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Ne tikai kādreizējais ģenerālprokurors Jānis Maizītis un bijušais Korupcijas novēršanas un apkarošanas biroja (KNAB) priekšnieks Aleksejs Loskutovs vien dalījušies ar ASV vēstniecības darbiniekiem gan pārdomās par iekšpolitiskajiem procesiem valstī, gan informācijā, kas viņu rīcībā nonākusi, pildot dienesta pienākumus, - kā rāda Wikileaks publiskotās ASV vēstniecības Rīgā šifrogrammas, ar ziņojumiem uz vēstniecību devusies arī KNAB priekšnieka vietniece Juta Strīķe.

Gan Loskutovam, gan Strīķei ASV vēstniecībai īpaši daudz kā stāstāma bijis sakarā ar KNAB naudas zādzībām, - kā izriet no šifrogrammām, toreizējais KNAB priekšnieks vēstniecības DCM (deputy chief of mission – otrais cilvēks vēstniecībā]) un „pol./ekon. priekšniekam” detalizēti izklāstījis informāciju, kas varētu būt uzskatāma par izmeklēšanas noslēpumu.

„Loskutovs paziņoja, ka viņš ierakstīja sarunu [ar Aivaru Lembergu], nodeva ierakstu prokurora birojam un ka ieraksts tika izmantots kā pierādījums slēgtā noklausīšanās sēdē pagājušajā gadā, lai paturētu Lembergu apcietinājumā. Viņš teica, ka šāda ieraksta esamība ir zināma tikai dažiem cilvēkiem, jo tas tieši parāda, ka Lembergs mēģina kontrolēt valsts ierēdni,” – šādi kādā 2008. gada maija sākuma šifrogrammā tiek atstāstīts Loskutova vēstniecības darbiniekiem stāstītais par Aivara Lemberga krimināllietu un viņa lomu tajā.

Daudz stāstāmā ASV vēstniecības darbiniekiem bijis arī Strīķei: „Atsevišķā sarunā ar pol/econ. priekšnieku Juta Strīķe, KNAB izmeklēšanas vadītāja, par pēdējiem notikumiem pastāstīja lielā mērā līdzīgu stāstu. Viņa piebilda, ka viņa vismaz vēlējās apsvērt iespēju, ka naudas zādzību organizējuši „politiskie spēki”, ko apdraud KNAB aktivitātes, lai samulsinātu un iedragātu Loskutovu, un lai prokurora birojs izmeklētu šo iespējamību. Viņa piebilda arī, ka saruna ar Lembergu bija veikta pirms pazudušās naudas atklāšanas brīža, līdz ar to viņa nedomā, ka šo divu notikumu laiks bija saskaņots, drīzāk nejauši izdevīgs KNAB pretiniekiem. Strīķe pievienoja personisku komentāru – viņa ļoti augstu novērtē Loskutovu, bet apzinās, ka viņa akadēmiskā pagātne nozīmēja arī atnākšanu strādāt bez apjomīgas vadības pieredzes, un ka tas viņam ir traucējis.”

Tomēr Loskutovs savu toreizējo vietnieci runīgumā būtiski pārspējis – visu informāciju par KNAB naudas zādzību viņš izlicis kā uz paplātes: „Loskutovs sāka ar apgalvojumu, ka viņš domā - pašreizējā situācija ir „sliktāka kā pagājušais rudens” un ka tā ir ietekmējusi „biroja prestižu”. Runājot par trūkstošo naudu, viņš teica, ka tas bija „nepatīkams pārsteigums”, jo viņš „uzticējās šiem kolēģiem”. Loskutovs teica, ka nauda tika izņemta reidos un glabāta kā fiziski pierādījumi ar pirkstu nospiedumiem, DNS vai kā nauda, ko iespējams izmantot lietā.

Viņš teica, ka tā tika glabāta divu personu pārraudzībā, kas pašlaik ir atstādinātas un kurām abām bija augstākā līmeņa pielaides valsts noslēpumam. Viņš uzskatīja, ka viņi pamanīja trūkstošo naudu nejauši – viņiem bija jāizsniedz iztikas līdzekļi kādam, no kura nauda tika izņemta, un personāls, kas to veica, kavējās. Kad viņi sāka skaitīt, KNAB darbinieki atklāja, ka no vairākās lietās izņemtās naudas trūkst 56 000 latu (apmēram USD 125 000).

Loskutovs teica, ka viņš nekavējoties informēja ģenerālprokuroru Maizīti par iztrūkstošo naudu un nodeva viņam lietu izmeklēšanai. Viņš teica, ka tieši informējis arī premjerministru Godmani, kam ir pakļauts KNAB. 18. aprīlī, kā viņš teica, viņš tika izsaukts pie prezidenta Zatlera. Prezidents bija „pārsteidzoši labi informēts”, un Loskutovs to saistīja ar viņa drošības padomnieku Rožkalnu (par kuru klīda baumas, ka viņš ir kandidāts, kas aizvietos Loskutovu pagājušā gada nogalē), un ļoti kritisks par Loskutovu.

Prezidents 21. aprīlī sasauca Nacionālās drošības padomes sapulci, lai pārrunātu šo lietu. Loskutovs paziņoja, ka tas nav atbilstoši, jo KNAB nav valsts drošības iestāde. (Komentārs: Mums nav atsevišķa apstiprinājuma, ka sapulce notika vai ka KNAB nav padomes jurisdikcijā, bet mums nav arī iemesla apšaubīt Loskutova teikto. Komentāra beigas). Lai gan vispārējā situācija bija slikta, Loskutovs teica, ka viņš jūtas labāk nekā pagājušajā rudenī, jo Maizītis ir atbildīgs par procesu. Tas nozīmē, ka „noteikumi ir skaidri” un tā nav „politiska spēle”.

Runājot par Lembergu, Loskutovs teica, ka viņam ir bijušas trīs tikšanās – viena pirms izvēlēšanas par KNAB priekšnieku (ko viņš atzina pagājušajā rudenī) un divas pēc darba pienākumu uzsākšanas, abas – pēc Lemberga pieprasījuma. Pirmā no tām bija nevērtīga – Lembergs bija piedzēries un nesakarīgs. Tomēr otrajā Lembergs izdarīja uz Loskutovu lielu spiedienu, lai darbā tiktu paturēts vecākais izmeklētājs, kas bija atlaists no darba par psihotropo narkotiku lietošanu. Lembergs teica, ka indivīdi bija „galvenais avots” informācijai par KNAB aktivitātēm un prokurora biroju.”

KNAB pirmdien nesniedza atbildi uz Pietiek jautājumu, vai birojā pēdējos gados ir veiktas kādas dienesta pārbaudes par tā darbiniekiem, kas kalpo par informācijas avotiem ārvalstu vēstniecībām, un, ja jā, kādi ir to rezultāti. Tā vietā KNAB paziņoja, ka, „veicot KNAB noteiktās funkcijas, likuma ietvaros birojs sadarbojas ar dažādām ārvalstu iestādēm un organizācijām, tai skaitā ar ārvalstu vēstniecībām. KNAB amatpersonu darbībās, nodrošinot nepieciešamo starptautisko sadarbību, nav konstatēti normatīvo aktu pārkāpumi”.

Saistībā ar iespējamo KNAB darbinieku, tostarp vadības noziedzīgo rīcību, atklājot trešajām personām izmeklēšanas noslēpumus un citu ierobežotas pieejamības informāciju, Pietiek pārstāvis jau ir vērsies LR Ģenerālprokuratūrā un Drošības policijā.

Pietiek šodien publicē visas ASV vēstniecības šifrogrammas, kurās pieminēta KNAB nozagtās naudas lieta un KNAB vadītāju saistība ar vēstniecību.

UNCLAS RIGA 000073 SIPDIS E.O. 12958: N/A

TAGS: PGOV, KCOR, KJUS, ASEC, LG

SUBJECT: FORMER KNAB OFFICIALS SENTENCED: FINES AND JAIL

TIME REF: 08 RIGA 228

1. Summary: Two former Anti-Corruption Bureau (KNAB) officials were found guilty on February 2 of charges surrounding the theft of money taken from KNAB vaults. Janis Imsa and Indra Veipa were sentenced to 7 and 4 years respectively. The discovery of the theft in spring 2008 was the catalyst for the sacking of former KNAB Chief Aleksejs Loskutovs. The prosecutor found no indication of counter-KNAB conspiracy, as Loskutovs and others previously claimed. The relatively quick decision comes at a time when the KNAB´s ability to recover from scandals and political attacks is more important than ever. End Summary.

2. On February 2, Janis Imsa, former chief specialist in the KNAB confidentiality maintenance department, plead guilty to charges of embezzelment for taking money that was evidence in cases from KNAB vaults. He received seven years (the prosecutor had requested four) in jail, confiscation of property and a monetary fine. Indra Veipa, Imsa´s boss, plead not guilty to similar charges of embezzelment and lack of oversight. She was acquitted of the embezzelment charges but found guilty of the lack of oversight charges. In addition to her receiving five years in prison (the prosecutor had requested six), confiscation of assets and a monetary fine, she has been banned from holding public positions for five years after her release. Veipa can appeal the ruling.

3. The arrest of Imsa and Veipa was the catalyst for the June 2008 sacking of former KNAB Chief Aleksejs Loskutovs for mismanagement of the KNAB. When the two officials were first arrested last April, Loskotovs claimed, and many believed, that the two had been put up to the embezzlement by political opponents of the KNAB who wished to disable the organization. The prosecutor and the court found no evidence of a conspiracy.

4. Comment: This high profile case was handled relatively quickly, with the court system using it as an example to others who may be similarly tempted. Now, with the new KNAB chief selection process in its last stages, and the economic and political crises in full swing, it will be more important than ever for the KNAB not to make the same mistakes of lax oversight of its employees. The only way for the KNAB to preserve its independence, and the public´s trust is to demonstrate that the organization is corruption-free and well managed.

End Comment

ROGERS

2009-02-04 15:06

C O N F I D E N T I A L SECTION 01 OF 02 RIGA 000228 SIPDIS

NOFORN E.O. 12958: DECL: 05/06/2028

TAGS: PGOV, KCOR, KJUS, ASEC, LG

SUBJECT: HERE WE GO AGAIN - ANTI-CORRUPTION CHIEF UNDER FIRE

Classified By: Charge Stuart M. Seldowitz. Reason: 1.4 (d) 1. (C/NF)

Summary: Two separate events have brought a new focus on anti-corruption chief Aleksejs Loskutovs, whose attempted removal from office last fall brought down the Kalvitis government. Two members of his staff have been sacked for stealing money seized in investigations, and indicted Ventspils mayor Aivars Lembergs has suggested that Loskutovs tipped him off before his March 2007 arrest. The press coverage has been breathless and former PM Kalvitis has been ebullient in claiming his vindication. The Prosecutor´s office has opened an investigation into the missing money and many politicians are so far reserving judgment. Loskutovs has said that there is no reason for him to step down, but admitted privately that he felt this crisis was worse than the one last fall. While the available information does not to us appear to point to illegal activity by Loskutovs, it does suggest that he is not the best manager and he displayed poor judgment in agreeing to meet with Lembergs. The bigger problem is that a public perception is beginning to develop that these problems are real and serious, and that Loskutovs and the anti-corruption agency are just as bad as everyone else when it comes to corruption. If that perception hardens, then Loskutovs´ own assessment that this is a worse situation than last fall could be proven correct. End summary

2. (U) The story began April 17 when the KNAB, Latvia´s anti corruption agency, announced that two officials were suspended for stealing money seized in an investigation. Press reporting made it seem as those the people involved were law enforcement agents of the KNAB who were simply keeping some of the money they found on raids. Prosecutor-General Maizitis confirmed that he had opened a criminal probe in the case and hopes to have the results by the end of May. Former PM Kalvitis could barely contain his glee at suggesting this showed he was right when he tried to remove Alksejs Loskutovs as head of the KNAB last fall, allegedly for poor financial management.

3. (U) The story was compounded by a suggestion in an interview with a men´s magazine by Ventspils mayor Aivars Lembergs, indicted on multiple corruption charges, that "Losha" (Russian diminutive for Loskutovs´ first name) had given him advance word of his arrest. In a subsequent rambling press conference, Lembergs seemed to suggest that he had met with Loskutovs while under investigation and that Loskutovs had assured him that all would be fine in his case. Loskutovs has said publicly that he is prepared to sue Lembergs for defamation and asked the prosecutor´s office to examine the claims.

4. (U) The press coverage of the two incidents has been extensive and breathless. One paper printed unsourced suggestions that KNAB agents were using money seized in raids as down payments in lucrative property transactions. Another reported that Loskutovs had "sworn allegiance" to Lembergs at one point. Even Diena, Loskutovs´ and the KNAB´s biggest defenders last fall, said that a "black cloud" hung over the KNAB. Another journalist who often covers corruption issues told emboff she was personally disappointed in the chain of events.

5. (U) Many political figures, including President Zatlers and PM Godmanis, are saying little, if anything, about the case, with most saying that will await word from the prosecutor about his investigations.

6. (C/NF) DCM and pol/econ chief met with Loskutovs April 29 to discuss the situation. Loskutovs opened by saying that he thought the current situation was "worse than last fall" and that it had impacted "the prestige of the agency." Regarding the missing money, he said it was an "unpleasant surprise" because he "trusted those colleagues." Loskutovs said that money was seized in raids and kept as physical evidence because fingerprints, DNA or the kind of money used could be useful in making a case. He said it was stored under the supervision of the two individuals, now suspended, both of whom had top secret security clearances. He claimed that they stumbled across the missing money by accident - they needed to provide for subsistence of someone from whom money was seized and the staff handling it delayed. When they eventually counted, KNAB officials found that 56,000 lats (roughly USD 125,000) were missing from among money seized in several cases.

7. (C/NF) Loskutovs said that he immediately informed Prosecutor General Maizitis about the missing money and turned the case over to him for investigation. He said he also directly informed PM Godmanis, who oversees the KNAB. On April 18 he claimed that he was summoned to see President Zatlers. The President was "surprisingly well briefed," which Loskutovs attributed to his security advisor, Rozkalns (who was rumored as a candidate to replace Loskutovs last fall), and very critical of Loskutovs. The President then called for a national security council meeting on April 21 to discuss the case. Loskutovs claimed that this is improper as KNAB is not a state security agency. (Comment: We do not have separate confirmation that the meeting occurred or that KNAB is not under its jurisdiction, but also have no reason to doubt Loskutovs´ account. End comment.) While the overall situation was bad, Loskutovs said that he felt better than last fall since Maizitis is in charge of the process. This means that that "the rules are clear" and it is not "a political game."

8. (C/NF) Turning to Lembergs, Loskutovs claimed to have had three meetings with him – one before being selected as KNAB chief (which he admitted last fall) and two since being on the job, both at Lembergs´ request. The first of those was worthless; Lembergs was drunk and incoherent. In the second, though, Lembergs put great pressure on Loskutovs to keep a senior investigator sacked for using psychotropic drugs. Lembergs reportedly said that the individuals was a "key source" for information on the activities of KNAB and the prosecutor´s office. Loskutovs claimed that he taped the conversation, turned the tape over to the prosecutor´s office, and that the tape was used as evidence in a closed hearing last year to keep Lembergs under arrest. He said the existence of such a tape is known only to a few people as it very directly shows Lembergs attempting to control a government official. The official Lembergs wanted to keep on was restored to office after appealing his removal in court, but he was later fired when he tipped off a judge, under investigation for taking bribes, that she was being watched.

9. (C/NF) In a separate conversation with pol/econ chief, Juta Strike, head of investigations at the KNAB, told much the same story on recent events. She added that she was at least willing to consider the possibility that the theft of money was arranged by "political forces" threatened by the KNAB´s activities in order to embarrass and undermine Loskutovs and that the prosecutor´s office would examine that possibility. She also added that the Lembergs interview had been done before the revelation of the missing money, so she didn´t think the timing of the two events was coordinated, merely fortuitous for the enemies of KNAB. Strike added a personal aside -- she thinks very highly of Loskutovs, but acknowledges that his academic background meant he came to the job without extensive management experience and that has hurt him.

10. (C/NF) Comment: We lack the full evidence necessary to draw firm conclusions in this case. Maizitis´ investigation will be essential in this regard. But based on what we do know, we can draw some preliminary conclusions. First, we agree with Strike that Loskutovs´ background did not provide him much management experience before taking on this job. Perhaps a third deputy director, solely for management/administrative issues, would be beneficial. Loskutovs admitted that he considered this last fall, but did not follow through. Second, Loskutovs did not exhibit good judgment in agreeing to meet Lembergs, especially on Lembergs´ terms. Any such meeting should have taken place either at the KNAB or a prosecutor´s office to dispel any suggestions that there were secret negotiations going on, and probably should have included at least one other officials from KNAB or the prosecutor´s office. Based on current evidence, though, neither of these missteps would strike us as being enough to remove Loskutovs from office. The problem is, though, that a perception of reality is beginning to form that Loskutovs is a weak manager and maybe the charges leveled last fall against him weren´t so crazy, and that he has, at a minimum, had conversations with Lembergs that create a perception of untoward activity. If those two perceptions harden into conventional wisdom in Latvia, Loskutovs could find himself in trouble. The tepid support from Diena and other influential media hasn´t helped. But a long holiday weekend came at a good time for Loskutovs and put a natural break to the breathless coverage. Additionally, Loskutovs´ enemies lack personal credibility on the issue, given their own issues with allegations of corruption. We don´t believe there is enough information currently available to suggest that Loskutovs has himself done anything illegal and his opponents learned last fall that absent hard facts there could be blow back against them if they try to sack Loskutovs now. All of this means that Maizitis´ investigation will carry a lot of weight. The Ambassador plans to meet with the Chief of Staff to President Zatlers and with PM Godmanis personally to praise both for being restrained to date and to urge both to await Maizitis´ findings before pronouncing on the case and Loskutovs´ future.

SELDOWITZ

2008-05-06 14:19

C O N F I D E N T I A L SECTION 01 OF 02 RIGA 000338

SIPDIS E.O. 12958: DECL: 06/11/2018

TAGS: PGOV, KCOR, KJUS, LG

SUBJECT: COMMISSION FORMED: KNAB CHIEF´S FUTURE IS DIM

REF: A. 07 RIGA 825 B. RIGA 292 C. RIGA 304

Classified By: CLASSIFIED BY CDA STUART SELDOWITZ FOR REASON 1.4(b)

1. (C) Summary. Following Prosecutor General Janis Maizitis´ submission of his report on the KNAB (ref b), Prime Minister Godmanis asked Anti-Corruption Bureau (KNAB) Chief Aleksejs Loskutovs to step down, which he refused to do. According to Latvian law, a Commission has been formed to determine whether Loskutovs should be dismissed. It is widely believed he will be. This satisfies the Coalition´s desire to get rid of Loskutovs, unrealized last fall (ref a), and calls in to question who will replace him; an effective leader and manager who will pick up the torch of fighting corruption in high places, or an official who is sympathetic and malleable to political interference. Even some KNAB supporters agree that Loskutovs should go because he has failed in management of his agency. Unfortunately, opponents of KNAB will take his likely dismissal not as setting a new and better standard for all public officials in Latvia, but as a vindication of their ham-handed attempts last fall to remove Loskutovs. End Summary.

2. (C) In an expected move, on May 11 PM Godmanis asked Loskutovs to resign and he refused. The decision to request his resignation was made pursuant to Prosecutor General Maizitis´ submission of his report on the investigation of the missing money at the KNAB (ref b). Maizitis specified that he did not believe Loskutovs was criminally liable for the stolen money but acknowledged that management controls were lacking at KNAB. According to Saeima legal procedure, a Commission has been formed to determine whether Loskutovs will be dismissed. This Commission includes Prosecutor General Maizitis, Security Police Chief Reiniks, Constitution Protection Bureau Chief Kazocins, Parliamentary National Security Commission Head Jaundzeikars and Defense Minister Veldre (representing the coalition). The Commission´s decision is due by June 16 and the imminent dismissal is projected for within the next week and a half - before the Saeima´s summer recess. Although it has not yet gone to vote, the press reports that the coalition has decided to dismiss Loskutovs. (Comment: We presume that Jaundzeikars and Veldre will vote to remove and Kazocins told us privately weeks ago that he thought the charges of poor management were credible and Loskutovs was likely done. End Comment.) Benefiting the Political Elite -------------------------

3. (C) Valts Kalnins, the head of the anti-corruption NGO Providus, told us that it is undeniable that there have been management deficiencies at the KNAB and there is no other remedy than to dismiss its Chief. Admittedly, however, the political elite have been waiting for this opportunity to dismiss Loskutovs and replace him with someone who is more "friendly" to politicians. Kalnins stated that the opportunity of the missing money has given them the argument they needed to get rid of Loskutovs that they lacked last fall (ref a).

4. (C) Dina Spule, of the KNAB International Relations Department, also stated that the timing of the investigation was serendipitous for the enemies of the KNAB. Spule intimated that some ongoing investigations are far more involved and widespread than anyone anticipated, and much broader than the general public realizes. The investigation of the Riga City Council, which was already very deep, is even more significant than the KNAB initially thought. More high-level suspects seem to be implicated and the occurrence of bribery is staggering. The investigation of the Riga City Council was nearing its completion before the scandal, and is now stalled, with people missing appointments to speak to the KNAB, and KNAB investigators suffering personal property damage in the interim. (Note: As we reported in ref C, we have heard that the Riga City Council case is the one that most worries the oligarchs. End Note.)

5. (C) The press has stated in several instances that Loskutovs is not the only person the Commission could recommend for dismissal. Juta Strike, Loskutovs´ Deputy, is also under the gun. Spule stated that Loskutovs believes that Strike will also be asked to leave, as she is in charge of KNAB investigators.

6. (C) The remaining question is who will be the next KNAB Chief. PM Godmanis has already named Andris Vilks as the Deputy who will take the position in the short term. Kalnins stated that Wilks is not corrupt, is qualified by experience (Vilks was Acting Chief last fall when Loskutovs was suspended), and can be expected to act independently of outside political influence. However, he is very balanced and cautious in his decision making and Kalnins does not know how proactive Vilks will be in the fight against corruption. Two other candidates are under discussion in the press: Security Police Chief Reiniks and Criminal Police Arturs Lulaks.

7. (C) Comment: This situation is different from last fall. Then, there was a rush to generate facts to ensure Loskutovs´ dismissal. This time, a methodical procedure, outlined in law, has been followed. As we have reported, Loskutovs did not grasp that there were real management issues here. Even if, as he alleges, he was set up, a lack of management controls made it possible for nearly 300,000 USD to go missing -- including some money that was physical evidence. That is a serious problem. Unfortunately we don´t think that a likely decision to remove Loskutovs will do anything to increase accountability in government. Instead, it will be taken as vindication of efforts last fall to remove Loskutovs and could spur further bad behavior to undermine the rule of law. With Loskutovs likely lost, we need to focus our attention on who will replace him; a noncorrupt official who has the potential to grow into a strong KNAB leader, or a weak figurehead who acts in the interests of the oligarchs. We also need to keep an eye on possible next steps, such as attempts to remove Prosecutor General Maizitis. End Comment.

SELDOWITZ

2008-06-12 11:14

UNCLAS SECTION 01 OF 02 RIGA 000348 SIPDIS E.O. 12958: N/A

TAGS: PGOV, PINR, LG

SUBJECT: Peoples Party´s Junkyard Dog: Gundars Berzins

1. Summary. For almost a year, one of the leading members of the People´s Party (TP) Gundars Berzins has regularly given interviews to daily paper Neatkariga Rita Avize (NRA) where he harshly and offensively criticizes developments, institutions, persons that according to his views hamper the implementation of the TP´s intentions and policies. A constant object of his criticism has been the U.S., in particular the Embassy and the former Ambassador, who according to Berzins, was "intervening in Latvia´s domestic affairs and squeezing Latvian politicians like lemons." His influence within the party, as well as the lack of any desire by others in the party to distance themselves from his statements leads to a conclusion that Berzins´ statements are something more than personal views of Mr. Berzins. While they may not be the official views of TP, party leaders certainly see value in a bit of anti-American rhetoric for their voters. End summary.

2. For almost a year one of the most influential People´s Party members Gundars Berzins has had a series of interviews mostly with a daily NRA (the fact, that the daily is owned by Ventspils Mayor Aivars Lembergs should not be underestimated either). Each interview is full of extremely rude, often obscene, statements aimed at various high officials. His attacks started last fall just before the previous Ambassador gave a speech at the University of Latvia on the status of rule of law in Latvia. Berzins reproached the U.S. Ambassador for what he termed constant interventions into Latvian domestic affairs and attacked Latvian politicians for being too weak to oppose her.

3. Then followed a series of interviews where Berzins continued voicing strong anti-American stances along with harsh criticism towards any official, and institution, including "Diena," the anti-corruption bureau (KNAB) and its chief Loskutovs, Latvian President Zatlers, intelligence (SAB) chief Kazocins, Prosecutor General Maizitis, and others. The level of criticism seemed in direct proportion to activities that might run counter to the interests of TP or its supporters. As debate began on the possibility of reelecting Kazocins, Berzins claimed (falsely) that Kazocins visitd the Embassy 2 - 3 times a week and compared him to a kitchen maid for the US Ambassador.

4. His statements are often openly rude and provocative. For instance, when asked to comment on a statement of former Minister of Foreign Affairs Artis Pabriks [when Pabriks decided to resign as minister and also leave TP Pabriks stated that some comments of the TP oldest members, clearly meaning Berzins, on alleged US intervention in Latvia´s affairs are not acceptable] Berzins responded "the little boy should change his wet pampers, put on the new ones and then come out to the public and reveal his true views on restitution to the Jewish community." (adding some anti-Semitism to go with anti-Americanism). Berzins did not spare even President Zatles, although he was among a handful of people who participated in the selection and "training" of the candidate. In one interview, following the collapse of the Kalvitis government and after Zatlers rejected TP´s candidate for PM, Berzins compared President Zatlers to a carpet that just lays there and where one can urinate or even defecate on. (Comment: The President is reported to have had a colorful reaction in his own right. End comment.)

5. More recently, as the scandal on money missing from the KNAB has grown, Berzns has suggested that there is a "cancer" in the security institutions that threatens Latvia. He has been especially critical of KNAB chief Loskutovs. Loskutovs and his supporters note with a combination or amusement and disbelief that last fall, during Kalvitis´ attempts to remove Loskutovs, Berzins talked about more than 100,000 lats being missing from KNAB -- a fact that did not become known to the KNAB or prosecutors office until April of this year.

6. The response of TP members is notable for often being non-existent. None of Berzins´ statements have been officially supported by his party or individual members. At the same time, there have not been any attempts of the party or its individual members to condemn or distance themselves from the offensive and ungrounded statements. The usual response of individual party members when asked to comment the statements has been that those are personal views of Gundars Berzins and he has the right to voice his personal views. While people who are not related to TP are not convinced that those are simply Berzins´ personal views because of his status within the party.

7. Comment: Berzins statements should be seen in the context of his status within the TP. Berzins is probably the second most influential person within the party, after founder Andris Skele. Berzins was one of a original founders of the party and has managed to remain one of Skele´s closest associates. He has been quite successful in public politics: he has been elected to parliament several times, including the last two parliaments. In 2004, he became minister of health in the Kalvitis government and continued to be a health minister also in the next Kalvitis government after the 2006 elections, resigning in 2007 saying he needed to rest. Some signs of anti-Americanism were observed when he strongly lobbied prohibition of the sale of Coca-cola in schools in 2006. The rules he proposed unfairly targeted Coca-Cola in comparison to other similar brands and he refused multiple offers by the company to discuss alternative resolutions to his concerns. After leaving politics, he claimed that he would fully devote himself to farming business. However, he is still quite a visible figure in Latvian political scene - he is believed to be the one who noticed potential prime ministers in Kalvitis and TP nominee last fall to succeed Kalvitis, Kuldiga mayor Edgars Zalans. He is also participating in all crucial high level and quite often confidential inter-party meetings. From time to time, his name is mentioned as a potential TP candidate for the post of Prime Minister.

8. Comment, cont: Most of Berzins´ statements are not based on verifiable facts and his tone is often simply offensive and rude. However, the statements should not be underestimated either, because they are published in one of the biggest Latvian dailies and the timing and content of the interviews seem to be rather well planned. Whatever the reason for them and whatever the origin, his statements are used as an instrument to a voice within TP on issues which could not be included in its official policy, including attacking the U.S. Nevertheless, these views resonate with a certain part of the electorate, so TP is perfectly happy to reap the political benefit of such attacks.

LARSON

2008-06-16 11:51

UNCLAS RIGA 000386 E.O. 12958: N/A

TAGS: PGOV, KCOR, KJUS, LG

SUBJECT: KNAB CHIEF DISMISSED REF: RIGA 363

1. Summary: On Sunday, June 29 the Latvian Saeima (Parliament) dismissed Anti-Corruption Bureau (KNAB) Chief Aleksejs Loskutovs in a secret ballot vote of 52 to 40. The vote followed a four-hour debate, dominated mostly by opposition party members. Opposition party New Era (JL) spearheaded a protest outside the Saeima building, where Loskutovs appeared early in the day to accept flowers and express his thanks for the support. The result to dismiss Loskutovs was never really in doubt. Juta Strike, a KNAB Deputy Chief, will be the acting Chief until Andris Vilks, another KNAB Deputy Chief, returns from vacation on July 16 to take that role. The Saeima will determine the legal procedure for appointing a new Chief and that decision is expected on August 2. Separately, press reports state that Prosecutor General Maizitis has offered Loskutovs a job. End Summary.

2. On June 29, in an extraordinary Sunday session of the Saeima, KNAB Chief Aleksejs Loskutovs was dismissed from his position. In a secret ballot, Saeima members voted 52 to 40 to remove him. This session was part of a larger meeting in which, following three hours of debate, the Saeima rejected motions of no confidence in the Defense and Agriculture Ministers. Protests and Debate -------------

3. A protest rally spearheaded by opposition party New Era (JL) began at 8am on Sunday morning. As many as 500 people gathered in front of the Saeima to express their thanks and give flowers to Loskutovs. He, himself, was not allowed to address the Saeima during the Sunday session, but he arrived at around 9:30 to accept the flowers and thank the crowd. He said that he was touched by the turnout, and reiterated that he was innocent. When the result of the Saeima vote was announced, the crowd yelled for the dissolution of Saeima, but the group was much smaller than it had been eight hours before. Opposition MPs urged the crowd to turn out for the August 2nd referendum to amend the Constitution to allow the public to dismiss the Saeima through a referendum vote.

4. Opposition members spoke for most of the four-hour debate preceding the vote. Ainars Latkovskis (JL) read a statement from Loskutovs, "I made a commitment to do my job well and I have never failed to fulfill that commitment." Solvita Aboltina (JL) stated that the Saeima library had suddenly become very popular, as Saeima members did not want to venture outside and face the protesting crowd. Former Prime Minister Aigars Kalvitis, who failed in his own attempt to oust the KNAB Chief last fall, proclaimed angrily that Loskutovs felt he was above the Saeima and the government, and that "as long as the People´s Party is in power," Loskutovs and others like him "will not work for any governmental institution." Most of the opposition focused on stating sarcastically that the coalition had discovered a new standard of accountability in government officials. The coalition mainly sought to justify their decision with the findings of the Special Committee´s report (reftel) and evoked the names of Prosecutor General Maizites and Constitutional Protection Bureau (SAB) Chief Kazocins who were members of that Committee. The result to dismiss Loskutovs was never really in doubt and opposition MPs gave up on some delaying tactics they considered earlier in the day. New Jobs ------------

5. Juta Strike, KNAB Deputy Chief has been named as the interim Chief until July 16 when her colleague Alvis Vilks returns from vacation and takes over the job. The Saeima has not determined the legally correct way to appoint a new KNAB Chief, and Vilks will hold that position until new rules areestablished.

 6. Prosecutor General Maizitis has reportedly offered Loskutovs a job. Neither the position, nor Loskutovs´ response is known, but the press states that Maizitis and Loskutovs will discuss the matter during the week of July 7.

7. Comment: Loskutovs´ dismissal comes as no surprise. The opposition was never in any doubt that it would happen, but the turnout at the protest showed the continued level of visibility and support for the KNAB. We do not expect any further protests during the Saeima´s session on Thursday, July 3, and anticipate appointment of the new KNAB Chief possibly on August 2. It will be interesting to see what happens in the future when a member of the coalition is accused of financial mismanagement, and if their colleagues hold them to the same standard with the same penalties as they held Loskutovs. We are inclined to doubt it. End Comment.

LARSON

2008-06-30 14:34

C O N F I D E N T I A L RIGA 000709 SIPDIS E.O. 12958: DECL: 11/19/2018

TAGS: PGOV, KCOR, KJUS, LG

SUBJECT: ANTI-CORRUPTION BUREAU STUMBLES

REF: A.RIGA386 B.RIGA700

Classified By: Ambassador Charles W. Larson Jr. for reason 1.4(b)

1. (C) Summary: The Anti-Corruption Bureau (KNAB) is a valuable organization that is in a period of transition. Post supports a strong KNAB that can continue to investigate corruption at all levels, but we are troubled with the organization´s seeming tin ear for the political efforts to neuter them. The KNAB has shown disregard for this threat and for potential negative public perceptions in actions they have taken. KNAB management recently awarded generous bonuses to their employees, the largest of any government agency, just prior to Prime Minister Godmanis´ request for a government-wide moratorium on such payments. The KNAB has also asked the international business community for potentially counter-government feedback on a draft proposal. With the KNAB´s unwitting assistance, the government has publicly built a case against current management, and has laid the foundation to appoint a new, politically-allied KNAB chief who will "clean house" and potentially hire new deputies. It is hard to imagine how effective this organization can be if this happens. End Summary.

2. (C) As a relatively new but valuable organization with idealistic employees, the KNAB has functioned to this point focused on their work. They perceive themselves as separate from the government. Public and legal opinion is that the KNAB´s prestige is still high. People trust the organization and wish it could do even more, understanding the limitations of budget and personnel. The KNAB´s biggest threat is a perceived underestimation of the influence of the very politicians they are investigating and the gravity of the negative press that some recent KNAB actions have drawn.

3. (C) The KNAB was the most generous institution among the several government offices that pushed bonuses through for their staffs just prior to Prime Minister Godmanis´ moratorium on these payments in the wake of general budget cutbacks. Press reports that the KNAB paid an additional 455,000 LVL (app. $1 million) to their employees. The KNAB explanation is that their salary system is complex and that the base pay is, on average, low and these performance bonuses make up the difference. Every government agency has an argument for why their salaries should remain or increase and the KNAB bonuses on such a scale gives the perception that the KNAB isn´t playing by the same rules as everyone else - another critical argument that the government continues to use against them.

4. (C) The KNAB is soliciting opinions and suggestions from the business community on a draft amendment to the law on public procurement, citing potential increased risk of corruption and undermining of fair competition. Although requesting the opinions of Latvian organizations that might be affected by draft laws is usual for the KNAB, asking for international feedback now seems ill-timed and oblivious in view of the KNAB´s weaked position without a Chief.

5. (C) Comment: Corruption in Latvia is systemic and the strength and value of the KNAB is undeniably important. However, the KNAB is living in an NGO/true believer bubble; crusaders steadfast in their faith and righteous in their actions. In November 2007, 8-10 thousand people rallied for Aleksejs Loskutovs but Saeima still dismissed him (ref a). Theft of evidence money by KNAB employees and the relentless attacks on KNAB investigators by the Latvian Internal Revenue Service (ref b) mark two more examples of internal mismanagement and give the ruling coalition a strong case to appoint a politically-allied Chief who will be tasked with "cleaning up" the organization that will likely be painted as out of control. End Comment.

LARSON

2008-11-20 15:30

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