Incoming finance minister Martin Helme is set to celebrate his 43rd birthday two days from today. Helme is described by his friends as an intelligent and confident person whose biggest problem is superficiality. It isn’t hard to see why, looking at the future minister’s past in the world of business.
“Perhaps I paid for the phone out of my own pocket and placed the receipt with accounting documents by mistake. I had my own money too,” Martin Helme told the court in 2008 when asked why his recently bankrupt company had a receipt for a Nokia phone paid for in cash.
What about three pairs of girls’ shorts, three blouses, a divinity fudge cake and pork goulash? Or women’s strings, bra and an Õhtuleht newspaper? “Blouses-shorts, perhaps those, because the meat and the newspaper were for work,” Helme explained. “The lingerie… my wife worked with me, so it is work attire I suppose.” Summer shoes? “We bought employees shoes and flip flops. My wife and her sister worked for us. The size doesn’t matter that much with open shoes.”
The company in question was called Pärlselja Meelelahutus and was run by Martin and Eeva Helme. The company ran a small café-bar called Martini Jazz Café on the corner of Sauna and Väike-Karja streets in Tallinn. The menu offered both food and drink and the establishment hosted live jazz music from time to time; the special was 35 kroons. The bar was tended by Martin and Eeva Helme and the food prepared by cook Jelena.
However, the business was short-lived: the company only operated from March until the fall of 2007. By mid-November, smaller sums owed to suppliers and a major sum to owners (Helme) were complemented by money owed for rent of premises. The café was simply evicted.
A single creditor preferred
“OÜ Pärlselja Meelelahutus has not had real business activity since November 20, 2007,” Helme told the trustee in bankruptcy.
The company filed for bankruptcy on November 23, after paying Martin Helme, who was the firm’s biggest creditor at the time, 10,000 kroons on the previous day.
Helme told the court it is possible he withdrew the money. “I took out 10,000 kroons because the company was done, there was no business activity. My debt was the biggest. I do not want to cover the expenses of a temporary trustee. I invested in that company,” he said.
The assessment of the temporary trustee in bankruptcy was less charitable. “It constitutes preferential treatment of a single creditor at the expense of others in a situation where the company was being de facto liquidated,” they found. Helme lent the company money on several occasions, usually before a major rent payment was due. He said he placed sums in the firm because the business plan was not working and the company failed to brake even after eight months – the original plan was to be in the black in six.
What went wrong? Helme said the main problem was failure to make efficient use of premises: Martini Jazz Café paid rent for two floors in the building while only using the top one. The café-bar on the top floor could not pay for everything. Helme also told the trustee in bankruptcy that turnover estimates were off.
The bar’s reported turnover between January 1 and September 30 of 2007 came to 324,689 kroons; net loss was 240,827 kroons.
The problem with this data is that the presiding judge found that minor expenses akin to an individual’s spending (that Helme later covered out of his own pocket) were the least of the company’s worries. A large chunk of the company’s accountancy was simply missing.
The temporary trustee in bankruptcy writes in their report that they suspect some invoices were not surrendered. Documents that were handed over were numbered 0120-0341, while those missing included invoices 0152, 0166, 0173-0220 etc.
It also turned out that no accountancy registers or systemic consolidated data existed for Pärlselja Meelelahutus – the accountant put together the balance sheet using the express method of adding up Excel spreadsheet entries and statements by the board. “This balance sheet is not a document. It is more akin to an essay,” the accountant told the court.
Why did the accountant fail to do their job? They said it was because Pärlselja Meelelahutus did not make an advance payment – in truth, there was no contract between the sides. While accounting firm ERT Partner sent out a draft contract, it was never signed.
Missing till rolls
Till rolls showing cash settlements were also missing. When the trustee in bankruptcy asked about it for the first time during the sitting, Helme said cash did not play a major role in the business.
“Cash sales were different, card payments made up a much bigger part. We mostly spent our cash on food and alcohol. Because turnover was modest, the till roll was never full and remains in the cash register. It is possible to retrieve it,” Helme promised.
His story changed a few weeks later. “I thought the roll was still in the register, but I suppose it has gone missing,” Helme now said. “It must have fallen to the ground; in any case, I was not able to find it.”
“I understand it is bad when accounting documents are missing,” Helme admitted in front of the court. The court found it was very bad. Even though Helme’s case ended in abatement and bankruptcy was never declared, the judge decided to file a report of criminal offense against the Helmes with the North District Prosecutor’s Office in 2009.
The judge pointed out that the company has registered as expenses purchases that had nothing to do with business activity, including small purchases that point to an individual’s expenses (goulash, blouses, phone etc.).
Helme explained that he bought necessary food products for the company from the grocery store from time to time. He agreed to return the sums for a total of 1,892 kroons, plus the Nokia cell phone.
More important than dubious expenses was deemed the fact Pärlselja Meelelahutus did not hand over to the trustee documents pertaining to the cash register – cash book, orders, till rolls – that made it impossible to get an overview of cash revenue and relevant expenses. The court also did not believe the role of cash in the business was modest.
“Because cash is commonplace in the catering business, it is likely cash was used also at OÜ Pärlselja Meelelahutus,” the court found and added that this is what makes the missing cash register documentation an important omission.
Annual report not filed
The prosecution launched criminal proceedings based on non-performance of accounting obligation. Proceedings against Martin Helme were terminated in 2012 without charges – the limitation period had come and gone after five years.
Martin’s wife Eeva Helme, who was also a member of the board of Pärlselja Meelelahutus, had made a deal with the prosecution beforehand that culminated in 100 hours of community service. Agreement procedure equals a conviction: to make a deal, the accused must agree to the content and criminal qualification of charges.
Before Estonia joined the European Union, Martin Helme ran the Free Europe research center that offered a critical point of view regarding Estonia’s accession. In an interview given to Eesti Ekspress before the EU referendum in 2003, Helme said that Estonia joining the EU would mean the end of a sovereign country. “We will lose our country; it will be the end of the Republic of Estonia.”
Helme said in the same interview that he is useless at math, looking back at his high school years. “I cannot even play cards because I cannot count tricks,” Helme (then 27) told Eesti Ekspress. When Estonia decided to join the European Union, Helme ran for European Parliament as an independent but did not make the cut. He got 1,475 votes.
The election was dominated by pro-European former foreign minister and future president Toomas Hendrik Ilves whose 76,120 votes were enough to bring fellow social democrats Marianne Mikko and Ivari Padar, who only got 1,012 votes, with him to the European Parliament.
While his political activity waned for a time, Helme took up the matter again after his unsuccessful foray into the bar business. In October 2008, he became the leader of the Estonian National Movement that flirted with national chauvinism. Helme ran for the European Parliament again in 2009 as an independent. This time, Helme took 9,840 votes or 2.5 percent of the vote. He also ran as an independent for Pärnu city council in 2009 and for the Riigikogu in the Kesklinn electoral district in 2011 but was not successful.
Helme also ran an NGO called MH Campaign Fund at the time the official goal of which was organizing campaigns for the promotion of “eurorealistic worldview” and political clarification. While its name suggests the fund might have had something to do with Helme’s campaigns, there is no factual evidence pointing to this.
“The association is active, and that activity is no business of Big Brother,” the 2012 report of the now defunct MH Campaign Fund reads. In addition to this sentence, the report consists of a title page and Helme’s signature. The fund’s activity or cash flow is not covered in the report.
Earlier annual reports are a little more telling: in 2010, Helme writes that the NGO is active and that no settlements have taken place with persons involved. The 2011 report reveals that “MH Campaign Fund is keeping an eye on developments in society and is prepared to intervene if necessary”. MH Campaign Fund was deleted from the business register in 2017 for failure to file annual reports. Pärlselja Meelelahutus also failed to present an official annual report.
Much depends on the finance minister
The Conservative People’s Party (EKRE) secured the finance portfolio during coalition talks with the Center Party and Isamaa. It turned out the ministry will go to Martin Helme.
If recent coalitions have agreed on ways of covering expenses during coalition talks, Isamaa, EKRE and Center have decided there is no need and that sums will be settled in the course of state budget strategy deliberations that are set to begin soon after the government takes office.
The talks will be moderated by the finance minister, meaning that Helme is facing a vital task: to find money with which to pay for EKRE’s election promises on the one hand and keep the budget from going bust on the other.
Several of Martin Helme’s acquaintances were surprised to hear he chose the finance ministry. “He is definitely no financial or economic expert. His education covers the humanities, while I’m sure he learned a thing or two in the Riigikogu Finance Committee,” a long-time acquaintance of Helme who wished to remain anonymous said.
“Martin’s biggest problem is that he is a superficial person who tackles problems in a rhetorical and airy manner; however, that is not how things work in the real world,” they said. Helme’s acquaintance added that the future finance minister would need to have capable officials at his disposal.
That said, Helme also has an advantage over his predecessor – he is a good speaker capable of convincing himself and others, and his good command of English makes him a strong performer on the international arena.
“In summary, Martin is talented enough to tackle complicated matters, but his natural superficiality will not make the finance portfolio an easy one for him.” Postimees did not manage to contact Martin Helme for comment despite repeated attempts.