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Viewing cable 07RIGA723, LATVIAN ANTI-CORRUPTION CHIEF SUSPENDED

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Reference ID Created Released Classification Origin
07RIGA723 2007-09-27 14:53 2011-08-25 00:00 UNCLASSIFIED Embassy Riga
VZCZCXRO9900
OO RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHRA #0723 2701453
ZNR UUUUU ZZH
O 271453Z SEP 07
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4390
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
UNCLAS RIGA 000723 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV KCOR KCRM LG
SUBJECT: LATVIAN ANTI-CORRUPTION CHIEF SUSPENDED 
 
Ref: RIGA 107 
 
1. Summary: Prime Minister Kalvitis has suspended and initiated a 
disciplinary case against Aleksejs Loskotovs, the head of the 
Latvian Anti-Corruption Bureau (KNAB). The charges stem from the 
alleged discovery of "continued and serious violations concerning 
the use and accounting of operative financial resources" resulting 
from the State Auditor's Office 2006 audit of the KNAB. The GOL and 
the Prosecutor General's office have launched a total of three 
separate inquiries to determine whether Loskotovs will keep his 
position and also whether the allegations against him are 
legitimate. While the Prime Minister insists this is a serious 
situation, most outside observers believe that Loskotov's suspension 
is part of a larger effort to block the work of the KNAB. End 
summary. 
 
2. In 2006 the respected State Auditor's Office performed an annual 
audit of both of the KNAB's public budget and classified operating 
budget. Loskotovs' suspension is in response to findings from the 
operating budget audit. State Auditor Inguna Sudraba stated that 
politicians have never reacted so strongly to State Audit Office's 
findings. She said that the response is inconsistent with government 
reaction to previous audits, and is concerned it may appear that the 
Prime Minister is using the Auditor's office to attain political 
goals. 
 
3. Kalvitis received the Auditor's report in June, but only now 
reacted. He reviewed the issue at the National Security Council 
meeting on September 19, including the President, FM, DefMin and 
other, before making the decision to proceed with the suspension and 
inquiries. Kalvitis claimed that he has observed misuse of this 
budget for years and was "fed up" with it. 
 
4. In press interviews, Loskotovs has speculated that his suspension 
is related to the personal interests of businessman and People's 
Party (TP) founder Andris Skele and Ventspils Mayor Aivars Lembergs, 
and "a revenge for the successful work of KNAB."  Kalvits reacted 
strongly against this allegation. 
 
5. Loskotovs is suspended indefinitely as Kalvitis oversees the 
management of the KNAB, but Loskotovs can only be removed by a 
majority vote of the parliament. To study whether Loskotovs is fit 
to maintain his position the GOL has launched two inquiries; one 
through the Prosecutor General's office and one through the State 
Civil Administration.  The Prosecutor General's office has launched 
a separate investigation to determine the validity of the findings 
in the Auditor's report. Once the Saeima receives the Commissions' 
findings it will vote on whether Loskotovs will keep his position. 
Currently there is no time frame for completion of these 
investigations. 
 
 
6. The more liberal press and many NGO's have been very critical of 
the move. Transparency International Latvia (TI) stated on September 
24 that the suspension of Loskotovs is "an unacceptable political 
attack against the (KNAB)." TI underlined that the timing of the 
government's action is also suspect, the KNAB's decisions in cases 
of alleged overspending in the October 2006 parliamentary elections, 
are due in October. TI called the actions the "last step in the 
anti-KNAB policy." 
 
7. Comment: The KNAB has been on the political hit list of leading 
political figures in Latvia for some time.  While we have no ability 
to judge the veracity of the charges against Loskotovs (and do not 
deny that there could be financial problems), certainly the 
appearance is of safeguarding the interests of Latvia's most corrupt 
political figures.  We will continue to watch the conduct and 
outcome of the inquiries, future Government actions, and the 
identity of possible replacements should Loskotovs be removed. 
Current signals are far from encouraging. 
 
Bailey