Riga Regional Court: Ex-Prosecutor Kokalis was scared of Lembergs' non-existent positions

In its verdict, rewriting the accusation word for word, the court of the first instance in the Lembergs case even went so far as to say that in autumn 1993, Ventspils Ex-Prosecutor Valentīns Kokalis was scared of Aivars Lembergs' positions, to which A. Lembergs, then Chairman of the Ventspils City Council of People's Deputies, was elected only a year later.

The sentencing part of the first instance judgment states that Aivars Lembergs was guilty of extorting a bribe - shares in SIA Puses - from Valentīns Kokalis because he held 11 positions at the time of the extortion of the shares. The first instance judgment also copied the powers conferred on these positions by the relevant laws and regulations, since it was these powers that had forced V. Kokalis to pay the bribe.

Thus, according to the indictment and the judgment of the first instance, A. Lembergs at the time of the extortion of the shares in SIA Puses was:

Chairman of the Ventspils City Council of People's Deputies;

Chairman of the Ventspils City Council;

Head of the Ventspils City Local Government;

Member of the Environment and Infrastructure Development Committee of the Ventspils City Council;

Chairman of the Economics and Budget Commission of the Ventspils City Council;

Chairman of the City Development Commission of Ventspils City Council;

Chairman of the Land Commission of Ventspils City Council;

Chairman of the Privatization Commission of Ventspils City Council;

Executive Director of Ventspils City Council;

Chairman of the Board of the Port of Ventspils;

State Trustee of the State Joint Stock Company Ventspils nafta.

In other words, the logic of the indictment shows that A. Lembergs was a powerful man in Ventspils at the time of the extortion of the shares, endowed with extensive powers. Using the powers of that office, according to the prosecution and the court of the first instance, A. Lembergs could have either forced V. Kokalis to liquidate his own partly-owned oil transshipment intermediary company SIA Puses, or dismissed the "true members" of the SIA Puses from work in state-owned enterprise (SOE) Ventspils nafta - the company's main lawyer, V. Kokalis and the director of SOE Ventspils nafta, Jānis Blažēvičs, both of whom were hiding behind their wife and brother, respectively, among the members of SIA Puses, apparently because of a blatant conflict of interest.

When did this extortion take place?

As the defense has pointed out in its appeal,

this conclusion of the court is wrong and absurd for several reasons.

First, because at the time when, according to the authors of the accusation and the first instance judgment, the shares in SIA Puses were extorted from V. Kokalis, nine of the eleven positions mentioned did not exist at all. Accordingly, at that time, A. Lembergs held not 11, but only two positions, one of them without specific powers.

In particular, the judgment states that "in the course of the judicial investigation it has been established" that Aivars Lembergs allegedly extorted shares in SIA Puses from V. Kokalis as a bribe "at a time not precisely specified in the pre-trial investigation, but not earlier than the autumn of 1993".

At the same time, the judgment states that "in the course of the judicial investigation it has been established" that "at a time, place and under circumstances not precisely specified in the pre-trial investigation, but before October 28, 1993, in one of their mutual discussions, Valentīns Kokalis, Jānis Blaževičs, Uldis Pumpurs and Mamerts Vaivads mutually agreed" to grant A. Lembergs a 1/5 (i.e., 20%) share in SIA Puses.

In other words, however vaguely the accusation specifies the time of the extortion of the shares in SIA Puses, it is nevertheless determined as "not earlier than the autumn of 1993", but "before October 28, 1993".

Well, it seems that all that remains to be done is to find out what positions A. Lembergs actually held in the few months between autumn 1993 and October 28, 1993, that made V. Kokalis fear that A. Lembergs might either order the liquidation of SIA Puses or dismiss V. Kokalis from his influential position at SOE Ventspils nafta, which would then be the end of the dizzyingly profitable SIA Puses business.

Positions that did not exist in 1993

In fact, until October 28, 1993, A. Lembergs held only the position of Chairman of the Ventspils City Council of People's Deputies and was appointed by government decision as one of the state trustees of Ventspils nafta, which had just been reorganized into a state joint-stock company. However, the state trustees of SJSC Ventspils nafta only acquired specific powers when the government of the time approved the statutes of SJSC Ventspils nafta, which took place in November 1993, i.e., after October 28. Until the official registration of the statutes, the appointed trustees were without powers.

A. Lembergs was elected almost a year later to the other eight positions mentioned in the judgment, whose powers were allegedly feared by V. Kokalis. The post of "Head of the Ventspils City Local Government", on the other hand, never existed at all - it's a term that can be used in the vernacular, not in a court judgment listing specific statutory powers.

In the autumn of 1993, the positions of Ventspils City Council Chairman, Executive Director, Chairman of the Council Committees and Chairman of the Board of Ventspils Port did not exist, so neither A. Lembergs nor anyone else could hold them.

Accordingly, the existence of such positions was not "established during the court proceedings", as stated in the judgment, because this was not possible at all.

It would be funny if it wasn't so sad, but even the judgment itself mentions all the dates on which A. Lembergs was actually elected in the second half of 1994 to positions which, according to the accusers, V. Kokalis had already been frightened of in the autumn of 1993.

For example, the judgment correctly states that A. Lembergs was first elected Chairman of the Ventspils City Council on June 10, 1994.

Here is an extract from the judgment:

[1.1] Aivars Lembergs was elected Chairman of the Ventspils City Council of People's Deputies by Decision No 11/6 of May 24, 1991 "On the election of the Chairman of the Council", which he held until June 10, 1994. By Ventspils City Council Decision No 1 of June 10, 1994 "On the Chairman of the Ventspils City Council," he was elected to the office of Chairman of the Ventspils City Council, which he held until March 20, 1997, and by Ventspils City Council Decision No 1 of March 20, 1997 "On the Chairman of the Ventspils City Council," he was elected to the office of Chairman of the Ventspils City Council, which he held until March 19, 2001.

In the performance of his duties, Aivars Lembergs, as an official in a position of responsibility, in accordance with the third paragraph of Article 30 of the Law "On City Local Government" (in force from April 24, 1991, to June 8, 1994), directed the work of the City Council and the City Board (paragraph 1), signed decisions and other documents, coordinated the work of the City Council commissions (paragraph 2), represented the City Council and the City Board in relations with legal and natural persons (paragraph 3), issued powers of attorney, signed contracts and other legal documents (paragraph 4), managed the city's economic development planning (paragraph 7) and coordinated the work of the officials appointed by the City Council and the City Board (paragraph 8). In turn, in accordance with the third paragraph of Article 10 of the Law (in the wording from February 26, 1993, to June 8, 1994), he was entitled to monitor the legality of the activities of public and administrative bodies and undertakings located in the city. In accordance with paragraph 2 of Article 62 of the Law on Local Governments (in force since June 9, 1994), he managed the work of the City Council, coordinated (..)

When did local government councils come into being?

The election of A. Lembergs as Chairman of the Ventspils City Council was the logical result of the brilliant victory of the political organization For Latvia and Ventspils (Latvijai un Ventspilij), which he led, in the local elections of May 29, 1994. In these elections (as well as in the next municipal elections in 1997), For Latvia and Ventspils, led by A. Lembergs, won all the seats in the Ventspils City Council.

It was not until the municipal elections of May 29, 1994, that local government "councils" emerged as elected bodies of local government, whereas before that the highest bodies of local government were the Councils of People's Deputies of towns and districts. The Law "On Local Governments", which gave the name of "council" to the highest bodies of local government administration, was adopted by the Saeima on May 19, 1994, and the adoption of this Law was in fact the first reform of local government during the period of the restored Republic of Latvia.

But it is clear from the court judgement in the A. Lembergs case that already in autumn 1993 V. Kokalis and his associate were afraid that A. Lembergs would form his own party (For Latvia and Ventspils was established in March 1994), this party would win the municipal elections, local governments would be renamed councils, thus A. Lembergs would gain powers that would threaten V. Kokalis' position in Ventspils nafta and his hidden participation in SIA Puses.

Historical facts

After the election of the Chairman and Deputy Chairman in July 1994, Ventspils City Council continued to organize its work by electing members to committees and commissions - according to their respective competences, skills and preferences. Accordingly, A. Lembergs was elected as a member of one Ventspils City Council committee and chairman of four of these commissions.

How could V. Kokalis have been scared of this democratic process, which took place in July 1994, already in autumn 1993? According to the prosecution and the court of the first instance, it's possible.

In August 1994, A. Lembergs was appointed by the City Council to the Board of the Ventspils Port (the Law on Ports introduced port boards only on July 12, 1994).

In September, the Port Board, consisting of two representatives of the Ventspils local government, three officials of the state-owned Ventspils port companies and five state representatives (representatives of the four ministries and the Latvian Development Agency at the time), elected A. Lembergs as Chairman of the Ventspils Port Board.

In September 1994, the City Council also appointed A. Lembergs as Executive Director of Ventspils City Council.

Prior to this, the Port of Ventspils had no board of directors and the local government of Ventspils had no executive director

- These posts were created as a result of the gradual reforms of the Latvian public administration after independence. How could V. Kokalis have been scared from these powers, whatever they may be, a year earlier?

Indeed, on September 21, 1993, the Latvian government transformed Ventspils nafta into a state-owned joint-stock company and appointed four state trustees - Minister of Finance Uldis Osis, State Secretary of the Ministry of Economics Aina Bataraga, State Secretary of the Ministry of Transport Uldis Pētersons, and Chairman of the Ventspils City Council of People's Deputies A. Lembergs.

Thus, the powers of the General Meeting of Shareholders (which are referred to in the judgment as endangering the interests of V. Kokalis) were never granted to A. Lembergs alone - the General Meeting of Shareholders of SJSC Ventspils nafta was entitled to decide only if at least three of the four state trustees participated in the decision-making. Moreover, the state proxies were obliged to be authorised by the Ministry of Finance, then headed by Uldis Osis.

In other words, if V. Kokalis was really afraid of the powers of the state trustees of SJSC Ventspils nafta in autumn 1993, then he should have given a bribe not to A. Lembergs, but to U. Osis. But to be extra sure - to both of them, with one of the state secretaries tagging along.