The internal security service and the prosecution believe they have cracked former Tallinn mayor and Center Party head Edgar Savisaar's alleged Swiss money laundering scheme.
How to spin political money
14th December 2016, 13:24
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Should episodes of money laundering included in the charges be proven in the course of Savisaar's trial set to begin in February, it will become a precedent in Estonian politics showing how dirty political money was laundered using international contacts. A fundamental role was played by discreet friends, off shore companies registered in tax havens, and opaque Swiss banks.
To believe the prosecution's version, everything starter with the former. Court materials show that Center Party chairman, head of Tallinn city council at the time Edgar Savisaar opened an account for Arsai Investments Ltd. of the British Virgin Islands at the Cantrade Private Bank in Zurich and listed himself as the person entitled with rights on March 25, 1997 or one and a half years after the tape scandal.
Savisaar's move at the time is hardly surprising as hiding behind companies in tax havens in Swiss banks was a common way of accumulating personal wealth among the business elite. More so as Savisaar could rely on advice from the best possible confidant – close friend Alexander Kofkin who had spent a long time doing business in Switzerland.
It remains unknown how the bank account that remained hidden from the Estonian public for 15 years was used in the meantime; however, events that led to suspicions of money laundering started in 2009. The turn of events reconstructed by security service investigators points to the decisive role of the divorce of Edgar and Vilja Savisaar.
Edgar Savisaar wanted to redeem jointly purchased real estate and repay loans in the process of division of property. Help came from fellow party member at the time Ain Seppik, whose sons' company OÜ Bravotex gave Savisaar a short-term loan of €173,073 on October 28, 2009. The loan was repaid by an unknown foreign company 18 months later.
Deal with Kofkin
Savisaar dodged the press by providing vague answers regarding the origin of the money until the first days of 2011 when the affair took a sudden turn. The Public Prosecutor's Office received a report of a criminal offense from the central criminal police's money laundering data bureau.
It is possible to say in hindsight that detectives had by then uncovered the core of the scheme: unknown Lichtenstein company Pipa Business Corporation that had repaid Savisaar's official loan from 2009 had very probably used money Savisaar had obtained illegally and deposited in Switzerland.
Because the affair lacked a number of vital details, public prosecutor Steven-Hristo Evestus decided not to pursue criminal charges at the time. The missing link turned up shortly after on January 24, 2011, coming from the internal security service. Deputy Director General Eerik Heldna wrote in a new report of a criminal offense that the service believes businessman Kofkin and his successful ventures in the capital under Savisaar and Jüri Ratas' city government is the missing puzzle piece. Attorney General at the time Norman Aas overturned Evestus' decision and launched a criminal investigation the intricacies of which are laid bare on the hundreds of pages of the case file.
The security service writes in its conclusion that Savisaar's behavior suggests that he accepted large-scale bribes from Kofkin in 2007. The service had found out that Kofkin used a company called Algel Familienstiftung that belonged to a Swiss acquaintance of him to transfer €191,570 to Edgar Savisaar's bank account on August 10, 2007.
The investigation suggests that the transaction could have served as payment for Savisaar having deputy mayors order borough governments, the enterprise department, and the city planning department to allow Kofkin's company Estkomplexim to erect a number of wiener kiosks in Tallinn as a result of a doctored competition and without securing building permits beforehand.
Kofkin told the bank that he was using a company in Lichtenstein to maintain discretion. Even though the transaction description read “loan”, Kofkin said it was to support the publication of Savisaar's book.
The existence of the money could have remained unknown had Savisaar not become indebted to the Seppik brothers' company in 2009. Repayment of the loan required money in Switzerland to be brought back to Estonia.
The prosecution now claims that in order to hide the origin of the money, Savisaar signed a fictitious loan contract with Pipa Business Corporation, headed by Peter Kaiser, in Vaduz, Lichtenstein on November 17, 2009. The beauty of the agreement lies in that while Savisaar is noted as the recipient of the loan, the money was to be transferred to PA Shipping Ltd., owned by Siim and Sulev Seppik.
Businessman's amnesia
The investigation revealed that next Kaiser opened a sub account for Pipa Business Corporation in Switzerland under the name Septo SAED the beneficial holder of which was Edgar Savisaar. The Tallinn mayor then transferred €185,000 from his Arsai Investments account to the Septo SAED account after which Kaiser forwarded a slightly smaller sum to Seppiks' PA Shipping Ltd. For unknown reasons the bothers moved the money through another intermediary they owned before it reached Estonia and was counted as repayment.
Detectives are under the impression that Savisaar moved his own illegally obtained money from Switzerland to Estonia under the guise of the contract. Suspicions are further corroborated by the fact that Pipa Business Corporation stopped seeking repayment in 2013, claiming that Savisaar's honorarium for his book had been used to settle the more than €173,000 debt. The same claim has been made by Savisaar's defender, Oliver Nääs, who maintains no crime has been committed.
Which party is correct is up to the court to decide. Testimony included in the case file does, however, reveal some conspicuous circumstances.
Peter Kaiser says that he does not remember how he met Savisaar, while he makes no attempt to deny Savisaar was in control of the Septo SAED account, and that the latter acronym was composed of the first syllables in his name.
Sulev Seppik says that the loan of more than 2 million Estonian kroons was given to Savisaar following a request from his father, politician Ain Seppik. Interest was not collected. The only thing he allegedly knew was that “the loan was to be repaid by some foreign company”. The decision to move the returned sum once more between his own companies was made by Sulev Seppik with the intent of ensuring discretion. Surveillance reports suggest Kofkin was well aware of the Seppik brothers' scheme.
Postimees did not manage to get a comment from defender Oliver Nääs before the article was published.