Investor accuses officials of corruption

  • 2001-08-16
  • Jorgen Johansson
RIGA - Gundars Bojars, Riga's mayor, has repeatedly told reporters here that one of his top priorities is to lure foreign investors to the capital. Still, top officials, who he inherited from the previous municipal government, may be a cause of concern for the mayor. Currently, Uldis Pastnieks, Riga city development department director, Aivars Lekuzis, Riga city economics development department director and Regina Bula, Riga city chief architect are all being investigated by the general prosecutors' office on several accounts of extortion.

Colin Francis, the plaintiff and a foreign investor here, and Bojars met Aug. 13. After the meeting Bojars admitted that in Francis' case there have been obstacles placed in his way by City Council members. "The Riga City Council has to protect foreign, but not only foreign, investors' interests,"Bojars told reporters. "Investors are cheated here and this must be stopped. We may have to develop new procedures in the City Council in order to look after our investors."

Francis, owner of Café Architect in Riga's Old Town, said he has had enough of the game officials are playing and that his business is suffering. According to him, he would have opened an outdoor bar in connection with his restaurant this summer, but this was stopped at the final stage by Regina Bula because Francis refused to pay her an alleged bribe of $10,000.

In his possession are several official documents signed by various institutions, including Riga city architect department; the final word, though, has to come from Bula.

There are also two contracts between the City Council and SIA Transco, Francis' company, signed by Pastnieks. The reason they had to draw up two contracts is that the first contract was not written on City Council's official stationery as required by law. Still, the second contract does not declare the first null and void. "

We were told by Pastnieks that since all documents were signed, he would tell Bula to give us the go ahead, and that it was all right for us to start the constructions,"Francis told The Baltic Times. "But when we started building, the economics police showed up and fined us 100 lats ($63.50) for illegal constructions. Then the negotiations with Bula started. She told us that we had to pay $10,000 for her signature or there would be no summer bar.

"We've lost staff because of these problems. I hired eight people for the summer bar, but I had to let them go since Bula suddenly changed her mind, though I had all the permissions and licenses. Now, the gloves are off."

Francis showed his correspondence with the City Council and said he has tried everything, but nobody wants to listen to him.

"Pastnieks told me I could even complain to God about my problems, because nobody here would listen to me,"Francis said.

As a last resort, Francis wrote a letter to Sergejs Dolgopolovs, Riga's vice mayor, trying to explain his predicament. This letter, however, was never replied to by Dolgopolovs. Instead Pastnieks sent a reply back to Francis where he expressed great disappointment with Francis' action.

Bank of Latvia President Einars Repse told reporters Aug. 8 that after observing processes in the state's administration, it can be concluded that cowardice and corruptibility have reached catastrophic levels.

"It looks like it is becoming a norm that such information turns up and nobody reacts to it - neither law enforcement institutions nor government representatives,"Repse said. "It seems that either everyone has resigned themselves with the situation in the state or simply do not see and understand what can be changed."

Pastnieks told The Baltic Times he was surprised to hear about the criminal investigation against him. He also added that the investigation is unnecessary, but he refused to elaborate further since the investigation is currently underway.

Lekuzis came with a counter attack on Francis saying he could hardly be seen as an investor in Latvia. "He hasn't met his obligations under the agreement to repair Café Architect,"Lekuzis said. "Nothing has been done and this means he doesn't want to work."

When asked about the criminal investigation against him, Lekuzis said all Francis' accusations are absurd and that he is only thinking up nonsense. "We don't need any money from him. What we need is for him to follow the provisions of the agreement,"he said. "Our only mistake was not to check his credibility as an investor before signing any agreements with him."

According to the original deal, Francis' company should invest 300,000 lats over a 10-year period. To date, this money has not been invested.

Francis said this was because the City Council has been renovating the building itself and that he sometimes has had to close down the bar because electricity, water and gas have been cut off for lengthy periods.

"They knew already in 1998 that this building would be renovated, and money was set aside for it, so I don't understand today why they were asking me to put up money they already had for renovations,"he said.

Regina Bula has been unavailable for comment as she has been out of the country.

Normunds Grencmanis, sales and marketing manager for the brewery Cesu Alus, sat and massaged his temples as he was looking through Francis' documents, contracts, licenses, approvals, letters and permissions. Grencmanis said they have invested a lot of money in Café Architect's summer bar. "We had planned this business over a five-year period, but nothing has been done here and we cannot get this money back since we are not selling any beer here,"he said.