How European Union Taxpayers Lose Money  by Funding the EBRD

I’ve been writing articles for years about a massive fraud at the European Bank for Reconstruction and Development (‘EBRD’) which I discovered in 2009. The fraud was proven with evidence from Nomura leaked in 2010, and then was confirmed by an investigation by the Dutch Parliament and confessions by the Latvian Prime Minister and Eurostat in 2014. Despite this, the fraud still continues to get worse now in 2023 because governments keep giving the EBRD more money. The EBRD is funded by 73 shareholder countries including all European Union (‘EU’) member states, the EU itself, and the EU’s European Investment Bank (‘EIB’).

The EBRD has an official mission of fostering transparency and democracy. What the fraud evidence shows is that the EBRD is not doing its mission and instead is using fraud to help Russian president Vladimir Putin’s oligarchs steal money while wrecking fledgling democracies. Right now in 2023, at least five Putin-linked commercial banks in five countries are protected by the EBRD. Staff at all EU finance ministries, regulators, and prosecutors have received this evidence repeatedly from me for years however all of them prefer to shut their eyes and continue pouring money into the black hole of the EBRD even while Putin is threatening to blow them up with nuclear missiles. These bureaucrats should do their jobs and stop this fraud. Any single country from the 73 shareholders can announce that it will stop funding the EBRD. If one country does this then the other countries will wake up and exit the EBRD.

The EBRD fraud is super simple. I was an early witness because I was whistleblower when the assets of the largest bank in Latvia, Parex Bank, were embezzled in 2004. The Latvian government decided not to use my whistleblowing to save money. Instead the government decided to purposefully lose billions of euros by secretly paying the EBRD to pretend to invest in Parex thus creating an illusion that Parex wasn’t looted even though it was. This bailout benefited members of Putin’s Tambovskaya Mafia including Eduard Khudainatov since they received the assets of Parex. Khudainatov was later found to be straw owner of Putin’s superyacht. In other words, thanks to the EBRD, EU taxpayers paid for Putin’s yacht.

The numbers were as follows: (1) the EBRD announced it invested 80 million euros in Parex because it was valuable, (2) the government quietly wrote-off fake Parex assets for several years without prosecuting anyone, (3) the book value of Parex assets was 4.9 billion euros at the beginning, (4) the government eventually admitted that 800 million of those assets were fake meaning Parex was insolvent at the time EBRD invested, (5) Latvia made a surprise announcement of paying 190 million euros to the EBRD to reverse the investment with the EBRD getting, and the Latvian people losing, 110 million euros. Plus Latvian people lost at least 800 million euros because of the fake Parex assets and the true number is likely closer to 4.9 billion euros since there is no reason why the embezzlers shouldn’t have stolen all of the money since law enforcement showed no interest.

The EBRD fraud was secret for a while in the sense that Latvia didn’t tell the public about the pre-negotiated reversion until it was reversed. Latvia even designated the reversion as a ‘state secret’ meaning anyone telling the truth about the national debt could be prosecuted and imprisoned. Besides the eventual confession of the government, which only a small minority of voters in Latvia understood, the fake accounting was also revealed in documents from Eurostat. Eurostat wrote that Latvia asked to make the EBRD-Parex deal ‘confidential’ and Eurostat agreed. People who aren’t trained in accounting might not understand the significance of this type of fraud (secretly paying someone to pretend to buy something) however any finance minister of any country can falsify national debt to sell fraudulent bonds to the public in this way.

Evidence from Eurostat proving the Latvia frauds (Parex and its successor Citadele) is in this video:

One reason for the fierce resistance to stopping the EBRD fraud could be that many ordinary people, even people employed by financial regulators and the EBRD, are blind to to frauds that are carried out through issuance of fraudulent bonds. As a result of the two EBRD frauds in Latvia (first Parex then Citatele) all EBRD bonds and Latvian bonds have been in default since the moment they were issued. So far the auditors, ratings agencies, and investors are keeping tight-lipped. Perhaps they have the mentality that as long as fraudulent bonds can be rolled over at every maturity with more fraudulent bonds then a fraud bubble can go forever without hurting anyone. They don’t think money is stolen when it’s stolen, but rather assume everything is ok as long as heist doesn’t get in the media and government officials pretend not to know about it. Because of this misconception everyone suffers as economies are dragged down with investment money going toward fraud and criminal activity instead of legitimate economic activity.

Now let’s look at numbers. I compiled a table of EBRD capital subscriptions by EU entities, in euros as of December 2022. Be aware these subscribed amounts haven’t been fully paid and perhaps that’s how the EBRD convinces countries to invest, by saying investors don’t have to put up the money. Anyway these countries have legal obligations to pay up. EBRD total capital subscriptions of 29,749,000,000 euros can all be considered lost just based on the frauds I have learned about, which could be only the tip of the iceberg.

A second concern is that the EBRD reported liabilities of 52,289,000,000 euros as of December 2022. The EBRD cannot pay these liabilities because the full extent of EBRD fraud goes way beyond Latvia. It appears, based on a string of fraudulent banking ‘investments’ made by the EBRD, that fraud is their normal way of doing business, their modus operandi. Over the years nobody has sent me any information showing that I’m wrong about the EBRD-Latvia fraud however many people have sent me information that the EBRD is organising similar frauds in other countries also.

Since I’ve been sending the EBRD fraud evidence to EU officials and officials from all of the EU member states for years, by this time they can all be considered conspirators rather than victims. They are in a conspiracy against themselves to throw away their own money. Normally shareholders in a limited company aren’t liable for the debts of that company beyond their capital investments, but in this case since the shareholders are aware of the fraud for years and haven’t stopped it, they are liable. This problem is magnified by the fact that EBRD bonds are issued with Triple-A ratings which the ratings agencies justify on the theory that the EBRD shareholder countries are guaranteeing the bonds. Shareholder countries should ask the ratings agencies not to write that these bonds are guaranteed since officially they aren’t, however so far nobody has complained thus again making the shareholder countries liable.


Austria:    684,320,000 1,203,000,000

Belgium:    684,320,000 1,203,000,000

Bulgaria:    237,110,000    417,000,000

Croatia:    109,420,000   192,000,000

Cyprus:      30,010,000     53,000,000

Czechia:    256,110,000   450,000,000

Denmark:    360,170,000    633,000,000

Estonia:      30,010,000      53,000,000

EIB:    900,440,000 1,583,000,000

EU:    900,440,000 1,583,000,000

Finland:     375,180,000    659,000,000

France: 2,556,510,000 4,494,000,000

Germany: 2,556,510,000 4,494,000,000

Greece:    195,080,000    343,000,000

Hungary:    237,110,000   417,000,000

Ireland:      90,040,000    158,000,000

Italy: 2,556,510,000 4,494,000,000

Latvia:      30,010,000      53,000,000

Lithuania:      30,010,000      53,000,000

Luxembourg:   60,020,000    105,000,000

Malta:        2,100,000       4,000,000

Netherlands:  744,350,000 1,308,000,000

Poland:    384,180,000    675,000,000

Portugal:    126,050,000    222,000,000

Romania:    144,070,000   253,000,000

Slovakia:   128,070,000    225,000,000

Slovenia:      62,950,000   111,000,000

Spain: 1,020,490,000 1,794,000,000

Sweden:    684,320,000 1,203,000,000

It’s interesting that Valdis Dombrovskis, who signed the EBRD-Latvia-Parex fraud in 2009, is currently European Commission Executive Vice President and the EU representative to both the EBRD and EIB. He also was caught by Spanish police accepting a six-million-euro bribe for trying to start a civil war in Spain. He remains unprosecuted with many journalists writing flattering articles about him without mentioning the clear evidence that he is a criminal. This highlights the attitude problem within EU institutions: a mindset of covering up corruption losses by continuously issuing more bonds instead of exposing and prosecuting corruption. The result is fraud and corruption on a scale never seen before in human history and a mountain-sized pyramid of unrepayable debt.

The EBRD did admit to a small part of the problem when releasing its 2022 results at its annual meeting in 2023. The EBRD normally reports huge profits from funding affordable lending to small entrepreneurs in impoverished dictatorial countries with no rule-of-law. Amazing how the EBRD manages to earn huge profits from this when no other credit institution has ever been able to do so. I’d say it’s a red flag. At least in 2022 when Russia invaded Ukraine with support from Belarus, the EBRD did write off about three billion euros of its assets in Russia and Belarus. The EBRD reported a net loss of one billion euros instead of the usual net profit of two billion euros. An obvious question could have been ‘why did the EBRD lend three billion euros which ended up in Putin and Lukashenko’s pockets even though the EBRD has a mission of fostering democracy?’ however the mainstream media missed this.

The EBRD right now supports Putinist banks in Armenia (Ameriabank), Cyprus (Bank of Cyprus), Latvia (Parex successor Citadele), Lithuania (Ukio successor Siauliu), and Ukraine (Megabank). Plus I discovered by reading annual reports that the EBRD used fraud to cover-up fake assets in Serbia (Kombank) and Slovenia (NLB Group). I’m not an expert on other EBRD investments which support the most corrupt people in Armenia (Vardanyan), Azerbaijan (Aliyev), Belarus (Lukashenko), Moldova (Dodon), Russia (Putin), and Turkey (Erdogan) however those amounts are huge also and future governments could sue the EBRD for damages. That’s not even mentioning the countries of Central Asia where the EBRD supports all of the corrupt dictators.

The previous table doesn’t show the full extent of money at risk because the EBRD does many ‘joint investments’ using off-the-books accounting. These ‘joint investments’ with individual shareholder countries are supposed to help the countries receiving the investments, like Ukraine. However don’t get too excited because investments in Ukraine, for example when the EBRD helped a corrupt politician and sanctioned money launderer loot Megabank last year, are similar to what the EBRD did in Latvia. The EBRD announces an investment, but later it turns out the investment was a scam and they ripped off all the people they were supposed to be helping. Then the scam gets spun in the media as a rescue while the losses are added onto national debt.


Austria: 10,600,000,000

Belgium:    3,560,000,000

Denmark:       668,700,000

Finland:   1,280,000,000

France: 15,350,000,000

Germany: 17,300,000,000

Ireland:    1,410,000,000

Italy: 11,680,000,000

Luxembourg:  2,080,000,000

Malta:       103,700,000

Netherlands: 15,400,000,000

Portugal:       606,100,000

Spain:   2,220,000,000

Sweden:    2,280,000,000

If we add in as liabilities the problem that the EBRD’s subsidiary banks laundered many billions for the Putin Regime and are still doing this now, then finally we can realise the full scale of the financial problem. For example EBRD subsidiary Citadele Latvia organized 800,000,000,000 euros of money laundering through a rogue branch of Danske Bank. Yes, that’s 800 billion not million.

Fraud at the EBRD is a serious problem with many billions of euros stolen and much of it channelled to the Putin Regime which uses the money for (1) conspicuous consumption for Putin and his oligarchs, (2) bribing and terrorizing members of democratic governments they seek to overthrow, (3) organised crime activities such as drug and sex-slave trafficking, and (4) outright military attacks against Ukraine and other countries. It’s clear so far that nobody in the EU who knows about this wants to admit they know. However the result of allowing the fraud to continue means (1) financial losses increasing every year, (2) more property destruction and people displaced by war every year, and (3) more people killed by drugs and war every year. Let’s stop the fraud and cover-up, admit to how much has been lost, and put an end to the EBRD thus boosting the EU economies and crippling Putin’s money-laundering going forward.

By: John Christmas, exiled whistleblower against the Parex-Latvia-EBRD fraud and co-author of ‘KGB Banker’

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