Läänemets and Heinsar reach compromise in tax dispute

TALLINN - Lauri Läänemets, the chairman of the Social Democratic Party, and Egle Heinsar, a former party member who accused him of paying undeclared "envelope" wages, reached a compromise before the labor dispute committee on Tuesday, reports the daily Postimees.

The labor dispute committee hearing on Tuesday was originally scheduled for December 3 but was postponed by a month for logistical reasons. The parties confirmed that a compromise was reached during Tuesday's session. The details of the compromise were not disclosed by the parties and will remain confidential.

In September, the daily Õhtuleht broke a story in which Läänemets, the SDE chairman, allegedly paid Heinsar, a fellow party member, undeclared "envelope" wages for editing work in 2021. According to Heinsar, the employment relationship was based on a verbal agreement, with a net salary of 1,000 euros.

Läänemets is alleged to have paid Heinsar a total of approximately 4,000 euros in cash. Läänemets stated that the amount paid in cash was not that high and that he had not done anything illegal, claiming it was a standard procurement of services.

At the time, the Tax and Customs Board (MTA) officially launched proceedings into the alleged payment of undeclared wages. The Riigikogu's (parliament's) Anti-Corruption Select Committee has also been investigating aspects related to expense reimbursements, after Heinsar claimed in the autumn that one of the invoices Läänemets submitted to be covered by parliamentary expense allowances for her work was fictitious.

The committee's chair, Anastassia Kovalenko-Kõlvart of the Center Party, confirmed to Postimees that the committee will revisit the issue when the Riigikogu reconvenes for its spring session. She believes the materials concerning the expense reimbursements could also be forwarded to law enforcement agencies for evaluation.

In early December, Postimees reported that Läänemets, through his representative, attorney-at-law Priit Raudsepp from the Walless law firm, had been trying to reach a compromise with Heinsar via phone and email for nearly six weeks.

"The motivation for seeking common ground for a settlement is the desire to avoid, among other things, the potential financial and time-related costs that may ensue if no agreement is reached. Without a settlement, the media coverage and public commentary you have mentioned, which has bothered you, will likely continue. Your reaction in Thursday's phone call confirms that regardless of whether you believe your position is entirely correct, there will always be someone in the public who disagrees with you. Therefore, I believe that regardless of which party's legal assessment of the facts is correct, media coverage of the proceedings is not pleasant for anyone," Raudsepp wrote to Heinsar on October 27.

However, the parties failed to find common ground at that time. As Heinsar told Postimees then, she found it difficult to understand what a theoretical compromise could even entail: Heinsar wanted Läänemets to acknowledge the existence of an employment relationship, for which there are only two options - either he acknowledges it or he does not.