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Bulgaria's 'Second-Most Powerful Politician' Resigns Amid Real Estate Scandal

Tsvetan Tsvetanov denies any wrongdoing, saying: “All I have done is completely legal.”
Tsvetan Tsvetanov denies any wrongdoing, saying: “All I have done is completely legal.”

SOFIA -- The deputy chairman of Bulgaria’s ruling GERB party says he is resigning from parliament amid a criminal investigation into his role in real estate deals involving fellow GERB party members that have been the focus of RFE/RL investigative reports.

Tsvetan Tsvetanov on March 27 announced that he has resigned as the chairman of GERB’s parliamentary group. He told journalists that he also will resign as a member of parliament.

However, Tsvetanov said he intends to continue as deputy chairman of the ruling GERB party.

Tsvetanov is widely considered to be the second-most powerful politician in the country after the GERB party leader, Prime Minister Boyko Borisov.

He is the fourth and highest-ranking member of GERB to resign from office since RFE/RL earlier in March began publishing a series of investigative reports about their lucrative real estate deals in the capital, Sofia.

Other resignations by GERB politicians have been submitted by former Justice Minister Tsetska Tsacheva, former Deputy Energy Minister Krasimir Parvanov, and former Deputy Sports Minister Vanya Koleva.

Tsvetanov obtained a new luxury apartment in Sofia in June 2018 from the Bulgarian construction firm Arteks in a cash-and-property-swap deal.

Tsvetanov gave Arteks 100,000 euros ($130,000) and two apartments in exchange for one luxury flat.

RFE/RL found that Tsvetanov received the new apartment from Arteks at a price that was four times lower than its actual market value.

Arteks also resold the two Sofia apartments it received from Tsvetanov in the swap just hours after the deal was completed.

The buyer was Simeon Velkov, a former employee at GERB’s election headquarters who had been a subordinate and close associate of Tsvetanov.

I am the political face that had to be punched right before the elections in this scenario."
-- Tsvetan Tsvetanov

Tsvetanov, who was Bulgaria’s interior minister from 2009 to 2013, denies any wrongdoing.

"I did not commit any crime, but in order for all speculation to end, that I can influence anyone by being in the parliament, I think the fairest, most proper and wise thing to do is to leave the Bulgarian parliament," Tsvetanov said on March 27.

To officially quit his parliamentary seat, Tsvetanov's resignation must be voted on and approved by other lawmakers.

That vote is expected to take place early on March 29.

"There is no drama," Tsvetanov said. "The parliamentary group of GERB stays united."

Tsvetanov maintains that the issue is part of a smear campaign ahead of a May election that will determine the Bulgarian members of the European Parliament.

"I am the political face that had to be punched right before the elections in this scenario," he said on March 27.

Rumiana Arnaudova, a spokeswoman for Chief Prosecutor Sotir Tsatsarov, says the Prosecutor-General’s Office is still examining details in Tsvetanov’s case to determine whether any crimes were committed.

Bulgaria’s Anti-Corruption Commission also is investigating the terms of real estate deals that Arteks has made with Tsvetanov and other GERB members.

The focus of that probe includes the origins of funds used in the purchases, potential trading in influence, and conflict of interest in the passage of legislation.

Arteks also is being investigated for its potential links to political parties, its party donations, and its participation in public procurement.

Nikolay Staikov, an expert from the Sofia-based nongovernmental Anti-Corruption Fund, said on March 21 that there are “well-founded suspicions” in Tsvetanov’s case.

Crucially, Staikov said, the completion of three transactions by Arteks using the same notary on the same day suggests the deals were “pre-negotiated transactions -- not market transactions based on supply and demand on the property market."

RFE/RL and the news website found that Tsacheva, Parvanov, Koleva, and GERB parliamentary deputy Vezhdi Rashidov also purchased luxury apartments in the same area from Arteks at prices that were 30 percent to more than 50 percent cheaper than the market value.

All of those real estate deals were completed after GERB lawmakers in January 2017 pushed through amendments to Bulgaria’s construction regulations in a way that is allowing Arteks to build a lucrative 34-story office and luxury apartment building in Sofia.

That building, known as Golden Century, will be one of Bulgaria’s tallest structures when it is completed.

Tsvetanov was the focus of a real estate scandal in 2011 when a tax audit revealed that he owned six apartments in Sofia -- something difficult to achieve on the salary of a public administrator.

However, tax authorities later dismissed any wrongdoing on his part.

With reporting by RFE/RL Bulgarian Service correspondent Polina Paunova in Sofia