RIGA - The detaining of two top Latvian businessmen brought the murky, insulated world of Ventspils business back to the headlines last week as investigators continued their sweeping probe into shady business practices in the port town. Mamerts Vaivads, chairman of Ventspils Nafta, a business conglomerate involved in transit, shipping and publishing, was arrested on Feb. 21 while dining in Riga's Vincents restaurant.
Prosecutors announced the next day that Vaivads had been detained on suspicion of having pocketed large sums of unreported cash, including laundered funds, either on his own or via offshore companies. Vaivads was released on Feb. 23 by court order.
Krists Skuja, chairman of Ventamonjaks, a chemical and oil products-handling terminal in Ventspils Free Port, was also detained the same day for the same alleged offenses. He too was later released.
No specific charges have been brought against the businessmen.
In addition, investigators conducted searches of five premises, including Ventspils Nafta's office, a business center in Ventspils, and the homes of Vaivads, Skuja and Uldis Pumpurs, head of council at Latvia Oil Transit and owner of the Uzavas brewery.
The crackdowns were assisted by Latvia's anti-corruption bureau, which has been increasingly decisive in tackling corruption 's on all levels 's in recent months. But the interrogation of Vaivads and Skuja is also part of a wide probe into Ventspils businesses, which are notorious for lack of transparency and bitter infighting, and has been dubbed "the Ventspils affair" in local media.
Ventspils Nafta, which last October obtained a new strategic investor, mocked the detainments, saying they had been conducted in violation of the Constitution and Latvian law. In a statement, Gundega Varpa, a company spokeswoman, expressed doubt as to the integrity of Latvian prosecutors and suggested the company would seek legal recourse in the European Court of Justice or the European Court of Human Rights.
So far there has been no reaction from the Vitol Group, an oil trading group that acquired a 34.75 percent stake in Ventspils Nafta last October.
But a noose appears to be slowly tightening around Ventspils businessmen. In January prosecutors detained Gita Grasmane in connection with Ventspils-related money laundering, and Gints Laivins-Laivenieks, a lawyer, was also recently brought in for questioning about illegal financial activities, according to reports.
For his part, Ventspils Mayor Aivars Lembergs, who is central to all business-related activity in Ventspils and a close associate of Vaivads, went on a media-blitz last week to lash out at Latvian prosecutors, U.S. philanthropist George Soros and even Russian Ambassador Viktor Kalyuzhny.
He told LNT television on Feb. 22 that he doesn't rule out that he could be the next to be detained. "Those who need to be destroyed have been determined," Lembergs said. "Number one 's Lembergs, number two 's [former Prime Minister Andris] Skele and number three 's [Transport Minister Ainars] Slesers."
Once sworn enemies, the three powerful men 's all considered oligarchs in Latvia's media 's appear to have made amends in the face of the growing crackdown on fraudulent activity by both prosecutors and the anti-corruption bureau. Their common adversary in the parliamentary elections last October was Einars Repse, head of the opposition New Era party.
Parties associated with Lembergs, Skele and Slesers now make up three-fourths of the current ruling coalition.
In Lembergs' opinion, the hunt for Ventspils businessmen is taking place on the initiative of "Soros' political forces" that are estranged after losing the election. In the past two years Lembergs has been increasingly vocal about supposed involvement of the U.S. billionaire in Latvian politics, particularly through NGOs and educational grants.
Regarding Kalyuzhny, Lembergs told the Republika magazine that the Russian ambassador is spreading lies about the fate of the oil pipeline to the Ventspils port, which has been dry for four years now after Russia cut off supplies.
Previously Kalyuzhny had told the same publication that Lembergs was to blame for the cut-off, as the mayor's personal ambitions interfered with business.
"I think that this lie is being spread not in the name of the country Kalyuzhny represents but in his personal interests," Lembergs said. "It's not a secret that the Russian ambassador has a special relationship with [Ventspils businessman Oleg] Stepanov. So the ambassador's words should be regarded as activity in the interest of specific economic and political interests."
In the mayor's words, "He is lying, claiming that whether or not oil will flow through the pipeline depended on me." Lembergs stressed that the decision not to deliver oil to Ventspils is purely political and depends on Moscow, which he cannot influence.
Stepanov, naturally, didn't take the blows sitting down. In an interview with the Bizness & Baltija paper published on Feb. 26, he slammed Lembergs for being involved in politics and business at the same time. "He should choose his profession: business or politics," he said, adding that politician Lembergs was "odious" and even dangerous.
"Concentrating power in the hands of Lembergs would bring only harm for the further democratization of society," said Stepanov.
During the parliamentary campaign last year the Ventspils mayor, who is a major support of the Greens and Farmers Union, did not hide his ambition to become prime minister. The party nominated him as its candidate for the position of head of government.
