The pride and joy of Airvars Lembergs – the Ventspils Basketball Club (BK Ventspils), received generous donations from state capital companies, Latvian Basketball Association and Ventspils transit businesses, was used for funding the back pocket for bribing politicians, as evidenced by the documents and information from the case about politicians who received bribes from Lembergs, courtesy of Pietiek.com.
The scheme that was disclosed within the framework of the case shows why basketball has received such generous donations in recent years. In fact, the basketball club has allegedly served as a “common fund” for illegally financing joint political projects.
On 1 November 2003 director (now board chairman) of BK Ventspils, Ralfs Pleinics, signed an agency and advisory agreement with some “mailbox company” registered in USA called Toronto Line LLC. According to this agreement, each month basketball club had to transfer to the account of this company 64 000 US dollars. Based on this agreement Toronto Line LLC undertook to represent the basketball club Ventspils, by ensuring the club’s participation in the international tournaments in Europe, by selecting the necessary sports equipment, undertaking organization of presentation and publicity activities and provision of other services, if parties agreed thereof.
In reality, the investigation revealed that this agreement was false and was actually used as a part of an elaborate mechanism, with the help of which the so called «5% fund» or «common bank» was being regularly replenished for use in bribing politicians and other officials. The monthly amount of 64 000 dollars swiftly grew into 68 000 dollars shortly after the agreement was signed, thereby altering the agreement itself as well.
So, the average yearly amount of money transferred from BK Ventspils to Toronto Line LLC and, eventually, to the «fund» was around 800 000 dollars (450 000 LVL). Similar amount – 450 412 LVL can be found in, for example, Ventspils financial statement for 2006 in the section «guest players and agency expenses».
However, not all Ventspils financial statements available at Lursoft clearly state where the money transferred through Toronto Line LLC ended up. The 2003 financial statement lacks this section; 2004 statement also lacks the 740 500 LVL agency expenses section. The 2005 financial statement states that 426 000 LVL were transferred for «foreign company services».
Pietiek sources close to investigation state that formation of the bribing fund using the BK Ventspils and Toronto Line LLC agreement most likely ceased activities in the second half of 2006, when evidence,, including the «5% fund» accountant’s, Gita Grasmane’s, computer’s hard drive containing lists of bribed politicians were removed as a result of multiple searches at places related to Lembergs. Those lists of names of politicians, officials and whole political parties were deciphered, allowing authorities to make educated guesses as to who received the money that was transferred through BK Ventspils. Then, after following the thread of foreign and Latvian companies, this money ended up as, speaking in terms of involved people, «cookies» – bribe money, used to «fund» specific beneficial decisions of Latvian politicians and officials.
Lembergs always denied the existence of the bribe fund. He has been the acting President of BK Ventspils since 1997, the man who, according to Pietiek’s source, supervised every significant decision related to the club’s funding or financial statements.
Pleinincs says that much time has passed and he cannot give any explanations about the Toronto Line LLC agreement and who exactly received the money. «I cannot confirm this information. I do not want to comment. This is the first time I hear such a thing,»- Pleinics denies relation to bribing.
Also, the once opponent of Lembergs – Olafs Berkis – who is one of the members of BK Ventspils and once gave testimony against Lembergs to the Prosecutor General’s office, claims that he no longer remembers some things. At the time when the BK Ventspils and Toronto Line LLC agreement was signed, Berkis was represented at many Ventspils transit companies, which generously sponsored the club. Pietiek sources note that donations of Ventspils transit companies to the «5% fund» were not made without Lembergs’ and Berkis’ knowing.
Why basketball clubs are being used for complex financial schemes for the creation of «common banks» for political corruption? «They like basketball», – Pietiek source close to the case ironically notes. He explains that «political basketball» money is a special bribe fund for specific needs, where the barriers between parties and differences of opinions need to be shattered in the name of a shared benefit to “fund” some joint activities.