WikiLeaks: Bulgarian Authorities Botched Banker Murder Probe by Design or Ineptitude

Emil Kyulev, one of the richest men in Bulgaria, was being driven to work in Sofia in his BMW sports utility vehicle on October 26, 2005 when, shortly after 9:00 am, he was shot and killed by a man hiding in the bushes. Photo by Sofia Photo Agency

The following cables, sent by John Beyrle, US Ambassador to Bulgaria before going to Moscow, have been released by WikiLeaks and their Bulgarian partner, the site for investigative journalism Bivol.bg.

The cables, dated November and December 2005, are titled: BULGARIA'S CRACKDOWN ON ORGANIZED CRIME: IS IT REAL OR IS IT MEMOREX? and BULGARIA'SCRACKDOWN ON ORGANIZED CRIME: BUSINESS AS USUAL. They shed light on the investigation of the high-profile murder of one of the wealthiest Bulgarians – banker, Emil Kuylev. In them the Ambassador voices disappointment from Bulgarian law enforcement authorities and their actions, even though they have been offered full support from FBI and other US agencies.

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

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

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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

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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

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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

Cable 2:

C O N F I D E N T I A L SECTION 01 OF 03 SOFIA 002054

SIPDIS

E.O. 12958: DECL: 12/08/2015

TAGS: PREL PINR ECON KCOR KCRM BU

SUBJECT: BULGARIA'S CRACKDOWN ON ORGANIZED CRIME: BUSINESS

AS USUAL

REF: SOFIA 1882

Classified By: AMBASSADOR JOHN BEYRLE, FOR REASON 1.4 (C).

1. (C) Summary: The Bulgarian government has little to show for its effort to crack down on organized crime six weeks after the killing of controversial banker Emil Kyulev. The police and Interior Ministry have yet to conduct a thorough investigation of the murder, possibly out of concern about revealing Kyulev's links to prominent political figures.  The authorities have boasted that 1,200 suspects were detained during the national police operation following the Kyulev shooting, but most have been subsequently released due to a lack of evidence. The Interior Minister told the Ambassador December 13 that 43 organized crime-related cases will be submitted for prosecution before the end of the year. Although we believe that some GOB officials have the sincere will to launch a real crackdown on the crime and corruption problem here, systemic and political problems will continue to hinder their efforts. End Summary.

Kyulev Case Loses Steam

-------------------------

2. (C) More than a month after the high-profile killing of Emil Kyulev, the police and Interior Ministry have made little progress in solving his murder. The GOB still has not seized key pieces of evidence, such as Kyulev's computer harddrive, bank and phone records, or taken advantage of the U.S. offer to exploit such evidence. According to our Legatt, the police have failed))either by design, apathy or lack of effective judicial process))to do basic victimology investigative work (where investigators try to establish a crime's motive based on the victim and his relationships). The MOI at one point appeared ready to seize Kyulev's bank records, notifying our Legatt that the police would act the next day. The seizure, however, was called off at the last minute.  MOI officials are blaming judges and prosecutors, who will not issue them the necessary search warrants, and Bulgaria's "restrictive" laws.  (However, we have worked with MOI on less politically sensitive cases where such obstacles were easily overcome.)  The fact that authorities are facing obstacles in the Kyulev case is suspicious, and potentially convenient, given the high-level political interest in the case.   Other reasons given for the delay are a lack of cooperation from Kyulev's widow and the GOB's fears that a seizure of Kyulev's bank records could lead to the collapse of DZI bank, one of Bulgaria's largest.

3. (C) Our suspicion, however, is that the GOB is avoiding a thorough investigation of Kyulev out of fear that a disclosure of his shadowy past could potentially embarrass prominent political figures, including the President. Kyulev was a former economic advisor to Parvanov, and is widely rumored to have helped fund his 2001 campaign.  Kyulev, however, reportedly did not limit his largess to the President or the Bulgarian Socialist Party; a thorough examination of his financial records would likely reveal links to the National Movement Simeon II as well.  Our British counterparts share this view:  they express frustration that the Kyulev killing has almost completely disappeared from the local press, and have advised the MOI on the need to keep the public's attention on the case in order to generate leads.  They note a sharp contrast between President Parvanov and Prime Minister Stanishev's initial strong calls for action and the current lack of action surrounding the case.

Operation "Respect" Merely A Show of Strength

--------------------------------------------- --

4. (C) The GOB's broader effort to crack down on organized crime in the wake of the Kyulev killing also appears to have lost momentum.  Almost all of the people detained in Operation "Respect" nation-wide police raids launched after Kyulev's shooting have been reportedly released.  Of the more than 1,200 people detained during Respect only 80 were held for more than 48 hours and most of these were later released due to a lack of evidence.  One suspect in Blagoevgrad died after being beaten by police. (The incident has lead to the dismissal of three police officials and an official apology from Interior Minister Petkov.)  The notorious Marinov brothers, founders of the SIC organized crime group, remain in custody, although the case against them is reported to be weak, according to our Legatt, and possibly politically motivated.

5. (C) We continue to hear speculation as to why the brothers have been singled out.XXX, an investigative journalist and leading expert on Bulgaria organized crime, told us one theory is that Mladen Mihalev (a.k.a. Madzho), a rival of the Marinov brothers within SIC and, like the Marinovs, one of its last surviving original members, has close ties to Interior Minister Petkov and pressed for the arrest of the Marinov brothers.  We have no way of verifying this specific claim, but it is likely that the Marinov brothers were chosen at least in part because they do not have a high-level political patron.

6. (C) The police continue to maintain a large presence on the streets and randomly stop and inspect suspicious luxury vehicles as part of Operation "Respect."  But, as this name suggests, these actions are little more than a show of force by the police, and do not appear to reflect any effective or long-term strategy to fight organized crime.  According to XXX, organized crime figures do not view Operation Respect and the latest government crackdown as a serious threat to their activities.  The only thing Respect has accomplished is to force these groups to keep a low profile for now, with the result that street-level crime has declined.  He agreed the operation lacked any real teeth. Our British colleagues, however, have heard from various sources that Operation Respect is having an effect and that many organized crime groups are concerned by the higher level of police scrutiny. Despite appearing to be a hastily contrived action by the MOI, Interior Minister Petkov told us that Respect had been conceived prior to Kyulev's murder, but was initiated earlier than planned.

7. (C) Apart from Operation Respect, Chief Prosecutor Filchev has said that the government is currently working on 43 organized crime cases to be submitted to the courts sometime in late December. Filchev has not specified the likely suspects in the cases but has said the crimes are in the sphere of financial fraud, VAT fraud, and drug trafficking. Interior Ministry Petkov admitted to us that the key problem for MOI in pursuing organized crime is that many officers at all levels are "working for the other side." He said several major operations in the past few months have failed because the leader of the targeted criminal group was tipped off by someone inside his ministry. Petkov told us his main priority is to reorganize the ministry and clean up its structures.

Attention Shifts to Customs

-----------------------------

8. (C) In recent weeks the attention of the police and MOI appears to have shifted away from organized crime and to corruption in the Customs Agency. The MOI announced in late November it was launching an investigation into high-level corruption in the Customs Agency. The Customs Agency attracted higher scrutiny after a former high-level customs official, suspected of being involved in smuggling, was gunned down in Sofia in October.  According to the press, the MOI sent a list of six senior-level Customs officials believed to be involved in criminal smuggling channels to the Prime Minister and Finance Minister (who oversees the Agency). Despite media speculation that all six would soon be relieved of their positions, only the Deputy Director of Customs, Dimitar Tolev, has resigned.

GOB Sees Progress in Fight Against Organized Crime

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9. (C) Interior Minister Petkov requested a meeting with the Ambassador December 13 to update us on the GOB's progress in the fight against organized crime and corruption.  Petkov noted a number of recent successes both on the legislative and operational fronts.  He mentioned that parliament had approved the first reading of the new Ministry of Interior Act and said the act would hopefully pass the second reading by early next year.  According to Petkov, most of the recommendations in the European Commission's monitoring report have now been implemented.

10. (C) In terms of operational measures, Petkov noted the 43 organized crime cases that will be submitted to the courts later this month. He expected all of the cases to result in prosecution, saying the MOI had agreed "we should only take on commitments we can fulfill."  He also mentioned that the police on December 9 had dismantled an "organized crime group" consisting of customs officers and other civil servants involved in falsifying customs documents to cover up the illegal import of Chinese goods. As part of the operation, the director of a local customs office in Sofia who was among the six senior-level Customs officials suspected of corruption))was arrested in the act of accepting a bribe and five others were detained. Petkov said the police and MOI have shut down a number of smuggling channels that were importing cement, powdered milk and cigarettes without paying duties, and smuggling drugs and counterfeit trademark goods.  On the Kyulev murder, MOI Chief Secretary Ilyia Iliev said the MOI was focused on three possible theories--the Marinov Brothers, Michael Chorny and Kyulev's activities in the insurance sector))but still had not received the necessary court orders to fully investigate.

Comment

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11. (C) It may be too soon to draw conclusions about the GOB's willingness to confront organized crime, but the signs so far are not encouraging. Part of the problem clearly lies in the technical incompetence and lack of solid investigative skills, resources, and cooperation among the law enforcement services. But we also believe that some in the GOB are unwilling to see a real investigation go forward that would shine a light into the darker corners of political activity here, especially regarding party funding.  As one analyst in the leading think tank Center for the Study of Democracy put it, "the Prime Minister has the will to pursue crime and corruption but has no levers; the Interior Minister has the levers, but no vision." (And, we would add, questionable incentive.)  We will have more opportunity to assess the government's intentions on organized crime in the upcoming case against the crime boss Ivan Todorov (a.k.a., Doktora), a case U.S. law enforcement assisted on that is currently awaiting action at the prosecutor's office.

BEYRLE

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