The Pandora Papers investigation resonated with Bulgaria in a particular way: rather than exposing unknown ties between oligarchy and politics, it confirmed numerous investigations which rarely caught the attention of foreign media.
So far, what’s been unpacked from the data leak has mainly concerned two politicians who allegedly started offshore and undeclared businesses in 2013: media mogul Delyan Peevski, living between Bulgaria and Dubai, and currently running for MP, plus former Minister Nickolay Mladenov, who was affiliated to GERB, a party that was the dominant power on the Bulgarian political scene since the late 2000’s despite being a subject to criticisms for corruption, receding media freedom and mismanagement of EU funds.
The Pandora Papers were leaked as Bulgaria is nearing a double election and it’s questionable whether any development related to them will solve the country’s political crisis.
On November 14 the country will go on a third round of parliamentary elections, following inconclusive results in April (when GERB took most votes again but found itself with no partners for a coalition) and in July, when newly formed opposition party There Is Such a Nation, led by popular talk host Slavi Trifonov, had a historic win but returned the mandate after chaotic decisions and failure to reach an agreement with the other opposition forces. Among the favorites this time is another recently established party, We Continue the Change, which is lead by former members of the technocratic government appointed in 2021 by President Rumen Radev.
On the same day and through the same ballots, Bulgaria will also vote in the next presidential elections. Incumbent Rumen Radev, supported by Bulgarian Socialist Party and endorsed by There is Such a Nation, is facing Sofia University rector Anastas Gerdjikov (supported by GERB) and judge Lozan Panov (supported by Democratic Bulgaria).
Oligarch, media mogul and an MP candidate Delyan Peevski
On October 5, long-time controversial figure Delyan Peevski was revealed as one of the Bulgarians named in the Pandora Papers, said journalist Atanas Tchobanov of bird.bg, who was involved in the investigation.
According to the massive document leak, during his time as a MP in 2013, Peevski was involved in three offshore companies which he has not declared. On November 19, 2013, as Bulgaria was gripped by antiestablishment protests, Peevski became a director of Felina Trade & Investment Inc., registered in the British Virgin Islands which held assets of $50,000 that were transferred to another British Virgin Islands-registered company.
The investigation also revealed that in 2016 Peevski did not declare revenue of $100,000 from Verum International Limited, registered in the Seychelles and under the umbrella of IGWT Limited in Dubai, also owned by Peevski.
In 2018, he signed a document confirming ownership of a company called Verum, connected to IGWT. Verum’s ownership was later transferred to a lawyer close to Peevski.
In a written statement sent to the Bulgarian National Television station following the Pandora Papers leak, Peevski denied any wrongdoing: “These enterprises were never active; they raised no capital and no deals were made through them. The attempt to suggest there’s anything suspicious is bound for failure.”
Peevski’s rise to influence began in 2001, when he joined the NDSV, a party established by Bulgaria’s last king, Simeon Saxe-Coburg-Gotha, who then became prime minister between 2001 and 2005, with his party NDSV. Around that time, Peevski’s New Bulgarian Media Group started becoming a dominant power in print media.
In 2013, he became an MP with the Movement for Rights and Freedoms (known also as DPS, focused on the Turkish minority in the country, with Peevski one of the few members not of Turkish origin). He was then elected by parliament as the president of the State Agency for National Security. His appointment triggered a wave of protests in Bulgaria, demanding lustration, and a major change in governance. This remained the biggest protest wave until the summer of 2020.
In recent years, investigations have claimed that firms connected to Peevski have been major recipients of public funds, mainly for infrastructure projects. In June this year, Peevski was sanctioned under the US’s Global Magnitsky Human Rights Accountability Act, and all his assets in the US were frozen.
According to the US Treasury Department Peevski “has regularly engaged in corruption, using influence peddling and bribes to protect himself from public scrutiny and exert control over key institutions and sectors in Bulgarian society”. “I have not engaged in any corrupt activity,” he told back then Pik.bg, one of the websites engaged with portraying his activities in a good light.
Expectations that the Magnitsky Act and Pandora Papers would quiet Peevski proved to be premature - Movement for Rights and Freedoms announced that he’ll run for MP in the general election and, untypically, in two towns simultaneously - Veliko Tarnovo and Blagoevgrad. “The nomination of Peevski as a candidate MP is a terrorist action against democracy”, said on October 12 Democratic Bulgaria co-leader Hristo Ivanov who decided to symbolically run against him in Veliko Tarnovo.
Former Foreign Minister and United Nations representative Nickolay Mladenov
On October 7, Nickolay Mladenov was identified as the second Bulgarian politician to have hidden offshore assets. This was rather surprising, given Mladenov’s respectable international reputation.
Mladenov, politically inactive as of now, denied the allegations and explained that the firm was established as a way to kickstart a consultancy practice. This never really happened because of his involvement in the UN.
Mladenov registered Afron Enterprises Ltd in Seychelles through Swiss agency SFM Corporate Services S.A, on August 9, 2013, seven days after being appointed a Special UN representative. Afron was closed in 2018.
“This firm was never active and no money transactions have been made through it,” Mladenov told bird.bg. He confirmed collaborating with Swiss agents for the process but insisted that, despite the listed dates, the firm was set up before the start of his tenure at the UN.
Mladenov was born in 1972 in Sofia to a family close to the communist elite. His father, Evtim Mladenov, was part of the repressive state security apparatus and his uncle, Mladen, was an ambassador.
Despite the background, Mladenov’s career has been associated with the centre-right. As a member of the United Democratic Forces, he was an MP between 2001 and 2005. From 2005 to 2007, he was a consultant to the World Bank, the International Republican Institute and National Democratic Institute, in Bulgaria, Afghanistan and Yemen. In 2007, he switched party membership to the rising GERB. The same year, he also became a Member of the European Parliament.
Mladenov was a Minister of Defence (2009-2010) and of Foreign Affairs (2010-2013). This lead to his appointments as a UN Special Representative for Iraq and Head of the United Nations Assistance Mission for Iraq. He was then a mediator in the Israeli-Arab conflict until the end of 2020. His status grew in this role: a January 2021 New York Times feature outlines him as having “calmed Gaza, aided Israel’s Arab ties and preserved hopes for peace”, while Israeli outlet Haaretz praised him as “one of the most successful UN envoys to the Israeli-Palestinian conflict”.
In 2020 Bulgarian media were pointing to Mladenov as a potential successor to Prime Minister Boyko Borissov, following the protests and the growing discontent with GERB’s politics. The speculation never became a fact.
The others on Pandora’s stage
In the investigation, the majority shareholders in Bulgaria’s third largest bank – First Investment Bank (also known as Fibank) – Tseko Minev and Ivaylo Mutafchiev appear as owners of businesses started by Cypriot citizen Georgios Georgiou, recipient of millions of loans from their own First Investment Bank. According to bird.bg, the loans might be over 1 billion leva. A classified diplomatic cable from 2005, published on Wikileaks, indicates that several Bulgarian banks, including First Investment Bank, were involved in money laundering and connected lending. Fibank has also made hefty loans to Delyan Peevski and historically, on three occasions it has been saved from bankruptcy through state money.
The files also contain a mention of the President of Bulgarian Football Union and former goalkeeper Borislav Mihaylov, one of the players in the famous USA 1994 national team of Bulgaria which historically reached semi-finals. The former player had become an increasingly controversial figure and according to his critics, one of the reasons for Bulgaria’s receding presence in international football. The leak contains a 2013 letter by now former President of UEFA Michel Platini, inquiring over the delayed construction work of the National Stadium in Sofia which was financed by UEFA.
Mihaylov was also troubled by an emergency congress on October 12, initiated by former player and Manchester United star Dimitar Berbatov, who ran for Mihaylov’s spot on a platform promising a radical change. In a tight battle, Mihaylov eventually won the election, voted by football clubs owners, with Berbatov expressing concerns over the transparency of the voting process.
“There’s no corruption in Bulgarian football”, Mihaylov said on October 10. Meanwhile, Berbatov stated that he will dispute the decision of the union and will seek a repeat round of voting. Sports and politics are tied in Bulgaria, with sport personalities often entering politics and politicians often engaged with investments in sports.
How will the revelations reflect on the elections
President Rumen Radev used the development around Delyan Peevski to criticize the political status quo and the Prosecutor’s Office, often seen as a shield for GERB’s and their partner’s affairs: “The deeds of Peevski seem more visible from the outside rather than inside the country. This doesn’t say anything good about our investigative and law enforcement authorities,” Radev commented on October 5 and later added he was surprised by Nickolay Mladenov’s mention in the Pandora Papers. On October 8 he said that “the names of many more people will become public”.
No representative of GERB has commented on the Mladenov controversy, which continues the line of the party to simply let controversies pass by through the media storm and then disappear.
The Pandora Papers confirm a sad tendency in Bulgarian politics: any pressure from the outside rarely has a resonance on how internal affairs are handled, the prime example being Delyan Peeevski’s comeback amid the Magnitsky sanctions and the involvement in low- or no-tax jurisdictions.
