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Bulgaria: Prosecutor Claims Proof Of Communist Money Laundering Network

  • Ron Synovitz

Prague, 13 December 1996 (RFE/RL) -- Bulgaria's chief prosecutor says he has documents proving the existence of a Communist Party financial network that reportedly was used by nomenklatura groups to obtain start-up capital for their business empires.

Prosecutor Ivan Tatarchev said the documents prove state funds were transferred abroad during the 1980s as aid to Third World revolutionary organizations. He says he can prove that a crime was committed because he says the transfers were never included in the state budget.

The announcement comes as Sofia hosts a three-day international conference on how to fight organized crime and corruption. That event has been organized by the Council of Europe.

Tatarchev said his revelation about the documents was provoked by European Court hearings in Strasbourg, where former Prime Minsiter Andrei Lukanov had filed a complaint against Bulgaria before his assassination in Sofia two months ago.

Lukanov's parliamentary immunity was stripped in 1992 and he was jailed for six months on charges of embezzlement in his capacity as a member of the Communist Party's Central Committee during the 1980s. The case was never tried in court.

The "Financial Times of London" caused an uproar in Sofia in May, 1994 when it reported that Bulgaria's nomenklatura financial groups had embezzled enormous sums of state funds from secret Communist Party bank accounts in Switzerland and Austria.

The newspaper reported that the money originally had been earmarked for aid to third world revolutionary organizations, but was withdrawn by former secret service agents with access to the accounts. The "Financial Times" said the agents who took the money became the leaders of Bulgaria's most powerful nomenklatura groups -- including a conglomerate of concrete, oil, casino gambling and private security firms called "Multigroup."

Bulgaria's former communist dictator, Todor Zhivkov, told RFE/RL last month that $2 billion in state funds had been transferred abroad during the 10 months that Lukanov served as Prime Minister in 1990. That sum equals the total amount of money Sofia had borrowed from Western governments in the Paris Club of lenders up to that time.

Bulgaria also had owed private lenders in the London Club another $9 billion when Lukanov infuriated the Western bankers by declaring a moratorium on debt repayments in March, 1990. Lukanov said that Sofia simply had no money left to meet its payments, but he never adequately explained where the money went. The present government in Sofia is heavily burdened by its obligations to meet payments on that rescheduled debt.

Bulgarians now commonly attribute the disappearance of the total $11 billion to what they call "the black hole."

Lukanov, a millionaire businessman who had helped orchestrate the insiders' coup that ousted Zhivkov in 1989, has been widely linked to Multigroup. His close former party and business connections with powerful figures in the Russian oil and gas industry had helped him obtain favorable conditions for gas deliveries to Bulgaria's steel sector, which has been a source of profit for Multigroup's private trading companies.

Lukanov also had chaired the board of Topenergy -- a joint venture between Multigroup, Bulgaria's state-owned Bulgargaz, and Russia's Gazprom. He was replaced at Topenergy last July by Multigroup chairman Iliya Pavlov, but the full story behind his sudden removal remains unclear.

Multigroup vice-chairman Nikolai Vulkanov has hinted that Lukanov was replaced because Socialist Prime Minister Zhan Videnov refused to approve favorable concessions for Topenergy as long as Lukanov remained at its head. Lukanov was Videnov's most outspoken critic within the Socialist Party.

Tatarchev told RFE/RL he has been warned by security services that his life is now in danger. He said he has hired a permanent bodyguard for protection.