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Saturday 24.02.2018 | Name days: Diāna, Dina, Dins

Russia – Lembergs - Latvia

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Aivars Lembergs

Friendly and charming in public, Ventspils Mayor, Aivars Lembergs, appears to have a whole different face in the court room, where hearings resemble some mafia movie. One after another witnesses keep revealing how Lembergs secretly controls Ventspils transit companies, which, he says, he has nothing to do with, reports the magazine Ir.

Witnesses have a number of stories to tell, “Aivars Lembergs began to shout in his usual manner and insulted everyone.” “To work in Ventspils we had to collaborate with Lembergs, otherwise we would have failed.” “The relationship between Lembergs and Ventspils Nafta Management Board members can be compared to a trainer who tames his tigers.” “He was alone in the Vienna hotel lobby, drinking wine. He did not even stand up when I entered. He just asked how my wife and children were doing. I perceived it as a clear threat.”

Lembergs is still accused of major crime: bribery, forgery, money laundering and abuse of office. The court has been hearing the case for four years already. Although Lembergs dismisses any accusations, documents and witnesses prove the opposite – since the 90s, he is the owner of all major Ventspils port companies and many other firms.

Lembergs as a businessman

Ainars Gulbis, CEO of once-influential SWH Riga holding, was one of the very first Lembergs’ business partners, according to his testimony. Gulbis reveals that his company was allowed to operate in the port on the condition that one third of profits go to Lembergs. He and an intermediary Maris Forsts were supposed get the remaining money.

The first project involved handling of potassium and the business scheme was as follows: They established a company which served as an intermediary. It agreed with Russian companies on cargo handling and charged them more than it later paid the state-owned port infrastructure company, which actually did all the job.

First amounts reached Lembergs in cash. “It was never less than $100 000,” says Gulbis, adding that later the amounts were transferred to Lembergs’ bank account in Switzerland. His words are confirmed by his business partner in Germany, Janis Gobins, who says that money was regularly placed in Swiss accounts.

“I remember Lembergs himself once travelled to Switzerland to do that,” Gobins says. His testimony has been published in How to Steal a Billion, a book by journalist Lato Lapsa.

Upon witnessing the huge amounts of money, a thought popped into Lembergs’ head – he wanted to co-own a profitable company. Gulbis says Lembergs eventually became a shareholder in his SWH Riga and a number of companies working in Ventspils (via offshores). In late 1992, the two men embarked on a joint business journey, but by early 1995 Lembergs had stripped him of each and every bit.

While Gulbis was testifying at court, law enforcement authorities were carefully checking whether or not Lembergs indeed owns the Swiss company, Multinord. The firm was once used as an intermediary in handling potassium, but later it became a co-owner of one of the largest companies in Ventspils port – Kalija Parks.

In the case of Multinord, Lembergs is accused of large scale bribe-taking and extortion. The court has recognized Gulbis as a victim. Gulbis has verified authenticity of documents, which now serve as en evidence. They cover the transfer of shares and dividend payments to Lembergs.

Lembergs got hold of influence in Kalija Parks not only via Multinord, but also Beleggingsmaatschappij Geit B.V, registered in the Netherlands. The company is the majority shareholder of Kalija Parks. According to materials of the criminal proceedings, it is indirectly owned by the Lembergs family.

Other bribe-taking and extortion charges relate to the intermediary Puses, which later became a shareholder of Latvijas Naftas Tranzits and used the company to privatize the leading port company Ventspils Nafta.

Offshore network

The entire Ventspils transit business is nothing but an entanglement of offshore companies and trusts, whose true beneficiaries are carefully hidden. Testimonies show that Aivars Lembergs and his children are owners or true beneficiaries of dozens of companies behind offshores.

Materials of the criminal proceedings reveal that owners of offshores turned tens of millions of lats a year. Besides, most of profits went to their own bank accounts, instead of Latvia-registered companies. So very little was paid in taxes. Swiss attorney Rudolf Meroni has given testimony on two such schemes. The first was as follows – in order to escape big tax payments, they included Lat Transnafta profit into its capital. A year later the capital was reduced and money was paid out to the owners. “It was all done in Lembergs’ family interest,” Meroni says.

Another scheme concerns an intermediary in handling Ventbunkers oil products, VB Forwarding. The company made quite a lot of money, which was then transferred back to Ventbunkers via two other firms. According to Meroni, during the last two or three years Ventbunkers has repaid VB Forwarding $45 million. The amount was split among VB Forwarding shareholders. They were offshores, whose alleged true beneficiaries were: Lembergs’ family, Igors Skoks, Olegs Stepanovs, Olafs Berkis and Genadijs Sevcovs. Meanwhile, documents of the court case shed light on the fact that Ventbunkers has paid the company a total of $60 million. Meroni has testified also on other business deals closed with an aim to channel millions of dollars into Lembergs family members’ bank accounts. To give an example, “Zele Mineral Resources‘ payout to the Lembergs family totalled $9.5 million,” Meroni says.

Lembergs as a spy

Jazeps Meiksans, of security firm Venta, testifies that his task was to spy on Lembergs’ foes: businessmen Valentins Kokalis, Igors Skoks and Olegs Stepanovs, as well as politicians Andris Skele and Kristiana Libane. He was also ordered to keep an eye on Prosecutor General Janis Maizitis and prosecutor Andis Mezsargs, who was in charge of the investigation into the so-called Lembergs’ case. The notorious oligarch is said to have been interested in anything – from weaknesses, hobbies and the financial situation to telephone conversations. Also Valentins Kokalis previously testified that his phone had been bugged.

Several witnesses explain how endangered they have felt. Attorney Gints Laivins-Laivenieks and Rudolf Meroni are currently under procedural protection, so both of them were interrogated in a closed hearing. “Knowing Lembergs’ political and business influence, as well as his connections with law enforcement authorities, I was simply afraid to refuse my services as a lawyer,” Laivins-Laivenieks said during the pre-trial investigation. Meroni, however, gave testimony in Island Hotel and other premises. “I do not want Lembergs or his associates to see that I am giving testimony. I have a reason to believe that it can endanger me,” he said.

The testimonies of both attorneys are crucial, as the men serve as a bridge between the Latvian business and owners of offshores, reports Ir.

Alleged bribery of politicians is being probed in a separate case, which has not reached the court yet. Testimonies given so far point at Lembergs’ political influence and the way it was achieved. Businessmen Julijs Krumins and Vladimir Komogorcev reveal that such political parties as Latvian Way, the Democratic Party Saimnieks and the national association For Fatherland and Freedom were supposed to get Ventspils nafta shares in exchange for favourable privatization rules.

Reportedly, leaders of ruling parties have been travelling to Ventspils to meet Lembergs.

According to Meiksans, politicians met with Lembergs also in LatRosTrans office in Riga. The meetings are said to have taken place on Wednesdays. Security firm Venta CEO Aivars Valcis (ex-chief of Riga Criminal Police) has also been spotted reporting to Lembergs. Meiksans says Valcis told him to wait outside, so he had a chance to notice well-known faces coming to meet Lembergs.

“Mostly they were from the party Greens and Farmers Union – Augusts Brigmanis and Indulis Emsis. Wasn’t it Wednesday when Emsis lost the notorious briefcase full of money?” Meiksans refers to the events of 2006, when Emsis was caught in spotlight after losing a briefcase with 10 000 lats in the parliament building’s cafe. The politician claimed he had intended to purchase a tractor.

“Lainis Kamaldins, head of the Constitution Protection Bureau, and Auditor General Raits Cernajs were also seen frequently,” he says.

Lembergs as an agent of the Soviet-era State Security Committee

Lembergs’ loyalty to Russia is another issue. In the book Aivars Lembergs: Road to Money and Power he is reported as saying that back when Latvia’s independence was at stake he had to make a tough decision on which country to side with. Lembergs says his situation was much more complicated than that of the poor, who had nothing to lose.

Lembergs has also previously pointed out that the fight against the Russian language resembles Medieval practices. Lembergs says the only foreign language he knows is Russian and he has been telling his son to learn Russian if he wants to succeed in business.

It should be added that back in 2006, whistle-blower site published a story on Lembergs as an agent of the Soviet-era State Security Committee (LAT: Valsts drosibas komiteja aka VDK). Code-named Peteris, Lembergs was dismissed on August 8, 1978, when he joined the Latvian Communist Party (LCP) and started to work in LCP Ventspils district committee. According to the portal, documents show that in 1987 Lembergs was listed as Security Committee’s reserve officer. The information reached the General Prosecutor’s Office in mid-2006. But in early 2007 it was widely reported that new documents shed light on the fact that certain Latvian politicians have been receiving unlawful payments from Ventspils.

It should be added that Russian nationals and companies have indeed taken part in founding some Ventspils companies. We shall also remember what American journalist Stephen Handelman wrote in his book Comrade Criminal: Russia’s New Mafiya. He said the State Security Committee played a crucial role in building a bridge between the old criminality and the post-communist criminal world. It was stressed in the book that on January 5, 1991, the Security Committee ordered to establish companies that would sell off the military technology to foreign countries. The goal of the new firms was to gather funds, so that the organization could keep working unlawfully if “destructive elements” came to power.

A study was conducted also by US weekly news magazine Time, which concluded that from 1989 to 1991 one of the main goals of the Security Committee was to found joint ventures with foreign countries. Officially, the companies were considered as drivers of the transformed Soviet economy. Unofficially, it was a way to pump money into offshore accounts of party leaders and chiefs of the Security Committee.

By the way, Ventspils’ network of companies includes a number of famous firms whose owners are former officers of the Soviet-era State Security Committee.

A book by Vilis Seleckis, Shadows over Ventspils, tells of the Security Committee and the Soviet Communist Party’s economic interest in Latvia. First and foremost, it is said to have been tied to Ventspils port, which handled one seventh part of the Soviet oil exports. It could mean that Ventspils port still serves those who see Latvia as nothing but a colony. Therefore, it is no wonder that those placed on watch are their former colleagues.

To cut it short, Lembergs has transferred the most valuable state asset into the hands of the nomenklatura (people within the Soviet Union who held various key administrative positions in all spheres).


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