Lehis: VEB Fund saga should not be forgotten

Photo: Peeter Langovits

Tax experts Lasse Lehis, who put together a legal analysis of the VEB Fund saga, finds that the state has misused the legal system in its favor in the fund’s case. The Riigikogu will discuss “the problem of the state’s responsibility in the VEB Fund incident” as a matter of national importance on Thursday.

Kanal 2 interviewed Lasse Lehis, who analyzed the legality of decisions made by the government and the central bank in 1993 as a professor of financial law at the University of Tartu at the time back in 2013.

What is your opinion of the VEB Fund case? Is it an old story best forgotten or one of the greatest heists in Estonian history?

If I had to choose between those two, it would be the latter. We should definitely not forget it. There are politicians in Estonia who feel we should stop talking about deportations. The VEB Fund is a much more recent event than the deportations and much more confusing as some facts remain hidden.

I do not know everything that happened or who got the money at the end of the day. We know who did not get their money, while we don’t know who ended up with it.

Has the state treated VEB Fund certificate holders fairly by leaving them without compensation for rescuing the Estonian kroon back in the day?

I think that certificate holders should have been compensated in some way. There are still options. The state has been shirking responsibility this whole time. Was it the government, central bank, the VEB Fund as a separate body – no one wants to take responsibility. That is why I think this matter should be resolved on the level of the Riigikogu.

What is your opinion of the parliament’s decision from 2012, according to which it is sensible to pay entrepreneurs back 0 euros as that is how much the VEB Fund was worth at the time?

That 0 was not written into the decision, but everyone understood that was the extent of compensation ordered as it would be impossible to retrieve the money from Russia. The decision stood on crooked legs.

The state’s entire defense tactic is built on the narrative that Russia took entrepreneurs’ money. Russia did not take money away from the bank’s clients. Russia took money from the two banks that then took it from their clients, with the help of the Bank of Estonia and a Riigikogu decision. Here is where the state is responsible for legalizing a bank robbery – we usually think of a bank robbery as someone stealing money from the bank, while here we can use that expression to describe how the bank stole money from its clients. If Estonia legalized it through a Riigikogu decision in 1993, the state must take responsibility and offer compensation.

What is the message the state is sending by acting in this manner? How would the state react if a taxpayer decided to pay them 0 euros?

Unfortunately, the state is misusing its capacity, its legal system to protect its own interests. That is the most unfortunate aspect of all this.

What would be a just solution for the victims?

I personally believe that because there were so many transitional problems – for example, the ownership reform, all the unpleasantries created by the Soviet regime and questions of how to compensate… It was a matter of agreement, and I believe it could have been attached to the general ownership reform package. For example, if the parties that suffered damages would have been given privatization bonds (EVP), those damages would have been compensated by now.

It is a matter of choices. It was not necessary to pay them right there and then. The state would have been unable to do so; however, it could have followed the example of other fields where Soviet injustice was compensated for. Options remain today, and these people should be compensated.

In a situation where a court ruling, seven years in the making, clearly stated in 2010 that Estonia took money entrepreneurs had in banks to save its currency and is obligated to return those sums, how is it possible that the Supreme Court later interpreted the ruling as there being no state responsibility or need to pay back anyone?

While it is difficult for the ordinary person to understand, it happens quite often as courts and proceedings are different. Sometimes, it also depends on whether rulings are appealed or not. In this case, the administrative court arrived at one conclusion while the Supreme Court’s constitutional review chamber later arrived at another.

Whether to accept that, while procedurally possible, our court system is not that uniform. It depends on how a case is handled, what lies at its center. Sometimes, these things happen incidentally, other times intentionally. It is not possible to contest the final decision legally. That is why the ball is now in the Riigikogu’s court that can either amend legislation or resolve the matter fairly using a one-off decision.