Teder promised close to a million in return for favor

Hillar Teder. Photo: Erik Tikan

Suspicions brought by the Office of the Prosecutor General suggest businessman Hillar Teder has tried to secure favorable decisions for his Porto Franco real estate development in both Tallinn and on the state level. Five individuals and the Center Party stand suspected.

“Evidence collected between January of last year and today points to various criminal offenses based on which proceedings were launched involving a number of suspected individuals,” case prosecutor Taavi Pern said.

The public was still in the dark about the year-long investigation when Prime Minister Jüri Ratas (Center) appeared live on Vikerraadio at 2 p.m. on Tuesday. At the same time, Estonian Internal Security Service (ISS) operatives were searching the premises of KredEx for evidence.

Spokespeople for the agencies did not wish to confirm the purpose of the search and asked journalists to turn to the Office of the Prosecutor General. Standing outside the offices of KredEx that issued a loan of €39.4 million to Hillar Teder’s Porto Franco real estate development following a government decision, one could hardly understand an operation to collect evidence was underway. The search was confirmed over the phone when reporters were asked not to photograph the faces of the agents conducting the search. The only signs to suggest the premises were being searched was a seemingly empty office and a plastic cover on the glass front door.

PM Jüri Ratas learned of the criminal investigation when asked about it on live radio. “I believe it could have something to do with [ISS] having information that there might have been suspicious or illegal elements involved,” Ratas said. “I cannot comment on the possible reasons live. However, the government decided to support the Porto Franco development. It helps maintain jobs in construction and will yield a lot of taxes,” he explained.

Asked whether he was aware as prime minister that KredEx had done anything wrong, Ratas said he had no such information. “I am aware that the ISS is carrying out proceedings,” Ratas said.

Kaitsepolitsei puistab KredExit. Photo: Tairo Lutter

A million euros for a favorable decision

State Prosecutor Taavi Pern said that Hillar Teder who has ties to the Porto Franco real estate development (the project’s head and majority stakeholder is Teder’s son Rauno Teder – J. R.) and Secretary General of the Center Party Mihhail Korb agreed that the businessman would donate a total of almost one million euros to the party leading up to local elections this fall in exchange for Korb making sure an exit road could be built on city land.

“The Center Party is also suspected of influence peddling. Allow me to add that Center has received €120,000 in donations from Teder in 2020,” Pern said.

It can be suggested that the Office of the Prosecutor General stumbled on an additional offense half by accident. “These additional suspicions are tied to bribery and influence peddling centered around Hillar Teder and [adviser to Minister of Finance Martin Helme] Kersti Kracht,” Pern said. He told ETV’s “Ringvaade” talk show that current suspicions suggest Kracht did not have accomplices when she asked Teder for a bribe and was looking for personal gain.

According to suspicions, Teder and Kracht agreed that the businessman would pay her to wield her influence as advisor to the finance minister and secure a favorable decision from KredEx crisis measures for the Porto Franco development.

“The bribe did not change hands as ISS operatives apprehended both Kracht and Teder. The two are also suspected of agreeing to money laundering regarding the bribe agreement and efforts to hide the assets,” the case prosecutor explained. He added that it is common for bribe agreement to be performed over long periods of time in major bribery cases and that is just what is being suspected in this case.

Kracht is also suspected of influence peddling and violation of procedural restrictions, while these suspicions are secondary and will not be disclosed in greater detail at this time.

Four people detained

Bureau chief for the Estonian Internal Security Service (ISS) Harrys Puusepp emphasized that both bribery and influence peddling are criminal acts on the level of agreement and that money does not have to change hands. “The agreement itself is the landmark. These people should know that nothing of the sort can be agreed with public officials under any circumstances,” he added.

The Office of the Prosecutor General has brought official suspicions against five persons who, in addition to Teder, Korb and Kracht, include two entrepreneurs one of whom is believed to have aided in the giving and accepting of bribes and the other in influence peddling.

Korb, who according to fellow Center Party member Jaanus Karilaid has resigned as the party’s secretary general, was the only one not detained. Whether the release of the four persons who were detained will be sought will become clear once initial proceedings have been concluded, Pern said.

Hillar Teder and Kersti Kracht could be looking at prison sentences of up to ten years as theirs are crimes in the first degree. Mihhail Korb is suspected of a crime in the second degree.

The suspicion against the Center Party concerns a crime committed during probation. This means that the party could incur a fine to which a previous pecuniary punishment could be added if the party is found guilty. Harju County Court in September of 2018 approved a deal between the prosecution and the Center Party that saw the party pay a fine of €25,000 for disguised financing with a conditional fine of €250,000 and a probationary period of 18 months added. This means that another claim worth a quarter of a million euros is hanging over the party.

Member of the board of the Center Party, MEP Yana Toom said she only knows what she has read from the press. “It does not feel good. Suspicions are suspicions and you cannot really protect yourself from them,” Toom said.

Postimees did not manage to contact Kersti Kracht, Hillar Teder – who can be legally detained for a period of 48 hours following suspicions – Mihhail Korb or other leading Centrists, including PM Jüri Ratas and Mayor of Tallinn Mihhail Korb, for comment.