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2019.12.13 12:00

Latvian municipal companies caught in US sanction turmoil

LRT.lt2019.12.13 12:00

The US has on December 7 placed the long-time mayor of Venspils, Aivars Lembergs, under sanctions. Companies controlled by Lembergs were also targeted, including the Ventspils Development Agency (VAA), which depended on funding from the state and municipality.

According to BNN, membership in the VAA is not cheap, yet its membership attracts state and municipal companies such as Ventspils University College, Latvian Olympic Committee, and others.

The fact that for years VAA has collected considerable amounts of money from the municipal companies largely depended on Lembergs, who has also been paid a very generous wage by VAA – 1.065 million euros since 2001.

Critics have previously accused Lembergs of using VAA to syphon state funds in corrupt schemes, according to BNN.

The most topical question now is what the VAA members will do now since the US has imposed sanctions against the Agency – will they leave the organisation?

When asked by Ventspilnieks.lv whether there are plans to remain a member of VAA and continue paying the €40,000 yearly membership fees, Kurzeme Philharmonic director Sigita Migoļa said in a written comment that “LLC Kurzeme Philharmonic has not been provided with any official information about this case” and the decision will be made in the near future.

Kārlis Krēsliņš, the rector at Ventspils University College, told Ventspilnieks that so far the university has not been an active member in VAA, adding that their lawyers are busy considering exit options.

“We have no cooperative work done with VAA,” he said. “We are located in Ventspils, but we are a state university. We comply with all international and state laws and regulations that are binding to us.”

When asked if they pay membership fees to Ventspils Development Agency, Krēsliņš said no financial operations have taken place in recent time.

Ventspils Tehnikums vice-director Uldis Bergmanis said on Wednesday a letter was received from the State Treasury and the decision was made to not pay membership fees to VAA. Ventspils Tehnikums is also considering leaving VAA entirely.

The story previously appeared on BNN, and was edited for brevity by LRT English