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| Round Table: Disclosure and Prevention of Conflicts of Interest
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 On 17 June 2010, the Center for the Study of Democracy organized a round table on the application of and proposed amendments to the Law on prevention and disclosure of conflicts of interest. The discussion brought together governmental representatives, experts from NGOs, and business associations. The roundtable was organized with the support of the Balkan Trust for Democracy, and is part of a series of public discussions and activities promoting good governance of the authorities-civil society relationship.
 Dr. Ognian Shentov, Chairman of the Center, opened the discussion reiterating the great political significance of the legal regulation of conflicts of interest. It is important to enable the better management of public funds (including European funds) through the mechanisms of public-private partnerships. Therefore, discussions need to address not only the legal system, but also the regulation of conflicts of interest in the public administration both at the local and at the central level. Building a mechanism for preventing conflicts of interest is therefore crucial.
 Mr. Dimo Gyaurov, Chairman of the Standing Committee on Anti-Corruption, Conflict of Interests and Parliamentary Ethics shared his support of the bill while also recognizing its weaknesses. Among the weaknesses is a possible breach of division of powers that might arise from the interference of the executive in the activities of the judiciary, which can occur when a single authority for control of the conflicts of interest is created. In Mr. Gyaurov’s view, the Parliamentary Committee should continue to function in cooperation with the newly created body. The Committee could continue its control of conflicts of interest among members of parliament and have some control over the newly created body within the executive power. It is also appropriate to enable the judiciary to control conflicts of interest among its own representatives. Meanwhile, establishing a new single authority would allow for the speedy resolution of issues that are not manageable for a 5-person committee (e.g., promptly verifying facts from MPs declarations).
 Dr. Maria Yordanova, Director of the Law Program at CSD and moderator of the discussion, pointed out that the recent changes to and the adoption of the law point to the active role of the Ministry of Justice in the legal regulation of the conflict of interest. This active engagement is a welcome change from previous practices of patchy and fragmented work.
 Ms. Janeta Petrova, Deputy Minister of Justice, noted that the Law on prevention and disclosure of conflicts of interest was a focus of her attention back when she served as a judge at the Supreme Administrative Court. As part of its 5th Division, which currently handles the administrative and legal disputes of the law, she and her colleagues encountered great difficulties in interpreting its provisions and implementation. The Law on prevention and disclosure of conflicts of interest has no prior analogue in the legal system, thus, placing the Supreme Administrative Court in an atypical position - that of a sanctioning administrative authority. The Supreme Administrative Court has already established good practices in this area, which can serve as the basis for future legislative changes related to the conflict of interest. The atypical role of the court, however, has led to some problems with the law’s enforcement at its commencement. In response to the European Commission’s analyses and recommendations, the Ministry of Justice proposes the creation of a single authority. This way, while keeping the system of existing bodies intact, the newly created authority will focus on identifying conflicts of interest, while the court will rule on detected conflicts of interest instead of imposing administrative sanctions.
 Mr. Konstantin Pentchev, Chairman of the Supreme Administrative Court, stated as obvious one of the main prerequisites of the law under which it is unacceptable that, in a single case, the lawyer and the judge or the prosecutor and the judge are in kinship. Yet, the latter was not as obvious prior to the enforcement of the Law on prevention and disclosure of conflicts of interest. As a result, it has been long claimed that there is no controversy in cases where company owners who have direct family ties to public officials participate in and win public procurement contracts awarded by these same officials. In some cases, even senior judges do not respect the above mentioned basic rules. For example, the Supreme Judicial Council ruled three times that there is no conflict of interest in cases where two of its members were involved in the management of a NGO, as no private interest was established. In this case, the Supreme Judicial Council did not take into account the fact that under the Law on Judiciary, specific positions are incompatible. More specifically, the Law on Judiciary banns members of the Supreme Judicial Council from participating in the management of NGOs. It must be noted however, that there are cases when people are involved in a conflict of interest situation through no fault of their own. For example, there are two cases in the administrative courts when, after an interview, a husband and wife are appointed at the same court in a position of subordination - a fact which is treated by the law as a conflict of interest. Meanwhile, there is no procedure or legal option that allows their administrative managers to reassign them to another administrative court. Therefore, changes to the Law on prevention and disclosure of conflicts of interest are a good opportunity for solving these types of issues.
 Mr. Todor Yalamov, Senior Analyst at the Economic Program at CSD, shared a different perspective on the Law on prevention and disclosure of conflicts of interest. Despite difficulties in finding statistics on enforcement of the law, publicly available data exist of the cases when private interests are declared. Less than two percent of the administrations have declared such cases, which amounts to about a hundred people. Meanwhile, media publications suggestive of or revealing the existence of private interests or conflicts of interest are much more numerous. This means that there is likely a problem in our self-assessment of what is abnormal and in detecting private interest. According to Mr. Yalamov, the greatest benefit to the law is its political significance and the impact of its adoption. An additional benefit is the provision of journalists with access to information through the declarations required as per the Law on prevention and disclosure of conflicts of interest. However, accompanying the latter development is the problem that about half of the administrations have not published these declarations on their respective websites. There are various reasons for that - some of the administrations have no websites, while in other cases the persons filing the declarations did not grant permission to publish their data. There are already many examples where tying the information from a single declaration to data from other records allowed citizens or investigative journalists to conduct a thorough investigation. These investigations were then published in the media and led to the corrective action of the respective institutions. Most of the examples that were effective on a national level worked exactly this way.
Building on Ms. Petrova’s statement about the relationship of the Law on prevention and disclosure of conflicts of interest to other laws, Mr. Yalamov further stressed on the existing relationship between the detection of conflicts of interest and the matters regulated by two other existing laws. The first is the Law on the Commercial Register, which enabled citizens and the media to investigate cases of conflict of interest and assist governmental institutions that lack the resources to do so. The continuation of this practice requires access to the Commercial Register to continue to be free and exhaustive. The Center has advocated for years for a common registry reform to allow the currently fragmented administrative information to be summarized and made comparable. This also applies to data disclosed under the Law on prevention and disclosure of conflicts of interest, so that every citizen can track information from the declarations on conflicts of interest. The second law related to the Law on prevention and disclosure of conflicts of interest is the Law on Non-Profit Legal Entities. Among the major problems identified by CSD and leading to the idea of civil society capture was the fact that many high officials from the central and local authorities participated in NGOs receiving funding from state and European sources. Even for-public-interest entities whose information should be available in the public NGOs register of the Ministry of Justice, data is difficult to find, as this registry is non-functioning. To increase the law’s effectiveness, Mr. Yalamov proposed that non-profit organizations are also registered at the Registry Agency, allowing for speedier and cheaper inspections of declared private interests.
 Ms. Nevyana Kaneva noted that one of the biggest problems in debating the law is the combination of two approaches when describing what constitutes a conflict of interest. On one hand, the law provides a general and abstract definition of conflicts of interest, on the other, it outlines concrete prohibitions. The result is particularly visible in court rulings where in spite of evidence for specific violations of these prohibitions, a benefit (i.e. private interest) needs to be demonstrated for legal sanctions to be enacted. This is the reason why series of cases identifying conflicts of interest were dismissed in courts. The amendments to the Law on prevention and disclosure of conflicts of interest attempt to overcome this problem by providing a more precise definition of private interest. Yet, Ms. Kaneva proposed a change to Article 2 to address any violation of the prohibitions described in the Act, as well as cases where a person has acted in a private interest. Current interpretation actually masks the boundary between conflicts of interest and corruption. The second important issue is controlling the declarations, which are an additional preventive method. The proposed amendments to the Law on prevention and disclosure of conflicts of interest suggest that respective committees retain control over the declarations; yet imposing sanctions should be entrusted to the newly created committee. According to Ms. Kaneva, that disrupts the process of identifying violations and penalizing them. Lastly, maintaining the independence of the commission was identified as crucial, thus, Ms. Kaneva proposed that the rules of operation of the new committee should not be adopted by the National Assembly, but by the committee itself.
Mr. Alexander Kashumov, Access to Information Programme, also confirmed the importance of the Law on prevention and disclosure of conflicts of interest as it relates to publicity and access to information. His organization expressed the view that continuous changes of the legal framework, though pressing and appropriate, overwhelm the judicial system. Mr. Kashumov identified as the most important issue the access to the declarations of conflicts of interest. Two recent decisions of the Commission for Personal Data Protection have further obstructed the access to these declarations. The two decisions allow some administrative bodies to publicize the fact that the persons concerned have submitted declarations, but not to publicize the contents of the declarations. The second problem encountered by the Access to Information Programme is the access to publicized reports of the committees managing conflicts of interest.
Agenda (Adobe PDF, 23 KB)
Seminar: Conflict of Interest, Good Governance and Management of the Local Authority - Civil Society Relationship, Hadjidimovo, May 14, 2010
Amendments to the Law on Prevention and Disclosure of Conflict of Interests (in Bulgarian)
Facebook Cause: Civil society for prevention and disclosure of conflicts of interests
Report: Crime without Punishment: Countering Corruption and Organized Crime in Bulgaria
Media Coverage (in Bulgarian) | |
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