Fear and Loathing in Latvia (or among its media)

Fear and loathing in Latvia? The borrowed phrase from the late Hunter Thompson may be just what fits the situation. Moreover, the “situation” is that nobody in the Latvian media is fully reporting the situation, especially not reporting as it affects them and their own people and, possibly, their sources.

I have already touched on this in an earlier blog, but I will repeat it here. Based on a number of sources and observations, Latvian Television has been visited by the Latvian Security Police because of a news item that was run on September 23 concerning the possible settlement of an investment dispute surrounding the “national airline” air Baltic. The report cited the possibility that former air Baltic CEO Berthold Flick could be awarded as much as LVL 16 million. This was part of a legal risk analysis prepared in connection with the investor claim filed against the Latvian state by Flick.  

It appears that a person involved in preparing the news item, based on a leaked document or documents, burned the source by either giving up the documents or other information that led to the source. All this has been hushed up or only minimally reported, at least the media part.

While the document or information that was leaked was something less critical than Latvia’s nuclear launch codes (well, assuming Latvia had any), the search for those responsible is as intense as if something like that had happened. The Security Police questioned around 12 employees of the Ministry of Justice, which apparently had a significant role in preparing the legal risk analysis. This was, in fact, reported in the Latvian media. However, as far as the apparently critical and decisive Security Police contact with Latvian Television, there is only one line in a LETA story (a story that, of course, could have been picked up by other media and the press). It says: As was determined by the news agency LETA, SP (Security Police) agents have questioned representatives of the mass media.  And that, so far, is all.

One reason may be that some of those involved, for whatever psychological reasons, simply don’t want to talk about it (it seems unlikely that the Latvian Security Police, tried to impose a gag order on anyone like the Lithuanian Special Investigation Service did with some of the journalists it questioned at BNS). But there was enough information available from other sources to see that there was a serious violation of media rights and probably a failure or lack of journalist training.

Once they had the necessary information, the Security Police followed the whole chain of custody  (and of production) of the document, including the aforementioned searches and interrogations at the Ministry of Justice, and by some accounts, at the State Chancellery as well. Apparently, the investigations are continuing. Certainly, state employees have a duty to protect confidential information, but as I said, these were not nuclear launch codes.

There is another possible explanation for the – to put it mildly- vigorous activities by the Security Police to track down leaks. It is that the law-enforcement and investigative agency may be being wittingly or unwittingly  used as a political bludgeon against a new approach to settling investor disputes. In some past cases, Latvia used rather expensive private law firms to litigate these cases – everything from the black humor case of dismantling a derelict Swedish-owned ship to the case brought by TeliaSonera against the shortening of the monopoly granted to telecoms operator Lattelecom (it was ended in 2003 instead of 2013). The new approach has been to handle these cases “in house” and to find a least-risk, least cost way of settling the matters.

The thing is – international disputes based on violation of investment protection treaties are seldom frivolous. Often they involve diplomatic support from the disputant’s nation (to be honest, I don’t know the procedures in detail). In any case, to get your government on your side, you have to have something more than an imaginary or crackpot theory of how your investment was compromised – usually by using the legal system or government action by the country that is accused of a violation.

Indeed, some of the recent cases in Latvia – the attempt to declare the Lithuanian IKI retail chain bankrupt over a small debt – as well as alleged shenanigans around the Estonian-owned Winergy wind farm project – seem to suggest that frivolous or contrived attempts to compromise foreign investments have happened with the assistance of Latvian courts or authorities. If this is the case, then these claims are not  frivolous and the risk to Latvia is significant. This may also have been the case with air Baltic, where the government moved quickly, but perhaps without taking all the necessary legal steps – to take control of the airline from what it perceived as a untrustworthy Flick and other shady interests, including Vladimir Antonov, a Russian businessman blamed for the failure of Lithuania’s Snoras Bank and the Latvian bank Latvijas Krajbanka.

If mistakes have been made by courts or state authorities, then it is not unreasonable to assume that there are significant risks for the Latvian state and that a negotiated settlement may be the least costly and time-consuming way out of the situation, even if it involves “paying off” parties to the case who are less than, as Latvians would say, “white and fuzzy clean”. Under the law, thieves are also protected against theft.

However, if this approach is taken, two sets of interests may suffer. First – those parts of the legal profession in Latvia for whom endless litigation is a source of revenue, regardless of the ethical norm that lawyers represent the best interests of their clients, and it is rarely in anyone’s best interests to have long, dragged out legal or arbitration proceedings with doubtful chances of success.

Secondly, a more forthright approach to settling investor disputes (which generally are not initiated “just for fun”, but instead following local legal actions, such as a crackpot insolvency case and the like) will affect the interests of schemers who exploit foreign companies to “legally extort” money or even to execute takeovers of profitable foreign subsidiaries (nevermind that the local goons put in charge if this succeeds cannot continue profitable operations, it suffices that they can empty the bank accounts). Some of these schemers, so it is said, have friends in high places and political influence – some would even say, some extent of state capture. However, to prove that would require some pretty heavy legwork by local journalists, which most local media cannot afford in terms of staff time and money. And some are simply afraid to do it because if they do, will be visited by the Security Police and no one will say or publish a word about it.

Turning up the repression in many ways

I haven't had the time or energy to post, although I should have. The country continues to ease toward a crypto police state. Just a few incidents as examples.
During Moscow mayor Yuri Luzhkov's visit to Riga, a number of deputies of the pro-Russian, left-leaning For Human Rights in a Unified Latvia (Latvian= PCTVL) picketed near the Riga City Council building, not against Luzhkov, but to demand that a street named after the deceased Chechen leader Dzhokar Dudajev be renamed. They were dispersed by the police, some taken home under compulsion.
You can have more than mixed feelings about the PCTVL, but they have a right to free speech and assembly like anyone else, and to use police force in a discretionary manner against a peaceful, "spontaneous" and technically "illegal" assembly just shows where the country is going.
Another sight, that would seem to have little to do with free speech, is the presence of joint police and Riga traffic wardens (the people who catch and fine fare jumpers) on the streets at night. These operations, to nab a few persons who have stolen 70 santims (or $ 1,40) worth of services look intimidating. The whole crew of burly police in bright green-yellow fluorescent vests and sometimes burly wardens standing around one or two people who have failed to pay or whose electronic tickets expired simply says " police state" to me and other passers-by.  Is this the most serious kind of crime in Riga at the moment? With bike thieves rampaging and other petty crimes with real victims (not the revenues of the Riga transport organization Rīgas Satiksme), is this what the police should be doing?
I do see a similarity with the dispersal of the spontaneous PCTVL protest, because the sometimes brutal and unfair actions of the traffic wardens have and will trigger spontaneous protests by other passengers. Children have been thrown off public transport at night,  tourists who misunderstood how to pay or use tickets have also been taken off the bus from the airport, their first contract with Latvia. There have been incidents of resistance -- verbal and otherwise -- to this behavior by some wardens. At the same time, there have been cases of unprovoked and disproportionate abusive behavior and even violence by fare jumpers, so there is sometimes reason to have the police nearby, but why these nightly shows of force and intimidation? Seems to me the message is -- if you see repression, brutality, unfairness - don't you dare protest, resist or rise up. 
Finally, there was a case of two men running a professional marijuana farm in the countryside getting 12 and 8 year jail sentences. I decided to Twitter in Latvian that this was outrageous, because such sentences are disproportionate for what is essentially a victimless crime. I was assailed on another news site, along with those who expressed sympathy for my views, as being an advocate of drug use, which I am not.  A few commentators suggested that even to debate such matters -- the scientific basis for calling marijuana growers "merchants of death" (a possible lethal dose starts at 10 kg of active ingredient THC in one sitting) and the folly of a hysteria-driven, repressive drug policy-- was something that should be repressed or punished.
Unfortunately, these commentators, as representatives of public sentiment, indicate that what a large part of the Latvian population wants is to be ignorant, scared, and to not only live in an increasingly repressive society, but to actually cheer it on.

Call for new protests in Bauska, Latvia

A blogger on the Bauska newspaper Bauskas Dzīve website has called for another peaceful but possibly civilly-disobedient protest on Wednesday, September 30. The action will coincide with administrative hearings against four Bauska residents charged with public order violations during an unsanctioned August 31 protest against the planned reorganization of the local hospital.

The blogger urges people to impede traffic on a main highway by repeatedly (and in large numbers) crossing the highway at a legal pedestrian (zebra-striped) crosswalk. By law, all vehicles have to stop when there are pedestrians on the crosswalk. It is not clear whether deliberate and repeated use of the crosswalk for the sole purpose of backing up traffic could be considered a violation.

Several hundred Bauska residents blocked two bridges and a major highway through the town for several hours until they were dispersed by a special riot squad sent from Riga. Local police made attempts to persuade the demonstrators to clear the bridges, but apparently didn't use force or threats of arrest.

Three of the protestors facing a court hearing on September 30 are charged with disobeying police orders, the fourth, with violating rules concerning public gatherings.

Media reports say police are expected to be out in force along the possible site of the demonstration, which has been called for 09:30 on Wednesday. It is expected that protestors will raise the issue of the local hospital again, despite assurances by Minister of Health Baiba Rozentale (during a September 3 visit to Bauska) that the hospital would continue to offer reduced, but adequate health care services. Rozentale's visit to the town just days after the bridge-blocking protest passed without incident, although she was confronted by demonstrators and engaged in a dialogue with them.

A number of hospitals in Latvia are being closed or downgraded as part of harsh austerity measures demanded by the European Union, the International Monetary Fund (IMF) and other lenders providing Latvia with loans to prevent state insolvency and to bolster the financial system. Bauska residents are especially upset with the closing of a maternity ward and the reduction of emergency services in a town straddling a major, heavily trafficed highway where accidents are frequent.