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Andrei Lukanov, red baron of Bulgaria

Andrei Lukanov, red baron of Bulgaria


As his body lay in a morgue in Sofia – and he was not spared the final indignity of a photograph of it, nude, being published on the front page of a tabloid – word already was spreading that Andrei Lukanov had been destroyed by what he had created.

The murder of Lukanov, erstwhile communist cabinet minister, prime minister for less than a year (during which his party relabelled itself from communist to socialist) and alleged organised crime kingmaker, remains officially unsolved. Those convicted of it, not long after his October 1996 murder, were acquitted on appeal 10 years later, the court finding shortcomings in evidence, procedural irregularities and accepting the claims of the accused that they had been seriously assaulted during interrogation.

Unofficially, theories endure as to the motives for his murder; principal among these, that he was eliminated on the orders of someone from within the business empires that he had helped create; that he was killed because former political associates feared that he was about to make public evidence that they were corrupt; and, perhaps an inevitable theory, that it was a hit by the Russian mafia to remove an obstacle to its interests in Bulgaria.

Vanguard
Had communism not fallen, Lukanov might have had a much more conventional career. He had the pedigree. A third-generation communist, he boasted among his ancestors a founder of the Bulgarian Communist Party. Lukanov’s father Karlo was foreign minister of Bulgaria from the late 1950s to the beginning of the 60s.

Andrei Lukanov rose rapidly, studying in Russia – where he had been born – at the Institute for International Relations in Moscow, moving on to posts representing Bulgaria at the United Nations and in the communist bloc’s trade and economic structure Comecon, achieving cabinet rank as minister of foreign economic affairs in 1987.

A significant mark of Lukanov’s weight at the time is that he managed to remain in place and grow in influence in spite of the fact that his boss, long-standing dictator Todor Zhivkov, did not like him. Various memoirs describe Zhivkov as seeing Lukanov as everything from a dangerous reformist to (and this could explain Lukanov’s durability) an agent of the KGB, possibly even the GRU, the Soviet foreign military intelligence directorate.

Lukanov, who as even his rivals and enemies later would acknowledge, had the intellect and the wit to read the signs of history, interpret and act on them, was thus at the core of the party coup that saw Zhivkov ousted on November 10 1989.

This was by no means merely pragmatism in the political sense. Lukanov, it seemed, was among those who wanted to combine reforms of the variety that would guarantee a continuing monopoly of power while turning the state’s resources to the building of capitalism, or at least, individual capitalists.

‘Red briefcases’
Within less than two weeks of Zhivkov being toppled, Lukanov was at the United States embassy in Sofia, saying – as recorded in a cable – that he, along with Petar Mladenov and others who led the coup, was "deadly serious" about the democratisation of society.

Lukanov said that the new leadership would, over the coming weeks and months, "concentrate on doing a thorough review/analysis of the state of the economy".

The ambassador, Sol Polansky, in a comment closing the cable, said that "by its actions to date, the new leadership does intend to move toward a more open society, with pluralism of opinion if not, at this stage, multiple parties (excluding the Agrarian Party)".

Around the same time, Lukanov and members of the cabinet held two days of discussions with economic advisers from Western countries including the US on proposals for economic reform.

But there is also a darker side, because it was around now that, so the story goes, vast sums of money were passing from state coffers into private hands; or at least, a new corps of well-resourced entrepreneurs was born, with the origins of their funding unclear. It was the time of the "red briefcases" of cash.

Ivo Nedyalkov, the collapse of whose East – West International Group in 1994 left thousands of small depositors empty-handed (he was prosecuted and convicted, in turn winning an appeal with damages against Bulgaria in the European court), has alleged in a television interview that there is some truth to the story.

According to Nedyalkov, in November 1989 Lukanov convened a meeting of people from the then-establishment to tell them "I am appointing you millionaires". What this meant, Nedyalkov said, was that more than 150 people from the ruling circle were given easy loans of millions of leva. He himself borrowed on this basis during the first years of the transition, but repaid it all, he said.

But Nedyalkov declined to identify any of those who had benefitted from Lukanov’s largesse, saying only that among those involved were people who had been in the insurance industry and who had been "bosses" but were now dead.

In power
Lukanov’s term as prime minister, from February to December 1990, was less than illustrious. Taking office, he announced in Parliament a programme to get Bulgaria out of its "political, economic and moral crisis". Nine months later, faced with a continuing economic crisis, dire shortages of goods, a general strike and street protests, and a collapse of confidence following his moratorium on foreign debt repayments, he vowed that he would not allow the opposition to drive him out of office, and when asked by a reporter whether he would be stepping down, he snapped "not now!" A few weeks later, he resigned.

He was out of office, but not out of power. Since his days as minister of foreign economic affairs, Lukanov had built up extensive contacts in international business circles. Robert Maxwell, who died in November 1991, had been among these since the communist era, when the controversial tycoon did deals with the Zhivkov regime.

However, matters were interrupted in 1992 when, during the term of office of the Philip Dimitrov government, Lukanov was held in custody for some time pending charges of large-scale financial irregularities while in office. Lukanov was released without these going to trial.

The list of people to whom Lukanov gave some form of assistance in their political, private sector or other form of public careers is a long one (and this is not to imply wrongdoing in their relations). It includes Roumen Petkov, who later was interior minister for part of the term of office of the Sergei Stanishev socialist-led government; Andrei Raichev, a well-known political commentator; it is said that Lukanov performed some introductions for business person Petar Mandjukov, currently a media owner with a background including the weapons and oil industry.

Lukanov was also widely reported to have been in at the communist-era founding of the Neva project, which is said to have been initiated by the KGB, figures from Bulgaria’s communist-era State Security and Maxwell, to make the most of large sums - including in foreign currency - moving it about as best suited those involved, which allegedly included the acquisition of Western IT for copy-catting in the Soviet bloc. In 1996, prosecutors moved against a number of senior figures, including former ministers, deputy ministers and a former ambassador to the US, all for alleged serious fraud through their involvement in Neva.

The early 1990s were also the time of the rise of various powerful business enterprises – Multigroup, Tron, the Orion circle as the big players, with other groups in time also becoming household names, such as VIS, SIC and TIM. Lukanov is believed to have been in at the founding of Multigroup, although in turn his relations with another powerful figure there, Iliya Pavlov, soured. Roumen Ovcharov, a minister in the Zhan Videnov government and later economy and energy minister in the Stanishev government, gave evidence during the Lukanov murder trial of hearing, some weeks before Lukanov’s death, a vitriolic shouting match between Lukanov and Pavlov.

The Orion circle, which was perceived as close to Videnov, whose own socialist government would collapse in uproar as a result of the 1996/97 financial meltdown, was the subject of public criticism by Lukanov, who called Orion a "marauding gang".

Tron had its own notable aspects, including media ownership – at least one radio station and a newspaper – while its boss Krassimir Stoitchev was an original owner of Mobiltel.

Further, another significant episode in Lukanov’s career was his place at the head of Topenergy, a Russian-Bulgarian gas enterprise with Gazprom making up Moscow’s component. In turn, Gazprom and Multigroup were said to enjoy cordial relations. The Topenergy episode ends in mystery; Lukanov had the job from May 1995 until July 1996, when he was dismissed abruptly with no public explanation. His replacement was Pavlov.

Politics
Lukanov continued to speak out strongly in his criticisms of the socialists in power. He was an arch-critic of Videnov, alleging that the prime minister was a "Stalinist" and that he was rolling back reforms.

In turn, remarkable things were being said from within the socialist upper echelon of power. Nikolai Dobrev, interior minister in the Videnov government and who, with Georgi Purvanov and Georgi Pirinski later would move to oust Videnov from the leadership of the BSP, gave speeches in 1996 bemoaning the grip of organised crime on the country (aficionados of such matters may wish to contemplate Dobrev’s statements and how similar they would prove to those made by a succession of interior ministers in subsequent governments of every political stripe).

The Interior Ministry, Dobrev told a March 1996 BSP supreme council meeting, was "infected with the cancerous tissue" of certain powerful groups that made crimes and political protection of crimes possible. "I have evidence that employees of the ministry are associated with violent gangs," he said. "That violent gangs have better penetration of the Interior Ministry than we have of them is a bad fact."

"I want to smash the criminal gangs," Dobrev said.

Speaking in December, he decried what he described as the "absence of the state" that was obvious from checks in commodity exchanges and in wholesale markets. Books were cooked, goods subject to excise lacked excise labels. He asked, rhetorically, how it could be that criminal groups acquired concessions for beaches and tourist sites, how they acquired sites for garages and car dealerships.

Death at the door
Accounts of events involving Lukanov in the weeks before his death are all, by definition, hearsay.

He is said to have told close associates that he had proof that senior government figures were involved in large-scale misappropriation of public money.

Similarly, Lukanov is said to have been ready to go public with disclosures regarding Topenergy.

He is said to have been preparing for a lengthy stay in the US.

The story goes that on the eve of his death, his bodyguards – a corps of bareti, former security service members – withdrew, apparently at his request; strange behaviour for a man who supposedly had been preparing to take on the role of whistleblower and to then quit the country.

There are reports that a man "dressed as a tramp" had been hanging around the Lukanov house for some days. There are conflicting reports that there was only one eyewitness to his killing, variously his wife and his driver. Either way, Lukanov’s life came to an end at 9.20am on October 2 1996, when a man described of a "tall, slim" build stepped up to him and fired four bullets into him at close range.

Aftermath
Not long after, the Sofia street was swarming with police and senior officials. Even the Russian ambassador, Alexander Avdeev (who went on to a series of senior diplomatic posts and later became Vladimir Putin’s minister of culture) came to the murder scene. Bulgaria made world headlines; it was the country’s first public "political" murder in decades.

The murder was condemned in Parliament by all parties. Videnov said that the killing was an attempt at destabilising Bulgaria and vowed that the killers would be caught. Parties agreed that the presidential elections, of which the first round was due to be held in 25 days, would go ahead as planned. (They did, with Petar Stoyanov as presidential candidate of the centre-right Union of Democratic Forces, with Todor Kavaldjiev as his running mate, beating into second place the socialist party’s Ivan Marazov and Irina Bokova. Stoyanov’s success was to prove decisive in the subsequent downfall of Videnov.)

As noted, there were the arrests and convictions of a group of Bulgarians and Ukrainians, and then the prolonged appeal process. Pavlov was among those who gave evidence during the appeal, in March 2003; the following day he was dead, shot in the heart outside the entrance of the headquarters of MG, the lineal descendant of Multigroup. At the time of his death, he was worth an estimated 1.5 billion euro and was reported to be Europe’s eighth richest man. Multigroup, in turn, had been lavish in its patronage, reportedly helping to pay for the education of several bright young people.

The clothing that the "tramp" had been wearing was found, as was the Makarov pistol, 40 days later, in the grounds of a Sofia school. Among the reasons for the conviction of the group of accused being overturned were shortcomings in the evidentiary trail; another was the assault, in a house in Bozhentsi, of some of the accused (conspiracy theorists like to suggest that this is precisely why they were assaulted, to pre-empt a successful conviction).

Conspiracy theorists, at least some of them, also like to suggest that Lukanov is not dead; that the apparent murder was a ruse, aided and abetted by someone still well-known in Bulgarian politics. Post-plastic surgery, they say, Lukanov lives on.

And his legacy? If indeed it is true that he played a significant part in the distribution of wealth to subsequently well-known controversial groups and individuals, then he should share an epitaph with Christopher Wren, and others: "Si monumentum requiris, circumspice". If you seek his monument, look around you.

But it may also be worth adding the closing words of Richard Crampton’s obituary of Lukanov in The Independent, two days after the murder: "During both his political and financial careers Lukanov had made many enemies, but he had also made friends. A most accomplished linguist and a man of considerable culture, he was clubbable as well as capable".