On February 14–15, 2008 Bulgaria was visited by Ms. Natalie Gilly, Director Strategic Lines and Customers of the French Deposit and Consignation Office, and Notary Pierre Beckers, member of the Supreme Council of the French Notary and vice president of the European Affairs Commission of the International Union of Notaries.

Publicity is the Surest Way to Restriction of the Possibilities for Corruption

Mr. Boiko Velikov, Chairman of the Combating Corruption Committee at the 40th National Assembly

Mr. Velikov, can we outline some trend regarding the warnings received in the anticorruption committee, is their number growing or decreasing, i.e. do people send more warnings or less, and what conclusion can we draw?
We can consider the question mainly from the viewpoint of the concrete results. This has been my wish from the very beginning – to present to the citizens, who give warnings, results from the measures taken. In the period since the committee was structured, over 1200 warnings have come in. All are registered with a position and opinion of the committee on each one, regarding the way it will be dealt with. We have submitted more than 330 warnings to the Prosecutor’s Office. The committee judged so, with the expectation, of course, to get back concrete results. Work is in progress on a large part of the warnings (more than 150) but proceedings have been started and charges brought.

I would like to note in particular that special deliberations were held on warnings of great public significance that were brought to the attention of the committee. There are results concerning a change in the environment. Here I could point out warnings related to the national reserve, the customs and tax services. Our aim is, putting forward the issue, to seek solutions from the viewpoint of restricting the corruption environment. On the basis of the warnings received, we set the subjects for parliamentary control which we place before the executive. What is most important to us is that the discussion of these subjects lead to a change in the conditions. The committee has no investigation functions, we are not a court or prosecutor’s office, but we put many questions that require a change, restriction of the conditions which form corruption, which provide environment for corruption activities and behaviour.

Then, would you specify the main spheres that need initiation of legislative changes?
Naturally, our work is directed above all towards the legislative sphere and the normative system, because this is within the powers of the committee. The legislative program is our prime task. I will point out several draft legislations on which the committee is working and insists that they be completed and tabled in the National Assembly. Particularly important is the Public Procurement Act. Its amendments were drawn at the committee for more than six months. I mean the roundtables organized on the initiative of the Civil Consultative Council, the work of the Expert Council, and the discussions in the committee. Thus we prepared a bill of amendments and supplements which was supported in principle and submitted to the Legislation Council of the National Assembly. When the council comes out with a position we will be ready to enter it in parliament.

Another important bill, on which we have been working for several months, is for restriction of the cash payments as they form corruption environment in the trade in real estate. The way tax and market evaluations are made is indicative. On the initiative of the Civil Consultative Council to the committee, the Notary Chamber and Club “Journalists Against Corruption” a joint roundtable was organized, which presented the French experience. I hope in the near future an expert group will be formed, with the participation of French representatives, which will propose legislative solutions considerably restricting the corruption environment. Many questions were posed at the roundtable which can find their solutions with the active participation of the Notary Chamber.

Another important bill for us is the bill of amendments and supplements to the VAT Act, where significant changes were made with anticorruption orientation, sufficiently well grounded and motivated. They led to a change in the environment, which does not mean that the problem is resolved. On the contrary, we must go on, because we have warnings clearly showing that in the country are active persons and groups engaged in corruption schemes and VAT fraud. With our accession to the EU these possibilities were restricted, but nevertheless we need to do the maximum to find solutions concerning both the Public Procurement Act and the VAT Act. Corruption conditions presuppose the accumulation of large funds, which is not in the interest of society.

The committee has declared clear positions on a number of other bills, too. I would mention the review of legislation concerning the conflict of interests – a very sore topic at present. It turned out that there are gaps in the legislation, despite the good regulations in a series of laws, but it is insufficient and our aim is to fill up these gaps on the basis of an analysis we obtained in a comparison with the European legislation. I believe this will yield good results in this sphere, too.

Another example of changes in the legislation is the so-called trade secret. There is no clear cut definition of “trade secret”, which creates conditions for concealment of information and formation of corruption environment. This is why we are studying the legislation, setting this task to the committee ourselves, in view of the drawing of the relevant amendments and supplements.

What impressed you most during the roundtable with the experts from the French Notary and the French Deposit Office and do you think in Bulgaria we could consider the establishment of such an office?
I was impressed by the presentation of the system, functioning in France for nearly 200 years. It has been built over decades and does not permit the formation of corruption environment, which in Bulgaria is a fact. We cannot avoid this problem in connection with the real estate trade. In the first place I would put the question of evaluations. The system of evaluation, the methods followed, allows for considerable deviations. In the committee we’ve had many cases of exchange of municipal or state property, estates, land and forests, from which the corruption scheme is quite obvious. A step in the right direction was taken – the transactions to be made according to tax evaluation, but this is not enough. The French specialists clearly showed us that this should be done on market basis, and market prices can be achieved by objective criteria, which in France are adopted through specialized editions, giving the market evaluation of the estates.

The establishment of such Deposit Office in Bulgaria is hardly possible within a short period of time. But it is necessary to undertake actions leading to considerable restriction of the corruption environment through changes in the methods of evaluation, to bring it in line with the market prices. There must be regulations for the way these transactions are to be made, and the way the market evaluations are registered. In my opinion, it is a must to introduce market evaluation, especially concerning the state and municipal property, because there the public interest is injured most often.

The establishment of a Deposit Office would be a big step forward, but it could happen with a sufficiently clearly expressed political will. We cannot compare ourselves with France at this stage, but the French experience could be partially applied in Bulgaria regarding the normative basis and the functioning of the system.

A topical theme at the moment is the process of absorption of the EU funds in Bulgaria. Has the committee received warnings and will you initiate any special legislative measures in view of the cutting of the financing under ISPA, SAPARD and PHARE from Brussels?
In the committee we are analyzing and assessing this issue since 2006, because the absorption of EU funds is a major factor for the state and its development. The resources allotted by the EU must be used to the maximum, according to the rules set by the EC. We have established several risk zones of corruption, which unfortunately were confirmed. We have the positions of the relevant ministries, we have outlined the risk zones and carried out parliamentary control on some of these programs. I can give examples. In several sessions we carried out parliamentary control on the SAPARD program, where we know there are established irregularities. We indicated some of the schemes, linked with consultancy firms involved in the process, we pinpointed companies which have made deals through SAPARD. The Ministry of Agriculture undertook concrete measures and we think they are giving results already. The full list of consultancy firms and beneficiaries was supplied to us. Here I want to underline specially: We do not view our attitude towards the consultancy firms in a criminal aspect. We aim at sufficient publicity. The consultancy firms carried out a large part of this process of absorption of EU funds, but it should be clear that transparent procedures are required from all. Part of our intentions is to secure this transparency and therefore we insisted before the Agriculture Fund to make known the beneficiaries. Such is the proposal of the committee, which was made by a member of parliament – the hundred companies in Bulgaria, which have absorbed the largest amounts under EU, to be made public. Transparency is the surest way to restriction of the possibilities for corruption. Just as the property of MPs, ministers, deputy ministers, etc. is public knowledge, just as we made possible checks and control on the part of the Audit Office of the property of high-ranking government officials – I think this is the right approach in the various activities, including the absorption of EU funds. Of course, the specialized departments of the Ministry of the Interior need to do very serious work, too. The newly founded National Security State Agency has powers, opening wide opportunities for combating corruption, and achieving practical results. Only results can convince the public that there is political will and a struggle is waged to counteract corruption.