U.S. Sanctions Bulgarian Power Broker, Gambling Tycoon Citing Influence Peddling

WASHINGTON -- The United States has slapped economic sanctions on three Bulgarian individuals, including a power broker and a gambling tycoon, as well as dozens of companies they allegedly own or control for their “extensive roles” in corruption in Bulgaria.
The Department of the Treasury on June 2 announced sanctions against former member of parliament Delyan Peevski, prominent businessman Vassil Bozhkov, and ex-national-security official Ilko Zhelyazkov under the Global Magnitsky Act. It also sanctioned 64 entities said to be linked to them.
Bulgaria, a NATO and European Union member, has suffered from rampant corruption since overthrowing communism more than three decades ago. It is the EU’s poorest member and routinely comes in at the bottom of the bloc for corruption perception and media freedom. “The United States stands with all Bulgarians who strive to root out corruption by promoting accountability for corrupt officials who undermine the economic functions and democratic institutions of Bulgaria,” Andrea Gacki, director of the Treasury Department’s Office of Foreign Assets Control, said in a statement.
“This designation under the Global Magnitsky sanctions program shows that we are committed to combating corruption wherever it may be.” The Global Magnitsky Act bans entry to the United States of any sanctioned person. It also blocks any U.S.-based property, including overseas U.S. dollar accounts, held by those sanctioned and prevents U.S. entities from doing business with them. Separately, the State Department announced a travel ban on former Bulgarian officials Alexander Manolev, Petar Haralampiev, and Krasimir Tomov for their involvement in corruption. The three served respectively as deputy economy minister, director of the state agency for Bulgarians abroad, and chief secretary of the state agency for Bulgarians abroad. Their immediate family members are also banned from entering the United States.
The sanctions come a little more than a month before snap parliamentary elections scheduled for July 11 and could potentially hurt the image of the former ruling GERB party. Opposition leaders have already seized on the news to criticize GERB and former Prime Minister Boyko Borisov, and a demonstration in Sofia on June 2 called for the resignation of the top state prosecutor. ‘Puppet Master’ Peevski, who controlled large swaths of the Bulgarian media landscape, including newspapers and television stations, is considered one of the most powerful people in the country. He served in parliament as a member of the Movement for Rights and Freedoms (DPS) party, which is mostly made up of ethnic Turks.

Bulgarian opposition officials accused Peevski of controlling GERB, including ministers and members of the judiciary in Borisov’s government, from behind the scenes.
Marshall Harris, a former U.S. State Department official who is now a lobbyist in Washington representing two Sofia-based businessmen, called Peevski the “oligarch in chief” and the “ultimate puppet master” in Bulgaria in material he distributed to members of Congress last year. His clients accused Peevski of seeking to seize their assets with the help of the prosecutor-general’s office. The Treasury Department said in its statement that 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.” It said Peevski sought to influence municipal elections in 2019 by providing politicians with positive media coverage in exchange for protection from criminal investigations. According to Reporters Without Borders, Peevski owned some 80 percent of the print media in Bulgaria at the time, as well as private television networks and websites. The Treasury Department said Zhelyazkov served as Peevski’s “frontman,” carrying out the various bribe schemes. Peevski did not immediately comment on the sanctions. Hristo Ivanov, the co-founder of Democratic Bulgaria, a West-leaning party in opposition to GERB and DPS, said Borisov’s government failed to investigate corruption. “Neither Bozhkov nor Peevski emerged on their own. Peevski was raised by the DPS and fed by GERB and Borisov," Ivanov said in a statement on the party’s website.
‘Cut Down To Size’ Peevski in December hired BGR Group, a large Washington lobbying firm, to help him with “issues in the U.S.,” according to lobbying registration documents.
In a possible sign he expected the United States to sanction him, Peevski soon sold off his media assets, dropped off DPS’s list for the April parliamentary elections, and disappeared from the Bulgarian political scene. He is reportedly living in Dubai.
“Bit by bit, he is being cut down to size,” Harris told RFE/RL in an interview after the U.S. announced the sanctions. Harris said the sanctions could give the opposition the “international cover” to look deeply into the accusations of corruption by Peevski. “People are going to be empowered by this and less afraid” to investigate, he said.

‘Gambling Czar’
Bozhkov is one of Bulgaria’s richest individuals, having made his fortune in the nation’s gambling industry. He fled Bulgaria last year for Dubai amid accusations of corruption. Earlier this year, he formed the Bulgaria Summer political party, which received nearly 3 percent of the April vote but fell short of receiving a seat in parliament. Bulgaria Summer was among the 64 entities sanctioned by the Treasury Department. The Treasury Department said Bozhkov “bribed government officials on several occasions,” including the former chairman of the now-abolished State Commission on Gambling. The businessman paid the former chairman $6,200 a day to revoke the gambling licenses of his competitors, according to an investigation by Bulgarian prosecutors. The Treasury Department also accused Bozhkov of providing money to a former Bulgarian official and a Bulgarian politician earlier this year to help him “create a channel for Russian political leaders to influence Bulgarian government officials.” The tycoon did not comment on the sanctions. Election Impact The sanctions could impact the July elections, which were called after the parties that entered parliament in April failed to form a new government. Emilia Zankina, a Bulgarian political analyst, told RFE/RL the sanctions against Bozhkov could boost his party’s appeal to “young voters vulnerable to populist appeals.” She did not expect the DPS -- which has historically garnered between 8 percent and 13 percent of the vote -- to be impacted. Genoveva Petrova, managing director of Alpha Research in Sofia, told RFE/RL the sanctions could hurt GERB if this is “just the beginning of the story.” She said if more details emerge showing a connection between Peevski’s alleged corruption and Borisov’s government, it could have “a significant impact” on the party’s results in July. GERB’s popularity has slid since a corruption scandal broke last summer, driving thousands of people in Sofia to protest for weeks on end. GERB came in first with 26 percent of the April parliamentary vote, but that was its worst performance since it was formed about 15 years ago.

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