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C O N F I D E N T I A L RIGA 000304 
 
SIPDIS 
NOFORN 
 
E.O. 12958: DECL: 06/02/2028 
TAGS: PGOV PINR LG
SUBJECT: THE RETURN OF JURGIS LIEPNIEKS 
 
REF: 06 RIGA 527 
 
Classified By: Ambassador Charles W Larson, Jr. Reason: 1.4 (d) 
 
¶1. (C/NF) Summary: Jurgis Liepnieks, former Chief of Staff to 
PM Kalvitis and confidante of Skele and now expelled from 
People's Party, offered his views of the state of politics in 
Latvia.  He suggested that Skele is gaining dominance over 
the other oligarchs through financial leverage, that Kalvitis 
really may have a deal to become the head of Latvijas Gaze, 
and that corruption investigations of the Riga City Council 
have People's Party very worried.  We take Liepniek's 
comments with the realization that he has his own political 
scores to settle, but we have always found him to be open 
with us and his information has had a high degree of 
reliability in the past.  End summary. 
 
¶2. (C/NF) Pol/econ chief met May 29 with Jurgis Liepnieks at 
our request.  Liepnieks previously served as PM Kalvitis' 
chief of staff, stepping down after the 2006 elections. 
Liepnieks had previously served as a close advisor to then-PM 
Andris Skele and was responsible for much of the People's 
Party's (TP) public relations activities over the years. 
Liepnieks and Skele have had a huge, and very public, falling 
out and Liepnieks was expelled from TP in fall 2007.  He is 
now working part time with former TP members Aigars 
Stokenbergs and Artis Pabriks in establishing their new 
party, but focuses mainly on operating his publishing house. 
Liepnieks is also indicted in the digital TV case and is 
widely rumored to have offered significant assistance to 
prosecutors in identifying Skele's role in the case.  It has 
even been suggested that after leaving Kalvitis' office, 
Liepnieks went in to some sort of witness protection program 
for several months.  We have no confirmation of this last 
point. 
 
¶3. (C/NF) Despite being out of professional politics, 
Liepnieks remains a political animal.  He is following the US 
presidential campaign in great detail and had many questions. 
 Turning to Latvian politics, he lambasted the major polling 
firm in Latvia, Latvijas Fakti, as skewing its data to meet 
its client's needs.  He cited as an example, a recent 
contract that Latvijas Fakti got to provide polling data to 
several ministries followed by a poll showing PM Godmanis' 
LPP/LC party at 6%, a number that shocked most observers as 
far too high.  He said SKDS is much more reliable.  (Comment: 
we think both companies have problems in methodology, but 
have found SKDS to be generally more accurate.  End comment.) 
 He added that in the recent SKDS poll, it shows that roughly 
35% of those polled say they either would not vote in the 
election for parliament or did not know whom they would 
support.  But, he said, this is when respondents were given a 
list of parties to choose from.  When asked whom they would 
support for parliament without being given a list, nearly 
half of Latvians say they do not know. 
 
¶4. (C/NF) Liepnieks opined that some recent public tension 
between TP and its coalition partners is based on two facts. 
One, TP wants to regain the prime ministerial post it lost 
when Kalvitis stepped down.  Two, Skele is in a dominant 
economic position over other oligarchs and wants to exploit 
that.  On the latter point, he said that various legal 
proceedings and changes in ownership of the oil transit 
companies have significantly weakened Aivars Lembergs, both 
financially and politically.  More surprisingly, Liepnieks 
alleged that Transport Minister Ainars Slesers, believed to 
be among Latvia's wealthiest men, is having cash flow 
problems.  Slesers' wealth, he claimed, is tied up in a 
number of projects, mostly real estate, that are taking 
longer to develop than planned and are at a point where if he 
withdrew his money now, he would suffer significant losses. 
He went on to allege that Slesers and Skele are involved in 
several joint projects, mainly around the port of Riga, and 
that Skele is demanding that Slesers come up with more money, 
knowing he can't, in order to gain leverage over him 
politically. 
 
¶5. (C/NF) Asked what motivates Aigars Kalvitis, Liepnieks 
said it wasn't money, per se.  Rather, he claimed, Kalvitis 
enjoys the trappings of power.  He likes the good life of 
access and recognition at everything from hotels to sporting 
events and he likes being around wealthy people who can 
facilitate that.  Asked if he believed reports that Kalvitis 
has a deal in place to become chair of Latvijas Gaze (50% 
owned by Gazprom), Liepnieks said he believed that Kalvitis 
has such an arrangement to move over when he is ready to 
leave politics.  But, he added, it is not as many believe a 
deal made in Moscow, but rather one made here in Latvia, 
which Moscow has said it would not object to. 
 
¶6. (C/NF) Queried what corruption cases have the greatest 
potential for creating shocks to Latvian politics, Liepnieks 
thought that it was the ongoing investigations into the Riga 
City Council.  More than any other, he said, these cases 
touch on many leading politicians from many parties and if 
fully uncovered would damage the careers of many of Latvia's 
leaders.  He alleged that this is the real reason for an 
assault on the anti-corruption agency (KNAB) - to derail 
these investigations.  He said that investigations in the 
criminal enforcement chief of the customs service, Vladimirs 
Vashkevics, are not likely to be as damaging to TP as many 
people believe, although he did not specify if that was 
because the link would be very hard to prove or simply did 
not exist. 
 
¶7. (C/NF) Responding to questions about the digital TV case, 
Liepnieks said he was frustrated by the slow pace of the 
case.  "I just want to tell my story and be judged," he said. 
 He added that the change of judge in the case after a 
petition from one of the other defendants was a good thing 
because the new judge is young and with a reputation for not 
being tied in to the corruption networks in the judiciary. 
That said, Liepnieks feared that the judge was given this 
case to prevent him from being able to take on the job of 
chief of the Riga regional court, where most high level 
corruption cases are tried, which would allow him to exercise 
oversight of many key cases.  (Note: Three months ago a 
retired minister, with no known connections to Liepnieks, 
warned us that many wealthy individuals feared this same 
judge and would work to prevent him from becoming chief of 
the Riga regional court.  End note.)  Liepnieks concluded the 
meeting by noting the importance of establishing a viable 
system for plea bargaining in Latvia and applauding Embassy 
efforts to promote the idea.  (Comment: Jurgis Liepnieks, and 
his seeming willingness to rat out Skele, is an excallent 
example of why Latvia needs a better system for plea 
bargaining that would reduce his sentence in exchange for 
cooperation.  End comment.) 
 
¶8. (C/NF) Comment: We have retained contact with Liepnieks 
because he remains one of the most astute observers of 
Latvian politics.  Pol/econ chief established friendly 
relations with him in Kalvitis' office and he has always been 
very open in our meetings, both in and out of office.  This 
was the first conversation in which we asked such pointed 
questions about individuals and their styles.  There is no 
doubt that some of Liepnieks' comments are designed to spin, 
but we report the conversation in full because his unique 
insights provide a window on some elements of Latvian 
domestic politics that we might not otherwise have. 
LARSON