Burkhardt: Reformists tried to extort one million euros from BRS

  • 2007-01-24
  • By Joel Alas

PAINTED SMILES: By firing the 'bribery-broadside' at the Reform Party, businessman Burkhardt (right) may have done a favor for his chief nemesis, Center Party leader Savisaar (left).

TALLINN - Six weeks away from parliamentary elections, the Reform Party, Estonia's leading party, has found itself fighting off allegations of bribery involving the re-nationalization of Eesti Raudtee (Estonian Railways). The allegations, which have been strenuously denied by the Reformists, were levelled by former Estonian Railways CEO Edward A. Burkhardt, who originally claimed in an interview with the "Pealtnagija" (Eyewitness) television program that aired on Jan. 17 that the Reform Party had tried to extort a bribe.

Speaking to The Baltic Times from his Chicago office, Burkhardt confirmed that the Reform Party had attempted to extort 1 million euros from his company, Baltic Rail Service, which had owned a 65 percent stake in Estonian Railways.
In exchange for the money, the Reform Party promised that it would wield its power in Parliament to guarantee the government buy-back of Estonian Railways from BRS, Burkhardt said.

"The offer was refused, then the demand was revised to half a million euros, which was refused as well," he said.
The American rail baron said the approach was made by a "fundraiser" for the Reform Party to "one of the Estonian investors" in BRS. He declined to name the people involved.
"He reported it to me and others in the investor group as well. I said, 'this is par for the course.' Unfortunately, it is what we have been seeing throughout this whole situation'scorruption. It is usually led by the Center Party, but here we have the Reform Party trying to get their share as well," he said.

Burkhardt went further, criticizing the Russian transport company Severstaltrans for financing the Center Party, which is part of the ruling coalition with the Reformists.
"The biggest concern should be the control that Russian transport interests have over the Center Party'sin turn over the coalition, and in turn over the government," said Burkhardt.

"That's an abomination for a democratic free country, to have turned over to Russian interest. That's a far bigger issue than the Reform Party asking for a million euros," said Burkhardt, who is a lifetime railroad businessman.
Burkhardt, who is president and CEO of the US-based Rail World consortium, rejected suggestions he was speaking out to damage Reform and the Centrists ahead of the March 4 general election.
"I am not involved in Estonian politics," he said.

"For anyone considering business in Estonia, you have to be very careful. We crossed the line of the strategic interests of big-money Russian interests, and they control the politicians in terms of anything related to transport," he said.
The government recently renationalized Estonian Railways at a cost of 2.35 billion kroons (150 million euros).
Estonian Railways, which owns the rail infrastructure and operates freight as well, was privatized in 2001 while Mart Laar was prime minister. BRS paid 1 billion for 66 percent of its assets.

However, the privatization deal soured over claims that the government had failed its end of the bargain, particularly over track tariffs, which the company had been blocked from raising.
Burkhardt's claims have been vigorously denied by the Reform Party.
Its leader, Prime Minister Andrus Ansip, said Burkhardt's claims were politically-motivated lies, delivered by an "embittered foreign businessman" ahead of an election in an attempt to damage Reform and boost its rivals.
"I don't know of any member of the Reform Party stupid enough to ask Burkhardt for even five cents in support of the party," Ansip said.

Ansip said Burkhardt should turn to the police if such extortion had taken place.
"Why did Burkhardt not take this course when he found out about it?" Ansip asked.
He went further, suggesting that Burkhardt had previously made outlandish claims and said his comments could not be believed.
In an effort to re-establish his party's credibility, Ansip has asked the Security Police to investigate the claims. "If the result of the analysis is that there are grounds to take criminal action against someone, this must be done," a Reform Party spokesman aid.

"If it turns out that we have empty allegations hanging in the air, some characters giving themselves off as politicians should be ashamed and embarrassed and seriously consider whether their place is in politics at all."
The Prosecutor's Office already backed away from initiating a probe, claiming that an official complaint must first be lodged.
Other businessmen with stakes in BRS have also denied any knowledge of such an extortion attempt taking place. Guido Sammelselg and Juri Kao, both former partners of Burkhardt, said they had not been approached by Reform.
Sammelselg, a former member of the BRS supervisory board, said Burkhardt's personal disappointment over the soured business deal had been overamplified and harnessed as pre-election ammunition.

Still, he was quoted by the Eesti Ekspress as saying that Burkhardt's claim did have basis. "Such a thing happened and that was the sum asked. It was meant seriously by the offering party. We considered it and refused," Sammelselg told the weekly.
Ansip said that Estonia was "thick of politician's pre-election accusations."

"See what is taking place… Marko Mihkelson (of Res Publica) said that the Center Party takes instructions from Moscow. Ain Seppik (from the Center Party) said that Res Publica's activity had been unlawfully financed by a Russian party. It is claimed that the whole scandal was initiated by (Pro Patria leader) Mart Laar. An anonymous accusation has been launched also at the Reform Party's address as if someone had been asking a bribe," Ansip said, illustrating the muddy political situation ahead of the March 4 general election.