Lithuania's state-owned railway company is buying almost all its rails from the Latvian company Sigmen, whose owner is a former KGB officer Yuri Simonenkov. Despite his connections to Russia's ruling elite, none of the deals have been screened for national security implications by Lithuanian institutions, LRT Investigation Team reports.
Its sources said Simonenkov (Sigmen shares officially belong to his wife) and people in his surrounding have ties with former KGB officers and agents, which further extend directly to Russian President Vladimir Putin's circles and Russian oligarchs who are subject to US sanctions. Meanwhile, Sigmen is involved in public procurement tenders and other transactions in Lithuania without any restrictions.
Lithuanian Railways (Lietuvos geležinkeliai) is currently engaged in the massive Rail Baltica project to connect the Baltic states to the European railway network. In the current stage of works, the company is building a 15-kilometre track in Kaunas, with rails supplied by Latvia's Sigmen.
In February, Lithuanian Railways signed an 11.5-million-euro contract with Sigmen and plans to buy rails worth €36 million this year.
For over a decade, Lithuanian Railways has been buying rail almost exclusively from this company that transports them from factories in Russia or Spain.
Simenkov worked for Latvia's KGB together with Yevgeny Roldugin who went to the KGB school with Putin and is the brother of Sergey Roldugin, one of the closest friends of the Russian president.
Simenkov started his business in Latvia from Skonto, a company established with other KGB workers. He owned a bank, Multibank, until 2008 which was put on the US sanction list for money laundering in 2005.
Until 2016, Simenkov had a joint enterprise with Sergey Nosov, a member of Putin' advisory body, the State Council, and the governor of the Magadan region.
After Latvia opened up its KGB archives last year, three agents have been named who were recruited by Simonenkov.
Observers say that Simonenkov's companies may still be linked to former KGB structures.
“There are several documents showing that, even before the Soviet Union collapsed, the KGB were preparing and ordering its employees to go into business, make use of their contacts, including in the criminal world. The KGB even provided funding for them to start businesses,” political observer Marius Laurinavičius has told LRT. “In the Baltic states, they left agents in business where they'd have a huge influence and could impact politics as well.”
Simonenkov's network of former KGB officers and agents reach all the way to the Kremlin, according to LRT Investigation Team's sources.
His name was also linked to the scandal of Latvia's former Central Bank chief Ilmārs Rimšēvičs, accused of taking a bribe.
Sigmen's contracts with Lithuanian Railways are worth nearly €130 million, while it is also the single supplier of tracks to private enterprises. However, not one of these contracts have been investigated by the special government commission that screens strategic deals for implications for the country's national security.
In several cases, however, the commission has blocked Lithuanian Railway's deals with Sigmen.
The State Security Department has not commented on the LRT investigation.