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Wednesday 17.01.2018 | Name days: Tenis, Dravis

Freeport blocked from funding Lembergs-related sports clubs

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A major advertising contract with the basketball club Ventspils and football club Ventspils has been suspended in Ventspils Free Port.

Both of the clubs were supposed to get a total of 687,000 lats ($1,3 million), excluding 21% VAT.

It should be added that the clubs are associated with the influence of the so-called old oligarch – Aivars Lembergs.

The 831,270 lats worth contract was blocked by the recently approved board member Girts Kronbergs on September 17. His candidacy was named by Reform Party.

Under the contract, both of the sports clubs were supposed to promote Ventspils Freeport until late 2013. Both the basketball club and the football club were about to receive 343 500 lats (excluding 21% VAT), reports the portal

Attempts to advocate sealing contracts for a period of two years, rather than one, are linked to alleged fear of Lembergs. In November, the Latvian government is set to decide on a tighter donation policy. So he is afraid that this will be the end of covert sponsorship under the disguise of advertising contracts.

However, Kronbergs recognizes that it might not be possible to block the second half of the amount from reaching the clubs.

“It’s too late. Back when officials were deciding on the Freeport’s 2012 budget, they agreed to earmark funds for both of the clubs.

The large-scale two-year advertising contract is not the only way the Freeport’s money reaches the basketball club Ventspils. This year alone it has already received at least 113,000 lats. Besides, the Freeport has already managed to sign two advertising contracts with the Lembergs’ club. The total value of each of them hits 56 500 lats.

The first one was sealed on April 24 and provided promotion of the Freeport during 2011/2012 playoffs. The second was concluded on May 3 and oversaw promotion of the Freeport during the matches of the UEFA Champions League 2012.

Pietiek stresses that Lembergs is President of the basketball club Ventspils, while the board consists of his associates. Lembergs and other Ventspils millionaires, such as Olafs Berkis and Igors Skoks are also among the few members of the club. Other – legal members – include various Ventspils transit companies, among which there are also those suspected of conflict of interest. Such allegations have been raised by Prosecutor’s Office on the suspicion that Lembergs owns shares in them.

According to Pietiek, advertising contracts with sports clubs affiliated with political parties is a way to flow tax money into them. Many have questioned whether it is really worth to pay thousands to have a freeport’s name printed on a basketball player’s shirt. Others raise worry about the transparency of spending tax money.

The fact that public companies choose to conclude advertising contracts with such sports clubs raises suspicion that this is done to cover affiliated parties’ pre-election campaigning costs.

To give an example, Edgars Jaunups, owner of the basket ball club VEF Riga, was long in charge of attracting funds from the political party Unity and previously also New Era Party.

His club received generous donations from both the Latvian State Forests and subsidiaries of the Latvian Railway. Its massive advertising campaign periodically occurs in both television and on advertising billboards.

The campaign was led by McCann Erickson Riga, owned by Ainars Scipcinskis. The company has also launched a number of pre-election campaigns for New Era Party and Unity.

LDz Cargo, a subsidiary of state-owned company Latvian Railway, has concluded an advertising contract with VEF Riga, which is supposed to receive 250 000 lats.

Another 900 000 lats Jaunups and Lembergs’ basketball clubs split in half in late 2011. The amount was paid by the Latvian State Forests, as both the men had exercised their political influence, reports the portal.


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