A Bulgarian ex-banker is pushing to be the first case considered under the Global Magnitsky Human Rights Accountability Act, a law passed by Congress that allows the government to levy sanctions in retaliation for human rights abuses and corruption.
Tsvetan Vassilev, once named the most influential man in Bulgaria by Forbes, claims his country is persecuting him with false and politicized charges.
He recently hired the Washington firm JWI Inc, signing a $50,000 six-month contract, to help process an application to be considered under the Global Magnitsky Act. That law allows the U.S. government to place targeted sanctions on anyone who, among other things, retaliates against whistleblowers exposing government corruption.
Vassilev has been indicted more than once by the Bulgarian government for money laundering and embezzlement related to the failure of Corporate Commercial Bank (Corpbank), where he was a majority shareholder.
Bulgaria has had Interpol, an international police organization that operates in 190 countries, place a red notice on Vassilev’s head for “misappropriation in public office in particularly large size, representing a particularly serious case.”
“In essence the Corpbank model … is a mechanism through which a group of people led by Tsvetan Vassilev managed to appropriate the public funds attracted and entrusted to them for management in the bank,” Bulgarian prosecutors said in a statement earlier this year, following another indictment against Vassilev and 17 others from the bank.
The government said Vassilev and other bank officials embezzled more than $1.5 billion while at Corpbank and siphoned even more from the bank’s coffers, which Vassilev denies.
Now Vassilev is hiring consulting and law firms to convince Washington that he’s been wronged.
Before signing the contract to represent him, Joseph Augustyn, an executive vice president at JWI Inc., flew to Serbia — where Vassilev and his wife are exiled — to meet with the ex-banker. A friend of Augustyn’s suggested the former banker needed help.
The saga involves a complicated web of accusations from both the Bulgarian government and counterarguments from Vassilev that date back several years. Even in the post-Soviet era, the country has a checkered record on corruption-related issues.
Although Augustyn, who spent nearly three decades at the CIA and speaks Russian, says that his intention was only to visit Vassilev and listen — with no promises of any kind of representation — he told The Hill that he became convinced of Vassilev’s innocence after a series of conversations.
Now Augustyn is helping the former banker pursue recognition under a U.S. law, updated last year, named after the late Sergei Magnitsky.
Magnitsky was a lawyer on which the Russian government levied several criminal charges after he exposed a $230 million tax fraud scandal. He later died in a Russian prison under mysterious circumstances.
The first Magnitsky Act, passed in 2012, focused on sanctions against Russians. The Global Magnitsky Act, which was included in a Pentagon spending bill signed into law in December, expanded the ability for the U.S. to cut off access to visas and the U.S. banking system to individuals in any country.
There have yet to be any formal applications filed as potential applicants await guidance from the State Department and the Treasury Department.
Former New Mexico Gov. Bill Richardson (D) is also getting involved in the Vassilev case through his nonprofit organization, the Richardson Center for Global Engagement.
Richardson told The Hill he’s known Vassilev since the two served on the Atlantic Council. His foundation handles various issues — including helping political prisoners and working to protect wild animals around the world — but is now expanding to human rights issues, including Magnitsky Act cases.
“The end result doesn’t have to be sanctions,” said Mickey Bergman, a vice president at Richardson Center for Global Engagement. He hopes that “if [just] the threat of [a case] being processed … is enough to influence behavior, it will be a really powerful way to show the Global Magnitsky Act can work.”
The government of Bulgaria, a NATO member that’s part of the European Union, has indicted Vassilev on multiple charges. Among those, it says that he operated a criminal operation within Corpbank, where he was a majority shareholder.
Corpbank was once Bulgaria’s fourth-largest lender, but it went bankrupt after a bank run obliterated its deposits. Bulgarian state prosecutors raided the bank’s offices, and the Central Bank ended up taking control.
Vassilev and his wife have fled to Serbia, which is not a member of the EU and does not have an extradition treaty with Bulgaria. Courts in Belgrade have not moved to grant Bulgaria’s request to extradite him.
Those representing Vassilev say there are two individuals at the center of the plot against him: Delyan Peevski, a media oligarch and member of Bulgaria’s Parliament, and Sotir Tsatsarov, the chief prosecutor of Bulgaria.
Vassilev had tried to call out corruption in the government, according to a white paper penned by JWI, by supporting political groups and parties that urge for political reforms.
Peevski, who had taken out a sizable loan from the Corpbank to help fund his media empire, allegedly declined to repay the loans, according to the Bulgarian Telegraph Agency, the country’s national news outlet. He denied the allegations, saying that all the loans had been repaid.
Reports began to surface in Bulgarian media that Peevski hired attackers to have Vassilev killed. Peevski made similar accusations against Vassilev. Both have denied the allegations.
When the feud broke out in 2014, the politician blamed Vassilev, his former ally, of obfuscating his own wrongdoing by making accusations against others.
“The convenient excuse — Peevski — is used to disguise and crush problems and questions to which Mr. Vassilev himself needs to respond,” Peevski told a Bulgarian news site at the time, according to Reuters.
The State Department issued an annual report for the investment climate in the country, as it does for countries worldwide.
“The judiciary continues to be the least trusted institution in [Bulgaria], with widespread allegations of corruption and undue political and business influence,” the report for 2017 reads.
These kinds of statements about corruption from the U.S. government and nonprofits are what drive advocates for Vassilev.
President Trump wrote a letter to Congress in April, signaling that he wants to take up Global Magnitsky Act cases.
“My Administration is actively identifying persons and entities to whom the Act may apply and are collecting the evidence necessary to apply it,” Trump said.
Augustyn, in representing Vassilev, is optimistic that the case will make the bar. There is a lengthy application that needs to be filled out and submitted to the State Department.
Once the State Department finishes its own probe of a case and agrees it should move forward, it sends it off to the Treasury Department’s Office of Foreign Assets Control (OFAC), which handles sanctions.
Once OFAC checks the application, which takes an unknown amount of time, it could then reach the president’s desk for approval.
“I came into the [CIA] speaking Russian, I’m familiar with that part of the world. … How do you translate that skill set to private sector? We’re used to dealing with certain law enforcement agencies, we know how the process works. We read people pretty well,” he said.
“People rely on us for our ability to maneuver around town and the law enforcement community, the intelligence community,” he added. “That’s the kind of thing that we do.”
— This article was updated at 4:30 p.m.