EAS weighed using taxpayer money to bail out Ärma farm

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Photo: Aldo Luud / Õhtuleht

Chairman of the board of Enterprise Estonia (EAS) in 2012, Maria Alajõe, looked into saddling the taxpayer with €190,000 euros in tourism support for which First Lady Evelin Ilves' OÜ Ermamaa was no longer eligible.

A letter sent to the Ministry of Economic Affairs by Alajõe speaks of everything but treating the president and his wife as ordinary citizens. The letter suggests that President Toomas Hendrik Ilves being elected for a second term constituted a sufficiently unexpected development to have the taxpayer pay for Ermamaa's failure to become a tourism farm.

Even though OÜ Ermamaa was granted support from the European Union Regional Development Fund's tourism product development and marketing program, Alajõe's proposal left Minister of Economic Affairs and Communications at the time Juhan Parts baffled.

Alajõe, currently employed as the Director of the Office of the Riigikogu, wanted to know whether the ministry would deem it admissible to cover the recourse claim from the Phare program, aimed at supporting Eastern European countries prior to EU membership.

Parts infuriated

Phare supported socio-economic development, administrative capacity, and harmonization of legislation of candidate countries. Alajõe wrote that the ministry still has money left over from the national contribution to the program – let us use it to return Ermamaa support to the European Union!

The money Alajõe proposed to use to cover Ermamaa's obligations had not come from the European Union; instead it was state co-financing for projects, taxpayer money that had remained idle in the agency's reserves for years. People who worked in the top echelons of the ministry at the time remember Parts was infuriated upon receiving the letter.

The proposal came off almost as an attempted crime; Parts' signature gifting the president a farm on the taxpayer's dime. The leadership discussed the matter for just a few minutes, and Parts ordered EAS to take back the letter – no such proposal has been made. The matter was out of the question, and that is where it remained.

The sheer absurdity of the letter haunted Parts and left him feeling he was being fooled. The minister told the agency's supervisory board that in a situation where the minister is forced to entertain such proposals it better start looking for a new management board.

These events are corroborated by minutes of the Riigikogu Anti-Corruption Select Committee sitting from November 14 this year. This time Parts told the committee: it is probable the agency did turn to the ministry in 2011 (information available to Postimees suggests it was the beginning of 2012 – N. N.), looking for guidelines concerning Ilves' second term and permission to use Phare resources to co-finance Ärma farm. Parts found it to be a wholly unsuccessful idea and asked the agency to retract the letter.

Laxer rules

Parts also emphasized that all applications for European subsidies were handled and satisfied by EAS, and that all of its individual decisions must be seen separately from ministerial or political guidance, suggesting that such a question even landing on the desk of the political minister was inadmissible and unethical.

Anti-corruption committee chairman Artur Talvik then asked Maria Alajõe about the letter Parts was referring to. Alajõe answered that the agency considered moving the Ermamaa project from under structural means to EAS reserves where rules were laxer.

Next Talvik asked whether the idea of the letter was to solve the matter without the need for a conditional recourse decision. Alajõe confirmed this, and explained that it was one of the ideas considered when it remained unclear whether it was possible to stop performance of Ermamaa's obligations.

Alajõe told the committee that the OÜ Ermamaa project belonged to First Lady Evelin Ilves in 2012, and that she was the only person who visited EAS to defend it. She added, however, that then director of the Office of the President Siim Raie attended one of the meetings.

EAS' recently dismissed director Hanno Tomberg told the committee on Monday that the enterprise support agency does not have a single surviving document from Ermamaa meetings that took place in March of 2012.

Alajõe claimed that Evelin Ilves told the agency's committee that even though the primary part of the business plan had been frozen and the company was not offering tourism services publicly, a number of activities continued: seminars, hosting important foreign dignitaries.

Because Evelin Ilves clearly voiced intent to continue activities, EAS wrote in its decision that realization of the business plan needs to be continued from January of 2017, and that the company would have to return 10 percent of the support sum upon failure to do so.

Owner of Ärma farm, Toomas Hendrik Ilves, has returned the prescribed sum by today. Tomberg told the committee that EAS went beyond its commission by including a conditional recourse rate in its 2012 decision. Had that not been done, the current board of the agency would be in its rights to make a new recourse decision, following a decision by Ermamaa of whether to move forward with the business plan.

Questionable chance

The possibility to secure return of support is far more questionable today. Tomberg added that the current board did not learn of the 2012 decision until July of last year.

When Talvik asked Tomberg whether the board of EAS was somehow politically influenced prior to sending Toomas Hendrik Ilves the recourse notice, the former executive firmly said “no”. Tomberg said that the Office of the President wanted to know in August of this year the volume of the recourse claim should the president not move forward with project activities. The office was sent the agency's entire documentation on the company.

Tomberg told Postimees that what he told the anti-corruption committee was the last of what he has to say on the topic of Ermamaa.

“EAS should conduct new proceedings,” he said. “There is pressure from everywhere, including the media.” Tomberg did not work for the agency in 2012. “I have no surviving minutes of meetings or agreements,” he said.