VZCZCXRO3296
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHRA #0476 1731452
ZNR UUUUU ZZH
P 221452Z JUN 07
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC PRIORITY 4129
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS RIGA 000476 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV LG
SUBJECT: President promulgates controversial amendments to Conflict 
of Interest Law 
 
 
¶1. Summary: On June 18, outgoing President Vaira Vike-Freiberga 
(whose term in office expires July 7) announced that she will 
promulgate controversial amendments to the "Law on Preventing 
Conflict of Interests among Public Officials," which were adopted by 
the Parliament on June 7.  The amendments were adopted by unanimous 
vote; however, NGOs identified a number of controversial elements 
and called on the President to return the bill to the Saeima, but 
she declined.  Although the anti-corruption bureau approved of the 
laws, corruption watchdogs and some law enforcement officials say 
the amendments amount to the effective "legislation of corruption." 
End summary. 
¶2. On June 7, the Saeima unanimously passed amendments to the Law on 
Preventing Conflict of Interests among Public Officials initiated by 
the Anti-Corruption Office (KNAB).  The KNAB initiated the 
amendments based on the argument that the current restrictions are 
"not proportional to possible merits brought by the implementation 
of these provisions."  Interestingly, even the opposition party New 
Era (JL), which claims to have the fight against corruption at the 
top of its party's priorities, supports the amendments stating that 
the arguments of the KNAB outweighed NGO criticism. 
¶3. The bill initiated by the KNAB included a number of amendments 
(including giving rights to members of the Saeima, municipal 
councils and ministers to decide on their remuneration, and the 
ability to vote for their own nomination to posts) which received 
sharp criticism from anti-corruption experts.  However, the heaviest 
criticism was directed at a provision which removed any limit to the 
value of gifts given to public officials after office hours. 
According to the key corruption watch-dog in the NGO sector, 
Providus, under the amendments officials will be able to accept 
gifts of unlimited value.  Providus also stressed that the 
amendments do not foresee any control mechanisms to verify whether 
those gifts are linked to a person's interest in specific decisions 
taken by the public official. 
¶4.  The KNAB refuted accusations that the proposed amendments would 
ease the possibility to bribe public officials, and stressed that 
the amendments do not remove criminal liabilities for accepting 
bribes or "trading with influences".  The Chief of the KNAB, Andrejs 
Loskutovs, commented that the amendments correspond to Latvia's 
existing situation. 
¶5.  Due to public debate on the amendments, the President's 
Chancellery called a meeting of experts, including KNAB and Providus 
representatives.  After having heard all arguments, the President 
decided to promulgate the law and provided the following arguments 
in support of her decision: 1) the amendments provide room for 
public officials to accept awards and gifts for their achievements 
in the fields of sport and creative arts (parliament includes a 
competitive weightlifter, active composer, and poet, for example); 
and 2) the amendments preserve a provision which prohibits any state 
official from having certain relations with a person who has given a 
gift within two years.  The President also added that the main focus 
should be on improving control "over state officials' income rather 
than imposing restrictions which are difficult to implement in 
practice."  She advised strengthening the capacity of the KNAB and 
the adoption of other laws related to controlling sources of income 
for state officials. 
 
¶6. Comment. The President's decision to promulgate the law, which 
does not follow the common European practice of setting limits on 
the value of gifts for state officials, should be viewed in the 
light of recent events.  Chiefly, in the last months of her term of 
office, President Vike-Freiberga has been rather critical about the 
work of the Parliament and the government (most significantly, 
having used her Constitutional powers to call a referendum to revoke 
controversial amendments to the Criminal Law passed by the 
Parliament.  See reftel), and one more reprimand could result in the 
open dissatisfaction of the government towards her presidency. 
Additionally, the amendments to the Law on Preventing Conflict of 
Interests among Public Officials have been criticized mainly by 
NGOs, and not been the subject of broad public or institutional 
criticism.  Whether the adoption of these controversial amendments 
will really foster corruption in Latvia will depends on the possible 
adoption of other legal norms mentioned by the President and on the 
ability of the KNAB to monitor the connections between public 
officials and gift donors. Despite the comments of Loskutovs in 
support of the legislation, several KNAB officers have confided in 
PolOff that what was originally proposed by the KNAB on this subject 
was significantly different from what ended up passing in the 
Parliament, though they would not elaborate.  Others in the general 
law enforcement community, to include the Prosecutor General's 
office, have bluntly stated to PolOff that they believe this is 
legalized corruption.  Implementation will be key to seeing how this 
develops. 
 
Bailey