Dragnet tightens in Daimler case

RIGA - Ex-Riga Mayor Gundars Bojars’ then-advisor on transport affairs and Rigas satiksme council’s deputy chairman Leonards Tenis was detained by the Corruption Prevention Bureau in the so-called ‘Daimler’ bribery affair, reports news agency LETA. Last Friday the Corruption Prevention Bureau carried out a search at the offices of municipal public transportation company Rigas satiksme in connection with the possible bribes given to Riga City Council officials by German car maker Daimler. The Corruption Prevention Bureau has not revealed the total number of offices searched or arrests made. Tenis was detained on the evening of Feb. 13 in Daugavpils.

Tenis, 50, a resident of Daugavpils, used to hold many influential posts during his career. He was elected to the 6th Saeima from the ticket of the Democratic Party Master; he worked as council chairman at the Excised Goods Council and Alcohol Monopoly Council.

In 1999, Tenis joined the Latvian Social Democratic Workers party, and when the party won the Riga City Council elections, Tenis became then-Riga Mayor Gundars Bojars’ advisor on transport matters. A year later, Tenis was elected board chairman at Riga Central Market and Riga International Bus Terminal.
Tenis lost these jobs in 2005, the same year, Corruption Prevention Bureau concluded, that he had been in a conflict of interest by working several municipal jobs simultaneously.

Tenis owns the company Royal Graphics and is a co-owner of the companies City Line and Viesnica Vita, according to firmas.lv data. In 2008, business daily Dienas Bizness included him on the list of Latvia’s 1,000 millionaires.
Information received from investigators in the United States indicates that Riga City Council officials feature in three incidences of bribery in connection with the German auto manufacturer Daimler. According to case materials from the U.S., between 1998 and 2008 the German concern paid at least 56 million dollars in bribes in 22 countries, including 2.2 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 which officials received the bribes.

Two more bribes were later paid in a scheme plotted by now former employees at the Daimler subsidiary Evo Bus to win a tender for the delivery of 117 buses and spare parts to Riga, from 2002 to 2006.
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 the magazine 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 euros 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 (HP). It is suspected that the firm may have paid up to 11 million 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 fictive 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.

The CPB investigators are cooperating with the Stuttgart prosecutor’s office and the Baden-Wurtemberg police.