US embassy cable - 05SOFIA766

UNCLAS SECTION 01 OF 03 SOFIA 000766 
 
SIPDIS 
 
DEPARTMENT FOR INL/AAE (MACKAY, HARTSHORN), EUR/NCE 
(BRANDON) AND EUR/ACE (CONNELL) 
DOJ FOR CRIMINAL (SWARTZ, JONES) OPDAT (ALEXANDRE, 
EHRENSTAMM, VALDER) 
 
E.O.  12958: N/A 
TAGS: SNAR, KCRM, KJUS, EAID, ASEC, PREL, BU 
SUBJECT: CONTINUED CRIMINAL JUSTICE ASSISTANCE FOR 
BULGARIA AFTER SEED GRADUATION 
 
REF: (A) 04 SOFIA 2310, (B) 04 SOFIA 2450 
 
1.   SUMMARY: Bulgarian criminal activity already has a 
direct and increasing impact on the United States, which 
is likely to continue even after Bulgaria's planned EU 
entry in 2007.  Embassy Sofia requests continued U.S. 
criminal justice assistance following SEED graduation in 
FY06.  Current U.S. assistance programs funded through 
SEED address critical weaknesses in the rule of law and 
business development environments, particularly targeting 
corruption and organized crime; trafficking in humans, 
narcotics, arms and other contraband; and financial and 
cyber crime.  While Bulgaria has made progress in 
fighting transnational crime, due in large measure to 
U.S. assistance, reform of its criminal justice system 
will be far from complete by 2007 and Bulgaria will not 
then be in a position to protect U.S. interests.  This 
request to continue criminal justice assistance after 
SEED graduation addresses a recommendation from Post's 
2004 OIG inspection report.  END SUMMARY. 
 
2.   Four criminal justice assistance programs are 
currently funded through INL (ref A): DoJ/OPDAT Resident 
Legal Advisor (RLA); DoJ/CEELI Criminal Law Liaison 
(CLL); DoJ/ICITAP Forensics Laboratories Project; and the 
Regional Criminal Justice Initiative (RCJI, a joint 
DoJ/CEELI and DoJ/ICITAP undertaking).  A fifth is funded 
through USAID: Treasury/OTA Financial Crimes Enforcement. 
Together, their combined FY05 budget request is $2.6 
million from country SEED funds. 
 
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U.S. INTERESTS AFTER EU ACCESSION: THE "NON-PANACEA" 
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3.   Without continued U.S. assistance after 2007, the 
task of strengthening Bulgarian criminal justice 
institutions will fall entirely to the EU, which will not 
necessarily be sensitive to U.S. criminal justice 
interests.  While EU assistance has sometimes proven a 
valuable complement to our assistance in the effort to 
transform Bulgarian justice, U.S. assistance programs are 
generally more pragmatic and flexible, and can be 
tailored in part to protect U.S. interests. 
 
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EFFECT OF BULGARIAN ORGANIZED CRIME ON THE U.S. 
--------------------------------------------- -- 
 
4.   Bulgarian organized crime groups already operate in 
the United States, especially in drug-related crimes, 
human smuggling, and prostitution.  Several Bulgarian 
groups are believed to smuggle Eastern Europeans to the 
United States through the U.S.-Mexican border.  Branches 
of Bulgarian businesses associated with organized crime 
and involved in money laundering are also active in the 
United States.  High-ranking representatives of 
businesses believed to be extensions of Bulgarian 
organized crime and individuals reported to have leading 
positions in the Bulgarian organized crime world 
consistently seek legal entry into the United States. 
 
5.   Bulgaria is a major transit country as well as a 
producer of illicit narcotics.  Strategically situated on 
Balkan transit routes, Bulgaria is vulnerable to illegal 
flows of drugs, people, contraband, arms, and money.  In 
addition, Bulgaria is a major producer of synthetic 
drugs, many of which are sold in the United States (ref 
B).  Bulgaria is also notorious for the high quality of 
counterfeit euros and U.S. dollars, and there have been 
several criminal cases involving Bulgarian associations 
accused of distributing counterfeit currency in the 
United States.  Human trafficking, arms smuggling, cyber 
crime and intellectual property rights violations are 
additional "growth areas" of Bulgarian criminal activity 
that are likely to have an increasing impact upon the 
United States in the years ahead unless Bulgaria's 
criminal justice institutions become capable of serving 
as an effective counterforce. 
 
6.   The Bulgarian Ministry of Interior estimates that 
110 organized criminal groups presently operate in 
Bulgaria, and their influence and power appear to be 
growing.  In the past two years, Bulgaria has experienced 
approximately 30 high-profile assassinations between 
rival organized crime groups, with law enforcement 
manifesting little ability to intervene.  (COMMENT: Two 
of the assassinated were Bulgarians who had acquired U.S. 
citizenship: Iliya Pavlov, owner of MG Corporation, a 
major Bulgarian organized crime cartel that also operates 
numerous legitimate businesses; and Dimitri Minev, 
founder of SIC insurance company, which engaged in 
extortion, racketeering, trafficking of humans and drugs, 
money laundering, and other illegal activities.  END 
COMMENT.)  The Embassy and high-level visitors have 
repeatedly pressed the Bulgarian government to take 
action, and the Ambassador has publicly raised concern 
over the Bulgarian legal system's weaknesses and the 
tendency of police, courts, investigators and prosecutors 
to blame one another for the failure of the justice 
system to function properly. 
 
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THE SHAPE OF THINGS TO COME: POST-SEED ASSISTANCE 
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7.   While the precise contours of an assistance program 
will be developed subsequently, our program should 
continue to build sustainable criminal justice 
institutions which will enable Bulgaria to become a 
credible partner in the fight against transnational crime 
by focusing on organized crime and corruption; 
trafficking in persons, narcotics and other contraband; 
and cyber, financial and intellectual property crime. 
One key measure of success will be the number of cases 
involving these priority crimes that go to trial and 
result in convictions and sentences. 
 
8.   The main component of a future program will be 
training at two levels: 1) training of justice sector 
personnel (police and investigators, prosecutors and 
judges) on criminal law reform legislation, particularly 
new criminal and criminal procedure codes; and 2) 
specialized training for justice sector personnel in the 
priority areas enumerated above.  To the extent possible, 
all training should be developed collaboratively with the 
National Institute of Justice and the Police Academy. 
Post's law enforcement operational personnel will be 
involved in the development of training programs and 
utilized in their delivery.  Other activities that 
advance the project, legislative reform, or assistance to 
ministries in developing procedures, for example, will be 
undertaken as necessary. 
 
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TRANSFORMING BULGARIAN CRIMINAL JUSTICE 
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9.   While slow, we have demonstrated progress with our 
assistance.  In 2004, a marked increase occurred in 
convictions on charges related to human trafficking. 
Bulgaria also established an effective financial crimes 
task force whose work recently led to indictments of five 
well-known organized crime figures on money laundering 
charges, the first such indictments under Bulgaria's 
money laundering statute.  It has made great strides in 
suppressing counterfeit U.S. currency operations. 
However, regulation of non-bank financial institutions 
remains lax, leaving Bulgaria vulnerable to financial 
crime, including terrorist financing schemes.  Further, 
not a single significant organized crime figure has been 
prosecuted for any of the more-than-30 killings linked to 
organized crime that have occurred in recent years. 
 
10.   One essential step in transforming the criminal 
justice system is the enactment of more effective 
legislation to address crime.  U.S. assistance has been 
instrumental in developing legislation to combat human 
trafficking and money laundering, and establish witness 
protection, asset forfeiture and probation systems.  But 
enactment of legislation is only one step in the long 
process of transforming Bulgarian criminal justice. 
Building the capacity of justice sector officials to 
understand and apply new legislation poses a critical 
problem.  Considerable work is needed in capacity- 
building before the transformation process can 
sufficiently protect U.S. interests. 
 
11.   Some of the most glaring structural deficiencies in 
Bulgarian criminal justice are currently being addressed 
under the aegis of a Spanish-led EU PHARE-funded project 
for reform of the Bulgarian Criminal Procedure Code. 
However, the project, which presently plans to terminate 
in mid-2006, will only produce the terms of a new 
Criminal Procedure Code.  It does not contain a component 
for training justice sector personnel on the code's 
application.  Such training, essential to rendering the 
code an effective instrument in the fight against crime, 
is likely to span several years, as experience with new 
criminal procedure codes in Russia and Bosnia 
demonstrates. 
 
12.   COMMENT: Continued funding of Bulgarian criminal 
justice assistance programs after SEED graduation serves 
our nation's best interests.  With a significant dose of 
U.S. assistance, Bulgaria has strengthened its criminal 
justice institutions over the past years and moved closer 
to being a credible partner in fighting transnational 
crime.  But the pace of its progress has not been equal 
to the increasing influence of Bulgarian crime on the 
United States.  Withdrawal of the United States' 
contribution to the transformation of Bulgarian criminal 
justice with that transformation at best only half- 
complete is likely to prove costly to the United States 
in the long run.  END COMMENT. 
 
PARDEW