KNABbed in Latvia

By bne IntelliNews April 20, 2011

Mike Collier in Riga -

The heads of some law enforcement and intelligence agencies like to keep a low profile, but that's not an option in Latvia where the bosses of the Corruption Prevention and Combating Bureau (appropriately acronymed as KNAB) have always made more headlines than arrests.

KNAB has existed in a state of perpetual turmoil for the last four years. It has indirectly led to the demise of one government (Aigars Kalvitis resigned as prime minister in 2007 after failing to oust then-KNAB chief Aleksejs Loskutovs) and the future direction of KNAB looks increasingly likely to determine the fate of the current government of Valdis Dombrovskis.

A list of recent events within the organisation makes it seem more like the Keystone Kops than the Untouchables. Loskutovs was eventually sacked by parliamentary vote in 2008 after it emerged that a pair of KNAB agents had been pocketing thousands of dollars seized during raids (unbeknownst to him). His replacement, Normunds Vilnitis, was a controversial choice who has only become more controversial with time.


Accused by some of being a placeman to protect the interests of some of the country's oligarchs, Moscow-educated Vilnitis attempted to overhaul KNAB's command structure, prompting his two immediate deputies, Juta Strike and Alvis Vilks, to go public last year with their opposition to the plan, which they said seemed designed to make law enforcement less, rather than more, effective. Strike and Vilks were not alone: more than 70 KNAB employees signed a letter to PM Dombrovskis denouncing the plan.

"All changes always meet resistance and it will always be this way," Vilnitis tells bne. "People who are not ready to accept changes, do not try to understand these changes and often express dissatisfaction without real arguments. The director of KNAB is responsible for the development of KNAB rules of procedure and related changes, therefore I do not quite understand politicisation of this matter and interference in the internal affairs of the bureau."

KNAB's internal battle has rumbled on, with Strike and Vilks facing repeated disciplinary action, while pressure mounts for Vilnitis' dismissal. TV viewers have even been treated to the sight of Vilnitis facing Strike and Vilks on live TV debates, which usually see him come off second best against their clean-cut Mulder and Scully image. In recent weeks, another KNAB officer, Juris Jurass, alleged in front of TV cameras that Vilnitis asked him to illegally wire-tap several politicians - an allegation Vilnitis says has "no grounds."

Vilnitis admits he has been surprised by the amount of publicity concerning KNAB. "I have realized that the work of KNAB is over politicised and there is political will to use KNAB as a weapon of influence," he says. "I believe that the reason for such strong reactions is that I am not really a typical official. I say what I mean and I do not find it acceptable to be pretending and playing around."

Some progress

But despite the distractions, KNAB has actually been making progress on some important cases. The highest-profile arrest of recent months came in June when Strike led a raid on the offices of the national power utility, Latvenergo. Former chairman Karlis Mikelsons and other top executives now face charges of abusing their positions.

The other big-ticket arrest by Strike was that of Vlademir Vaskevics, a high-ranking finance ministry official and former senior tax official, in January. Vaskevics is living proof that not all accountants lead boring lives, having in the past been involved in incidents involving car bombs and alleged gangland hits, while his lifestyle seems to suggest that even humble bean-counters in charge of customs and excise can save substantial sums of money if they really try. He managed to scrape together €90,000 bail in March and the bribery case against him continues.

Strike is now under police protection after threats were made against her from unknown sources. Meanwhile, Vilks' job has become the ball in a game of what PM Dombrovskis described as "ping pong" between himself and Vilnitis.

Dombrovskis seems serious about getting rid of Vilnitis, describing the KNAB chief's attitude after an April 4 meeting as "bordering on legal nihilism" after Vilnitis made a mockery of Dombrovskis' order to reinstate Vilks. Vilnitis did indeed end Vilks' suspension - then suspended him again the next day.

Adding an important new plot twist, former KNAB boss Loskutovs was elected to the Latvian parliament in October on the ticket of Dombrovskis' Vienotiba bloc. He now chairs a parliamentary sub-committee which is responsible for scrutinising KNAB, leading to the fascinating spectacle of Loskutovs and Vilnitis facing off. "First of all, is it ethical to chair a commission having parliamentary control if one's position was lost due to substantial violations?" asks Vilnitis. "Second, can a person have an objective opinion if the topic of the discussion, for example, is the organisational scheme developed by this person?"

For his part, Loskutovs acknowledges that KNAB has made some important arrests despite its inner turmoil, though he feels that this is despite, rather than because of, Vilnitis' leadership. "A month ago, the sub-committee visited KNAB to speak abut the activities of the bureau... Mr Vilnitis was extremely arrogant, saying that our request to meet with other members of the bureau was without sense. We understood it was impossible to continue," Loskutovs tells bne. "But then two days ago, we went to KNAB again and surprisingly the conversation was quite constructive. I'm mostly satisfied that Vilnitis' conflict with his deputies stays separate from KNAB's everyday work."

Loskutovs insists, though, that KNAB would be more effective without Vilnitis in charge. "A lot of officers' work is spent writing explanations of their activities and during his period as director a lot of officers have left the bureau, including around 19 department heads from my time," he says, adding that Vilnitis has failed to use all the resources available to him, actually returning money earmarked for anti-corruption activities.

The irony of the situation is not lost on Loskutovs: a former KNAB chief who was hounded from office by politicians, now finds himself a politician attempting to get rid of a KNAB chief. "There is almost some sort of internal logic to it," he smiles. "It had to happen."

KNABbed in Latvia

Related Articles

Latvia’s Citadele Bank pulls IPO

bne IntelliNews - Latvia's Citadele Bank has postponed its initial public offering (IPO), citing “ongoing unfavourable market conditions”, the bank announced on November 11. The postponement ... more

BOOK REVIEW: “Europe’s Orphan” – how the euro became a scapegoat for policy ills

Kit Gillet in Bucharest - The euro, conceived as part of a grand and unifying vision for Europe, has, over the last few years, become tainted and often even blamed for the calamities that have ... more

Mystery Latvian linked to Scottish shell companies denies role in $1bn Moldova bank fraud

Graham Stack in Berlin - A Latvian financier linked to the mass production of Scottish shell companies has denied to bne IntelliNews any involvement in the $1bn Moldovan bank fraud that has caused ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.