VZCZCXRO2172
RR RUEHIK
DE RUEHRA #0584/01 3440731
ZNR UUUUU ZZH
R 100731Z DEC 09
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC 6177
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHTL/AMEMBASSY TALLINN 0023

UNCLAS SECTION 01 OF 02 RIGA 000584 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV KCOR LG
SUBJECT: LATVIA'S FALLING CORRUPTION SCORE: RESOURCE REQUEST 
 
REF: RIGA 186 
 
RIGA 00000584  001.2 OF 002 
 
 
¶1. (SBU) Summary: Latvia's score on Transparency 
International's (TI) 2009 Corruption Perceptions Index (TI 
Index) decreased significantly from 5.0 to 4.5 on a 10 point 
scale.  The Latvian Corruption Combating and Prevention 
Bureau (KNAB) and other observers believe that corruption has 
indeed increased in Latvia since the start of the economic 
crisis in late 2008.  In order to help combat further 
slippage, Embassy Riga requests the emergency provision of 
limited technical assistance from the Department of Justice, 
funded by possible fallout or excess funds that may become 
available.  See para 7 for resource request.  End Summary 
 
¶2. (U) Latvia's 4.5 score places it in 56th place overall, 
22nd place among EU members, and last among the three Baltic 
states.  This year's score brings Latvia back to its pre-2002 
level - before the establishment of the KNAB.  Latvia's score 
had risen from 4.6 in 2002 to 5 in 2008. 
 
¶3. (SBU) Latvia's 2009 TI Index score is a composite of six 
expert and public surveys completed in late 2008 and early 
2009, so some time lag exists in the date.  All the surveys 
measured perceptions of corruption, not actual corruption, 
and the results may have exaggerated reality.  TI's local 
chapter notes that one of the events that probably increased 
the public's perception of corruption was the controversial 
removal of KNAB's director and the subsequent 8 month vacancy 
in KNAB's director's chair (Reftel).  However, a corruption 
expert at Providus, a local NGO, told us that KNAB's everyday 
work carried on normally during the vacancy.  The Director of 
TI's local chapter suspects that the public's widespread 
belief that the government incompetently dealt with the 
crisis could have bleed into people's perceptions of 
corruption levels in Latvia.  A KNAB representative also 
pointed out that in 2007 KNAB conducted a survey that asked 
anonymous respondents how widespread they believed bribery to 
be and whether or not they had been involved in bribery.  The 
results revealed a lower actual level of corruption than what 
had been perceived. 
 
¶4. (SBU) Nevertheless, informed observers do believe that 
corruption has increased in Latvia since the start of the 
economic crisis.  The Chairwomen of the Latvian Chamber of 
Commerce and Industry (LCCI) told the press that before the 
crisis the going rate for a government contract was a 10% 
bribe, but now members of her organization say that the going 
rate is about 15%-20%.  The LCCI is considering the 
establishment of a code of conduct, for a critical mass of 
companies to stand together against corrupt business 
practices.  KNAB officials believe that the crisis is 
increasing corruption at all levels of government.  They said 
that procurement corruption is increasing, particularly at 
the local level, because businesses are competing for a 
smaller number of contracts and they are increasingly 
resorting to bribery to win those few contracts.  They also 
say that government officials, whose salaries the government 
has cut by as much as 60%, are more frequently demanding 
bribes out of desperation. 
 
¶5. (SBU) The crisis could also be decreasing Latvia's 
capacity to fight corruption.  KNAB's budget is down about 
30% this year.  In response KNAB has focused its efforts on 
investigations and reduced other activities, such as public 
education.  The Prosecutor General's budget is down about 
40%. 
 
CONCLUSION AND RESOURCE REQUEST 
------------------------------- 
 
¶6. (SBU) Latvia has made great strides in reducing corruption 
since regaining independence, but it does appear that the 
situation, and certainly people's perception of the 
situation, is deteriorating.  Although the evidence 
is anecdotal, the economic pressures on many Latvians make 
this theory plausible. As the economy recovers, the 
short-term pressures that appear to be increasing corruption 
will recede, but the increasing perception of corruption 
could have real consequences in the long-term fight against 
corruption.  Increasing cynicism about the government could 
lead people to further disengage from the political process 
and a perception that "everyone is doing 
it" could increase cultural acceptance of corruption. 
Foreign investors could be discouraged from coming to Latvia. 
 To avoid this, Latvia's corruption-fighting institutions 
must do more with fewer resources. 
 
¶7. (SBU) USG technical assistance aimed at increasing those 
institutions' capacity could help the Latvians reverse the 
tide.  Embassy Riga believes that over the coming year, five 
priority DOJ training courses on informant development, asset 
 
RIGA 00000584  002.2 OF 002 
 
 
forfeiture, interview and interrogation skills, trial 
advocacy, and political/election fraud would fill critical 
skills and training gaps in KNAB and other Latvian law 
enforcement institutions. At an estimated cost of only 
$15,000 per course, we could provide cost-effective and 
critical reinforcement at emerging weak links in the region, 
and provide a valuable vote of confidence in those courageous 
elements and voices who are seeking to prevent a further 
decline in their country's economy and international 
reputation. 
GARBER