UPDATED: Latvian, Estonian banks named in Council of Europe corruption scandal

Take note – story published 7 years and 3 months ago

Heads of the delegations of the Baltic States and the Nordic Countries (NB8) to the Parliamentary Assembly of the Council of Europe (PACE) have signed a joint statement to the leaders of PACE expressing their concern about possible corruption within the organization.

In the statement, released January 26, the heads of delegations unanimously condemned corruption among the members of PACE, which had recently emerged. The statement requests the PACE to take concrete steps for independent and transparent investigation of the allegations.

“PACE as an organisation that protects human rights and upholds European values must have zero tolerance in regard to corruption. It is not possible to work in an environment where even just one of your colleagues accepts a bribe without batting an eye,” head of the Estonian delegation and Vice-President of the PACE Marianne Mikko said.

The heads of delegations from Norway, Sweden, Denmark, Finland, Estonia, Latvia and Lithuania proposed to review the Assembly’s Code of Conduct, and also how the members observe it.

It was also recommended to create a control mechanism that would be launched in case of obvious violation of the PACE rules by a member of the PACE, in order to preclude future corruption cases.

The move comes shortly after anti-corruption organization Transparency International called for an investigation into allegations of vote-buying within PACE.

The Baltic Connection

The allegations center on an investigation suggesting Azerbaijan, among other countries, had "unduly influenced, over many years, Council of Europe activities and votes on human rights issues, including by allegedly transferring huge sums of money and other favours to key parliamentarians."

Transparency International also "expressed dismay at the apparent lack of effective internal anti-corruption mechanisms at Europe’s most important human rights institution."

The source of the allegations is a think-tank called European Stability Initiative which produced a quite remarkable report  on December 16, 2016 detailing free gifts and incentives allegedly handed out in order to gain influence.

Huge bribes were paid in December 2012 to an Italian politician that "reached Italy via two banks in Estonia and Latvia" according to the report.

"This path was chosen to conceal the fact that these were payments from one PACE member to another," the report says.

The banks in question are named as Baltikums Bank in Latvia and the Estonian branch of Danske Bank, with the money funneled via UK and Marshall Islands registered companies.

The investigation centers on Italian Luca Volonte, but it would be interesting to know if his was an isolated case -- or if other Council of Europe figures might have chosen to do discreet business via Baltic banks.

The Council of Europe is supposed to be one of the chief forces against corruption in Europe. 

Italian Public Broadcaster RAI3 has produced a quite brilliant piece by legendary investigative reporter Paolo Mondani about the allegations on its investigative show 'Report', which can be watched HERE.

Interestingly, LSM discovered the company listed as making the payment via Baltikums Bank, namely 'Jetfield Networks' of the Marshall Islands could not be found in online registries.

However, there was a company with the same name (the only company worldwide that we could find) registered in New Zealand from 2009-2012. According to New Zealand's company register, the director of the company was one 'Inta Bilder' and her address was given as: "Stacijas Laukums 2, Ak 555, Riga Lv-1050, Latvia."

Her name is a familiar one to connoisseurs of offshoring scandals.

The company was actually set up by an offshoring specialist called "Equity Trust International" which offers a glitzy web page in Russian as well as other languages.

The actual owner of 'Jetfield Networks' in New Zealand is another offshore company, 'Interhold Limited' whose director Manti Effrosyni is listed at an address in Cyprus, another popular offshoring hub.

LSM briefly searched records for the companies listed as making payments via Estonia and it quickly became clear that they were in turn owned by further offshore entities. In some cases, these were even the same further offshore entities. For example, both 'Hilux Serrvices' and 'Polux Management' are owned by 'Solberg Business Limited' and 'Akron Resources Corp'. Both also share the same Glasgow address.

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