By John Christmas, exiled whistleblower from Parex Bank
Latvian and Russian translations available
Maybe the Kremlin thought he was a perfect front man because of his boyish innocent looks?
Valdis Dombrovskis was Prime Minister of Latvia from 2009 to 2014. His defining moment as Prime Minister was signing an agreement to privatize a stake of recently bailed-out and nationalized Parex Bank to the European Bank for Reconstruction and Development (EBRD) in 2009. Everyone can watch a video of him signing that on YouTube.
According to Dombrovskis and the EBRD, the EBRD invested in Parex after determining during due diligence that Parex was valuable. Parex was, according to them, an important domestic retail bank serving ordinary Latvian people and the Latvian economy. The EBRD deal was a signal to bond investors that Parex assets were sound, the bailout loan from Latvia to Parex would be repaid, and Latvia was fit to join the Eurozone with the European Central Bank (ECB) buying most of Latvia’s bonds. The primary use of the bailout loan was to help shell-company depositors withdraw their money from Parex and re-deposit at ABLV Bank.
This was shocking news to the Latvian business community since it was common knowledge for many years that Parex was a Russian Mafia money laundering bank with clients sourced from rep offices in Moscow and Kiev. A whistleblower (me) distributed information about fraudulent loans to known criminals and as a result got chased into exile with threats. Transparency International announced its Corruption Perceptions Index in front of Parex because, according to TI’s Latvian director, Parex ‘symbolizes the corruption related ills we have in Latvia.’ The Spanish court document from the Tambovskaya Mafia trial indicates that the main money launderers used platform accounts at Parex. Since Vladimir Putin-linked Tambovskaya started off as an organization of heroin traffickers and sex-slave pimps, likely responsible for murdering KGB informants Alexander Litvinenko and Alexander Perepilichny in London, it’s hard to see why bailing out the shell-company accounts at Parex was important for the Latvian economy. Latvia could have allowed Parex to collapse, putting the losses to whoever owned those tens of thousands of shell companies. And, Latvia could have sued auditor EY.
The news that the EBRD due diligence didn’t turn up any embezzlement and fraud was especially shocking because abundant information about embezzlement and fraud at Parex is openly available on the internet. You can read about the fraudulent loans from my whistleblowing, which turned out to be exactly on-target since the same loans I identified were later admitted to be losses. And the media discovered more blatantly criminal loans, for example two huge loans to two known Tambovskaya members which were purposefully documented such that the borrowers didn’t have to pay back.
Does the story sound horrible already? Be mentally prepared because it keeps getting worse.
In 2010, the Latvian government and EBRD split Parex into a ‘bad bank’ named Parex and later Reverta and a ‘good bank’ named Citadele. At that time, they admitted that half of the assets were bad, contradicting what they said a year earlier. Also, leaked information indicated that the Dombrovskis deal with the EBRD was fraudulent. The EBRD didn’t really invest in Parex but rather Dombrovskis paid them, with our money of course, to temporarily cover-up the embezzlement and fraud.
However Dombrovskis, with assistance from Swedish journalist Anders Aslund who later was revealed to be on the Latvian government payroll, managed to spin a new story to explain what happened. Now they were saying that Sweden caused the Latvian economy to collapse by making an asset bubble and that Parex collapsed because of this asset bubble and therefore Dombrovskis bailed out Parex to rescue Latvia from Sweden. The story is absurd, and reverses the timeline of what really happened. Parex was looted first, then the government fraudulently transferred billions of euros to Parex, and then the economy collapsed in reaction to the bailout. Sweden had no involvement, however Swedish investors in Latvia did lose a lot of money. Sadly, a large enough minority of Latvians believed Dombrovskis and therefore he was able to continue winning elections.
After years of trying to expose the true Russian Mafia story in the media with limited success, since most of the media decided to carry the fake Sweden story, I finally got what I thought was a breakthrough in 2014. I met Dutch Parliamentarian Pieter Omtzigt and convinced him to ask the Dutch Parliament to confirm that the leaked information was correct and that Dombrovskis’ privatization of Parex to the EBRD was fake. Then we asked the European Commission’s Eurostat to force Latvia to correct its financial accounts back to the time of the fake privatization. This was widely publicized in the Dutch media however journalists outside of the Netherlands ignored the new information.
Eurostat sent a ridiculous reply to Omtzigt which should have been published on the front page of the Financial Times and Wall Street Journal to warn all global investors not to buy European bonds. You can read the letter on my website www.LawlessLatvia.com. Eurostat wrote that (1) they knew about the fake privatization already and (2) Latvia asked Eurostat to keep it ‘confidential.’ In other words, Eurostat doesn’t care if corrupt European Union member states make false financial declarations thus ripping off bond investors.
Back in Latvia, Dombrovskis was no longer prime minister because he was on his way to Brussels, and there was a new prime minister Laimdota Straujuma. Following the news from the Netherlands, she admitted that the privatization would be reversed at the end of 2014 which is the same as admitting that it was fake. She said the reversion agreement which was part of the 2009 sale agreement was designated as a ‘state secret’ which means that any journalist who published the true revenue and debt figures for Latvia between 2009 and 2014 would have faced criminal prosecution. Later, it was discovered that the Latvian Finance Ministry was secretly paying journalists to report on government finances as instructed by the Latvian Finance Ministry. In other words, journalists had to go along with Dombrovskis’ Sweden story. They couldn’t write about my whistleblowing and the EBRD cover-up of my whistleblowing or else they would go to prison.
Despite confirmation that the Dombrovskis-EBRD deal was a massive fraud, the reputation of Dombrovskis remained untarnished in Brussels. Seems everyone read articles about how he was a hero because he rescued Latvia from Sweden. Thus Dombrovskis became European Commission Vice President from 2014 to 2019.
During this time, I was still in exile receiving death threats. Also, a folk singer named Ansis Ataols Berzins attempted to flee from Latvia to Czech Republic however Latvia managed to get him back and lock him in prison. Berzins didn’t steal anything or hurt anyone, however was saying in public that the Russian Mafia stole the assets of Parex and that the Sweden story was fake. Spin-doctors from the Latvian government managed to (mostly) cover-up my story and Berzins’ story while promoting Latvia as a ‘success story’ in the international media. But the reality is that the national debt doubled then tripled while at the same time 15% of the population ran away and people who stayed behind slid deeper into poverty. Keep in mind that the government had no obligation to bail out Parex and therefore didn’t have to increase the national debt at all, and the last time 15% of the population fled was when the Red Army invaded in 1944.
The Russian Mafia’s Latvian Proxy Network, the shell-company and bank network established by former KGB agents as soon as Latvia supposedly became independent in 1991, had centered around Parex since the beginning. However during the 2008-2009 bailout, Parex personnel and accounts went to Ukio Bank in Lithuania (linked with Putin, looted in 2013 with the looting partly covered-up by the EBRD), ABLV Bank in Latvia (blacklisted by the US Treasury in 2018 for looting Ukraine and Moldova, now being allowed to ‘self-liquidate’ because the proposed independent administrator was assassinated), and Citadele Bank in Latvia (still operating as usual as if nothing happened). Also, it appears that the Latvian Proxy Network set up rogue cells at the Baltic branches of Swedbank and Danske Bank and ran hundreds of billions (that’s billions with a ‘b’) of dollars and euros through those in just a few years.
The total amount of Latvian Proxy Network money laundering must be approaching a trillion (that’s trillion with a ‘t’) dollars and euros by now, making this by far the largest slush fund in history with nobody prosecuted except the folk singer who complained about it. This is enough money to bribe thousands of politicians and journalists throughout the European Union and United States with plenty of money left over for the superyachts of the Mafia.
This is also ample money for bribing the EBRD, Eurostat, ECB, and EY. I’m not sure if the reason why they are running a cover-up racket to protect the Latvian Proxy Network is bribery. However they definitely all know about it and don’t seem concerned about their own criminal actions. A report posted on the Eurostat website in 2018 clearly states that representatives from Eurostat, the ECB, and EY visited Latvia together in 2017. Among the issues they discussed was the sale of a stake in Citadele to the EBRD. It turned out that the Citadele privatization in 2010 was fraudulent and similar to the fraudulent Parex privatization in 2009. Dombrovskis was responsible for both of those, the second fraud apparently a partial roll-over of the first fraud. There is a secret agreement (secret to the public, but not to Eurostat, EBRD, ECB, EY) to reverse the Citadele privatization, to be paid by unknowing Latvian taxpayers for the unneeded service of allowing Citadele to use the EBRD as a front to give itself undeserved credibility. We already learned in 2010 that the half of Parex assets that went to Parex/Reverta were fraudulent. Now based on this 2018 Eurostat report we can speculate that the half of Parex assets that went to Citadele may also be fraudulent. From the remaining Latvian Proxy Network banks, Citadele is the only one which has a United States dollar correspondent account. That account is at Citibank which presumably isn’t aware that the EBRD didn’t really invest in Citadele.
My experience with the staff at the EBRD, Eurostat, ECB, and EY is that they ignore my direct attempts to contact them. When I ask journalists to call them, I understand that they reply with slurs against me and refusal to discuss my evidence since apparently everything they do with our tax money is top secret. This behavior is not only cruel, but also stupid because they are undermining themselves. For example, the European Commission asked Latvia to privatize Parex and Citadele, and then the European Commission’s Eurostat allowed Latvia to fraudulently comply by making temporary fake privatizations. What was the point of that? And, the fraud is mainly against Latvian taxpayers and investors in Latvian bonds. The largest investor in Latvian bonds is the ECB. The ECB is conspirator in a fraud racket against itself!
Now in September 2019, Dombrovskis’ popularity in Brussels remains as strong as ever even though back in Latvia only 9% of voters support his political party. Just this month he was promoted and now has the title European Commission Executive Vice President. Western journalists, with a few exceptions, are keeping silent about his history as a fraudster. I explain the Dombrovkis-EBRD-Eurostat-Parex-Citadele fraud to journalists and they usually reply ‘that’s not important’ and then they publish articles about much smaller scandals. I’m left wondering if their silence is motivated by corruption, fear, or if they just don’t understand accounting.
How much money must the Russian Mafia steal and the Latvian Proxy Network launder for the media and the European Commission to wake up? This isn’t just about heroin and sex slaves anymore. This is about looting entire governments and starting wars, as the Latvian Proxy Network did in Ukraine. Dombrovskis himself was accused by Spanish journal ‘Interviu’ of accepting a six-million-euro bribe to encourage the Catalonian separatists, almost causing a war in Spain. And imagine that the Kremlin can give out six-million-euro payments to thousands of European politicians and try to smash apart every country in Europe and still have money left over, given the enormous amounts of black money slushing around. It’s time for a public inquiry, not about whether Dombrovskis really did organize frauds with the EBRD because that’s already confirmed, but about why the European Commission is entrusting an obvious front-man for the Kremlin with serious responsibility.