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Dysfunctions Last Updated: Feb 7, 2024 - 1:43:08 PM

In Bulgaria, private security firms take over
By Charles Perragin, Le Monde Diplo,  12/23
Nov 29, 2023 - 12:19:27 PM

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Unregulated private security has plugged a gap where the state has failed, tackling petty crime and even providing social services. But too often it’s become embroiled in corruption and political manipulation.

In the little village of Novo Jelezare, in Bulgaria’s Thracian plain, the farmhouses are falling down and the grain silos rusting. At siesta time, the streets are deserted. No one comes to live here these days. With his grey moustache, Dimitar Gargov looks like an American sheriff. He works for local security firm Traffic SOT and sometimes patrols the village, when he’s not delivering food, medicine or winter firewood. ‘You could die here and no one would notice for months,’ he said, knocking at a door.

Penka Litova, dressed in mourning black, opened up. She moved here from a nearby village 20 years ago: ‘I came to look after my parents when they became ill. I’ve been alone for the last 13 years – my children are in the UK. There’s no public transport any more, and the nearest pharmacy is a day’s walk.’ Gargov and his team drive her to doctor’s appointments, which helps relieve the loneliness. Sometimes they deliver flowers. ‘They’re my surrogate family.’

‘They provide social services’
Bulgaria’s private security sector employs around 130,000 people (18 for every 1,000 of its population, compared to 2.3 in France and 0.7 in Italy), more than the police (29,000) and army (37,000) combined. Besides guarding public spaces and private homes, ‘they provide social services in hundreds of remote villages, especially since the pandemic,’ says Tihomir Bezlov, professor of criminology at the Centre for the Study of Democracy (CSD) thinktank in Sofia.

It’s not just in sparsely populated areas that security guards seem to be everywhere. An hour further south is Plovdiv, Bulgaria’s cultural capital and second city. Tanya Georgieva, director of the local Red Cross centre, puts together baskets of basic foodstuffs, such as flour and cooking oil, and organises deliveries, some of which are handled by Traffic SOT. ‘They also help elderly people who live alone with bathing and official paperwork, and provide emotional support,’ Georgieva said. ‘If you call the emergency services, you have to be dying.’ Traffic SOT regularly provides transport for people like Anna, 93. ‘I can’t even leave the house without help,’ she told me. ‘They’ve been taking me to hospital appointments instead of the ambulance for the last three years.’

Wherever state services are lacking, security firms have taken over. Across the EU, governments encourage the use of private security to handle petty crime and take pressure off the police for static duties (1). In Bulgaria, when private security firms moved into rural areas to replace the police (understaffed since the 1990s), it was on a permanent basis. Bezlov explains: ‘The communist state’s grand plans for industrialisation left the countryside empty, and at the beginning of the century 40% of Bulgaria’s farmland was lying idle. The big agroindustrial companies were short of labour. In the 2000s, with unemployment at 20%, many deprived people from the cities moved to the countryside, and crime soared.’

In August 2015 the government redeployed many police to the Turkish border to turn back migrants (2). The labour ministry launched a grand but unregulated and unmonitored plan to encourage municipalities to outsource more work to private security. In small towns like Vidin, in northwestern Bulgaria, these firms, with the help of local authorities, set up systems where groups of households paid for militias to maintain law and order in their community.

Legally, private security firms are only permitted to guard specific locations and premises: houses, schools, parks. In practice, they cover much larger areas – whole villages or groups of villages, and even areas on the border with Romania. The guards often stop and search vehicles, and make arrests. They are sometimes more effective than the police in fighting crime, especially burglary (3).

In 2018 the government took the plunge and authorised mayors to contract out security for entire communities to private companies. At the time, Tatyana Ivanova represented the sector in the Bulgarian Chamber of Commerce and Industry: ‘It amounted to privatising the police, a return to feudalism that allowed local authorities to hire their own forces. I alerted the president in person and warned him things would get out of control.’ After six months the law was amended and made more restrictive, but in practice, according to sector trade unions, police positions in rural areas remain vacant and no one checks on the scope of private security activities.

Local community efforts
Many shops and houses in the small industrial town of Haskovo, in the eastern Thracian plain near the Turkish border, display stickers of the security firm that protects them. One such firm belongs to former wrestler Deyan Yordanov, who has lived here since 1995. ‘People are spending less on security,’ he told me, ‘but small firms like ours are still hiring – students or pensioners who don’t have enough to live on. And of course we sponsor the local church and karate club.’ It’s common to see old men in security guard uniforms, often former police officers, patrolling the streets or watching grocery stores. Atanas Rusev, an expert on security at CSD, says, ‘There aren’t many employers in small towns. Until quite recently, Bulgaria still had a lot of smallholder farmers, but agroindustry has put them out of business.’

Security is still one of the sectors of the economy that provide the most informal employment, with easy access to precarious jobs. A few years ago, the Khaskovo water company’s security contract set guards’ pay 16% below the national minimum wage. ‘I’ve stopped bidding for public contracts,’ Yordanov said. ‘They force you to break the law: to save money, bosses will temporarily fire their staff when it’s time to pay their social security contributions.’

These private security firms are maintaining a grey economy which accounted for 21% of GDP in 2020 according to the Bulgarian Industrial Capital Association, the country’s largest employers’ organisation. But according to Rusev ‘the informal sector is contracting rapidly. A high level of emigration to Western Europe has cut unemployment to 4%. Job vacancies are soaring and the poor are choosing declared work, which is better paid than undeclared work.’ So security firms have fewer clients, but also fewer undeclared staff. Rusev’s research suggests the sector has lost between a quarter and a third of its workforce in six years. Nevertheless, firms are declaring a higher volume of business, leading to an 80% rise in (official) turnover since 2012, to between €500m and €800m a year.

As the sector’s largest client, the state is stimulating business activity, notably through contracts to guard critical facilities – power stations, ports and even military bases. Until 2013 the interior ministry used its own security unit to guard these sites. Ivanova says, ‘It was a private entity within the state, not subject to the legal constraints on the police.’ Since the unit was disbanded, former members have found jobs with private firms whose staff are not all up to the task. ‘They lack the skills to guard sensitive sites such as international ports, where they may have to deal with drug and arms smuggling, or human trafficking,’ warns sociologist Filip Gounev, a former deputy interior minister.

The use of private security to guard military sites was finally called into question in July 2022, after an explosion at an ammunition depot belonging to arms manufacturer EMCO, near Karnobat in the east of the country. The government suspects Russian intelligence involvement. In 2021 Bulgarian prosecutors had already linked six Russians to four explosions between 2011 and 2020 at depots housing munitions awaiting shipment to Georgia and Ukraine. Bulgaria, which is one of the few countries with companies (including EMCO) that specialise in cutting-edge munitions compatible with Ukraine’s Soviet-era weapons, has been selling huge volumes to Ukraine since the Russian invasion. Since August 2022 the defence ministry has banned private security firms from guarding military facilities.

‘We’re cheaper than the police’
Iliyan Panchev, a former soldier and now president of NAFOTS, Bulgaria’s second-largest association of security firms, doesn’t believe for one minute that the sector is being marginalised: ‘We’re cheaper than the police. We act as a filter: we defuse conflict, we collect evidence – soon we’ll be submitting criminal cases directly to the courts.’ In rural areas, private firms provide vital human and technical resources to the police on an informal basis, including tailing suspects. Pavel Videnov, president of SOT 161, the country’s largest firm with more than 4,000 staff, told me, ‘If the state was rich, I wouldn’t be in favour of delegating sovereign powers. But they have no choice.’

Criminologist Anton Kojouharov says, ‘Regulation is inadequate. Security business licenses are issued to companies, not individuals, and we commonly see people trained as chauffeurs doing physical protection work.’ Moreover, the law is unclear on what powers guards have and when they can use force. Videnov said, ‘The rules being so vague, especially on physically restraining offenders, costs us a lot of court cases.’ When it comes to carrying firearms, the law doesn’t distinguish between security guards and ordinary citizens. Private investigation services aren’t regulated either.

The countryside around the small southern town of Radnevo is scarred by lignite mining which supplies the three power stations of the Maritsa East Complex, of which no 2 is said to be Europe’s most polluting industrial facility. Borislav Binev, head of a local security firm, said, ‘As soon as state funds are involved, you’re either making a loss or you’re involved in something shady.’

The state-owned company in question, Maritsa East Mines, has been criticised for fixing public tenders several times. In 2014 the company short-circuited the process for renewing the €50m security contract for the entire industrial complex. Before any bids could be made, it invoked force majeure (as the complex is classed as ‘critical’) and chose a provider directly. Two years later, it had the €15m contract for security services, provided by a company linked to Bulgarian MP and oligarch Delyan Peevski, classified as a state secret. When the value of the contract was revealed, even the government judged it too costly (4).

According to Ivanova, two out of three public tenders are fixed. It’s because of the porosity between the private security sector and politics. Since the collapse of the communist state, a new middle class has emerged in Bulgaria: former apparatchiks use their connections to win security contracts. According to Rusev, 80% of security firm directors are former interior ministry officials and 15% come from the armed forces. This creates networks of interest. ‘Some competitors have threatened to force me out of Radnevo,’ said Binev, who was once a town councillor there. ‘It’s a vicious circle. They misappropriate funds, then they get a foothold in a new town by charging rock-bottom prices to pinch clients from small companies like ours and win public contracts. And in return they exert political influence.’

Historian and political scientist Nadège Ragaru sees it as state capture: ‘Senior officials have interests in the private sector and can award big public contracts and develop crony relationships locally. It’s the same all across the economy.’ During the 2019 local elections, security firm Delta Guard was caught buying votes on behalf of the conservative Citizens for European Development of Bulgaria (GERB) party in the village of Gorna Oryahovitsa.

It was Yavor Bozhankov, an MP recently expelled from the Bulgarian Socialist Party (successor to the Bulgarian Communist Party) for saying that Russia would not win the war in Ukraine, who blew the whistle: ‘It’s a tried and tested method. After casting their ballots, voters go and buy something at the corner shop and get too much change back. The guards keep busybodies away. What with emigration, people moving to the city and low turnouts, candidates can get themselves elected by buying as little as a thousand votes.’ Bozhankov also told prosecutors that security guards were trying to scare people off voting in other nearby villages. ‘These firms will do anything to make themselves useful and keep their public contracts. They’ve become full-time political players.’

In theory, an interior ministry team is supposed to oversee security firms and revoke licenses when there are failings. ‘In practice, just seven people are responsible for monitoring thousands of firms whose licenses are not time-limited. You might as well say the market’s completely unregulated,’ says Kojouharov. Bezlov adds, ‘The police look the other way. If they’re not fired first, many get jobs in private security when they retire. It’s best not to quarrel with your future employer.’ And given the ‘close links between the security sector and the higher echelons of power’, it’s unlikely supervision will get any stricter.

When Bulgaria’s communist system collapsed, the security sector established ties with the business and political elite and with organised crime. Between 1994 and 2004 three laws were passed to limit illegal practices. They established a system of licenses issued by the interior ministry, introduced regulation of the security and insurance businesses, and required security firms to provide guards with a minimum amount of training. These measures had considerable impact: some companies changed names or came under new management; others closed down or ceased their illegal activities. Between 1995 and 2003 the number of people in the sector involved in organised crime fell by more than three quarters.

Many security firm directors reinvested their profits and used their contacts to move into energy, gambling, tourism or civil engineering (5), and some went into politics: former karate champion Boyko Borisov, who founded private security firm Ippon-1 in 1991, was mayor of Sofia (2005-09), founding chairman of GERB in 2009, then prime minister for three terms (2009-21).

To understand this entanglement today, you have to visit central Sofia. Two sinister-looking heavies were waiting outside a branch of Sofia City Municipal Bank. ‘At this time of day, they’re expecting the security van,’ said Nikolay Staykov, founder of the Anticorruption Fund, a watchdog NGO. ‘These guys and the ones transporting the money are all from Ippon-1. If that’s not a conflict of interests, I don’t know what is… They also guard storage facilities for Lukoil Neftohim, the biggest oil refinery in the Balkans. And we know a lot of that fuel is sold on the black market [20-30% according to the Bulgarian Petroleum and Gas Association]. So they’re the prime suspects.’

‘Shut out of his own company’
Staykov received death threats after investigating public prosecutors, especially Petyo Petrov, head of the investigation department at the Sofia City Prosecutor’s Office until 2015. Staykov explained how, three years ago, ‘under the protection of friends still working in the judicial system’, Petrov tried to take control of two factories belonging to Izamet, the country’s largest lift manufacturer, which is owned by Iliya Zlatanov. ‘Overnight, Zlatanov found himself shut out of his own company by security men from Delta Guard, who were working for Petrov.’ Following revelations published by Staykov’s team, which led to an investigation for extortion and ‘illegal recordings’, Petrov disappeared.

Some security firms act as private militias for the powerful at all levels of government, doing everything from misappropriating public funds to buying votes in local elections and extorting money from businesses. In all these activities, they enjoy the protection of public prosecutors, the all-powerful state-within-a-state accused of stifling investigations of oligarchs suspected of corruption and Borisov’s close associates (6). ‘During the transition to democracy, political reforms gave the justice system a huge degree of independence to prevent political interference by the communists,’ says Ragaru. ‘But if you give a prosecutor-general a lot of power and there’s no chance he’ll be investigated, there’s not much you can do to stop him having informal relations with the business sector.’

After the July 2020 protests calling for an end to the ‘mafia state’, and in particular for the resignations of Borisov (then prime minister) and Bulgaria’s chief public prosecutor Ivan Geshev, five general elections were held between April 2021 and April 2023, as the major political parties failed to form coalitions. After a series of interim governments, Borisov’s GERB eventually agreed to share power with Kiril Petkov’s liberal PP-DB (created through a merger between We Continue the Change and Democratic Bulgaria), which came second in the 2023 election. This despite Petkov having launched an anticorruption programme against Borisov and his close friends, and even leading a short-lived interim government in 2022.

One condition of this unnatural alliance was that representatives of GERB on the Supreme Judicial Council should have Geshev dismissed. The other was an undertaking to pursue judicial reform. Legislation has already been introduced to provide tougher judicial supervision of chief public prosecutors (especially when they suspend investigation of apparently serious allegations) and allow independent investigations of them.

Not everyone is reassured. After all, Geshev’s successor as chief public prosecutor, Borislav Sarafov, used to be his deputy. ‘New values, same old faces,’ Staykov commented. Representatives of the private security sector are calling for more new legislation. ‘We need to ditch the ridiculous measures introduced in 2018, such as the ban on subcontracting. It was supposed to be a way of controlling the grey economy, but it stops small firms doing business,’ said NAFOTS president Iliyan Panchev. Tatiana Ivanova believes ‘private security should not be a sub-department of the interior ministry, but a business activity like any other.’

All this may not be enough to end corruption and embezzlement. According to Gounev, connections between private security firms, politics and business have withstood all measures to strengthen the state since the late 1990s. Some firms have abandoned traditional crime in favour of white-collar crime as practised by state-owned companies and municipalities that award contracts in return for backhanders. Having been stand-ins for the police and the judicial system, they have come to play a vital supporting role for those with political ambitions.

(1) ‘Private security and its role in European security’, white paper, Confederation of European Security Services (COESS)/French National Institute of Advanced Studies in Security (INHES), December 2008. 
(2) Franziska Klopfer and Nelleke van Amstel, Private Security in Practice: Case studies from Southeast Europe, DCAF, Geneva, 2016.
(3) Franziska Klopfer and Nelleke van Amstel, A Force for Good? Mapping the private security landscape in Southeast Europe, DCAF, 2015.
(4) Ibid.
(5) Felia Allum and Stan Gilmour (eds), The Handbook of Organised Crime and Politics, Edward Elgar, Cheltenham, 2019.
(6) Jean-Baptiste Chastand, ‘Le procureur général, “intouchable” figure du système judiciaire bulgare’ (The prosecutor general: an ‘untouchable’ in Bulgaria’s legal system), Le Monde, Paris, 13 October 2020.

Source:Ocnus.net 2023

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