Politicians hiding behind offshore companies

RIGA - Latvia’s Corruption Prevention Bureau (CPB) has made available information after investigations that show the Latvian political heavyweights are the ones who benefit from multiple offshore companies, and that the state budget loses millions of lats as these persons channel the money into their own pockets, with direct negative affect on everyone in Latvia, says Economy Minister Artis Kampars (Unity), reports Nozare.lv.

According to Kampars’ blog, “the members of the business community all around the world make use of offshore advantages mostly to optimize their tax expenses. The offshore system has been established a long time ago, and every state has the right to decide its own tax system and conditions for business activity. Even though most of the democratic countries see the offshore system as a significant hindrance (money laundering, smuggling and illegal trade), and I have called on my colleagues in Europe to discuss potential changes to the system, most likely we will have to accept the existence of such offshore conditions,” concludes Kampars.

“Latvia differs from other countries in this regard. Most of the offshore companies abroad are established to hide the true identity of their owners or people who benefit from these companies. However, information that has become available to the public on CPB’s searches proves that Latvian political heavyweights are the ones who benefit from the multiple offshore companies that are registered abroad,” says Kampars.
In an interview with Rietumu Radio on June 10, Kampars said that national airline airBaltic operated with a loss of 18 million lats (25.7 million euros) in the first five months this year, is close to bankruptcy and that the loss was created to “pump out funds” from the company.

Kampars said that he had received alarming information. “Last year the Latvian government invested more than 15 million lats into the company to make sure that airBaltic can buy new planes on lease and continue development. AirBaltic head and co-owner Bertolt Flick showed the government his business plan, which promised a large profit this year and in 2012 - instead, the company is losing enormous [amounts of] money,” said Kampars.

He also noted that then-Transport Minister Ainars Slesers (Latvia’s First Party/Latvia’s Way) had signed an “extremely disadvantageous” shareholders’ agreement with airBaltic, which continues to cause losses for the state of Latvia. “This person should pay for these losses, or be held responsible in some other manner,” said Kampars.

“If it is confirmed that the company is close to bankruptcy, there is such a notion as bankruptcy fraud, and that already carries a criminal penalty,” stressed Kampars. The minister hopes that the state will not have to rescue the airline, as it already had to bail out Parex bank.