Millions Behind the Curtains: ACF Uncovers Dubious Procurement Practices at Four Cultural Institutions

An investigation by the Anti-Corruption Fund Foundation (ACF) has uncovered violations and suspicions of distorting competition in public procurement procedures organised by several cultural institutions.

The tenders contracted for the provision of construction supervision and refurbishment services, worth nearly EUR 5 million, in four entities under the umbrella of the Ministry of Culture: State Theatre of Satire Aleko Konstantinov, Drama Theatre Lovech, City Theatre Behind the Channel, and the National Cultural Education Complex and School for the Study of Italian Language and Culture.

“Our analysis of the public procurement procedures shows violations of the terms of reference,” said Daniela Peneva, a legal expert at the ACF. “Furthermore, an email communication that came to our attention raises concerns that contractors may have been selected before the start of the tenders.”

Violations of the terms of reference

The tender documents show that in five of the eight tender procedures under review, the awarded contractors had not completed similar projects in the past five years, as required in the terms of reference. One of the awarded companies, Multi Stroi Comers Ltd, did not meet the financial criteria in the tender for the refurbishment of the building of the National Cultural Education Complex and School for the Study of Italian Language and Culture.

An additional violation was detected in the tender that awarded the contract to refurbish the City Theatre Behind the Channel building. In this case, the evaluation committee disqualified candidates for failing to meet the technical criteria after having already reviewed their financial offers.

“Our findings raise the question of how these specific companies were selected and whether the awarding parties exercised all due care in checking their capacity,” said Peneva.

Ties between the awarded contractors raise suspicions of manipulated tender procedures

The ACF has established that the reviewed public procurement tenders were awarded to three companies or consortia formed by them.  The selected contractors were Crypto Energy Ltd, Multi Stroi Comers Ltd and D&D Ltd, or consortia in which they participated. Publicly available information reveals the existence of many ties among these companies.

Two of the companies, Crypto Energy and Multi Stroi Comers, are linked to a single person, Petar Duylgerov. The two companies share the same address – 21 Hristo Belchev Str. in Sofia. Furthermore, Dyulgerov’s phone number is listed in Multi Stroi Comers’ entry in the central professional register of building companies. Dyulgerov’s phone number was also listed as a point of contact for Teatral, a consortium between Multi Stroi Comers and D&D, which was awarded a contract by the City Theatre Behind the Channel.

Another detail that stands out in the tender documents is the repetition of the names Ivan Sotirov and Kristian Sotirov. Both lawyers, the father and son were hired by the cultural institutions as external experts to prepare the tender documentation and to participate in the expert evaluation committees. The consortium Teatral was listed in the register by Ivan Sotirov. In turn, the son, Kristian Sotirov, was a member of the evaluation committee which awarded the contract to the company.

An email from 16 May 2024, which ACF has access to, reveals details about a suspected scheme in the tender procedure awarding the detailed design and design supervision of the refurbishment of the State Theatre of Satire building.

The email is sent by Ivan Sotirov, who served as expert on the evaluation committee, to several recipients, including Kalin Sarmenov, the theatre’s director, and project manager Elena Trichkova. It contains documentation relevant to the upcoming tender.

Among the email recipients is Crypto Energy, the company which was subsequently awarded the contract.

“The email communication shows that Duylgerov’s company was privy to key information about the public tender at least six days before it was announced,” said Peneva. “This is a blatant violation of the principle of equal treatment of the participants in the public tender, as it provides Crypto Energy with an opportunity to prepare its offer based on inside information not available to the other candidates.”

When approached for comments, Elena Trichkova said that the email, containing inside information, likely reached Duylgerov by accident.

According to Peneva, the links between the awarded companies and the repeated participation of Ivan Sotirov and Kristian Sotirov as external experts raise the question of whether inside information was not shared in the course of the preparations for all reviewed tender procedures.

The ACF sent inquiries to the awarding entities and the selected contractors.

According to Biliana Ivanova, director of the National Cultural Education Complex and School for the Study of Italian Language and Culture, Multi Stroi Comers provided documents proving its professional experience. Those documents were then reviewed by the evaluation committee. On the issue of the failure of the awarded company to meet the financial criteria, Ivanova said that the committee had conducted a compliance check on the basis of the provided documents.

Crypto Energy’s owner, Petar Dyulgeriv, did not offer details on the issue of links between the awarded companies and his possible involvement.

The ACF will report this case to the Public Financial Inspection Agency and the Ministry of Culture. We will monitor their response and inform the public about these institutions’ reactions.