Corruption crisis in Latvia

Whilst all eyes are on Lisbon and the Constitutional Treaty, some constitutional problems are again raising their heads in Riga. The problems in the small but perfectly formed Baltic state of Latvia have come about because head of the country's anti-corruption chief, Aleksejs Loskutovs has been fired. This is an edited version of the report that we have recieved from the European Parliament office in Riga, and follows previous reports on the unfolding crisis that I have posted here.

Latvia´s Cabinet* yesterday recommended the dismissal of Latvia´s Anti-Corruption Bureau head Aleksejs Loskutovs who has avidly pursued investigations tied to persons connected with the ruling coalition. An ad hoc investigative committee composed of Cabinet members, the National Security Council chairman and headed by the General Prosecutor had not made an official recommendation, according to leading daily Diena. Moreover, the General Prosecutor´s office termed the temporary dismissal by Prime Minister Kalvitis ("People´s party", EPP-ED) as "unwarranted" and "illegal", as the law relegates the authority to dismiss the Anti-Corruption chief solely to the General Prosecutor. Prime Minister Kalvitis defended his initial, unilateral 24 September dismissal based upon a State Audit report of accounting violations, describing the General Prosecutor´s office´s position as just "another legal interpretation".

Tensions between the Anti-Corruption Bureau and leading ruling coalition parties have been brewing for well over a year. The Prime minister was earlier forced to retract a new security law after widespread public disapproval. According to past-President Vike-Freiberga, the proposed law would have compromised Anti-Corruption Bureau investigations into the affairs of Latvian "oligarchs" tied to political parties.

Other events have included the arrest of the Greens/Farmers Party prime ministerial candidate Aivars Lembergs the dismissal of an Anti-Corruption Bureau official I. Bode after the official had been reinstated by Prime Minister Kalvitis and investigations that may have connections to prominent members of ruling coalition parties.

These events in Latvia have elicited the intervention of the US Ambassador, Catherine Bailey, who yesterday encouraged Latvians to maintain their recently won democratic values and questioned, "Whether (people will) allow the state to become a plaything of a few individuals, who allow decisions to be made so that their friends can stuff their pockets". She intimated that Latvian poltiticans were taking their directions from Latvian oligarchs rather than making their own decisions.

- Georgs ANDREJEVS MEP (ALDE): "It´s clear that this (above) statement has been coordinated with the US government (...) the United States and Russia may be more closely following events in Latvia than European institutions that are engrossed in the Reform treaty".
- Latvia´s President Zatlers: Latvia must be "capable to act without external advice" but thanked the US Ambassador for the "critical viewpoint of a friend"
- Rihards PIKS MEP ("People´s party", EPP-ED): "The Anti-Corruption Bureau must have a spotless reputation."
- Girts KRISTOVSKIS MEP (UEN ): This move will "diminish the fight against corruption in Latvia" and is "a significant threat to the rule of law in Latvia."

Prime Minister Kalvitis´ 24 September initiative was based on a June report by the State Audit. The audit noted accounting irregularities at the Anti-Corruption Bureau. Kalvitis stated that these may have led to "the loss of over a hundred thousand lats (€140,000)". Although the report is secret, the Head of the State Audit announced that the irregularities were not significant enough to warrant dismissal. The Chief Prosecutor concurred that the irregularities were insufficient to warrant dismissal. The Chief Prosecutor´s office contended that the dismissal of Loskutovs by the Prime Minister during the period of investigation was illegal.

The conflict over the Anti-Corruption Bureau comes on the heels of several revelations indicating possible cronysim that may have cost taxpayers millions of lats:

A lease (without tender) of the central post office for a sum considerably lower than was previously offered by companies.
Possible privatisation at the expense of higher market value prices for lucrative Riga port-area territories, etc.
Finally, Transparency International has estimated that an expected Anti-Corruption Bureau decision will fine leading coalition parties, including the "People´s Party" and the "First Party/Latvian Way", "up to two million lats" for illegal campaign expenses following a decision by Latvia´s Supreme Court that decreed many campaign expenses as illegal.

Members of the opposition "New Era" party (EPP-ED) maintain that the dismissal is illegal and solely politically-motivated.

The national parliament, the Saeima, will soon hold a vote on the Cabinet´s recommendation.

* Latvia´s ruling coalition is composed of:

"People´s Party" (EPP-ED)
"Greens/Farmers party" coalition (unaffiliated)
"First party/Latvian Way" (ALDE MEP)
"Fatherland and Freedom/LNNK" (UEN) - one minister reportedly abstained from the vote

This I suspect will run and run. I will speak to a Latvian diplomat friend and see if I can find out some more