With the announcement that Freeport of Ventspils declared itself a victim, in February 2022 Latvian authorities commenced a criminal procedure over the payments that the sea port was providing to the organisation managed by ex-mayor of Ventspils Aivars Lembergs over the course of 20 years, as reported by LTV programme De facto.
The current management of the freeport believes this may have caused damages worth EUR 1.3 million, as reported by lsm.
De Facto has reported multiple times on the state of affairs that was in place in Ventspils for years – the money of private companies, state and municipal institutions flowed to different organisations managed by Lembergs, which provided Lembergs with much greater income than his wage in as chairman of the city council. This practice seemed generally acceptable to supervisory institutions. The practice finally ceased in 2019, when the US imposed sanctions against Lembergs.
The Corruption Prevention and Combating Bureau (KNAB) has commenced an investigation of the payments exacted by the Freeport of Riga to one such organisation – Ventspils Development Agency. This was revealed by Ventspils City Council opposition deputy and member of the sea port’s authority Ģirts Valdis Kristovskis last week. He was authorized by the sea port to prepare evidence for law enforcement institutions.
«The amount is impressive. An audit revealed to the freeport’s board that losses reach approximately EUR 1 300 000,» Kristovskis told the programme.
Ventspils Development Agency was founded in 1998 by the municipality and sea port companies, such as Ventspils nafta, Ventbunkers, Kālija parks and Ventamonjaks. The company was entrusted with the city’s marketing. Freeport of Ventspils became a member later on, as well as local university and technical college, as well as municipal institutions. Membership fees from all of them reached hundreds of thousands of euros a year.
Read also: VBP Deputy Chairman: Freeport of Ventspils board is a victim of Lembergs’ management
«The lion’s share was paid by the freeport’s authority. Every five years and nearly EUR 113 000 a year,» Kristovskis revealed.
The audit revealed that in 2001 Lembergs’ managed Ventspils Development Agency invited Lembergs’ led sea port to become a member of the agency. The now former sea port’s CEO Imants Sarmulis reported that a single-time membership fee would have to be paid – 35 000 lats or 50 000 euros. This amount allegedly included different services for unlimited time.
But the freeport continued paying the membership fee year after year. And it later increased four times. The freeport’s authority did not even decide on increasing the fee, except for one year. Fees were generally kept hidden in a small section of the budget.
KNAB is now investigating possible large-scale waste of public resources and abuse of power.
Sarmulis said he could not remember was he said in 2001 that the fee would be a single-time thing. He claims the agency helped develop the sea port’s industrial area, which is why payments to the association were justified.
«Lembergs was in charge of it. He personally controlled the process. I went to him several days a week to coordinate activities,» said Sarmulis, justifying Lembergs’ wage in the association, which was paid from funds of the sea port.
Before ending up on the US list of sanctions, Lembergs’ wage paid in Ventspils Development Agency was close to EUR 100 000 annually.
Lembergs told De Facto that KNAB has sent questions to the association. He links the criminal procedure with the upcoming elections, adding that there was nothing illegal there at all.
The former mayor tried to explain that by paying his association for marketing services to implement different projects, the freeport paid a relatively cheap price overall:
«Outsourcing promotion of such projects would have added more zeros to the freeport’s authority every year in costs.»
Although it was presented as though everything good that happened in Ventspils was an accomplishment of this agency, the current authority of the freeport reports having no reliable information as to whether or not there were any successes at all: every year the agency provided a single A4 sheet of paper on which it reported on spending the freeport’s money. The tasks allegedly completed by the agency were done by the freeport in the end, claims Kristovskis.