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Wednesday 19.02.2020 | Name days: Zane, Zuzanna

So-called «media controlled by Lembergs» may end up under sanctions

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Aivars Lembergs, Ventas Balss, sanctions, municipality, funding, media, OFAC, corruptionThere is a possibility of so-called «media controlled by Aivars Lembergs», such as Ventas Balss and Neatkarīgā Rīta Avīze, may experience negative consequences from the sanctions USA has applied against him and four legal persons in Latvia.

This much is affirmed by Latvia’s Justice Minister Jānis Bordāns: «It is not excluded that certain so-called media controlled by Lembergs may experience consequences from applied sanctions.»

BNN had previously reported about Ventspils City Council claiming on many occasions that it does not finance any media, including Ventas Balss. Nevertheless, data from Procurement Monitoring Bureau (IUB) suggests LLC Ventas Balss has received more than EUR 1.7 million from the city council since 2008.

For example, one of Ventspils City Council’s biggest contracts with Ventas Balss was worth EUR 369 066 in 2017 and 2018. This amount was allocated in a talks procedure without announcing a tender.

Also in 2017, Ventspils City Council had helped out ‘for provision of information services’. According to IUB, the total amount provided to the media has reached EUR 413 596. And this amount is composed of money paid by residents in taxes.

It is worth adding that Latvia’s Prime Minister Krišjānis Kariņš has ordered Environment Protection and Regional Development Minister Juris Pūce to assess the effect of sanctions applied by US Office of Foreign Asset Control on Ventspils municipality, as well as consider future actions in regards to this.

Among the generous supporters there is also Ventspils Freeport authority, which is paid finances from the city council. Last year, the freeport’s authority was advertised by the media for a massive EUR 116 808.64. The same amount was spent in 2017.

This system has been in place for years. For example, in 2015, an advertisement contract was signed for EUR 118 807. «To improve society’s trust and increase residents’ support for operations of Ventspils Freeport and create a positive image for the freeport’s authority», as mentioned in the tender decision signed by Ventspils City Council vice-chairman for infrastructure affairs Jānis Vītoliņš.

It should be added that Ventspils Freeport authority is one of four companies that have been applied with OFAC sanctions.

Currently the Cabinet of Ministers is trying to pull Ventspils Freeport from the list of sanctions and have management delegated to the state through the means of a new company that would manage it on behalf of the government.

More on this topic: State company may take over Ventspils Freeport authority’s duties before year’s end

Feeders – municipal companies and institutions

Information found on IUB homepage shows that LLC Ventas Balss has signed a contract worth EUR 36 363 with municipal company Ventspils Digitālais centrs in April 2019. The name of the contract – Publication of topical information in a local newspaper and its release in Ventspils City.

Aigo Gūtmanis, who is also a member of Lembergs’ party For Latvia and Ventspils and foster son to Ventas Balss editor Gundega Mertena’s mother-in-law’s brother.

As for the tender itself, it should be said that the section of the tender regarding duties mentions the following: «Prepared publications are to be coordinated with the Client’s representative prior to publication.»

Ventspils municipality institution Ventspils Digitālais centrs, which is a company owned by the city council, requests that journalists coordinate content before publishing, which is unacceptable from the perspective of good journalism.

While in the past the city council allocated funding for LLC Ventas Balss directly from the municipal budget, now it is financed through companies and city council institutions. The possible reason for this is that with such a plan in place the city council does not have to carry responsibility for what is published by the newspaper or how content is put together – as long as funding comes from companies each of which has its own director and board. This means capital associations sign advertisement contracts with a media and it has no duty to report before the company how the money – taxpayers’ money – is used.

It should be added that ties between companies’ budgets and municipal budget are not exactly hidden, either – budgets of companies are composed from funding allocated by the municipality. It is also worth mentioning that the city council strictly supervises operations of companies under its wing, which means all companies that provide Ventas Balss with funding and sign advertisement contracts have people loyal to Lembergs.

Relatives and friendships

The «network» is simple. Ventspils Digitālais centrs is an institution of the city council. It signs a contract with Ventas Balss so that the media distributes information about so-called «topical developments in the city».

But the same contracts have been signed by the newspaper with four other companies this year – LLC Ventpsils Olympic Centre for EUR 12 900, municipal company Komunālā pārvalde and Kurzeme Philarmonic – each for EUR 14 005. Additionally, Ventas Balss was sponsored by Ūdeka with EUR 13 600.50 this year. Ventas Balss chief editor Gundega Mertena is often called a supporter of Lembergs’ regime. Her husband Austris Mertens is a board member at A.Mertena Office. The firm provides sludge-removal services to LLC Ūdeka.

Other contracts for ‘distribution of topical news in the city’ have been signed with company LLC North Kurzeme Regional Hospital for EUR 13 999.99 and municipal company Ventspils City Education Office for EUR 12 561.98.

Lursoft database shows that Ventas Balss beneficial owner is the media’s owner Mihails Soifers, who was once the commercial director in Lembergs’ controlled media Neatkarīgā Rīta Avīze.

On Monday, 9 December, US Department of Treasury Office for Foreign Asset Control, based on the so-called Magnitsky law, established sanctions against a number of private persons and their organizations in Europe, Asia and Latin America. Aivars Lembergs is among those people.

OFAC has issued a Global Magnitsky General License No.1, which sets forth that within 30 days, cooperation has to be stopped with those on the list of sanctions – Aivars Lembergs, the Ventspils Development Agency, the Business Development Association and Latvian Transit Business Association.

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