LATVIA/RUSSIA SPY INCIDENT: FALLOUT MORE DOMESTIC

C O N F I D E N T I A L RIGA 000055 SIPDIS SIPDIS NOFORN E.O. 12958: DECL: 01/30/2018 TAGS: PREL PINR ODIP RS LG SUBJECT: LATVIA/RUSSIA SPY INCIDENT: FALLOUT MORE DOMESTIC THAN BILATERAL REF: RIGA 22 Classified By: Ambassador Catherine Todd Bailey. Reason: 1.4 (d) ¶1. (C/NF) Summary: Latvian officials are very pleased with the reaction to the expulsion of a Russian diplomat from Riga for espionage. The reaction from Moscow has been limited to a pro-forma expulsion of a Latvian diplomat, but there has been none of the heated rhetoric that many expected. Russia is also confirming it will continue work on several ongoing bilateral projects. However, the case has created a bit more of a domestic backlash than expected. Opponents of the current intelligence chief, Janis Kazocins, are using revelations that two police officials are being investigated for providing the Russian diplomat with information to renew suggestions that he should be removed when his term expires in May. We need to keep a close eye on this because Kazocins has been an important bulwark in the rule of law in Latvia. End summary. ¶2. (C) On January 21 Latvia expelled Aleksander Rogozhin, second secretary at the Russian Embassy in Riga, for "activities incompatible with his diplomatic status." Multiple GOL officials subsequently confirmed to us that he was involved in espionage and that they have "hard evidence" to back up the case. As expected, the Russians expelled a Latvian in return, sending Peteris Podviskis, second secretary and consul at the Latvian Embassy in Moscow, home SIPDIS on January 25. FM Riekstins told Ambassador Bailey that Podviskis was "not involved in intelligence activities" and that his next assignment would likely be Washington. ¶3. (C) MFA U/S for Bilateral Affairs Edgars Skuja told pol/econ chief January 30 that Latvia was pleased with the "calm and proportional" Russian reaction. No Russian officials trashed Latvia in the press, nor did the Russians raise a fuss on Latvia's treatment of its ethnic Russian population at the OSCE, two things that occurred when a Russian diplomat was last declared PNG in 2004. Skuja also said that on January 29, Russia confirmed that a working group of the bilateral intergovernmental commission would meet as planned in February and a working group on a double taxation treaty would also proceed as planned. ¶4. (C) Where there has been an unexpected reaction is domestically in Latvia. Skuja confirmed press reports that two Latvian government officials, Skuja said he knew only that they "worked for the police," were being investigated for providing classified information to Rogozhin. This revelation, as well as an interview by an unnamed official in the Constitutional Protection Bureau (SAB, main intelligence agency) saying that Russian spies operate with ease in Latvia, has led to series of attacks in the press on the work of SAB chief Janis Kazocins, whose term expires in May. Most of these attacks are coming from quarters that have long opposed Kazocins and sought his removal from office. In recent press comments, some politicians such as Parliamentary Security Committee Chair Jaundzeikars, have been highly critical of Kazocins, others, including President Zatlers and PM Godmanis, have offered general praise for Kazocins, but said it is too early to decide whether he should get another term. Former President Vike-Freiberga came out strongly in support of Kazocins, saying that those who are urging the removal of Kazocins are the same as those behind last year's attempts to amend the oversight of Latvia's security agencies, which she stopped only with an unprecedented use of her constitutional powers. ¶5. (C/NF) Comment: On the expulsion of the Russian diplomat, the Latvians played this perfectly. A low key and factual approach allowed Russia to respond as it must without escalating significantly. The calm reaction by Moscow and the continuation of bilateral activities are positive signs that the Latvia-Russia relationship is on a relatively solid footing. On Kazocins, we think Vike-Freiberga is correct. Kazocins, whose agency controls all wire taps used for law enforcement, has long been a thorn in the side of Latvia's oligarchs. Along with anti-corruption chief Loskutovs and Prosecutor-General Maizitis, he is one of bulwarks in preserving the rule of law in Latvia by urging that investigators follow the evidence no matter where, or to whom, it leads. As Latvia gets closer to a decision on his future, it is something we want to keep a close eye on because the decision will say much about what Latvia's political elite have learned from the Loskutovs dismissal and end of the Kalvitis government last fall. BAILEY