SWINGING FOR THE FENCES: LATVIA'S ANTI-CORRUPTION

C O N F I D E N T I A L RIGA 000107 SIPDIS NOFORN SIPDIS E.O. 12958: DECL: 02/14/2017 TAGS: EAID KCRM LG PGOV SUBJECT: SWINGING FOR THE FENCES: LATVIA'S ANTI-CORRUPTION BUREAU IN 2006 Classified By: Pol/Econ Chief Waser for reasons 1.4 b. and d. ¶1. (C) Summary: At its annual briefing to the Riga diplomatic corps, Latvia's anti-corruption bureau (KNAB) highlighted 2006 as a year where it made great strides in tacking corruption. Overall, the KNAB's successful completion of the cases for formal prosecution has dramatically increased from 27 cases in 2005 to 41 cases in ¶2006. Moreover, the KNAB is beginning to get at some of Latvia's "big fish," although difficulties still remain in investigating cases with possible links to organized crime. Alexis Loskotovs, Director of the KNAB, stressed to the diplomatic corps that the KNAB, though continuing to grow, is ready and capable of 'exporting' Latvia's experience. We agree that the KNAB can be a partner and mentor to other post-Soviet states looking to strengthen anti-corruption efforts. End Summary KNAB Summary of 2006 Activities ¶2. (SBU) Ambassador Bailey and PolOff attended the Diplomatic Corps briefing hosted by Latvia,s Anti-Corruption Bureau (KNAB) and conducted by Director Alexis Loskotovs. Loskotovs summarized the activities and success of the KNAB in fighting public corruption. By the end of 2006, KNAB officials sent to the Prosecutor General (PG) for prosecution 41 criminal cases involving 65 people, a significant increase from 2005 in which only 27 cases were passed to the PG. Fifty one additional cases of possible corruption were opened in 2006 but are still under investigation. Loskotovs cited increased experience and skill level as the key factors in the KNAB,s success in sending more cases for prosecution. Noteworthy Cases ¶3. (U) Loskotovs highlighted a number of noteworthy cases from the year. He paid special attention to the indictments of two judges in October: the head of Riga City Vidzeme district court and another lower ranking judge of the same court were alleged to have misused their offices for personal gain and taken bribes. Both judges have been arrested and suspended from office, and are currently awaiting trial. ¶4. (U) Other important cases for 2006, according to Loskotovs, were: -- the prosecution of a former State Secretary and lawyer from the Ministry of Science and Education for involvement in a multi-million dollar real estate scam; -- the prosecution of the Mayor of Ventspils, Aivars Lembergs, and the Chairman of Ventspils Free Port Council for refusing an order from the Cabinet of Ministers and using office for personal gain; -- the prosecution of the head of the procurement commission of the Ministry of the Interior for bribery; -- the prosecution of a Riga City Council official for asking for and taking a bribe in regards to the privatization of some land; -- the arrest of the deputy state secretary of the Ministry of Science and Education for asking for and taking a bribe; -- the prosecution of the Executive Director of the Daugavpils City Council for arranging kickbacks in the procurement of oil products; -- and the prosecution of two officials of the Central Board of the State Border Guard of Latvia for taking bribes. At the end of 2006, all of these cases were in or awaiting trial. ¶5. (U) The national elections which took place in October of 2006 were the first since the KNAB,s creation in 2003. As such, the KNAB was particularly focused on violations of the new campaign finance laws during the first nine months of the year. The full results of their efforts during the elections will not be available until later this year but so far, 34 incidences of illegal activity in the lead up to the October elections have resulted in fines to the parties. Additionally, the KNAB has a pending proposal before the Parliament, which, if passed, would toughen campaign finance laws by introducing administrative liability for donors to political parties for illegal donations and criminalize serious violations of campaign finance laws. The Future ¶6. (SBU) Asked by an attendee if he felt his job was secure, Loskotovs reported that he has recently met with the Prime Minister and feels optimistic that the KNAB will maintain its present independent status. He added that in order for powers to be removed from the KNAB or to make any other change in its status, the constitution would have to be amended. The KNAB has the most independent status possible in the present legal system, he said. ¶7. (U) In addition to again making the case for Latvia,s membership in the OECD in order to benefit from the organization's anti-corruption and anti-bribery activities, Loskotovs pronounced the KNAB ready to be an exporter of experience and knowledge to transitional countries such as Georgia and Moldova. The KNAB conducts annual training and education seminars for over 1000 Latvian public officials each year. In 2006, 32 such seminars were held and included topics such as prevention of conflict of interest, professional ethics, assessing corruption risks, what is corruption, etc. Additionally, the KNAB has produced and released a CD-ROM of interactive training material on Public Sector Ethics. Loskatovs urged attendees to think of the KNAB when considering how to help other countries develop anti-corruption agencies or improve existing ones. ¶8. (C) Comment: The KNAB has faced lingering criticism from the international community and local NGO's for its perceived inability to or avoidance of dealing with high level, deep rooted corruption. Loskotovs takes this criticism seriously and has confided in PolOffin separate meetings that he depends on the support of the international community to bolster and support his position when dealing with difficult cases. While we believe that the KNAB has made great strides in addressing public corruption among bureaucrats, 2006 was the first year it really went after high level officials such as mayors, judges and the most senior bureaucrats. It remains to be seen how these cases will fare in the courts. Loskotovs has also expressed to us his view that corruption is closely linked to Organized Crime, which he admits the KNAB is ill equipped to handle adding that the KNAB often lacks the political support to deal with Organized Crime. Both Loskotovs and his deputy cite this as the reason why the KNAB has never addressed the issue of corruption at Riga Free Port. While the KNAB still has room to grow and will benefit from continued US support and assistance, we do believe that it can be a useful partner for other former Soviet states looking to develop and strengthen their own anti-corruption efforts. BAILEY