OLAF: Bulgaria's Agriculture Fund Ignored Blatant SAPARD Abuses

Politics » BULGARIA IN EU | February 24, 2009, Tuesday // 00:00

Bulgaria's State Agriculture Fund demonstratively ignored the signals of the European Anti-Fraud Office OLAF about siphoning off of SAPARD funds for six months, and has not yet taken any measures to demand back the abused EU money from the perpetrators.

This becomes clear from a devastatingly critical OLAF letter sent to Bulgaria's Deputy Prime Minister, Meglena Plugchieva, the National Coordinator of the financial management of EU funds, Dimitar Ivanovski, the Agriculture Minister, Valeri Tzvetanov, and the Head of the State Agriculture Fund, Alizan Yahova.

The text of the letter has been revealed by the Sega Daily as cited by the BGNES news agency. The letter was sent after an OLAF mission to Bulgaria from January 26 until January 30, 2009.

The February letter is unlike the OLAF letter, which leaked to the Bulgarian press in July 2008, and claimed that influential forces in the Bulgarian government patronized firms committing SAPARD abuses, and named the so called "Nikolov-Stoykov group" as an example.

The February letter is more neutral in its tone but the OLAF Head, Franz-Hermann Bruener, is explaining to the Bulgarian civil servants what constituted a violation in the EU, and that Bulgaria is supposed to notify the European Commission about every discovered violation two months after the end of every quarter.

"Many of the violations uncovered in the last summer, at the end of January, 2009, have still not been reported to the Commission, or to the National Coordinator", Bruener writes.

During their January visit, OLAF experts have inspected the State Agriculture Fund's actions on 17 projects with gross violations. Four of these have been reported by the Fund itself, and the other 13 were reported as containing abuses by OLAF in 2008.

OLAF has found that the Fund had not demanded back the EU subsidies from nine of the firms, which were exposed as abusing the money by OLAF.

Penalty procedures against four other firms have started but are found to have failed. Four of the firms which were inspected in January 2009 are believed by OLAF to be related to the so called Nikolov-Stoykov group, and that each of them bought agricultural machines with at least one fake deal.

These firms are "ET Kartel - Valentin Yanev", "Solveks Mira Fruit Jsc", "Solaris AC", and "Riokom Single Member Ltd". The State Agriculture Fund, which is also Bulgaria's Executive Agency under the SAPARD program, has asked only the last firm to return its SAPARD subsidies but the firm has not done so.

The Fund also has not notified about the violations of Solaris and Kartel the Ministry of Finance, which is supposed to refer the matters to the European Commission. The Fund has told the Ministry about Solveks but has inexplicably failed to demand back the SAPARD money from it.

The four firms in questions received a total of BGN 3,3 M in SAPARD program subsidies.

OLAF has also inspected five other firms unrelated to the Nikolov-Stoykov group which were said to have bought food processing equipment with at least one fake deal according to OLAF's own report from 2008.

These include "Mekom-Silistra", KFM, Helikom Ltd, Tinned Food Factory YUPER, and Top Konserv Jsc. The Fund has demanded back the SAPARD funds only from YUPER, KFM, and Top Koserv, who have failed to return any money.

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