• 2007-01-24


The bribery scandal that has shaken Estonia is pedestrian and yet shocking. The fact that corruption remains a part of life in the Baltics' most prosperous state is not surprising, and if anything confirms the fallibility of the creative, techno-savvy Estonians. At the same time the incident, which involves a seven-figure sum, is stunning given the brazen way in which power may have been abused in a deal of such far-reaching strategic importance for Estonia.

As Edward Burkhardt, a lifetime railroad man who had a dream of transforming Estonia's backwards railroad into a thriving export artery for Russian raw materials, told The Baltic Times, a representative from the ruling Reform Party asked for 1 million euros in return for a favorable outcome in the re-nationalization of Eesti Raudtee (Estonian Railways).

His claim has been backed by Guido Sammelselg, another executive of Baltic Rail Services, the privately owned firm that for the past five years controlled Estonian Railways. "Such a thing happened and that was the sum asked. It was meant seriously by the offering party. We considered it and refused," Sammelselg was quoted as saying.
As expected, the Reformists, a liberal group and one of Estonia's most popular parties, went ballistic at the accusation. Prime Minister Andrus Ansip's rebuttal was predicable, and therefore insufficient. "Why did Burkhardt not take this course when he found out about it?" the prime minister asked.

We can think of three reasons straight away: First, few would have believed them anyway. Second, by blowing the whistle the BRS executives would have torpedoed any deal, and by that time they had made up their mind to bail out of Estonian Railways. They were fed up with government interference. And third, it would've been pragmatic. Ansip should know: If every business executive went to the police every time he/she learned of a bribe, GDP growth would fall by about a percentage point in all three Baltic states. As the saying goes, "crime doesn't pay;" likewise, neither does battling crime.

The Reform-Estonian Railway bribe points to a deeper, dangerous trend. Time and time again we see Baltic companies battered by the guns of Russian strategic interests. The scenario has been so frequently played that it has become cliche. Russia wants control of vital energy and export-related companies in the Baltics, and it will stop at nothing. It wanted Ventspils Nafta, but when the Latvians said "no," Russia cut off the oil. It coveted Mazeikiu Nafta, but when the Lithuanians sold to the Poles, the Russians again cut off the oil.

While Russian business didn't try to buy Estonian Railways, it loathed the presence of Americans in the company. This is the Baltics, Russia's backyard, where the infrastructure and industrial gems were built during the Soviet Union. For these reasons, Russia believes it all belongs to them. They apply the same logic toward Belarus, Ukraine, Armenia and parts of Central Asia. Unfortunately, some Balts continue to play right into Russia's hands. The temptation of seven-figure bribes must be too great to resist.