Last week, the heroic Saulkrasti police finally managed to find millionaire Jūlijs Krūmiņš, who for the past 12 years has been claiming the title of elusive Joe in the Lembergs trial - Krūmiņš appeared in Riga Regional Court to give testimony.
The questioning of Jūlijs Krūmiņš for about an hour in the Lembergs trial fully demonstrated how crucial it is for the truth to be established that a witness comes to the courtroom and gives live testimony in open court, where no versions can be arranged with prosecutors; no answers can be prepared in advance or given in advance by the legal assistance provider.
Much has been written about how everything was done in the first instance trial to ensure that Jūlijs Krūmiņš did not have to answer all the defense questions, for example, most recently here.
Why was Krūmiņš so carefully protected from the questions of his former business partner Aivars Lembergs in an open trial? It can be suggested with a high degree of certainty that the reason why Jūlijs Krūmiņš was protected from questions from the defense is that Jūlijs Krūmiņš can only be reined in for a very short period of time. In particular, it was evident that only when the former judge Inita Malahovska, who provided legal assistance to both Krūmiņš and Ainārs Gulbis (both of them had one, which is also saying something), put before the courtroom the documents that had been prepared in advance, were they able to stick to the pre-prepared version in their testimonies (see a photo from the interrogation here). As soon as they were to testify to the questions asked by the defense, both of them, with their testimonies, destroyed the essence of the prosecution's case.
There is no doubt that Jūlijs Krūmiņš cannot be convinced to testify "correctly" in order to give the "right" testimony in court - testimony that would confirm the version recorded in the accusation.
Jūlijs Krūmiņš mostly says what he thinks,
even though this causes problems not only for his enemies, but also for his friends, business partners, girlfriends and, to some extent, even for himself.
So the court of appeal, with the help of the heroic Saulkrasti police officers, finally gave Aivars Lembergs the opportunity to ask some questions of his former - if not friend, then certainly business partner - Jūlijs Krūmiņš.
At the beginning of the questioning, the witness stated that "I don't remember what I did yesterday. I am 80 years old."
However, further questioning soon revealed that the elusive witness of 12 years remembers some things very well, and in fact remembers perfectly well what he did the day before: "I just came back from Dubai yesterday. I didn't come especially because it was my name day on April 12 - I didn't want to be here," honestly said Krūmiņš, comfortable in the situation.
During the interrogation, it was quite obvious that Krūmiņš was confusing two business projects and two companies, in which the Riga-based transit company he owns, SIA Man-Tess, was once also involved in the oil transit business in Ventspils.
In particular, Krūmiņš apparently confused the SIA Lat Transnafta project with the SJSC Ventspils nafta privatization project.
In fact, Krūmiņš did not remember the SIA Lat Transnafta project at all, talking only about the $5 million "damage" caused to him in the privatization of Ventspils nafta. Thus, he strengthened the conviction, at least for an outside observer, that the accusation against Lembergs for extorting shares in SIA Lat Transnafta from some of its members (sic! - he allegedly extorted from some, but did not extort from others!) at the beginning of 1995 was artificially constructed by the Prosecutor General's Office many years later - in 2008.
But one of the proofs that the charge of extortion of shares in SIA Lat Transnafta was artificially fabricated is that, like Krūmiņš, the other real beneficiaries of this business project - as we would say nowadays - mostly did not remember it at all, or perhaps did not want to remember it. "There was this project, we made a ton of money from it - well, what's there to remember?" - that was the basic message of the participants in the trial described here.
To understand why Krūmiņš confused the two business projects mentioned above, it is necessary to recall the essence of these business projects.
The SIA Lat Transnafta project was launched in 1993, but actually started in mid-1995 when the money came in - when the members of SIA Lat Transnafta finally paid for the shares they had only registered before. For those who have been interested in business, it will be clear that "registered share capital" and "paid-up share capital" are two different things. Before the shares were actually paid up, the members of SIA Lat Transnafta and the proportions of capital they held changed even several times.
The essence of the SIA Lat Transnafta project was the construction of another relatively small oil storage tank farm next to the oil storage tank farm of SJSC Ventspils nafta. But in 1999 Lat Transnafta sold the tank farm to Ventspils nafta. The SIA Lat Transnafta project was thus implemented from 1995 to 1999, and at the end of the project the participants made a substantial profit - the money invested was well worth it. Almost nothing was publicly known about this business project, and only from the Lembergs criminal case files has it become clear what it was.
In contrast, there is a huge amount of information about how SJSC Ventspils nafta, one of the four largest and most profitable companies from the Soviet heritage of restored Latvia, was privatized.
The first stage of the privatization of SJSC Ventspils nafta was implemented at the end of 1997, when JSC Latvijas naftas tranzīts, founded by oil transit companies, acquired 37% of the shares of SJSC Ventspils nafta.
However, for this 37% stake, a steep price of 73 million lats had to be paid, which is the most exorbitant sum in the history of privatization in Latvia (for comparison, 32% of the shares of the monopoly company Latvijas gāzes were sold for 25 million lats, which was also used for the modernization of the company itself). The money had to be paid to the shareholders of JSC Latvijas naftas tranzīts at the time and several of them (including SIA Man-Tess, some members of SIA Puses) were not able to do so. This led to sharp conflicts, and the blame for all the misfortunes at that time was mostly placed on Lembergs - the undisputed leader of the Ventspils transit business group at that time.
Obviously, it is through this prism, that Krūmiņš remembered the Ventspils nafta privatization project very well, but remembered nothing about the Lat Transnafta business project, that his testimony in the appeal instance of the Lembergs case should be assessed. Moreover, it is through this prism that it is understandable why everything was done to prevent Krūmiņš from giving live testimony in the first instance of the Lembergs criminal case. For, as has already been said, Krūmiņš speaks his mind, and Krūmiņš can only be restricted in his expressions for a very short period of time.
Lembergs has not been charged with anything that happened in the privatization of SJSC Ventspils nafta. The most serious charge against Lembergs is that in early 1995 he allegedly extorted shares in SIA Lat Transnafta from some of the members of SIA Lat Transnafta, including SIA Man-Tess (whose new owners deny that anything was extorted), but he did not extort shares in SIA Lat Transnafta from other members, although transfers of shares did take place.
According to the prosecution's version, which is also reproduced in the judgment of first instance, Lembergs extorted these shares in SIA Lat Transnafta even from those from whom he was physically and legally unable to extort anything in neither before, after or during 1995. For example, also from Banka Baltija and from Ainārs Gulbis, the boss of JSC SWH.
So - what exactly did the finally captured Krūmiņš say at the hearing described here?
To begin with, Aivars Lembergs recalled that Krūmiņš had previously testified at two hearings in this case, which took place in September 2010 - almost 12 years ago. At that time, Krūmiņš answered all the questions asked by the prosecutors and was actively assisted in his testimony by former judge Malahovska, who had prepared a pile of documents in advance, about which the prosecutors then also asked questions.
At the end of the second day, there was an opportunity for Raimonds Krastiņš, Lembergs' defense lawyer, to ask questions and immediately the version prepared by the architects of the Lembergs case about the extortion of SIA Lat Transnafta shares collapsed like a house of cards - Jūlijs Krūmiņš claimed that he and millionaire Ainārs Gulbis had initiated this criminal case so that Aivars Lembergs "wouldn't become Prime Minister".
But then Krūmiņš told the court that he could not stay in the courtroom any longer because he had to go to Australia. He justified the need to go to Australia by saying: "I am afraid that Aivars Lembergs may become Prime Minister. I don't want to be in Riga if such a time comes. I want to buy a house in Australia."
The court of first instance agreed that this was a sufficiently important argument to release the witness from his criminal duty...
But the real conflict between Krūmiņš and Lembergs started in 1999 or 2000, because Krūmiņš's company SIA Man-Tess had paid $5 million for the privatization of Ventspils nafta, but wanted to get the money back. "You owed me 5 million - I know that very well! Because you persuaded me to take part in the privatization," Krūmiņš testified in response to a question from Lembergs.
"The whole story goes something like this. At one time, in the early 1990s - it's hard for me to say now whether it was 1993 or 1994 - I had lent Ainārs Gulbis a large sum of money. And because he couldn't pay me back, he offered me - it's hard for me to recall now - some 28 or 27 percent of the shares in Ventspils nafta that he had. To pay off some of the loans. I refused. I said: 'I don't need Ventspils nafta, I'm building my own terminal - I don't need it,'" Krūmiņš testified in court. However, a colleague of his persuaded Krūmiņš: "Jūlijs, why don't you go to Aivars Lembergs and talk with him?" "Of course, I should. I then went to Ventspils and met with Aivars Lembergs. And I said to Aivars: 'I don't want to deal with this - get into other businesses and things like that.' But I'm being offered the interest, I'm being offered the shares in Ventspils nafta. Maybe there's something, somebody - maybe there's something to earn or something? He said: 'Jūlijs, it's a golden vein. You won't get it for the first year, the second year you will get, say, dividends there, from Ventspils nafta there. And for all the money you invest in Ventspils nafta, I personally promise you 15%.' This was in 1999," Krūmiņš testified.
According to the prosecution, in 1995 Lembergs had extorted shares from Krūmiņš in one business project, and a few years later Krūmiņš was on his way to his extorter to talk about another, much more ambitious business project. Does this really sound plausible?
But Krūmiņš has not received any dividends from the privatization of Ventspils nafta. On the contrary, he was supposed to have paid in 250,000 dollars on a regular basis.
It is plausible that this was indeed the case - as already written above, the participants in the first stage of the privatization of Ventspils nafta, which had merged into JSC Latvijas naftas tranzīts, had to buy 37% of the shares of Ventspils nafta for a huge sum. As already mentioned, several participants were unable to do so and wanted to sell their shares in JSC Latvijas naftas tranzīts. One of the first to withdraw from the project was Krūmiņš.
He testified: "I received no dividends, nothing. The only thing I could do was to go to the prosecutor's office and tell them everything, how it was, how Aivars deceived me. How I lost 5 million dollars. But since he gave me the money in 2008, I said I had no more claims. I have no more claims against him. In 2008, I was done with the whole thing." Krūmiņš also clarified that the 5 million was received by SIA Man-Tess and not from Lembergs personally.
Subsequent developments show that the shares owned by SIA Man-Tess were bought by JSC Ventbunkers, which as a result of this transaction acquired a controlling stake in JSC Latvijas naftas tranzīts.
Krūmiņš repeatedly confirmed and stressed that it was because of the 5 million invested in the privatization of Ventspils nafta that he had turned to the prosecutor's office to testify against Lembergs. He did not recall any SIA Lat Transnafta and did not have a legal aid provider to remind him of this.
"And I turned to Aivars in 1999, I say. We met, I forget where, we met somewhere. I said: 'Aivars!' I said: 'You understand, I have nothing, I want to develop there, I had just built Vernisāža.' I said: 'Give me 5 million and let's go our separate ways.' After that, I couldn't reach Aivars Lembergs anymore. He had changed his phone number, he wouldn't answer my calls. I met with Mamerts /Vaivads, Chairman of the Supervisory Board of JSC Latvijas naftas tranzīts/ once. I said: 'Mamerts, if Aivars doesn't give me the money, I'll go to the prosecutor's office.'" After that, Krūmiņš met with prosecutor Andis Mežsargs and "the whole thing started".
Krūmiņš brought the documents to the prosecutor's office together with his neighbor Ainārs Gulbis. "Gulbis rented a house next to mine in Baltezers at the time, we met every day, he told me. And he basically said that 'you will never get the 5 million back from him.' And that he had filed with the prosecutor's office, and 'you should file too.' I filed, yes. He was the init... - the one from whom I got the idea," Krūmiņš testified in court.
He also repeatedly emphasized that "in 2008, when I received money from Lembergs, I was done with it all and I did not think about the case anymore."
Getting into his element, Krūmiņš also seemed to remember that he had graduated from the Institute of Cinematography in his youth, so there must be some artistic effect even in something as serious as giving evidence in an appeal court.
"When I was called to court, I left. If I am called to court again, I will get on a plane and go to my grandchildren in Australia. I don't want to be part of this nonsense, this theatre anymore," the millionaire described the nature of the criminal proceedings he initiated.
As he was leaving, he also made an appeal to the court: "I think Lembergs has paid for what he's done, and that lawyer of his, the crook from Switzerland, has already stolen everything from Lembergs, freed him. Let him live out his days, stop tormenting him here. If I forgave him, then you forgive him too!" But to Lembergs he said: "You see, I am even advocating for you!" "Goodbye, Jūlijs, be well!" replied Lembergs.
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