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TO RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC IMMEDIATE
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INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 RIGA 000123 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: CVIS PREL PGOV KCOR OVIP CHERTOFF MICHAEL LG
SUBJECT: Scenesetter for Secretary Chertoff's visit to Riga 
 
¶1. We look forward to welcoming you in Riga.  Your visit, and the 
accompanying signing of the MOU (assuming agreement can be reached 
on the text) on the Visa Waiver Program (VWP), is a significant 
marker of the strength of our bilateral relationship.  Joining the 
VWP is the foreign policy issue that average Latvians care about 
most and it is the lens through which the bilateral relationship is 
viewed.  The U.S. and Latvia enjoy strong relations, including 
through our common membership in NATO.  Latvia has been a true ally 
in Iraq and Afghanistan and has actively shared its successful 
transition to democracy with other post-Soviet states.  Latvia faces 
challenges in the rule of law that are common in the post-Communist 
world but where you can deliver a strong message on the importance 
of the issue.  Latvia faces some economic challenges including 
slowing growth and double digit inflation.  DHS has been active in 
Latvia, assisting in promoting security and transparency in the port 
of Riga, combating financial cyber crimes, cracking down on 
narcotics trafficking, and working to secure Latvia's borders. 
 
¶2. The US and Latvia have enjoyed 85 years of unbroken diplomatic 
relations and our refusal to recognize the Soviet occupation and 
annexation of the country has led to a strong base of public support 
for the US in Latvia.  We led the way in supporting Latvian 
membership in NATO and were pleased to see them join the EU, putting 
to an end the historical anomaly of their separation from Europe. 
Latvia has stood with the US since September 11 in the fight against 
terrorism.  It has deployed troops to Iraq and Afghanistan, losing 
three soldiers in Iraq.  Last year, Latvia decided to focus its 
attention on Afghanistan; deploying troops as part of the NATO ISAF 
mission and police as part of the EU training mission.  Later this 
year, Latvian troops will deploy jointly with soldiers of the 
Michigan national guard to train and mentor units of the Afghan 
National Army.  Latvia has also been a strong supporter of Georgia 
and Moldova, assisting in their transition to democracy and a market 
economy and has even established a small aid program to assist 
them. 
 
¶3. As we near 17 years since the restoration of Latvia's 
independence, though, the reserve of good will from the policy of 
non-recognition of the Soviet occupation has begun to fade.  Younger 
Latvians question the value of the military deployments and wonder 
what Latvia would get in return.  EU membership creates the 
possibility of travel, study and work within Europe, exposing young 
Latvians more often to European values and standards. 
 
¶4. That is why admission to the VWP has been such a hot political 
issue here - Latvians see admission as acknowledgement that Latvia 
has truly joined the ranks of modern European states and that the US 
honestly values Latvia as a partner.  Attempts on our part to 
separate the technical requirements for admission to VWP from the 
strength of the bilateral relationship have been doomed from the 
start.  We believe that Latvia is serious about meeting its security 
obligations under the enhanced VWP and that Latvian admission to the 
program will help increase Latvian awareness and understanding of 
American values by facilitating travel and people-to-people 
contacts. 
 
¶5. Latvia is making good progress on VWP related issues, expressing 
a willingness to work with us on all admission criteria including 
information exchange.  But as a small EU members state, Latvia faces 
challenges in handling the pressure of negotiating the MOU 
independent of the EU.   As we move forward, we will need to further 
review the security of the Latvian passport issuance process (below) 
and air security arrangements.  We believe that, based on current 
trends, the refusal rate for Latvians will fall below 10% by the end 
of the fiscal year. 
 
¶6. Latvia's economy has been the fastest growing in Europe for 3 of 
the last 4 years, nearly reaching 10% in 2007.  This has begun to 
decline as initial rush of post-EU membership growth slows and is 
likely to be only 4 - 7 % this year - a rate most countries would be 
ecstatic to achieve, but represents a significant slow down here. 
EU membership has also brought inflation as prices soar to EU 
levels.  In 2007, it hit double digits and finished the year at 14% 
on an annualized basis. 
 
¶7. As rapid as Latvia's growth has been, it has been hampered by 
corruption, which is prevalent at all levels and throughout all 
sectors of the economy.  It also holds back Latvia's political 
development as many of the major political parties are tied to 
oligarchs who use politics to advance their personal business 
agendas.  Latvia has seen progress in combating corruption, with 
several of the oligarchs under active criminal investigation and 
another arrested.  The complexity of the cases and the vast 
resources of the oligarchs make successful prosecution of these 
cases difficult, but if convictions and stiff sentences can be 
secured it will help provide a brighter future for Latvia.  In 
addition to stressing the general need to combat corruption, you can 
help us by talking about the importance of plea bargaining from your 
experience as a judge.  Latvia is currently debating such a law, 
which is vital to the cases against the biggest fish, but those 
against whom it could be used are effectively distorting the reality 
of what it does and turning public opinion against it by calling it 
 
RIGA 00000123  002 OF 002 
 
 
"the snitch law." 
 
¶8. A recent scandal in the passport office not only illustrates the 
nature of the corruption problem in Latvia, but also the challenges 
in addressing it.  Between 2003 - 2005 almost 100 individuals, 
mainly from Russia and other former Soviet countries, were able to 
secure valid Latvian passports by having fraudulent entries created 
for them in the Latvian citizenship register.  These people paid as 
much as 100,000 Euros to receive these documents.  As the scandal 
unfolded in the press at the beginning of 2008, no officials lost 
their jobs, although one did resign.  The GOL was slow to report the 
problem to us and when it did, initial reports were contradictory or 
lacked key details.  We think that this stemmed both from 
embarrassment at the scandal as well as from interagency turf 
battles.  We have stressed to the Latvians, though, that this is not 
acceptable and that if they join VWP we would demand more rapid and 
accurate information of such an incident.  A DHS team will visit 
Riga later this month to examine what happened and to learn what 
measures the Latvians have put in place to avoid a repeat of the 
scheme. 
 
¶9. Another example of corruption in Latvia has been the Riga 
Freeport.  Given its location, available capacity and connection to 
road and rail links it could become a real engine for future growth 
in Latvia, but corruption prevents it from being used to its full 
potential and raises the possibility of it becoming a security 
liability. Pursuant to a Congressional request, a DHS-led 
interagency team visited Riga in 2006 to conduct a study of the 
port.  Their report identified a number of issues where security and 
transparency could be improved, but little action has been taken to 
date to address these concerns.  Coast Guard personnel have also 
been in Latvia to assist in port security initiatives to help Latvia 
meet international standards. 
 
¶10. Border security is a key issue for Latvia and one in which we 
have provided extensive assistance.  Latvia joined the Schengen area 
in late 2007 and now forms part of the EU's (and NATO's) eastern 
border (with Russia and Belarus).  The US has provided extensive 
assistance to the Latvian border guards to improve their capacity, 
in particular to detect and intercept any attempt to bring nuclear 
material into Latvia.  Given the long Latvian border with Russia (as 
well as Latvia's long coastline), narcotics trafficking and 
trafficking in persons are also issues of concern and we have also 
provided training and assistance in these areas. 
 
¶11. The border with Russia is also the site of extensive backlogs of 
trucks from all over Europe waiting to cross into Russia. 
Corruption and outmoded systems contribute to the Russian delays. 
Latvia has appealed to the European Union for help in managing its 
overworked road border crossings.  The long truck lines are one 
major area of friction in an otherwise improving Latvian-Russian 
relationship.  Over the past two years Latvia and Russia have sought 
to move past their historical issues stemming from the Soviet 
occupation and move on to more practical cooperation.  Latvia 
remains wary of Russia and its future intentions, though. 
 
¶12. One area of friction in the bilateral relationship with Russia 
is the status of more than 400,000 individuals, mainly ethnic 
Russians, who are not citizens of Latvia.  About half of all ethnic 
Russians are not citizens.  These are individuals who moved to 
Latvia during the occupation or their descendents.  They can become 
citizens, but must pass a test of Latvian language, history and 
government.  Many resent the need to naturalize or feel that the 
language requirement is too hard.  In 2007, the EU granted these 
individuals the ability to travel within the union without visas and 
eased the employment restrictions on them, thus reducing the 
incentives for naturalization.  The ethnic Russian community has 
asked whether we will extend VWP privileges to the non-citizen 
community here, analogous to the EU's step. 
 
¶13. The fact that over 35% of all Latvians (and 50% of the residents 
of the capital, Riga) have Russian as their first language gives 
rise to two separate media spaces in Latvia; one in Latvian and one 
in Russian.  Their coverage reflects the divergent interests of the 
two communities and the Russian language media's line on foreign 
policy tends to be pro-Moscow in its orientation.  Questions from 
the press will focus largely on when Latvians can actually begin to 
travel under the VWP, VWP participation by non-citizens, the above 
mentioned passport scandal, and possibly the port. 
 
¶14. I appreciate you making the stop in Riga, even if short.  It 
will show that we are committed to working with Latvia in 
partnership and it will show progress on the issue most important to 
the man on the street. 
 
LARSON