Identifier
Created
Classification
Origin
07SOFIA1007
2007-08-17 12:53:00
CONFIDENTIAL
Embassy Sofia
Cable title:
PM STRUGGLES TO CLOSE SOCIALIST RANKS
VZCZCXRO3123 OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR DE RUEHSF #1007/01 2291253 ZNY CCCCC ZZH O 171253Z AUG 07 FM AMEMBASSY SOFIA TO RUEHC/SECSTATE WASHDC IMMEDIATE 4154 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
C O N F I D E N T I A L SECTION 01 OF 04 SOFIA 001007
SIPDIS
SIPDIS
E.O. 12958: DECL: 08/15/2017
TAGS: BU PGOV
SUBJECT: PM STRUGGLES TO CLOSE SOCIALIST RANKS
REF: A. A) SOFIA 582
B. B) SOFIA 643
C. C) SOFIA 678
D. D) SOFIA 862
E. E) SOFIA 949
Classified By: Classified by CDA Alex Karagiannis for Reasons 1.4 (B) a
nd (D)
C O N F I D E N T I A L SECTION 01 OF 04 SOFIA 001007
SIPDIS
SIPDIS
E.O. 12958: DECL: 08/15/2017
TAGS: BU PGOV
SUBJECT: PM STRUGGLES TO CLOSE SOCIALIST RANKS
REF: A. A) SOFIA 582
B. B) SOFIA 643
C. C) SOFIA 678
D. D) SOFIA 862
E. E) SOFIA 949
Classified By: Classified by CDA Alex Karagiannis for Reasons 1.4 (B) a
nd (D)
1. (C) SUMMARY: The ruling Bulgarian Socialist Party (BSP),
hurt by a surprisingly poor showing in May's European
Parliament elections and a high-profile corruption scandal,
is struggling to close ranks ahead of October municipal
elections. PM Stanishev has a two fold party mission:
assert his leadership and re-energize his party; and maintain
cohesion by balancing two powerful BSP figures - tainted
former Economy and Energy Minister Ovcharov and equally
controversial Interior Minister Petkov. As a result of the
PM's maneuvers, both Petkov and Ovcharov were stripped of
their deputy party chairmanships. Ovcharov was also moved to
a sinecure post in parliament, while Petkov is fighting a
rearguard action to avoid losing control of the domestic
intelligence service, which the PM wants to bring under his
direct control. Meanwhile, support for the Socialists
continues to erode, displaced in popularity by Sofia Mayor
Borisov's new populist party, GERB. With coalition partner
NMSS in single digits, and the BSP suffering internal
fissures, the October elections are shaping up as a key test
for government longevity if not stability. Odds-makers still
believe the government can muddle through a full term in
office but it may be more brittle and preservation-minded in
the face of a strong GERB showing. END SUMMARY
2. (C) The dog days of August have been anything but quiet in
terms of behind the scenes political theater. Following May
Euro-parliamentary elections, internal turbulence has built
within several parties. The main traditional center-right
groups are collectively in free-fall with poll numbers in the
single digits. Former President Stoyanov resigned leadership
in the Union of Democratic Forces (UDF),replaced by Plamen
Yoroukov, a businessman and novice in politics. Egotistical
former Prime Minister Kostov orchestrated a brief withdrawal
and then return to the Democrats for Strong Bulgaria (DSB)
leadership. Neither maneuver had any appreciable impact
among voters. Meanwhile, ex-King Simeon's NMSS (now in the
process of renaming itself but keeping the same initials)
continues its slow sinking. Though blessed with powerful and
capable government ministers, NMSS, in the ex-king, has an
uninspired and underwhelming leader; the party is flat and
listless. The ethnically-Turkish Movement for Rights and
Freedoms (MRF) retains its core 9-15 percent support and
remains essential to coalition cohesion. But it is a
provincial, not national party; and its reputation for
corruption makes it a party of last resort in terms of
eletoral alliances in the run-up to October municipal
elections. Meanwhile, vicious infighting withinthe BSP,
heretofore the largest and most powerfu party in Bulgaria,
has taken center political stge.
STANISHEV'S PARTY POLITICS: A BALANCING AC
--------------
3. (C) PM Sergei Stanishev's BSP was wounded by
worse-than-expected results in the May 20 European Parliament
elections and in a high-profile corruption scandal centered
on one of BSP's key figures, former Economy and Energy
Minister Roumen Ovcharov (refs A and B). In early June,
Stanishev forced Ovcharov to resign due to his involvement in
the scandal and dismissed the entire BSP leadership, citing
poor election results (ref C). Stanishev called an
extraordinary party congress June 16, which endorsed the
government's policies with an overwhelming majority, despite
hard-line internal opposition. Since then, the PM has
further moved to consolidate his BSP leadership and
re-energize the party for October 28 local elections. At a
June 30 party meeting, the PM stunned colleagues by
introducing a new party structure. He abolished the deputy
chairmanship, thus effectively dismissing all five party
deputies and replacing them with six party secretaries who
have purely organizational functions. As a result of this
administrative maneuver, Stanishev limited the power of two
key BSP figures -- ex-minister Ovcharov, and the equally
influential and controversial Minister of Interior Roumen
Petkov. The two, who both served as Stanishev's deputies in
the BSP, passionately detest each other. Each has powerful
and loyal party apparats; BSP stability has largely hinged on
the balance of power between their rival lobbies.
4. (C) BSP insiders tell us that with his June move,
Stanishev clipped Petkov's and Ovcharov's wings and asserted
his leadership while preserving the balance within the party.
"Removing the deputy chair's posts was a sophisticated and
SOFIA 00001007 002 OF 004
painless way of getting rid of Ovcharov
and taming Petkov without waging an open battle, as the last
thing the party needs now is scandals and mutual
accusations," one of Stanishev's aides told us. Both
Ovcharov and Petkov, however, stayed on as members of the
BSP's new 21-member Executive Bureau. BSP insiders confide
that the PM kept them on because he was unwilling to make any
potentially destabilizing changes ahead of local elections.
Officials close to President Georgi Parvanov, the former
Socialist party chairman who played a key role in assembling
the three-party coalition, also retained their seats in the
BSP leadership. Stanishev reserved the six secretary
positions for less controversial officials loyal to him. BSP
insiders tell us that the current Socialist Party Executive
Bureau would most likely be a temporary solution. The PM is
likely to make more significant changes in the BSP leadership
after the local elections or after a regular party congress
next year.
TAINTED OVCHAROV: DOWN BUT NOT OUT
--------------
5. (C) Following his official dismissal from the government
July 18, Ovcharov did not spend much time out in the cold
(ref D). As a member of the Socialist parliamentary group,
he was promptly elected chairman of parliament's budget and
finance committee (effectively overseeing his former
ministry). Though the position ordinarily carries more
prestige than actual power, he is likely to exercise
considerable influence. His predecessor as chair, Petar
Dimitrov, replaced Ovcharov as the new Minister of Economy
and Energy, but is an energy newcomer (and lacks details of
all the deals Ovcharov struck). Energy industry insiders
tell us that Ovcharov still carries more weight in the
Ministry of Energy than does Dimitrov (ref E). Ovcharov has
salted the ministry with his people in senior positions, and
friends and supporters who won lucrative contracts remain
loyal to him.
6. (C) Ovcharov's parliamentary appointment, green-lighted by
the PM, raised eyebrows among the public which wondered why
an official dogged by allegations of corruption and abuse of
power would be awarded such a post. Furthermore Ovcharov,
largely perceived as overly confident and arrogant, was an
open rival to Stanishev for the posts of both BSP chairman
and prime minister. During the June 2005 election campaign,
he was one of the few BSP officials who openly questioned
Stanishev's nomination as PM, giving extensive interviews
about the young party leader's "lack of competence and
experience." Thus, outside observers thought the PM would
gladly use the opportunity presented by the major graft
scandal to sideline his rival entirely, and in fact one of
the PM's aides told us he was initially tempted to do so.
7. (C) Stanishev's aides, however, advised him that he did
not need to stoke a powerful enemy (Ovcharov heads BSP's
Sofia branch). In early June, Ovcharov reportedly threatened
Stanishev that if kicked out of politics and left in
disgrace, he would respond with public statements against
BSP's partnership with the much reviled (in both BSP and the
public at large) MRF. Consequently, BSP insiders tell us,
the PM agreed to grant Ovcharov a "face-saving exit" from the
corruption scandal, as long as the former minister does not
rock the party boat.
PETKOV STRUGGLES TO RETAIN POWERS
--------------
8. (C) Another reason for the PM to keep Ovcharov on the
scene, according to some BSP insiders, was that his possible
ouster could have increased disproportionately the influence
of Interior Minister Petkov. Petkov's loyalty, political
acumen and his pragmatic, down-to-earth approach, coupled
with close ties with President Parvanov and the MRF, have
helped him accumulate significant authority in the BSP.
Unlike Ovcharov, Petkov has been -- up to now -- generally
considered an ally of rather than a rival to the PM both in
the BSP and the government. Previously dubbed "the Regent"
because of his close ties with the less-experienced
Stanishev, Petkov retains strong influence in the party's
local branches. Relations between Stanishev and Petkov,
however, have significantly deteriorated since May when the
PM announced a plan to bring the domestic intelligence
service directly under the PM's office as part of a new
National Agency for Security (NAS),thus curbing Petkov's
powers. Stanishev, who says the plan reflects the
government's priority for strengthening the rule of law
post-EU accession, has already won the support of the junior
coalition partners. (Note: On balance creation of the NAS is
the right thing to further professionalize the service and
have accountability.)
9. (C) Although generally backed by politicians and security
SOFIA 00001007 003 OF 004
experts, the NAS was quickly dubbed the "Agency for Party
Security" as critics groused that its creation reflected
primarily the PM's efforts to rein in Petkov within the BSP.
BSP politicians tell us the PM is wary of persistent
speculation that Petkov is using information from the
domestic intelligence service for political influence. A
Socialist MP familiar with the matter told us Stanishev
believed the separation of the domestic intelligence service
from the MOI and its inclusion in the NAS would prevent the
use of information collected with specialized surveillance
techniques for political purposes. Although the technical
aspect of the surveillance will still be handled by the MOI,
the collected information will not go to the Interior
Minister but straight to the NAS where it would be used
according to strict regulations, the MP said. Local media
have also commented that the significance of the information
gathered by the domestic intelligence service has turned
Petkov into a separate center of power. Indicative of the
paranoia is a recent rumor among local politicians that the
PM feared that he himself might be bugged. According to the
widespread rumor, "the first thing the PM does when having a
private conversation is to remove the battery of his mobile."
10. (C) Stanishev and his supporters have done a poor job
making the public case for the new agency. Petkov has led a
spirited internal fight against it and he and his loyalists
have trashed it publicly. Petkov warned local media that
removing the domestic intelligence service from the MOI would
be a "severe mistake" and that "one cannot automatically
merge secret services." Tension rose following an incident
on the eve of the BSP's June 16 congress. According to
multiple insider sources, Petkov showed up uninvited at the
PM's office to protest against the NAS, making threats to
Stanishev and noting that he still needed Petkov's support in
the party. The PM reportedly said Petkov was drunk and
"when he is drunk he usually speaks the truth."
While this incident largely stayed out of the public eye
(snippets are now leaking out),the press reported an open
confrontation between Petkov and the PM during a July 13
meeting of the ruling Coalition Council. The formal meeting,
attended by the three party leaders and high-ranking party
officials, was expected to focus on the forthcoming
government reshuffle (ref D). As corroborated by insiders
and reported in the press, Petkov surprisingly stole the
stage and confronted the PM regarding his plans about the
NAS. Participants watched stunned as the meeting turned into
a personal exchange between Stanishev and Petkov as the
latter kept asking the PM to explain, "why he wanted to
create a second Ministry of Interior."
11. (C) Petkov's internal party opponents were quick to take
advantage of the situation. "You cannot fight organized
crime when you are friends with them," Socialist MP Tatyana
Doncheva, one of the most vocal critics of Petkov, told us at
a recent meeting, referring to widespread allegations about
Petkov's ties with leaders of organized crime group SIC.
According to Doncheva, Petkov, "will continue to do
everything possible to block the creation of the agency, and
the work of the agency, once it is launched." "The only way
for the agency to be effective is the replacement of the
incumbent Interior Minister," she said. Petkov's alleged
ties with organized crime figures, involvement in murky deals
and problems with strong alcohol were also listed in an
anonymous letter recently sent to foreign diplomatic missions
in Sofia. Skillfully playing sympathetic reporters, Petkov
revealed the letter (though not its contents) himself,
dismissing the allegations as an "absurdity." The letter,
subsequently published by a Sofia-based news web site but not
yet in the papers, is largely believed to come from within
BSP circles. (Comment: Much of the information in it is
accurate and corroborated by multiple sources; other
allegations are harder to pin down.)
12. (C) If not quite open warfare between BSP factions, these
skirmishes are nonetheless taking a toll on party cadres.
Party morale took another tumble after President Parvanov's
August 12 interview alleging "friendly fire" by the BSP
against him in the release of the secret services dossier on
him. (Petkov had been Parvanov's major ally and defender
when the dossier was released.) Parvanov's statement
distracted attention from the dossier issue, but also fueled
speculation within the party about who the President was
targeting. Stanishev came to Parvanov's defense, spraying
cold water on the entire matter.
SOCIALIST HARDLINERS URGE LEFT TURN
--------------
13. (C) Beyond the political wrangling, there is also an
internal policy dispute within BSP. A hardline faction,
"Left within the BSP," accuses the BSP leadership of dragging
the party to the right. Led by Parliament Legal Committee
Chairman Yanaki Stoilov, this faction asserts that the
SOFIA 00001007 004 OF 004
Socialist-led government has pursued reformist economic
policies that do not represent the core values shared by the
BSP electorate. (It takes aim at the 10 percent corporate
tax enacted last year and the recently proposed 10 percent
flat personal income tax.) The group, which urges a "left
turn" in economic policies and a return to orthodox socialist
values, suffered a bitter defeat at the June party congress
which backed Stanishev's course by an overwhelming majority.
The faction was also partly muted by the government's recent
decision for a second 10-percent pension increase this year,
which will come into force in October (just in time for local
elections). Its noisy actions notwithstanding, this faction
has limited political influence in the BSP, and lacks
organizational powers and or funding. But while it does not
threaten Stanishev's leadership, its vocal opposition to
government policies could discourage core BSP voters, whom
the party is now struggling to retain, from turning out in
the October elections.
BORISSOV'S PARTY TOPS POLLS AS SOCIALIST SLIDE
-------------- --
14. (C) As the Socialists thrash, the new party of Sofia's
charismatic but controversial mayor Boiko Borissov gains
strength. Launched last December, GERB has gradually
increased its support since the party's minimal victory in
May's European Parliament elections. Since June it has edged
out the BSP as the most popular political party. An August 2
survey by the reputable Alpha Research polling agency showed
that GERB, advertised by its popular leader as Bulgaria's
"new center-right," enjoys a nearly five percent lead ahead
of the BSP. The MRF and extreme nationalist party Ataka are
almost on a par at 6.9 percent and 6.7 percent respectively.
The NMSS party and smaller center-right parties crawl at the
bottom. But despite discontent with the current government,
60 percent of Bulgarians do not want early general elections,
the survey showed.
15. (C) The next several months will see rising political
heat as the parties marshal for local elections. GERB's
victory in Sofia, where Borissov will run for re-election
(and BSP cannot convince anyone to run against him yet),is
perceived as a "fait accompli" by both pollsters and
politicians. But GERB faces a bigger challenge in the
countryside where there are many regional players and where
the BSP traditionally has the best-developed organization.
Analysts also note that nine months after its launch, GERB,
which uses strongly populist and anti-government rhetoric, is
still a personality-based group centered on its charismatic
leader. The key challenge for the BSP, according to analysts
and BSP insiders, is to galvanize traditional Socialist
voters, many of whom feel the BSP-led government is betraying
core party values. Senior Socialist officials tell us the
BSP campaign would focus primarily on winning back the party
base, many of whom stayed home in May. But, the open
factional feuding runs counter to easy success on that score.
16. (C) COMMENT: BSP's troubles may be theatrical, but are
not dramatic. The party is still a formidable machine and
Stanishev is firmly in charge. The upcoming municipal
elections will be a serious mid-term test. The growing
challenge from Borisov's party, coupled with internal party
issues, explains Stanishev's unwillingness to make
potentially destabilizing moves ahead of the election. The
cost for what local media called the "artificial peace within
the BSP" was the return of Ovcharov, a move that sidesteps
Stanishev's declared intentions to battle corruption. As a
result of his moves, however, the PM has steadily affirmed
his leadership, exceeding the shadow of his former "regents"
and ending the widespread perception that he is controlled by
more powerful BSP figures. The PM may make more changes in
the party leadership and the government following the local
elections. Even so, we believe the PM would refrain from
drastic moves that could shake the coalition, as his ultimate
goal is to complete a full term in office.
17. (C) COMMENT CONTINUED: A second electoral victory of GERB
over BSP will put more pressure on coalition stability. If
the traditional center-right parties and NMSS do poorly, as
seems probable, Borissov will be even more encouraged to
demand early national elections, arguing the voters have
rejected the ruling coalition and that he represents the true
governing alternative. In short, it will be an interesting
electoral season and even more interesting aftermath as the
government strives for continued cohesion. We do not
anticipate foreign or security policy shifts from Stanishev's
government, but it will likely be more inwardly-focused on
both coalition management and domestic issues.
Karagiannis
SIPDIS
SIPDIS
E.O. 12958: DECL: 08/15/2017
TAGS: BU PGOV
SUBJECT: PM STRUGGLES TO CLOSE SOCIALIST RANKS
REF: A. A) SOFIA 582
B. B) SOFIA 643
C. C) SOFIA 678
D. D) SOFIA 862
E. E) SOFIA 949
Classified By: Classified by CDA Alex Karagiannis for Reasons 1.4 (B) a
nd (D)
1. (C) SUMMARY: The ruling Bulgarian Socialist Party (BSP),
hurt by a surprisingly poor showing in May's European
Parliament elections and a high-profile corruption scandal,
is struggling to close ranks ahead of October municipal
elections. PM Stanishev has a two fold party mission:
assert his leadership and re-energize his party; and maintain
cohesion by balancing two powerful BSP figures - tainted
former Economy and Energy Minister Ovcharov and equally
controversial Interior Minister Petkov. As a result of the
PM's maneuvers, both Petkov and Ovcharov were stripped of
their deputy party chairmanships. Ovcharov was also moved to
a sinecure post in parliament, while Petkov is fighting a
rearguard action to avoid losing control of the domestic
intelligence service, which the PM wants to bring under his
direct control. Meanwhile, support for the Socialists
continues to erode, displaced in popularity by Sofia Mayor
Borisov's new populist party, GERB. With coalition partner
NMSS in single digits, and the BSP suffering internal
fissures, the October elections are shaping up as a key test
for government longevity if not stability. Odds-makers still
believe the government can muddle through a full term in
office but it may be more brittle and preservation-minded in
the face of a strong GERB showing. END SUMMARY
2. (C) The dog days of August have been anything but quiet in
terms of behind the scenes political theater. Following May
Euro-parliamentary elections, internal turbulence has built
within several parties. The main traditional center-right
groups are collectively in free-fall with poll numbers in the
single digits. Former President Stoyanov resigned leadership
in the Union of Democratic Forces (UDF),replaced by Plamen
Yoroukov, a businessman and novice in politics. Egotistical
former Prime Minister Kostov orchestrated a brief withdrawal
and then return to the Democrats for Strong Bulgaria (DSB)
leadership. Neither maneuver had any appreciable impact
among voters. Meanwhile, ex-King Simeon's NMSS (now in the
process of renaming itself but keeping the same initials)
continues its slow sinking. Though blessed with powerful and
capable government ministers, NMSS, in the ex-king, has an
uninspired and underwhelming leader; the party is flat and
listless. The ethnically-Turkish Movement for Rights and
Freedoms (MRF) retains its core 9-15 percent support and
remains essential to coalition cohesion. But it is a
provincial, not national party; and its reputation for
corruption makes it a party of last resort in terms of
eletoral alliances in the run-up to October municipal
elections. Meanwhile, vicious infighting withinthe BSP,
heretofore the largest and most powerfu party in Bulgaria,
has taken center political stge.
STANISHEV'S PARTY POLITICS: A BALANCING AC
--------------
3. (C) PM Sergei Stanishev's BSP was wounded by
worse-than-expected results in the May 20 European Parliament
elections and in a high-profile corruption scandal centered
on one of BSP's key figures, former Economy and Energy
Minister Roumen Ovcharov (refs A and B). In early June,
Stanishev forced Ovcharov to resign due to his involvement in
the scandal and dismissed the entire BSP leadership, citing
poor election results (ref C). Stanishev called an
extraordinary party congress June 16, which endorsed the
government's policies with an overwhelming majority, despite
hard-line internal opposition. Since then, the PM has
further moved to consolidate his BSP leadership and
re-energize the party for October 28 local elections. At a
June 30 party meeting, the PM stunned colleagues by
introducing a new party structure. He abolished the deputy
chairmanship, thus effectively dismissing all five party
deputies and replacing them with six party secretaries who
have purely organizational functions. As a result of this
administrative maneuver, Stanishev limited the power of two
key BSP figures -- ex-minister Ovcharov, and the equally
influential and controversial Minister of Interior Roumen
Petkov. The two, who both served as Stanishev's deputies in
the BSP, passionately detest each other. Each has powerful
and loyal party apparats; BSP stability has largely hinged on
the balance of power between their rival lobbies.
4. (C) BSP insiders tell us that with his June move,
Stanishev clipped Petkov's and Ovcharov's wings and asserted
his leadership while preserving the balance within the party.
"Removing the deputy chair's posts was a sophisticated and
SOFIA 00001007 002 OF 004
painless way of getting rid of Ovcharov
and taming Petkov without waging an open battle, as the last
thing the party needs now is scandals and mutual
accusations," one of Stanishev's aides told us. Both
Ovcharov and Petkov, however, stayed on as members of the
BSP's new 21-member Executive Bureau. BSP insiders confide
that the PM kept them on because he was unwilling to make any
potentially destabilizing changes ahead of local elections.
Officials close to President Georgi Parvanov, the former
Socialist party chairman who played a key role in assembling
the three-party coalition, also retained their seats in the
BSP leadership. Stanishev reserved the six secretary
positions for less controversial officials loyal to him. BSP
insiders tell us that the current Socialist Party Executive
Bureau would most likely be a temporary solution. The PM is
likely to make more significant changes in the BSP leadership
after the local elections or after a regular party congress
next year.
TAINTED OVCHAROV: DOWN BUT NOT OUT
--------------
5. (C) Following his official dismissal from the government
July 18, Ovcharov did not spend much time out in the cold
(ref D). As a member of the Socialist parliamentary group,
he was promptly elected chairman of parliament's budget and
finance committee (effectively overseeing his former
ministry). Though the position ordinarily carries more
prestige than actual power, he is likely to exercise
considerable influence. His predecessor as chair, Petar
Dimitrov, replaced Ovcharov as the new Minister of Economy
and Energy, but is an energy newcomer (and lacks details of
all the deals Ovcharov struck). Energy industry insiders
tell us that Ovcharov still carries more weight in the
Ministry of Energy than does Dimitrov (ref E). Ovcharov has
salted the ministry with his people in senior positions, and
friends and supporters who won lucrative contracts remain
loyal to him.
6. (C) Ovcharov's parliamentary appointment, green-lighted by
the PM, raised eyebrows among the public which wondered why
an official dogged by allegations of corruption and abuse of
power would be awarded such a post. Furthermore Ovcharov,
largely perceived as overly confident and arrogant, was an
open rival to Stanishev for the posts of both BSP chairman
and prime minister. During the June 2005 election campaign,
he was one of the few BSP officials who openly questioned
Stanishev's nomination as PM, giving extensive interviews
about the young party leader's "lack of competence and
experience." Thus, outside observers thought the PM would
gladly use the opportunity presented by the major graft
scandal to sideline his rival entirely, and in fact one of
the PM's aides told us he was initially tempted to do so.
7. (C) Stanishev's aides, however, advised him that he did
not need to stoke a powerful enemy (Ovcharov heads BSP's
Sofia branch). In early June, Ovcharov reportedly threatened
Stanishev that if kicked out of politics and left in
disgrace, he would respond with public statements against
BSP's partnership with the much reviled (in both BSP and the
public at large) MRF. Consequently, BSP insiders tell us,
the PM agreed to grant Ovcharov a "face-saving exit" from the
corruption scandal, as long as the former minister does not
rock the party boat.
PETKOV STRUGGLES TO RETAIN POWERS
--------------
8. (C) Another reason for the PM to keep Ovcharov on the
scene, according to some BSP insiders, was that his possible
ouster could have increased disproportionately the influence
of Interior Minister Petkov. Petkov's loyalty, political
acumen and his pragmatic, down-to-earth approach, coupled
with close ties with President Parvanov and the MRF, have
helped him accumulate significant authority in the BSP.
Unlike Ovcharov, Petkov has been -- up to now -- generally
considered an ally of rather than a rival to the PM both in
the BSP and the government. Previously dubbed "the Regent"
because of his close ties with the less-experienced
Stanishev, Petkov retains strong influence in the party's
local branches. Relations between Stanishev and Petkov,
however, have significantly deteriorated since May when the
PM announced a plan to bring the domestic intelligence
service directly under the PM's office as part of a new
National Agency for Security (NAS),thus curbing Petkov's
powers. Stanishev, who says the plan reflects the
government's priority for strengthening the rule of law
post-EU accession, has already won the support of the junior
coalition partners. (Note: On balance creation of the NAS is
the right thing to further professionalize the service and
have accountability.)
9. (C) Although generally backed by politicians and security
SOFIA 00001007 003 OF 004
experts, the NAS was quickly dubbed the "Agency for Party
Security" as critics groused that its creation reflected
primarily the PM's efforts to rein in Petkov within the BSP.
BSP politicians tell us the PM is wary of persistent
speculation that Petkov is using information from the
domestic intelligence service for political influence. A
Socialist MP familiar with the matter told us Stanishev
believed the separation of the domestic intelligence service
from the MOI and its inclusion in the NAS would prevent the
use of information collected with specialized surveillance
techniques for political purposes. Although the technical
aspect of the surveillance will still be handled by the MOI,
the collected information will not go to the Interior
Minister but straight to the NAS where it would be used
according to strict regulations, the MP said. Local media
have also commented that the significance of the information
gathered by the domestic intelligence service has turned
Petkov into a separate center of power. Indicative of the
paranoia is a recent rumor among local politicians that the
PM feared that he himself might be bugged. According to the
widespread rumor, "the first thing the PM does when having a
private conversation is to remove the battery of his mobile."
10. (C) Stanishev and his supporters have done a poor job
making the public case for the new agency. Petkov has led a
spirited internal fight against it and he and his loyalists
have trashed it publicly. Petkov warned local media that
removing the domestic intelligence service from the MOI would
be a "severe mistake" and that "one cannot automatically
merge secret services." Tension rose following an incident
on the eve of the BSP's June 16 congress. According to
multiple insider sources, Petkov showed up uninvited at the
PM's office to protest against the NAS, making threats to
Stanishev and noting that he still needed Petkov's support in
the party. The PM reportedly said Petkov was drunk and
"when he is drunk he usually speaks the truth."
While this incident largely stayed out of the public eye
(snippets are now leaking out),the press reported an open
confrontation between Petkov and the PM during a July 13
meeting of the ruling Coalition Council. The formal meeting,
attended by the three party leaders and high-ranking party
officials, was expected to focus on the forthcoming
government reshuffle (ref D). As corroborated by insiders
and reported in the press, Petkov surprisingly stole the
stage and confronted the PM regarding his plans about the
NAS. Participants watched stunned as the meeting turned into
a personal exchange between Stanishev and Petkov as the
latter kept asking the PM to explain, "why he wanted to
create a second Ministry of Interior."
11. (C) Petkov's internal party opponents were quick to take
advantage of the situation. "You cannot fight organized
crime when you are friends with them," Socialist MP Tatyana
Doncheva, one of the most vocal critics of Petkov, told us at
a recent meeting, referring to widespread allegations about
Petkov's ties with leaders of organized crime group SIC.
According to Doncheva, Petkov, "will continue to do
everything possible to block the creation of the agency, and
the work of the agency, once it is launched." "The only way
for the agency to be effective is the replacement of the
incumbent Interior Minister," she said. Petkov's alleged
ties with organized crime figures, involvement in murky deals
and problems with strong alcohol were also listed in an
anonymous letter recently sent to foreign diplomatic missions
in Sofia. Skillfully playing sympathetic reporters, Petkov
revealed the letter (though not its contents) himself,
dismissing the allegations as an "absurdity." The letter,
subsequently published by a Sofia-based news web site but not
yet in the papers, is largely believed to come from within
BSP circles. (Comment: Much of the information in it is
accurate and corroborated by multiple sources; other
allegations are harder to pin down.)
12. (C) If not quite open warfare between BSP factions, these
skirmishes are nonetheless taking a toll on party cadres.
Party morale took another tumble after President Parvanov's
August 12 interview alleging "friendly fire" by the BSP
against him in the release of the secret services dossier on
him. (Petkov had been Parvanov's major ally and defender
when the dossier was released.) Parvanov's statement
distracted attention from the dossier issue, but also fueled
speculation within the party about who the President was
targeting. Stanishev came to Parvanov's defense, spraying
cold water on the entire matter.
SOCIALIST HARDLINERS URGE LEFT TURN
--------------
13. (C) Beyond the political wrangling, there is also an
internal policy dispute within BSP. A hardline faction,
"Left within the BSP," accuses the BSP leadership of dragging
the party to the right. Led by Parliament Legal Committee
Chairman Yanaki Stoilov, this faction asserts that the
SOFIA 00001007 004 OF 004
Socialist-led government has pursued reformist economic
policies that do not represent the core values shared by the
BSP electorate. (It takes aim at the 10 percent corporate
tax enacted last year and the recently proposed 10 percent
flat personal income tax.) The group, which urges a "left
turn" in economic policies and a return to orthodox socialist
values, suffered a bitter defeat at the June party congress
which backed Stanishev's course by an overwhelming majority.
The faction was also partly muted by the government's recent
decision for a second 10-percent pension increase this year,
which will come into force in October (just in time for local
elections). Its noisy actions notwithstanding, this faction
has limited political influence in the BSP, and lacks
organizational powers and or funding. But while it does not
threaten Stanishev's leadership, its vocal opposition to
government policies could discourage core BSP voters, whom
the party is now struggling to retain, from turning out in
the October elections.
BORISSOV'S PARTY TOPS POLLS AS SOCIALIST SLIDE
-------------- --
14. (C) As the Socialists thrash, the new party of Sofia's
charismatic but controversial mayor Boiko Borissov gains
strength. Launched last December, GERB has gradually
increased its support since the party's minimal victory in
May's European Parliament elections. Since June it has edged
out the BSP as the most popular political party. An August 2
survey by the reputable Alpha Research polling agency showed
that GERB, advertised by its popular leader as Bulgaria's
"new center-right," enjoys a nearly five percent lead ahead
of the BSP. The MRF and extreme nationalist party Ataka are
almost on a par at 6.9 percent and 6.7 percent respectively.
The NMSS party and smaller center-right parties crawl at the
bottom. But despite discontent with the current government,
60 percent of Bulgarians do not want early general elections,
the survey showed.
15. (C) The next several months will see rising political
heat as the parties marshal for local elections. GERB's
victory in Sofia, where Borissov will run for re-election
(and BSP cannot convince anyone to run against him yet),is
perceived as a "fait accompli" by both pollsters and
politicians. But GERB faces a bigger challenge in the
countryside where there are many regional players and where
the BSP traditionally has the best-developed organization.
Analysts also note that nine months after its launch, GERB,
which uses strongly populist and anti-government rhetoric, is
still a personality-based group centered on its charismatic
leader. The key challenge for the BSP, according to analysts
and BSP insiders, is to galvanize traditional Socialist
voters, many of whom feel the BSP-led government is betraying
core party values. Senior Socialist officials tell us the
BSP campaign would focus primarily on winning back the party
base, many of whom stayed home in May. But, the open
factional feuding runs counter to easy success on that score.
16. (C) COMMENT: BSP's troubles may be theatrical, but are
not dramatic. The party is still a formidable machine and
Stanishev is firmly in charge. The upcoming municipal
elections will be a serious mid-term test. The growing
challenge from Borisov's party, coupled with internal party
issues, explains Stanishev's unwillingness to make
potentially destabilizing moves ahead of the election. The
cost for what local media called the "artificial peace within
the BSP" was the return of Ovcharov, a move that sidesteps
Stanishev's declared intentions to battle corruption. As a
result of his moves, however, the PM has steadily affirmed
his leadership, exceeding the shadow of his former "regents"
and ending the widespread perception that he is controlled by
more powerful BSP figures. The PM may make more changes in
the party leadership and the government following the local
elections. Even so, we believe the PM would refrain from
drastic moves that could shake the coalition, as his ultimate
goal is to complete a full term in office.
17. (C) COMMENT CONTINUED: A second electoral victory of GERB
over BSP will put more pressure on coalition stability. If
the traditional center-right parties and NMSS do poorly, as
seems probable, Borissov will be even more encouraged to
demand early national elections, arguing the voters have
rejected the ruling coalition and that he represents the true
governing alternative. In short, it will be an interesting
electoral season and even more interesting aftermath as the
government strives for continued cohesion. We do not
anticipate foreign or security policy shifts from Stanishev's
government, but it will likely be more inwardly-focused on
both coalition management and domestic issues.
Karagiannis