Ghost of Mazeikiu sell-off continues to haunt politicians

  • 2004-05-27
  • By TBT staff
VILNIUS - The Vilnius District Court on May 24 began hearings into the role of three former government officials in the 1999 Mazeikiu Nafta privatization, a case that the parliamentary opposition has labeled as political, but one that has already shed an unflattering light on both Lithuanian and U.S. officials.

Former Reform and Municipal Affairs Minister Sigitas Kaktys, former Transport Minister Rimantas Didziokas and former Economy Deputy Minister Antanas Bartulis are charged with abuse of power and acting beyond their competence.
The three men are accused of using their governmental positions to influence the contract that sold Mazeikiu Nafta, the oil refinery and one of the country's strategic industrial assets, to Williams International, an American petroleum company. Prosecutors allege that the contract's final terms stipulated unreasonably low tariffs for oil transporters Lietuvos Gelezinkeliai (Lithuanian Railways) and Klaipedos Nafta.
If found guilty, the one-time officials could be prohibited from working in certain fields, ordered to pay a fine or face up to four years in prison.
During the first day of hearings documents surfaced that seemed to suggest that Lithuania was being pressured by the United States to sell the refinery to Williams International.
One declassified Foreign Ministry document showed that Stasys Sakalauskas, then ambassador to the U.S.A., told the ministry on July 14, 1999, that Deputy Undersecretary of the U.S. State Department Ronald Asmus had reported that the leadership of Williams was concerned about the Lithuanian party's will to reconsider what had been agreed earlier and even warned of possible consequences.
"Asmus thinks that failure to sign the agreement will have strategic consequences," Sakalaukas wrote in his report.
Indeed, as the three defendants stand trial, both their case and other investigations into the Mazeikiu Nafta affair have caused commotion across town and in Parliament.
At a press conference held May 24, Andrius Kubilius, current leader of the Homeland Union-Lithuanian Conservatives Party that was in power at the time of the Williams deal, called the case "politicized."
Pointing out the timing of the trial, which began only weeks before the June 13 European Parliament and presidential elections, Kubilius accused the ruling Social Democratic Party of trying to smear right-wing and center politicians at an inauspicious time.
Former President Valdas Adamkus, who leads the current polls for the presidential election, was one of the main forces behind the deal.
Meanwhile, a parliamentary commission investigating the events leading up to the transaction expressed its dismay when impeached President Rolandas Paksas failed to appear to testify on May 24. This was the third consecutive time that Paksas has snubbed the commission.
Speaking to reporters the same day, Paksas was unapologetic for his breach of parliamentary protocol.
"As you know, I'm traveling across Lithuania to meet with people, and I'm not often in Vilnius. And when I am in Vilnius, my beloved politicians make sure I spend my time with prosecutors," he said, referring to the pretrial investigation pending against him for his role in the privatization of the Zemaitijos Keliai road construction company.
Paksas resigned his post of prime minister in 1999 in protest over plans to sell the state's controlling stake to Williams International.
In almost three years of operations under Williams International management, Mazeikiu Nafta racked up losses of over 750 million litas (217 million euros). Williams eventually sold its stake to Russia's Yukos in 2002, defeating the 1999 government's principal goal of keeping the strategic object out of Russian hands.
Speaking to the Baltic News Service, U.S. Assistant Secretary of State for European and Eurasian Affairs Elizabeth Jones said, "It seems to us that the original investment, original privatization was decided on a strategic basis. That was important for Lithuania at that time."
In Jones' words, "It also seems to us that to try to criminalize those kinds of decisions is a mistake, because that tends to discourage investments. When it seems to us it will be appropriate for Lithuania to be taking steps to encourage investments."
The parliamentary commission hopes to release its final report by the end of the month, while the Vilnius District Court is expected to hear the case against Kaktys, Didziokas and Bartulis well into autumn.