A controversial association For Latvia’s Development was set up back in March, 2012. Its founder is a person close to the political party Unity – Ventspils millionaire Olafs Berkis. Now it has emerged that for at least a couple of years he has been drawing cash from the so-called Lembergs “Scholar Fund”. Allegedly, the money was accumulated in a number of offshore companies, including Vitale Consulting, registered in Liechtenstein.
According to materials from Lembergs’ criminal case, money directed to Vitale was used to bribe political parties and politicians. Besides, the firm has transferred nearly two million dollars to an offshore Telesia Ltd, allegedly owned by Berkis.
The portal Pietiek has got hold of certain documents from the so-called Lembergs’ grant holders’ court case. They show that back in 2005 and 2006 the Liechtenstein firm Vitale transferred a total of 1.9 million dollars to Telesia Ltd. The money reached the company in four parts – two payments of 400 000 dollars each were made in 2005, while another 700 000 dollars (two payments – 400 000 and 300 000 dollars) were transferred in 2006.
Investigators of the case do not rule out the possibility that the amounts Vitale directed to the offshore, allegedly owned by Berkis, were used to bribe politicians. In addition, Vitale money transfers give rise to doubt that also Berkis, just like Lembergs, was probably involved in the scheme. These offshore networks allowed him to avoid Latvian taxes and take part in money laundering.
Informally Berkis has long been associated with financial support to the party Unity. Besides, behind-the-scenes talks suggest that Berkis most likely provided financial support to the leader of the so-called “Olsteins’ Six” – parliament member Klavs Olsteins. The group of six parliament members quit Reform Party last summer. Berkis denies any financial ties with political parties, including Unity. However, he is on good terms with the so-called Unity’s “cashier” Edgars Jaunups and former leader of the New Era Party (Jaunais laiks) – Einars Repse. Repse is also an ex-prime minister and head of the association For Latvia’s Development.
A number of sources have told Pietiek that Lichtenstein offshore Vitale Consulting is one of the companies in which cash (from the so-called “5% Fund”) meant for Lembergs’ “scholarships” was accumulated. Money from AS Ventspils nafta and AS Ventbunkers‘ oil and transit business services was unlawfully directed away from the two companies. Berkis was elected Chairman of Ventbunkers Supervisory Council early this year.
Berkis claims that he does not know anything of any cash flows linked to the so-called scholarship fund. However, a number of sources close to the General Prosecutor’s Office imply that he might be one of the persons who, via offshore companies and tax avoidance schemes, took part in “granting scholarships”.
Pietiek studies show that the ”5% Fund” was set up using money from spending not directly related to oil and oil transit business. Money was accumulated in offshore companies and then withdrawn. The next step was bringing it to Latvia to bribe parties and politicians. Cash was used so that there were no traces of any bank transfers. Ex-prime minister and Greens and Farmers Union member Indulis Emsis’ suitcase lost back in the autumn of 2006 serves as an indirect evidence, as it was full of cash – 10 000 dollars.
The General Prosecutor’s Office launched investigation in the so-called Lembergs’ grant holders’ case in early 2007. Investigators are probing alleged bribing of parties, politicians and state officials, orchestrated by Venstpils Mayor Aivars Lembergs. Presumably, about 7.5 million dollars were used for such purposes.
Although Pietiek sources claim that the probe has been halted, Prosecutor General Eriks Kalnmeiers confirmed this spring that they are still actively investigating the case.
Allegedly, funds from the so-called “5% Fund” went to such parties as Latvian Way, For Fatherland and Freedom/LNNK, Latvia’s First Party, democratic party Saimnieks, Einars Repse’s New Era Party and several minor parties. The Latvian Green Party and Latvian Farmers Union, which both make up the Greens and Farmers Union, were also “grant receivers”.