The Corruption Prevention and Combating Bureau (KNAB) has launched a criminal investigation this summer into possible illegal activities within the Ports Development Fund.
Earlier this year, a State Audit Office (SAO) report revealed serious irregularities concerning the fund’s legal status, financial management, and personnel activities. The audit found that an incomplete legal framework complicates the fund’s oversight and governance. Moreover, the lack of effective supervision and financial control mechanisms for the fund’s expenditures, along with missing internal regulations for approving expenses, was highlighted.
The SAO also discovered that funding decisions were made by unauthorized persons, and there were indications of potential personal interests among employees of the Secretariat of the Latvian Ports, Transit and Logistics Council involved in approving transactions.
The audit further revealed that service contracts had been signed with employees of the Ministry of Transport (SM) for tasks duplicating the ministry’s own responsibilities. These ministry employees did not seek approval for secondary employment, and the ministry itself failed to assess or issue such permits.
Additionally,
remuneration was paid to ministry employees who were not actually performing their duties,
and the fund’s annual reports were not submitted to the relevant authority.
The State Audit Office informed the Prosecutor General’s Office about the findings, which then referred the case to KNAB. Following an internal review, KNAB decided to initiate criminal proceedings, the SAO confirmed to the news agency LETA.
KNAB confirmed to LETA that in June it opened a criminal case concerning the abuse of official authority for personal gain and falsification of documents for personal gain. At the current stage of the investigation, no individual has yet been designated as a suspect. KNAB did not provide further details.
In May, the Parliamentary Secretary of the Ministry of Transport told the Saeima’s Public Expenditure and Audit Committee that the Ports Development Fund, which until now operated under the Latvian Ports, Transit and Logistics Council, could in the future be reorganized into an association.
The fund was established in 1994, but since 2010 it has no longer been part of the state budget, leaving its legal status unclear. The fund’s budget consists of contributions from Latvia’s three major ports — the Ventspils, Riga, and Liepāja Special Economic Zone (SEZ) authorities — totaling about 231,000 euros per year on average.
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