Barroso warned of Udre's vulnerability

  • 2004-10-20
  • By Aaron Eglitis
RIGA - A critical letter released last week by a European Parliament committee called on Commission President Jose Manuel Barroso to assume personal responsibility for corruption allegations surrounding Ingrida Udre. The letter further recommended that Udre be dismissed if allegations against her are proved to be true.

Barroso met with Prime Minister Indulis Emsis on Oct. 19. Though the PM's official spokesman said their talks had nothing to do with Udre, there is speculation that, given the gravity of the committee's letter, Barroso may have wanted personal assurance that Latvia's commissioner-designate was beyond reproach and that financial allegations against the Greens and Farmers Party, of which Emsis is a member, would not damage the cohesion of Europe's new commission.

While much of the international media have focused on Italian commissioner-designate Rocco Buttiglione and his remarks on homosexuality, Udre has also been mentioned as a problematic commission designate due to her poor hearing performance. In Brussels Udre failed to convince MEPs that she was not culpable in allegations surrounding the Greens and Farmers Party's campaign finance in 2002.

The economic and monetary affairs and internal market and consumer protection committees asked that Barroso personally vouch for Udre to the point of demanding resignation if her integrity falls under question again.

The Greens and Farmers Union, a political marriage unknown in Western Europe, emerged in 2002 as a means of surpassing the 5 percent barrier in national elections. Bolstered by slick advertising and a war-chest of 500,000 lats (746,000 euros) in donations, much of which party members such as Udre admitted originated among Ventspils-based business interests, the party trolled the countryside with a message of discreet Euroskepticism. The campaign paid off, with the GFU winning 10 percent of the vote and 12 seats in the 100-seat Parliament.

Later, however, a long shadow of doubt was thrown over the donations, as the anti-corruption bureau announced that up to 93 percent of the donations could not be accounted for as donors' own resources. Many of the campaign donors were individuals, and the size of their offerings amounted to the maximum allowable by law - 10,000 lats. In the poorest country in the EU, donations of this size created suspicion.

Investigators were ultimately unable to prove their claims. "Control of income for a physical person is very deficient in Latvia, making it difficult to prove the size of people's assets," Valts Kalnins, an anti-corruption expert, said.

Still, A large chunk of donations - nearly 75,000 lats - were deemed illegal and an order was given to the GFU to transfer this amount to the Finance Ministry. Shortly afterward, two people who had allegedly served as intermediaries for donations changed their stories, reducing the overall amount to be handed over to the state to 56,000 lats.

Throughout the controversy, GFU members claimed that the anti-corruption bureau was politically persecuting their party, and eventually they sued the bureau, claiming the bureau did not have the authority to demand the transfer. The case was appealed and reconvened on Oct. 19, with a final verdict to be expected at the end of the month.

Udre repeatedly said during her commissioner hearing in Brussels that she was not to blame for the problems surrounding GFU financing. Still, she worked as an auditor in a Big Five accounting firm in the first half of the 1990s and specialized in Ventspils Nafta, the large oil operator controlled by Ventspils Mayor Aivars Lembergs. This alone, given the nontransparent nature of Ventspils businesses, gave rise to serious concern about who was behind the new Latvian party.

For instance, one Patricija Korotejeva, a convicted oil smuggler, donated 9,700 lats to the GFU campaign fund, while Andris Beikmanis, who was charged with defrauding the state of 171,000 lats from the State Real Estate Agency, forked over 9,800 lats. In addition, the bureau accused four people of donating another 36,300 lats through third parties. Another four allegedly had their signatures forged to the tune of 38,350 lats, and and there is an investigation underway to determine culpability. (The names of the four were not released by the anti-corruption bureau since they themselves committed no wrongdoings.)

According to Latvian law, as the leader of the party Udre was responsible for the illegal donations. However, Parliament refused to lift her immunity in 2003 while an investigation into the matter was being pursued rigorously by the then ruling New Era party.

Soon after the government fell, and the priorities of the anti-corruption bureau, led by the young Juta Strike, were pushed onto the back-burner. The new Emsis-led government immediately took to removing Strike and instead chose the less impressive Aleksejs Loskutovs. After the high-profile investigation, the amount of donations to the GFU has declined dramatically, and a majority come from party members.

In her personal declaration to the European Parliament, Udre admitted to owning only an apartment in Riga. No other assets were declared. She has given 2,600 lats to the party in the last year, while an adviser to Prime Minister Indulis Emsis has added 4,000 lats in the last ten months. Head of the Latvian Hunters Association Elmars Svede has given 8,150 lats since January.

As The Baltic Times went to press, there was scant information available as to how the Udre candidacy for the European Commission would develop. Perhaps tellingly, however, Udre has yet to give up her position as speaker of Parliament, which formally she must resign before taking up her job in Brussels. MPs have yet to vote on a replacement since, according to People´s Party leader Aigars Kalvitis, it is not a foregone conclusion that Udre will become a commissioner.

Corruption is certainly nothing new to Latvia, a country that ranks high on Transparency International´s corruption index in the world.