site.btaUPDATED Prosecution Service Takes Up Allegations of Irregular Contracting in Construction of TurkStream

The Sofia City Prosecution Office will be looking into media reports about irregular contracting in the construction of the TurkStream gas pipeline extension via Bulgaria. A press release by the prosecution service says that the alleged violations concern the selection of a contractor, a deal between the contractor and subcontractors aiming to bypass legal restrictions, and the stepped up construction of the pipeline.

The press release does not say what exactly the procedure will be and only mentions that a randomly selected prosecutor will decide what actions to take by the Judicial System Act and the Code of Criminal Procedure.

The prosecutors were apparently following up on publications by the Anti-Corruption Fund earlier in August, where the said violations transpired based on information from hacked emails of Russian politician Alexander Babakov. 

The ACF findings

In its findings published on August 26 and 29, 2023, the Anti-Corruption Fund showed a memo from a meeting in Istanbul between "the Russian, Bulgarian and Arab sides" - probably referring to Saudi Arabia as the place of the seat of Arcad, which was ultimately selected as a contractor in the TurkStream extension project in Bulgaria - which was held on July 1, 2019 but was never announced to the public. It took place after the bids were placed for the construction of the gas pipeline network. The participants in that meeting discussed unlawful contracting "under Russian supervision" and financing from Gazprom and Russian banks. 

In a second publication, ACF showed a letter from Tsvetelina Borislavova, Chairperson of the Supervisory Board of the Bulgarian-American Commercial Bank (BACB), to Alexander Vorobyov, an adviser to Babakov and a sanctioned person in exactly that capacity. The email makes it clear that BACB was the investment bank chosen by the contracting parties for the implementation of the project. It is not clear who these "contracting parties" were, since, on paper, that was a public procurement procedure for the construction of infrastructure, and BACB cannot be anything other than a servicing bank of the contracting authority, i.e. of the state-owned Bulgartransgaz. What is more, the procedure for selecting the financing bank for this project was launched only a year later, in June 2020, the Anti-Corruption Fund said.

"The big question remains as to what the real deal at the top was for this project between then Prime Minister Boyko Borissov and Russian President Putin," the Anti-Corruption Fund wrote.