Organized Crime and Corruption Center for the Study of Democracy 2005

Organized Crime in Transition Countries – the Case of Bulgaria  Structure of Organized Crime  Organized Crime Activities  Corruption  The use of violence or threats to use violence  Age of the OC structure  Conspiracy  Establishing market monopoly  Division of labor  Internal rules and sanctions in organized crime groups

Organized Crime in Transition Countries – the Case of Bulgaria  Structure of Organized Crime  Organized Crime Activities  Corruption  The use of violence or threats to use violence  Age of the OC structure  Conspiracy  Establishing market monopoly  Division of labor  Internal rules and sanctions in organized crime groups

Organized Crime in Transition Countries – the Case of Bulgaria Specificities of organized crime activities in Bulgaria, just like in Russia:  Protection  Mediation of business conflicts Organized crime developments :  From violence towards investments and corruption  From large hierarchical structures towards networks

Origin and history of organized crime in Bulgaria  Former sportsmen, security services officers, and criminals  1991 – robberies and racketeering  – protection of business entrepreneurs and smuggling of regulated goods  – smuggling of embargoed goods into former Yugoslavia, nationwide racketeering schemes  Introducing the insurance racket VIS-2 и SIK

Origin and history of organized crime in Bulgaria ViolenceCorruption Organization Market Origin Sporadic Chaotic NoneNeighborhood based No participation Widespread Chaotic Low-level policemen Primitive hierarchies Sporadic, protection Private Security Companies Widespread, coordinated Mid-level, prosecution National levelControl over some markets Insurance Companies Attempts to limit use of violence High-level politicians Competing groups at national level Control of some markets & investments

The Changing Nature of Organized Crime in Bulgaria  The end of the Yugo-embargo and the ban of crime-related insurance companies  Transition to networks and “grey import”  Legalizing businesses and investing black market profits  Control over domestic markets of raw goods  The heroin epidemics

The Changing Nature of Organized Crime in Bulgaria ViolenceCorruption Organization Market The Ban Abandoning the protection racket Police, prosecution Fragmented, creating international links Searching new sources of income Legalization TargetedEntire spectrum + Political elites Three levels of networks, internationalizatio n Privatization deals, “special markets” Redistributio n Executions at the highest level Entire spectrum + courts Three levels of networks + hierarchies, regions Monopolizing markets, domestic and international investments. EU- integration Executions at the highest level Entire spectrum, +EU accessions funds Three levels of networks, redistribution

Organized Crime as a Network

Smuggling (cigarettes, alcohol, gasoline / gas) Parallel imports, Duty- free shops Lasting goods (home appliances, white goods) Grey import – under- declaring values and quantities of imported goods Smuggling of Turkish goods Importing Chinese goods at under-declared values The Changing Nature of Organized Crime in Bulgaria

Organized Crime Hierarchies Cressey- Mafia Stricture V.Volkov- Russian Stricture

Organized Crime Hierarchies and Corruption V.Volkov- Russian StrictureBulgarian Stricture

Organized Crime as Network and Corruption

Studies of Irregular Payments  Irregular Payments = (market size in terms of number of containers) x (irregular payment per truck)

Organized Crime Hierarchies and Corruption in Bulgaria’s Drug-Distribution Market Drug distribution areas coincide police precincts. Each is headed by its own boss Hierarchical structure under the area’s boss