SIXTH FRAMEWORK PROGRAMME
PRIORITY 7
FP6-2004-CITIZENS-5
CRIME AND CULTURE
PROJECT MEETING
(FIRST PROJECT RESEARCH PHASE)
Bucharest, 3 – 4 November 2006
Case studies
•Case Study 1: Suspect donation to the
party foundation Democracy of the
United Democratic Forces
•Case Study 2:Privatization of
Bulgartabac Holding (BTH)
Data Generation
•Documents related to the two
particular cases - media materials, NGO
analysis, Verdicts, Parties leaders’
statements etc.
•General materials on corruption from
the target groups we were not able to
obtain documents to the cases.
Codes development:
•1st level: Most explicit ideas, usually
associated with specific words and phrases
•2th level:beyond the basic meanings of the
concepts, deeper argumentations and
perceptions
•3rd level: hidden ideas or concepts with more
abstract character
Interpretation: building a single story to
place findings in appropriate position.
Case study 1
•Michael Chorny announcing “his”
donation to the Democracy foundation
in October 2003
•The pre-history of his expulsion from
the country in 2000
•Immediate start of several investigative
proceedings
•Huge media coverage
•Libel cases won by Chorny 2004-2006
•Nicosia court decision that Chorny was
not the owner of the company which
made the donation
Background facts
•Party financing is a poorly regulated
area – the issue of “structural
corruption” (problems with disclosure,
parties-foundations)
•Party funding and organised crime.
What is organised crime? Gap between
judicial pronouncements and “public
knowledge”
Major dichotomies in the understanding of crime and
corruption
•Legalistic conceptions v. public-interest-based conceptions
•Pro- and contra-foreign financial participation in domestic
politics (no special worries about the foreign element)
•What to do with money from illegitimate sources – accept
to make good use of them or reject and blacklist?
•Legitimate lobbying v. corrupt influence. How to build a
social base for a political platform
•Private use of political money v, public use of political
money
•Transparency v. egalitarianism
Target Group Politics
•From legalistic to inflated interest-based
conceptions of corruption: favouritism in
privatisation; state control of smuggling
channels; turning the party into a corrupt
hierarchical structure
•Gap between the understandings of accusers
(Sugarev) and accused (Kostov); government
and opposition
•Attempt to normalise “inflated” conceptions of
corruption – the circle of firms idea (clientelism
and favouritism in defence of the public good)
Target Group Judiciary
•Heavy emphasis on legalistic
conceptions
•Transformation of corruption allegation
into libel
•Was it an attempt to setup Kostov, or
an instance of a kickback for a
governmental favour?
•Inconclusive character of judicial
involvement – neither confirm or reject
allegations conclusively, which provides
ground for the production of myths
Target Group Police and Prosecutors
•Wide-spread use in official documents of
“inflated” public interest based conceptions of
corruption: “circles of friends”, favouritism,
party machines, “political umbrella against
investigation”, massive theft through
privatisation
•Naming people as part of mafiotic structures –
including a minister of interior
•Use of such documents in election campaigns
•Lack of judicial confirmation of allegations –
these rarely reach the courts as formal
indictments
•More politicians than magistrates in terms of
discourse
Target Group Media
•Corruption as an all-embracing metaphor –
criminal and bad government;
•Main theme: The elite is stealing from the
people on a massive scale.
•Solutions: convictions. But also, people want to
share in the spoils of corruption. Participatory
corruption ideal.
•Role of the media: to hook in the people in the
process of grand stealing, to make them a
witness, rather than to “condemn” and
“sanction” corruption.
•Arguments: disproportionate interest in the
outbreak and unfolding of scandals, and lack of
interest in its resolution
Target Group Civil Society
•Most sophisticated discourse, dictating the fashion
in general
•Corruption is measurable, and it is increasing or at
least is very high. It is bad for the economy.
•It is a problem which could be dealt with through
institutional change and a change in the incentive
structure of important actors (Stanchev on party
funding)
•Results could be expected quickly
•Civil Society discourse raises dramatically public
expectations, delegitimises governments, creates
new populist political actors (necessity of political
will, new facs, etc.)
Target Group Economy
•The discourse of silence
•Corruption as an economic problem stemming
from read tape
•Depersonalised speak of corruption – structural
problems come to the fore
•Disparity between popular perceptions and
business community perceptions
•Corruption as “grease” – the business
community will never surrender this option
Conclusions
•From legalistic, quid pro quo
understandings of corruption to the
predominance of the metaphor of
criminal government
•Delegitimation of mainstream politics
•Preparation of ground for new populist
actors
•The wearing out of the effect of the
corruption discourse
Case Study 2: Privatization of Bulgartabac
Holding
BULGARTABAC Holding:
– leading tobacco company in SEE
– state-owned and managed
– tobacco buying, processing and leaf trade,
manufacturing and export of cigarettes
1998: First put up for sale by the UDF Government
in.
July 2000: Privatization Agency (PA) cancels tender
and invites new bids.
March 2001: privatization procedure terminated.
Case Study 2: Privatization of
Bulgartabac Holding
•The parliamentary elections in 2001 were won
by Simeon II National Movement (SIINM)
•New Minister of the Economy and Vice PrimeMinister Nikolay Vasilev announced that the
privatization of the Bulgartabac tobacco holding
would be completed by the end of 2001.
•Due to political and economic constraints, the
new bidding did not start until the spring of
2002.
Case Study 2: Privatization of Bulgartabac
Holding
•March 25, 2002 – procedure opened
•June 5, 2002 - start of second phase with 5
candidates remaining
•July 22, 2002 – final bids submitted
•August 23, 2002 – PA chooses Deutsche Bank
•Chorni appeals PA decision at SAC
Case Study 2: Privatization of Bulgartabac
Holding
•March 25, 2002 – procedure opened
•June 5, 2002 - start of second phase with 5
candidates remaining
•July 22, 2002 – final bids submitted
•August 23, 2002 – PA chooses Deutsche Bank
•Chorni appeals PA decision at SAC
Case Study 2: Privatization of Bulgartabac Holding
•October 2002 – 3 member SAC panel declare the
procedure illegitimate and cancels the choice of
buyer
•December 2002 – 5 member SAC panel confirm
decision of 3 member panel. Final decision
•Chorni succeeds to block the deal with Deutsche in
court, but not to buy BTH
•February 7, 2003 – Government prepared a special
privatization law to overrule court decision
•April 3, 2003 – due to opposition in Parliament, PA
stops negotiations, and Council of Ministers stops the
procedure
Target group Politics
•Political vs. technical
privatisation
•“National security” (ab)use
Target Group Judiciary
• Economically effective
privatisation
Target Group Media
•Non-transparency, lack of
transparency
•Favouritism, Friendly connections
•Violation of journalistic ethics
Target Group Civil Society
•Political rent seeking
Target Group Economy
•Definitions of corruption
-Power abuse for personal benefit
-Pressure exercised by state
agencies/local authorities
-Way to get things done
-Corruption as a deal
-Compensatory corruption
Target Group Economy
•Hierarchic structure of corruption
-1st level: Favors exchange
-2nd level: preferable treatment in
return to bribes
-3rd level: corruption in procurement
-4th level – corruption in the legislative
process and at governmental level
Target Group Economy
•Corruption as a barrier to business.
•Business
interest
in
corruption
exchange
Conclusions
•What privatisation??
•Political capital as a profit from corruption?