Violations exist, but there are no perpetrators. This succinctly summarizes the position of the Specialized Prosecutor’s Office regarding the investigation published by the website “Za istinata” (“For the Truth”), which reveals irregularities in public procurement in the municipality of Shumen. The article titled “Money Down the Drain – How Municipalities in Shumen Spent 402,000 BGN on a Non-Executed Waste Separation Project” recounts the unfortunate attempts of several municipalities in the Shumen region to build a waste separation facility and the 402,000 BGN of public funds that were effectively wasted.
After a citizen alerted the Shumen Prosecutor’s Office about the irregularities mentioned in the publication, an inquiry was initiated and sent to the Specialized Prosecutor’s Office (SPO). A financial inspection was also commissioned.
The facts presented in the investigation were confirmed by the financial inspection. Nevertheless, the Specialized Prosecutor’s Office refused to initiate a pre-trial investigation, citing a lack of direct intent regarding the established violations, as well as no tangible material benefit for the responsible official—in this case, Deputy Mayor for Construction of Shumen, Eng. Boyan Todorov, who signed the public procurement contracts.
This was made clear in the ruling by SPO Prosecutor Petar Belchev on January 14, 2022, in which he declined to initiate a pre-trial investigation and terminated the inquiry. A copy of the ruling was sent to the whistleblower from Shumen, Bilan Yankov, who filed the complaint with the prosecutor’s office.
The story of the wasted 402,000 BGN
dates back to 2016-2017 and would have faded into obscurity had there not been a waste separation crisis in Shumen over the past year. This brought back to light the failed initiative of several municipalities in the Shumen region to construct their own waste separation facility.
In 2016, under the Operational Program “Environment,” many Bulgarian municipalities had the opportunity to establish separating facilities with EU funds. Consequently, the municipal council in Shumen tasked Mayor Lyubomir Hristov with taking action to apply for the EU project in cooperation with the municipalities from the regional waste management association (RWMA). With the same decision, the councilors allocated 350,000 BGN (excluding VAT) for the preparation of the project.
In early 2017, the Municipality of Shumen announced not one, but five procedures for selecting contractors for the project preparation, resulting in five contracts totaling 402,000 BGN (including VAT). All five contracts bear the same date and reference number – Exh. No. 25-01-135 from April 13, 2017.
It is noteworthy that all five contracts are for approximately 67,000-68,000 BGN each, regardless of whether they pertain to cost analyses, surveys of public attitudes, or the preparation of projections. The contracts were signed with two companies: “Proproject Bulgaria” Ltd. and “ES-Energy Project” Ltd.
Experts on European projects were adamant that, from the perspective of the Public Procurement Act (PPA), there are clear violations in the procedure. The most significant violation is that a single public procurement has been divided into five separate procedures, resulting in the signing of five distinct contracts. This is unacceptable according to Article 21, Paragraph 15 of the PPA. According to the experts, there should have been only one procedure announced, adhering to all requirements for competition, equality, and the right to appeal as established by law.
Nevertheless, the pre-project studies were conducted, and the funds were disbursed to the companies, but the project never commenced. At the end of 2018, Mayor of Shumen Lyubomir Hristov announced that the application process had been terminated, as all project proposal documents needed to be redone and there was a risk that co-financing from the municipalities would become unaffordable for some of them. Consequently, during a working meeting at the end of 2018, the municipalities from the regional association decided to halt the application process.
After being alerted by the publication,
the prosecutor’s office initiated an inquiry and began investigating the case.
However, the prosecution is not addressing the missed benefits from the failed project, but is focusing on the violations related to the public procurements ordered by the Municipality of Shumen.
A financial inspection was commissioned for the Municipality of Shumen to verify whether violations indeed exist, as claimed in the publication by “For the Truth.” The audit by the State Agency for Financial Inspections (SAFI) concluded with a report dated September 29, 2021, confirming the facts outlined in the publication. The public procurement was indeed divided into five procedures, resulting in five separate contracts worth between 76,000 BGN and 82,000 BGN each. All contracts were signed by Deputy Mayor for Construction Boyan Todorov, who was authorized by the Mayor of Shumen.
The five contracts with the selected contractors were awarded through an invitation for offers. According to the financial inspection, the awarding of five public procurements through the invitation for offers constitutes a violation of Article 21 of the PPA.
Analyzing the conclusions of the financial inspection and the facts of the case, Prosecutor Petar Belchev from the Specialized Prosecutor’s Office ruled: “In the described case, in the exercise of his powers concerning the signing of the contracts, Deputy Mayor for Construction of the Municipality of Shumen Boyan Todorov violated the provision of Article 21, Paragraph 15 of the PPA, thereby breaching his official duties. On the other hand, the materials in the case file lack data regarding the subjective aspect of the act under Article 282 of the Penal Code.”
There is a lack of evidence
regarding the direct intent of Todorov to acquire a benefit for himself or others, or to cause harm.”
Subsequently, Prosecutor Belchev commented that although “a wrong procedure was applied in signing the contracts, this occurred within the limits of the law.” He concluded that there is no evidence of mismanagement, embezzlement, or disadvantageous transactions in this case, which led to the termination of the inquiry.
Thus, the story concludes—violations exist, but no one is held accountable. Neither for the 402,000 BGN squandered from the Shumen budget, nor for the failure of the waste separation facility project. Furthermore, the gap left by the municipality will likely soon be filled by a private company.
