Lov3ll
07-18-2008, 11:52 AM
EU is funding Bulgarian mafia, finds Brussels report
Thursday, July 17, 2008, 06:21 PM GMT
The Daily Telegraph has seen a damning European Commission report which harshly criticises Bulgaria over the administration of EU subsidies that are being looted by officials working hand in hand with the mafia.
The report is due to come out next Wednesday and, unusually for Brussels, it does not mince its words: here, for readers of this blog, is an exclusive preview.
"Bulgaria itself has to make the commitment to cleanse its administration and ensure that the generous support it receives from the EU actually reaches its citizens and is not siphoned off by corrupt officials, operating together with organised crime," it concludes.
In the run up to join the EU, Bulgaria benefited from and continues to receive cash worth £1.7 billion - hundreds of millions in payments will now be cancelled.
The European programmes, known as PHARE (£618 million), SAPARD (£353 million) and ISPA (£697 million) are designed to help Bulgaria set up management for future EU funding. The cash, not including farm payments, will be worth GBP5.5 billion over the next five years.
"Bulgaria is experiencing difficulties in many of these programmes and has to demonstrate that sound financial management structures are in place and operating effectively. There have been serious allegations of irregularities as well as suspicions of fraud and conflicts of interest in the award of contracts."
"The lack of firm commitment and results in the fight against corruption and organised crime is worrying. It impacts directly on Bulgaria's administrative capacity and hence its ability to ensure the sound management and efficient delivery of EU funds."
"Bulgaria needs not only to enhance substantially its administrative capacity but also drastically curb opportunities for high level corruption and effectively fight organized crime."
The Balkans country - the EU's poorest - looks set to lose badly needed money as agencies administering the PHARE funds are suspended.
"Monitoring and audits show serious weaknesses in the management and control systems and point to a number of irregularities, suspected fraud cases and conflicts of interest between the programme administration and contractors. As a result, payments to two Implementing Agencies, namely the Central Finance and Contracting Unit (CFCU) and the Implementing Agency at the Ministry of Regional Development and Public Work (MRDPW), have been suspended. The amounts of funds which are affected by the suspension of financial assistance are around €610 million, including around €250 million which has not yet been contracted."
On SAPARD: "There are three sets of problems...
"The first relates to projects worth €26 million which are currently subject to investigations by OLAF regarding implementation difficulties due to fraud and possibly corruption. It seems that the Bulgarian authorities have recently started recovery procedures.
"The second concerns investigations into the activities of the ex- executive director of the SAPARD Agency for a measure having a total expenditure of €10 million. The executive director was dismissed in 2007 after allegations of wrongdoing in regard to the management of State Fund Agriculture. The Bulgarian authorities have argued that the allegations were not related to the management of the SAPARD funds. However, the Prosecutor's Office of Bulgaria is currently investigating the case and has recently accused the ex- executive director for "wrongful approval of projects" under the measure "investments in wholesale markets". Criminal proceedings have been initiated against him.
"The third problem relates to the findings of a recent audit by the Commission services, covering a total amount of €105 million still to be paid from SAPARD to beneficiaries (representing 63% of the remaining total amount to be disbursed under the programme). The audit revealed serious deficiencies regarding the control system for investment aid for three core Programme measures."
"The Commission has indicated that future payment applications from the NAO to the Commission for any additional expenditure incurred under these three measures are suspended until Bulgaria corrects its system to the satisfaction of the Commission... The Commission will consider resuming payments when information is received from the Bulgarian authorities that corrective action has been fully implemented and when this information is confirmed by an independent audit body."
On ISPA: "In January 2008, allegations were made in the Bulgarian press against the Executive Director of the National Road Infrastructure Fund (NRIF) concerning a conflict of interest related to the signing of contracts between the NRIF and a construction firm controlled by a family relative. In addition, two NRIF officials responsible for the implementation of EU funds were arrested and charged with taking bribes. On 24 January, the Commission sent a letter to the Ministry of Finance requesting the interruption of payments to the NRIF's three ongoing Cohesion Fund (ex-ISPA) projects and asking that the NRIF not sign any new contracts under the 2007-2013 programmes, until the matter was thoroughly investigated and any necessary corrective action taken. The Executive Director has subsequently been replaced.
Funding for the road sector (€144 million for ongoing Cohesion Fund (ex-ISPA) projects) has been interrupted and the preparation of a formal suspension is under way. The freeze on signing new contracts in the road sector (under the 2007-2013 programmes) remains in place.
Following investigations, the first audit reports submitted by the Ministry of Finance to the Commission services failed to reassure the Commission that the NRIF would be able to properly implement Cohesion Fund projects. The Commission recommended that an independent audit be carried out that would then also serve as a basis for a concrete and detailed action plan to improve the management and control systems in the NRIF. On 18 June 2008, the Commission services received an audit report prepared by an international audit company on behalf of the Bulgarian authorities, together with a detailed action plan based on the 'preliminary' findings of this audit company."
"One of the main conclusions of the external auditors' report is that further investigations are necessary, in particular as regards a number of possible conflict of interest cases. The Bulgarian authorities are currently in the process of organising investigations in this respect."
http://blogs.telegraph.co.uk/bruno_waterfield/blog/2008/07/17/eu_is_funding_bulgarian_mafia_finds_brussels_report
Thursday, July 17, 2008, 06:21 PM GMT
The Daily Telegraph has seen a damning European Commission report which harshly criticises Bulgaria over the administration of EU subsidies that are being looted by officials working hand in hand with the mafia.
The report is due to come out next Wednesday and, unusually for Brussels, it does not mince its words: here, for readers of this blog, is an exclusive preview.
"Bulgaria itself has to make the commitment to cleanse its administration and ensure that the generous support it receives from the EU actually reaches its citizens and is not siphoned off by corrupt officials, operating together with organised crime," it concludes.
In the run up to join the EU, Bulgaria benefited from and continues to receive cash worth £1.7 billion - hundreds of millions in payments will now be cancelled.
The European programmes, known as PHARE (£618 million), SAPARD (£353 million) and ISPA (£697 million) are designed to help Bulgaria set up management for future EU funding. The cash, not including farm payments, will be worth GBP5.5 billion over the next five years.
"Bulgaria is experiencing difficulties in many of these programmes and has to demonstrate that sound financial management structures are in place and operating effectively. There have been serious allegations of irregularities as well as suspicions of fraud and conflicts of interest in the award of contracts."
"The lack of firm commitment and results in the fight against corruption and organised crime is worrying. It impacts directly on Bulgaria's administrative capacity and hence its ability to ensure the sound management and efficient delivery of EU funds."
"Bulgaria needs not only to enhance substantially its administrative capacity but also drastically curb opportunities for high level corruption and effectively fight organized crime."
The Balkans country - the EU's poorest - looks set to lose badly needed money as agencies administering the PHARE funds are suspended.
"Monitoring and audits show serious weaknesses in the management and control systems and point to a number of irregularities, suspected fraud cases and conflicts of interest between the programme administration and contractors. As a result, payments to two Implementing Agencies, namely the Central Finance and Contracting Unit (CFCU) and the Implementing Agency at the Ministry of Regional Development and Public Work (MRDPW), have been suspended. The amounts of funds which are affected by the suspension of financial assistance are around €610 million, including around €250 million which has not yet been contracted."
On SAPARD: "There are three sets of problems...
"The first relates to projects worth €26 million which are currently subject to investigations by OLAF regarding implementation difficulties due to fraud and possibly corruption. It seems that the Bulgarian authorities have recently started recovery procedures.
"The second concerns investigations into the activities of the ex- executive director of the SAPARD Agency for a measure having a total expenditure of €10 million. The executive director was dismissed in 2007 after allegations of wrongdoing in regard to the management of State Fund Agriculture. The Bulgarian authorities have argued that the allegations were not related to the management of the SAPARD funds. However, the Prosecutor's Office of Bulgaria is currently investigating the case and has recently accused the ex- executive director for "wrongful approval of projects" under the measure "investments in wholesale markets". Criminal proceedings have been initiated against him.
"The third problem relates to the findings of a recent audit by the Commission services, covering a total amount of €105 million still to be paid from SAPARD to beneficiaries (representing 63% of the remaining total amount to be disbursed under the programme). The audit revealed serious deficiencies regarding the control system for investment aid for three core Programme measures."
"The Commission has indicated that future payment applications from the NAO to the Commission for any additional expenditure incurred under these three measures are suspended until Bulgaria corrects its system to the satisfaction of the Commission... The Commission will consider resuming payments when information is received from the Bulgarian authorities that corrective action has been fully implemented and when this information is confirmed by an independent audit body."
On ISPA: "In January 2008, allegations were made in the Bulgarian press against the Executive Director of the National Road Infrastructure Fund (NRIF) concerning a conflict of interest related to the signing of contracts between the NRIF and a construction firm controlled by a family relative. In addition, two NRIF officials responsible for the implementation of EU funds were arrested and charged with taking bribes. On 24 January, the Commission sent a letter to the Ministry of Finance requesting the interruption of payments to the NRIF's three ongoing Cohesion Fund (ex-ISPA) projects and asking that the NRIF not sign any new contracts under the 2007-2013 programmes, until the matter was thoroughly investigated and any necessary corrective action taken. The Executive Director has subsequently been replaced.
Funding for the road sector (€144 million for ongoing Cohesion Fund (ex-ISPA) projects) has been interrupted and the preparation of a formal suspension is under way. The freeze on signing new contracts in the road sector (under the 2007-2013 programmes) remains in place.
Following investigations, the first audit reports submitted by the Ministry of Finance to the Commission services failed to reassure the Commission that the NRIF would be able to properly implement Cohesion Fund projects. The Commission recommended that an independent audit be carried out that would then also serve as a basis for a concrete and detailed action plan to improve the management and control systems in the NRIF. On 18 June 2008, the Commission services received an audit report prepared by an international audit company on behalf of the Bulgarian authorities, together with a detailed action plan based on the 'preliminary' findings of this audit company."
"One of the main conclusions of the external auditors' report is that further investigations are necessary, in particular as regards a number of possible conflict of interest cases. The Bulgarian authorities are currently in the process of organising investigations in this respect."
http://blogs.telegraph.co.uk/bruno_waterfield/blog/2008/07/17/eu_is_funding_bulgarian_mafia_finds_brussels_report