US embassy cable - 05SOFIA1882

C O N F I D E N T I A L SECTION 01 OF 03 SOFIA 001882 
 
SIPDIS 
 
E.O. 12958: DECL: 11/02/2015 
TAGS: PREL, PINR, EINV, ECON, KCOR, KCRM, BU, Organized Crime 
SUBJECT: BULGARIA'S CRACKDOWN ON ORGANIZED CRIME: IS IT 
REAL OR IS IT MEMOREX? 
 
REF: A. A) SOFIA 1847 
     B. B) SOFIA 1207 
     C. C) SOFIA 1860 
 
Classified By: AMBASSADOR JOHN BEYRLE, FOR REASON 1.4 (C). 
 
 
1. (C) Summary: In the wake of the high-profile killing of 
banker Emil Kyulev, Bulgarian authorities have begun a 
crackdown on organized crime, including the arrest of two 
notorious crime figures.  It is not yet clear whether this is 
a genuine effort to deal with the problem of organized crime 
or simply an effort to "round up the usual suspects" and 
create the perception that Bulgaria is doing something at a 
time when the pressure and attention on the issue is intense, 
especially in connection with pre-accession scrutiny from the 
EU.  The Interior Minister has requested U.S. assistance in 
its investigation of the Kyulev murder and other organized 
crime cases.  This cooperation should provide us with an 
opportunity, over the next few weeks, to better judge the 
political will of the new government to crack down on 
organized crime.  In order to be successful, the government 
will have to overcome systemic corruption among police, 
prosecutors, judges, and individual members of the governing 
coalition.  End Summary 
 
Government Initiates "Crackdown" Against Organized Crime 
--------------------------------------------- ----------- 
 
2. (C) The GOB appears to be taking some initial steps 
towards reining in organized crime following the high-profile 
shooting of banker Emil Kyulev (ref A).  The Prosecutor's 
Office on October 31 announced that it would press charges 
against two well-known organized crime figures, Krassimir and 
Nikolay Marinov, for planning three future assassinations and 
participating in organized crime.  The two brothers, who are 
nicknamed Big and Little Margin, were arrested on Friday 
evening as part of a nation-wide police operation targeting 
suspected crime figures following the Kyulev murder.  The 
brothers are two of the only remaining figures of the former 
organized crime group SIC, which later became Intergroup (ref 
B).  Most of SIC's other members have been killed. 
 
3. (C) According to the police, the Marinov brothers were 
planning the killing of three individuals: former 
external-intelligence chief and founder of the BSP "Generals' 
Movement" Lyubomir Gotsev, suspected crime boss Ivan Todorov 
(a.k.a., the Doctor), who once was an ally of the Marinovs 
but now is alleged to be working for the rival criminal group 
TIM, and businessman Nikola Damyanov, who is reported to have 
close ties to American millionaire Marc Rich.   The Marinov 
brothers do not appear to be involved in the Kyulev killing. 
 Apart from the Marinov brothers, recent inspections and 
searches by police reportedly led to the arrest of 144 
individuals.  It's not clear, however, whether these efforts 
are designed to round up the usual suspects and show that 
Bulgaria is taking some action against organized crime or 
whether the police are actually doing the legwork to build 
cases that can later be prosecuted.  Many of the 144 people 
arrested are believed to be insignificant figures who will 
likely be released shortly due to the lack of evidence 
against them.  Other speculation in the press and among some 
officials is that the Marinov brothers are simply rivals of 
criminal groups who currently enjoy the protection of some in 
power, and therefore are easy targets for the police. 
 
Kyulev Killing Attracts High-Level Attention for Now 
--------------------------------------------- ------- 
 
4. (C) The government's response to the Kyulev killing has 
been uncharacteristically energetic, which is likely a 
testament to Kyulev's influence and stature among Bulgaria's 
political elite as well as the inopportune timing of his 
killing immediately after the release of the EU's critical 
report on Bulgaria's accession prospects.  Shortly after the 
shooting, the Interior and Justice Ministers and chiefs of 
the security services were summoned to appear before a 
special session of parliament to provide information on the 
case.  Prime Minister Stanishev will appear before parliament 
to answer questions on November 4.  President Purvanov also 
convened a meeting of the cabinet-level Crime Control 
Coordination Council to determine Bulgaria's response to the 
Kyulev murder.  In addition to the President, the Ministers 
of Interior, Justice and Finance and the Prosecutor General 
attended the Council meeting.   Discussion at both meetings 
was reportedly strident at times, with talk about Bulgaria's 
statehood and EU aspirations being purposely subverted and 
calls for extraordinary measures to combat crime. 
 
5. (U) Deputy Interior Minister Kamen Penkov proposed using 
the army to help crackdown on organized crime, but later 
retracted the idea following objections from defense 
officials.  Many officials, including President Purvanov, 
Penkov and former Defense Minister Nikolay Svinarov, 
initially suggested that political motives were behind 
Kyulev's assassination.  Namely efforts by some to derail 
Bulgaria's EU accession but such emotional speculation has 
cooled in the week since the killing.  President Purvanov 
after the session made a strong push for state institutions 
in Bulgaria to demonstrate their will and capacity to fight 
organized crime in the "interest of its citizens and 
businesses."  He also suggested setting up an independent 
counter-corruption service and establishing a special 
prosecutor unit for fighting corruption, who would report 
directly to the Prosecutor General. 
 
Theories Behind Kyulev's Murder 
------------------------------- 
 
6. (C) The police and the MOI are reportedly investigating 
four possible theories behind Kyulev's death, three of which 
relate to his business ties.  One theory purports that Kyulev 
owed the former head of VAI Holdings (formerly VIS) Georgi 
Iliev money and refused to pay this debt after Iliev was 
killed last August.  Another theory claims that Kyulev's 
plans to develop a number of businesses on the Black Sea (in 
the tourism and real estate sectors) clashed with members of 
TIM, who view that area as their own territory.  A third 
theory posits that Kyulev's murder was the result of an 
outstanding debt to his former business partner Michael 
Chorny and other Russian partners in the now defunct 
Roseximbank.  With the investigation still in its early 
phase, though, these theories amount to little more than 
speculation at this point. 
 
Requests for US Assistance 
-------------------------- 
 
7. (C) Foreign Minister Kalfin immediately after the Kyulev 
killing asked for U.S. assistance in the investigation (ref 
C), and Interior Minister Petkov sent the letter in para 10 
below to the Ambassador on October 28.  Our Legatt has met 
daily since the killing with MOI Chief Secretary Iliev to 
coordinate this effort.  Per the MOI request, the FBI has 
provided the Bulgarians with all of Kyulev's financial and 
travel records available in the US.  The FBI also is helping 
to enhance a surveillance photograph of a subject who the MOI 
believes may be connected to the Kyulev murder. 
Additionally, the FBI has extended an offer to send a special 
team to Bulgaria to exploit any financial documents the 
Bulgarians acquire in the Kyulev investigation.  This effort 
would be in coordination with the British, who are also 
working with the MOI to exploit documents and conduct a 
ballistics analysis related to the case. 
 
8. (C) Our Legatt also is offering to assist the MOI in two 
other ongoing organized crime cases against the Marinov 
brothers and Ivan Todorov.  Ivan Todorov (a.k.a., the Doctor) 
is a former member of the "Amigos" crime syndicate who is 
thought to be one of the largest drug traffickers  in the 
Balkans and actively involved in cigarette smuggling and tax 
evasion.  Todorov also is  involved in money laundering and 
other financial crimes.  The MOI has agreed to a request to 
not mention our assistance publicly. 
 
Comment 
------- 
 
9. (C) Whether by design or ineptitude, the police appear to 
have botched the initial phase of the Kyulev investigation. 
Photographs widely circulated on the Internet, for example, 
show a large group of police officers trampling the crime 
scene without any apparent overall direction.  As one of our 
Bulgarian contacts said ruefully, "This is not CSI."  It is 
still too early to tell whether the GOB is truly serious 
about finally cracking down on organized crime, although the 
combination of Kyulev's prominence and EU scrutiny certainly 
create the right conditions for it.  One of PM Stanishev's 
top advisors made a convincing argument in support of his 
boss' commitment to follow the trail wherever it leads, 
saying candidly that the government needs outside assistance 
because "we don't know who to trust" in the ranks of the 
deeply-corrupted police.  However, it is almost inevitable 
that a thorough investigation of organized crime in Bulgaria 
would reveal financial links to politicians from all of the 
major parties.  We will be watching closely to see whether 
the government, an uneasy coalition of three disparate 
parties glued together by the imperative of EU accession, has 
the nerve to follow through in a major showdown with 
Bulgarian organized crime. If it continues down the path of 
seeking USG assistance, the GOB will have to face the choice 
either to act on whatever evidence we provide or to drag its 
feet.  In either case, their true intentions will soon become 
apparent.  END COMMENT. 
 
10. (U)  Text of the letter from Interior Minister Petkov to 
the Ambassador follows: 
 
Your Excellency: 
 
It is a pleasure for me to address you and to once again 
express the great satisfaction of the constructive and 
beneficial cooperation which the Ministry of Interior 
maintains with the U.S. law enforcement bodies. 
 
Bulgaria highly appreciates the material and moral assistance 
of the U.S. in the entire process of Bulgaria's accession to 
the Euro-Atlantic structures, notably the introduction of 
best practices and standards in the work of the Bulgarian 
police. 
 
Undoubtedly a proactive, trustworthy partnership between our 
police and special services has no alternative at a time when 
serious challenges posed by trans-border organized crime face 
us.  I would like to assure you that the Ministry of Interior 
is firmly resolved to continue its consistent and purposeful 
work for the successful counteraction of organized crime by 
employing the necessary will and all available resources. 
 
In that regard and in the context of our excellent 
partnership, I would be most grateful if the U.S., through 
the Federal Bureau of Investigation, in the course of the 
measures undertaken to more effectively fight organized crime 
and its trans-border forms considers the possibility to 
provide technical assistance for computer analysis to MOI 
bodies as well as special equipment for joint investigative 
operations. 
 
Respectfully, 
Rumen Petkov 
October 27, 2005 
 
BEYRLE