The loud construction industry bribery case fell apart with a bang

The so-called construction cartel case became public at the end of summer 2019, when the Competition Council (CC) together with the Corruption Prevention and Combating Bureau (KNAB) inspected ten leading construction companies on suspicion of collusion in public and private procurements. As the CC emphasized at the time, on the basis of very reasonable suspicions.

However, in reality, the KNAB was already aware of possible illegal agreements and bribery in 2018. On September 19, 2018, KNAB initiated criminal proceedings for possible criminal offenses for which penalty is provided for in the third part of Section 320, the second part of Section 323 and the second part of Section 196 of the Criminal Law, namely bribery and large-scale bribery, as well as use of and exceeding of authority for the purpose of acquiring property.

In the first days of September 2019, KNAB detained two persons on suspicion but later released them. At that time, KNAB was looking into at least six persons in connection with this case. At the time when KNAB had summoned several politicians to testify in this case and President Egils Levits called for not punishing the cartel company that would be the first to apply to the investigation authority, Neatkarīgā interviewed the then head of the Competition Council. The full interview can be read in Latvian here.

KNAB initiated criminal proceedings for bribery and bribery on a large scale, abuse of power and exceeding of authority for the purpose of acquiring property, on September 19, 2018. The facts at the disposal of KNAB at that time testified to the possible giving and accepting of large bribes, to the possible coordination of prices in procurements by tenderers, as well as to bribery of officials in order to ensure the realization of business interests in non-procurement matters. According to the information given to the media by KNAB at that time, the criminal offenses were committed between the beginning of 2015 and the middle of 2018. Possible bribe amounts range from 25,000 euros to several hundred thousand euros.

At the same time, KNAB has obtained information in the criminal proceedings that has indicated possible signs of an illegal agreement between the largest companies in the construction industry, which in turn is the competence of the CC.

The facts obtained during the pre-trial investigation were forwarded by KNAB to the CC, which, after reviewing the information, initiated an investigation of the case on the basis of suspicion of a possible violation of Section 11 of the Competition Law.

After an investigation lasting about three years, on May 10 of this year, KNAB closed the criminal case of the so-called construction cartel, which started in 2018. As explained by the Strategic Communication Division of KNAB, in the pre-trial investigation KNAB could not confirm the information on possible bribery criminal offenses in the construction cartel case, and on May 10 this year, a decision was taken to close the criminal case against eight persons involved in the criminal proceedings.

"KNAB receives information about various possible cases of corruption. The authority takes every such message very seriously, and this criminal case was no exception. KNAB used all the methods available to the authority to verify information about possible bribery in the so-called construction cartel case. The evidence obtained during the pre-trial investigation did not confirm the initial information and did not form the composition of the criminal offense,” said Anda Rumjanceva, Head of the Criminal Procedure Investigation Board of KNAB.

Meanwhile, the CC continues to conduct investigations within its competence.

“Regardless of the result of the KNAB investigation, the Competition Council continues to conduct its investigation in the so-called construction cartel case, in which it is examined whether the largest construction companies have not commited the most serious violation of competition law - a mutual illegal agreement or cartel. The Competition Council must make a decision in this case by August 1,” revealed Māris Spička, Head of the Executive Council of the Competition Council.

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