Latviski English По-русски
Monday 16.07.2018 | Name days: Hermīne, Estere

State Audit doubts LDz’s charity activities

(No Ratings Yet)

Results of one of State Audit revisions remained without public attention, which is a shame. The institutions checked how the Transport Ministry orders around at the state owned Latvijas dzelzceļš (LDz). The company’s charity and advertisement contracts turned out to be especially suspicious, de facto programme of LTV reports.

Suspicion was mainly ticked because the advertisement procurement process is being carried out in an uncontrolled manner. LDz’s understanding of advertisement and charity is rather blurry. Furthermore, the criteria that govern the company’s choice of which sports clubs to fund are unclear as well. All this creates suspicion that the company’s advertisement funds are “blown” in the general direction of specific political “winds”.

The State Audit has investigated LDz’s charity and advertisement contracts starting from 2009 to the middle of 2012. Results of the survey are not revealed, however, because the information is secret.

It became known to de facto that amounts of money that were being allocated to sponsoring over the years, have decreased significantly – in 2009, the concern gave away 2.3 million LVL; in 2011, however, LDz donated only 93 thousand LVL. This year, LDz donated 250 thousand LVL.

One of the reasons for the reduction of funding for charity could be that any donation over 1 000 LVL needs to be coordinated with the Finance Ministry, de facto assumes. However, advertisement contracts do not need to be coordinated with the ministry. On top of that, LDz marked those documents secret and does not plan to publish them.

The State Audit also concluded that advertisement contract sums grew as rapidly as sponsoring expenses decreased. 74% of all investigated advertisement contracts are related to sports – this raises suspicion that those are not advertisement contracts, but funding of sports clubs.

LDz management does not deny this possibility. “If I believe that my advertisement should be printed on the t-shirts of VEF sports team and the Finance Ministry says “no”, I am still right if don’t violate the law. If I believe this is what we need – then this is what we need,” – claims Magonis.

LDz is sponsoring the aforementioned sports club for several years. In March 2012, LDz signed a contract with the sports club for 200 thousand LVL.

The State Audit has found several interesting contracts with Dinamo Riga regarding advertisement and charity. For example, LDz Infrastruktūra noted the purchase of four platinum subscriptions to hockey games as a form of donation. This cost the concern 8.4 thousand LVL. It is highly unlikely that a subscription that allows visiting hockey games for free and taking drinks, snacks and souvenirs can be considered a donation. The State Audit also discovered that rent of a balcony at Arena Riga was also registered as an advertisement contract, which cost 120 thousand LVL. The contract states that the advertisement poster must not exceed 20 x 30 cm and must be located near the balcony.

To the question on whether the company’s reputation really needs a whole balcony, Magonis replied “of course”. “Where do we invite a person? Just sit him down on the tribunes?” – he asks rhetorically.

Furthermore, Magonis does not deny that not every advertisement contract can be measured in numbers. In LDz’s case, advertisement is not likely to immediately contribute to the growth of demand on the company’s services.


Leave a reply

In pictures: French victory in World Cup celebrated by tens of thousands in Paris

After the football World Cup was won by the French national team on Sunday, an enormous crowd of people gathered in central Paris to celebrate.

Another case of African swine fever infection recorded for domestic pigs in Latvia

African swine fever infection was recorded for domestic pigs in Tērvete on Monday, 16 July. 16 pigs were liquidated because of the infection, as reported by Food and Veterinary Service.

MEP Artis Pabriks becomes political party «Attīstībai/Par!» prime minister candidate

Latvian political party «Attīstībai/Par!» has picked Daniels Pavļuts, Juris Pūce, Ilze Viņķele, Artis Pabriks and Mārtiņš Bondars as its regional candidate list leaders. Artis Pabriks will also be the party’s prime minister candidate.

Russian-U.S. presidents meet in Helsinki

U.S. President Donald Trump and Russian President Vladimir Putin are meeting on Monday in Helsinki.

Heat of up to +30° C expected in Latvia this week

Weather in Latvia will be warm and even hot at times this week, as air temperature reaches up to +30° C. At night, air temperature is not expected to go below +20° C. Many regions will likely experience thunderstorms closer to the middle of the week, Environment, Geology and Meteorology Centre reports.

Week in Lithuania. Lithuania's Tripartite Council fails to reach agreement

Lithuania's Tripartite Council on Tuesday, July 10, failed to reach agreement on raising the minimum wage. Employers are inclined to back the government's proposal to raise the minimum pay to 420 euros. Meanwhile, trade unions want it increased to 450 euros.

BNN summary of the week: NATO to increase and ABLV Bank loses its license

BNN offers a summary of this week’s topical news in a variety of categories: Future; Deal; Fight; Decline; Decision; Opinion.

SEB Bank to unite life insurance companies working in Baltic States

SEB Bank will unite life insurance companies working in Baltic States, BNN was told by SEB Bank’s representative Agnese Strazda.

Saeima deputy Askolds Kļaviņš becomes suspect in criminal case

Saeima deputy from the Union of Greens and Farmers Askolds Kļaviņš has been made a suspect in the criminal case regarding abuse of official power.

Minister: E-health system has stabilized, but improvements are still needed

Functionality of the E-health portal has stabilized. Disconnection errors have ceased. Nevertheless, we have to continue improving the system further, said Latvian Healthcare Minister Anda Čakša said in an interview to Rīta panorama programme of LTV.

Six to eight Finance and Capital Market Commission officials may work at ABLV Bank

Six to eight FCMC trusties may work at the liquidated ABLV Bank, says Finance and Capital Market Commission chairman Pēters Putniņš.

Latvia’s Cabinet of Ministers receives expanded draft on deposit system

Environment Protection and Regional Development Ministry has submitted to the Cabinet of Ministers an expanded legislative draft regarding amendments to the Packaging Law and Environment Protection Law for their review in the State Chancellery, as confirmed by the ministry’s representatives.

Latvia will not escape talks on increasing defence spending

It is necessary to develop Latvia’s defensive capabilities. Because of that, Latvia cannot escape talks on increasing defence spending to more than 2% of GDP, said Defence Minister Raimonds Bergmanis, who is participating in the NATO summit in Brussels.

Russia extends food product embargo until end of next year

On Thursday, 12 July, Russian President Vladimir Putin decided to extend the embargo on food product imports from countries of the European Union and other countries until the end of next year.

Heat in Latvia to remain for longer; thunderstorms and heavy rain expected, as well

Next week in Latvia will be appropriately hot for summer, as air temperature is expected to reach +30° C at times. Nevertheless, most of Latvia will experience rain and thunderstorms, as reported by State Environment, Geology and Meteorology Centre.

US President announces «tremendous amount of progress» in defence spending matter

On Thursday, 12 July, US President Donald Trump announced having achieved a great deal of progress in the NATO member states’ defence spending matter during the summit.

Providus: it is impossible for Latvian parties to attract large funding honestly

«If we look at political parties’ ability to attract funding from large companies, for example, conclusions are rather sad – there is no way for parties in Latvia to attract funding in an honest way,» Providus think tank researcher Iveta Kažoka said in an interview to BNN.

Study: Latvian residents rely on knowledge and hard work rather than luck

30% of Latvia’s residents believe company success formula relies on decade-long work and significant profits, as well as employee satisfaction, according to the latest Latvian Barometer study of Baltic International Bank.

Competition Council warned 34 persons for possible cartel agreements this year

In the first half-year of 2018 the Competition Council warned 34 persons about possible cartel agreements in six possible violation episodes. Affected companies work in three sectors – burial, security and driving school services.

European Commission predicts 9% lower wheat harvest for Latvia this year

According to estimates from the European Commission, Latvia’s wheat harvest is likely to be 9% below that of last year, according to information from Agriculture Ministry’s Market and Direct Support Department.

ECB revokes Latvian ABLV Bank’s credit institution license

European Central Bank has decided to revoke Latvian ABLV Bank’s license, as confirmed by Finance and Capital Market Commission.

US President asks allies to increase defence expenditures to 4% of GDP

During NATO summit in Brussels US President Donald Trump told leaders of participating member states that they have to increase their expenditures on defence to 4% of GDP.

NATO agrees to station multinational division North headquarters in Latvia

In accordance with an agreement reached by Denmark, Latvia and Estonia, it has been decided to station the headquarters of NATO’s multinational division North at Ādaži base, as confirmed by Latvia’s Foreign Affairs Minister Edgars Rinkēvičs.

President vetoes two bills over consecutive days, still enjoys high support

Lithuanian President Dalia Grybauskaitė has used her presidential powers in full swing this week, vetoing two bills over two consecutive days. First the head-of-state vetoed amendments paving the way for a far-reaching overhauling of the country‘s healthcare facilities. And the next day, on Wednesday, July 11, she scrapped amendments to the Referendum Law, which, if implemented, would have lowered the threshold for a dual citizenship referendum. President cautioned that the bill was potentially not in compliance with the Constitution.

Competition Council permits merging of two energy wholesale traders and producers

On 4 July, Latvia’s Competition Council decided to permit the merging deal as a result of which Enefit Green AS will gain decisive influence over Nelka Energia AS by purchasing 100% of the company’s shares. Permission was given because the merge is not expected to have a major impact on competition on the market, the council explains.