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Cablegate: Latvia's Falling Corruption Score: Resource Request

VZCZCXRO2172
RR RUEHIK
DE RUEHRA #0584/01 3440731
ZNR UUUUU ZZH
R 100731Z DEC 09
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC 6177
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHTL/AMEMBASSY TALLINN 0023

UNCLAS SECTION 01 OF 02 RIGA 000584

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PGOV KCOR LG
SUBJECT: LATVIA'S FALLING CORRUPTION SCORE: RESOURCE REQUEST

REF: RIGA 186

RIGA 00000584 001.2 OF 002


1. (SBU) Summary: Latvia's score on Transparency
International's (TI) 2009 Corruption Perceptions Index (TI
Index) decreased significantly from 5.0 to 4.5 on a 10 point
scale. The Latvian Corruption Combating and Prevention
Bureau (KNAB) and other observers believe that corruption has
indeed increased in Latvia since the start of the economic
crisis in late 2008. In order to help combat further
slippage, Embassy Riga requests the emergency provision of
limited technical assistance from the Department of Justice,
funded by possible fallout or excess funds that may become
available. See para 7 for resource request. End Summary

2. (U) Latvia's 4.5 score places it in 56th place overall,
22nd place among EU members, and last among the three Baltic
states. This year's score brings Latvia back to its pre-2002
level - before the establishment of the KNAB. Latvia's score
had risen from 4.6 in 2002 to 5 in 2008.

3. (SBU) Latvia's 2009 TI Index score is a composite of six
expert and public surveys completed in late 2008 and early
2009, so some time lag exists in the date. All the surveys
measured perceptions of corruption, not actual corruption,
and the results may have exaggerated reality. TI's local
chapter notes that one of the events that probably increased
the public's perception of corruption was the controversial
removal of KNAB's director and the subsequent 8 month vacancy
in KNAB's director's chair (Reftel). However, a corruption
expert at Providus, a local NGO, told us that KNAB's everyday
work carried on normally during the vacancy. The Director of
TI's local chapter suspects that the public's widespread
belief that the government incompetently dealt with the
crisis could have bleed into people's perceptions of
corruption levels in Latvia. A KNAB representative also
pointed out that in 2007 KNAB conducted a survey that asked
anonymous respondents how widespread they believed bribery to
be and whether or not they had been involved in bribery. The
results revealed a lower actual level of corruption than what
had been perceived.

4. (SBU) Nevertheless, informed observers do believe that
corruption has increased in Latvia since the start of the
economic crisis. The Chairwomen of the Latvian Chamber of
Commerce and Industry (LCCI) told the press that before the
crisis the going rate for a government contract was a 10%
bribe, but now members of her organization say that the going
rate is about 15%-20%. The LCCI is considering the
establishment of a code of conduct, for a critical mass of
companies to stand together against corrupt business
practices. KNAB officials believe that the crisis is
increasing corruption at all levels of government. They said
that procurement corruption is increasing, particularly at
the local level, because businesses are competing for a
smaller number of contracts and they are increasingly
resorting to bribery to win those few contracts. They also
say that government officials, whose salaries the government
has cut by as much as 60%, are more frequently demanding
bribes out of desperation.

5. (SBU) The crisis could also be decreasing Latvia's
capacity to fight corruption. KNAB's budget is down about
30% this year. In response KNAB has focused its efforts on
investigations and reduced other activities, such as public
education. The Prosecutor General's budget is down about
40%.

CONCLUSION AND RESOURCE REQUEST
-------------------------------

6. (SBU) Latvia has made great strides in reducing corruption
since regaining independence, but it does appear that the
situation, and certainly people's perception of the
situation, is deteriorating. Although the evidence
is anecdotal, the economic pressures on many Latvians make
this theory plausible. As the economy recovers, the
short-term pressures that appear to be increasing corruption
will recede, but the increasing perception of corruption
could have real consequences in the long-term fight against
corruption. Increasing cynicism about the government could
lead people to further disengage from the political process
and a perception that "everyone is doing
it" could increase cultural acceptance of corruption.
Foreign investors could be discouraged from coming to Latvia.
To avoid this, Latvia's corruption-fighting institutions
must do more with fewer resources.

7. (SBU) USG technical assistance aimed at increasing those
institutions' capacity could help the Latvians reverse the
tide. Embassy Riga believes that over the coming year, five
priority DOJ training courses on informant development, asset

RIGA 00000584 002.2 OF 002


forfeiture, interview and interrogation skills, trial
advocacy, and political/election fraud would fill critical
skills and training gaps in KNAB and other Latvian law
enforcement institutions. At an estimated cost of only
$15,000 per course, we could provide cost-effective and
critical reinforcement at emerging weak links in the region,
and provide a valuable vote of confidence in those courageous
elements and voices who are seeking to prevent a further
decline in their country's economy and international
reputation.
GARBER

© Scoop Media

 
 
 
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