Corruption, Energy, Financial Services, Latvia, Legislation

Yesterday the Corruption Prevention Bureau forwarded to the Prosecutor General's Office a criminal case on bribery during the reconstruction of the Plavinas power plant and the Riga 2nd cogeneration plant, asking that 17 persons be held responsible. Strelcenoks, however, declined to reveal their names., writes LETA.

The Corruption Prevention Bureau wants the prosecutor's office to charge four former Latvenergo officials with taking bribes, and two of them also with money laundering. The bureau also wants four authorized representatives from foreign companies to be charged with offering bribes, eight with money laundering, and one with aiding and abetting bribery.

According to the Corruption Prevention Bureau, Latvenergo officials and employees, in abuse of office and motivated by personal gain, accepted large bribes and, in turn, ensured that the company made decisions in favor of several foreign companies, registered in Spain, Turkey and Sweden, in several "Latvenergo" public procurement and reconstruction contracts. This is proven by evidence that the bureau's investigators found.

Based on consulting agreements signed by go-between companies and the foreign companies, Latvenergo officials and staff members were paid large amounts of money for signing contracts with the foreign companies, implementation of these contracts, and observing non-disclosure provisions stipulated in these contracts. The go-between in fact managed money that was to be given to Latvenergo officials for their illegal activity.

The bribery affair was implemented through a money laundering scheme via a number of companies registered in Latvia and abroad, which involved various money transfers, property deals and investments in companies that belonged to Latvenergo officials and the consulting company's owner.

The Corruption Prevention Bureau investigators have established that of EUR 178 million spent on the first round of reconstruction of the 2nd cogeneration plant Latvenergo officials and staff members received a bribe of no less than EUR 6 million altogether via a large number of companies registered in several countries. Reconstruction of Plavinas power plant cost EUR 32 million - of which a bribe of no less than EUR 1 million went to the perpetrators.

Also, they received about EUR 1.1 million bribe out of USD 57 million and EUR 289 million – the cost of the second round of the 2nd cogeneration plant reconstruction, but the largest part of the bribe, about EUR 11 million, was intercepted after several persons were detained within the Corruption Prevention Bureau's criminal case in June 2010.

During the investigation, the Corruption Prevention Bureau seized a total of about LVL 400,000 in cash.

There is solid evidence in the case to bring all the persons involved in the case to account, stressed Strelcenoks. This is the most voluminous case in the Corruption Prevention Bureau's history, and all officers from the investigative departments of the bureau were involved in the investigation. Strelcenoks also publicly thanked many of the persons involved in the investigation, including investigators Juta Strike and Lienite Sikore, who worked on the case on not only early mornings and late evenings, but also on weekends.

Investigation in the case continued for two years, and fourteen countries were involved in the investigation altogether. The materials in the case are comprised in 262 files. European Anti-fraud Office and authorities in many countries assisted the Corruption Prevention Bureau.

As reported, the Corruption Prevention Bureau has listed 17 persons, including six officials, as suspects in the case. These include former Latvenergo President Karlis Mikelsons who was detained in June 2010 but released in August of the same year on an LVL 50,000 bail, as well as his deputy Aigars Melko and Sadales tikls CEO Ivars Liuziniks and his deputy Andrejs Stalazs.

Daugavpils businessman Mihails Paladijs was detained in July 2010, and his 100 percent shares in Buvenergoserviss company were arrested. The company previously won various Latvenergo contracts.

Another suspect is consultant Andrejs Livanovics, whose company Energy Consulting acted as an agent for the Swiss company AF Colenco, which consulted Latvenergo on the reconstruction of the Riga 2nd cogeneration plant – a project worth millions of lats. The branch office of AF Colenco in Latvia has the same address as the private home of the Livanovics in Marupe County.