Riga Council named in bribe scandal

RIGA - Information received from investigators in the United States indicates that Riga City Council officials feature in three incidents of bribery in connection with the German auto manufacturer Daimler, according to the weekly magazine Ir. According to case materials from the U.S., between 1998 and 2008 the German concern paid at least 56 million U.S. dollars in bribes in 22 countries, including 1.8 million euros in Latvia.
The first case occurred between 1998 and 2000, when 383,000 euros was paid to the council, at that time led by the Latvia’s Way party, to win a tender for the delivery of 40 Mercedes-Benz buses. The documents do not indicate exactly who received the bribes.

Two more bribes were later paid to win a tender for the delivery of 117 buses and spare parts to Riga. A first payment of 216,000 euros was made “to one of the parties which controlled Riga City Council at that time, including the son of a high official who had influence over the tender.”

A second bribe of just over 1 million euros was later paid to officials from a party no longer in power when the delivery was made. According to Ir, suspicion here mainly falls on LSDWP (Latvian Social Democratic Workers’ Party).
However, bribe-taking by Riga City Council officials is not the only reason why Latvia features in Daimler investigation documents. Latvian bank accounts were also used in six cases where several million lats were transferred to Russian officials through fictitious companies.

It is also likely that Daimler will not be the last such scandal. In April this year, the Wall Street Journal wrote of suspicions among investigators in Germany and Russia regarding bribery, money laundering and tax evasion by the firm Hewlett-Packard. It is suspected that the firm may have paid up to 11 million U.S. dollars to win a contract worth 48 million dollars to install a new IT system for the Russian Prosecutor General. The matter is said to involve fictitious companies in several countries, including Latvia.

The Latvian Corruption Prevention Bureau has initiated an investigation into possible bribe-taking by Riga City Council officials in connection with the Daimler scandal.