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07VILNIUS6482007-09-13 13:26:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius
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C O N F I D E N T I A L SECTION 01 OF 03 VILNIUS 000648 
E.O. 12958: DECL: 09/12/2017 
Classified By: CDA Damian Leader for reasons 1.4 (b) and (d). 
¶1. (C) SUMMARY.  Some media outlets in Lithuania, newspapers 
especially, extort politicians and businessmen using rewards 
of positive coverage and the threat of negative coverage. 
Media corruption damages media credibility, undermines 
Lithuania's democratic institutions, and intimidates 
politicians, businesses, and civil society.  It also hurts 
U.S. businesses, who are less apt to "play the game" than 
their local counterparts.  End summary. 
Context: Picture is bleak, regulation weak 
¶2. (C) Government officials, businessmen, NGOs, and others 
criticize Lithuania's media for being corrupt, in addition to 
the usual complaints that it is scandal-focused and 
sensational.  Media owners, with business and/or political 
interests, have a heavy hand and often operate as de facto 
¶3. (U) Lithuania's toothless media watchdogs do little to 
stop corruption.  The 1996 law on public information was 
watered down in 2002.  The maximum fine that any media 
regulatory agency can impose is 10,000 litas (about 4,000 
USD).  In 2006, the largest fine levied was 3,000 litas 
(1,200 USD) for airing a program unsuitable for children 
early in the evening.  When the Journalist and Publishers 
Ethics Commission finds an ethical violation, media outlets 
often do not run the "required" retractions.  The Commission 
then announces the retraction or correction on the national 
radio network. 
¶4. (C) Former journalist and current advisor to the Prime 
Vilius Kavaliauskas told us, "you must buy the right not to 
be attacked."  He added, "A daily can replace a minister -- 
any daily any minister."  Government officials seem paralyzed 
by the media.  In meetings at all levels, GOL officials often 
shrug their shoulders in resignation when we point out the 
lack of media ethics. 
¶5. (C) Media outlets have clear favorites, as in many 
countries, but in Lithuania direct payments are also 
involved.  A Labor Party official told us that for him to 
place a positive article in Lietuvos Rytas, a leading daily, 
it would cost him 25,000 litas (10,000 USD), but it would 
only cost the Social Democratic Party 5,000 litas (2,000 
USD).  He was not complaining about paying for an article -- 
he accepted that as common practice.  He was complaining that 
his party had to pay more than another party.  These paid 
political advertisements misleadingly appear as original 
journalism.  In another example of playing favorites, Vale 
Cepleviciute, a journalist who worked at the daily Respublika 
for 13 years, said at a recent conference on media corruption 
that for years Vitas Tomkus, Respublika's owner and de facto 
editor, told staff not to criticize the well-known 
businessman turned politician Viktor Uspaskich. 
¶6. (U) Politicians occasionally get caught paying for media 
coverage.  Lithuania's Chief Ethics Commission recently ruled 
that over the last two years Kazimiera Prunskiene, current 
Minister of Agriculture and Lithuania's first Prime Minister 
after independence, inappropriately promoted herself and her 
party in a public education campaign that ran advertisements 
in newspapers.  In September, the Parliament voted not to 
reprimand Prunskiene for her actions. 
Squeezing businesses 
¶7. (C) Raimundas Voishka, General Manager of the Lithuanian 
office of Pfizer, a U.S. pharmaceutical firm, told us that, 
several years ago, Tomkus personally told him that for one 
million litas (400,000 USD) his Respublika newspaper would 
"kill" Pfizer's competition.  Tomkus used vulgar language and 
was not ambiguous.  Tomkus told Voishka he had two weeks to 
think about his offer.  After two weeks, advertising staff 
from Respublika approached Voishka, who said Pfizer had 
nothing to advertise.  Shortly after that, Respublika carried 
an article about people dying from Viagra, one of Pfizer's 
products.  The paper followed up with stories about Pfizer 
charging too much for its products, taking advantage of poor 
hospital patients and sick people.  They put Voishka's 
picture on the front page. 
¶8. (C) Respublika ran an article that said Voishka beat up a 
child (he had, in fact, had an altercation with a 
neighborhood boy).  Respublika sent the article to Pfizer's 
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headquarters.  When the Prosecutor's office and Pfizer's 
internal investigations cleared him of any wrongdoing in the 
incident, Respublika claimed that Voishka had bribed 
Lithuanian officials and Pfizer management.  Another story, 
published in Respublika and other papers owned by the 
Respublika Group, claimed that a Pfizer executive got drunk 
with one of the Prime Minister's advisors and, in the wee 
hours of the morning, urinated on a restaurant window. 
Police came to investigate, the story continued, but the two 
drunkards bribed them to avoid arrest.  Pfizer investigated, 
questioning police and restaurant workers and examining the 
scene of the alleged incident.  They found no evidence that 
the incident occurred. 
¶9. (C) Voishka told us that most American companies are 
unwilling to pay bribes to the media, European companies are 
a little more willing, and for local companies it is part of 
doing business.  For example, an executive at a local bank 
told us Respublika published several negative articles about 
the bank.  The bank began paying Respublika for advertising 
and the negative press stopped.  The bank felt it made the 
right choice to play the game. 
¶10. (C Mykolas Katkus, CEO of the Lithuanian affiliate of 
the U.S. public relations firm Hill & Knowlton, told us that 
media corruption is important, but added that perception of 
corruption is equally or more important.  He said that many 
people suspect that any positive or negative article is 
either paid for or an attempt at blackmail.  Katkus added 
that, ten years ago, the media was the most trusted 
institution in Lithuania, with approval ratings in the high 
70 percent range -- more trusted than the Catholic Church -- 
and now it is one of the least trusted institutions, with 
ratings around 40 percent. 
¶11. (C) Voishka and others, including Katkus, worry about the 
role of Lithuanian "oligarchs" in many business sectors, 
including media ownership.  Voishka noted that the biggest 
companies in Lithuania are small by international standards, 
but in Lithuania (population 3.4 million) they are 
proportionately larger than their infamous counterparts in 
Russia or other countries.  Voishka added that Lithuanian 
oligarchs are keen to limit foreign entry into media in 
particular and business in general.  Until recently, the 
regional daily Kauno Diena was owned by a Norwegian group and 
it was, according to the PM's adviser Kavaliauskas, "the only 
objective paper in the country."  Recently it was bought by 
local firm Hermes Capital, and, Kavaliauskas feels, it joined 
the lowest common denominator approach to media, with 
apparently purchased articles and biased reporting.  (Note: 
We agree.)  Katkus, the PR company CEO, told us that the 
media business model in Lithuania trades short term financial 
gains for long term losses in credibility.  The only major 
media outlet in Lithuania with foreign ownership is the 
business daily, Verslo Zinios, which is owned by a Swedish 
A journalist's view 
¶12. (C) Kristina Kuncinskaite Grudiene, a journalist who 
worked for Respublika for 8 years and now works for TV3, told 
us that owners are the problem and journalists work under 
very bad conditions, including a low basic salary and a 
constant fear of firing.  At Respublika, staff assume that 
management often eavesdrops on all phones.  Grudiene told us 
that Tomkus, Respublika's owner, often comes to the office 
late at night to nix any story he does not like.  Staff are 
constantly trying to write stories that will please and not 
offend him.  Grudiene told us that Tomkus once fired 20 
people for running a story he did not like. 
¶13. (C) Tomkus's capriciousness extends to attacks on 
businesses.  Respublika was a long time sponsor of the 
Zalgiris basketball team, but in May he told Grudiene to 
resign for writing a neutral story about the team's proposed 
new stadium.  Apparently, she told us, Tomkus had recently 
received some bad financial news and the same day Zalgiris 
approached him for sponsorship money.  His petty response for 
bad timing was a negative story in the press.  Usually, 
though, attacks on businesses are about advertising money. 
Grudiene told us that earlier this year Respublika ran 
several articles criticizing Mercedes cars when Mercedes' 
local affiliate did not renew its advertising contract with 
Critics beware 
¶14. (U) Rytis Juozapavicius, a former journalist and current 
head of Transparency International (TI) in Lithuania, is a 
vocal critic of media corruption.  TI recently did a survey 
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of over 500 business leaders (owners, CEOs, etc.) to learn 
about their perceptions of and experiences with the media. 
It found that:  91 percent of business leaders surveyed 
believe the media has the power to destroy businesses; 63 
percent said they were "aware of the existence of paid 
slander against companies and/or individuals" in the media; 
and 43 percent said that when they purchased advertising with 
national newspapers, it also meant favorable publicity in 
addition to advertising. 
¶15. (U) Several media outlets, especially the weekly Ekstra, 
a supplement to the national daily Lietuvos Rytas, regularly 
attack Juozapavicius and TI.  Stories have insinuated that TI 
board members are linked with the mafia.  Ekstra also alleged 
in one story that Juozapavicius tried to bribe a journalist 
by offering a laptop computer in exchange for advertising a 
certain company on television. 
Glimmers of hope: legislation, internet, new owners 
--------------------------------------------- ------ 
¶16. (C) TI has worked with the Journalists and Publishers 
Ethics Commission, the Inspector of Journalists Ethics, and 
the Lithuanian Journalists Union to draft legislation that 
they hope the Government will bring to the Parliament in fall 
¶2007.  Currently, most media pay a Value Added Tax charge of 
five percent, far less than the 18 percent other businesses 
pay for most items.  The draft legislation proposes that 
media sources that the Journalist and Publishers Ethics 
Commission finds in violation of the Journalists' Code of 
Ethics would lose this privilege and be charged the 18 
percent VAT.  The 18 percent VAT would also apply to 
pornographic, violent, or majority advertising (80 percent or 
more of the publication is ads) media.  Juozapavicius, 
however, fears the bill is unlikely to pass and that MPs who 
support it would face pressure from the media lobby as well 
as attacks in the mass media. 
¶17. (C) Since owners are the major source of corruption, a 
change in ownership could bring a rapid improvement in 
Lithuanian media.  However, media owners seem to prize the 
power they wield.  If anything, the trend in Lithuania is for 
large companies -- MG Baltic, Hermes Capital, Achema Group -- 
to consolidate media ownership.  The worst offender, 
Respublika Group, remains strong.  Despite a decline in sales 
of its flagship daily Respublika, its tabloid Vakaro Zinios 
is the best selling newspaper in the country. 
¶18. (U) Alternative forms of media are gaining in popularity, 
in particular internet news portals and the free wire 
service-based daily 15 Minutes.  These sources of news seem 
relatively free of hidden paid advertising and are less 
biased than their print counterparts.  They are not strong 
enough to dispel the influence of the major print media, 
¶19. (C) A combination of increased foreign ownership, an 
improved legal framework, and alternative media, such as 
internet news portals, could reduce media corruption in 
Lithuania, but such a combination is unlikely to happen soon. 
 In the meantime, the media will continue to be a menace that 
serves the few at the expense of the many -- including U.S. 
businesses in Lithuania.  Post has worked to improve the 
situation by sponsoring International Visitor programs, the 
Ambassador hosting a recent round table discussion with young 
journalists, and meeting with Government regulators and 
relevant civil society groups.  We will continue with these 
efforts and will look for ways to encourage the Government to 
draft stronger legislation.