Journalists in Bulgaria have released dozens of tools to the public as part of an investigation into companies which may have abused funds received from the European Union for infrastructure projects.
According to secret accounting books for several firms, consultancy companies “distribute bribes at all levels – from a deputy minister to auditors and experts”.
When funds are released for the projects, firms shave up to 40% off by keeping parallel books, doing less work than planned or using fewer materials, but still invoicing for the full job before funnelling the money into a complex network of other businesses, real estate and even drug trafficking.
One trend reporters noticed was firms subsidising the development of ‘guest houses’ with EU development funds. When they dug into the phenomena they discovered that of the 700 ‘guest houses’ which had been completed, half were in fact luxurious private villas.
Earlier this month, Victoria Marinova, a Bulgarian broadcast journalist, was murdered for her coverage of the case.
Tools publicly released so far include a search engine of companies and how much public money they’ve received and a database of projects the contracts were awarded for.
Atanas Tchobanov, editor of the Bivol news website which broke the story, called for “an EU-wide regulation of transparency for the public procurement contracts, including the subsequent audits and corrections, is a must. But also, we found other loopholes in the due diligence process, that should exclude linked companies to bid for one tender, or find conflicts of interest among the experts who are evaluating the projects. Those holes are exploited by the consultancy companies we expose in GPGate to win a big number of “soft projects” – external technical assistance under operational programs, project management, and reporting, consultancies, awareness raising, research and impact assessment, publicity, etc.
“Through inflated invoices, those relatively cheap (less than €500 000) projects generate cash, that is used to bribe officials for the hard (construction) projects, worth tens and hundreds of millions,” he added.