Viewing cable 08RIGA338
Title: COMMISSION FORMED: KNAB CHIEF'S FUTURE IS DIM

IdentifierCreatedReleasedClassificationOrigin
08RIGA3382008-06-12 11:14:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Riga
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PP RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHRA #0338/01 1641114
ZNY CCCCC ZZH
P 121114Z JUN 08
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC PRIORITY 5006
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
C O N F I D E N T I A L SECTION 01 OF 02 RIGA 000338 
 
SIPDIS 
 
E.O. 12958: DECL: 06/11/2018 
TAGS: PGOV KCOR KJUS LG
SUBJECT: COMMISSION FORMED: KNAB CHIEF'S FUTURE IS DIM 
 
REF: A. 07 RIGA 825 B. RIGA 292 C. RIGA 304 
 
Classified By: CLASSIFIED BY CDA STUART SELDOWITZ FOR REASON 1.4(b) 
 
¶1. (C) Summary. Following Prosecutor General Janis Maizitis' 
submission of his report on the KNAB (ref b), Prime Minister 
Godmanis asked Anti-Corruption Bureau (KNAB) Chief Aleksejs 
Loskutovs to step down, which he refused to do. According to 
Latvian law, a Commission has been formed to determine 
whether Loskutovs should be dismissed. It is widely believed 
he will be. This satisfies the Coalition's desire to get rid 
of Loskutovs, unrealized last fall (ref a), and calls in to 
question who will replace him; an effective leader and 
manager who will pick up the torch of fighting corruption in 
high places, or an official who is sympathetic and malleable 
to political interference. Even some KNAB supporters agree 
that Loskutovs should go because he has failed in management 
of his agency. Unfortunately, opponents of KNAB will take his 
likely dismissal not as setting a new and better standard for 
all public officials in Latvia, but as a vindication of their 
ham-handed attempts last fall to remove Loskutovs. End 
Summary. 
 
¶2. (C) In an expected move, on May 11 PM Godmanis asked 
Loskutovs to resign and he refused. The decision to request 
his resignation was made pursuant to Prosecutor General 
Maizitis' submission of his report on the investigation of 
the missing money at the KNAB (ref b). Maizitis specified 
that he did not believe Loskutovs was criminally liable for 
the stolen money but acknowledged that management controls 
were lacking at KNAB. According to Saeima legal procedure, a 
Commission has been formed to determine whether Loskutovs 
will be dismissed. This Commission includes Prosecutor 
General Maizitis, Security Police Chief Reiniks, Constitution 
Protection Bureau Chief Kazocins, Parliamentary National 
Security Commission Head Jaundzeikars and Defense Minister 
Veldre (representing the coalition). The Commission's 
decision is due by June 16 and the imminent dismissal is 
projected for within the next week and a half - before the 
Saeima's summer recess. Although it has not yet gone to vote, 
the press reports that the coalition has decided to dismiss 
Loskutovs. (Comment: We presume that Jaundzeikars and Veldre 
will vote to remove and Kazocins told us privately weeks ago 
that he thought the charges of poor management were credible 
and Loskutovs was likely done. End Comment.) 
 
Benefiting the Political Elite 
------------------------------- 
 
¶3. (C) Valts Kalnins, the head of the anti-corruption NGO 
Providus, told us that it is undeniable that there have been 
management deficiencies at the KNAB and there is no other 
remedy than to dismiss its Chief. Admittedly, however, the 
political elite have been waiting for this opportunity to 
dismiss Loskutovs and replace him with someone who is more 
"friendly" to politicians. Kalnins stated that the 
opportunity of the missing money has given them the argument 
they needed to get rid of Loskutovs that they lacked last 
fall (ref a). 
 
¶4. (C) Dina Spule, of the KNAB International Relations 
Department, also stated that the timing of the investigation 
was serendipitous for the enemies of the KNAB. Spule 
intimated that some ongoing investigations are far more 
involved and widespread than anyone anticipated, and much 
broader than the general public realizes. The investigation 
of the Riga City Council, which was already very deep, is 
even more significant than the KNAB initially thought. More 
high-level suspects seem to be implicated and the occurrence 
of bribery is staggering. The investigation of the Riga City 
Council was nearing its completion before the scandal, and is 
now stalled, with people missing appointments to speak to the 
KNAB, and KNAB investigators suffering personal property 
damage in the interim. (Note: As we reported in ref C, we 
have heard that the Riga City Council case is the one that 
most worries the oligarchs. End Note.) 
 
¶5. (C) The press has stated in several instances that 
Loskutovs is not the only person the Commission could 
recommend for dismissal. Juta Strike, Loskutovs' Deputy, is 
also under the gun. Spule stated that Loskutovs believes that 
Strike will also be asked to leave, as she is in charge of 
KNAB investigators. 
 
¶6. (C) The remaining question is who will be the next KNAB 
Chief. PM Godmanis has already named Andris Vilks as the 
Deputy who will take the position in the short term. Kalnins 
stated that Wilks is not corrupt, is qualified by experience 
(Vilks was Acting Chief last fall when Loskutovs was 
suspended), and can be expected to act independently of 
outside political influence. However, he is very balanced and 
cautious in his decision making and Kalnins does not know how 
proactive Vilks will be in the fight against corruption. Two 
 
RIGA 00000338  002.2 OF 002 
 
 
other candidates are under discussion in the press: Security 
Police Chief Reiniks and Criminal Police Arturs Lulaks. 
 
¶7. (C) Comment: This situation is different from last fall. 
Then, there was a rush to generate facts to ensure Loskutovs' 
dismissal. This time, a methodical procedure, outlined in 
law, has been followed. As we have reported, Loskutovs did 
not grasp that there were real management issues here. Even 
if, as he alleges, he was set up, a lack of management 
controls made it possible for nearly 300,000 USD to go 
missing -- including some money that was physical evidence. 
That is a serious problem. Unfortunately we don't think that 
a likely decision to remove Loskutovs will do anything to 
increase accountability in government. Instead, it will be 
taken as vindication of efforts last fall to remove Loskutovs 
and could spur further bad behavior to undermine the rule of 
law. With Loskutovs likely lost, we need to focus our 
attention on who will replace him; a noncorrupt official who 
has the potential to grow into a strong KNAB leader, or a 
weak figurehead who acts in the interests of the oligarchs. 
We also need to keep an eye on possible next steps, such as 
attempts to remove Prosecutor General Maizitis. End Comment. 
SELDOWITZ