Viewpoint: A Piece of Cake

What should be done with Ugis Magonis? The former boss of Latvia's state-owned railway company currently languishes in a police cell as investigations continue into why he was (allegedly) driving back from Estonia with half a million euros in cash keeping the back seat of his car warm.

I'm not talking about what should be done with him in a legal sense – because faith in the legal system is about as substantial as the memory of a meringue you ate last year.

Magonis has not been convicted of anything yet.

Personally, I favour the operatic treatment for Magonis. This case of a hubristic high-flying businessman brought low in such spectacular fashion might suggest itself to grand opera, but I think the Verdi treatment would be too much, despite the fact Magonis recently projected his own face onto the walls of Rundale palace, creating a perfect operatic stage set.

This is more of a Gilbert and Sullivan operetta – the absurdity of a rail boss in a car, the cliched attache case of cash that you only find in 1970s gangster movies, the information that the whole alleged scam involved buying clapped out old locomotives (metaphor alert) at an inflated price and, most hilariously of all, a story that he attempted a high-speed escape in his executive limousine only to be foiled by roadworks.

That last detail about the high-speed chase now seems to have been fiction, but one can hardly blame Latvian media (LSM included) for seizing on it with such glee. Because as recent history repeatedly shows us, the arrest of a 'VIP' in connection with large-scale graft unfortunately turns out to be the high-water mark for the Latvian justice system.

What follows is as depressing as it is predictable: a court case of mind-boggling complexity and duration, the gradual erosion of the charges and exploitation of a legal code that seems to have more loopholes than a string vest, an even more rapid erosion of public faith and interest in the justice system, disillusionment and the quiet slippage of the case into obscurity – almost as if it never even happened.

Indeed at times it seems as if Latvia may have the only legal system in the world in which a verdict is optional. Witness the graft trial of Ventspils mayor Aivars Lembergs, which has been dragging on for more than 8 years with no end in sight. You can stage at least two Olympic Games within one Lembergs trial, qualify as a medical doctor, or cycle round the world twice.

The Nuremberg war crimes tribunal only took a year. The impeachment of Warren Hastings – a notoriously long-drawn-out trial in the UK that became a national joke – took 'just' seven years.

In the US, the corruption trial of Illinois state governor Rob Blagojevich was done in the blink of an eye – two and a half years. The Enron trial, the complexity of which is beyond anything Latvia could possibly dream up, was dealt with in two years.

There was a similar sense of media and public euphoria to the current Magonis craze when Karlis Mikelsons, chairman of the Latvenergo electricity utility, and someone with a strikingly similar air as Magonis of the big-boss-who-knows-it-all was led away in handcuffs in 2010 in an investigation of large-scale bribery, money-laundering and all-round corruption within the company (also a state owned monopoly). Five years later “the case continues” as we are taught to say in journalism school.

It might be argued that the so-called Digital TV case – another massive fraud involving public money - is an exception, with a string of defendants recently convicted in connection with a rigged tender to overhaul the nation's TV broadcasting infrastructure. But even this was far from perfect – the smaller, less well-known cogs in the scam seem to have been handed the harshest sentences while the person the general public believes to be primarily responsible for the whole swindle – who for legal reasons cannot be named here – wasn't even in the dock.

It was the same with the Jurmala vote-buying scandal, with the collapse of Parex bank and the near-collapse of airBaltic, with other less celebrated cases. Justice was not seen to be done. The 'guilty' were at best grazed and dazed for a few minutes, certainly not knocked out.

It's hard to think of a single Latvian case in which a high-profile defendant accused of the most flagrant abuses of office has got what was coming to them in a straightforward and speedy manner. This is serious. The cynicism of the public is to be expected. 'They' always get away with it, and even if a conviction does by some miracle occur, it has no consequence at all.

Political fixer/publicist/consultant Jurgis Liepnieks was recently convicted of being part of a money-laundering and fraud scam in connection with the Digital TV case. He was fined. He is appealing. Respected journalists still turn to him for his opinions on everything from the budget to refugee quotas. His credibility appears unaffected. The conviction is irrelevant.

The real business future of Latvia lies not with placemen of dubious distinction ripping off their giant monopolies but with people setting up their own firms, making things, going to foreign lands and selling them Latvian products. That's much more commendable than sitting in an office playing with a giant train set or selling electricity to a clientele that can't buy it anywhere else.

Yet still they stare out at us with smug self-assurance from the covers of business magazines, careful to hoist their cuffs just enough to show off their Breitling watches. They think they are classy but in fact they are rather seedy. They say they will share their business secrets with us, but all they share are their own inflated egos. Their real business 'secret' is nothing more than “Get access to public cash then fill your pockets with it.”

Magonis was with Latvian Railways for thirteen years. That is not the career curve of a restless go-getter, it's of someone who knows they are onto A Good Thing. He has not been convicted of anything. Maybe he never will be.

It's easy to mock the ingenue enthusiasm of the young TechHub Riga crowd and other young entrepreneurs with their almost evangelical belief in the transformative power of yet another app but at least they are creating new, self-owned companies that will sink or swim according to their appeal, the investment they drum up and a bit of luck. If they make money they will have earned it, and if they want to drive around with it on the back seat of their renovated Volkswagen Camper Vans, that will be their privilege.

Meanwhile we are assured that Latvia's accession to the Organization for Economic Cooperation and Development (OECD) remains on track. There may be a few things about running state-owned companies to iron out, but nothing major. These minor blips do not seem to include the fact that people running these state-owned companies have a nasty habit of winding up in court in connection with massive graft.

Luckily many of the remaining state-owned enterprises retain such convoluted and opaque reporting procedures, otherwise who knows what might come out into the public domain. The public only owns the companies, it has no need to know what actually goes on within them. Only high-fliers like Mikelsons, Magonis and He Who Cannot Be Named really understand how they work, which is why they deserve such large salaries.

As full disclosure is being demanded, I should make a confession of my own. In recent weeks, when saying I am going to do some work in the library or load up with logs for winter, I have made a little detour to a cafe where they make really excellent cakes. My favorite is their poppy seed cake, a swirl of pastry stuffed with poppy seeds with a lick of chocolate on top.

I order one with a cup of coffee and take it to a table outside, enjoying the sunshine for a few minutes. The Latvian for poppy is 'magone'. I sip my coffee and imagine how many of these delicious magoņu maizites I could buy with half a million euros. Probably enough to last at least eight years, enough to fill up the entire back seat of my car, enough to make me one very fat cat indeed.

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