donors.

The Labour Party received 3 million pounds from the unions. A new trend has appeared, too: the Labour Party has been attracting more and more corporate money, although

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business is generally considered to be right wing. For the first time the sum given by the unions is smaller than the sum of the three largest donations (the money given by the unions is half the sum given in 1992). Lord Seinsburry, owner of a chain of supermarkets, Lord Hamlin, publisher, and Sir Christopher Ontatge, former philanthropist and conservative, donated the sum of 6.1 million pounds.

‘Those who demanded certain assurances from the Party for their cash were unacceptable. There is only one valid reason for giving money to a political party and that is to help the party of your preference be elected so that you, along with the rest of the nation, can enjoy the supposedly beneficial results of that party’s government,’ Lord MacAlpine says.

But things are not that easy.

B) In Slovenia: Selfregulations - The LDP protects its name‘We cannot find any special connection between companies and parties in Slovenia,’

Grega Repovsh says. ‘Years ago I found some indirect link between eight companies which had sponsored the Liberal Party and had won tenders after that. Nothing could be proved in this respect - the companies submitted tenders and won, probably because they were better than other companies. I cannot say this was a deal. We also have a lot of firms, which win tenders without having sponsored the ruling party.’

Peter Frankl, in his observations, also comes to the conclusion ‘There is no deal’. He could not say that companies financing political parties have better luck in tenders. The sums donated to political parties are too small, since there are very strict rules in this respect. No tenderer can assure a contract for himself with such small sums. Besides, the name of each company, which has donated more than three average salaries to a political party, must be announced.

According to Peter Frankl the real issue is in what other way companies are connected with the political parties. He cannot give a direct answer whether there is any connection between them, because he thinks that most connections are not transparent. Peter Frankl is convinced that the official data about the financing of the political parties do not mean anything. ‘Small money is transparent, big money isn’t,’ he says with a laugh.

‘We cannot find out whether the LDP has been involved in any scandal; I tried to dig out for such, without any success,’ Grega Repovsh admits. ‘Once I had a meeting with the Secretary General of the LDP and we talked about their financing. In order to convince me, he called the accountant and asked him to bring all the accounts for the last three years. He dumped them on the table and said: ‘Search’. I could see all the information I was interested in. After that he told me: ‘It’s not worth doing it. We are a small country; in one or two years everyone will know what you have done’.

Branko Grim, member of the Social Democratic Party, the largest opposition party in Slovenia is MP and one of the leaders. He is responsible for the election campaigns of his party, he is also member of the Committee on the Political System, which, in his opinion, is the most important committee in Parliament. Branko Grim is nervous - for ten years, with an exception of six months, the SDP has been in opposition. The party cannot win enough seats in order to form a government. All tools of power are in the hands of the LDP.

‘During the last parliamentary elections the LDP bought all the media in Slovenia,’ he says. ‘I do not know how, but they bought them. We need neutral media, but this is impossible here. There is absolute monopoly over the media. On the other hand, it is very difficult to launch a new newspaper in such a small market. Things are changing very slowly here. All media are dependent on the previous regime. For example ‘Delo’, the strongest press group in Slovenia is formally a private newspaper. But some of the shares belong to the largest financial group in the country, controlled directly by the government. You know that we ruled the country in coalition for six months. At that time all the resources of the country

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were depleted, we failed, and consequently, we lost the elections.The day we came into power, the financial group, which had a stake in ’Delo’, sold its

shares to ‘Gorenje’. There was an incident in ‘Gorenje’ several weeks later and they needed money. We told them:”Sell us you stake in ‘Delo’”. They refused. These things are difficult to explain to someone who does not live here. We have a high standard in Slovenia, but we do not have a real working democracy.

We are a quiet country, because everything in under the table. This does not mean that everything is all right. Even the schools have not changed. The students now use the same textbooks I used as a student.’

C) In BulgariaAt MRF there is formally one person who is responsible for the finances, but the

actual financier is the leader Ahmed Dogan,’ says Osman Oktay, ex-member of the MRF executive body.

‘For our election campaign we received funds only in compliance with the provisions in the law, and no other sums. The financing was mainly from the leaders; we also had BGL 40,000 from anonymous donors. We are a big party and we know how many seats we can win. The runners themselves contributed money for the campaign. The campaign was entirely self-financed.

Some of the people, who donated money, are: Junal Ljutfi, Emel Etem, Kasim Dal. Each of them gave the sum of BGL 5,000.

MRF received donations from physical entities amounting to BGL 171,350. They won 21 seats in parliament. They spent the least money.

At UDF the Chairman of the party and the financier Radev are the people in charge of the finances.

‘I am the only person responsible for the financing of the campaign of our party,’ Muravey Radev says. ‘Even the Chairman (Ivan Kostov) did not know about all the receipts.’

He says that UDF have no anonymous donors, since this is against the law. He denies the accusations that UDF used up the money of ‘Agriculture’ Fund for their election campaign, and that the Ministry of Finance carried out a number of checks on the gambling halls of Vasil Bozhkov, after his refusal to finance UDF’s campaign last year.UDF’s expenditure amounted to BGL 1,517,683. They received 51 seats.

Georgi Parvanov and Dimitar Dabov know everything about the finances of BSP; the chairmen of their coalition parties have all the information about the finances of the coalition.

BSP spent BGL 711,241 and won 48 seats.NDSV spent BGL 1,559,50, most of the money was spent on the media campaign.

They won 120 seats. Maxim Dimov was the financier, the King was informed about the most sensitive details.

MRF still cannot get over the scandal with Osman Oktay. ‘We could have done a lot of things with USD 350,000 during the election campaign, good things for MRF,’ Ahmed Emin, Head of Ahmed Dogan’s Office says. ‘MRF has never seen so much money, and we have been holding elections for 12 years. Especially in the media. We could have used more advertising in the print media to present our platform. We would have had more print materials. We could have had better communications. We could have used the money to secure 5 or 6 seats more in Parliament for MRF. We could have achieved this, we had the energy and the will to do it.’

Ahmed Emin describes the story of the money that was donated, but never reached the MRF’s HQ. Many details are still not quite clear. The information MRF discreetly omits is the following:

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In the autumn of 2000A rich Bulgarian citizen, most probably of Turkish origin, tries to establish contacts

with some of the officials at the MRF’s HQ. He wants to help the election campaign of MRF in 2001. This is the first time he has sponsored a MRF campaign, he is outside the business circle round the leader Ahmed Dogan. He wants to establish close contacts with the MRF’s leaders. He meets Osman Oktay and informs him about his intentions to donate USD 350,000. Several months later Parliament is to pass amendments to the Law on Political Parties; according to these amendments physical entities can donate up to BGL 10,000, legal entities can donate up to BGL 30,000.

The money was given cashIn three tranches of USD 100,000 each, and one tranche of USD 50,000 by X to

Osman Oktay, officials from MRF Central claim. The first tranche was given at the end of 2000.

MRF finds out about the money rather late - in May; the information is revealed by the donor. ‘We cross-questioned the donor in the presence of Osman Oktay,’ Ehmed Edin, who was at this meeting, says. ‘Mr. Oktay admitted the fact that he had received USD 350,000 from this sponsor. He also admitted that he had received another DEM 100,000 (USD 50,000) from our coalition partner EuroRoma for our election campaign.’

Ahmed Dogan offered Oktay to give the money to MRF, or to return it to the donor. Oktay, in the words of the Head of Mr. Dogan’s Office, did not do anything. At the dramatic session of MRF’s Central Council on 16 October, the unanimous decision (72 people out of 76 members attended the meeting) was to expel Osman Oktay from MRF.

‘The Chairman thanked him for his work so far, but the thing he has done, cannot be forgiven,’ Emin says.

‘We have left him to his creditors,’ a member of the Council says after the meeting.The Financial Investigation Bureau has been informed about the case; MRF is also

working on the case.‘I deny these accusations,’ Osman Oktay stated at the press conference on Wednesday,

24 October, held at Balkan Agency. The same morning he filed a claim against Ahmed Dogan and Emel Etem for ‘ruining his reputation as a politician and an individual’. The claim is for BGL 1. ‘I have never dealt with the money of MRF. Few people can tell you about its finances, but I am not one of them. And I do not think anyone would risk giving so much money.’

Oktay says that he has no bank accounts. ‘168 Chassa’ asked whether the money could have been transferred to the corporate accounts of his girlfriend, who has some business in Italy. Oktay, after a second’s hesitation says: ‘This must be proved.’

Oktay behaves like a man who is not guilty, who has been wrongly accused. Or like a man, who knows that no evidence can be presented against him.

There is nothing dramatic in the accountsThis internal scandal in MRF has again provoked interest in the financing of the

parties’ election campaigns.The conclusions that can be drawn from this scandal are that the parties cannot control

whether their members steal, or not, but they can distance themselves from such members in the name of honesty and respect to their voters.

It is also true that in such cash scandals no evidence can be found, the parties in the deals rely on each other’s honesty. In money matters parties rely exceptionally on people’s honest words.

The National Audit Office cannot find any proof for such money, since it is not in the accounts. If these USD 350,000 had reached the MRF’s HQ, in what way would they have been recorded?

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Most probably they would not have been entered into the accounts.The wish of the donor was not to leave any traces of the donation. It is true that the

money would have been of great help to the party’s small election campaign. The accounts presented to the Audit Office show that MRF spent only BGL 171,320.20

For the first time this year the Audit Office received the accounts of the financing of the election campaigns of the parties. ‘168 Chassa’ was the first newspaper to get this information. The provisions in the law arethat the parties cannot spend more than BGL 2 million on their election campaigns. Of course, no party has recorded bigger sums.

The law has been observed in these accounts. So, there is nothing dramatic in them. The four

parties have received special letters, expressing the thanks of the Chairman of the Audit Office Ass. Prof. Georgi Nikolov.

‘We have never made any compromises in this respect; all sums are entered into the accounts. We have never had any ‘black’ safes, everything must be legal and transparent, so that we can enjoy the people’s trust. We must have internal financial documents,’ says Ahmed Emin. Ahmed Emin, Dr. Hasan Ademov and Mustafa Karadai were in charge of the financing of the MRF election campaign in July. All the finances - the income and the expenses were checked by this committee. They were also checked by MRF leader Ahmed Dogan.

‘Our donors made their donations only at UDF’s HQ,’ UDF Deputy Chairman and former Finance Minister Muravey Radev says. He was responsible for the finances of the election campaign. ‘Any runner for parliament, of any UDF member takes the sponsor to the HQ, where he makes the donation. No money has changed hands.’ The former Finance Minister has compiled a book: ‘ UDF - Financial Regulations’. This is a manual on accounting at UDF’s HQ at 134 ‘Rakovski’ St.

‘When we started the campaign, we came to the conclusion that we will need a committee, responsible for the control and financing of the campaign. A committee of three people was elected: Georgi Petkanov, Nikolai Marinov and I.’ says Maxim Dimov, financier of the NDSV election campaign. ‘The committee was elected on 2 December and functioned until 17 July, the election day. In that period

we had meetings every day, we completed the accounts for the receipts and expenses, and at the end we gathered

the information, and presented the documents to the Audit Office. We had an account at Post Bank. We received our donations in BGL, USD and DEM there, or at the cash desk in the Head Office at 30 ‘Shishman’ St. We issued the respective accounting documents for each payment. We also issued certificates to the donors.’

Dimitar Dabov, Organization Secretary at the Supreme Council at BSP was responsible for the financing of the election campaign of ‘Coalition for Bulgaria. ‘We do not have big donors,’

says he. ‘ But we have a lot of members - 250,000 BSP members, and they gave 1 or 2 levs each. I remember the biggest donation. The sum was BGL 7,000 donated by a firm. The people gave money to the party organizations with the municipality party councils; some of the sums were given at the HQ. At regional level we managed to cover the expenses for the media and the posters. Transport was our biggest expenditure. We had about 15 cars at ‘Pozitano’, almost all regional councils had cars, some of the runners used their own transport.’

III. The peak of the iceberg - the deal.How a campaign is financed, a Bulgarian businessman is telling:When the time comes, each party chooses the person to manage its finances. Usually

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they chose a person with a lot of connections and good knowledge of finances. Maxim Dimov, the financier of NDSV, was such a person. Hristo Biserov was his counterpart in UDF.

Everyone from business seeks contacts with him. Everything starts with small talk. Nobody tells you: Give us 5 million levs. You are among friends. Usually such talks start with the remark: ‘The party must be helped’. Obligations are taken on, when the party is in power. When the party is in opposition, things are different. A circle of people is formed; this circle comprises people, who either do not get on very well with the government, or they just think that the ruling party will lose the elections. The financier gets support from every MP - every MP gathers his mini-circle.

Invariably these MPs are chosen from the business circles. For example, the person in charge of the campaign asks the party representative in the region to give him the names of suitable people, after that they are short-listed. Then the financier establishes contacts with the chosen persons.

A HQ for the financing of the party is formed, parallel to the HQ for the election campaign.

A lot of managers go to the HQ, they offer their services, they say: These are our demands, that’s what we can offer. The agreements are oral. You say what your problems are, and you receive assurance that they will be solved.

Are there obligations that cannot be taken on?It depends on the money. Nevertheless, you cannot make some demands, e.g. to

become Prime Minister. The promises they make are to help you with you business environment in the first place, so that you can work. Companies want to start business in gas, petrol, road construction. The contacts are mainly with the big business. Second, they can promise to appoint your people in the government - in the local, regional or state administration. In the third place they can promise to appoint your people as ministers.

The links are direct, there are no unfulfilled promises. In 1997 I went to Kostov first, and he sent me to Hristo Biserov. In 1997 Kostov did not deal with money. Later on Kostov was very loyal to everyone, who had donated money.

The most important thing is to know who will be the next party in power. I have given money to both parties. In the whole state 90% of the people, who take money for the party, take money for themselves, as well.

There are bank transfers, and you are given an order. However, not all donations are entered into the accounts. At present 90% of the economy operates with ‘black money’. In Bulgaria you pay cash.

The practice is the following: we have won, send us you people for the respective positions. There is a team who makes the appointments. With NDSV the team comprised Nikolai Marinov, Manager of the Agency for Foreign Investment, Stoyan Ganev, former head of the Prime Minister’s Protocol, and Konstantin Ivanov, Simeon’s adviser.

At UDF Kostov was the only person to have an overview of the finances; in NDSV this person is Simeon.

In UK, after coming into power the Labour Party carried out a parliamentary survey of the

link between the business and the political parties.They did not find any evidence, but pointed out certain facts that make this link very

strong.Breweries in Great Britain traditionally support the Conservative Party. At the

beginning of 1990s the Conservative government made a proposal to lift monopoly on beer. Brewery monopolies protested because they felt threatened by smaller brewers. As a result this monopoly was kept. There are suspicions that this decision was prompted by the

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numerous donations made by the breweries to the Conservative Party. They have a very strong lobby in Great Britain.

The Labour government gives a number of other examples, most of them concern the Conservative government.

‘However, there are serious concerns that the same things are happening now with the Labour government,’ David McKee adds. ‘If you attend some annual conference of a political party, you will see that they resemble a show, you will see lavish lunches, the expenses being covered by big companies. Actually, by making donations to parties, they buy contacts with ministers.’

Since the Labour Party won the elections companies working in the field of genetic engineering have been very successful. They cultivate artificially created crops on thousands of acres of land. ‘Monsanto’, the largest multinational company working in this field, is one of them. A lot of MPs are of the opinion that these companies exercise too much influence over the Labour government through the donations they make. A lot of journalists from ‘The Guardian’ and ‘The Observer’ are curious to find out to what extent this could sometimes influence the policy of the government.

Armament companies cannot operate without protection from the government, either. Any business, which carries out orders from the state (armament companies are such businesses), and which has no loyal persons in government, will face grave problems. So, armament companies and construction companies provide funds for party conferences, meetings, dinners, etc.

‘Politicians have been corrupted all my life,’ says David McKee. ‘ In fact, everyone will tell you that candidate MPs spend lots of money, but no legal actions have been taken against any of them.’

In spite of the intentions they declared Scandals erupt with the Labour Party in power.‘No one knows for sure the exact sums the political parties receive. You can check the

amounts the parties spend during their election campaigns, but you cannot check the amounts that enter their safes. The curious thing is that both the Conservative and the Labour Party spend a lot,’ David McKee says.

What distinguishes the two Indian brothers Srichand and Gopichand Hinduja from their countrymen, and the British, is the fact that they are very, very rich. The British media say that they have reached their tentacles among prominent figures from the Conservatives, the Labour and the Liberal Party. There are rumours at Westminster (the seat of government) that half a dozen candidates received donations from them during the last elections.

Their business in the City is subject of constant speculations. Their fight to become British citizens started with the first signals from India, that they could be prosecuted for an alleged bribe of 30 million pounds, given to them in 1986 by the Swedish Armament Company ‘Boforce’ for the conclusion of a deal with the Indian government for the sum of 775 million pounds. On 22 January 1990 Gopichand was pointed out in the report of the Indian Central Investigation Office as one of the suspects.

One month later - on 21 February, the two brothers applied for British naturalization. In April 1990 their applications were turned down. An Indian expert, who has been watching their careers very closely says: ‘ M6 and the Foreign Office must have piles of files on them’

On 5 March 1997 Gopichand Hinduja applied again. On 4 November 1997, ‘strikingly soon’, he got his British passport. Srichand Hinduja applied on 20 October 1998 and became a British citizen on 23 March 1993. It takes the British authorities years to decide on such applications.

There is outcry in the media. They claim that this is an example of the deals between

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the rich and the political parties. The Hinduja brothers gave money to the Labour party and against it they received British citizenship.

Peter Mendelson, Senior Secretary and close friend and adviser of Tony Blair says that he looks favourably at their applications. This statement brought about Mr. Mendelson’s second resignation. A parliamentary investigation was initiated against him. By the way, he still enjoys the Prime Minister’s confidence.

‘The media can exercise pressure, but if you have the support of the Prime Minister, you survive in politics,’ Dr. Justin Fisher says.

The Labour Party and the Hinduja brother still maintain close contacts. ‘The Guardian’ disclosed the fact that Prince Charles, taking into consideration a report by the British Secret Service, refused to accept a large donation from ‘Hinduja’ Foundation. Tony Blair, however, accepted a gift from the same Foundation: the sum of 1 million pounds for ‘The Home of the Millennium.’ ‘ They have the right to donate money for public causes,’ the Premier says for BBC.

The investigation of Peter Mendelson’ lobbying for the two brothers to receive British passports proves that Mendelson was given a report similar to the report sent to Prince Charles.

The parties in Slovenia are financed from the budget and this explains the fact that there are no big scandals in

the country. In countries like UK, for example, where the campaigns and the parties are not financed from the budget, the link between business and the parties is stronger.

The Slovenian legislator is convinced that it is better for the parties to be financed by the state, and not having them linked with companies, which is the practice in the USA, for example. This is also a way to keep some distance between the business and the political parties. The same law is in force in Sweden, too. However, it is not applicable in the USA, where election campaigns are very expensive.

In Slovenia there is no direct connection between the firms - sponsors of the election campaigns and the decisions the government takes. The LDP is pushing Slovenia into the EU and NATO. This coincides with the interests of the biggest companies. They think this act will be beneficial for the Slovenian business, and that is why they support the LDP policy and finance it.

On the other hand, a specific interest in a temporary isolation of Slovenia can be seen among pharmaceutical and food-processing companies, in the agricultural sector and in the energy sector. Investment banks are also interest in having Slovenia outside the EU, or at least postponing its accession to the EU. They are ready to finance ‘independent’ meetings and media in this connection.

Investment funds have a great influence on the management of the companies. Undoubtedly, the biggest political party exercises influence in the appointment of the managers of the companies with a state stake. This becomes quite clear when you see the list of managers. 80% of the managers supported the LDP until recently.

The national privatization interests that oppose Slovenia’s joining the EU, cause withdrawal of some of the managers, who support the LDP.

However, the business cannot influence the political change.This process is not likely to put an end to the 10-year rule of the LDP, after the

country becomes a member of the EU and NATO. The largest opposition party - the SDP has the same foreign policy aim.

ClientelismIn February 2002 Premier Yanes Drnovshek announced at the party conference of the

LDP in Ljubljana, that membership in the LDP is a responsibility, not favoritism. He had in mind a petition, signed by Slovenian MPs who insisted that brewing should not be sold to

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foreign investors. The Premier stated that such actions can be classified as clientelism, and this is what the Slovenian politicians should never do - mix politics and business.

‘The breweries are the biggest sponsors of the LDP,’ I tell Peter Yamnikar, thinking about ‘Lashko’, the biggest brewery.

‘It’s not quite true. Every company has the right to give donations of up to 10 average salaries, no more. This makes about 5,000 Euro,’ says he.

Contrary to the LDP, there are scandals in the other parties.1. In the Slovenian People’s PartyOn 8 February 2002 the Slovenian Prosecutor’s Offices brought charges against

Marian Podobnik, former chairman of the People’s Party. He was charged with accepting illegal financing for his party. The trial is impending. This could be described as the finale of a story of illegal financing of the election campaign in 1992. The case became public knowledge after several newspapers published the confession of the key witness - the Executive Manager of the PR agency ‘Magenda’.

In 1992 the People’s Party hired ‘Magenda’ to organize its election campaign.‘Lek’, the second largest pharmaceutical company in Slovenia, decided to donate

DEM 55,000 to the People’s Party. At that time this was legal, since there were no limits on the sums.

However, ‘Lek’ did not make the donation directly, but hired the PR agency ‘Herties’ ( a sister-company of ‘Magenda’ - they are owned by the same entity). They signed a contract for advertising video-clips. ‘Herties’ did not produce the videos, instead they spent the money on financing ‘Magenda’, which at the time was organizing the Slovenian People’s Party election campaign.

The contract between ‘Lek’ and ‘Herties’ is fictitious. In its reports ‘Herties’ states that they produced videos, which is not true.

Why did ‘Lek’ decide to act in this way?Under the Law on Political Parties of 1989 state-owned companies are allowed to

sponsor political parties out of their profits. In 1992 ‘Lek’ was a state-owned company. The Council of Workers had to take the decision about the sponsorship. The Council was the only body to decide how the profits could be spent. However, the Board decided to neglect the workers, and came with the decision that ‘Lek’ would sponsor the People’s Party out of the company’s advertising budget, not out of the profit.

This is a breach of the law, firstly because the Party was financed from the budget of the company, and secondly because the signed contract was fictitious. The documents on this operation were falsified.

At that time the People’s Party received two credits from Austria. The Party leaders illegally brought the money into the country in their briefcases and in their shoes, and organized a very big campaign. The People’s Party won seats in Parliament.

But ‘Magenda’ did not receive its fees (40% of the budget of the company was not paid, this makes about DEM 1,5 million); the money was not enough, despite the Austrian credits.

Mr. Tolovic, the Executive Manager of ‘Magenda’ waited for five years. He knows that he will be prosecuted if he reveals this information earlier, since the expiry term for such offenses is five years. Five years and one day later he gave an interview to the press.

He told the journalists everything: what Marian Podobnik, President of the People’s Party had promised to Metody Dragonya, Manager of ‘Lek’; how they had received the money and had not produced the videos. He told how they had carried the money from Austria in their shoes. Copies of documents - the payment order issued by ‘Lek’ to ‘Hetries’, part of the contract - appeared in the press.

The investigation dragged for three years. The President of the People’s Party

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resigned. Of course, ‘Magenda’ got its revenge, but not its money.2. In the United List of the Social Democrats (OSSD)In 2000 several members of the United List of the Social Democrats (a coalition of

social democrats and former communists) decided to establish a kind of club called ‘Kalandrovo Society’. Formally the club is not connected with the party, apart from the fact that its founders are members of the same party. ‘Kalandrovo Society’ asked the ‘Westminster Foundation’ in London, a foundation of the Labour Party for a donation. The society received 15,000 pounds (BGL 45,000). Under the recently adopted law, however, the political parties cannot receive donations from abroad. Using this donation, OSSD together with ‘Kalandrovo Society’ organized workshops for OSSD activists, and training of OSSD members during the election campaign. In practice, the ‘Westminster Foundation’ sponsored the Slovenian Party.

A Slovenian journalist came across this information, quite by chance: while surfing the Internet, he read the website of ‘Westminster Foundation’. The scandal was huge and public. OSSD tried to explain that everything was normal, when it was not. This donation was like a by-pass for their campaign. Three days later this information was withdrawn from the website of the Labour Party. The spokesman of the Labour Party admitted this fact, when asked by journalists. Immediately after that he took a two-month leave.

OSSD never returned the money donated from abroad.3. During the 1992 presidential campaign of Milan KucanQuite recently ‘Mladina’ magazine found out that in 1992 during his presidential

campaign Milan Kucan did not pay DEM 40,000 for his campaign organized by the advertising agency ‘Studio Marketing’. If ‘Studio Marketing’ donated the money, they had to pay taxes on this donation. However, they did not pay any taxes on this sum.

The consequences of this revelation? ‘Studio Marketing’ paid the due taxes.Now in Bulgaria, nearly one year after the last parliamentary elections, the economic circles have found

their places close to the ruling party. With one or two exceptions, they are the same people, who were close to the previous government of Ivan Kostov. The influence they have today indirectly confirms their role as donors in the NDSV election campaign.

The unchangeable KjulevKjulev, banker and majority share-holder of ‘Roseximbank’ easily shook off the

negative image due to his business contacts with Michael Chorni, who was expelled from the country by the previous government in 2000. His bank still handles the money operations of Mobiltel - the biggest GSM operator. Chorni still owns Mobiltel. ‘Emil Kjulev is, in practice, the deputy chairman of the newly-formed party NDSV,’ politicians comment ironically. This is true to a great extent. Among the former employees, or business partners of Kjulev are: Plamen Panayotov, chairman of the parliamentary group of NDSV, whose office ‘Letnikov&Panayotov’ renders services to the bank, Ivan Iskrov, Chairman of the Economic Committee and former member of the Board at the bank, MP Daniel Valchev, former member of the Supervisory Council of ‘Roseximbank’.

Right after his engagement as financier with NDSV for the elections, Maxim Dimov was elected Deputy Chairman of the Board of ‘Roseximbank’. The Head of the Security at ‘Roseximbank’ Krasimir Petrov was appointed Head of the Regional Directorate of Internal Affairs in Burgas by the Chief Secretary of the Ministry of Internal Affairs Boyko Borisov, and promoted to general .

The state channels all payments of the Tax Office and the Customs and Excise Office - the biggest cash flows in the country, through ‘Roseximbank’. The operations of the biggest tax-payers in the country LUKOIL, Mobiltel, BTC are also handled at this bank.

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Economic and Investment BankThe former bank of Slavcho Hristov, which was used by the UDF government, is now

the second favorite of NDSV. Informed sources state that the first meeting of Simeon, when he came to Bulgaria, was with Slavcho Hristov. After the elections things did not go very well for the banker. He had to sell (or hand over) his shares at their nominal value, in spite of the stable state of the bank, to Tsvetelina Borislavova, partner and wife of the Chief Secretary of the Ministry of Internal Affairs Boyko Borisov. Analysts claim that the owners of the bank have not changed, only the persons representing it have changed.

The payments of the tax authorities, and the customs and excise administration go through EIBANK, too, as well as the payments of the Bulgarian Telecommunications Company.

The envy between these two banks is used to balance their influence on the government. Last month an official from the Ministry of Finance ordered a firm to make its payments through ‘Roseximbank’ - the bank of ‘The New Time’, i.e. of NDSV. Finance Minister Milen Veltchev dismissed this official. ‘”The New Time” has no bank,’ the Minister said. To the unofficial question whether there are conflicts between ‘Roseximbank’ and Simeon’s government, Kjulev answered that ‘there are no conflicts’, and he expected that the Minister will apologize in an official statement. No such statement has been made so far.

‘Kjulev has become very greedy’ MPs comment.

‘MG’ HoldingIlia Pavlov, President of ‘MG’ Holding openly demonstrated how close he was to the

King. Right after the victory of NDSV Simeon appeared at Ilia Pavlov’s birthday party at the Grand Hotel Varna in ‘Konstantin and Elena’ resort near Varna. There were comments about the close connections between them

‘We paid for the elections, and now you will sell only to us,’ Ilia Pavlov loudly discussed the contribution of ‘MG’ Holding in the corridors at the Privatization Agency. But, amazingly, he has fallen well behind the key players close to the government. ‘Ilia’s strategy is wrong,’ a friend of his comments. ‘He thinks that one should buy only a few key players, that it is not necessary to give money to the whole party. This is the reason for his failure.’

The former ‘Multigroup’ has strategic interests in the construction of the gas-main Burgas-Alexandropulis. Because of the strong competing lobbies for this project, the government announced that the participation will be only state participation. At this stage. As the country has no means, presumably it will assign the work to private firms - sub-contractors. ‘MG’ has interests in another strategic project, too - the construction of the second bridge over the Danube.

‘Multigroup’ paid for the tuition of the Minister of Economics Nikolai Vasilev, and the Executive Manager of ‘Bulgartabac’ Georgy Popov. Recently, accused by a Russian firm of having asked for a bribe of USD 500,000 Georgi Popov received the firm support of his friend Nikolai Vasilev.

The Executive Manager of a cigarette factory in Blagoevgrad Hristo Lachev also comes from ‘MG’; he was the manager of private firms of ‘Multigroup’, producing cigarettes in Ukraine. At the end of last year ‘MG’ concluded a very profitable deal, exporting tobacco for Ukraine from the cigarette factory in Blagoevgrad. The privatization of the tobacco monopoly ‘Bulgartabac’ is forthcoming.

Dimitar Kalchev, Minister of the State Administration and former mayor of Russe, also had some business with ‘Multigroup. The Deputy Minister of Economics Hasan Hasanov, from MRF, is connected with this group, too.

Petrol giants LUKOIL and ‘Naftex’

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It is said that both companies spent about DEM 10 million for the election campaign - for billboards, TV, newspapers. Immediately before the elections they made a deal: Denis Ershov’s ‘Naftex’ agreed to stopthe import of fuels, and to use the refinery of ‘Nephtochim’, property of LUKOIL, against the sum of USD 50 million. There had been a long conflict between the companies. The production of ‘Lukoil’ had been decreasing. ‘’Naftex’ had to stop using the refineries in Rumania and Greece, because it was dumping the prices on the domestic market. The contract was signed at a meeting between the executive managers of both companies Valentin Zlatev and Mitko Sabev, and the Executive Manager of ‘Naftex’ in Varna. Since then Valentin Zlatev has been seen in the King’s surrounding very often. Valentin Zlatev was equally close to the former Premier Ivan Kostov, too.

The two companies gave almost all their billboards in support of the King. The cars of NDSV travelled using credit cards issued by ‘Lukoil’ and ‘Naftex’ (Petrol). Maxim Dimov says that there were about 20 cards, other officials say that there were much more cards. The expenses were entered as ‘Internal expenses’ for ‘Petrol’.

How can a company cover such expenses. BGL 16 million (DEM 16 million) are the transport losses declared by ‘Lukoil’ for one month only. This figure is unrealistically high. Losses are being declared even now.

The people in power of the two companies: Gati Al-Jaburi - Head of the Supervisory Council of NEC, who came from the

‘Lukoil’ office in London. The Deputy Minister of Economics Nikola Yankov, former Deputy Manager of the bank of ‘Naftex’ - ‘Neftinvestbank’. The Executive Manager of the National Electric Company (NEC) Milcho Kovachev came from the Board of ‘Lukoil’.

Vasil Bozhkovcontrols the gambling business in Bulgaria. The owner of one of the biggest football

teams TSKA and boss of the gambling business works in a very friendly business environment. He controls all strategic positions of the gambling business in the country. A close friend of his is the new Head of the Committee on Gambling and former MP, nicknamed ‘Stupid’, whose wife is MP of NDSV.

Another close friend is Irina Krasteva, the new Chairperson of the Pools. The Pools declared a profit of BGL 90 million (DEM 90 million) for last year. Irina Krasteva has another business partner - the Greek businessman Socrates Kokalis, who has interests in the Bulgarian ‘Games of Luck’. Irina Krasteva was treated for alcohol addiction in 1985, and she still has such problems. Her son Delyan Peevski is Deputy Chairman of the Youths’ Movement ‘Simeon the Second’ and a friend of Galia Dicheva’s son, Rosen Dichev. Galia Dicheva represented Simeon since 1990, and now she is one of the influential persons in the King’s surrounding.

Another person is Vasil Ivanov - Luciano. The Law of the Civil Servant was amended because of him in the para. concerning qualifications. This was the first amendment the majority in the new parliament adopted intuito persone, in spite of the arguments that there are a lot of well qualified people in Bulgaria with higher education, who could be appointed in the position of Head of the State Agency for Youth and Sports. Nevertheless, the post was given to the ‘GCSE holder’ Luchano.

The former head of security of Vasil Bozhkov Nikolai Antonov was appointed Head of Department ‘Road Taxes’ with the Ministry of Finance.

The Transport Minister Plamen Petrov, recommended for this appointment by the King’s friend Spas Rusev, is a close friend of Vasil Boshkov, too.

Prince Kiril

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The younger son of King Simeon, Prince Kiril Preslavski, who is working in the City of London, enjoys his father’s trust. He is the person who forms the circle of the Yuppies in the government. The most prominent members are the Finance Minister Milen Veltchev, who at the beginning of the year exchanged the country’s Brady debt for Euro-bonds. The swap was serviced by ‘Morgan Stanley’, the bank where Prince Kiril and Milen Veltchev’s brother Georgi Veltchev work. The contract with ‘Crown Agents’ for 13 million pounds for the management of the Bulgarian Customs and Excise Offices, which was granted without a tender, is the result of the close contacts of this cabinet with Great Britain, too.

Nikolai Vasilev, Minister of Economic, has also been chosen by Prince Kiril. His main tasks are to manage the privatization of ‘Bulgartabac’, BTC and NEC.

Sales of titles- in UKThe ruling party cannot grant titles to people, who have sponsored it over the last five

years - these are the regulations in the new British law.‘The Labour Party often claims that the Conservatives often sell titles of nobility.

Lloyd George was of the opinion that when the government grants someone peerage this settles its engagement to him; this means that this system is more honest than the system of selling benefits. The Conservative Party did not sell titles and benefits when I was treasurer...But I am sure that even if the financing of the political parties is abolished, the list of peerages will not disappear,’ Lord MacAlpine says.

Facts show that big industrialists receive titles, and the companies they represent often give money to the Conservatives. It is also true that some of these Tories are granted peerages when the Labour Party is in power.

in Bulgaria – the “Petar Mandjukov” case: Count Monte Christo out of nowhere16 May With Decree 286 the Prime Minister signed the proposal made by Anton

Stankov, Minister of Justice to award Petar Mandjukov ‘Stara Planina’ Order First Degreefor his remarkable contribution and servicesfor the development of the international relations and cooperation between Bulgaria and the peoples of Russia and CIS, as well as for his 60th anniversary. The proposal has been sent to the President.

To the question: what facts, concerning the remarkable contribution of Petar Mandjukov to the development of the Bulgarian-Russian relations, have been published in ‘Russia Today’ daily (this newspaper has existed for 5 years), the editor-in-chief Dimitrina Gergova said that ‘there are no such public facts, connected with this name’. We posed the same question to Alexander Samarin, Press Officer at the Russian Embassy: Can the Embassy point out any facts in this connection. Mr. Samarin promised to check, and we have not been able to reach him since then. Zahari Zahariev, Head of the Federation of Societies for Friendship with the Peoples from Russia and CIS, who submitted the proposal to the Ministry of Justice, was in Moscow and we could not talk to him.

The motives of the government for this proposal are the large-scale charitable activities of Petar Mandjukov. However, the public opinion regards these activities as part of the absolution a trader of arms could ask to be granted by God.

Stara Planina Orderis the highest order in Bulgaria, Atanas Pavlov, Head of the Presidential Protocol explained to ‘168 Chassa’. It is awarded to heads of states, senior foreign leaders, as well as to foreigners, who have rendered exceptional services for the development of Bulgaria. In 1994 The Council of Ministers decided that ‘Stara Planina’ and ‘Madarski Konnik’ can be awarder to Bulgarian citizens, too.

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What are the criteria?‘Undoubtedly, these should be prominent figures with a very high reputation,’ Atanas

Pavlov says.After the proposal of the Council of Ministers is submitted to the President, he decides

whether to sign a decree, or not.‘We have not received such a proposal so far,’ is the answer from the President’s Press

Office on 22 May.After the last parliamentary elections Petar Mandjukov appeared in the public space

like Count Monte Christo - out of nowhere. He is a handsome, charming man, there is an air of a lot of money, with not very clear origin, about him. In his conversations he does not conceal the fact that he ‘helped’ NDSV, as well as the BSP, because he has always had left-wing convictions.

At the cocktail parties after NDSV won the elections, he willingly talks on two topics: the present tragic state, according to him, of the Bulgarian press, and his two idols-Andrey Lukanov and Nikolai Dobrev.

Probably even at that time he was planning to enter the printed media market. Probably he missed the influence of the big newspapers, especially in 2000, when his name was connected with the sale of Ukrainian weapons in Sudan, and the government of Ivan Kostov suspended the license of his firm ‘Norwood’. Today Petar Mandjukov is the happy owner of ‘Duma’ daily; it is true that this is a party newspaper, losing BGL 50,000 monthly, but it was for sale on the market. As to the second topic: According to himAndrey Lukanovis ‘the politician, with the most admirable integrity’ he has ever known, while Ognian Doynov is his opposite.

Petar Mandjukov says that now he renders some help to Andrey Lukanov’s family, as well as to some other former managers of enterprises, because he knows that ‘red money’ is nothing but a myth. Nice, but not very discreet.

There are talks among the armaments traders in Bulgaria that in 1991 Lukanov introduced Petar Mandjukov to firms from Ukraine, with which he was doing business. At Petar Mandjukov’s office in ‘Belovodski Pat’ in Boyana, Yulii Georgiev warned the ex-Premier about a possible attempt on his life.The connection with Nikolai Dobrevis very close, too. The Deputy Manager of the Russian armaments giant ‘Rossvooruzhenie’ was close to Dobrev. From 1992 to 1995-6 Petar Mandjukov’s off-shore company ‘Norwood’, registered in Cyprus, was the agent of “Rossvooruzhenie’ in its contracts with the countries in military crisis. When at the beginning of 1997, Nikolai Dobrev returned the mandate to BSP for the formation of the government, Mandjukov ‘found’ USD 200,000 for the BSP election campaign. There is no information how much money he ‘found’ and where from for the election campaigns of NDSV and BSP last year. We do not know whether he is among the official donors of these two parties. This information is not public.

In the period 1997-1999, during the second Yugo embargo, Mandjukov established and maintained close contacts with the government of Milosevic. At the beginning of 1999 he met the incumbent Military Minister of Serbia Pavle Bulatovic at the border checking point at Kalotina.

Mandjukov has concluded a number of successful deals with weapons. However, the fact is thathe has never traded in Bulgarian weapons, but in Russian and Ukrainian weapons.It could be said that he has assisted the armaments industries of these two countries, not the Bulgarian armaments industry. In the process, he has managed also to derive benefits for

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himself.These are the facts, known about him in Russia. Is trade in Russian and Ukrainian

weapons special contribution and services to Bulgaria?23 February 2002. Evgeni Primakov lands at Sofia Airport for the promotion of his

latest book. The same evening Svetlana Sharenkova, organizer of the visit, introduces the armaments trader to the Russian guest. ‘We know comrade Mandjukov,’ says the former Russian Premier, shaking hands with Mandjukov.

Later on a small group is invited to dinner at Sky Plaza restaurant.‘I drink a toast to the worthiest President of Russia Vladimir Putin,

and to the worthiest Bulgarian President Georgi Parvanov’, Mandjukov says with exaltation.If Petar Mandjukov is awarded the highest Bulgarian order, as he expects, then the

silent conclusion will be, that even ‘Stara Planina’ Order First Degree can be bought.After this article had been published, and owing to the growing

negative public opinion, the president of the Republic postponed the distribution of “Stara planina” order to Petar Mandjukov.

IV. Selfregulations – the unique British modelNo one remains impartial in London when they hear the name of a woman - Elizabeth

Filkin. ‘Mrs. Big Nose’ is the name given to her by her detractors, the woman, too big for the shoes the Parliament had pushed her in. Elizabeth Filkin visited the Bulgarian Parliament last year. Her visit in Sofia as member of the British delegation remained unnoticed by the Bulgarian media.

However, this is not the case in London.The creation of the post of Commissioner of the Parliamentary Committee on

Standards and Privileges, as a result of the report of the ‘Neil Committee’, became a challenge to the House of Commons. The Parliament opened this post to guarantee self-regulation and to regain the public trust. The person to occupy this position must fight all forms of corruption among the British MPs.

‘Having such a position in Parliament was a big cultural turning point. For better or for worse, this caused some problems,’ Peter Fisher says. He thinks that this position should be kept in Westminster.

Elizabeth Filkin’s responsibilities are to carry out internal investigations of any signals of corruption concerning MPs or members of the government. The theory is that if you have someone like Elizabeth Filkin in Parliament, who will check that the rules are observed, then the people will trust the Parliament, as the system in it is honest.

She investigates signals of corruption concerning all parties in Parliament. These signals are mainly connected with the property status declarations the MPs have to fill in.

Scandals erupt with people close to Tony Blair.Peter Mendelson had to resign over a scandal about a loan of 300,000 pounds given to

him by millionaire Jeffrey Robinson that he had not filled in the declaration form. Later on Tony Blair appointed him again, but Mendelson had to hand in his resignation for the second time over the affair with the passports of the Hinduja brothers.

Millionaire Jeffrey Robinson failed to declare 200,000 pounds which he had received from one of Robert Maxwell’s companies. He also had to resign from Tony Blair’s cabinet and now he is only MP.

Keith Vaz, Minister for Europe in Tony Blair’s previous cabinet, the only member of the cabinet of Asian origin, and whose name is connected with the Hinduja brothers, was accused by Filkin of having recommended a lawyer for a peerage without announcing the fact that he had received 1,000 pounds for a party conference from the same lawyer. Keith Vaz refused to give ‘full and accurate’ answers to Ms Filkin’s questions. Some of the accusations

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against him were taken down, but he is not in the Labour government now.The former Prime Minister John Major was suspended from Parliament after it

became clear that he had not declared fees he had received giving lectures abroad. The penalties for such breaches are either suspension from the House of Commons for

a week or two, or the MPs are deprived of the right to take the floor. The party can expel the MP from Parliament for misbehaviour, or make him resign from the Cabinet. Presumably, the worst punishment is the shame for the MP’s offence.

During her term of office Elizabeth Filkin enjoyed the support of the media, but the support of the MPs diminished.

Her opponents say that she exceeded her rights, revealing information about MPs suspected of corruption, and these allegations were not proved later. Moreover, they claim that she dealt only with less important cases, leaving the ‘big shots’ alone. Obviously she managed to make a lot of enemies.

At the end of January Elizabeth Filkin left the Parliamentary Committee on Standards and Privileges as her term expired. With very few exceptions, all MPs must have breathed a sigh of relief.

‘She was supposed to work on behalf of all the MPs, they wanted someone in this position, but none of them liked her,’ Justin Fisher says. ‘From the point of view of the public, her term was successful. Sometimes her actions were largely accepted.’

However, the post of Elizabeth Filkin in Parliament remains.The British MPs still have the will for self-regulation.

V. Conclusions1. The connection in UK between business and politics is strong,

however the most regulated. There is also clear line between business interests and state policy. Unlike Bulgaria where the government and the Parliament are infused by different business interests, although the state funding. ( See the interview with Bulgarian MP T. Doncheva “Politicians and newspapers have been poisoned by money”)

2. The Slovenian political elite is the most uncorrupted, instead of these in UK and Bulgaria, maybe because of the safeguarded Slovenian nomenklatura. Obviously, we can wait for more scandals in the forthcoming privatization and Slovenian membership in EU. In addition, in UK and in Slovenia the intolerance of the society to the corrupted politicians has been stronger than in Bulgaria. The media efficiency – also.

3. The British elite has been aware of the need of moral policy and of the moral devastation that business infusion causes in politics. Therefore they are unanimous in seeking selfregulations. In Slovenia both the Political Parties Law and the social intolerance have been on a very high level. In Bulgaria the Political Parties Law in his Party Funding part gives possibilities for corrupted practices and needs to be changed. A moral criteria of the political behaviour in Bulgaria has been existed but has not been heard. ( See the interview with the Chairman of the National Audit Office Georgi Nikolov: No control over party finances can be exercised in the near future )

4. Transparency misses in the Bulgarian Law, instead of UK and Slovenia Laws.

5. The position of Commissioner of the Parliamentary Committee on Standards and Privileges in UK Parliament has been unique and socially helpful.

6. Corruption makes more expensive the electoral campaigns and after that - the people’s life in generally. The Slovenian campaigns are less expensive per capita than Bulgarian. Donors in Bulgaria take back their donated money using privileges and “possibilities” of the Grey economy.

7. The privileges for a few business people creates abnormal conditions for all

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business in Bulgaria – the bigger part has been supporting the difficulties and the government unfair play and has been suffering. On the other side, the politics has been suffering too because of the chaotic conflicts of business interests inside the government and the Parliament. A strong line between business and politics is needed.

8. The State Funding in Bulgaria does not decrease the political corruption as the expectances were.

The Chairman of the National Audit Office Georgi Nikolov:No control over party finances can be exercised in the near future

The law does not say if we can check the reliability of the data

Q: Mr. Nikolov, what if the picture of the financing of political parties during election campaigns?A: You can see two pictures: a hidden one and one on the surface. The latter contains all the data they have to present to the Audit Office in compliance with the Law on Political Parties. The reports presented by the political parties will be summarized within a week or two, and the Audit Office will write a report on the financing of the political parties during the last elections. The hidden picture should probably be connected with corruption.Q: Did the Audit Office work out the accounting criteria?A: The law that was adopted is too general. According to it, the parties and the coalitions must present their accounts of the receipts and expenses to the Audit Office. That is all. Unfortunately, the same text has been duplicated in the law on presidential election. This text has placed us in a very strange situation: The Law on Political Parties specifies the sources of financing, and at the same time the Law on MPs provides that MPs must report their sources of financing and the expenses grouped in respective items. The Audit Office took the initiative and invited the financiers of the main political parties - UDF, NDSV, BSP and MRF to work out the structure of such a report. In it we included the main groups of receipts and expenses. Q: What do you mean?A: We requested the names of the donors, especially those, who donated sums close to the maximum limit. The parties declared the total sums they received, respectively from physical and legal entities. We wanted to have these lists of names in the supplements, in order to check if the law had been observed. The party representatives explained that they do not have sums bigger that the sums, allowed by the law (BGL 10,000 for physical entities and BGL 30,000 for legal entities). Naturally, anyone, who wants to donate more money, will give it in several payments, or the payment will be made on behalf of somebody else. But these things should have been regulated in the Laws on parliamentary and presidential elections.Q: Are these your only concerns?A: No. The law provides only that the parties must present their accounts at the Audit Office. There are no provisions, which state whether we have the right to make checks on the spot, to verify that the accounts are correct. All the accounts at the Audit office should be subject to countercheck, otherwise we might be misled.

There are no provisions concerning these accounts after they have been presented and examined at the Audit Office. Is the Audit Office the place where these accounts will be kept, or does it have the right to make them public. My opinion is that, since the legislator has chosen the Audit Office as the body to collect the accounts, we should have the authority to check them and after that announce them, because we are a supervisory body, not archives.

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It is important to see how much the campaigns cost the Bulgarian tax-payers. The Constitutional Court suspended the regulations that the parties should pay for their ballots, because this limited their opportunities to participate in the ruling of the country. In the elections for the 39 National Assembly 54 parties and coalitions were registered. 36 parties and coalitions, and 11 independent candidates participated in them. A lot of ballot papers were printed. Many of them were not used.Q: Why are you skeptical towards these accounts?A: There is such a thing as creative accounting, and parties have no accounting. Everyone can present invoices, etc. for these sums, but the primary documents for these receipts and expenses are not there. You cannot trace the money. My information is that there are about 280 parties in Bulgaria. I doubt that all of them are parties in the narrow sense of this word. Some of them are commercial entities, their receipts and expenses can be checked.

However, very few people pay attention to party accounting.If we do not do this, I am sure that the Law on Political Parties will not guarantee

more transparency of the political powers.Q: When do you receive the accounts?A: The parties must present their accounts not later that 15 March. The first campaign will be in 2002.

In their reports they must present copies of their accounts, containing receipts and expenses. The expenses must be grouped in items: staff, rents, administrative expenses, service, etc. Who will define these expenses? Every accountant will have to decide by himself where to group given expenses. The law does not specify the contents of the items in the report; who will decide what the ledger should contain, if it necessary to have such a ledger. For me it is useless. The ledger is useful in one-entry accounting, while parties have double-entry accounting. This is the form to record assets and liabilities.

This has not been done in the Law on Political Parties, and this hinders the check of the party cash flows.Q: What opportunities does the law give?A: Art. 27 provides that the Audit Office announces its decision on the regularity of the financial documents of the parties not later than 6 months after they have been presented. What financial documents and what regularity? The law does not specify. The fact that such documents have been presented, or the fact the the Audit Office can check the reports within 6 months? There are no provisions that the results of the finances of the parties should be announced, something extremely important, especially during elections.

If the Law is not amended, I am sure that we, as tax-payers, will not have the control we want to have. I hope the politicians will realize this, and will take into considerations these weaknesses in the amendments to the law on elections of mayors and municipal councilors. Such elections are forthcoming. The government is preparing a national strategy to fight corruption, and financing political parties is one of the spheres, most often connected with corruption.Q: Can you, on your initiative, check the accuracy of the reports of the parties?A: We can, but we need primary documents to start with. All parties have structures in the regional centres, in every municipality. Can you imagine the amount of the work, if we decide to go into depths. The lack of such documents makes these efforts a complete waste of time. We will make countercheck at the party head offices, to verify whether their reports, presented at the Audit Office correspond to their official accounts.Q: How can the Audit Office control cash flows?A: It is difficult to check the money that has entered the parties’ safes. Membership dues - yes, there are documents for this. Donations - not always. However, all budget entities keep accounts of the cash flow, and parties are such entities. Where the money comes from, what

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the expenses are. This will give a clear picture of the cash flows. The question is: do we want it.

The people give their money; you have written on a sheet of paper the donation to a party, but it has not been entered into the accounts, you keep this sheet in your pocket, the money may never come to the head office. That is why I keep repeating again and again: accounting.Q: Is the situation so vague in other countries, too?A: Yes. In Germany and France there are a lot of publications in the press about black safes, about corrupted politicians. Unfortunately, this is a disease common for all parties.

MP Tatyana Doncheva

Politicians and newspapers have been poisoned by money

I think the time has come for business and politics to reach an agreement

Q: Mrs Doncheva, business has never influenced the political behavior of the rulers to such extent. Where should one draw the line between business and politics, so that they can develop in a healthy way, from the point of view of public interest?

A: In the first place business, especially big business, influences the policy in any country with market economy. Very often politicians come from corporations, or they start working for corporations after they leave politics. Political positions are very important for the development of the business in any country, as a rule. Not only within the country, since a country can have international influence, and can penetrate into foreign markets through business. Business cannot have enough scope to operate and enough stability without protection from the state.

‘Kostov’ period after 1997, when the big privatization was made, and when the private sector became predominant, is an example how business can be divided into ‘our companies’ and ‘outsiders’. Some businesses enjoyed the protection of the government in more than one way: in the privatization process, in their usual business activities, in the orders they received, in their participation in tenders and in all kinds of activities that could bring them money. The former rulers were at war with the other companies. Under the slogan ‘to fight the groups’ they suppressed even perfectly legal businesses, that did not want to be politically dependent. This was the reason why a large part of this business was against Kostov’s government. Nowadays, we are observing just the opposite trend.

In practice, the serious economic circles chose the government - the Premier, ministers, deputies, chief secretaries, heads of departments with the ministries, etc. The parliamentary group of NDSV was chosen in the same way. Business treats these people as walking pens, as hired workers. They have only one obligation: to sign documents, to amend laws, according to given instructions. In practice the state machine is still used for the purposes of the private business.

As a result there is no state policy, since there is no one to form such policy, and the state becomes a hostage of inevitable business conflicts. This is one of the biggest mines in the present rule.

I think that the time has come for business and politics to reach an agreement. They should agree how the state, with the help of the private business, can pursue its interests, at home and abroad, and how the private business, which is more flexible and more adaptable, can get support from the state. At the same time, the main state institutions and the regulations should be the responsibility of the state and of the politicians.

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Q: Do you think business needs to be separated from politics?

A: Yes. When it gets involved in its own conflicts, the business people will realize it.

Q: How can such a line be drawn? Certainly one way is to pass respective laws.

A: Another way is the mechanism of ruling the state. When the laws are precise and detailed, and they do not allow for any arbitration.

Q: What conclusions can a politician draw from the campaign for the local elections in Blagoevgrad?

A: The last local elections have shown a very worrying trend. Elections are business. Business for the media, who make a lot of money during elections, and business for the Roma people.

Q: And for the parties?

A: For the parties - no, because they only incur expenses.

Q: What about some party members?

A: For some party members - this is called theft at another level; but it’s a matter of party mechanisms to control the expenses. The prices in the media have been rapidly going up over the last elections. Everyone, who has been engaged in election campaigns knows that 90% of the money for the campaign goes to the media. The prices imposed in the local newspapers in Blagoevgrad are fabulous for local by-elections. It may be hard, but we should ask ourselves why in Great Britain electronic media provide limited free time, prices in the print media are limited, too. The British have understood that it is better for the media and politicians to have a ceiling of election advertising... The opposite practice means that under the market economy conditions we prompt the parties to pour money in the media. On the other hand, media make profits out of election campaigns, and after that they give their support to the elected people, simply because they are a source of income for them. This is ridiculous.

Q: What were the prices in Blagoevgrad?

A: According to Lazar Prichkapov’s team the price of a publication in a local newspaper was BGL 5,000. You can imagine the sums for the national media during parliamentary election. This is corrupting the nation.

Q: Print media have a very strong influence in Bulgaria. These prices are a matter of demand and supply.

A: Yes, it’s true, but this is hypertrophic supply and demand.

Q: The parliament is authorized to amend the Law on Political Parties and to fix the ceiling on advertising materials in the media.

A: For amendments to the law, all political parties, that are aware of the problem, must work together.

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Q: Is there such awareness?

A: I cannot say that everybody is perfectly aware of this. At this stage there is a race. Everyone, who poses this question, risks having the media turned against them. There is another dependence, too. When I, as a politician, am a big sponsor of some central media, they also become dependent on me. There are cases when the people know which politicians use which newspapers as their PR agencies. Everyone says that newspapers cannot be made to think and act as if there was no market economy in Bulgaria. Their only aim is the circulation. Probably at some point the big newspapers will understand that the thrill is not only in the circulation, but also in achieving important aims.

Q: You think that the newspapers have been poisoned by the money...

A: I think that the newspapers have been poisoned by money as much as the politicians have been. And they do not protect their own freedom of speech. In my opinion freedom of speech means that you can think freely and tell the truth, no matter what the price is. We have defined the problem that business should be separated from politics. We should know where the reasonable line of principle lobbying goes. That is why the parties should be relatively more independent, and I put their financial independence in the first place.

Q: This is the purpose of state subsidy - to make the parties less dependent on business.

A: Yes, but in all elections, in every country in Western and Eastern Europe, this money is not enough.

Q: What do you think of the fact that anonymous donations, according to the Bulgarian law, are the biggest in Europe - 25% of the total party financing, and there is no transparency of the donors?

A: I disapprove. This should be changed. But the motives of the parliament to adopt the provision for anonymous donors, lie in the fact that firms could be subjected to repressions, if they have sponsored another party, not the one in power.

Q: Do we have to wait until the political elite raises enough money, so that they could realize what their mission is?

A: This is a problem of politicians not only in Bulgaria. Last year an American professor in Political Sciences told me that America has a serious problem with the political life, because everything is so commercialized, that if you do not have enough money, you cannot enter politics. That is why America is doomed to have not very high quality politicians, and this will reflect on its development in the long run, no matter that now only a few people are aware of this trend. There isn’t a political group in Bulgaria, who can define a cause. Politics is largely regarded as a show, as a routine where you go from one party to another, you ride in a Mercedes; it is not regarded as serious efforts to achieve difficult aims. That is why the general opinion is that everyone can become a politician, provided he speaks fluently.

Sofia, May 2002

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