Bulgarian Prosecutors launch formal investigation about Government deal with Microsoft

The prosecution office of the Bulgarian capital Sofia has launched a formal investigation about the contract Bulgaria has signed with a Microsoft distributor for the acquisition of software for the needs of the state administration.

The investigation is based on collected data and proofs in a preliminary probe, made by the police. It aims at “unnamed public officials”, according to Sofia city prosecution spokesperson Steliana Kozhouharova, as quoted by the Bulgarian influential Dnevnik daily.

I’ve blogged about this dirty deal in details in December 2007. In short: the price, paid for the software (by the way, well in advance – 6 months before the beginning of the contract; the distributor said that he’ll keep the money “in a Bulgarian bank” thus making sure he contributes to the financial system of the country /sic!/) is much higher than the price of the same software in the shop. The average computer shop in Bulgaria sells the software for half the price, paid by the government. Considering the fact, that in such huge cases, Microsoft usually gives high discounts, it is interesting to see what the prosecution has found in its preliminary probe in order to file a formal investigation.
The distributor – CAPK “Progress” (a remnant from communist time, as it was found well before the changes in Bulgaria, and to some sources considered as a company, organized by the former State Security) has offered price of Leva 68 760 000 (approx: Euro 34 M; 1 Euro is equal to 1.95 Bulgarian Leva by law) for 60 000 licenses for PC and Leva 2 674 100 for 2000 licenses for server operating systems (OS). With the 20 % VAT the total amount reaches Leva 85,7 M or almost Euro 44 Million.

[Minister of State Administration] “N.Vassilev, who has come under strong public criticism for signing the deal, refused to comment on the prosecution inquiry, telling Dnevnik he had not heard of any probe”.

Microsoft has been blamed publicly for bringing corruption to the emerging markets, most recently in Budapest, Hungary in May this year, when Steve Ballmer was egged while giving a speech at the university.
The U.S. company was also fined by the European Commission with record Eur 899 M in February, that after some more fines ranging in the hundreds of millions Euro in the previous years.

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