How A Latvian Magazine Fought Oligarchic Corruption

After the collapse of the Soviet Union, the three Baltic states — Latvia, Lithuania, and Estonia — regained their independence and joined the European Union. Of all former Soviet republics, they have made the cleanest break from their communist past. But there is one post-Soviet challenge they share with countries like Ukraine: fighting corruption.

Ten years ago, three oligarchs exercised an outsized influence on Latvian politics. They held political office and used their connections to advance their business interests.

Then, a failed anti-corruption investigation, followed by a magazine report on their backroom political and business machinations, helped to bring their corruption to public attention.

Pauls Raudseps — editor of IR Magazine, which uncovered the oligarchs’ illicit business activities — spoke with Hromadske on the sidelines of last weekend’s Riga Conference about Latvia’s experience fighting oligarchic corruption.

Latvia’s anti-corruption path has not been entirely smooth. But its experiences show how the proper institutions staffed by dedicated professionals can allow a country to take action against graft, Raudseps says. And IR Magazine’s reporting demonstrates how investigative journalism can help open the public’s eyes to important societal issues.

Pauls, your magazine, you had done an investigation and published a story on the higher-scale corruption where some of the former government officials are involved, including the former minister of transportation. Often we don’t know these stories unless they are coming internationally but they are significant for the country. So what is at stake? What is their significance for the country?

Well the significance is that ten years ago, fifteen years ago it was very clear to everybody in Latvia that the country was run by three oligarchs: Mr. Lembergs, Mr. Slesers and Mr. Skele.

And they are?

Mr. Lembergs is still the mayor of Ventspils, Mr. Skele was a former prime minister who continued to be influential in politics and in business, and Mr. Slesers was a number of times the minister of transportation. And it was clear to everybody that basically all the important decisions were being taken by these three guys.

For a decade? Or more?

A little less, well basically starting around 2000 and up until the crisis. I think, perhaps it was a little bit of an exaggeration but clearly they were very important for the political system and what happened in politics in Latvia. Not that they were all powerful, there were other governments, there could be resistance from the population – we had big protests in 2007 that led to the collapse of the government – but in any case they were very, very important. And in 2009 our anti-corruption bureau started listening to the conversations that one of these three, Mr. Slesers, was having in a hotel room where he met with all his business partners and other politicians. And they listened to those conversations for two years. In 2011 they decided that they had enough material to try to start a criminal process that would lead to the indictment of Slesers. And actually this decision had incredibly important political effects in Latvia because they went to the parliament and asked for permission to search Mr. Slesers home (because he was a deputy and the parliament had to give permission for his home to be searched) and the parliament refused, they voted down that request. They said no, we’re not giving you permission to search his home and because of that the President, Zatlers, initiated a procedure that led to the dissolution of parliament, to extraordinary elections and basically to Slesers and Skele, two of these guys, being drawn out of politics because their parties lost those elections. And they didn’t get into parliament and basically now they are not nearly and influential as they used to be. So that in of itself was a very important result. But the problem was that the investigation based on these conversations went on and on and on and on, and finally at the end of last year it was shut down and the procuracy said we couldn’t get enough material to take this to court, so we’re shutting down the investigation. And what my magazine got was the conversations that took place in that hotel room between 2009 and 2011 and we published in three magazines in a row, not the whole thing, it’s an incredible amount and a lot of it wouldn’t be interesting or important. But we took the most important parts and published them in three issues of our magazine, where you could see how Slesers talked about his hidden interests in various businesses, how he made decisions as a minister, as a deputy, as somebody who was also very influential as a deputy in the Riga city council, in the port of Riga where these businesses did their thing. You could read how he talked with another of the oligarchs, Lembergs, about putting their candidate in for President of the country or for the general procurator and all sorts of other important positions. They talked about how they controlled the press and how they influenced various television stations in Latvia. And this has, I mean it’s been like an explosion of a bomb in Latvia because there are two issues. First of all, why was there no indictment? How could it be that after you read all this and it becomes entirely clear that these guys were conspiring to do all sorts of illegal things, it’s clear from the conversations, was the procuracy actually not able to bring a case against Slesers? And the second thing is since Lembergs is still active in politics, what are the implications for politics today? And so an investigatory commission has been formed in parliament that is supposed to come up with answers to these questions and it’s really one of the hottest topics in Latvian politics today.

You mentioned the anti-corruption bureau and it’s usually, it takes time for this institution to work and to become independent for real. With some other institution like the general prosecutor’s office or some other government institution trying still to not let them investigate what they don’t want. So really, in that particular situation, how successful do you think is the Latvian anti-corruption bureau? How established is it? How influential is it? Because as we have [seen] these organs, these institutions are being created now, for instance in Ukraine, and of course it’s a long way [off] but how did it work and what was the Latvian experience?

I think it’s very important that the institutions get people, both in the position… It’s most important that the person running the institution, but also at the next level running the departments, that they are genuinely committed to these issues, to fighting corruption. In Latvia that was the case for many years, starting around 2002 when the then government nominated a woman called Juta Strike to be the head of the anti-corruption bureau. Parliament didn’t accept that nomination but nevertheless she continued to work there as a head of the investigatory part of the parliament. And most of the important investigations that led to really – the fact that Lembergs is on trial now – is thanks to the fact that that department was able to investigate and to the fact that they started this investigation especially, and a number of other very important investigations and indictments, were thanks to the fact that there was a group of people in the bureau very committed to fighting corruption despite all of the political pressure – and there was a huge amount of political pressure against them all the time – they were able to continue these investigations. Unfortunately, in 2011 parliament put a new head of the bureau in who turned out to be a very bad choice and he basically has more or less dismantled all of that and most of the good investigators have left. And unfortunately we’re in a situation right now where it’s not entirely clear whether the bureau will really be able to fulfill that role of investigating high-level corruption. They still continue to arrest policemen and things like that for taking small bribes, but whether they will continue working on high-level corruption is an open question. But the fact is that for almost fifteen years this was an institution that really did a great deal of good, that the bad guys were actually scared of, and even if there’s a break now, if we’re in a situation, in a position, where that is not as effective, I think that experience in and of itself shows that it is possible and that soon we’ll be able to return to a situation where we once again will have people running the bureau who are actively interested in fighting high-level corruption.

Yet the implication is that you can create that institution but then you have to keep it going according to the rules for a while. Don’t take it for granted.

No, you can’t take it for granted at all. Because there will be an incredible amount of pressure against it, there’s no question about that.

When we are speaking about corruption in Latvia, high-level corruption, all kinds of deals, of course the question of Russian influence pops up [0855]. In particular mentioned the port of Ventspils, [0858] Latvia is the route for Russian goods on external markets, so really in that particular case, is there anything there or is this an internal Latvian case?

Well first of all, all the conversations here had to do with the port of Riga.

Port of Riga, yes, we understand that it’s about the Port of Riga but generally that would be the example that there is a connection with Russia the Latvian ports matter.

I mean any time you have people talking about doing business in ports you have to talk about Russian transit. And there is one episode in these discussions that we published where Sleser specifically talks about having a very rich Russian investor who is very closely tied to the Kremlin come in and build a fertilizer trans-shipment terminal in the Port of Riga. So they do have these business interests. The other issue that’s very tied to Russia is that Slesers talks about being very interested in getting various investments in various real estate development deals and to get the money for that he came up with a scheme to allow people who invest a certain amount of money by buying an apartment or something in Latvia, that they would get residency for five years in the country. Which was a very controversial proposal but he got that through parliament and it was clearly because he had these business interests that he wanted to, that that would be beneficial for. We don’t see them talking about the kind of money changing hands between Russia and them, I’m not saying that didn’t happen, but we don’t see that in the conversations. About direct sort of corruption coming from Russia influencing them. But the fact is that maybe that’s not even necessary because their business interests are tied to Russia so they’re always very aware of what the Russians are thinking and they don’t want to do anything politically that could harm their businesses. So just the fact that they are doing business with the Russians and that’s an important income for them is a tool of influence.

But then there is another story that you can’t always say that just the Russians are corrupt. There is this narrative of what-aboutism, but other Europeans being involved because where there are big ports there are often dubious things happening globally and in Europe also.

We don’t see that in these conversations, that not what they talk about. I think there are some Western investments in the Port of Riga but in general we’ve seen that the port has been very...They haven’t been very happy to see people from outside come in, especially from the West so…

Way too much work to hide all the ends.

And what is the public feeling about the whole issue at this time? I remember, we live in a time when the public doesn’t trust politicians very well and that’s what’s misused by the populists. With this reason of look, all the politicians are corrupt, it doesn’t matter in Russia, in Europe, our politicians as well. And there will be other political forces who would play with that on the right and also in their own interests. So how does this kind of situation influence the Latvian public and their disappointment with the way the country is one?

Well first of all I think that the general sense that there are corrupt politicians in Latvia is not very new. I think that the greatest effect of the publication of these conversations could be on the people who, up until now, have willing to close their eyes to this and vote for parties that were close to the oligarchs [1308]. There’s a party that’s actually leading the government now, the Greens and Farmers, that is very closely tied to Lembergs. They’ve said he’s their candidate for prime minister.

To the current prime minister?

No, the current prime minister, it’s complicated, let’s just say the present party – Lembergs is not in government – but the party that’s running the government, the Prime Minister’s party, has historically had close ties to Lembergs. And the voters for this party have traditionally closed their eyes to the fact that everybody knows that Lembergs is involved in these shady dealings, but they’ve sort of said well there’s no real proof and he seems to be a good mayor of Ventspils, so they’ve kind of ignored it. [1359] And I think the publication of these conversations, hopefully, and we see that happening because there’s an immense amount of interest. These issues were just sold out and you never see every copy of a print run of a magazine be sold out and the last one that we ran of the thousands and thousands that we printed we only got 200 back that weren’t sold. So there was an immense amount of interest in this and I think and I hope that the people who up until now have been kind of able to close their eyes, this will force them to say you know this is printed, black on white, I read it, I read what they said  – and they spoke in a very vulgar way, you can probably imagine that they used a lot of Russian swear words – and when you read that and say can I really accept this? And I think that, I hope that for a significant number of the people who were willing to sort of close their eyes won’t be able to do that anymore because we published this.

So basically we can say that with that Latvia is somehow healing itself from the oligarchs.

Yes, that’s what we’re trying to do. Step by step we’ll try to get out of it.