In the next six months Latvia is set to join both NATO and the EU. When it does, the financial largesse of Western Europe and the United States will rain down, to the tune of more than $500 for each man, woman and child in this country of 2.5 million. Where that money ends up and how it is spent is part of the Corruption Bureau’s work–and right now it’s focused squarely on the port city of Ventspils, a one-man fiefdom of ex-communist Mayor Aivars Lembergs. His income last year: more than $1 million. His official city salary: $7,112. He’s never been convicted of any wrongdoing. But if one believes the clamor in the Latvian capital of Riga, that day may not be far off. Either way, the Corruption Bureau’s investigation in Ventspils will be a bellwether for most of the young democracies being embraced by the EU.
In a recent interview with NEWSWEEK, the self-assured, affable Lembergs defended himself. The allegations of fiscal impropriety swirling about him are political, he said, designed to break his hold on the city and its 44,000 voters. He testily refused to answer published charges that his wife and children can be found prominently in the maze of offshore companies controlling one of Latvia’s fattest corporate cows, Ventspils Nafta, which has, in some years, accounted for up to 15 percent of Latvia’s GDP.
If nothing else, Lembergs is a survivor. He has pulled off the supreme feat of staying mayor for 15 years, weathering a time when Latvian nationalists swept out former communists, like him, with a vengeance. Lembergs’s political future depends on whether government investigators uncover corporate “shells within shells” that may hide the true ownership of Ventspils’s companies, according to a top editor with Latvia’s leading daily newspaper, Diena, whose reporters still are unable to unravel it after years of trying.
No matter how disapproving reformist politicians and editorial writers in Riga may be, the people of Ventspils still love their mayor. Driving through the quaint, 700-year-old city, it is not hard to see why. Many of the litter-free streets and sidewalks are paved with handsome bricks. Modern, well-maintained children’s playgrounds are set among the native scrub pines. A fancy imported truck prowls the streets sucking up dead leaves. “We live well in Ventspils. The city is taken care of. There are no potholes,” concedes Oyars Grinbergs, Ventspils head of the New Era opposition party, led nationally by a vocal Lembergs foe.
The city’s streets may be clean–but its politics clearly are not. When it comes to corruption, Latvians view themselves as having a more corrupt government than the people of either Lithuania or Estonia, the Baltic neighbors also set to join the EU and NATO next year. In this year’s Corruption Perceptions Index, compiled by Transparency International in Berlin, Latvia ranks between Jamaica and Colombia at No. 57. Lithuania comes in at 41, while Estonia gets 33, with their northern neighbor, Finland, grabbing the No. 1 spot as the least corrupt of 133 countries surveyed.
Significantly, none of this seems to spill into daily life, according to Inese Voika, Transparency’s rep in Latvia. For all the alleged hidden hanky-panky in Lembergs’s city hall, she says, Ventspils is relatively free of the more ordinary forms of corruption that plague many post-communist societies. The petty official venality of traffic police and housing clerks is nearly absent. Elections are generally free and fair. That’s why the people of Ventspils “don’t feel the lack of democracy,” says Voika.
Ventspils’s economic mainstays are the two pipelines that carry Russian oil and the railroad that carries myriad other valuable natural resources from Latvia’s immense eastern neighbor. In a complicated business spat that perhaps has nothing to do with Ventspils, Russia shut off the crude-oil supply in January. Ventspils Nafta’s profits plummeted from $4.5 million in 2002 to a projected $30,000 this year. Russia’s largest oil major, Yukos, wrote a letter to the prime minister offering to help but first demanded “transparency” from Lembergs regarding who owns what in the city.
The mayor refused, saying that Yukos’s clever use of the transparency buzzword represents yet another ill-advised attempt to meddle in Latvian politics. “Transparency doesn’t mean that every person has to take their clothes off. That’s striptease. Don’t mix them up.” Perhaps. But what Lemberg considers “striptease” is what Europe considers to be public responsibility. Come May 1, when Latvia joins the Union, he’d better get with the act.
