ANALYSIS OF PARTY INCOME - Delna



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ANALYSIS OF PARTY INCOME:

DONATIONS FROM MEMBERS OF THE BOARDS AND COUNCILS OF STATE AND LOCAL GOVERNMENT COMPANIES

INTERMEDIARY REPORT

Prepared by:

Liga Stafecka (Liga.Stafecka@delna.lv)

Andrejs Karpovics (Andrejs.Karpovics@delna.lv)

June 2006

This research was conducted with the financial support of the Open Society Institute and under the auspices of the project “Monitoring Misuse of Administrative Resources Prior to the 9th Saeima Election.”

Elections are not a game! Vote wisely!

CONTENT

I Summary 3

1.1. The goals and frameworks of the research 3

1.2. The method 4

1.2.1. Financial amounts – more than LVL 1,000 4

1.2.2. Sources of information 4

1.2.3. Time frame 4

1.3. Main conclusions 4

II A general discussion about party income 7

2.1. Political parties represented in Parliament 7

2.2. Parties represented in major local governments 10

2.3. Proportion of major donors in overall party income 11

III Donations to parties by members of the boards and councils of state and local government enterprises 14

3.1. A general discussion about the structure of governance at state and local government companies 14

3.2. Donations made after taking a position on the board or council of a state or local government company 16

3.2.1. First Party of Latvia 16

3.2.2. Latvian Green Party 17

3.2.3. Latvian Farmers Union 17

3.2.4. New Era 18

3.2.5. People’s Party 19

3.2.6. Latvian Social Democratic Workers Party 19

3.2.7. People’s Harmony Party 20

3.2.8. New Centre Party 20

3.3. Donations made prior to taking a position on the board or council of a state or local government company 21

3.4. Trends in donations made to political parties by members of company boards and councils 22

Appendix I. Donations from people who have been given a job as members of a board or council of a state or local government company 24

Appendix 2. Donations made by people before becoming members of state or local government company boards or councils 38

I Summary

1 1.1. The goals and frameworks of the research

The aim of this analysis is to find whether there is a relationship between donations that are made to political parties and decisions that are taken on the members of boards and councils at companies that are owned by the state or a local government. The results of the research confirm that there is, indeed, such a relationship, and Transparency International Latvia, therefore, would like to focus public attention on the fact that parties receive indirect state financing through company boards and councils, while at the same time, they also politicise the management of government properties, thus distancing themselves from the actual functions of those properties.

Under the auspices of the “Monitoring Misuse of Administrative Resources Prior to the 9th Saeima Election” project, TI Latvia has conducted observations at the level of local governments and the national government. TI Latvia has analysed the income of political parties and the possible use of state or local government resources to support parties. This intermediary report offers a review of one of the aforementioned levels – analysis of political party income from January 1, 2005, and the end of May 2006. The primary focus has been on the leading donors of money to political parties. In the context of this report, a leading donor is someone who has donated at least LVL 1,000 to a specific party in one year’s time. For private individuals in Latvia, that is quite a significant sum, and it can indicate that the individual has certain intentions with respect to the party’s activities.

TI Latvia hopes that this research will lead members of the public to become actively involved in politics, and that includes providing financial support. A donation to a party is a donation to the strength of the country’s democratic system. TI Latvia also, however, would like parties to respond to suspicions about the receipt of indirect state financing and the selfish politicising of company councils.

This report contains a review of the basic principles of managing public properties, the structure and limitations of this process, so as to remind readers of same. This is a preventive project – as we watch the behaviour of state and local government officials during campaign season and work actively together with those who are involved in this project, we hope to attract timely attention to the most problematic aspects of the possible misuse of state and local government resources for election purposes.

2 1.2. The method

1 1.2.1. Financial amounts – more than LVL 1,000

The researchers analysed only those donations to political parties by members of the boards and councils of state and local government companies which exceeded LVL 1,000 over the course of a year. Such donations indicate close links between the donor and the party, and financial donations are a part of the mix. The researchers also analysed donations above LVL 1,000 which were received from state or local government representatives on the boards of free ports. These, in a narrower sense, are not really state or local government companies, but the fact is that political representation is a key principle in assembling their governing structures. It is also true that members of free port boards receive very high salaries, and that explains TI Latvia’s interest in this issue.

2 1.2.2. Sources of information

Analysis about party donations was based on information that was published in the electronic database of declarations filed by government officials with the State Revenue Service, in the candidate lists of the Central Election Commission, in the archives of the LETA news agency, in the donor database of the Corruption Combating and Prevention Bureau, and in the official journal Latvijas Vēstnesis about changes in the management of companies.

3 1.2.3. Time frame

The analytical project covered the period of time between January 2005 and May 2006. The researchers purposefully included the period of time just before the 2005 local government election so as to illustrate the dynamics of political donations in advance of that election, which took place in March 2005. This also helped to mark out the possible situation in advance of the 9th Saeima election.

3 1.3. Main conclusions

An analysis of party donations during the aforementioned period of time reveals the fact that donations of LVL 1,000 or more make up the majority share of income for most of the political parties with representation in Parliament. This is particularly true of For the Fatherland and Freedom/LNNK, for which such donations made up 95% of all income between the beginning of 2005 and May 2006. For the People’s Party, such donations made up 92% of total income, for the Latvian Farmers Union and People’s Harmony Party – 85%, for the First Party of Latvia – 94%, for New Era – 82%, and for the Latvian Alliance of the Green Party and Farmers Union, as well as the Latvian Green Party – 80%. The lowest proportion of such donations in the overall income structure of a party that is represented in Parliament is 50%, and that applies to the left wing For Human Rights in a United Latvia. These numbers make it clear that parties which are represented in government institutions largely subsist on the basis of major donations, and that creates suspicions to the effect that parties are dependent on a few major donors. This threatens the right of the public to be represented when decisions are taken.

The research results also show that donations from people who are members of the boards and councils of state and local government councils make up a significant portion of the income of several of Latvia’s political parties – those which have been or are in power at the state or local government level. The highest proportion of such donations (15 to 20%) is found among the First Party of Latvia, the People’s Party, the Latvian Green Party and the Latvian Farmers Union. The New Era party, which was in the national government coalition until April 2006, received donations from the members of state and local government council boards and councils equal to 6% of the party’s total income. Even less money from this group of donors was received by the “left wing” parties – the People’s Harmony Party, New Centre, and the Latvian Social Democratic Workers Party. That is because the Latvian Social Democratic Workers Party and New Centre were represented in the governing coalition of the Rīga City council until March 2005. When there was a shift in power on the Council, the representatives of these left wing parties who had been appointed to company councils were replaced by right wing party representatives.

The fact that the income structure of Latvia’s political parties is so very much dependent on donations from members of state and local government councils indicates that the members of these structures are appointed largely on the basis of political belonging, not of professional criteria. Inevitably, those who are appointed to state and local government councils are people who are close to a specific political party and, usually, know nothing about the relevant areas of business. It has to be pointed out that this politicisation of state and local government councils is in violation of a principle that is defined in the Commerce Law and in the law on state and local government capital shares and enterprises – that councils are supervisory institutions which represent the interests of shareholders (the state or the local government, not political parties) between general meetings and oversee the operations of boards. It should be added here that the law “On state and local government capital shares and enterprises” says that company boards require the agreement of company councils in certain cases – concluding transactions which exceed a sum defined in statutes our council decisions, specification of general principles of commercial operations, purchase, alienation or encumbering of real estate, etc. Given that the law offers company councils extensive authority, it must be emphasised that it is critically importance to ensure that when councils take decisions on the various issues, this is work in which professionals from the sector in which the state or local government company is operating take part. The reality in Latvian politics, however, is that far more often those parties that are in power use the membership of company councils to politicise the management of state properties, thus drawing further away from their basic areas of operations.

The results of the research show that donations from members of the councils of state and local government enterprises represent a significant share of income for several parties, and so there is reason to claim that parties receive indirect state financing through this process. This, it must be noted, is a violation of the principle of equal political competition. These financial resources are available only to those parties which are represented in the governing coalition of the national government or of local governments. Governing parties which can nominate their representatives for membership in the councils of state and local government companies gain the upper hand in comparison to opposition parties which cannot do so and thus lose one possible source of income.

Given the conclusions formulated by the researchers, TI Latvia seeks to attract the attention of the public and of political parties to the problem which has to do with major donations to parties which are made by people who represent state and local government companies. It has to be added that existing laws do not ban parties from accepting donations from this group of donors. For the reasons that are cited above, however, such donations are a problem in ethical terms, and TI Latvia feels that parties should take another look at donation policies, limiting donations from the party representatives who are members of the councils of state and local government companies.

II A general discussion about party income

1 2.1. Political parties represented in Parliament

Over the course of 18 months, the party in Parliament which has received the largest sum in donations is New Era (JL), which received LVL 453,555.77 (EUR 652,389) between January 1, 2005, and May 2006. The second richest party is the People’s Party (TP), which received LVL 278,051.59 during that period. Figure 1 shows the donations received from people who have donated more than LVL 1,000 a year. Data show that the so-called “major donors” contribute the majority share of party income. The leader in this regard is For the Fatherland and Freedom/LNNK (TB/LNNK), for which 95% of the party’s budget come from major donors. For the People’s Party,. the figure is 92%, the Latvian Alliance of the Green Party and Farmers Union (ZZS) – 85%, and for the First Party of Latvia (LPP) – 84% of all donations. New Era and the Latvian Green Party have a slightly lower share of such donations – around 80% in both cases. For opposition parties such as For Human Rights in a United Latvia (PCTVL), the figure is far lower – between 50% and 68%.

Figure 1

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Data show that the operations of parties are based entirely on those donations which are received from major donors. This creates a greater risk of political corruption, because parties are becoming more and more dependent on a few major donors, thus threatening the likelihood that the public interest is observed when decisions are taken by party representatives. A greater diversity in party income would reduce the risk of political corruption, because then no major donor would take a dominant position in the party and in the state and local government institutions in which it is represented.

Figure 2

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If one looks at party donations which exceed LVL 1,000, one can identify three major groups of donors – private businesspeople, party activists, and elected officials or members of the boards or councils of state and local government companies. Most of the major donors are private businesspeople who, in several instances, represent one and the same company, thus creating suspicions that the donations are meant to avoid the legal ban against legal entity donations to political parties. Comparatively much smaller is the sum of income which flows into party treasuries from party members – those who have elected party posts or who work for state and local government institutions. Donations from board members from state and local government institutions have become a permanent and important source of financing for parties in many instances, and a more detailed discussion about these donations will be found in the next chapter.

Figure 3

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* The term “party activists” is interpreted in this study as referring to members of Parliament and of local government councils, European Parliament members and their assistants, members of local government council commissions, as well as people who hold senior positions in parties (existing and former party leaders, general secretaries, board members and directors of regional chapters).

If one analyses the list of party donors that has been published by the KNAB, one sees that opposition parties have less of a proportion of major donors in their income. As can be seen in Figure 3, however, donations from so-called active party representatives make up a significant share of PCTVL income. There is another alliance which is represented in Parliament as a faction but was not included in the table because its members previously were MPs for the People’s Harmony Party – Harmony Centre (SC). If we look at party income, however, we see that 87.26% of donations to Harmony Centre have come from the alliance’s chairman, Aivars Bergers – LVL 9,250 of LVL 10,600. He is the only one to have donated more than LVL 1,000 per year. That is in part because the alliance was established after local government elections in 2005, which means that the most important spending period was avoided. The most active donor to PCTVL, meanwhile, is Euro-MP Tatjana Ždanoka, who has donated LVL 6,550 to her party. Data show that some parties are complete dependent on a single donor, and this can have a significant effect on party operations, creating suspicions that the party is working on behalf of the major donor’s interests.

Nearly one-third of the major donations received from the People’s Party have come from active party representatives, particularly the party’s founder, Andris Šķēle, who donated LVL 9,000 in 2005 and the same sum in 2006, as well as Jūrmala City Council member Agris Kalnciems and Salaspils City Council member Vilnis Grīviņš. The latter man served as director of SIA Lion before being elected to the City Council. That job is currently held by his wife, Elita Grīviņa, who is also one of the party’s leading donors. Vilnis Grīviņš was an active People’s Party supporter in the past, too. Since 2002, he has donated LVL 21,500 to the party, while his wife has contributed LVL 12,500.

2 2.2. Parties represented in major local governments

Researchers took a separate look at political parties in Valmiera, Liepāja, Daugavpils, Ventspils, Rīga and other towns and cities – parties which are not represented in Parliament. These include New Centre (JC), Latvia’s Way (LC), and the Fatherland party. Figure 4 shows the income of these parties, also pointing out the importance of major donors in terms of overall income. New Centre received the most income among those parties which are not represented in Parliament. The party considers itself to be a national structure, as it is represented in several local governments. That has much to do with the reason why this particular party has received much more money than other regional parties. The same is true of Latvia’s Way, which is not represented in Parliament but does hold seats in local government bodies. LC received LVL 89,016 in donations during the studied period, and approximately 85% of that money came from major donors.

Figure 4

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Among regional parties, the wealthiest are For Liepāja’s Development (95% of income comes from major donors) and Light of Latgale, which is represented in Daugavpils (85%). There are two regional parties in Figure 4 for which no data are available – the Daugavpils City Party and For Latvia and Ventspils. KNAB data do not show that anyone donated any money to those parties in the surveyed period of time. The last registered donation in the case of For Latvia and Ventspils was submitted on June 15, 2004. This leads to three possible implications whether the party lives only on the party membership fees whether on the voluntary work or other resources that are not declared, probably administrative resources.

3 2.3. Proportion of major donors in overall party income

As was noted above, the activities of political parties very much depend on major donations, and that is made clear in the proportion which such donations represent in overall political party income. TB/LNNK is the leader in this regard, with 95% of its income coming from such donors. Figure 5 shows the proportion of major donors and the number of donors, which makes it possible to see how important specific donors are in providing party finances. It can be claimed that TB/LNNK is more dependent on major donors, because 95% of the party’s income during the study period came from just 25 donors. The People’s Party receives 92% of its income from major donors, but in its case, the donations came from 50 donors – two times more than in the case of TB/LNNK. The ZZS is also significant dependent – 80% of income comes from 17 individuals. New Era is less dependent than the aforementioned parties on specific donors, as 82% of their incomes are provided by 103 people.

Figure 5

Major donors and donated resources

| |Total sum of major donations |Proportion of major donations in|Number of major donors |

| | |total party income (%) | |

|TP |256,358,50 |92% |50 |

|ZZS |33,830 |80% |17 |

|LZS |249,500.90 |85% |70 |

|LZP |93,944.40 |80% |32 |

|TSP |121,304.55 |85% |32 |

|Fatherland |18,000 |78% |18 |

|LPP |248,049,60 |94% |55 |

|JL |377,521.45 |82% |103 |

|TB/LNNK |87,026.50 |95% |25 |

|Light of Latgale |12,200 |85% |3 |

|Liepāja Party |6,000 |48% |3 |

|For Liepāja’s Development |7,500 |97% |3 |

|New Centre |101,155,67 |79% |33 |

|PCTVL |34,831,04 |50% |18 |

|Conservative Party |3,970 |87% |1 |

|Latvia’s Way |75,656,20 |85% |21 |

|Latvian Social Democratic |139,115.62 |69% |50 |

|Workers Party (LSDSP) | | | |

|Harmony Centre |7,200 |68% |1 |

|Latvian Youth Party |1,000 |33% |1 |

This table includes all donations which exceeded LVL 1,000 in the course of a year.

One party which is very much dependent on a few donors is Light of Latgale, which receives support from three people. The same is true with the For Liepāja’s Development party. The Conservative Party is supported almost entirely by just one single donor. This can create a high risk of political corruption, because party operations are dictated by just a few people. For the LSDSP and PCTVL, there is quite a lot of diversity among donors.

To summarise, analysis of the income structure of parties indicates that parties are quite dependent on major donors, because the donations which exceed LVL 1,000 make up the majority of party budgets. Second, there are certain parties which are dependent on just a few major donors. Harmony Centre, for instance, has just one donor of this type. Third, two regional parties have received no donations at all during the survey period, which suggests that their operations are based on volunteerism. Alternatively, they may be receiving funding which is not declared (this thesis is dependent on consultations with the KNAB).

III Donations to parties by members of the boards and councils of state and local government enterprises

This section of the report reviews the issue of members of management institutions at state and local government enterprises who donate money to political parties. The aim is to discover the proportion which donations from such people represent in the income structure of Latvia’s political parties.

First, we will take a general look at the structure of management at state and local government enterprises so that the reader might understand the competence and functions of the relevant boards and councils, as well as the relationships among them. Next, we will offer data about party donors, focusing in particular on the share of donations which come from people who are members of the boards or councils of state or local government enterprises. In order to illustrate these trends more precisely in relation to the surveyed problem, we will also offer a review of major party donors from amongst the group of donors that is being studied. In conclusion, we will offer our thoughts about the way in which members of the boards and councils of state and local government companies are chosen and the principles which are applied to this process.

1 3.1. A general discussion about the structure of governance at state and local government companies

According to Latvia’s Commerce Law, the managing institutions of private, state and local government companies include the meeting of shareholders, the board and the council.[1]

The highest-ranking institution at a company is the meeting of shareholders, which represents the shareholders of the company – the relevant ministry or local government in this case. The meeting of shareholders is represented by senior officials from ministries (the minister, the state secretary or the deputy state secretary) or by senior local government officials (council chairmen, directors of local government institutions). The functions of the meeting of shareholders are carried out by the shareholders. Only the meeting of shareholders can elect or sack members of the councils of state and local government companies, and only they can take decisions on compensation that is paid to council members. Usually the members of state and local government company councils are elected and sacked by shareholder meetings after agreement is reached with the shareholder, i.e., with the senior representatives of the relevant ministry or local government.

The council is the institution which oversees the state or local government company, represents the interests of shareholders during the period between meetings of shareholders, and oversees the operations of company boards in accordance with laws and the relevant company’s statutes. In the statutes it can be specified than the council must agree with the board when important issues are handled (expropriating the company, launching a new area of operations, purchase of real estate, etc.).

Council members elect a chair from amongst themselves, also choosing at least one deputy chair. The Commerce Law says that compensation for council members is determined by meetings of shareholders, but government regulations say that the salary of the council chairperson of a state or local government company may not exceed 20% of the salary of the company’s board chairperson. The salary of the deputy chair of the council and of members of the council may not exceed 15% of the wages paid to the board chairperson.

The board, for its part, is the executive institution of the company – it manages and represents the firm. Board members are chosen by the company council for three-year terms, unless the statutes of the company define a shorter term in office. Board members elect a chair from amongst themselves. The chairperson organises the board’s activities (the statutes of a company can also say that the chair of the board is selected by the council). The council determines the compensation paid to board members.

The Commerce Law says that board members can be withdrawn by the meeting of shareholders. The council of a company can sack a board member until the next meeting of shareholders, but no longer than for two months.

Figure 5 The permitted number of state or local government company boards and councils and compensation in accordance with the type of state or local government company

|Type of |Criteria |Maximum |Maximum monthly |Maximum |No. of |No. of board |

|company | |monthly wage |wage of rep of |monthly wage |council |members |

| | |of board chair|capital |of senior |members | |

| | |(LVL) |shareholder |employee (LVL)| | |

| | | |(LVL) | | | |

| |Financial indicators |Avg. no. of | | | | | |

| | |employees | | | | | |

| |Balance |Net turnover | | | | | | |

| |(million LVL)|(million LVL)| | | | | | |

|Small |Up to 3 |Up to 4 |Up to 49 |No more than |No more than 150|No more than |3 |No more than |

| | | | |1,000 | |100 | |3 |

|Medium |3-15 |4-23 |50-249 |No more than |No more than 250|No more than |No more than |No more than |

| | | | |2,000 | |150 |5 |4 |

|Large |15-24 |23-40 |250-499 |No more than |No more than 350|No more than |No more than |No more than |

| | | | |3,000 | |250 |7 |5 |

|Very large |24+ |40+ |500+ |No more than |No more than 500|No more than |No more than |No more than |

| | | | |4,000 | |240 |10 |6 |

Source: Cabinet of Ministers Regulation No. 704, 16 December 2003.

Government regulations state that in determining the number of council and board members at state and local government companies and in deciding on their monthly compensation, companies are divided up into four groups – small, medium, large and very large. The criteria for this division are shown in Figure 5, and each size of company has a specific maximum number of board and council members, as well as maximum salaries that are paid to such individuals.

2 3.2. Donations made after taking a position on the board or council of a state or local government company

1 3.2.1. First Party of Latvia

Donations from the members of state and local government company boards and councils have been received by virtually all of the parties that have spent time in the governing coalitions of the national government or the Riga City Council between January 2005 and May 2006. The largest proportion of members of state and local government company boards and councils is controlled by the First Party of Latvia (LPP), which is represented in the national governing coalition and in that of the Rīga City Council. Data show that 20% of the party’s overall income comes from these kinds of donors – LVL 53,000 in all. By comparison, a very similar share of major donations (29%) is received from party activists. A bit more than one-half of such income has been provided by MPs Ainārs Šlesers and Inese Šlesere, as well as by a former member of the Jūrmala City Council, Aleksandrs Bašarins.

Other major LPP donors have been Andris Ameriks, a member of the current and previous session of the Rīga City Council. He has represented the Rīga local government on the board of the Rīga Freeport since 2001, initially as a member of the Centre political alliance and then as a representative of the LPP. Over the course of the past two years, Ameriks has donated the maximum allowed sum of money to the LPP – LVL 10,000. He can afford to do this because he earns very good money at the Freeport. Another impressive sum – LVL 8,000 – was donated this year to the LPP by Romāns Mežeckis, an LPP member who is deputy council chairman at AS “Ventspils Nafta” and VAS “State Real Estate”, as well as a member of the council at VAS “Latvian Air Traffic”. The maximum permitted sum of LVL 10,000 was donated to the LPP during these 18 months by the businessman Dainis Liepiņš, who is closely linked to the party. He represents the Transportation Ministry on the board of the Rīga Freeport, and he is a council member for several companies – VAS “Rīga International Airport”, VAS “Latvian State Roads” and the stock company “Rīga Heat” (until the end of last year). Approximately one-third (62%) of donations made to the LPP by members of company boards and councils during the surveyed period were contributed during the first few months of 2005. This can be explained by virtue of the fact that a local government election was held in March of that year, and parties spent a lot of money on that process. This trend was seen in other parties, as well – donors become most active during the pre-election period.

2 3.2.2. Latvian Green Party

The second largest proportion of donations coming from state and local government company council members (17%) has been received by another party which is in the governing coalition – the Latvian Green Party (LZP). During the 18 months, this party received LVL 20,307 from this group of donors. The biggest sum – LVL 10,930 – was donated by Viesturs Silenieks, a member of the party who represents the Environmental Ministry on the board of the Rīga Freeport. He has held that post for several years now. The party’s representative at VAS “Electronic Communications Inspector”, Arnis Luhse, donated a total of LVL 5,227 to the LZP last year.

3 3.2.3. Latvian Farmers Union

Approximately one-half of donations from company board and council members came to the LZP during the first three months of last year, when the party needed money for its local government election campaign. The budget of the Latvian Farmers Union (LZS) also has received a considerable share of its income (16%, or LVL 46,150) from the party’s representatives on the boards and councils of state-owned companies. Since the beginning of 2005, the LZS has received major donations from board members of VAS “Latvia State Forests” – LVL 15,685 from Kārlis Boldiševics (who is also on the council of AS “Ventspils Nafta” and VAS “Latvian Development Fund), and LVL 5,580 from Modris Grantiņš (a board member at “Latvian State Forests”). The maximum amount in donations that is permitted by law – LVL 10,000 – was provided to the LZS by businessman Ivars Bārdiņš last year. He has been a council member of VAS “Central Region Roads” since 2003. Bārdiņš has filed a government official’s declaration which shows that he earned LVL 3,292.85 from this post in 2005, LVL 3,060 in 2004 and LVL 765.10 in 2003. This means that over the course of three years, he earned more than LVL 7,000 thanks to his work on the company’s council. Less than one-quarter of the donations which the LZS received from its board and council representatives (LVL 10,700) were transferred to the party’s account between January and mid-March 2005, when the local government campaign was in full swing.

4 3.2.4. New Era

A comparatively smaller proportion in terms of party income is received from representatives of state and local government boards and councils by New Era (JL), which was represented in the national governing coalition until April 2006 and has been part of the governing coalition of the Rīga City Council since March 2005. Calculations show that these donors provided approximately 6% of total JL donations since the beginning of 2005. JL representatives in senior positions at state-owned companies donated a total of LVL 26,681 of the party. It has to be added that all of these donations were received after the March 2005 local government election, which led to JL’s membership in the Rīga governing coalition. This made it possible for the party to nominate its representatives for selection as senior officials at companies that are owned by the Rīga local government.

It is necessary to emphasise here that the leading JL donors during the surveyed period represented the councils of state-owned companies and the board of the Rīga Freeport, as opposed to the councils of Rīga local government companies. That may be because salaries are higher among the former group of officials. Vilis Vītols, a former chairman of the council at VAS “Latvenergo”, as well as Nikolajs Sigurds Bulmanis, the former Economics Ministry representative on the board of the Rīga Freeport, each donated LVL 5,000 to JL. A member of the JL faction of the Rīga City Council, Mārtiņš Greste, donated LVL 5,000 to the party after he was elected chairman of the council at AS “Rīga Heat”.

5 3.2.5. People’s Party

For the People’s Party (TP), 15% (LVL 42,100) of all donations since the beginning of 2005 have come from party representatives on the councils or boards of state and local government companies. The general secretary of the TP, who represented the Finance Ministry on the council of VAS “Ventspils Nafta” and on the board of the Ventspils Freeport, has donated LVL 14,000 to his party since the beginning of 2005. TP representative Māris Kaijaks, who, from 2004, has served on the council of VAS “State Real Estate” and VAS “Latvian Air Traffic”, donated LVL 10,000 to the TP over the course of a year-and-a-half.

A board member of VAS “Latvian Postal Service”, Jānis Kalniņš, donated LVL 8,000 to the TP last year. The government official’s declaration which Mr Kalniņš filed shows that his work at the Postal Service was his only source of income. He was paid LVL 39,361, and he donated approximately one-fifth of that sum to the TP. It has to be stressed that TP representatives on the councils and boards of state and local government companies did not make major donations to their party during the first three months of 2005, as representatives of other parties had done. All donations from this group of donors were made after the 2005 local government election.

6 3.2.6. Latvian Social Democratic Workers Party

A comparatively small share of party income has been received from representatives of local government company boards and councils by the Latvian Social Democratic Workers Party (LSDSP), which was in power in the Rīga City Council until March last year. The LSDSP took power in 2001, and immediately it placed its people on the boards and councils of companies that are owned by the Rīga City Council. Over the course of 18 months, these people donated LVL 9,706 to the LSDSP, or 5% of the party’s income during the surveyed period. Approximately two-thirds of the sum was donated in the first three months of 2005, when the LSDSP was still the ruling party in the Rīga local government. After a change in the power structure, all of the LSDSP’s representatives were sacked from their posts on the councils of local government companies.

The leading LSDSP donors among those who are still members of local government company councils has been Andris Apsītis, board chairman of SIA “Light of Jūrmala”. Over the course of 18 months, he donated LVL 2.980 to the LSDSP. Rīga City Council member Jānis Karpovičs, who has been a council member at SIA “Rīga Water” and AS “Rīga Heat”, donated LVL 2,000 to the party in January 2005.

7 3.2.7. People’s Harmony Party

Among people who have donated money to the left-wing People’s Harmony Party (TSP), which is in opposition in Parliament, only one has been a member of the council of a state-owned company – Marija Leščinska, who donated LVL 2,000 to the party in January 2005, was a member of the council of VAS “International Rīga Airport” until October 2005 (she was appointed to the post in April 2004 during the term in office of Indulis Emsis’ minority government). This donation represented 1.4% of the party’s total income over the last year-and-a-half.

8 3.2.8. New Centre Party

Another party in the governing coalition at the Rīga City Council until March 2005 was the New Centre Party (JC), which was chaired by the deputy mayor of Rīga, Sergejs Dolgopolovs. He represented the local government on the board of the Rīga Freeport and the council of SIA “Rīga Traffic” until the change which occurred in the Rīga power structure in March 2005. He donated LVL 1,000 from the money that he earned as a City Council member and of the aforementioned board and council – less than 1% of the total income of JC.

After the local government election which led to the establishment of a coalition of rightist parties at the Rīga City Council, Dolgopolovs and other members of JC were sacked from their posts at local government companies and the Rīga Freeport.

3 3.3. Donations made prior to taking a position on the board or council of a state or local government company

It is necessary to point out that a review of the relationship between donations to political parties and changes in the membership of state and local government company councils and boards shows another trend – first a party supporter donates a significant amount of money to a party, and then the party nominates that supporter to work on the council or board of a company. It is, of course, possible that the nomination is made because the relevant person is professional and highly competent, but the impressive donation to a party which takes decisions on the membership of company boards and councils creates suspicion that there may be a political conflict of interest.

Researchers identified nine instances in which a party supporter donated a large sum of money to the party and then was nominated to a senior post at a state or local government company. The greatest number of such questionable transactions involved New Era (five instances) and the First Party of Latvia (three). For the Fatherland and Freedom/LNNK had one such instance (see Appendix 2).

Suspicions of favouritism in regard to party donors occur if one considers the decision in late 2005 to appoint LPP supporter Viltolds Suksis to the management structure of ASS “Rīga Sickness Insurance Board” (now known as AS “RSK Insurance AS”). Before the 2005 local government election, he donated LVL 10,000 to the LPP, which then became a partner in the governing coalition of the Rīga City Council. Suksis has donated LVL 19,000 to the LPP since 2002, and until mid-2005 he served as board chairman of the state-owned SIA “Cultural and Sports Centre Daugava Stadium”. He was appointed to the post when the shareholder of the company – the Ministry of Education and Science – was run by the LPP’s Juris Radzevičs.

Another man who was nominated to the councils of local government councils after the LPP joined the governing coalition of the Rīga City Council after the March 2005 election was City Council member and plastic surgeon Jānis Zaržeckis. In advance of the local government election, he supported his party with a donation of LVL 9,000. Since 2002, he has donated a total of LVL 15,420. After the change in the City Council’s power structure, Zaržeckis was appointed council chairman of SIA “Rīga Traffic Lights”, and in December 2005 he joined the council of SIA “Rīga Traffic”, replacing LPP member Juris Lujāns, who resigned from the City Council.

New Era has also nominated financial supporters who have donated money to the party for work on the councils and boards of state and local government companies. In February 2005, the Economics Ministry, then run by JL member Krišjānis Kariņš, nominated Nikolajs Sigurds Bulmanis to the board of the Rīga Freeport. He donated LVL 2,500 to the party in January 2005 and has donated a total of LVL 15,005 since 2002. Ivars Gaters, who was appointed to three local government company councils after the change in power at the Rīga City Council (SIA “Rīga Water”, AS “Rīga Central Market” and SIA “Rīga Urban Construction”), donated LVL 3,000 to the party. Rīga City Council members Baiba Brigmane and Māra Marnauza (both representing JL), who had donated significant sums of money to their party in advance of the local government election (LVL 1,200 and 2,800 respectively), were also nominated for work on the councils of companies which belong to the Rīga local government.

After the Rīga City Council election in March 2005, when a new coalition was established by JL, the TP, the LPP and TB/LNNK, Gaidis Bērziņš was nominated to work on the council of AS “Rīga International Bus Station”. At the beginning of last year, he donated LVL 2,827 to one of the parties in the governing coalition – TB/LNNK.

4 3.4. Trends in donations made to political parties by members of company boards and councils

Analysis shows that members of state and local government company councils often hold other positions from which they earn additional monies (this is less common among board members). For instance, Elmārs Švēde, who represents the LZS on the council of VAS “Latvian Railways” and that of VAS “State Real Estate”, also earned money last year as an advisor to Agriculture Minister Mārtiņš Roze (ZZS) and as a member of the Valmiera City Council. A leading TP donor, Aivars Tiesnesis, worked last year on the council of AS “Ventspils Nafta”, the board of the Ventspils Freeport, and the board of VAS “Latvian State Forests”, but he was also paid a salary as an advisor to Finance Minister Oskars Spurdziņš (TP) and as general secretary of the TP.

Most of the people who work on the councils of Rīga local government companies have other jobs, too – most often they are members of the City Council who hold additional posts in addition to those duties (the law on holding more than one job at once applies only to members of the City Council’s Presidium and to chairs of council committees). One member of the City Council, Māra Marnauza, is on the council of SIA “Purvciems Buildings” and that of “SIA “Rīga City Pawnshop”, and she is also pro-rector of the Rīga University College of Pedagogy and Educational Management. Another member of the City Council, Aina Krūkle (LPP), serves on the council of SIA “Sarkandaugava” and that of SIA “Rīga City Pawnshop”. Last year she also was hired by the Communal Department of the Rīga City Council.

Changes in the membership of state and local government company councils occur most often when there is a shift in power at the national or local level. This makes it absolutely clear that membership on these councils is based on political, not national interests. In 2004, a very precise statement about this fact was made by the then prime minister, Indulis Emsis (ZZS): “This is a very simple issue – just like they [council members] were kicked out of those jobs at one time, they are now appointed with the same method. [..] That is a fact of life, and nothing can be done.” Emsis also pointed out that the opposition does not have the same opportunities in this regard as do parties in government. “That does not happen anywhere in the world. Tell me where that happens, and I will go there to study.” The bottom line is that the replacement of company council members is based on political interests and motivations, and that is in violation of the Commerce Law, which says that councils oversee companies, represent the interests of shareholders (the state or local government, not any political parties) in the period between meetings of shareholders, and supervise the operations of company boards.

It has to be noted that some parties have received impressive donations not only from members of state and local government company councils, where the appointment of members is seen as common practice, but also from members of the boards of major state and local government companies, and that suggests that the boards of companies are also becoming political. This is seen most distinctly at VAS “Latvian State Forests”, where members of the board include one of the leading TP donors, Aivars Tiesnesis, as well as LZS representatives and donors Modris Grantiņš and Kārlis Boldiševics. Party representatives are also on the board of VAS “Latvian Railways” – one of the leading LPP donors, Uģis Magonis, as well as Aivars Strakšas, nominated by the TP. According to the Commerce Law, the board is an executive institution which manages and represents the company. This means that members of the board, whose everyday job has to do with company management, must be highly competent professionals, not supervisors who have been installed by political parties.

In most cases, work on a company council represents just one source of income for officials, and that allows them to donate most of the money which they have received from the state or local government council to the political party with which they are linked. This means that political parties receive indirect financing from state and local government companies. This is in violation of the principle of equal political competition, because these resources are available only to those parties which are represented in governing coalitions at the national or local level. This must, therefore, necessarily be seen as a manifestation of the misuse of administrative resources in Latvia’s political world.

Appendix I. Donations from people who have been given a job as members of a board or council of a state or local government company

The People’s Party (TP)

January 1, 2005 – May 23, 2006

Total donations: LVL 278,052

|Donor |Job |Sum |Date |Information about 2005 income (also |

| | | | |about 2004 income if donation made in |

| | | | |first half of 2005 |

|Aivars Tiesnesis |Council member, Ventspils Nafta |LVL 5,000 |12.4.06 |2005 earnings: LVL 8,400 from |

| |(representing the Finance | | |Ventspils Nafta, LVL 12,298 from |

| |Ministry as of March 2005), board| | |Ventspils Freeport, LVL 23,315 from |

| |member, Ventspils Freeport | | |Latvian State Forests; total 2005 |

| |(representing the Finance | | |income – LVL 108,233. Since 2003, |

| |Ministry as of March 2004), board| | |total donations to TP of LVL 28,000 |

| |member, Latvian State Forests (as| | | |

| |of April 2004) | | | |

|Māris Kaijaks |Council member, Latvian Air |LVL 4,000 |7.4.06 |2005 earnings: LVL 4,832 from Latvian|

| |Traffic (as of May 2004), board | | |Air Traffic, LVL 38,092 from State |

| |chairman, State Real Estate (as | | |Real Estate; total 2005 income – LVL |

| |of October 2004) | | |43,426. Since 2002, donations to TP |

| | | | |of LVL 33,000 |

|Jānis Klaužs |Deputy council chairman, Latgale |LVL 4,000 |31.3.06 |2005 earnings: LVL 3,120 from Latgale|

| |Roads (as of March 2004), council| | |Roads; total 2005 income – LVL 20,320.|

| |member, Central Region Roads (as|LVL 100, total of |13.1.06 |Since 2003, donations to TP of LVL |

| |of March 2006) |LVL 4,100 | |6,310 |

|Jānis Kalniņš |Board member, Latvian Postal |LVL 100, LVL 7,900,|23.12.05 |2005 earnings: LVL 39,361 from |

| |Service (as of November 2004) |total of LVL 8,000 |25.10.05 |Latvian Postal Service; total 2005 |

| | | | |income – LVL 39,361. Since 2002, |

| | | | |donations to TP of LVL 16,215 |

|Aivars Strakšas |Council member, Latvian Postal |LVL 3,000 |17.10.05 |2005 earnings: LVL 13,490 from |

| |Service April 2004 to September | | |Latvian Railways, LVL 4,457 from |

| |2005), council member, Latvian | | |Latvian Postal Service; total 2005 |

| |Railways (as of September 2005) | | |income – LVL 30,441. Since 2004, |

| | | | |donations to TP of LVL 6,000 |

|Aivars Tiesnesis |Council member, Ventspils Nafta |LVL 9,000 |16.9.05 |2005 earnings: LVL 8,400 from |

| |(representing the Finance | | |Ventspils Nafta, LVL 12,298 from |

| |Ministry as of March 2005), board| | |Ventspils Freeport, LVL 23,315 from |

| |member, Ventspils Freeport | | |Latvian State Forests; total 2005 |

| |(representing the Finance | | |income – LVL 108,233. Since 2003, |

| |Ministry as of March 2004), board| | |total donations to TP of LVL 28,000 |

| |member, Latvian State Forests (as| | | |

| |of April 2004) | | | |

|Andris Pauls-Pāvuls |Council member, Latvian Postal |LVL 3,000 |30.8.05 |Government official’s 2005 declaration|

| |Service (as of September 2005), | | |not yet available on State Revenue |

| |council member, Latvian Air | | |Service homepage. Since 2002, total |

| |Traffic (April 2004 to September | | |donations to TP of LVL 10,000 |

| |2005), council member, State | | | |

| |Information Network Agency (as of| | | |

| |November 2004) | | | |

|Māris Kaijaks |Council member, Latvian Air |LVL 6,000 |22.6.05 |2005 earnings: LVL 4,832 from Latvian|

| |Traffic (as of May 2004), board | | |Air Traffic, LVL 38,092 from State |

| |chairman, State Real Estate (as | | |Real Estate; total 2005 income – LVL |

| |of October 2004) | | |43,425. Since 2002, total donations |

| | | | |to TP of LVL 33,000 |

Total donations from representatives of state and local government company boards and councils: LVL 42,100, or 15%.

Latvian Green Party (LZP)

January 1, 2005 – May 29, 2006

Total donations: LVL 117,795

|Donor |Job |Sum |Date |Information about 2005 income (also |

| | | | |about 2004 income if donation made in |

| | | | |first half of 2005 |

|Viesturs Silenieks |Board member, Rīga Freeport |LVL 1,000 |24.2.06 |Government official’s 2005 declaration|

| |(representing Environmental |LVL 200 | |not yet available on State Revenue |

| |Ministry as of December 2003) |Total: LVL 1,200 |17.1.06 |Service homepage. Since 2002, total |

| | | | |donations to LZP of LVL 19,585 |

|Viesturs Silenieks |Board member, Rīga Freeport |LVL 1,000 |5.10.05 |Government official’s 2005 declaration|

| |(representing Environmental |LVL 300 |16.3.05 |not yet available on State Revenue |

| |Ministry as of December 2003) |LVL 1,000 |16.3.05 |Service homepage. Since 2002, total |

| | |LVL 800 |9.3.05 |donations to LZP of LVL 19,585 |

| | |LVL 1,000 |8.3.05 | |

| | |LVL 130 |4.3.05 | |

| | |LVL 500 |22.2.05 | |

| | |LVL 5,000 |3.2.05 | |

| | |Total: LVL 9,730 | | |

|Arnis Luhse |Council member, Electronic |LVL 527 |12.9.05 |2004 earnings: LVL 2,454 from |

| |Communications Directorate |LVL 1,350 |25.7.05 |Electronic Communications Directorate;|

| |(representing Environmental |LVL 1,650 |11.4.05 |2005 earnings: LVL 3,240; total 2005 |

| |Ministry as of October 2004) |LVL 1,700 |10.3.05 |earnings of LVL 4,920 and EUR 30,300. |

| | |Total: LVL 5,227 | |Since 2002, total donations to LZP of |

| | | | |LVL 19,585 |

|Andrejs Brūvelis |Board member, Latvian State |LVL 3,000 |6.9.05 |2005 earnings: LVL 24,665 from |

| |Forests (as of July 2003) | | |Latvian State Forests; total 2005 |

| | | | |earnings – LVL 45,047. Since 2004, |

| | | | |total donations to LZP of LVL 3,220 |

|Jānis Teterovskis |Council member, Latvian Postal |LVL 1,150 |3.3.05 |2004 earnings: LVL 6,120 from Latvian|

| |Service (as of January 2003) | | |Postal Service; 2005 earnings: LVL |

| | | | |6,426; total 2005 earnings – LVL 8,710|

Total donations from representatives of state and local government company boards and councils: LVL 20,307, or 17%.

First Party of Latvia (LPP)

January 1, 2005 – May 29, 2006

Total donations: LVL 269,105

|Donor |Job |Sum |Date |Information about 2005 income (also |

| | | | |about 2004 income if donation made in|

| | | | |first half of 2005 |

|Aina Krūkle |Council chairwoman, Rīga City |LVL 3,000 |3.5.2006 |2005 earnings: LVL 362 from Rīga |

| |Pawnshop (as of November 2005), | | |City Pawnshop, LVL 1,053 from SIA |

| |council chairwoman, SIA | | |Sarkandaugava; total 2005 earnings – |

| |Sarkandaugava (as of May 2005) | | |LVL 10,030. Since 2005, total |

| | | | |donations to LPP of LVL 3,400 |

|Andris Ameriks |Board member, Rīga Freeport (as |LVL 10,000 |25.4.2006 |2005 earnings: LVL 68,705 from Rīga |

| |of April 2001, reappointed April| | |Freeport; total 2005 earnings – LVL |

| |2005) | | |147,565. Since 2004, total donations|

| | | | |to LPP of LVL 30,000 |

|Dainis Liepiņš |Board member, Rīga Freeport |LVL 2,500 |23.1.06 |2005 earnings: LVL 4,552 from Rīga |

| |(representing Transport Ministry|LVL 2,500 |17.1.06 |Heat, LVL 1,371 from Rīga |

| |as of March 2004) council | | |International Airport, LVL 3,150 from|

| |member, Rīga Heat (April 2004 to|Total: LVL 5,000 | |Latvian State Roads, LVL 70,444 from |

| |December 2005), council member, | | |Rīga Freeport; total 2005 earnings – |

| |Latvian State Roads (as of March| | |LVL 105,301. Since 2002, total |

| |2005), council member, Rīga | | |donations to LPP of LVL 29,800 |

| |International Airport (as of 10 | | | |

| |2005) | | | |

|Juris Lujāns |Council member, Rīga Water (May |LVL 2,000 |29.12.05 |2005 earnings: LVL 2,180 from Rīga |

| |to December 2005), council | | |Water, LVL 2,900 fro Rīga Traffic; |

| |member, Rīga Traffic (May to | | |total 2005 income – unknown. Since |

| |November 2005) | | |2003, total donations to LPP of LVL |

| | | | |5,650 |

|Sergejs Mihailovs |Board member, Daugavpils Bus |LVL 1,000 |24.2.05 |2004 earnings: LVL 6,222 from |

| |Park (as of 2002) | | |Daugavpils Bus Park; 2005 earnings – |

| | | | |LVL 7647; total 2005 income – LVL |

| | | | |7,745, EUR 1,500 |

|Andris Ameriks |Board member, Rīga Freeport (as |LVL 10,000 |17.2.2005 |2004 earnings: LVL 68,876 from Rīga |

| |of April 2001, reappointed April| | |Freeport; 2005 earnings -- LVL |

| |2005) | | |68,705; total 2005 earnings – LVL |

| | | | |147,565. Since 2004, total donations|

| | | | |to LPP of LVL 30,000 |

|Romāns Mežeckis |Council member, State Real |LVL 8,000 |17.2.05 |Total 2004 income from councils – LVL|

| |Estate (as of March 2004), board| | |29, 748; 2005 earnings – LVL 4,996 |

| |member, Jūrmala Water (April | | |from State Real Estate, LVL 1,500 |

| |2004 to June 2005), council | | |from Jūrmala Water, LVL 1,258 from |

| |member, Latvenergo (April 2040 | | |Latvenergo, LVL 4,831 from Latvian |

| |to March 2005), council member, | | |Air Traffic; total 2005 income – LVL |

| |State Air Traffic (as of April | | |42,285 |

| |2004), council member, Ventspils| | | |

| |Nafta (as of August 2005) | | | |

|Uģis Magonis |Council chairman, Latvian |LVL 9,000 |17.2.05 |Total 2004 income from councils – LVL|

| |Railwayys (August 2004 to August| | |14,675; 2005 earnings – LVL 6,635 and|

| |2005), board chairman, Latvian | | |LVL 17,053 from Latvian Railways, LVL|

| |Railways (as of September 2005),| | |7,091 from Latvijas Mobilais |

| |council member, airBaltic (2004 | | |Telefons, LVL 4,147 from airBaltic; |

| |to October 2005), council | | |total 2005 income – LVL 34,857. |

| |member, Latvijas Mobilais | | |Since 2002, total donations to LPP of|

| |Telefons (May 2004 to October | | |LVL 19,000 |

| |2005) | | | |

|Dainis Liepiņš |Board member, Rīga Freeport |LVL 5,000 |14.2.2005 |Total 2004 income from Freeport and |

| |(representing Transport Ministry| | |company councils – LVL 49,292; 2005 |

| |as of March 2004) council | | |earnings: LVL 4,552 from Rīga Heat, |

| |member, Rīga Heat (April 2004 to| | |LVL 1,371 from Rīga International |

| |December 2005), council member, | | |Airport, LVL 3,150 from Latvian State|

| |Latvian State Roads (as of March| | |Roads, LVL 70,444 from Rīga Freeport;|

| |2005), council member, Rīga | | |total 2005 earnings – LVL 105,301. |

| |International Airport (as of 10 | | |Since 2002, total donations to LPP of|

| |2005) | | |LVL 29,800 |

Total donations from representatives of state and local government company boards and councils: LVL 53,000, or 20%.

Latvian Farmers Union (LZS)

January 1, 2005 – May 29, 2006

Total donations: LVL 293,796

|Donor |Job |Sum |Date |Information about 2005 income (also |

| | | | |about 2004 income if donation made in|

| | | | |first half of 2005 |

|Elmārs Švēde |Board member, State Real Estate |LVL 5,600 |24.4.06 |2005 earnings: LVL 7,248 from |

| |(as of October 2004), council | | |Latvian Railways, LVL 29,183 from |

| |member, Latvian Railways (as of | | |State Real Estate; total 2005 |

| |January 2003) | | |earnings – LVL 212,944. Since 2002, |

| | | | |total donations to LZS of LVL 25,930 |

|Kārlis Boldiševics |Board member, Ventspils Nafta |LVL 5,700 |23.3.06 |2005 earnings: LVL 8,400 from |

| |(representing Environmental | | |Ventspils Nafta, LVL 23,315 from |

| |Ministry as of July 2005), board| | |Latvian State Forests, LVL 5,738 from|

| |member, Latvian State Forests | | |Rural Development Fund; total 2005 |

| |(as of June 2006), Rural | | |earnings – LVL 46,558. Since 2003, |

| |Development Fund (as of February| | |total donations to LZS of LVL 16,299 |

| |2005) | | | |

|Modris Grantiņš |Board member, Latvian State |LVL 1,500 |28.12.05 |Total 2004 income from Latvian State |

| |Forests (as of July 2003) |LVL 2,000 |20.10.05 |Forests: LVL 16,637; 2005 earnings –|

| | |LVL 2,000 |5.10.05 |LVL 24,615; total 2005 earnings – LVL|

| | |LVL 40 |3.3.05 |32,638. Since 2003, total donations |

| | |LVL 40 |11.1.05 |to LZS of LVL 5,860 |

| | |Total: LVL 5,580 | | |

|Ivars Bārdiņš |Council member, Central Region |LVL 10,000 |3.11.05 |Total 2004 income from Central Region|

| |Roads (as of November 2003) | | |Roads – LVL 3,060; 2005 earnings: LVL|

| | | | |3,293; total 2005 earnings – LVL |

| | | | |25,171, EUR 11,500. Since 2004, |

| | | | |total donations to LZS of LVL 10,200 |

|Kārlis Boldiševics |Board member, Ventspils Nafta |LVL 1,400 |20.10.05 |2005 earnings: LVL 8,400 from |

| |(representing Environmental |LVL 985 |6.10.05 |Ventspils Nafta, LVL 23,315 from |

| |Ministry as of July 2005), board|LVL 500 |25.8.05 |Latvian State Forests (LVL 9,434 in |

| |member, Latvian State Forests |LVL 1,000 |10.8.05 |2004), LVL 5,738 from Rural |

| |(as of June 2006), Rural |LVL 1,000 |15.7.05 |Development Fund; total 2005 earnings|

| |Development Fund (as of February|LVL 450 |12.7.05 |– LVL 46,558. Since 2003, total |

| |2005) |LVL 1,000 |13.6.05 |donations to LZS of LVL 16,299 |

| | |LVL 1,050 |3.3.05 | |

| | |LVL 2,500 |7.2.05 | |

| | |LVL 100 |18.1.05 | |

| | |Total: LVL 9,985 | | |

|Jānis Lapše |Council chairman, Rural |LVL 1,140 |29.9.05 |2005 earnings: LVL 2,276 from Rural |

| |Development Fund |LVL 45 |19.9.05 |Development Fund; total 2005 earnings|

| | |LVL 1,000 |18.8.05 |– LVL 13,388. Since 2003, total |

| | |LVL 20 |17.3.06 |donations to LZS of LVL 4,326 |

| | |LVL 20 |11.2.2005 | |

| | |Total: LVL 2,225 | | |

|Aivars Smagars |Council member, Latvian Postal |LVL 20 |9.3.05 |2005 earnings: LVL 5,847 from |

| |Service (as of April 2004) |LVL 2,000 |10.2.05 |Latvian Postal Service (no |

| | |Total: LVL 2,020 | |information about earnings in 2004); |

| | | | |total 2005 earnings – LVL 9,312. |

| | | | |Since 2003, total donations to LZS of|

| | | | |LVL 2,135 |

|Elmārs Švēde |Board member, State Real Estate |LVL 5,000 |21.1.05 |Total 2004 income from Latvian |

| |(as of October 2004), council | | |Railways – LVL 7,236 (LVL 7,248 in |

| |member, Latvian Railways (as of | | |2005), from State Real Estate – LVL |

| |January 2003) | | |29,183 (LVL 29,183 in 2005); total |

| | | | |2005 earnings – LVL 212,944. Since |

| | | | |2002, total donations to LZS of LVL |

| | | | |25,930 |

Total donations from representatives of state and local government company boards and councils: LVL 46,150, or 16%.

New Era (JL)

January 1, 2005 – May 29, 2006

Total donations: LVL 453,556

|Donor |Job |Sum |Date |Information about 2005 income (also |

| | | | |about 2004 income if donation made |

| | | | |in first half of 2005 |

|Juris Zvirbulis |Council member, Rīga Traffic (as|LVL 2,000 |5.5.06 |2005 earnings: LVL 3,959 from Rīga |

| |of May 2005), consulting council|LVL 2,000 |24.2.06 |Traffic, LVL 591 from Rīga Light; |

| |member, Rīga local government |Total: LVL 4,000 | |total 2005 earnings – LVL 28,339. |

| |agency Rīga Light (as of | | |Since 2004, total donations to JL of|

| |September 2005) | | |LVL 17,000 |

|Baiba Brigmane |Council chairwoman, Rīga |LVL 1,200 |21.4.06 |2005 earnings: LVL 7,124 from Rīga |

| |International Bus Depot (as of | | |International Bus Depot; total 2005 |

| |May 2005) | | |earnings – LVL 112,498. Since 2002,|

| | | | |total donations to JL of LVL 2,750 |

|Nikolajs Sigurds Bulmanis|Board member, Rīga Freeport |LVL 5,000 |24.1.06 |Government official’s 2005 |

| |(representing the Economics | | |declaration not yet available on |

| |Ministry from February 2005 to | | |State Revenue Service homepage. |

| |April 2006) | | |Since 2002, total donations to JL of|

| | | | |LVL 15,005 |

|Māra Marnauza |Council member, Rīga City |LVL 1,375 |27.12.05 |Government official’s 2005 |

| |Pawnshop (as of July 2005), | | |declaration not yet available on |

| |council chairwoman, Purvciems | | |State Revenue Service homepage. |

| |Buildings (as of May 2005) | | |Since 2002, total donations to JL of|

| | | | |LVL 4,255 |

|Ēriks Škapars |Deputy council chairman, Rīga |LVL 1,405.60 |22.12.2005 |2005 earnings: LVL 3,148 from Rīga |

| |Water (as of June 2005), council| | |Water, LVL 1,252 from Jugla |

| |chairman, Jugla Buildings (as of| | |Buildings, LVL 1,457 from SIA |

| |May 2005), council member, SIA | | |Zemgale; total 2005 earnings – LVL |

| |Zemgale (as of June 2005) | | |27,220 |

|Juris Zvirbulis |Council member, Rīga Traffic (as|LVL 1,200 |20.10.05 |2005 earnings: LVL 3,959 from Rīga |

| |of May 2005), consulting council| | |Traffic, LVL 591 from Rīga Light; |

| |member, Rīga local government | | |total 2005 income – LVL 28,399. |

| |agency Rīga Light (as of | | |since 2004, total donations to JL of|

| |September 2005) | | |LVL 17,000 |

|Mārtiņš Greste |Council chairman, Rīga Heat |LVL 5,000 |20.2.06 |2005 earnings: LVL 2,676 from Rīga |

| |(from July to December 2005 and | | |Heat; total 2005 income – LVL |

| |from February 2006) | | |52,645. Since 2005, total donations|

| | | | |to JL of LVL 10,050 |

|Uldis Grava |Council member, Liepāja Special |LVL 2,000 |29.8.05 |2005 earnings: LVL 6,309 from |

| |Economic Management Zone |LVL 500 |16.3.05 |Liepāja Special Economic Management |

| | |Total: LVL 2,500 | |Zone; total 2005 income – LVL |

| | | | |18,140. Since 2004, total donations|

| | | | |to JL of LVL 12,755 |

|Vilis Vītols |Chairman, Latvenergo (council |LVL 5,000 |13.6.05 |Total 2004 income from Latvenergo of|

| |chairman from March 2005 to | | |LVL 7,923; total 2005 income – LVL |

| |April 2006) | | |302,013. Since 2002, total |

| | | | |donations to JL of LVL 21,459 |

Total donations from representatives of state and local government company boards and councils: LVL 26,681, or 6%.

Latvian Alliance of Green Party and Farmers Union (ZZS)

January 1, 2005 – May 29, 2006

Total donations: LVL 42,335

|Donor |Job |Sum |Date |Information about 2005 income (also |

| | | | |about 2004 income if donation made in|

| | | | |first half of 2005 |

|Naina Cibulska |Board chairwoman, Rīga Central |LVL 2,000 |11.10.05 |2005 earnings: LVL 22,417 from Rīga |

| |Market (on board sine 1997, | | |Central Market; total 2005 earnings –|

| |elected chariwoman in July 2005) | | |LVL 91,017 |

Total donations from representatives of state and local government company boards and councils: LVL 2,000, or 3%

People’s Harmony Party (TSP)

January 1, 2005 – May 29, 2006

|Donor |Job |Sum |Date |Information about 2005 income (also |

| | | | |about 2004 income if donation made in|

| | | | |first half of 2005 |

|Marija Ļeščisnka |Council member Rīga International|LVL 2,000 |20.1.05 |Total 2004 income from Rīga |

| |Airport (from April 2004 to | | |International Airport of LVL 4,643, |

| |October 2005) | | |2005 income – LVL 5,517.85; total |

| | | | |2005 earnings – LVL 20,235.85 |

Total donations from representatives of state and local government company boards and councils: LVL 2,000, or 1%

New Centre (JC)

January 1, 2005 – May 29, 2006

Total donations: LVL 127,999

|Donor |Job |Sum |Date |Information about 2005 income (also |

| | | | |about 2004 income if donation made in|

| | | | |first half of 2005 |

|Sergejs Dolgopolovs |Board member, Rīga Freeport |LVL 1,000 |12.4.05 |2005 earnings: LVL 15,722 from Rīga |

| |(April 2001 to April 2005), | | |Freeport (LVL 66,885 in 2004), LVL |

| |council member, Rīga Traffic | | |5,133 from Rīga Traffic (LVL 5,880 in|

| |(from February 2003 to May 2005) | | |2004); total 2005 income – LVL |

| | | | |52,550.11 |

Total donations from representatives of state and local government company boards and councils: LVL 1,000, or less than 1%

Latvian Social Democratic Workers Party (LSDSP)

January 1, 2005 – May 29, 2006

Total donations: LVL 202,420

|Donor |Job |Sum |Date |Information about 2005 income (also |

| | | | |about 2004 income if donation made in|

| | | | |first half of 2005 |

|Pēteris Ladnijs |Board chairman, Mežciems Building|LVL 1,000 |27.1.05 |2004 earnings: LVL 1,240 from |

| |Management (as of November 2004),| | |Mežciems Building Management, LVL |

| |chairman, Liquidation Commission,| | |10,240 from Kurzeme Buildings; |

| |local government company Kurzeme | | |government official’s declaration for|

| |Buildings (until November 2004) | | |2005 not yet available. Since 2003, |

| | | | |total donations to LSDSP of LVL 1,800|

|Juris Erts |Board member, local government |LVL 94 |12.3.05 |2005 earnings: LVL 1,571 from |

| |company Mežciems (January to May |LVL 1,000 |27.1.05 |Mežaparks, LVL 389 from Sarkandaugava|

| |2005), deputy council chairman, |Total: LVL 1,094 | |(LVL 195 in 2004); total 2005 |

| |Sarkandaugava (November 2004 to | | |earnings – LVL 23,317, EUR 60,000. |

| |May 2005) | | |Since 2005, total donations to LSDSP |

| | | | |of LVL 1,094.40. |

|Jānis Karpovičs |Council chairman, Rīga Heat (2001|LVL 2,000 |27.1.05 |2005 earnings: LVL 3,000 from Rīga |

| |to July 2005), deputy council | | |Heat (LVL 5,550 in 2004), LVL 1,509 |

| |chairman, Rīga Water (2001 to May| | |from Rīga Water (LVL 4,450 in 2004); |

| |2005) | | |total 2005 income – LVL 17,620. |

| | | | |Since 2005, total donations to LSDSP |

| | | | |of LVL 2,950 |

|Jānis Kalnačs |Council chairman, Rīga Water |LVL 1,000 |1.2.05 |2005 earnings: LVL 2,093 from Rīga |

| |(2001 to May 2005), council | | |Water (LVL 5,928 in 2004), LVL 988 |

| |member, Getliņi EKO (2002 to July| | |from Getliņi EKO (LVL 2,780 in 2004);|

| |2005) | | |total 2005 income – LVL 12,258. |

| | | | |Since 2003, total donations to LSDSP |

| | | | |of LVL 1,300 |

|Andris Apsītis |Board chairman, Jūrmala Light (as|LVL 1,000 |26.5.06 |Total 2004 earnings from Jūrmala |

| |of 2000) |LVL 1,000 |28.4.06 |Light – LV 12,387 (government |

| | |LVL 500 |18.1.05 |official’s declaration for 2005 not |

| | |Total: LVL 2,500 | |yet available). Since 2005, total |

| | | | |donations to LSDSP of LVL 2,980 |

|Antoņina Leškoviča |Board member, Kauguri Health |LVL 1,000 |12.5.06 |Total 2004 earnings from Kauguri |

| |Centre (as of 2001) |LVL 635 |27.10.05 |Health Centre – LVL 14,064 |

| | |Total: LVL 1,635 | |(government official’s declaration |

| | | | |for 2005 not yet available) |

Total donations from representatives of state and local government company boards and councils: LVL 9,709, or 5%

Appendix 2. Donations made by people before becoming members of state or local government company boards or councils

|Donor |Job |Party, sum |Date |Information about 2005 income (also |

| | | | |about 2004 income if donation made in|

| | | | |first half of 2005 |

|Juris Radzevičs |Appointed council member, |LPP |2.5.05 |Since 2003, total donations to LPP of|

| |Latvenergo, May 2006 |LVL 5,000 | |LVL 7,450; total 2005 income – LVL |

| | | | |7,309 |

|Vitolds Suksis |Appointed council member, RSK |LPP |28.2.05 |Since 2002, total donations to LPP of|

| |Insurance Company, December |LVL 10,000 | |LVL 19,000; total 2005 income – LVL |

| |2005 | | |1,278 (cash holdings of LVL 227,889) |

|Jānis Zaržeckis |Appointed council chairman, |LPP |17.2.05 |Since 2002, total donations to LPP of|

| |Rīga Traffic Lights, July 2005;|LVL 9,000 | |LVL 15,420. 2005 earnings: LVL |

| |appointed council member, Rīga | | |1,092 from Rīga Traffic Lights, |

| |Traffic, December 2005 | | |unknown income from Rīga Traffic |

| | | | |(monthly income known to exceed LVL |

| | | | |500) |

|Mārtiņš Greste |Appointed council chairman, |JL |20.2.06 |Since 2005, total donations to JL of |

| |Rīga Heat, February 2006 |LVL 5,000 | |LVL 10,050 |

|Ivars Gaters |Appointed council member, Rīga |JL |22.2.05 |2005 earnings: LVL 2,149 from Rīga |

| |Water, May 2005; appointed |LVL 3,000 | |Water, LVL 919 from Rīga Urban |

| |council member, Rīga Central | | |Construction, LVL 726 from Rīga |

| |Market, July 2005; appointed | | |Central Market |

| |council member, Rīga Urban | | | |

| |Construction, September 2005 | | | |

|Baiba Brigmane |Appointed council chairwoman, |JL |21.2.05 |Since 2002, total donations to JL of |

| |Rīga International Bus Depot, |LVL 1,200 | |LVL 2,750; 2005 earnings – LVL 7,124 |

| |May 2005 | | |from Rīga International Bus Depot |

|Māra Marnauza |Appointed council member, Rīga |JL |18.2.05 |Since 2002, total donations to JL of |

| |City Pawnshop, July 2005; |LBL 2,800 | |LVL 4,255 (government official’s |

| |appointed council chairwoman | | |declaration for 2005 not yet |

| |Purvciems Buildings, May 2005 | | |available on State Revenue Service |

| | | | |homepage) |

|Nikolajs Sigurds Bulmanis |Appointed representative of the|JL |20.1.05 |Since 2002, total donations to JL of |

| |Economics Ministry to board of |LVL 2,500 | |LVL 15,005 (government official’s |

| |Rīga Freeport, February 2005 | | |declaration for 2005 not yet |

| | | | |available on State Revenue Service |

| | | | |homepage) |

|Gaidis Bērziņš |Appointed deputy council |TB/LNNK | |Since 2002, total donations to |

| |chairman, Rīga International |LVL 2,327 |3.1.2005 |TB/LNNK of LVL 12,827 (government |

| |Bus Depot, May 2005 |LVL 500 |4.2.05 |official’s declaration for 2005 not |

| | |Total: LVL 2,827 | |yet available on State Revenue |

| | | | |Service homepage) |

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[1] For the purposes of this research, a state or local government company is one in which all capital shares or shares with voting rights belong to the state or a local government. Researchers also, however, analysed donations from those representatives of the state who were appointed to the councils of companies in which the state does not hold a majority share – the stock company Ventspils Nafta, for instance.

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