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Cablegate: Loskutovs Update

VZCZCXRO8681
OO RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHRA #0827 3100526
ZNR UUUUU ZZH
O 060526Z NOV 07
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4501
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS RIGA 000827

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV KCOR KCRM LG
SUBJECT: Loskutovs update

Ref: RIGA 811 and previous

1. Summary: Continuing to search for ways to avoid a vote on the
fate of anti-corruption bureau (KNAB) chief Loskutovs, the Saeima
legal affairs committee told the government it needed to bolster its
case for dismissal and the government pulled back its request for
the parliament to dismiss Loskutovs. Prime Minister Aigars Kalvitis
continues to contend that his initial suspension of Loskutovs was
within his rights, and rejects the Prosecutor General's protest of
that action. The Civil Servant Disciplinary Committee issued
Loskutovs a reprimand on the basis of the audit of KNAB accounting
methods, further weakening Kalvitis' claim that these irregularities
demanded drastic action. With a broader view to system reform, the
Saeima Legal Affairs Committee has requested a group of subject
matter experts to review and revise the law covering the accounting
of the types of operational budget funds that prompted the
suspension on the KNAB chief. End Summary.

2. The decision of whether to dismiss Aleksejs Loskutovs as head of
the anti-corruption bureau (KNAB) is in flux. The Saeima Legal
Affairs Committee reviewed the decision of the government on
Loskutovs' removal. The Committee's conclusion was to take the vote
off the their agenda, and send the case back to government. Their
statement was that the committee headed by Prosecutor General
Maizitis, had done a very superfical investigation, therefore the
case should be sent back to for a more thorough inspection. A
Saeima vote would have been required to send the case back to the
government. Before the Saeima had a chance to vote, the government
pulled back the recommendation for dismissal for more research.

3. The Civil Servant Disciplinary Committee informed Prime Minister
Aigars Kalvitis on November 2 that it had decided to issue Loskutovs
a reprimand for the accounting violations found by the state
auditor. Maris Skudra, head of this committee, stated earlier in the
week that dismissing him would be an inappropriate punishment, but
that some disciplinary action was in fact required. Committee
members voted on whether to issue Loskutovs a reprimand, a fine or
to dismiss him.

4. As a separate issue, the Legal Affairs committee proposed, and
the Saeima approved, several mandates to review current procedures
and laws. These include, formation of a new commission to carry out
a more thorough investigation of general use of (often classified)
operational budgets, due by November 20. Members of this commission
will include the State Audit service, Security Police, and SAB (main
intelligence agancy). The commission would then be expected to draft
unified norms for all security institutions with respect to
operational budget resources. By December 1 the government should
draft a procedure on the formation, composition and work of the
commission that is entitled to dismiss the KNAB chief, should the
issue arise again in the future. By May 1 it is requested that legal
norms on the regulation of classified and operational budgets should
be elaborated.

5. Comment: In a commentary article titled "Driving in Reverse" in
Diena, Askolds Rodins asserted probably the most likely outcome when
he stated, "The government's decision to 'withdraw Loskutovs from
the Saeima' may mean that his suspension is no longer of importance,
and he will be punished in a way which does not involve losing his
job." The attempt to remove Loskutovs was the catalyst for the
current political crisis in Latvia, but it will likley be set aside
because the storm it unleashed was far greater than PM Kalvitis
expected. End Comment.

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