Bulgarian Constitutional Court judge nominee faces money laundering allegation

Written by on December 7, 2012 in Bulgaria, News - No comments

Galya Gougousheva, the only nominee for the vacant seat on Bulgaria’s Constitutional Court, has been alleged to have been involved in money laundering and using proxies to carry out commercial activity, bypassing the legal bar to Bulgarian magistrates doing so.

The allegations against Gougousheva are spelled in a letter sent by Plovdiv lawyer Petar Vanev to Iskra Fidossova, chairperson of Parliament’s legal affairs committee, a facsimile of which has been posted on Parliament’s website (in Bulgarian).

Based on publicly available documentation, including the property register kept by Bulgaria’s Register Agency and the property declarations submitted by Gougousheva to the Audit Office, the letter details numerous property and commercial transactions carried out by Gougousheva and her family.

The focus of the allegations is on Gougousheva’s son Stefan, who deposited nearly two million leva as equity into a firm that Gougousheva described as a “family investment company” (even though it was owned at the time by offshore companies registered in the Seychelles). The firm was later sold back to Gougousheva’s mother for an undisclosed amount, but not before the company acquired extensive real estate holdings and stakes in other property firms.

The same “family investment firm”, Legal Partners, gave Gougousheva more than 232 000 euro in loans, which she paid back in part thanks to a 95 000 euro donation she received from her son, Vanev’s letter said.

The letter claimed that Stefan Gougoushev owned, through his stakes in various companies, assets worth tens of millions of leva, and that the start of all these financial operations coincided with Gougousheva’s appointment as prosecutor in Sofia in 2006.

Vanev asked Parliament’s committee to investigate a number of things, including Gougousheva’s relationship with firms formally owned by her relatives and the source of funds used by her son to increase the equity of Legal Partners.

The reason for Vanev’s request was that “the facts as presented above give rise to doubts of money laundering, covert commercial activity by Galya Gougousheva and movement of funds of unclear origin, mainly towards the acquisition of real estate, with the participation of offshore companies.”

Gougousheva, in her media appearances earlier this week, denied that she or anyone in her family had any business interests in the real estate sector. Concerning the loans taken from Legal Partners, Gougousheva said that she used the money to buy apartments for her two sons and that the loan contracts were signed at her insistence in the interest of transparency.

Parliament’s legal affairs committee chairperson Fidossova said that the letter has been forwarded to the Supreme Judicial Council (SJC) and the council’s inspectorate, with a request for a detailed investigation.

Unlike in the debacle of Veneta Markovska – the previous nominee for the same seat, accused in a similar letter of conflict of interest and corruption – the committee would not be satisfied with the nominee’s explanations alone, Fidossova said, as quoted by Sega daily.

(Fidossova, incidentally, came under harsh criticism for dismissing the letter against Markovska during the latter’s hearing in the legal affairs committee, which endorsed Markovska for the job. The public row continued to escalate even after Parliament formally appointed Markovska, leading to President Rossen Plevneliev leaving Markovska’s swearing-in ceremony before she could take the oath, as The Sofia Globe reported at the time).

The head of the SJC ethics committee Yassen Todorov told Sega that his committee would investigate the allegations, but the council’s probe was unlikely to be concluded before December 19, when Parliament is scheduled to vote on Gougousheva’s nomination, the daily said.

Gougousheva, who is now deputy head of the appellate prosecution in the specialised criminal court (set up by Bulgaria earlier this year to deal with high-profile cases), is due to be heard by Parliament’s legal affairs committee on December 12.

She was nominated by the centre-right Union of Democratic Forces (UDF) – against the wishes of the party’s own MPs – after Prime Minister Boiko Borissov said his ruling party GERB would back any nominee by UDF for the vacant seat.

(Justice Palace in Sofia. Photo: Klearchos Kapoutsis/flickr.com)

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Alex Bivol is the news editor of The Sofia Globe.