RIGA, June 28 — Ilmars Rimsevics, a member of the European Central Bank’s Governing Council, will face prosecution for bribery in Latvia, further tainting the nation’s reputation in a year that’s already brought US money-laundering allegations and the closure of its No. 3 bank.
Prosecutors announced today that Rimsevics, Latvia’s central bank governor, has been charged following an anti-corruption probe that saw him briefly detained in February. It’s another blow for the tiny euro-area country that’s been accused of helping funnel criminal funds into the European Union, and even of breaching North Korea sanctions.
The glut of banking scandals has prompted Latvia to overhaul its finance sector, which had acted as a regional hub for cash from the former Soviet Union since the collapse of communism. Rimsevics, as governor and before that as deputy governor, has overseen the industry since 1992. His legal woes have deprived him of his seat at ECB policy-making meetings. He’s banned from travel, including to the ECB’s headquarters in Germany.
“It doesn’t look good for Latvia and it also doesn’t look good for the ECB,” Guntram Wolff, director of Bruegel, a Brussels-based think tank, said by phone. “The fact the ECB hasn’t itself seen any of this coming is very uncomfortable for the people in Frankfurt.”
Rimsevics, who denies all wrongdoing and refuses to step down, is accused of soliciting and accepting a bribe of €100,000 (approx. RM468,000) or more in relation to a small lender that’s since been closed over money laundering. The case has unearthed claims including death threats, Russian meddling and suggestions of score-settling among Latvia’s elite.
The 53-year-old official now cuts an isolated figure in his Baltic homeland, with the president, government and parliament all urging him to quit before his terms ends in 2019. Due to laws on central-bank independence, it’s proving difficult to force him out.
Latvia’s Prosecutor’s Office said it’s “taken and issued a decision to initiate criminal prosecution against the Latvian central bank president,” according to a statement on its website. Rimsevics’s lawyer wasn’t immediately available for comment.
The bribery case has strained ties between Latvia and the ECB, which has challenged some of the domestic restrictions on Rimsevics. Other ECB policy makers also have run into legal difficulties in the past. An ECB spokesman declined to comment.
Latvia, where foreign deposits once eclipsed local savings, is dismantling the so-called non-resident industry and banning the use of shell companies. The US, whose report of wide-spread money-laundering violations triggered the demise of ABLV Bank AS, says the authorities must still do more to cleanse the sector. — Bloomberg
