CONTINUED CRIMINAL JUSTICE ASSISTANCE FOR

UNCLAS SECTION 01 OF 03 SOFIA 000766

SIPDIS

DEPARTMENT FOR INL/AAE (MACKAY, HARTSHORN),EUR/NCE
(BRANDON) AND EUR/ACE (CONNELL)
DOJ FOR CRIMINAL (SWARTZ, JONES) OPDAT (ALEXANDRE,
EHRENSTAMM, VALDER)

E.O. 12958: N/A
TAGS: SNAR KCRM KJUS EAID ASEC PREL BU
SUBJECT: CONTINUED CRIMINAL JUSTICE ASSISTANCE FOR
BULGARIA AFTER SEED GRADUATION

REF: (A) 04 SOFIA 2310, (B) 04 SOFIA 2450


1. SUMMARY: Bulgarian criminal activity already has a
direct and increasing impact on the United States, which
is likely to continue even after Bulgaria's planned EU
entry in 2007. Embassy Sofia requests continued U.S.
criminal justice assistance following SEED graduation in
FY06. Current U.S. assistance programs funded through
SEED address critical weaknesses in the rule of law and
business development environments, particularly targeting
corruption and organized crime; trafficking in humans,
narcotics, arms and other contraband; and financial and
cyber crime. While Bulgaria has made progress in
fighting transnational crime, due in large measure to
U.S. assistance, reform of its criminal justice system
will be far from complete by 2007 and Bulgaria will not
then be in a position to protect U.S. interests. This
request to continue criminal justice assistance after
SEED graduation addresses a recommendation from Post's
2004 OIG inspection report. END SUMMARY.


2. Four criminal justice assistance programs are
currently funded through INL (ref A): DoJ/OPDAT Resident
Legal Advisor (RLA); DoJ/CEELI Criminal Law Liaison
(CLL); DoJ/ICITAP Forensics Laboratories Project; and the
Regional Criminal Justice Initiative (RCJI, a joint
DoJ/CEELI and DoJ/ICITAP undertaking). A fifth is funded
through USAID: Treasury/OTA Financial Crimes Enforcement.
Together, their combined FY05 budget request is $2.6
million from country SEED funds.

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U.S. INTERESTS AFTER EU ACCESSION: THE "NON-PANACEA"
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3. Without continued U.S. assistance after 2007, the
task of strengthening Bulgarian criminal justice
institutions will fall entirely to the EU, which will not
necessarily be sensitive to U.S. criminal justice
interests. While EU assistance has sometimes proven a
valuable complement to our assistance in the effort to
transform Bulgarian justice, U.S. assistance programs are
generally more pragmatic and flexible, and can be
tailored in part to protect U.S. interests.

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EFFECT OF BULGARIAN ORGANIZED CRIME ON THE U.S.
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4. Bulgarian organized crime groups already operate in
the United States, especially in drug-related crimes,
human smuggling, and prostitution. Several Bulgarian
groups are believed to smuggle Eastern Europeans to the
United States through the U.S.-Mexican border. Branches
of Bulgarian businesses associated with organized crime
and involved in money laundering are also active in the
United States. High-ranking representatives of
businesses believed to be extensions of Bulgarian
organized crime and individuals reported to have leading
positions in the Bulgarian organized crime world
consistently seek legal entry into the United States.


5. Bulgaria is a major transit country as well as a
producer of illicit narcotics. Strategically situated on
Balkan transit routes, Bulgaria is vulnerable to illegal
flows of drugs, people, contraband, arms, and money. In
addition, Bulgaria is a major producer of synthetic
drugs, many of which are sold in the United States (ref
B). Bulgaria is also notorious for the high quality of
counterfeit euros and U.S. dollars, and there have been
several criminal cases involving Bulgarian associations
accused of distributing counterfeit currency in the
United States. Human trafficking, arms smuggling, cyber
crime and intellectual property rights violations are
additional "growth areas" of Bulgarian criminal activity
that are likely to have an increasing impact upon the
United States in the years ahead unless Bulgaria's
criminal justice institutions become capable of serving
as an effective counterforce.


6. The Bulgarian Ministry of Interior estimates that
110 organized criminal groups presently operate in
Bulgaria, and their influence and power appear to be
growing. In the past two years, Bulgaria has experienced
approximately 30 high-profile assassinations between
rival organized crime groups, with law enforcement
manifesting little ability to intervene. (COMMENT: Two
of the assassinated were Bulgarians who had acquired U.S.
citizenship: Iliya Pavlov, owner of MG Corporation, a
major Bulgarian organized crime cartel that also operates
numerous legitimate businesses; and Dimitri Minev,
founder of SIC insurance company, which engaged in
extortion, racketeering, trafficking of humans and drugs,
money laundering, and other illegal activities. END
COMMENT.) The Embassy and high-level visitors have
repeatedly pressed the Bulgarian government to take
action, and the Ambassador has publicly raised concern
over the Bulgarian legal system's weaknesses and the
tendency of police, courts, investigators and prosecutors
to blame one another for the failure of the justice
system to function properly.

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THE SHAPE OF THINGS TO COME: POST-SEED ASSISTANCE
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7. While the precise contours of an assistance program
will be developed subsequently, our program should
continue to build sustainable criminal justice
institutions which will enable Bulgaria to become a
credible partner in the fight against transnational crime
by focusing on organized crime and corruption;
trafficking in persons, narcotics and other contraband;
and cyber, financial and intellectual property crime.
One key measure of success will be the number of cases
involving these priority crimes that go to trial and
result in convictions and sentences.


8. The main component of a future program will be
training at two levels: 1) training of justice sector
personnel (police and investigators, prosecutors and
judges) on criminal law reform legislation, particularly
new criminal and criminal procedure codes; and 2)
specialized training for justice sector personnel in the
priority areas enumerated above. To the extent possible,
all training should be developed collaboratively with the
National Institute of Justice and the Police Academy.
Post's law enforcement operational personnel will be
involved in the development of training programs and
utilized in their delivery. Other activities that
advance the project, legislative reform, or assistance to
ministries in developing procedures, for example, will be
undertaken as necessary.

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TRANSFORMING BULGARIAN CRIMINAL JUSTICE
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9. While slow, we have demonstrated progress with our
assistance. In 2004, a marked increase occurred in
convictions on charges related to human trafficking.
Bulgaria also established an effective financial crimes
task force whose work recently led to indictments of five
well-known organized crime figures on money laundering
charges, the first such indictments under Bulgaria's
money laundering statute. It has made great strides in
suppressing counterfeit U.S. currency operations.
However, regulation of non-bank financial institutions
remains lax, leaving Bulgaria vulnerable to financial
crime, including terrorist financing schemes. Further,
not a single significant organized crime figure has been
prosecuted for any of the more-than-30 killings linked to
organized crime that have occurred in recent years.


10. One essential step in transforming the criminal
justice system is the enactment of more effective
legislation to address crime. U.S. assistance has been
instrumental in developing legislation to combat human
trafficking and money laundering, and establish witness
protection, asset forfeiture and probation systems. But
enactment of legislation is only one step in the long
process of transforming Bulgarian criminal justice.
Building the capacity of justice sector officials to
understand and apply new legislation poses a critical
problem. Considerable work is needed in capacity-
building before the transformation process can
sufficiently protect U.S. interests.


11. Some of the most glaring structural deficiencies in
Bulgarian criminal justice are currently being addressed
under the aegis of a Spanish-led EU PHARE-funded project
for reform of the Bulgarian Criminal Procedure Code.
However, the project, which presently plans to terminate
in mid-2006, will only produce the terms of a new
Criminal Procedure Code. It does not contain a component
for training justice sector personnel on the code's
application. Such training, essential to rendering the
code an effective instrument in the fight against crime,
is likely to span several years, as experience with new
criminal procedure codes in Russia and Bosnia
demonstrates.


12. COMMENT: Continued funding of Bulgarian criminal
justice assistance programs after SEED graduation serves
our nation's best interests. With a significant dose of
U.S. assistance, Bulgaria has strengthened its criminal
justice institutions over the past years and moved closer
to being a credible partner in fighting transnational
crime. But the pace of its progress has not been equal
to the increasing influence of Bulgarian crime on the
United States. Withdrawal of the United States'
contribution to the transformation of Bulgarian criminal
justice with that transformation at best only half-
complete is likely to prove costly to the United States
in the long run. END COMMENT.

PARDEW