A year and a half after it was formed, the Bulgarian Criminal Asset Forfeiture Commission (CAFC) was not as effective as it could be because of restrictions placed on it by law, CAFC head Professor Stoyan Koushlev said on November 29.
Nicknamed by the Bulgarian-language media as the “Petkanov commission” (after Georgi Petkanov, minister of interior from 2001-05 who created the CAFC), legislation and bureaucracy and not criminals had proven to be CAFC’s main problems, Koushlev said to a forum organised by the Centre for the Study of Democracy entitled Criminal Asset Recovery: Irish and Bulgarian Experience.
The main problem, according to Koushlev, was that the CAFC needed to have the final conviction of a suspect issued by the court in order to be able to take serious actions such as confiscating assets. Until a conviction was issued, all the CAFC could do was to freeze the assets of the suspected person. “Because Bulgaria has a three court system (regional, district and appeal courts) the entire process slows down our work immensely and I think that we can amend the law and make an exception for the CAFC’s work and introduce a two court system, the way it is in Ireland for example,” Koushlev said. According to him, this would not require a change of the entire legislation but an amendment of the law under which the CAFC operated. “The law should be changed to give more rights to the CAFC in order to achieve good results.”
The CAFC was in the process of investigated 88 cases, all at various stages of the process, of assets allegedly acquired as a result of criminal activity, worth a total of 88.5 million leva. Of these, 40 cases had reached court but not a single conviction had been issued. “I expect the first convictions to become a reality early next year,” Koushlev said.
Until then the assets of the suspects will remain “frozen” and the CAFC did not have power over them, unlike the situation with the Criminal Asset Bureau in Ireland, the model which Bulgarian MPs followed when drafting the Bulgarian legislation. “I can give you a good example,” said Koushlev. “We have a case where a businessman is driving a 500 000 euro luxury vehicle and at the same time is registered as unemployed. Unfortunately without a court ruling we can’t do anything about it because the vehicle is not registered under the person’s name but under that of his driver, which allows him to avoid prosecution. Under the current legislation, unless the driver is a member of the suspect’s family we cannot take any actions against the businessman.” The European Commission had raised these issue several times in its reports but “unless we change the law we can’t do anything against the so called ‘unaccountable assets’ we see almost every day”.
Koushlev said that a major fault in the legislation was that the CAFC had no power to investigate people who claimed social security but were living in luxury houses. “In Ireland they can do that, while here we are hopeless. For example some Roma barons who everyone knows are living in luxury houses but still receive their social security.”
The biggest success of the CAFC so far had been the investigation of German citizen Manfred Dill, owner of Tanne hotel in the mountain resort of Bansko. Dill, who is also a honorary citizen of Bansko, received a seven years sentence in Germany earlier this year on money laundering charges, in connection with a European Union funds crime scheme. “As a result of our co-operation with German partners we froze Dill’s assets in Bulgaria, including Tanne hotel, worth 15 million leva.”
The restrictions in the legislation were a result of the compromises the MPs accepted back in 2005 when drafting the law, Koushlev said. “Now we see that the law has a lot of defects and is actually far from the original concept.” When asked why these compromises were made Koushlev said: “You know even today I could see how the attitude of some MPs towards the CAFC changes almost daily. These are MPs from all spectrums of the political life, MPs who we all see sharing the company of people under suspicion for having acquired assets as a result of criminal activity”. Then Koushlev made the stunning statement. “Frankly speaking, if it wasn’t for the EU and the support we get from ambassadors here they would have closed us by now.”
Koushlev’s biggest fear is that according to the law when a conviction is issued by the court the criminal’s apartment for example is sold on tender and the money goes into the state budget. The problem was that the tender was organised not by the CAFC but by other state bodies. “For me this a possibility for corruption since the criminal could use other people and bet on the tender and buy back his property.”
Another thing that had to be changed was that the threshold in Bulgaria for criminal assets forfeiture was 60 000 leva, while in Ireland it was the equivalent of 26 000 leva. In the UK the threshold was even less: the equivalent of 15 000 leva. “This alone showed the difference between Bulgaria and other EU countries when it comes to public’s attitude towards assets forfeiture,” Koushlev said. “We can only dream of our employees being protected with anonymity the same way it is in Ireland.”
The Irish experience
The Criminal Assets Bureau (CAB) was formed in Ireland in 1996 to recover proceeds from organised crime. The Bureau was established to deal with increasing levels of serious organised crime in the Republic of Ireland, prompted by the murder of crime reporter Veronica Guerin and police officer Jerry McCabe. Its powers were extended in 2005 to include the proceeds of corruption and organised crime committed outside Ireland. The only members of the organisation whose names are in the public domain are the chief bureau officer and the legal officer.
Since 1996 the CAB has confiscated properties worth 120 million euro and collected 150 million euro in unpaid taxes and made two million euro in social welfare savings, the current chief bureau officer, chief Superintendent John O’Mahoney, said. “Indeed in 1996 the draft law was described by lawyers and NGOs as draconian but the public attitude was one of support since we had the two murders of Guerin and McCabe that acted as a catalyst of it.” O’Mahoney described the situation in Ireland in 1996 as being similar to that in Bulgaria in 2007.
“We had criminal gangs involved in drug dealing and racketeering and the traditional methods of police work were not enough to deal with them. They used to run their operations as businesses and were not afraid to show their wealth in front of everyone: luxury houses and vehicles, they behaved as they were above the law.”
Under the current law the CAB can launch an investigation without a court order. All it needs is a suspicion. “That way we can reach the top guys who used to enjoy support from above.”
The legislation gives the CAB the powers to investigate public officials as well. “If we suspect that a municipal councillor had helped in rezoning agricultural land into land for development we have the powers to investigate them.”
