Sofia Echo

Bulgaria

Bonus backlash

Author: Clive Leviev-Sawyer Date: Fri, Mar 02 2012 11248 Views
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Bulgarians appalled by the disclosures about the enormous bonuses that government ministers and top officials have been paid are quite likely to emphasise with the Billy Crystal line at the 2012 Oscars: "So tonight, enjoy yourselves because nothing can take the sting out of the world's economic problems like watching millionaires present each other with golden statues".

Whatever the monetary worth of those golden statues, the disproportion of the sums ladelled out could have political consequences in the views of ordinary Bulgarians – the ones who are the lowest-paid EU citizens, who are told time and again of the value of fiscal discipline, who suffer inadequate services and who may have been among the 50 000 people in this country who lost their jobs in January.

As the bonus scandal deepened, it was the subject for discussion on public broadcast Bulgarian National Television’s Referendum talk show on February 28. Viewers able to vote in the poll produced a more than 82 per cent majority in favour of a cap on bonuses of no more than 30 per cent of basic salary. Fifteen per cent voted against and the rest were undecided. Of course, given that it was a "yes" or "no" question, it would be a matter of speculation whether those who voted against either thought the level of the cap should be different, or thought that those in public office in Bulgaria were souls deserving of generous reward or, for that matter, benefitted from the bonus system.
 
Politics, politics
To fill in the background, the first sign of controversy was the news that the Finance Ministry had paid 235 000 leva in Christmas bonuses, although Finance Minister Simeon Dyankov countered that no one had got more than 3000 leva.

Then it emerged that National Health Insurance Fund chief Neli Nesheva and other senior staff had taken large sums from a total of four million leva paid in bonuses by the long-troubled institution. The outcry cost Nesheva her job.

Violeta Nikolova, who had headed the Registry Agency, was sacked for the twin offences of under-performance and taking large bonuses, adding up to 72 000 leva in 2011.

The Agriculture Ministry, it was confirmed, had paid 600 000 leva in bonuses.

All of this was clearly a threat to the image of Prime Minister Boiko Borissov’s administration, which since coming into office in July 2009 repeatedly has underlined its commitment to keep a tight grip on the purse strings and has highlighted the profligacy of the 2005 to 2009 socialist-led coalition that preceded it in office.

Though the story got a bit richer when details emerged of just how the previous government, or individual members of it, had been giving themselves pats on the back and a bit in the pocket.
 
Performance
After her dismissal, Nikolova insisted on television that she always had worked in the public interest, had never taken bribes, was not corrupt and "I have worked honestly 18 to 20 hours a day". She insisted that there was nothing wrong in someone assessing their own work.

Bulgarian-language media generally took a dim view of the idea that the performance of the Registry Agency justified substantial rewards.

This agency has a poor track record, including at one point the previous summer having stopped functioning and leaving the already cumbersome and onerous process of compulsory re-registration of companies with yet another delay. Nikolova was adamant, however, that she owed for having got it up to the level of what she called a functioning administration.

She said that she had not taken the full amount of the bonuses that the rules would have allowed her to.

That was a point that already had piqued considerable interest among Bulgarians. Just how much could an official add to their pay packet and on what rational basis, if any?
 
Politics, again
Borissov’s ruling party GERB, which had just been given comfortably high ratings in opinion polls and with some of its individual Cabinet ministers boosted by positive public perceptions of their performances during the February floods in southern Bulgaria, sought to hit by making public just what had been going on under the socialists.

Senior GERB MP Dimitar Glavchev alleged that there were discrepancies in tax returns and court declarations.

He said this on February 28, after a request for information established that 11 ministers, deputy ministers and members of the political cabinets of then-prime minister Sergei Stanishev’s administration had accepted 733 625 leva for sitting on the boards of companies in which the state has a stake. Of this sum, 315 470 leva had not been declared.

It emerged that socialist MP Kornelia Ninova, an MP for Stanishev’s socialists, had been paid just less than 7700 leva over four years for sitting on the board of then-state tobacco giant Bulgartabac.

There were disputes about figures. GERB alleged, quoting figures that it had requested, that then-finance minister Plamen Oresharski had been paid 4700 leva for participating in boards.

Glavchev said that Oresharski had "forgotten" to declare this income to the court. At a news conference called to respond to the ruling party’s allegations, socialist party leader Stanishev said that Oresharski had earned the money from lectures, not from board memberships. Stanishev essayed a defence of Oresharski’s merits, saying that then-finance minister had got back from Iraq a debt to Bulgaria of $300 million.
 
Damage control
By February 29, the Government was moving fast to contain the damage.

Senior GERB MP Iskra Fidossova said that legislation would be amended to provide for an additional payment system limited to a 30 per cent cap and with such payments awarded only on the basis of a three-monthly performance assessment system.

Reaching for a grip on the headlines, Borissov told journalists the same day that no Cabinet minister, deputy minister, chiefs of political staffs, district governors and their deputies, who had been in office during the crisis would be permitted bonuses.

They all had until March 2 to return the money or donate it to a children’s charity.

Failure would carry penalties: "If it is a minister, I will fire him or her; if it is a head of a political cabinet and he or she has not been fired by the minister, I will fire the minister," Borissov said.

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