LATVIAN PASSPORT SCANDAL CAUSE FOR SERIOUS CONCERN

S E C R E T SECTION 01 OF 03 RIGA 000023

SIPDIS

NOFORN
SIPDIS

E.O. 12958: DECL: 1.4(C) FROM HCS 7-04 AND LIAS-06 DECL:25X1
TAGS: CVIS KFRD KCRM PGOV PREL LG
SUBJECT: LATVIAN PASSPORT SCANDAL CAUSE FOR SERIOUS CONCERN

REF: A)TD 314/74662-07 B)TD 314/72856-07

Classified By: 1.4(c) from HCS 7-04 and LIAS-06 DECL:25x1


1. (S/NF) Summary: A scandal involving the issuance of at
least 100 passports to individuals not eligible for Latvian
passports has dominated the news in Latvia in recent days.
The scheme, which allegedly involved passports issued in
2004-05, appears to have involved multiple individuals in the
passport issuing agency. The GOL,s response to date, both
internal and external, has been lacking. The foreign
minister first learned of the scandal from the press and
despite multiple days of pressure by us, the GOL has yet to
provide us any official information on the incident or the
names and passport numbers of the illegally obtained
documents. PM Godmanis continues to assert in the press that
this will have no effect on Latvia,s eligibility to join the
visa waiver program. Intelligence information leads us to
believe that the scandal is even more serious than the
government is admitting and that it likely does not yet know
the true extent of the problem. While we have stressed that
the administration continues to support Latvia,s membership
in VWP, we have been clear that this is the type of incident
that opponents of the program will seize on to argue that it
should not be expanded. We have pressed the GOL to be fully
forthcoming with us in providing as much information as
quickly as possible, noting that this is what would be
expected of them should they enter the VWP. We have
encouraged them to give their Ambassador in Washington
information to brief both State and DHS on the issue. If
that does not happen soon, Washington agencies may wish to
consider calling in the Ambassador to stress the importance
of full transparency on an issue like this. End summary.

What we know from the press
--------------


2. (U) Starting January 7, the Latvian press has been
dominated by information that a police investigation has
revealed that approximately 100 Latvian passports were issued
illegally in 2004 and 2005 to applicants who were not Latvian
citizens. Latvian news reports that most passports were
issued to citizens of CIS countries and Russia. Estimates are
that each passport cost as much at 100.000 euros ($147,135).
The news daily Diena reported that that the discovery of the
illegal passports was accidental, and that it was uncovered
during the investigation of another case. Latvian Prime
Minister Ivars Godmanis states that all passports have been
located and that holders will no longer be able to use them.
Press reports state that the fraudulently-obtained passports
allowed some to purchase lucrative property in Jurmala, a
coastal city near Riga.


3. (U) According to press reports, law enforcement has
currently identified nine suspects in this case, some of whom
work for the Latvian Office of Citizenship and Migration
Affairs (PMLP),the institution responsible for issuing
passports. Many suspects are former and current State
officials who reportedly counterfeited documents to support
Latvian passport applications. Two suspects have been
remanded in custody. More suspects are expected to be named.
Olita Magone, director of the secretariat of the minister
with the special portfolio for E-government, resigned from
her position on January 2. She is the former director of the
Population Register Department at the PMLP and has been named
a suspect in the case.


4. (U) In fall 2007, when the Latvian Security Police took
over the investigation, an employee from the Citizenship and
Migration Board drowned in the Daugava River. He worked in
the division of the PMLP which handled individual cases and
monitored the status of individuals. Some press sources have
stated that he was a key witness in the case, but this cannot
be confirmed. Police have ruled the death a suicide and said
there is no connection to the case.

5. (U) PM Godmanis has publicly stated on several occasions
that the scandal will not affect the implementation of the
U.S. visa waiver program. During a television interview
Godmanis stated that the discovery of the passport buying
scheme shows that the Latvian authorities are capable of
"detecting such processes", and that "(the system is capable
of self-purification, and it is good."


6. (U) The PMLP has tasked a special commission to look into
how to stop the unlawful issuance of passports in the future.
According to the director of the Citizenship and Migration
Board (PMLP),Vilnis Jekabsons, to address the current
situation, requests for information about specific
individuals have been sent to "the relevant institutions in
Latvia and abroad." During the continuing investigation,

RIGA 00000023 002 OF 003


1,200 records have been checked to date, and data on 79
unlawfully registered persons have been annulled.


7. (U) Additionally, Jekabsons asserts that the security of
the population register has been significantly improved. In
2006 the PMLP introduced a new Population Register system
which "reduces to the minimum" the possibility that unlawful
data could be entered, including strict checks before
passport issuance. Jekabsons has also forwarded names to the
Interior Ministry about former PMLP employees who may also
have suspect motives.

What we know from the GOL
--------------


8. (S/NF) To date the best source of information we have is
from ref B (dated November 5, 2007),which was obtained
clandestinely and cannot be revealed to Latvians. We have
pressed the MFA on several occasions to provide us any
information they might have. Charge met January 9 with MFA
State Secretary Penke. Charge stressed that this is a
serious issue and that statements by the PM that this will
not affect visa waiver were surprising since there had been
zero communication between the GOL and the USG on this issue.
Penke agreed and said FM Riekstins was very concerned. He
said the MFA first learned of the scandal from the same press
reports as the Embassy and had been trying for several days
without success to get information from the Security Police
who are leading the investigation. (Comment: Post finds this
highly unlikely given the date of ref B. End comment.)


9. (S/NF) On December 10, Penke called the Charge to claim
that the information on all the names and passport details
had been passed to USG reps on August 6, 2007. (Comment: In
the January 11 follow-up meeting Penke also stated that this
information had also been forwarded to Interpol. End
Comment.) We believe that Penke is referring to information
passed by the Security Police to post GRPO and reported ref A
(and entered by post's CONS section to CLASS). When that
information was provided there was no context behind it to
indicate that it stemmed from any problems in the passport
office. When the press reports first surfaced, post GRPO
contacted the Security Police and asked if the August list
was the same as that in the press and was told no. Security
Police contacts told post GRPO that they believed about 20
percent of the August list corresponded to the 100 passports
referred to in the press, but they could not verify that as
the investigation was ongoing and they, themselves, did not
know. A request by post's RSO to the Security Police to
provide us all the names and passport numbers for the
illegally obtained documents was denied and RSO was told the
information was "too sensitive." It is our view that, to
date, the GOL has not officially provided the USG a list of
the passports and names of people to whom the
fraudulently-obtained passports were issued, although Penke
committed to the Charge to do so. Further follow up by GRPO
with the Security Police on January 11 resulted in the
provision of a &working list8 of 79 names. According to the
Security Police, this list came with the caveat that the MFA
will soon pass the Embassy a list officially so the Embassy
should take no action until the MFA does so. Penke stated
during the January 11 follow-up meeting that they would be
receiving and would forward to us on Monday, January 14 a
list of names from the Security Police.


10. (S/NF) In the January 9 and 11 meetings, Charge stressed
to Penke that honest and timely communication with the U.S.
government both in Riga and Washington were paramount to
maintaining the U.S. perception of Latvian reliability,
especially with reference to the VWP. Post also underlined
that sharing this kind of information on a timely basis would
be a requirement once the program was enacted. Penke assured
Charge that FM Riekstins was committed to ensuring full
cooperation with the USG but was facing communication
challenges within the GOL. Charge also referenced PM
Godmanis' comments that all passports issued fraudulently
have been collected and that a repeat of the problem was not
possible with Latvia's new, more secure passports. Charge
asked how the government could be sure that it had all the
documents in question in hand and noted that since the
problem semed to involve corruption in the issuing agency,
the strength of the new document would not obviate the
possibility of it being issued to someone who was not
eligible for it. Penke took both points on board.
Information passed to GRPO unofficially by LSP on January 11,
which we cannot share with others in the GOL, directly
refutes Godmanis' statements. LSP stated that of the 79 names
confirmed to be involved, authorities do not have physical
possession of all the passports. Also, this does not include
an additional 20 to 30 names, which are still under

RIGA 00000023 003 OF 003


investigation.


11. (S/NF) Although the death of a former passport official
is being called a suicide and unrelated to the investigation
(para 4 above),intelligence information suggests otherwise.
As reported ref B, GRPO had information that the death was a
murder to cover up the fraud. Because of the source of the
information, we were not been able to confront anyone in the
GOL to ask if the death was connected to the list passed to
us a few months before.


12. (S/NF) Comment: This scandal has completely overwhelmed
the Latvian government and is evidence of one of the
criticisms of Godmanis as a manager -- that he
compartmentalizes too much and does not bring in others
before making decisions. Our meetings with the MFA and
official requests to the security police make clear that the
GOL does not seem to know the full scope of the scandal and
that information is not being shared within the government.
Yet, Godmanis is publicly pronouncing on things in a very
confident manner. In fact, we do not believe that there is
any way to tell at this point the scope of the scandal. The
publicly available information is contradictory and the
Security Police tell us one thing in intel channels, another
in law enforcement channels and still a third version to
others in the GOL. The PM says that all passports concerned
have been collected, but other government sources say that
many of the people to whom the passports were issued are
outside of Latvia. If so, it would be an unprecedented
example of law enforcement cooperation to retrieve them from
people outside the country. It is also unclear whether those
who obtained the documents through fraud will themselves be
investigated and charged with crimes. And the government
remains unable to provide a full list of all passports in
question. Frankly, the government has been in damage control
mode from the start and has not gotten off the back foot in
explaining the entire situation.


13. (C) Comment, cont'd: While stressing that we support
Latvian admission to the VWP, we have underscored to the GOL
that a major scandal of corruption in the passport office is
exactly the kind of issue that opponents of the VWP will
seize on to thwart its expansion. Charge stressed during the
January 11 meeting that it was of highest importance that the
GOL restore our faith in the integrity of the Latvian
passport issuing system. Post has strongly encouraged the GOL
to give their Ambassador in Washington any available
information to brief both State and DHS on the issue. If
that does not happen soon, Washington agencies may wish to
consider calling in the Ambassador to stress the importance
for Latvia's VWP aspirations of full transparency on an issue
like this. End Comment.
SELDOWITZ