Conclusions of Investigation

/Conclusions of Investigation
Conclusions of Investigation 2018-06-17T16:43:00+00:00

CONCLUSIONS OF THE PARLIAMENTARY INVESTIGATION OF THE NATIONAL SECURITY AND DEFENCE COMMITTEE OF THE SEIMAS OF THE REPUBLIC OF LITHUANIA

INTO THE ALLEGED INAPPROPRIATE INFLUENCE OF INDIVIDUALS, BUSINESS ENTITIES AND OTHER INTEREST GROUPS ON THE STATE AUTHORITIES IN RESPECT OF ADOPTING OF DECISIONS AND THE UNLAWFUL IMPACT ON POLITICAL PROCESSES

The National Security and Defence Committee of the Seimas of the Republic of Lithuania (hereinafter referred to as – Committee), by order of the Seimas of the Republic of Lithuania, carried out, as a temporary investigation commission, a parliamentary investigation into the alleged inappropriate influence of individuals, business entities and other interest groups on the state authorities in respect of adopting of decisions and the unlawful impact on political processes (hereinafter referred to as – parliamentary investigation).

  1. Ground for the Committee’s powers. Resolution of the Seimas of the Republic of Lithania No. XIII-691 of 19 October 2017 “On the Direction to the National Security and Defence Committee of the Seimas of the Republic of Lithuania to Carry Out a Parliamentary Investigation into the Alleged Inappropriate Influence of Individuals, Business Entities and Other Interest Groups on State Authorities in Respect of Adopting of Decisions and Alleged Unlawful Impact on Political Processes“ (hereinafter referred to as – resolution of the Seimas No. XIII-691 with amendments).
  2. Committee’s composition: Committee’s chairman Vytautas Bakas, chairman’s deputy Rasa Juknevičienė, members Virgilijus Alekna, Arvydas Anušauskas, Algirdas Butkevičius, Dainius Gaižauskas, Jonas Jarutis, Laurynas Kasčiūnas, Michal Mackevič, Juozas Olekas, Audrys Šimas.
  3. Issues of the parliamentary investigation:
  • To establish whether maintaining communication with the persons able to jeopardize the state authorities was aimed at exerting inappropriate influence on the state authorities in respect of adopting decisions or unlawful impact on politicians and (or) political processes;
  • To establish whether there were any cases of funding of political parties or individual politicians able to jeopardize the public interests for exerting inappropriate influence on state authorities in respect of adopting decisions or unlawful impact on politicians and (or) political processes;
  • To establish whether there were state-interests-jeopardizing cases when, in order to influence the situation in the economy sectors that are strategically important for the national security, inappropriate influence on the state authorities in respect of adopting of decisions or unlawful impact on politicians and (or) political parties was exerted.
  1. Committee’s work duration: 19 October 2017 – 1 June 2018.
  2. Dates of Committee’s hearings: 8 November 2017, 15 November 2017, 22 November 2017, 24 January 2018, 7 February 2018, 28 February 2018, 7 March 2018, 14 March 2018, 21 March 2018, 16 May 2018, 23 May 2018, 29 May 2018, 30 May 2018.
  3. Participants at the Committee’s hearings: Minister of Transport and Communications of the Republic of Lithuania Rokas Masiulis, senior adviser of the Budget and State Property Management Department under the Ministry of Transport and Communications Darius Kuliešius, director of the State Security Department (hereinafter referred to as – SSD) Darius Jauniškis, SSD director deputy Kęstutis Budrys, SSD officials, director of the Special Investigation Service (hereinafter referred to as – SIS) Saulius Urbanavičius, SIS director deputy Žydrūnas Bartkus, former Minister of Transport and Communications of the Republic of Lithuania Eligijus Masiulis, member of the Seimas (former Minister of Transport and Communications) Rimantas Sinkevičius, former general director of AB ”Lietuvos geležinkeliai” Stasys Dailydka, AB “Lietuvos geležinkeliai“ (JSC “Lithuanian railways”) general director Mantas Bartuška, AB “Lietuvos geležinkeliai” (JSC “Lithuanian railways”) general director deputy Gerimantas Bakanas, AB “Lietuvos geležinkeliai” (JSC “Lithuanian railways”) Informational Technologies Centre’s director Eglė Radvilė, AB “Lietuvos geležinkeliai“(JSC “Lithuanian railways”) Prevention Department director Rolandas Terminas, AB ”Lietuvos geležinkeliai“(JSC “Lithuanian railways”) Prevention Department’s cyber security experts Šarūnas Grigaliūnas and Donatas Vitkus, director of the Cyber Security and Telecommunications Service under the Ministry of National Defence (hereinafter referred to as – MND) Darius Adomaitis, acting director of the Cyber Security and Information Technologies Department under the MND Jonas Skardinskas, representative of the Lithuanian army Viktoras Kucenko, former Minister of Energy Arvydas Sekmokas, former Vice-Minister of Energy Romas Švedas, former advisers of the Prime-Minister Irina Urbonavičiūtė, Tomas Garasimavičius, Justas Pankauskas, journalist Tomas Dapkus, former Prime Minister Gediminas Kirkilas, former Prime Minister Andrius Kubilius.
  4. Legal acts relevant to the parliamentary investigation:
  • Law of the Republic of Lithuania on Temporary Investigation Commissions of the Seimas;
  • Seimas of the Republic of Lithuania Statute;
  • Law of the Republic of Lithuania on the Basics of National Security;
  • Law of the Republic of Lithuania on State Secrets and Official Secrets;
  • Law of the Republic of Lithuania on the Protection of Objects of Importance to Ensuring National Security;
  • Law of the Republic of Lithuania on the Special Investigation Service;
  • Law of the Republic of Lithuania on Intelligence;
  • Law of the Republic of Lithuania on Criminal Intelligence;
  • Decision of the Board of the Seimas of the Republic of Lithuania “On the Approval of the Description of the Procedure for Organizing the Making of Laws and Other Legal Acts by the Seimas, Parliamentary Control and Supervisory Activity of the Seimas”.
  • The Committee faced the problem of public disclosure of the information received for official purposes; pressure on the members of the Committee was exerted on that ground.

The Committee, in pursuance of the Seimas resolution, was guided by the received information: letter of the Special Investigation Service of the Republic of Lithuania No. 4-01-621 of 24 January 2018; letter of the Public Procurement Office of the Republic of Lithuania No. 4S-266 of 20 February 2018; letter of General Prosecutor’s Office No. 17.2-2339 of 23 April 2018; letter of the State Security Department of the Republic of Lithuania No. 18-3191 of 4 May 2018 and annexes thereto: letter No. 19-286 of 9 March 2018, letter No. 19-277 of 8 March 2018, letter No. 19-235 of 27 February 2018; letter of the State Security Department of the Republic of Lithuania No. 18-3279 of 9 May 2018 and annexes thereto: letter No. 19-286 of 9 March 2018, letter No. 19-356 of 23 March 2018, letter No. 19-392 of 23 March 2017, letter No. 19-33 of 11 January 2017, letter No. 19-639 of 24 May 2017, letter No. 19-466 of 17 April 2017, letter No. (06)-19-210KF-411KF of 10 May 2011, letter No. (03)-19-1510KF-698KF of 6 October 2006; letter of the Special Investigation Service of the Republic of Lithuania No. 4-01-3718 of 14 May 2018; letter of the Ministry of Energy of the Republic of Lithuania No. (12.8-14 K)3-992 of 22 May 2018; letter of Algirdas Butkevičius, a member of the Seimas of the Republic of Lithuania, No. SN-S-40 of 24 May 2018; public audit report of the National Audit Office of the Republic of Lithuania No. VA-P-20-14-20 of 20 November 2009; letter of the Lithuanian Private Railways Companies Association No. 54 of 14 July 2017; minutes of the Committee’s hearings of 8 November 2017, 15 November 2017, 22 November 2017, 24 January 2018, 7 February 2018, 28 February 2018, 7 March 2018, 14 March 2018, 21 March 2018, 16 May 2018 and 23 May 2018.

8.  Parliamentary investigation results:

The influence exerted by interest groups on decision-making in a country in itself is not corrupt or unlawful activity but rather one of the essential elements of the decision-making process. Whether the interest groups’ influence is useful or harmful depends on the extent these groups may influence the decision-making and on how this influence is distributed between several interest groups. Unproportionally big influence of one or several business groups may condition unlawful influence, parallel structures’ (for state authorities) coming into existence or even seizure of the state. In a long-term perspective, such processes may put the representative democracy and public interests to danger.

Seizure of state or public policy or separate state authorities includes inappropriate influence on policy formation by passing public policy decisions not to the favour of the public but to the favour of a specific interest group or person (typically, business group). This may be pursued both by various unlawful means, e.g., corruption, trading in influence, and lawful means, e.g. lobbying and supporting political parties and political campaigns. Unlawful influence on decision-making may be exerted without personal acquaintance with the decision-makers, without having direct contact with them but by handling information which is provided to them or, on the contrary, by creating close social and economic contacts with such persons.

Seizure of public policy has an adverse effect on the state by various means: by distorting the allocation of public and private resources, which has an adverse effect on the possibilities of consistent development; by deepening the social and economic disparity; by affecting adversely the trust in the government and its legitimacy, policy efficiency (even visibility of unlawful activity may result in big damages) and etc.[1].

8.1.    To establish whether maintaining communication with persons who could jeopardize the public interests was aimed at exerting inappropriate influence on state authorities in respect of adopting decisions or unlawful impact on politicians and (or) political processes.

  • The Committee established:

During the parliamentary investigation, the Committee established (see para 8.2 hereof) that the inappropriate influence on state authorities in respect of adopting of decisions or unlawful impact on some politicians and (or) political processes is inseparably associated with using of non-transparent or insufficiently controlled lobbyism, non-transparent and insufficiently controlled public and private interests as well as non-transparent and biased media to achieve specific goals.

The Committee, having, in 2017, carried out an investigation into the national security threat allegedly posed by contacts of member of the Seimas of the Republic of Lithuania Mindaugas Bastys and into the possibilities to initiate the accusatory process, concluded that: 1) member of the Seimas Mindaugas Bastys, by maintaining close and constant contacts with the representatives of state atomic energy corporation of the Russian Federation “Rosatom”, which started the construction of the Baltic nuclear power plant in the Kaliningrad region and is constructing the Belarusian nuclear power plant in Belarus, acted against the public interests of Lithuania; 2) close contacts of member of the Seimas M. Bastys with former or current intelligence and security structures officers of the Russian Federation, Kremlin-linked journalists and former or current underworld figures poses a threat to the national security; 3) member of the Seimas M. Bastys, by going between “Rosatom” and enterprises which are associated with “Rosatom”, officers of intelligence and security structures, Kremlin-linked journalists and former or current underworld figures, sought to exert influence on political processes and top officials in Lithuania who could change the geopolitical direction of Lithuania and inflict harm on the Lithuanian state. By resolution No. XIII-285 of 18 April 2017 “On the parliamentary investigation carried out by National Security and Defence Committee of the Seimas of the Republic of Lithuania into the national security threat allegedly posed by contacts of member of the Seimas of the Republic of Lithuania Mindaugas Bastys and into the possibilities to initiate the accusatory process”, the Seimas of the Republic of Lithuania upheld the committee’s conclusions.[2] After the Seimas initiated the accusatory process against M. Bastys, the Constitutional Court, in its conclusion No. KT22-I2/2017 of 22 December 2017 “On the conformity of the actions of member of the Seimas of the Republic of Lithuania M. Bastys, against whom the accusatory process was initiated, with the Constitution of the Republic of Lithuania”, said that the action of the member of the Seimas of the Republic of Lithuania – when he, answering to question 55 of the questionnaire for candidates who apply for working or getting familiarized with classified information “Are (were) you acquainted with persons who work (worked) for intelligence, security agencies or associated institutions of other countries? If yes, please specify them”, concealed his contacts with the former KGB agent Piotr Vojeika and, in such a manner violating the requirement of Art. 17 (2 (11)) of the Law of the Republic of Lithuania on State Secrets and Official Secrets not to conceal data about the contacts affecting the adoption of the decision on the permission to work or get familiarized with the classified information, acting in bad faith, sought to get a permission to work or get familiarized with the classified information, upon receipt of which, due to his contacts, he could pose threat to the security of state secrets – contradict the Constitution of the Republic of Lithuania. By this action, member of the Seimas of the Republic of Lithuania Mindaugas Bastys flagrantly violated the Constitution of the Republic of Lithuania and the oath he has given[3].

During the parliamentary investigation carried out by the Committee in 2017, information on the contacts of the Lithuanian politicians and representatives of business circles with persons able to pose threat to the public interests as well as on their inappropriate influence on state authorities in respect of adopting decisions or unlawful impact on some politicians and (or) political processes was received.

It should be noted that, according to the data provided to the committee, prior to the elections to the Seimas of 2012, manager of corporate group “Arvi”, honorary consul of the Russian Federation Vidmantas Kučinskas favoured M. Bastus and was aiming to make him the minister of agriculture in the new Government to be formed after the elections to the Seimas. By using his contacts with Albinas Januška and then president of the Baltic Institute of Agribusiness Raimundas Lopata, he cared for shaping of public opinion about M. Bastys as about a possible prospective minister of agriculture. With this end in view, video clips about M. Bastys were created, conferences where M. Bastys participated were arranged. In October 2012, after the Labour Party publically announced that one of the desired ministries in the new Government was exactly the Ministry of Agriculture, corporate group “Arvi” manager V. Kučinskas directed the corporate group’s vice-president to convince chairman of Social Democratic Party of Lithuania (hereinafter referred to as – LSDP) Algirdas Butkevičius not to give this ministry to the Labour Party. V. Kučinskas asserted that “Arvi“, aiming to have a “friendly” minister of agriculture, did much for the corporate-group-supported LSDP candidates to win the elections to the Seimas in Suvalkija.

The Committee established that member of the Seimas M. Bastys, in the 2012-2013 period, had participated in the organization of the meetings of the state atomic energy corporation of Russia “Rosatom” representatives with Lithuanian public officers, at which “Rosatom” interests in Lithuania and in the region had been promoted. It was established that state atomic energy corporation of the Russian Federation “Rosatom”[4] (hereinafter referred to as – “Rosatom“), in the 2012-2013 period, had drafted and tried to implement the plan – to found, with Lithuanian enterprises, a joint venture (consortium) which would trade in the electric power produced by nuclear power plants constructed in the Kaliningrad region and Belarus (hereinafter referred to as Baltic NPP and Belarusian NPP) using the existing and prospective power transfer links with Kaliningrad region, through the use of Kruonis Pumped Storage Plant (hereinafter referred to as – Kruonis Pumped Storage Plant), and to participate in the Baltic NPP construction and the Ignalina nuclear power plant (hereinafter referred to as – “Ignalina NPP “) decommissioning projects, and, in the event of favorable circumstances, – in the new nuclear power plant’s construction project in Visaginas. With the help of the business partners from Lithuania, “Rosatom“ expected not only to enter the Lithuanian market but also to ensure support for the Rosatom-implemented projects, primarily Baltic NPP project in the Kaliningrad region[5].

State corporation of Russia “Rosatom” tried, through its representatives and intermediaries in Lithuania, to found a representation which would take care of creating of “Rosatom” and Lithuanian consortium of enterprises. In 2012, during the negotiations between the general contractor which implements the Ignalina NPP decommissioning projects – company “NUKEM Technologies” (hereinafter referred to as – “NUKEM”), which has been under 100 % control of “Rosatom” since 2009, – and UAB “Vėtrūna“, which performs the construction works, on the debt for the performed construction works, “NUKEM” representative Kęstutis Puidokas (a former KGB agent of the USSR), who provided the necessary information about the situation at the Ignalina NPP, as well as Piotr Vojeika (a former KGB agent of the USSR) and Jevgenijus Kostinas, who represented “Rosatom“ interests, joined the arisen dispute to mediate between the two parties concerned.

The Lithuanian enterprises were offered the opportunity to receive orders in relation to the Ignalina NPP decommissioning projects[6], and to participate in the Baltic NPP (hereinafter referred to as – Baltic NPP) and Belarusian NPP (hereinafter referred to as – Belarusian NPP) construction. In September 2012, the opportunity to construct electric links between Lithuania and Kaliningrad region, whereafter – the idea to found a joint venture (“Rosatom” applied for owning 40 % shares), which would sell the electric energy produced in the future Baltic NPP and Belarusian NPP, started to be considered. In order to ensure the political support to these plans, “Rosatom”, through its agents in Lithuania, several times attempted to arrange a meeting between “Rosatom” representatives with the head of the Government of Lithuania.

In his explanations to the Committee (hearing of 3 April 2017), A. Butkevičius specifies that member of the Seimas M. Bastys addressed him, requesting that a “Rosatom” representative be seen; however, A. Butkevičius clearly said that he would not see him and that “there would be no meeting” (quotation from the record of Committee’s meeting of 3 April 2017). A. Butkevičius explained to M. Bastys that “there should be no meeting with “Rosatom” for political reasons” (quotation from the record of Committee’s meeting of 3 April 2017) and warned M. Bastys: “I told him you wouldn’t come“ (quotation from the record of Committee’s meeting of 3 April 2017). In answer to a question about what the consequences of “Rosatom” implementing its plants in Lithuania could have been, A. Butkevičius explained that meetings with “Rosatom” representatives at that point of time had been unreasonable as there would have been doubts spread regarding the chosen strategic direction of Lithuania, which would have been seen as Lithuania changing its position, abandoning its strategic energy projects and staying in the BRELL system. In answer to a question about whether he, being the Prime-Minister, felt the “Rosatom” interest in the Kruonis Pumped Storage Plant, A. Butkevičius explained that it had been the Lithuanian Confederation of Industrialists which had been interested in this issue; various discussions of this issue had been held in the confederation, while the Government had never considered this issue during his time as the Prime-Minister.

The Committee established that on 22 February 2013, a brief meeting between A. Mertenas and Prime-Minister A. Butkevičius, which was not planned but agreed on in a fast-track manner, took place in the Ignalina NPP construction sites[7] where meeting with NUKEM, the company which performed the electric power plant’s decommissioning works, was held. This meeting was not included into the Prime-Minister’s schedule. The media release drafted by the Government of the Republic of Lithuania specifies that the Prime-Minister, when visiting the nuclear power plant’s nuclear objects’ sites, met with the representatives of “Rosatom”, which owns “NUKEM“ shares, too. “At the initiative of “Rusatom Overseas“, a brief meeting was arranged and during that meeting I was familiarized with the company-implemented projects“, – the press release quotes Prime-Minister Algirdas Butkevičius[8].

In his explanations to the Committee (hearing of 21 March 2018), Tomas Garasimavičius, a former energy adviser of A. Butkevičius, confirmed that the meeting had been held and specified that the purpose of visiting the Ignalina Nuclear Power Plant on 22 February 2013 had been to discuss the problems in the Ignalina power plant as the project was being delayed. There was a visit to the Ignalina Nuclear Power Plant itself, whereafter there was a meeting and going to object B1, i.e. used fuel storage reservoir, which was under construction at that time, where the meeting with contractors was held, at which, apart him, the Prime-Minister and adviser Irina Urbonavičiūtė participated. “Rosatom” representative A. Mertenas participated at the meeting, too.

Irina Urbonavičiūtė, a former economy adviser of A.Butkevičius, confirmed to the committee (hearing of 21 March 2018) that the meeting requested by “Rosatom” representatives had taken place during the Prime-Minister’s visit to the Ignalina NPP (22 February 2013). “Rosatom” representative A. Mertenas participated at the meeting, too. Topic discussed during the meeting – Kaliningrad nuclear power plant’s construction prospects, Lithuania joining the project either by way of letting the Kruonis facilities on lease or otherwise. The meeting was not minuted.

In his written explanations submitted to the Committee, A. Butkevičius specifies that “Rosatom“ representatives have sought a meeting with him as with the Prime-Minister for many times; however, all such offers were rejected. The Government had a clear West-oriented energy strategy, firm position, wherefore he cared nothing for any offers from “Rosatom”. The meeting with “Rosatom” representative A. Mertenas, which took place on 22 February, during his visit to the Ignalina NPP, was not planned. The NUKEM representatives who accompanied him at the nuclear objects’ construction sites during the visit asked to give a hearing to the “Rosatom” representatives.

Having failed to ensure the strategic “Rosatom” plans’ approval by Lithuanian authorities, this Russian corporation seeks to maintain influence in Lithuania through its company NUKEM, which implements the most important Ignalina NPP decommissioning projects. NUKEM gears up for participating in the planned tenders on the new large-scale Ignalina NPP decommissioning projects (project B25). In order to implement these endeavors, NUKEM seeks to provide itself with the support of a major Lithuanian construction company which it could jointly participate in the tender with. For NUKEM it is extremely important that its project partner has the necessary influence in the Lithuanian power authorities and political circles, which would assist in assuring the success in participating in the tenders.

According to the Committee’s data, in 2018, it is planned to announce Ignalina NPP public procurement in relation to the short-lived low- and medium-level radioactive wastes management project (B25) with estimated funds requirement, according to the data of 2015, being more than 180 mln euros by year 2022 (annex 2 to resolution of the Government of the Republic of Lithuania No. 1427 of 23 December 2015 “On the Development Programme for Radioactive Waste Management”). Former KGB agent of the USSR R. Puidokas, who represents NUKEM interests, maintains active contacts with corporate group “MG Baltic” representatives, who are interested in corporate-group-managed company “Mitnija” participation in the Ignalina NPP decommissioning projects. “MG Baltic” corporate group’s interest in the given projects is demonstrated by the meeting between K. Puidokas and “MG Baltic” manager Darius Mockus, which took place as early as in autumn 2009. The contacts between “MG Baltic” and NUKEM / “Rosatom” representatives are still maintained through K. Puidokas, who also maintains contacts with the former “MG Baltic” vice-president R. Kurlianskis. Since 2016, the critical part in these plans has been played by Tomas Dapkus, who represents “MG Baltic“ interests and maintains intensive contacts with K. Puidokas, who represents NUKEM interests.

The Committee has received information that another NUKEM consultant, Jonas Tamulis, represents NUKEM interests in Lithuania, too.

On the corporate group “MG Baltic” activity. Corporate group “MG Baltic“ has been operating since 1992. In 2002, corporate group “MG Baltic” managers, aiming to ensure financial gain and personal influence, drafted the long-term activity development strategy (hereinafter referred to as – Strategy), which hitherto has been consistently and purposefully implemented. The following main goals were envisioned in the corporate group’s Strategy:

  • To decrease the adverse effect of state power management, judicial and other authorities (influence on legal acts and decreasing the applicable sanctions);
  • To create and maintain constant contacts in power and management authorities, receive information from important institutions (Seimas, Government);
  • Lobbying with its results evaluated according to the number of influenceable structures.

For the strategy implementation purposes, some politicians, state officials and officers were engaged by various unlawful ways – collecting confidential or compromising materials with a view to bribe, exerting influence, handling media information. Corporate group MG Baltic engaged its controlled media, through which the influence was exerted or public advertising services, including but not limited to political advertising, in exchange for adopting of decisions that were needed by the corporate group were offered. Those persons are chosen as influence targets who can assist or hinder implementing “MG Baltic” business interests, wherefore, in most cases, it is the political parties’, state authorities’, state-controlled enterprises’, courts’ and law-enforcement agencies’ representatives who become these targets.

According to the data collected by the Committee, “MG Baltic” representatives exerted influence on the political processes by influencing the members of specific political parties represented in the Seimas and Vilnius City Municipality. In the 2005 – 2006 period, corporate group’s managers sought to enhance their influence in the Vilnius City Municipality to be able to expand the corporate group’s companies activity in the construction and real estate sectors. At that time, it was the “Rubikon” corporate group (associated with Liberal and Centre Union (hereinafter referred to as – LCU)) which used to get the biggest orders in relation to the projects implemented in the city of Vilnius.

In order to provide themselves with a competitive advantage, “MG Baltic” managers took on the task of implementing a political scenario aimed at influencing some LCU members so that they establish a new liberals party which would meet the interests of the corporate group. “MG Baltic” representatives, using their influence on the part of the LCU leaders, pro-actively participated in resolving the parties’ internal affairs: they were being informed about the ongoing processes in the party on a constant basis; the candidacy for the leader of the newly established party was being discussed with them; the “MG Baltic” representatives, in their turn, were giving directions to politicians on how they must act inside the party.

After the foundation of the new liberals party “Liberals Movement of the Republic of Lithuania” (hereinafter referred to as – LMRL), which the corporate group could exert influence on, – the LMRL candidates to the posts in the Seimas and in the Government were discussed with the corporate group’s managers. In 2016, after the publication of information about the political corruption case, “MG Baltic“ representatives sought to keep maintaining influence on the LMRL.

Availing themselves of the political situation emerged in the end of 2005 in respect of the ongoing processes in the Vilnius city municipality, “MG Baltic” corporate group’s managers sought to influence an influential member of the Social Democratic Party of Lithuania (hereinafter referred to as – SDPL) so that the latter convince his faction to vote for the findings of the Temporary Investigation Commission of the Seimas, which examined the facts of corruption in the Vilnius city municipality. With this in view, media controlled by the “MG Baltic” corporate group was engaged, too.

In 2007, the “MG Baltic” representatives, aiming to strengthen their positions in the Vilnius City Municipality, exerted influence on the candidates to the Vilnius City Council during the municipal elections of 2007, whereafter exerted influence on the Vilnius City Council members, favoured certain persons to take key positions in the municipality.

In 2009, the “MG Baltic” representatives pro-actively participated in the political processes related to the disintegration of the National Resurrection Party’s (hereinafter referred to as – NRP) faction in the Seimas; issues of the retirement of the chairman of the Seimas and of the appointment of a new candidate for the chairman of the Seimas were being discussed with them – all this in order to cover up for ones and form a negative opinion about the others. Actions aimed at attracting a part of the NRP faction’s members to the LMRL were coordinated with them as well.

In 2017, the “MG Baltic“ representatives pro-actively participated in the processes related to the elections of the chairman of the LSDP and disintegration of the party; they also tried to influence the party’s internal discussions on participating in the governing coalition in the Seimas. With this end in view, collected compromising information about the prospective candidates for the chairman of the party, exerted influence on persons so that they change their mind.

In December 2008, after Eligijus Masiulis, being the chairman of the LMRL, was appointed as the minister of transport and communications, corporate group “MG Baltic” representatives sought to win construction works tenders organized by enterprises and institutions subordinate to the Ministry of Transport and Communications, which would ensure long-term profitable activity for the corporate group’s company “Mitnija”. “MG Baltic” representatives were mostly interested in high-value construction works procurement tenders organized by AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”). In an effort to get decisions favorable to them, “MG Baltic” representatives created a scheme: they exerted, through media and E. Masiulis, influence on the AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”) management in respect of the company’s poor activity, organized, through an intermediary (AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”) employee which E.Masiulis recommended), direct meetings with then head of the company Stasys Dailydka, during which details in relation to the participation in the tenders were being discussed. Since February 2009, meetings between “MG Baltic“ and AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”) representatives have been organized almost on a monthly basis, sometimes even more often. The actions were coordinated by R. Kurlianskis; the progress of unofficial agreements was controlled by D. Mockus. By following the created scheme of influencing the AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”) management, corporate group “MG Baltic” representatives provided the corporate-group-managed company AB “Mitnija” with long-term successful participation in the tenders announced by AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”). The main partner of AB “Mitnija“ in relation to AB “Lietuvos geležinkeliai“(JSC “Lithuanian Railways”) tenders was company “Kauno tiltai”, with whose manager N. Eidukevičius “MG Baltic“ representatives maintain close contacts on a constant basis. In the 2009-2013 period, both these companies, together with other partners, won construction works procurement tenders organized by AB “Lietuvos geležinkeliai“(JSC “Lithuanian Railways”) for total value (including VAT) exceeding 1 bln litas (which made approximately 10 % of all the procurements by AB “Lietuvos geležinkeliai“(JSC “Lithuanian Railways”)). It should be noted that, according to the data received by the Public Procurement Office (hereinafter referred to as – PPO), AB “Lietuvos geležinkeliai“(JSC “Lithuanian Railways”) up until 2009 had not entered into a single public procurement contract with companies associated with corporate group “MG Baltic” (PPO letter No. 4S-266 of 20 February 2018).

After the high-value Lithuanian railways infrastructure construction projects came to the end, “MG Baltic“ representatives began showing interest in the road construction tenders implemented by the Lithuanian Road Administration under the Ministry of Transport and Communications (hereinafter referred to as – LRA). On 8 March 2016, Daivis Zabulionis, former deputy head of the State Tax Inspectorate (hereinafter referred to as – STI) and temporary head of the Public Procurement Office, allegedly being favoured by “MG Baltic” and AB “Kauno tiltai” managers, was appointed as the LRA deputy head. According to the data collected by the Committee, inasmuch as he was responsible for public procurements of LRA, corporate group “MG Baltic” and AB “Kauno tiltai” managers had a discussion on unlawfully paying him a fixed fee for his favouritism to “MG Baltic” company “Mitnija” and AB “Kauno tiltai” in respect of receiving LRA orders.

Corporate group “MG Baltic” representatives, aiming to receive high-value orders in the projects supervised by the Ministry of Education and Science and the Ministry of Healthcare (construction of modern technologies valleys, medical institutions), used their influence on the heads of these ministries, maintained contacts with the then rectors of the Kaunas University of Medicine and Kaunas University of Technology as well as with the then general director of the Kaunas University of Medicine clinics. “MG Baltic” representatives used to receive for coordination issues related to publishing of TV reports and publications related to the healthcare system funding as well as to the salaries of university rectors.

From April 2009 until the middle of 2016, AB “Mitnija”, being under control of corporate group “MG Baltic”, won, together with other partners, 33 public procurement tenders announced by universities and healthcare institutions, for total value (including VAT) exceeding 100 mln euros.

In January 2010, minister of education G. Steponavičius asked R. Kurlianskis for help in not allowing the resolution on referring to the Constitutional Court (to examine whether the certain provisions of the Law of the Republic of Lithuania on Science and Studies contradict the Constitution of the Republic of Lithuania), which was considered in the Seimas, to pass. With this end in view, R. Kurlianskis sought to influence member of the Seimas Aleksandras Sacharukas so that the “United Lithuania” faction (“Viena Lietuva”), which he managed, does not support this referring, promising to resolve issues that are important for A. Sacharukas. After the resolution of the Seimas was not adopted, G.Steponavičius informed R. Kurlianskis about thanking A. Sacharukas.

Corporate group “MG Baltic“ representatives pro-actively acted in order to gain influence in relation to the issues related to the state-funded large-scale and high-value informational technologies projects implemented in the Centre of Registers, the State Tax Inspectorate, and the Emergency Response Centre. For this purpose, T. Dapkus maintained close contacts with vice-minister of justice Raimondas Baksys. In 2017, T. Dapkus, using his contacts in the Seimas and taking advantage of the fact that a parliamentary investigation into the e-health project, which had been unsuccessfully implemented for many years, was initiated, sought to take advantage of the situation and make it possible for his favoured persons/entities to take over the implementation of the e-health project.

Corporate group “MG Baltic” representatives, in a non-transparent manner, exerted influence on the decisions of state authorities related to the Ministry-of-Economy-supervised and EU-funded investment projects. In 2006, “MG Baltic“ president Darius Mockus, in an effort to ensure a favourable funding model for the tennis complex, whose one of the construction initiators was UAB “Teniso pasaulis” – a company managed by “MG Baltic” – and whose contractor was AB “Mitnija”, sought to influence the then Minister of National Defence Gediminas Kirkilas by allegedly threatening with negative media publications. The objective pursued was to make the whole project 100 % publicly funded, although neither the Ministry of Finance, nor the Competition Council upheld such a funding model.

When giving explanations at the Committee’s hearing (23 May 2018), the then Minister of National Defence G. Kirkilas noted that he was familiar with D. Mockus; they shared interest of playing tennis, for which reason D. Mockus, as regards the tennis complex construction funding, had addressed him as a member of Government who plays tennis. G. Kirkilas said he had taken interest in the issue of funding; however, he had adhered to the position that the project (public and private partnership) needed by the sports community must be implemented in accordance with the requirements of all the legal acts.

In 2010, “MB Baltic“ representatives made efforts to influence the then Minister of Economy D. Kreivys to adopt decisions favourable to the corporate group. As a means of influence, “MG Baltic” representatives spread, through the corporate-group-controlled media, defamatory and compromising information on D. Kreivys.

According to the data received by the Committee, the corporate group “MG Baltic” representatives sought to influence politicians and officials to adopt or block legal acts able to create exclusive business conditions for the corporate group. In the 2007-2008 period, using the influence on the members of the LMRL’s faction in the Seimas, the corporate group sought to receive favourable decisions on the amendments to the Law on Alcohol Control, whereby alcoholic beverages advertising on TV would be restricted as little as possible.

In the 2007-2014 period, corporate group “MG Baltic” representatives favoured the head of the STI Modestas Kaseliauskas, who, in 2007, had expressed a wish to co-operate with the corporate group’s managers. At R. Kurlianskis direction, negative publications about the persons and institutions that are ill-disposed towards M. Kaseliauskas were prepared and publications that are detrimental to him were stopped. In 2014, the corporate group’s representatives were especially active in shaping a positive public opinion about the activity of the STI and its head M. Kaseliauskas, aiming to extend his term of office.

In 2015, after mutual disputes between the shareholders of another influential business group “VP Market” came to light and doubts in regard to the evasion of the payment of taxes by it arose, “VP Market“ group’s managers sought to assure the support of corporate group “MG Baltic” managers and the possibility to use the corporate group’s influence on the STI and the help of the media controlled by the corporate group. On 28 August 2015, with T. Dapkus being an intermediary, a meeting between R. Kurlianskis and the then head of the STI Dainoras Bradauskas (was appointed as the head of the STI in April 2015) was organized during which the results of the ongoing tax analysis of the “VP Market” group’s activity were discussed. It was agreed at the meeting that the head of the STI would supervise the progress of the VP Market corporate group’s tax analysis and hand over the results thereof to “MG Baltic” representative R. Kurlianskis, who would then report to the VP Market representative.

Also, the data collected by the Committee shows that MG Baltic, using its contacts in the State Tax Inspectorate (hereinafter referred to as – STI), assisted UAB “Vilniaus prekyba“ (hereinafter referred to as – VP) in evading tax obligations in amount probably reaching millions of euros.

According to the Committee’s data, VP, for the “MG Baltic” services, paid to corporate group managers in the form of big discounts to the MG-managed company “Mineraliniai vandenys”, which operates in “Maxima” trade centres.

In the Committee’s opinion, it would be meaningful to evaluate anew the materials which were collected during the tax investigation in respect of the said circumstances, taking into consideration the inadmissible contacts of the STI state officials with “MG Baltic”, take steps aimed at evaluating the explicability of the tax obligations accrued to the “Vilniaus prekyba” and compensating for the damages allegedly incurred by the state.

The corporate group “MG Baltic” representatives sought to get a hold on the Lithuanian Radio and Television Commission (hereinafter referred to as – LRTC). In 2013, after Edmundas Vaitiekūnas was appointed as the LRTC chairman, “MG Baltic“ representatives, by maintaining informal relations with him and receiving from him inside LRTC information, were aiming at the corporate-group-managed media obtaining a competitive advantage and weight.

The Committee received a written testimonial of D. Kreivys “that “MG Baltic” representatives, as regards the tennis complex funding, sought to influence the Minister of Economy D. Kreivys, exerted constant and long-term pressure on him; however, he did not take any actions for the tennis complex to be 100 % funded from public sources. It was requested that the project make the list of objects that are funded with EU foundations funds; however, under the acting descriptions and procedures, did not meet the said conditions, wherefore the said funds were not assigned for the development.“

Corporate group “MG Baltic” representatives, by maintaining informal contacts with member of the Competition Council Elonas Šatas, sought to use his influence in 2014, when the Competition Council was resolving issues related to the sale of AB “Alita“ shares to company AB “Mineraliniai vandenys“ managed by corporate group “MG Baltic“.

In the 2009 – 2016 period, corporate group “MG Baltic“ representatives, aiming to strengthen their influence in law-enforcement authorities, collected information about the ongoing processes in the General Prosecutor’s Office and other law-enforcement authorities, organized meetings with prosecutor’s office representatives, maintained contacts with the Vilnius Regional Prosecutor’s Office and the Kaunas Regional Prosecutor’s Office. Some officials, after working in the law-enforcement authorities, were employed in the companies of the “MG Baltic” corporate group: Aurelijus Racevičius (former head of Interpol National Central Bureau of Lithuania), Nerijus Zulonas (former head of the Vilnius County Subdivision of the Financial Crime Investigation Service), Ramutis Jancevičius (former head of the Vilnius Regional Prosecutor’s Office). By co-operating with N. Zulonas, “MG Baltic” representative R. Kurlianskis sought to receive classified information from him. T. Dapkus used to maintain constant contact with Raimondas Petrauskas, who headed the Department of State Accusation of the General Prosecutor’s Office at that time, inform R. Petrauskas about the upcoming media publications, while R. Petraukas, in his turn, used to provide T. Dapkus with information about the situation in the General Prosecutor’s Office. Corporate group’s representatives maintained contacts with the then chief prosecutor of the Kaunas Regional Prosecutor’s Office K. Betingis – an investigation on the A. Gureckis application on fraud in the “Mitnija” company was being carried out in the Kaunas Regional Prosecutor’s Office at that time.

In October 2015, corporate group “MG Baltic” manager D. Mockus, at the meeting with the then chief prosecutor of the Vilnius Regional Prosecutor’s Office R. Jancevičius, sought to influence the prosecutor’s office’s decisions related to the real estate project “Quays of Užupys“ developed by “MG valda“ as the Užupys community, protesting against the designed number of floors, went to the Vilnius Regional Prosecutor’s Office. On 7 December 2015, article “Period put to the history of quays of Užupys” showed up, stating that the Vilnius Regional Prosecutor’s Office, having carried out the investigation, refused to go to the court in respect of the legality of this construction project.

In February 2016, at the request from “VP Market” group’s representatives, negative information about the former general director deputy Darius Raulušaitis, who temporarily headed the General Prosecutor’s Office during the period of the pre-trial investigation into “VP Market” managers’ activity, was published on the web-portal administered by “MG Baltic”.

In his explanations given at the Committee’s hearing (16 May 2018), representative of the media group managed by “MG Baltic” T. Dapkus argued that the information provided in the SSD certificate, which had made the news, was defamatory, an attempt to ‘take care of’ him as of a journalist by way of disclosing his information sources. When communicating with politicians and officials, he collected information for his journalistic activity. His activity in question covers the period from 2005, although he has been working in the media group managed by “MG Baltic” since 2012. T. Dapkus refused to answer some of the questions provided, stating that he could not reveal the information sources.

On the activity of UAB Vilniaus prekyba. On 28 June 2007, the Seimas of the Republic of Lithuania adopted the Law of the Republic of Lithuania on the Nuclear Power Plant, establishing the new provisions of implementing of the nuclear power plant’s project and created legal, financial and organizational opportunities for implementing the new nuclear power plant’s project.

On 29 April 2008, the then Minister of Economy Vytas Navickas, acting under resolution of the Government No. 331 of 15 April 2008, signed, on behalf of the Republic of Lithuania, a Contract with private limited liability company “NDX energija” on Creating the National Investor. Para 2 thereof sets out that the contract’s object is to create the national investor through founding LEO LT and consolidating public limited liability companies “Lietuvos energija”, “Rytų skirstomieji tinklai“ (Eastern Distribution Networks) and “Vakarų skirstomieji tinklai“ (Western Distribution Networks) into a national investor companies group, in which LEO LT would act as a company patronized by this group and the Republic of Lithuania would own more than 1/2 shares and votes at the general meeting of LEO LT shareholders. On 20 May 2008, LEO LT, AB was registered in the register of legal entities.

For the new nuclear power plant project implementation purposes, Art. 10 of the Law of the Nuclear Power Plant provided for the national investor – company “Lietuvos energija”, which displayed private initiative to invest into the project.

On 2 March 2009, the Constitutional Court admitted that Art. 8 (1) of the said law, as regards the non-establishing of any legal regulation to ensure the achievement of the objective of the law – laying the groundwork for the construction of the new nuclear power plant, contradicts Art. 46 (3) of the Constitution of the Republic of Lithuania. The Constitutional Court pointed out that the law does not establish any principles to ensure effective representation of the state as of the share manager in achieving the objective of the law – laying the groundwork for the construction of the new nuclear power plant, – which must be observed as regards the selection of persons to represent the state shares in this company. Furthermore, the way of organizing the management (for exercising by the national investor’s shareholders of their property and non-property rights) for collecting funds for the construction of the nuclear power plant has not been yet established as well.

The Constitutional Court stated that the law had failed to lay the financial groundwork for achieving the objective of the law – laying the groundwork for the construction of the new nuclear power plant, thereby refusing to comply with the requirement to regulate the economic activity so that it serves the purpose of the nation’s well-being imposed on the state by Art. 46 (3) of the Constitution.

Taking this into consideration, the Constitutional Court concluded that Art. 8 (1) of the Law on the Nuclear Power Plant, as regards the non-establishing of any legal regulation to ensure the achievement of the objective of the law – laying the groundwork for the construction of the new nuclear power plant, – contradicts Art. 46 (3) of the Constitution of the Republic of Lithuania.

The Committee received information that LEO LT project had been implemented in a non-transparent manner; in the 2006-2007 period, corporate group “Vilniaus prekyba” shareholders and managers, seeking to implement the LEO LT project and, therefore, seize the main companies in the Lithuanian energy sector, sought to compromise, bribe or otherwise affect the politicians, heads of authorities and public figures who disapproved or resisted to this project. By using its significant influence in the retail trade and other economy sectors of the country, corporate group “Vilniaus prekyba“ sought to exert negative influence on other business groups whom this transaction was not favourable to. Corporate group “Vilniaus prekyba” was getting prepared for “the retaliatory measures” directed against business groups and politicians resisting their idea. For example, the possibility to compromise the member of the Seimas <…>, who pro-actively called for examining the transparency of the prospective transaction, and <…>, who did not publicly approve the project. <…>, was contemplated.

Taking into consideration the information collected during the investigation, in the Committee’s opinion, it would be meaningful to evaluate anew whether a criminal act was committed and (or) damages were incurred on the Lithuanian state in relation to creating the national investor, if yes – take measures to compensate for it. In the Committee’s opinion, it is meaningful to request the General Prosecutor’s Office to assess whether a criminal act was committed and whether damages were incurred on the state in relation to creating the Independent Investor through establishing LEO LT.

In the Committee’s opinion, it would be meaningful to request the Energy Commission of the Seimas of the Republic of Lithuania to assess what damages the Lithuanian state incurred (or could incur) in relation to creating the Independent Investor through establishing LEO LT and the activity of this company and offer measures for these damages to be compensated for.

8.1.2.  The Committee states that:

Russian corporation “Rosatom”, by using, in the 2012-2013 period, company NUKEM, which it controls, sought to exert unlawful influence on state authorities, some politicians and (or) political processes, aiming to assure the Lithuanian power authorities’ approval to the strategic projects that are favourable to the Russian Federation: construction of the new nuclear power plants near the Lithuanian border, laying of electric power transmission junctures with the Kaliningrad region, wherethrough the electricity produced in the nuclear power plants under construction could be trade in, using of Kruonis Pumped Storage Plant in these projects.

“Rosatom“ plans of the end of 2012 – 2013 to take over the control over the Lithuanian electric energy system should be evaluated as an attempt to change the geopolitical direction of Lithuania. Taking this into consideration, the possibilities of NUKEM company, which has been under 100 % control of “Rosatom” since 2009, to participate in the Lithuanian energy projects should be strictly assessed in terms of national security, based on the provisions of the Law of the Republic of Lithuania on Enterprises and Facilities of Strategic Importance to National Security.

In pursuance of the “Rosatom” managers’ direction, persons who represented the interests of Russian corporation “Rosatom” and acted as its intermediaries in Lithuania, used to organize meetings with high-rank officials of the Republic of Lithuania with a view to receive approval to “Rosatom“ projects in Lithuania and in the region, aiming to change the Lithuanian energy geopolitical direction and pose threat to the national security. As they had failed to assure support of the Lithuanian authorities, “Rosatom” plans were not implemented. NUKEM company, which is managed by Russian corporation “Rosatom” and implements important Ignalina NPP decommissioning projects, was, at the same time, engaged in other activity: sought to organize meetings between high-rank officials of the Republic of Lithuania and “Rosatom” representatives, promoted the “Rosatom” interests in Lithuania and in the region that are different from the strategic interests of Lithuania provided for in the National Energy Independence Strategy.

Persons representing the interests of Russian corporation “Rosatom” and affiliated companies are planning to maintain influence in respect of the Ignalina NPP decommissioning project, having recourse to the most affluential business group in Lithuania – corporate group “MG Baltic“, which, by using its extensive ties in the political circles and the media group it controls, seeks to exert inappropriate influence on state authorities, politicians and (or) political processes.

As regards the Ignalina NPP decommissioning process, the interests of both corporate group “MG Baltic” and “Rosatom” are the same. Corporate-group-“MG Baltic”-managed company UAB “Mitnija” would assure long-term construction works, while “Rosatom” would be able to control the Ignalina NPP decommissioning process.

In 2002, corporate group “MG Baltic” managers, aiming to ensure financial gain and personal influence, drafted the long-term activity development strategy, which hitherto has been consistently implemented and must be seen not only as a business development strategy but also as the strategy of exerting non-transparent influence on state authorities (including law-enforcement authorities), politicians, political parties and political processes.

After establishing a political party closely associated with corporate group “MG Baltic” managers – Liberal Movement of Lithuania, – with under 10 years, corporate group “MG Baltic” has become the most influential business and influence group in Lithuania. This was pre-determined by the value of the managed assets; wide range of business interests; control over the influential media group; close ties with the political system and influence on certain political parties; using of contacts and exerting of influence in respect of adopting political decisions that are favourable for their business development.

“MG Baltic“ managers, either directly or through intermediaries, sought to influence particular members of the Seimas, ministers, heads of ministries and other state institutions as well as state-managed enterprises acting in the sphere of their regulation, and public officials.

“MG Baltic“ representatives’ actions aimed at exerting inappropriate influence not only on individual politicians but also on political processes and making impact on law-enforcement and other controlling authorities shall be assessed as modus operandi of this business group.

“MG Baltic“ representatives, aiming to provide the corporate group’s companies with profitable public orders, exerted influence on the decision-making of state authorities and state-managed companies in relation to public procurements. Engaging the party which is closely associated with the corporate group’s managers and the ministers delegated by this party was aimed at winning high-value public procurement tenders in relation to the construction projects supervised by the ministries of transport and communications, healthcare, education and science, justice and economy as well as construction projects supervised by institutions and enterprises which are subordinate to them.

In the estimation of the Committee, the scheme of actions in the transport sector drafted by corporate group “MG Baltic” and LML representatives, which turned out to be especially effective, allowed creating exclusive business conditions for the corporate group. Corporate-group-owned company “Mitnija“ and partners, in the 2009-2013 period, won construction works procurement tenders organized by AB “Lietuvos geležinkeliai“ (Lithuanian Railways) alone for total value more than 1 bln litas (which made about 10 % of all public procurements of AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”)).

The “MG Baltic“ representatives’ modus operandi was applied not only to competitors but also to politicians, public officials and officers who were unfavourable to the corporate group and was purposefully aimed at enhancing the non-transparent influence of the corporate group’s managers in the country.

Specific state authorities could be assessed as de facto seized. This statement is proven by the cases when business groups, in order to resolve the problems encountered, reached out to corporate group “MG Baltic”.

Such activity of corporate group “MG Baltic” poses threat to the state structure as: (1) political decisions are being de facto adopted by an unaccountable group of persons; (2) political influence has become something you can buy; (3) when required by the corporate group’s interests, the media under its control is used as a tool of pressure and manipulation. Possible effect of such activity – façade democracy with the rule of money and informal networks of influence.

The long-term systematic implementation of the corporate group “MG Baltic” strategy, taking into account the scale of operation of the “MG Baltic” representatives, may be evaluated as destructive activity capable of destabilizing the state structure and the democratic political system, wherefore posing threat to the public interests and national security.

The Committee established that “MG Baltic” representatives, on a constant basis, maintained contacts with a former KGB agent and other persons whose represented companies seek to change the geopolitical direction of Lithuania. The Committee has data that Rosatom and Corporate Group MB Baltic are aiming to receive especially high-value long-term orders in relation to the strategic projects of Lithuania, wherefore this may pose threat to the public interests.

In the Committee’s opinion, one of the corporate group’s management’s activity lines was and still is – exerting systematic inappropriate influence on state and municipal authorities, politicians, public officials and officers; using this influence in order to ensure the received information management, non-transparent participation in the state-announced public procurements, inappropriate influence on the heads of the law-enforcement authorities as well as controlling and supervising state and municipal authorities, and non-transparent contacts with media. The corporate group drafted the strategy on how to organize and develop its activity and influence, which has been consistenly implemented since 2002.

In the Committee’s opinion, this strategy is aimed not at the business developing but rather at extracting as much private corporate group’s managers’ profit as possible, developing inappropriate influence with the use of the methods which are inconsistent with the legal norms, wherefore exerting of inappropriate influence shall be deemed to be the source of the corporate group’s wealth as well as consistent and constant increasing of the corporate group’s domination.

The Committee established that the corporate group’s representatives, on a constant basis, maintained contacts with a former KGB agent of the USSR and/or LSSR as well as with other persons who represent companies which seek to change the geopolitical direction of Lithuania. The Committee has data that Rosatom and the corporate group seek to receive especially high-value long-term orders in relation to the strategic projects of the Republic of Lithuania (e.g., “Rosatom” and Corporate Group “MB Baltic” are bound by common purpose to receive especially high-cost long-term orders in relation to the decommissioning of the Ignalina NPP), wherefore this may pose threat to the public interests of Lithuania.

The corporate group’s management, acting independently and using the corporate group’s funds, consistently developed the activity aimed at ensuring, by unlawful methods, permanent support of state and municipal politicians, heads of state and municipal enterprises, heads of state-managed limited liability companies, created a corruption-and-inappropriate-influence-based scheme of influence aimed at supporting, on the state and local municipal levels, decisions that are favourable to it. The Committee’s materials make it clear that the given group of persons used this influence for profit extracting purposes, providing fee-based services based on the mentioned inappropriate influence on other business entities, and did it systematically, having mutually distributed the roles and aiming to receive personal gain. According to the information received by the Committee, it is reported that the influence was the object of trade in respect of rendering assistance to other business groups and receiving direct material and other gain, which was not necessarily given to the corporate group as to a legal entity but went directly to its management, personally.

This allows us to presume that the group consisting of several persons who agreed in advance has been, for a long time, carrying out the activity which, actually, meets the signs of organized criminal group’s activity and used and is still using the corporate group’s infrastructure and funds as tools for its unlawful acting. In such a manner, exerting inappropriate influence in itself has become personal business and source of wealth of the corporate group’s managers.

It is particularly disturbing that the given group of persons, by exerting inappropriate influence on/through the politicians, officials, state enterprises’ employees, managers, represented and, according to the available Committee’s data, is still representing not only its own interests but also the interests of other companies, including “Rosatom“. The major part of these interests is related to the efforts to change the geopolitical direction of the Republic of Lithuania.

The Committee received information that such kind of projects as the projects in relation to the Ignalina NPP s decommissioning can be implemented at least by 46 companies from Europe, USA, Japan, for which reason, for the purposes of ensuring the national security interests, it would be meaningful to recommend the Government of the Republic of Lithuania to look for the contractors that match the Euro-Atlantic security criteria.

Considering that both Russian energy company “Rosatom” and corporate group’s activity is based on exerting inappropriate influence on state authorities and that both companies, in a non-transparent manner, seek to exert influence on political processes, and that the “Rosatom” goals to prevail in the energy sector of the region are incompatible with the goal of the Republic of Lithuania to ensure the energy independence from the Russian Federation, the Committee thinks that such relations posed and are still posing direct threat to the national security of the Republic of Lithuania.

8.1.3.  Committee’s conclusion:

Maintaining contacts with the persons able to pose threat to the public interests, representatives of Russian state corporation “Rosatom” and “Rosatom”-managed company NUKEM, was aimed at exerting inappropriate influence on state authorities in respect of adopting decisions or unlawful impact on certain politicians and (or) political processes.

The activity of corporate group “MG Baltic”, which is the most influential Lithuanian company, as well as the activity of owners and representatives of the companies established during the parliamentary investigation, aimed at exerting and exerting inappropriate influence on the political system as well as decisions adopted by state authorities and unlawful impact on certain politicians and political processes, poses threat to the democratic state management and national security.

8.2.   To establish whether there were any cases of funding of political parties or individual politicians able to jeopardize the public interests by exerting inappropriate influence on state authorities in respect of adopting decisions or unlawful impact on politicians and (or) political processes.

  • The Committee established:

The Constitutional Court has repeatedly stated that, in a constitutional democracy, special requirements are raised to the formation of political representative institutions. These institutions cannot be formed in a way that raises doubts as to their legitimacy, legality, inter alia, as to whether the principles of democratic law-governed state were violated when electing persons to the political representative institutions. Otherwise, the people’s trust in the representative democracy, state authorities, state itself would be undermined. Democratic elections are an important form of the citizens’ participation in the state management and, at the same time, a mandatory element of the formation of the state political representative institutions. Elections cannot be deemed to be democratic and their results – legitimate and lawful, if they are held in disregard of the principles of democratic elections envisioned in the Constitution, in violation of the democratic elections procedures (conclusion of the Constitutional Court of 5 November 2004, resolution of 1 October 2008, conclusion of 7 November 2008, resolution of 9 November 2010, resolution of 29 March 2012, conclusion of 26 January 2012). The Constitutional Court, in its resolution of 9 November 2010, stated that, as established in the Constitution, elections shall be deemed to be acceptable when the race for the mandate is carried out freely and in good faith, when the electorate has the right and the real possibility to choose from several candidates, when the voters, during the voting, may express their will freely and without being under control. The formation of a political representative institution shall be subject to the transparency and accessibility requirements.

The Law of the Republic of Lithuania on Funding of, and Control Over the Funding of Political Parties and Political Campaigns, which had been in effect up to 1 January 2012, allowed legal entities to make donations to political parties and political campaign participants. The law was amended over the alleged dependence of political parties on the donations from the legal entities and with a view to encourage politicians and political parties to compete in ideas more. There have been cases when interest groups funded, through different affiliated companies and organizations, political parties in disregard of the provided maximum allowed donation limits.

The Committee assessing the funding of the Lithuanian political parties and possible threats to the public interests received data that the legal regulation, which had been in effect up to 1 January 2012, allowed funding Lithuanian political parties and politicians by legal entities registered in the Republic of Lithuania which, by their activity, nature thereof or capital origin are associated with foreign (registered in other countries) entities which allegedly pose threat to the interests of Lithuania.

In Lithuania, the interests of this business group (primarily, in the oil chemistry sector; however, also in the AB “Mažeikių nafta“ case when “Baltic Holding“ vied for its management) were mostly represented by former leader of the Labour Party V. Uspaskich. However, this business group in general, according to the data received by the State Security Department, has always put and is still putting a particular emphasis on corporate ties and has always invested and is still investing a lot of funds into this, factually seeking to ingratiate itself with wide range politicians and public officials (especially in the Government, Ministry of Economy and Ministry of Environment) in respect of adopting decisions relevant to the business group.

Before the elections to the Seimas of 2004, together with the “Petrochemical Holding” business group (note: according to R. Juknevičienė and L. Kaščiūnas, they have become affiliated only since 2006), the Lithuanian companies had funded various political actors and candidates, not only the Labour Party. For example, according to the official data, UAB “Nemuno bangos grupė“ (which was afterwards reorganized into UAB “Neo Group“ and UAB “NB Europe“), before the elections to the Seimas of 2004, had provided A. Vazbys (Homeland Union), A. Kubilius (Homeland Union), P. Grecevičius (Homeland Union), R.J Dagys (Homeland Union) with LTL 21 000 support each; V. V. Martinkaitienė (Labour Party) got LTL 3 000 support.

During the electoral campaign to the Seimas, the Labour Party officially declared that it had paid to UAB “Švenčionių vaistažolės“, which is associated with D. Buriak, for various provided services (advertising, event management, installations lease and etc.), approximately LTL 80 000. LTL 30 000 more was paid to this company by the candidates then delegated by the Labour Party (with each paying sums ranging between several hundreds and several thousands litas): S. Bajeričius, A. Bosas, V. Bukauskas, G. Bužinskas, V. Domarkas, G.J. Furmanavičius, V. Gedvilas, L. Graužinienė, A. Ivanauskas, J. Jagminas, E. Karpickienė, V. Prunskienė, M. Subačius, R. Šatkauskas.

The Labour Party declared to have paid LTL 20 000 for the services provided by UAB “Forumo rūmai“ during the agitation campaign of the elections to the Seimas of 2004. It is not unthinkable that, in such a manner, the given companies, whom the politicians or political parties claim to have paid for the provided services to, are just laundering a part of their funds. This, in its turn, shows close relations between those political actors and business groups.

The Committee has information that UAB “Dujotekana”, which trades in the Russian state-owned gas company “Gazprom”-supplied gas in Lithuania, spent LTL 550 000 on different political campaigns in 2004. UAB ”Dujotekana“, either directly or through a company managed by its main shareholder, in 2004, provided to Social Democratic Party of Lithuania; Homeland Union; New Union, Electoral Action of Poles in Lithuania LTL 37 500 each; to Lithuanian Farmers and New Democracy Union – LTL 50 000; to Vilija Blinkevičiūtė – LTL 100 000; to Kazimira Danutė Prunskienė – LTL 30 000. In the 2006-2011 period, UAB “Dujotekana” devoted LTL 57 500 to the Civil Democratic Party and supported public institutions associated with the politicians, e.g., public institution “Institute of Democratic Politics” (VšĮ “Demokratinės politikos institutas“), funded the media.

Since 1 January 2012, after the Seimas amended the Law of the Republic of Lithuania on Funding of, and Control over the Funding of Political Parties and Political Campaigns, it has been prohibited for the legal entities to make donations to political parties and political campaign participants in Lithuania. However, the committee has data about the interests of persons, business entities and other interest groups in respect of supporting individual politicians or political parties as well as about the methods used in order to fund, unlawfully or in a non-transparent manner, political parties.

The established cases opened up opportunities for individual politicians or political parties to obtain advantages over other politicians or political parties as well as opportunities for their backers, either lawful or unlawful, to exert inappropriate influence or impact on the decision-making and political processes. The Committee distinguished the main problems which, due to the systematicity and the inappropriate nature of the influence of concerned persons on state authorities in respect of adopting decisions or unlawful impact on politicians and (or) political processes, may pose threat to the public interests:

  1. Non-transparent and unlawful funding of political parties;
  2. Unlawful and uncontrolled lobbying;
  3. Uncontrolled public and private interests;
  4. Non-transparent and biased part of media.

Non-transparent and unlawful funding of political parties. Notwithstanding the prohibition for legal entities to fund political parties and political campaigns, which came into effect on 1 January 2012, the concerned business groups, individual businessmen, politicians and even media owners sought to circumvent this prohibition; they also took advantage of the inefficient system of control over funding of political parties and political campaigns. Business representatives, aiming to receive exclusive conditions for their activity, are prepared to support, in various forms, political parties or individual politicians that would like to get additional funding, thereby getting the possibility to influence the decision-making. The following forms of non-transparent and unlawful funding of political parties shall be distinguished:

Support in cash. There are cases when political parties’ representatives request or demand legal entities to give them support in cash as well as cases when the support is offered by business representatives themselves. The Committee was provided with information about the goals of the representatives of interest groups and about their inclination to provide financial support to political parties. For example, about the arranged regular meetings of the representatives of interest groups in which politicians and political parties’ leaders participate. At the meetings, ways and conditions of providing financial support to a political party or its individual members, even specific amounts of money for the political party or its influential members are discussed; requirements are raised by the representatives of interest groups to the politicians in respect of specific political decisions to be adopted; legal acts drafts and other issues are considered, e.g., persons who must take certain positions in the state sector or extension of their terms are communicated.

The financial support to political parties is often provided in exchange for satisfying the interest groups’ demands in respect of businesses’ specific interests in the public procurement or investment projects sphere. Most typically, legal entities use, for providing financial support to political parties and political campaigns, money which is not reflected in the official accounting records, i.e. ‘shadow’ money, which the political parties do not record on the books as well.

Support in the form of discounts. Political parties, aiming to become identifiable, use the available funds to publicly advertise their activity or ideas. Public advertising services are provided by the business which often provides political parties with improperly big discounts, thereby funding a part of the services. Managers of certain mass media organizations or representatives thereof apply, as a concealed form of supporting political parties, politicians, specific pre-agreed financial discounts for political advertising in the mass media or discounts for the airtime. The politicians who received discounts also undertake to satisfy the interests of the interest groups, adopt decisions that are necessary for the influence groups and satisfy the needs of the interest groups. For example, in 2017, a mass media organization published information, stating that the officials suspected that some political party had received discounts for the broadcasted political advertising.

Support through funding a supporting fund. It is not uncommon that the funds of the legal entities which are donated to the legal entities associated with the representatives of political parties and having the status of a funding recipient are used for funding a political party. The Committee was provided with the analysis of financial flows of the public institution associated with the politicians, which enables to conclude that the public institution having the status of a funding recipient, in fact, had not carried out any activity at all; however, less than one month prior to the beginning of the electoral campaign, the funds transferred to the public institution’s account (tens of thousands of litas had been transferred) were used to pay for the lease, events (musical performers), food, publishing, T-shirts and badges production and similar services typical for the political party advertising activity. In some specific cases, not only the leaders of interest business groups and political parties but also the managers of certain mass media organisations participated in the agreements of interest groups and political parties to support a political party through legal entities which have the status of a funding recipient. According to the Committee, this could have been related to the especially non-transparent use of funds intended for public advertising of the state authorities.

According to the data of the Committee, 46 members of the Seimas of the 2012-2016 term were in some or other way associated with public institutions, i.e. a legal entity having the status of a funding recipient. In total, 46 members of the Seimas were associated with 121 funding recipients, while 16 members of one of the political factions were associated with as many as 41 funding recipients. Such contacts between the politicians and the funding recipients may lay the groundwork for the manifestations of the said corruption mechanisms.

Support in the form of settling of accounts. It is not uncommon when a business (legal entity), having provided a service to a political party, does not receive any remuneration for it from the political party directly; however, the costs incurred by the legal entity are compensated by other legal entities which, either directly or through intermediaries, win public procurements organized the state authorities managed by the representatives delegated by the political party or which, representing their own interests, settle the accounts with the political parties through legal entities which have the status of a funding recipient and are associated with the representatives of those political parties. The Committee was provided with information and an illustrated cash flow chart showing that a major event of a political party, which cost tens of thousands of euros and during which exclusively political party’s and its leaders’ activity was made public, was paid for through the associated companies.

Support in the form of advertising political parties free of charge (hidden advertising). Political parties or individual politicians are supported in the form of hidden advertising of political parties or individual politicians, accentuating the positive role of the politician or the institutions he manages in exchange for adopting decisions favourable to the business. The Committee was provided with information on the way the media business group’s representatives negotiate with the political party representatives on discounts for political party advertising and publicity services in exchange for the decisions favourable to the corporate group.

Illegal and uncontrolled lobbying

Legal lobbyists and lawful activities they carry out are one of the elements of a mature democratic community. Lobbying is associated with the Constitutional right to participate in the state management; transparent lobbying is beneficial for the community and often conditions better legislation and national policy formation process; however, the official information allows stating that, in Lithuania, this legal institute is still not working properly. It was established that up to the middle of 2017, out of 38 officially registered lobbyists, only 12 had published information about their activities, while, after 1 September 2017, when the Law on Lobbying Activities in a new wording came into effect, 58 lobbyists were registered in total; however, not all of the lobbyists lodged declarations on the lobbying activity they had carried out.

Business entities are always in the constant search for and in the process of creating lobbying strategies allowing creating exclusive conditions for their business development, while the politicians, in their turn, rarely being aware of the extent of the operation of the business group, without digging too much into the possible consequences of their actions, initiate legal acts’ amendments or adopt decisions that are sometimes beneficial only to narrow interest groups. Research “Political Behind-the-Scene Stuff. (Non)-Transparency of Lobbying in Lithuania” conducted at the “Transparency International” Lithuanian Chapter’s request,[9] revealed the following political corruption distinctions:

  • 6 of 10 businessmen specified that it is the associations, registered lobbyists (52 %), professional unions (41 %) and enterprises (35 %) that tend to be aiming to exert influence in Lithuania;
  • 8 of 10 businessmen know cases when persons in a position of authority, when adopting decisions, sought to provide benefits to specific interest groups, without regard to the public interests;
  • Most typically, the influence on decision-making is sought to be exerted in the energy (81 %), construction (65 %), pharmacy and healthcare (48 %) sectors, alcoholic beverages (58 %) and tobacco (53 %) markets, while the interest groups representing these sectors are named as the most influential;
  • The majority of the businessmen are fully aware of the harm caused by unlawful lobbying: 68 % of the businessmen state that it is the citizens’ trust in the state that suffers the most from exerting of non-transparent influence on the decision-making; financial wealth of the citizens (66 %), national budget (64 %) and business and investment environment (64 %) suffer as well.

The unlawful lobbying case analysis shows that a person interested in a specific decision chooses several influence persons (members of the Seimas, heads of the state authorities), which often do not even know about each other’s initiatives to support and implement the interests of that specific person. The Committee was provided with information about the legal entity which, in pursuance of its business development interests in the municipal territory, sought to amend the provisions of the environmental law. The company, having influence in the municipality, acted through municipal managers, asking them to address the supervising ministry and initiate the law amendments that are supposedly necessary for the municipality but really for the business group. After the municipality-proposed law amendments did not get through, the business group, in an intensive manner, sought to influence separate members of the Government and of the Seimas. It was achieved that the officials who had evaluated the project negatively and had not upheld the law amendments necessary for the company be reassigned to another position. In the given situation, the business group acted through persons who had political influence and politicians who were unaware of the affected circle of persons, while the company interest was presented as a decision beneficial for the public interest.

Another case is related to the business group’s goal to influence the supervising ministry so as to make the territorial subdivision which is subordinate to it change its opinion and adopt the decision necessary for the business group. In this case, compromising of the decision-makers in media was considered; however, it was decided that the most effective way to achieve the desired result would be financial proposal to the persons able to influence the decision-making through the contacts of the political party representatives. Seeking to receive a favourable decision in another similar situation, the business group offers financial support for the formation of a positive politician’s image in the mass media in exchange for his influence on the local municipality in respect of adopting decisions that would be favourable to the business group.

It should be noted that, in some cases, decisions favourable to the business group were being discussed with the members of the Seimas who register or refuse to register drafts of legal acts favourable to the interest groups, proposals in their regard, or do not accept separate proposals if it is beneficial to the business group’s representatives. The Committee was provided with the examples of considering of the provisions of the laws drafts during the 2012-2016 term of the Seimas.

The Committee has also received, for the parliamentary investigation, information about the goal to influence the politicians of the Seimas and the municipality so that the decisions related to reorganizing the institutions that provide social services be adopted. This case is different in that the politicians belonging to different political parties represented in the Seimas, members of the Seimas met with the person interested in favourable decisions and, in his environment, agreed on the possible decisions, exerted influence on the municipal and executive power authorities. The actions of the members of the Seimas and of the municipal politicians were mutually coordinated; the politicians’ meetings with the persons were not made public, while the mutual contacts of the persons were not declared, although it was the issue of reorganizing of the provision of social services to the public.

In all the cases listed, certain opposition and governing majority members of the Seimas of this term participated in coordinating the non-transparent interests and lobbying. There are data that one of the politicians was sought to be influenced for a particular fee.

It should be noted that such cases of unlawful and non-transparent lobbying when influential groups of persons are formed in the country, i.e. persons which, in respect of the decisions they adopt, exert inappropriate influence on the state authorities both for personal enrichment, increasing the profit received by the managed companies, and for “trading” in the available influence while acting as an agent of other business or interest groups, pose threat to the national security.

Uncontrolled public and private interests

The Committee was provided with information about cases when business and state representatives relate to each other by various ties: they may have been studying, working or amusing leisure together; they may belong to the same political party or relate to each other by kinship, marriage ties and etc. The relation between the persons should not be evaluated as negative until and unless it implicates a conflict of interests.

Currently, in Lithuania, out of all the conflicts of public and private interests that are able to develop or that have already developed, only those conflicts are investigated which become publicly known. Unrevealed conflicts of interests where business or private interests are satisfied increase the risk of corruption and do harm to the state. It is observed that the business tends to seek to have as many links with the state authorities or politicians as possible. It is common for the businessmen to become politicians themselves; however, for the time being, no effective pro-active public and private interests control aimed at identifying possible conflicts of interests in advance and preventing adopting of the decisions that are unfavourable to the state is implemented in Lithuania, i.e. there is a lack of more responsible declaration of public and private interests and more pro-active and effective control over the data declared. Although the number of the persons obliged to declare private interests is ever increasing, there is practically no analysing of the data in the declarations of the latter and no studying of the validity and the sufficiency thereof.

It should be noted that the absence of effective declaration process monitoring and control, i.e. absence of pro-active control, was mentioned in the European Commission’s Anti-Corruption Expert Assessment as one of the substantial defects of the Lithuanian public and private interests coordination system as early as in 2014[10].

For example, pretty high level of nepotism expansion was established in 2017, following a kin relations analysis in the sphere of management of one of the ministries. The analysis results revealed that employees of that ministry and of 10 subordinate institutions implementing control and supervision over economic entities had kinship with 53 ministry-controlled companies and 5 ministry-controlled licenced associations.

An illustrative example of a conflict of interests as of the prerequisite for corruption manifestations and inflicting corruption-related harm on the state: interests and contacts of the former chairman of the supervisory council of one of the state-managed companies and influence thereof on the state enterprises. For example, after appointing a person bound with the corporate group by indirect business ties as the chairman of the supervisory council of a state enterprise, persons who used to be employed in an associated corporate group or their family members started to hold high-rank positions in the enterprise, while the value of the public procurements organized by the state enterprise or associated enterprises which this corporate group won has increased by 16 times (from tens to hundreds of millions of euros). In a similar manner, the same business group, within a period of 9 years, has won public procurement tenders organized by another state-managed company for total value of 10 mln euro; however, after appointing an associated person as a high-rank official in the state-managed company, the business group, in less than a year, won 5 mln euro worth public procurement tenders. The personal contacts analysis revealed that the person, either himself or through other persons, has interests in the companies associated with the interest business group, which he pulls strings for and which wins the tenders.

The Committee was provided with facts-and-analysis-based information illustrating the corporate group’s financial benefit resulting from the cooperation between the corporate group and a political party. Up to the moment when the favoured party’s representative was appointed as a minister, the business group had not participated in public procurement tenders implemented by state-managed companies operating in that sector. After appointing the minister, the business group has won public procurements organized by state-managed companies for the total value of 500 mln euros, of which 170 mln euros were procurements organized by the state-managed company whose manager’s staying in power issues had been discussed with the supervising company and other politicians and included into the list of business group’s requirements to the supported politicians. During the meeting of the business group’s representatives with the state institution’s manager, mutually beneficial co-operation was being agreed on.

Within the 2009-2012 period, the value of the public procurement tenders organized by the state enterprise and won by the business group’s companies made 32 % of all the tenders won by the corporate group’s companies in the whole public sector. Within the 2013–2017 period, the value of the public procurement tenders organized by the state and won by the business group’s companies made as much as 43 % of all the tenders won by the corporate group’s companies in the whole public sector.

Maintaining informal contacts between the controlling and controlled entities poses a risk of conflict of interests, too. Membership of public officials and interest business representatives in one of the hunters clubs may serve as an example of that. For example, employees who manage one of the ministries, its subordinate institutions, and who are responsible for the use of and supervision over the use of state resources are members of a hunters club. Interest business entities, shareholders and managers thereof are members of the same hunters club, too. This link between the hunters club members and the legal entity specified may pose a risk of conflict of interests where the interest business representatives hunt together with public officials able to provide them with more favourable business conditions. Membership of the members of the Seimas in hunters clubs may pre-requisite the appearance of informal contacts with business representatives who are members of those hunters clubs, too, thereby posing a risk of appearance of conflict of interests. During the 2016– 2020 term of the Seimas, 34 members of the Seimas are registered as hunters.

Conflicts of interests may be caused by the participation of the political parties in the businesses activity as well. It should be noted that 141 members of the Seimas of the 2016-2020 term, together with their spouses, are or were related to more than 930 legal entities, i.e. are or were members of their management bodies, shareholders, employees of these legal entities.

Role of non-transparent and biased media

The main expectation of the community is that the information provided by the media is objective. Strong investigative journalism is deemed to be an effective means of deterring corruption and revealing particular corruption cases; however, the available data speak that mass media organizations in Lithuania are closely associated with the business.

According to the traditional 2017 World Press Freedom Index published by Reporters Without Borders, Lithuania dropped to place 36 from last year’s place 37. It is reported that Lithuanian media is “known to be independent and able to freely criticize authority but not always the interests of large businesses”. Head of the Institute of Journalism of the Vilnius University, associate professor, doctor Deimantas Jastramskis, commenting on this situation, stated that the freedom of press is weakened by strong concentration of the media organizations property and the market part – television, radio, newspapers, partly Internet – and by the fact that the media is managed by big businesses which are well-established in the other business spheres, too. Non-transparent transactions between the politicians and the big business which manages media decimates the freedom of press even more. Last year, the situation with “MG Baltic” and “Lietuvos rytas” group was tragic in this respect[11]. The media transparency problematics is also illustrated by the data of the survey of businessmen carried out by the Transparency International Lithuania chapter[12]: absolute majority of businessmen surveyed believe in huge power of media in pre-determining persons’ or companies’ success: almost 62 % of those surveyed fully believe and more than 29 % tend to believe that unfavourable publications on media and broadcasts about a particular person or a company may destroy that person or company;

  • 54 % of those who had dealt with media representatives, confirmed to understand that journalists would draft a favourable publication about a company in exchange for ordering advertising services in media;
  • Most commonly, the respondents associated corruption in media with: “sponsored articles, publications” – almost 44 %; almost 21 % of those surveyed specified “biased, false, purposefully misrepresenting information“; and almost 14 % – “non-official representation of business and political groups by the media“.

During the parliamentary investigation, the Committee received data that the owners of the mass media could have directly used it as a means to satisfy personal or managed-business interests, increase personal influence and profit by exerting inappropriate influence on public institutions, politicians, political processes, sought to exert unlawful impact on law-enforcement or managed-business-controlling authorities.

For example, to summarize the results of the analysis of the support provided to AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”), we can make an assumption that a part of the support went to the organizations which specified, as their activity, sports and other activity without having any economic ground for that. A big part of this support (more than 1 mln euros) in 2014-2016 went to VŠĮ “Krepšinio rytas“.

Media bias is often pre-determined by the ambition of the governing business to win more orders in state authorities in respect of public advertising services orders. After receiving funding, media organisations tend to stop publishing negative information about that particular state authority. Media organisations may be used as a tool of exerting influence on the political system by offering free airtime on TV to a political party, providing discounts, ensuring visibility of specific members of the party on TV shows in exchange for a possibility to exert influence on the political system; mass media may be interpreted as a business of making the public sector representatives adopt the necessary decisions by making (or not making) public some specific negative information (either true or fabricated) about a particular person.

Large nation-wide mass media groups have a strong hold over the formation of public opinion. There are cases when business interest groups, political parties or owners of media organizations themselves, in a non-transparent manner, seek to use the mass media for achieving their objectives. The Committee was provided with information on the following cases of exerting inappropriate influence:

  • During a meeting between a representative of the political party governing in municipality and a business group representative, it is agreed that the municipality should raise conditions to the media group whereunder the municipality would support the media-group-patronized project in exchange for its favouritism to the party governing in the municipality or representatives thereof;
  • A media organization publishes fabricated information about a high-rank official, allegedly doing this in order to influence the decision-making by that person, bring his activity or activity of the state authority he represents into discredit;
  • During a meeting between media group’s representatives and heads of a ministry or an institution which is subordinate to this ministry, the possibility of receiving public advertising services orders in exchange for the refusal of exerting influence and publishing articles criticizing the activity of the ministry is discussed;
  • Possibilities of influencing law-enforcement authority’s decision-making in respect of the unlawful activity of the business manager in relation to implementing a EU-funded project are discussed with media group’s representatives;
  • During a conversation with a former state institution’s head, a representative of a media group demands to provide compromising information about the head of the supervising ministry. The minister-compromising-information was necessary for exerting influence by providing the ministry activity public advertising service;
  • A politician asks a media group’s representative to stop negative publications about the activity of the head of a state institution. The politician says that the head of the state institution would like to make a deal. The representative of the media group raises a condition that the head of the institution must order public advertising services;
  • During a conversation between a media group’s representative and a representative of a state-managed company, conditions upon the fulfilment of which the media would stop criticizing the head of that state-managed company are discussed. A condition is raised that the state-managed company must order public advertising services.

8.2.2.  The Committee states:

Business groups and politicians are looking for the ways of creating and are creating schemes of how to provide financial support to political parties or representatives thereof in circumvention of the prohibitions established in the legal acts. There exists a scheme whereby the influential business group agrees with certain political parties represented in the Seimas on the conditions, i.e. on the provision of financial or other support to the political party or representatives thereof in exchange for performing the requirements of the business group.

Political parties or representatives thereof, by accepting non-official (non-transparent, unaccounted, undeclared) financial support from the business groups, gain an unfair competitive advantage over other parties which compete in the political process in good faith. Therefore, the business groups which provide non-official financial support to political parties or representatives thereof “become entitled” to demand that the politicians adopt decisions necessary for the business group or, in abuse of their political position, influence other persons holding relevant state service positions. In such a manner, business groups which support political parties unofficially gain an unfair competitive advantage over the transparent and lawful businesses.

Non-official funding provided to political parties by business groups forms a non-transparent mechanism aimed at satisfying mutual interests, distorting political processes and harming democracy.

Business groups support political parties and individual influential political parties’ representatives (members of the Seimas, municipal councils) in a non-official manner in exchange for favourable decision-making:

  1. Provide political parties or influential politicians with financial support in the form of unaccounted money;
  2. Provide financial support to public institutions (supporting funds) founded by political parties or associated with them, which, having the status of a funding recipient, can accept funds from donators (including business entities, other private individuals and legal entities), which they use for political advertising;
  3. Defray expenses of political parties or individual influential representatives of political parties or politicians, applying various intermediate transactions (payments) schemes for this purpose;
  4. Business groups which manage media organizations apply unreasonably, disproportionally high discounts to political parties’ or individual politicians’ public advertising services;

The current legal regulation of lobbying activity and the practice on the supervision over the lobbying activity do not ensure transparency of the lobbying activity. By using these flaws, the business entities constantly look for and create lobbying strategies, exert influence on certain political parties, politicians, public officials of decision-making state authorities in respect of adopting decisions meeting the business interests. Therefore, the politicians, often not being aware of the extent of the lobbying activity of the business, not digging too much into the prospective consequences of their actions, initiate legal acts amendments or adopt decisions that are favourable only to narrow interest groups.

It is a commonplace when some leaders of political parties, members of the Seimas, politicians come to the business groups’ representatives or other influential businessmen and, in their environment or other informal environment, agree on the decisions needed by the business. Such meetings are neither made public nor anywhere declared. Business groups usually act through several politically influential persons with each one of them being unaware of the other politicians, state institutions’ heads or public officials engaged for this purpose, wherefore not having full information, not seeing the situation in its entirety; in such a manner, a decision designed to meet the business group’s interests is presented to politicians as an issue of importance to public interest (amending a legal act, voting in adopting a decision, appointing a person to a responsible office, granting permission and etc.).

During the investigation, it was established that the politicians often do not declare their public and private interests in declarations, do not announce in the agendas meetings with persons representing and promoting business interests, do not make statements about such meetings to the press. The content of the conversations during such meetings, requests of business-representing persons and their proposals to politicians or other high-rank public officials raise the possibility of arising of a conflict of interests.

The existing public and private interests’ declaration mechanism is not controlled pro-actively. This opens up opportunities to conceal the conflict of interests in public service. Concealed conflicts of interests, undisclosed contacts between politicians or other decision-makers with business entities pose risk of corruption, lay the groundwork for adopting decisions that meet the narrow interests of business entities and private individuals.

It is likely that, in Lithuania, there exist flexible, non-transparent mutual-interests-based contacts between politicians, business and media organisations. There are cases when some mass-media-managing business group, using non-transparent methods incompatible with the journalistic ethics:

  1. Uses media as a tool of access to state or municipal authorities’, state-managed companies’ decisions needed for the promoted clients and themselves;
  2. Favours certain political parties or representatives thereof in a form of granting free TV or radio airtime, providing unreasonable, disproportionally high discounts on political advertising, publishing biased publications in periodicals or web-portals, ensuring visibility of certain party members.
  3. Seeks to win as many orders for public advertising services of state authorities, state institutions and state-managed enterprises as possible.

There are cases where these goals are sought by way of spreading non-objective information, fictitious facts, tendentious compromising or blackmailing persons.

8.2.3.  Committee’s conclusion

The established cases of non-transparent and unlawful funding of certain political parties related to unlawful and uncontrolled lobbying activity violations and conflicts of public and private interests as well as to the interest of business groups which is to exert, using the controlled media organizations, inappropriate influence on state authorities in respect of adopting decisions or unlawful impact on politicians and (or) political processes pose threat to the public interests.

8.3.   To establish whether there were cases posing threat to the public interests which, seeking to influence the situation in economy sectors that are of strategical importance to the national security, are aimed at exerting inappropriate influence on the decisions-making by state authorities or unlawful impact on politicians and (or) political processes.

  • The Committee established:

The Lithuanian companies which are of strategic importance to the national security have always been a target for the state corporations and special services which implement geopolitical ambitions of Russia. Some strategic companies of Lithuania remain closely associated with Russia, both in respect of inherited infrastructure, equipment used and those companies’ staff contacts. Russian security and intelligence services, associated state corporations and business structures, by using favourable intermediaries in Lithuania, are looking for various ways of forging a bond with the employees of strategic companies of Lithuania, aiming to exert influence on strategic economy sectors as well as economic and political processes in Lithuania.

The Lithuanian intelligence services always warn the decision-makers about the Russian geopolitical interests, which are planned to be achieved through various economy projects, especially in the strategic sectors of transport and energy.

The National Security and Defence Committee of the Seimas, as early as in May 2017, in the exercise of the parliamentary control, considered the situation in certain state enterprises which are of strategic importance to the national security and paid attention that the existing legal regulation fails to ensure that some decisions adopted in the companies of strategic importance in respect of purchasing equipment of importance to the national security and maintenance thereof meet the public interests.

During this parliamentary investigation, the Committee considered the cases where, seeking to influence the situation in the economy sectors of strategic importance to the national security, inappropriate influence on the state authorities’ decision-making could have been exerted:

  • The case of VĮ “Ignalinos AE“ (state enterprise “Ignalina NPP”);
  • The case of AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”);
  • The case of state enterprise “Oro navigacija“.

The case of VĮ “Ignalinos AE“ (state enterprise “Ignalina NPP”). During the investigation, the Committee considered the issue of whether the influence had been exerted on the Lithuanian authorities and VĮ “Ignalinos AE“ in respect of decision-making in relation to the implementation of the nuclear power plant’s decommissioning projects.

The Committee established that, after Lithuania had adopted the decision to decommission the 1-st section of Ignalina Nuclear Power Plant (INPP), specific preparation works related to the 1st section’s decommissioning had been started: a number of preliminary studies had been carried out, possible costs for the whole INPP decommissioning had been estimated, General Contract between the Republic of Lithuania and the European Bank for Reconstruction and Development (hereinafter referred to as – EBRD) had been signed on 5 April 2001. As early as in June 2000, Vilnius hosted a conference between the donor countries of the Ignalina International Support Fund (IIDSF), ministries of Lithuania, EBRD and INPP representatives during which the INPP decommissioning funding issues were being resolved and a lot of projects were being discussed.

At the early stage, there were two projects: “Temporary Used Nuclear Fuel Storage” (hereinafter referred to as – project B1) and “Solid Radioactive Waste Processing and Storage Complex” (hereinafter referred to as – project B2/3/4). Both tenders in relation to projects B1 and B2/3/4 were initiated in 2002, simultaneously; the information about them was published in the media.

The tender in relation to project B1 received 8 offers in total, of which 5 were dismissed; 3 participants, including corporate group’s consortium managed by “Atomstroyexport”, a company affiliated with Russian corporation “Rosatom”, were invited to participate in the second stage. On 28 July 2004, after the second cycle evaluations, German companies consortium GNB Gesselschaft für Nuklear-Behalter mbH – RWE NUKEM GmbH (hereinafter referred to as – GNS/NUKEM), which submitted a 165.1 mln euros worth offer, was announced as the winner. Inasmuch as the funds accumulated by TIENRF by that time were not enough to implement the project, the possibility to terminate the tender was considered; however, at the EBRD’s initiative, the scope of works provided for in the technical specification (primarily – the number of newly designed containers to be purchased) was decreased. The contract was signed on 12 January 2005.

The tender in relation to project B2/3/4 (Solid Radioactive Wastes Processing and Storage Complex) received 6 offers; 4 participants were invited to participate in the second stage, whereafter there were only 2 of them left. After the evaluation of the bids, it was established that the prices offered by both tender participants exceeded the TIENRF-approved sum of donation; other technical / commercial inconsistencies between the bids and the requirements laid down in the tender documents were established, too. On 21 February 2005, after both participants had renewed their bids, German company RWE NUKEM GmbH (hereinafter referred to as – NUKEM[13]) was announced as the winner.

Similarly to project B1, the final evaluation report was signed by the evaluation commission composed of 14 members which are Projects Management Group (hereinafter referred to as – PMG) advisers and INPP specialists; all EBRD approvals were received. The contract was signed on 01 December 2005.

Contracts drafts (Special Terms, annexes), as part of procurement documents set, were drafted by PMG advisers together with the specialists of the Procurement Department of the EBRD, being assisted by INPP specialists; projects were drafted on the basis of standard General Terms applied by the EBRD and taking into consideration the specific requirements to the EBRD-funded projects (i.e. applicable law – English law; contract’s language – English; only direct EBRD payment method is applied and etc.). Contracts drafts were drafted in accordance with the best available international practices (in 2001–2002, when the contracts drafts started to be drafted, the construction experience in respect of similar building complexes was very limited). The contracts were signed by the then general director of VĮ “Ignalinos atominė elektrinė“ (state enterprise “Ignalina Nuclear Power Plant“). Afterwards, both contracts were amended to extend the project implementation time frames and to increase the funding.

It is specified in the report on the public audit performed by the state control in 2009 “Using of Funds Intended for the Decommissioning of the Ignalina Nuclear Power Plant” that, in accordance with the Seimas-ratified “General Treaty on the Activity of the International Foundation Funding the Decommissioning of the INPP” concluded by the Republic of Lithuania and EBRD in 2001, the EBRD acts on behalf of TIENRF as the administrator of the foundation’s funds and assumes no liability for the proper application of funds, while the responsibility in relation to projects implementation goes to the institutions of the Republic of Lithuania, although they do not administer the funds intended for the implementation of these projects.

One of the most important projects for the whole decommissioning process, i.e. project B1, was started to be implemented without having the funds needed for this project. For the international public procurement announcement purposes in relation to project B1, TIENRF had collected approximately 80 mln euros, while the price offered by the tender winner – GNS/NUKEM corsortium – was 165 mln euros initially and 171.6 mln euros – after signing the contract which was signed after holding additional negotiations (State Control audit report, para 21, 28). While the approval by donor countries of the project funding in a bigger amount was pending, it was decided that the project contract’s price wold consist of two parts: initial (constant) part in amount of 92.7 mln euros and additional (optional) part which depended on the period in which the containers would be purchased. Inasmuch as the procurement of 163 special containers was approved on 31 July 2006, which was provided for in the contract as the third option, the contractual price in amount of 171.6 mln euros was chosen, which was afterwards increased due to the delayed project co-ordination with the Lithuanian institutions in relation to the receipt of the required permissions.

In the Committee’s evaluation, in such a manner, the contract concluded under the English law stipulated the possibility for the contractor to make demands for additional funding. According to the Committee’s data, the VĮ “Ignalinos atominė elektrinė“ (SE “Ignalina Nuclear Power Plant”) contract with the contractor (GNS/NUKEM consortium) on the implementation of project B1 was signed without being considered on the VĮ “Ignalinos atominė elektrinė“ (Ignalina Nuclear Power Plant) board’s level and without its approval. Secretary of the Ministry of Economy Artūras Dainius, who was holding office of the INPP board’s chairman at that time, when giving testimony during the pre-trial investigation carried out by the Vilnius Regional Prosecutor’s Office, explained it this way: “he knew that the issue of signing this transaction was not considered in the board; however, after the information was made public, it would be illogical to convene a board’s meeting and approve the actions which have been already committed; it would also be illogical for the board to cancel this transaction. The decision on this transaction was seemingly fully understandable, acceptable, just and necessary. This understanding found place not on the level of a specific company or institution; such understanding found place on the level of state authorities” (Vilnius Regional Prosecutor’s Office’s Organized Crime and Corruption Department’s Prosecutor’s resolution of 01 August 2012 to terminate the pre-trial investigation).

  1. Ševaldinas, who, at the time of signing the contract, was holding office of the SE INPP general director, when giving testimony during the pre-trial investigation carried out by the Vilnius Regional Prosecutor’s Office, stated: “The EBRD and the Ministry of Economy carried out independent contract reviews and approved it for signing. The Lithuanian Government, by a resolution, directed him to sign the contract with company GNB on project B1 as well as documents with EBRD on funding conditions. Before signing the contract with the GNS/NUKEM consortium on project B1, he spoke with A. Dainius asking whether any other documents, permissions were necessary for signing the contract. A. Dainius said that the powers to sign the contract had been delegated to him, V. Ševaldinas, by the Government’s resolution and that no other formalities were needed; the contract could be signed. The Committee points out that no document authorizing the Ignalina NPP general director to sign the contract was registered in the Legal Acts’ Register.

According to the data of the audit performed by the state control, by November 2009, the factual implementation of project B1 was 31 months (2.5 years), of project B2 – 36 months (3 years) and project B3/4 – 22 months (1.8 years) behind the set schedule. In the first six months of 2002-2009, the price of project B1 increased to 171.6 mln euros (factual contract price) from 80.5 mln euros (estimated contract price), and, after signing the last addition to the contract, the price increased to 193.5 mln euros; the price of project B2/3/4 increased to 120.1 mln euros (factual contract price) from 72.4 mln euros (estimated contract price) and, after signing the last addition to the contract, the price increased to 122.5 mln euros (state control’s audit report, para 4-5).

Former vice-minister of energy Romas Švedas, in his explanations given at the Committee’s hearing (07 March 2018), argued that, after being appointed as the vice-minister of energy in 2009, he was appointed as the Ignalina NPP board’s chairman and started supervising the Ignalina NPP projects issues (before then, it was A. Dainius, state secretary of the Ministry of Economy, who had been in charge of these issues). At that time, the Ignalina NPP decommissioning project was the biggest one; it was about 3 bln euros worth, – therefore, great power of attraction was being felt. According to the projects funding scheme, the EBRD pays funds to the client who, in his turn, settles accounts with the contractor. He quickly noticed that, although the money is paid, both important projects (B1 and B2/3/4) are very delayed, while the Ignalina NPP management maintains no diligent supervision. After the substitution of the Ignalina NPP’s manager V. Ševaldinas, issues of why the money is being paid for non-performed works started to be raised. After deciding to stop paying money for non-performed works, a big conflict with contractor “NUKEM” occurred. Surprisingly to the Lithuanian party, the European Commission and the EBRD took the stand of NUKEM in this conflict and strongly urged not to turn on each other. According to R. Švedas, the NUKEM domination was legally entrenched in the signed contracts. Strong lobbying of the contractor as well as signals from the European Commission and the EBRD to pay to the contractors under the signed contracts but not according to the works performed were being felt. R. Švedas directed the Committee’s attention to the fact that it was mainly the Germans who worked with the Ignalina NPP projects (in the European Commission, EBRD and NUKEM) with the majority of them having graduated from the same high schools in Saint-Petersburg (Politechnical University and Konstantinov Institute of Nuclear Physics) and knowing Russian. Having understood that he had no levers to reverse the situation, R. R. Švedas vacated the office of the vice-minister of energy (6 September 2011). Other key aspect – during the conflict with NUKEM, media began intensively hitting at the new Ignalina NPP manager Osvaldas Čiukšys (quotation: “KK2 journalists are on duty by the doors of the general director; when he goes to work, they follow him, filming him, driving after him“).

Former minister of energy Arvydas Sekmokas, when giving explanations at the Committee’s hearing (14 March 2018), stated that there were two main reasons of the projects delay: NUKEM not really sought to perform its obligations assumed under the contract; the second reason – the Ignalina NPP administration lacked demanding of the contracts to be performed. These problems were discussed with vice-minister R. Švedas and prime-minister A. Kubilius. It was decided to substitute the company manager. The Ministry-established selection board selected O. Čiukšys as the new general director of the Ignalina NPP out of three candidates (on 3 March 2010). After these changes, LNK television began broadcasting TV programmes compromising O. Čiukšys, which was the first sign of the existence of certain risks. Then A. Sekmokas received oral information from the SIS that corporate group “MG Baltic” was trying to exert influence in respect of the Ignalina NPP decommissioning projects. Reportedly, corporate group’s vice-president R. Raulynaitis with one of the “MG Baltic” female employees went to Ignalina, visited the object and met with O. Čiukšys. Two weeks later or so, that woman was employed at the Ignalina NPP (appointed to the position related to public procurements). According to the information orally provided to A. Sekmokas by the SIS, this related to the interests of “MG Baltic”-owned construction company “Mitnija”. At the time, he requested vice-minister R. Švedas that that woman be immediately dismissed; however, the dismissal process took a good deal of time (he did not receive any information about the dismissal for a month or more). After the lapse of several weeks after her dismissal, in a café, A. Sekmokas was approached by a person who claimed to be R. Raulynaitis and asked why he had dismissed such a good employee. A. Sekmokas went away not saying a thing. Some time later, during an official event in the Presidential Palace of the Republic of Lithuania, he was approached by the same person, R. Raulynaitis, and “MG Baltic” manager D. Mockus, who displayed interest in why he had treated their company so badly. A. Sekmokas refused, again, to say a thing; however, he understood that as an attempt to exert pressure on him. As the conflict between the Ignalina NPP and contractor NUKEM kept unfolding, the possibility of whether to terminate the contract with NUKEM through resorting to lawyers was considered. Vice-minister R. Švedas informed him that he had sent a letter to the European Chamber of Auditors, requesting it to carry out an examination. However, the EU authorities exerted pressure demanding to agree with NUKEM, for which reason R. Švedas vacated the office. At about the same time, R. Sekmokas received a letter from Guenter Oettinger, a European Commission’s member in charge of the energy, in which he unambiguously calls him to agree with NUKEM, otherwise Lithuania would face serious and great challenges, he warned. Inasmuch as other important EU-funded projects (electric links with Sweden and Poland and gas link with Poland) were started to be implemented at the time, after receiving such a letter, there was no other alternative but to continue the negotiations with NUKEM, during which a strong pressure on the negotiators was being exerted. NUKEM demanded for additional funding, while the European Commission’s position was that it is it who gives funding, wherefore, it is it who shall decide on the additional funds to allocate to NUKEM so as to make it possible to finish the projects initiated. A. Sekmokas also numbers former European Commission’s member Guenter Verheugen’s visit to Lithuania among the episodes of exerting pressure on Lithuania. Before meeting with him, R. Švedas had high expectations; however, G. Verheugen supported NUKEM during the meeting (quotation: “arrived as a typical NUKEM lobbyist”). Several months later, being in a foreign country, A. Sekmokas met with G. Verheugen, who approached him and asked whether Lithuania had reached an agreement with NUKEM. Furthermore, A. Sekmokas was aware of that NUKEM, during the negotiations, was represented by Jonas Tamulis. From R. Švedas, he knew that “MG Baltic“ exerted pressure on O. Čiukšys; that K. Puidikas was trying to exert influence, too; however, he did not meet with him and cannot say what kind of pressure he was trying to exert.

Former Prime-Minister A. Kubilius, when giving explanations at the Committee’s hearing (23 May 2018), confirmed that, while holding the position of prime-minister, he met with J. Tamulis, who paid a visit to him at the Building of the Government and tried to convince him that Lithuania should not terminate the contract and that it should continue working with NUKEM as all the EU authorities give their approvals. J. Tamulis told A. Kubilius that the Ignalina NPP projects, including their delay, were funded with the EU funds, wherefore, for Lithuania, there was no need to worry about the EU money.

According to the Committee’s data, NUKEM was on fighting terms not only with Ignalina NPP but also with project-implementing sub-contractors – Lithuanian construction companies. In July 2012, NUKEM owners (“Rosatom“ and “Atomstroyexport” managed by it / NIAEP) started to look for new sub-contractors. The goal was to attract licenced companies even where the contracts could be financially unfavourable. In August 2012, NIAEP owners, reportedly, agreed with UAB “Vilstata”, a company registered in Visaginas which became the projects sub-contractor. However, the consultancies with other construction companies were continued even after signing the contract: new enterprises and concerned persons got involved in the negotiations over the possibility to participate in the Ignalina NPP decommissioning projects. In the said period, the NIAP representatives held negotiations with various Lithuanian companies, including corporate-group-“MG Baltic”-managed company UAB “Mitnija”.

According to the Committee’s data, long-standing representative of NUKEM in Lithuania was a former agent of the Lithuanian department of the KGB of the USSR K. Puidokas; UAB “Lakona”, which he established, signed a representation and consultation contract with NUKEM (official K. Puidokas status in NUKEM varied with time; however, K. Puidokas practically implemented the same NUKEM representation functions and assignments), which was coordinated with “Rosatom” representatives supervising over the Ignalina NPP projects (thanks to K. Puidokas efforts, company “Rosatom” is not mentioned in the contract). In September 2009, “MG Baltic” president D. Mockus met with K. Puidokas; during that meeting, “MG Baltic”-managed construction company “Mitnija” possibilities to participate in the Ignalina NPP decommissioning projects were being discussed.

According to the Committee’s data, in 2018, it is planned to announce a public procurement in relation to the short-lived low- and medium-level radioactive wastes management project (B25) with estimated funds requirement, according to the data of 2015, being more than 400 mln from 2018 until 2038, of which more than 180 mln euros are required by year 2022 (annex 2 to resolution of the Government of the Republic of Lithuania No. 1427 of 23 December 2015 “On Radioactive Wastes Processing Development Programme”).

Joint-stock company “Lietuvos geležinkeliai” (Lithuanian Railways). According to the Committee’s data, AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways“), being a company of strategic importance to the national security of Lithuania, uses integrated unified train protection system “KLUB–U” (hereinafter referred to as – KLUB-U). The KLUB-U system is produced in “Izhevskiy radiozavod” (a company of the Russian Federation (hereinafter referred to as – Russia)), in which dual-purpose (used both for civil and military purposes) products are produced. The system was installed by the specialists from Russia; coming with automatic braking and speed control system, driver’s vigilance system and many other functions, it enables to establish the train’s location in online mode, using satellite communication, calculate the distance to highway crossings and traffic lights (according to the electronic map of a specific railway route). Some of the functions may be discharged remotely, by using Russian satellite communication system GLONASS/GPS. The KLUB-U system is installed in all types of locomotives and self-moving trains of AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”), including new-generation locomotives “Siemens” purchased in Germany.

It should be noted that, after the international community applied sanctions to Russia, the USA and the UK prohibited export to Russia of electronic components used by “Izhevskiy radiozavod“ companies.

AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”) purchased the KLUB-U system for the first time in 2005-2006 under the contract of 4 July 2005 with Estonian company “Kolomna Energy Service OU” (affiliated company of Russian PJSC “Kolomensky zavod”). By the contract, which was concluded by way of unannounced negotiations, AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”) purchased 4 diesel-powered locomotives, fully equipped, including communication assets and safety system KLUB-U as well as spare parts, locomotive testing and personnel training services. Total transaction value – € 7 837 645 without VAT.

After this procurement, AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”) continued installing the KLUB-U system in locomotives and self-moving trains. By order of AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”) general director No. Į-334 of 30 April 2010, the (KLUB–U) instruction on integrated unified train protection system No. 246/AA-T was approved, whereunder it is prohibited to dispatch locomotives with turned off or improperly working KLUB-U system. The KLUB-U information received in respect of each route must be, in a mandatory manner, saved in records with scanned and decoded data mandatorily stored on data mediums.

According to the information provided by the Lithuanian Private Railway Companies Association (LPRCA letter No. 54 of 14 July 2017), by order of the minister of transport and communications of the Republic of Lithuania No. 3-241 of 2 April 2012, the KLUB-U system was included into the list of technical regulations of railway sub-systems applicable in the Republic of Lithuania (see para 92, 93, 100 thereof). The order states that the automatic locomotive signalization and speed control system installed in locomotives must comply with the requirements of the KLUB-U system produced by specific manufacturer “Izhevskiy radiozavod”. The State Railway Inspectorate, when refusing to register locomotives with other-manufacturers-produced automatic locomotives signalization and speed control systems installed, was guided exactly by this list. By order of the minister of transport and communications of the Republic of Lithuania No. 3-367 of 14 August 2017, the KLUB-U instruction 246/AA-T was deleted from the list of technical rules of railway sub-systems applicable in the Republic of Lithuania and substituted with general requirements.

Based on the AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”) information provided to the Committee (service report “On the Actions to Ensure the Safety of KLUB-U”), it was established that AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”), aiming to secure safe operation of KLUB-U facilities and prevention of the posed threats, held hybrid safety exercises in respect of objects of critical infrastructure aimed at analysing possible threats, including KLUB-U equipment reliability and performance, vulnerability thereof, analysing network’s typology and planning of other possible harmful actions. Based on the results of the exercises, by order of the AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”) general director No. Į-613 of 6 October 2017, the Informational Technologies Centre of the company was obliged to isolate the locomotives traffic control system KLUB-U server from the traffic management system and turn it off. On 20 October 2017, the KLUB-U system server was disconnected from the traffic management system and isolated from the AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”) network. On 14 November 2017, AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”) cyber security experts performed and evaluated the company information systems network scanning and confirm that the KLUB-U system is isolated from the company network as well as from the traffic management system.

At the Committee’s request, the National Cyber Security Centre under the Ministry of National Defence (hereinafter referred to as – NCSC) carried out evaluation of unified integrated train protection system KLUB-U installed at AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”) and concluded that, in terms of cyber security, the KLUB-U system is notable for the high risk level as the security flaws of the system (e.g., software errors) may be used for its seizure, wherefore this poses threat to the confidentiality, integrity and accessibility of the KLUB-U services and processed information. AB “Lietuvos geležinkeliai“(JSC “Lithuanian Railways”), considering the conclusions and recommendation followed after the cyber exercises held in September 2017, and aiming to manage risks, isolated the vulnerable KLUB-U server from the company informational systems network and traffic management system. The actions performed are adequate to the situation identified and AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways) controls the risks mentioned.

Former minister of transport and communications Rimantas Sinkevičius, when giving explanations at the Committee’s hearing (15 November 2017), argued that he, being the minister, received, neither from the SSD nor from AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways“) management or board, any information or warning that a system allegedly posing threat to the national security may have been or be installed in the company. R. Sinkevičius argued that he had known nothing about the order of the former minister of transport and communications whereby KLUB-U was included into the list of mandatory technical regulations. He had also not experienced any pressure from the business groups, although, when appointing S. Dailydka as the company manager for the next term, he noticed certain unrest in his environment. However, he, personally, did not experience, either from the Government or from the Seimas, any influence.

Former minister of transport and communications A. Butkevičius, when giving explanations at the Committee’s hearing (15 November 2017), argued that, to his knowledge, no other equipment could have been installed at the time as it was operated by satellite communications means; only two satellite communication systems – American and Russian, which was used by international organizations, too, – were available in the world. At the time, there were no threats from Russia, nobody even talked about possible threats resulting from installing or procuring particular equipment. In general, he was never involved in public procurement issues.

Former minister of transport and communications E. Masiulis, when giving explanations at the committee’s hearing (22 November 2017), argued that, when being the minister, he had never participated in resolving AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”) issues related to public procurements. When working as a minister, he had a possibility to get familiarized with classified information of different classification levels; he had been receiving SIS certificates on a regular basis. However, within the four years he was in the office, he, indeed, did not receive any insights, comments or any indications from those institutions that are responsible for national security, prevention of threats in Lithuania that the system installed might not meet the national security. As regards the signing of the order on including the KLUB-U equipment into the list of mandatory technical requirements, he stated the equipment to be already installed in a great deal of locomotives and the order just to be legally enshrining the existing situation.

Former AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”) general director S. Dailydka, when giving explanations at the Committee’s hearing (22 November 2017), argued that the railway system inherited a whole lot of problems from the Soviet times. After installing KLUB-U, everything was functioning properly; many problems, thanks to the processes automatization, got resolved by themselves. It is also important in respect of possible critical situations, e.g., in the event of seizure of the locomotive, it would be possible to stop it from the Traffic Management Centre. After the Ukrainian events began unfolding, the company began concerning itself with other similar systems, considered the experience of Estonia and Latvia; however, this experience was not insightful. There were considerations to isolate the system from the possibility to manage it through satellite communication; however, they did not dare to do that. According to S. Dailydka, up to 2015, he had not received any security-threats-related warnings, although the SIS employees had used to visit the company, take interest in its processes, go into detail, ask questions and etc. Only in 2015, there was a message or letter received (he cannot remember from where exactly) that KLUB-U might be dangerous and it was needed to assess the possible threats. In the period while he was the company manager, neither politicians, nor other officials addressed him in respect of employing any persons. It was either the board or managers of directorates who used to deal with the personnel matters.

The Committee has data that, in 2006, the SIS did provide information expressing its concerns in relation to the absolute domination of the Russian capital companies in the sphere of technical maintenance and repair services provided by AB “Lietuvos geležinkeliai” (JSC “Lithuanian Railways”) (e.g., locomotives are repaired in Russia or by a Russian capital company in Latvia). In the major part, the domination of the Russian companies is conditioned by objective factors (e.g., origin of the rolling stock); however, from the perspective of the SIS, this creates conditions for exerting influence on the company’s financial indicators, capacity and, alongside with that, on the national security interests of the country.

The case of state enterprise “Oro navigacija”. Strategically important state enterprise “Oro navigacija” renders aerial navigation and air traffic management services, which are the services the air traffic safety depends on to a great extent. In 2004, VĮ “Oro navigacija” organized an international public procurement tender in respect of radio-locating equipment procurement, in which Spanish company “Indra sistemas” was announced as the winner. This company’s partner in implementing the project was Russian capital company NRPL registered in Finland. This company, which has been established by Russian citizens in Finland, presented primary airspace monitoring radars (PAMR) “Ural” produced by Russian enterprise “Severniy zavod” and installed them in Vilnius, Kaunas and Palanga airports. The services of repair of that equipment had been provided by NRPL up to 2017.

Former (up to 2017) VĮ “Oro navigacija“ general director Algimantas Raščius maintains close contacts with one of the NRPL founders whom he got acquainted with in 1992. At the present time, they both are bound by the common business – they founded a Lithuanian company which does business related to aerial navigation services, implements projects in Vietnam.

8.3.2.  The Committee states:

The system of legal and organizational management means of funding of Ignalina Nuclear Power Plant’s decommissioning and projects B1, B2/3/4 as well as the contracts provisions failed to ensure the proper representation and protection of the national interests.

Neither during, nor after the tender, although the owners and the corporate structure of contractor NUKEM, which implements projects B1, B2/3/4, have changed several times, the assessment for its reliability and conformity with the national security interests was carried out.

Business interest groups, by using non-transparent contacts with some politicians and representatives of state authorities, are constantly seeking to exert influence on the decision-making process in respect of the prospective high-value Ignalina NPP decommissioning projects.

In 2018, it is planned to announce a public procurement in relation to short-lived low- and medium-level radioactive wastes management project (B25) with estimated funds requirement, according to the data of 2015, being more than 400 mln from 2018 until 2038, of which more than 180 mln euros are required by year 2022 (annex 2 to resolution of the Government of the Republic of Lithuania No. 1427 of 23 December 2015 “On Radioactive Wastes Processing Development Programme”).

Corporate group “MG Baltic” representatives, in an effort to influence the decisions-making by the Ignalina NPP management, use, as a tool for exerting influence, the “MG Baltic”-managed media organisations.

The contracts on funding of Ignalina Nuclear Power Plant’s decommissioning and project implementation, the project-implementing contractors and the sub-contractors they engage must be evaluated for conformity with the national security interests in accordance with the procedure laid down in the legal acts.

In the perception of the Committee, corporate group “MG Baltic” representatives and politicians supervising over this sphere created a scheme of exerting inappropriate influence on AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”) management aimed at ensuring long-term successful participation of the corporate-group-owned construction company “Mitnija” in high-value construction works tenders organized by AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”). Some of the public procurements were implemented in a non-transparent manner with the conditions thereof being coordinated with concerned business groups, affected politicians or their intermediaries in advance.

Locomotives safety and management system KLUB-U produced by a company owned by the Russian military industry complex had been subject to installation in state-managed company AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”), which is of strategic importance to the national interests, since 2005; and up to year 2017, it had been mandatorily used. Using of certain functions of this equipment poses risk (in respect of taking over the locomotive control remotely) in terms of national security.

Up to September 2017, the Ministry of Transport and Communications of the Republic of Lithuania as well as AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”), which is of strategic importance to the national security and falls to the sphere of regulation of this ministry, had failed to ensure that the KLUB-U system be evaluated in terms of national security; it should be especially noted that the threat allegedly posed by the KLUB-U system operation peculiarities to the national security interests had been evaluated neither after the Russian aggression in Geogria of 2008, nor after the Russian aggression in the Ukraine which had started in 2014. It should be noted that the features of the KLUB-U system had failed to be, in a timely manner, evaluated from the perspective of the Law of the Republic of Lithuania on Mobilization and Support of the Host Country.

State enterprise “Oro navigacija”, a company of strategic importance, renders aerial navigation and air traffic management services that are crucial for traffic safety and Lithuanian airspace control. The airspace monitoring equipment produced by Russian company “Severniy zavod”, which was installed in the Vilnius, Kaunas and Palanga airports by this company, is incompatible with the national security interests of Lithuania.

8.3.3.  The Committee’s conclusion:

By the non-transparent contacts maintained by representatives of Russian state corporation “Rosatom”, representatives of Rosatom-managed company NUKEM and representatives of corporate group “MG Baltic” with Lithuanian politicians, public officials, company managers, inappropriate influence was exerted on the state authorities in respect of adopting decisions aimed at changing the projects implementation at VĮ “Ignalinos AE“ (state enterprise “Ignalina Nuclear Power Plant”), which is of strategic importance to the national security interests.

The locomotives safety system KLUB-U produced by “Izhevskiy radiozavod”, a company of the Russian military industrial complex, and installed in AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways”), is incompatible with the national security interests of Lithuania.

The radar equipment produced by Russian company “Severniy zavod” and installed at VĮ “Oro navigacija“ is incompatible with the national security interests of Lithuania. Former long-term contacts of this company management with representatives of the manufacturers of the insecure equipment as well as the equipment installation circumstances shall be assessed as allegedly having influenced the decisions in the sector which is of strategic importance to the national security and allegedly having posed threat to the national interests.

8.4.  The Committee proposes:

To the Government and the General Prosecutor’s Office:

  • To assess the damages allegedly incurred on the state by the transactions made by business-group-“VP Market”-managed companies and the state (state-managed companies) on the basis of which the business group “VP Market” companies paid out dividends from the profits received for the provision of monopolistic services in the electric energy distribution market and, if such damages are established, to resolve the issue on compensating these damages;
  • To assess the legality of the transactions made between state-managed company AB “Lietuvos geležinkeliai“ (JSC “Lithuanian Railways“) and corporate-group-“MG Baltic”-managed company AB “Mitnija” in the 2009-2013 period.

To the Government:

To found an inter-institutional work group, charge it with an assignment to examine and submit offers on improving the legal acts and procedures regulating the issues below:

  • Funding of, and control over the funding of political parties and political campaigns, inter alia, improving the requirements to the financial statements submitted by the political parties, including those in respect of specifying the income received during the calendar year from the funding sources specified in the law on political parties, parties’ expenses according to the expense groups; ensuring effective accounting of non-monetary donations and control thereof; imposing on the political parties the obligation to provide the Central Electoral Commission with extracts of accounts of state budget appropriations on a constant (monthly) basis; where, under the Law on Political Parties, the funding from sources not specified in the law is unlawful, – qualifying this violation as a flagrant violation of the law; shortening the term for the public information drafters and disseminators to lodge declarations to 15 days from 25 days after the announcement of the elections results, thereby laying the groundwork for issuing the invoices and providing them to the political campaign participants in a manner so that, if the invoices are received in delay, the political campaign funding reports are not submitted in disregard of the set time frames or are not inaccurate, i.e. specifying not all the funding expenses of the political party; adding to the law on funding of, and control over the funding of political campaigns the provision that the small donations sum received by the independent political campaign participant and published on the Central Electoral Commission’s web-site must be specified in the political campaign funding accounting journal, along with the donators;
  • Political advertising (especially in the non-elections and non-political-campaigns period) and control over its lawfulness; specifically, ensuring that such control includes, inter alia, expenses of the state-sector entities on public communications, activity public advertising (especially before and during the elections);
  • Order of declaration and public advertising of lobbying activity, informal meetings of business groups representatives with politicians and public officials, including using of “soft law” means (e.g., rules of conduct imposing the requirement to publish agendas, information about meetings, meetings results, decisions adopted, actions planned), the minimum scope of information which must be made public, deadlines for its publication, counter-obligation to make public the information about the meetings, supervision over the effectiveness of the performance of the public advertising obligations;
  • Procedure for declaring and lodging declarations on public and private interests in public service; by legislative and other means, to ensure effective control over possible, alleged and real conflict of interests, giving the priority to the prevention of conflicts of interests, assisting the persons engaged in public service to avoid real and alleged conflicts of interests;
  • Improving the procedures for public consultation, aiming to ensure that the consultations, where meaningful, are used on the initial law-making stages prior to drafting a legal act’s draft, so that they include as many interest groups as practicable (where necessary, by imposing the state obligation to ensure that those interest groups that have less bargaining power be established and included, especially where other interest group expressed their position in this regard), and the effectiveness of these consultancies; to consider a possibility to install unbiased control over the law-making initiatives, the need in them, and the impartiality;

To examine good practices of the member states of the Organization for Economic Cooperation and Development (OECD) in respect of media market regulation and consider a possibility to establish a legal regulation that would allow ensuring media management splitting from other certain businesses (especially engaged in trade in excise goods), which [good practices] ensure the effective control over the influence of other businesses (e.g. advertising agencies, public communications enterprises) in media; ensure control over media concentration; ensure control over independence of the media content from the business interests; encourage effective pluralism of public information and fair competition. To control the distribution of public sector’s expenses on activity public advertising according to public information drafters, disseminators, drawing a comparison between the information provided by both parties to the transaction; monitor the relation between the state and private sector orders and separate public information drafters, disseminators. To consider a possibility of including, for a specified period, public information drafters, disseminators into the “blacklists” in respect of public orders for the violations identified.

To examine good practices of the EBRD and, on the basis thereof, to draft measures on strengthening the investigative journalism. To examine whether the public information drafters perform the requirement to establish, by internal documents, the protection of journalist from the possible restriction of his rights; where necessary, to provide for the means ensuring the effectiveness of such protection.

To consider a possibility of initiating a public cooperation agreement (-s) of politicians, public information draftsmen, distributors, associated structures thereof, journalists, associated structures thereof, public representatives, aiming to ensure the media function which is to provide objective and non-biased information to the public.

To establish the administrative liability and ensure its application for non-performing the legitimate demands of the Temporary Investigation Commission of the Seimas provided for in the Law on the Temporary Investigation Commissions of the Seimas. To impose on state institutions the requirement prohibiting to provide other persons with the investigation-related materials, until the parliamentary investigation conclusion is announced. Also, to establish that actions of the members of the temporary investigation commission violating the Law on the Temporary Investigation Commissions of the Seimas or the investigation regulation in relation to publishing the investigation-related information must be considered in the Commission for Ethics and Procedures of the Seimas. For unauthorized dissemination of information, the staff (public servants) assisting the investigation commission shall be brought to account under disciplinary procedures.

  1. The Committee’s conclusion was upheld at the Committee’s hearing of 30 May 2018. Voting results: for – 10, against – 0, abstained from voting – 1.

Proposals

To the Government of the Republic of Lithuania:

To draft legal acts which would create conditions and incentives to support initiatives aimed at encouraging investigative journalism, enhancing regional media, self-regulation of the media, social responsibility and accessibility of information, decreasing media concentration;

To draft and submit to the Seimas amendments to the Law on the Provision of Information to the Public setting out that broadcasting licences and (or) rebroadcasting content licences are issued only to those entities whose owners and licenced media organisations’ managers meet the requirements of impeccable reputation and national security interests;

In accordance with Art. 11, Art. 12 and Art. 13 of the Law of the Republic of Lithuania on Enterprises and Facilities of Strategic Importance to National Security and Other Enterprises of Importance to Ensuring National Security, to initiate the inspection of company “Nukem Technologies GmbH” transactions whereby this company participates in the Ignalina Nuclear Power Plant decommissioning projects for the conformity with the national security interests.

To draft and submit to the Seimas legal acts drafts entrenching the Civil Confiscation Institute which provides a possibility to confiscate assets of entities owned by or affiliated with criminal groups as well as assets obtained as a result of criminal acts of corruption;

Give proposals:

Funding of, and control over the funding of political parties and political campaigns:

  • to consider possibilities and give proposals on how to maximize the unification of the conditions for activity and funding of political campaigns’ participants (political parties, selection committee).
  • to propose measures allowing effectively fighting against unlawful funding of political parties’ and political campaigns’ participants;
  • to propose measures allowing supervising over the financial activity of entities which have the status of a funding recipient – charity or support funds eligible to receive donations from legal entities, including business undertakings, – preventing the use of the funds donated to charity or support funds to defray the political activity expenses, i.e. for activity other than specified in the articles of association.
  • to give proposals ensuring the transparency of political advertising;

Lobbying activity:

  • to draft proposals on the procedure of declaring informal meetings of politicians, public officials with business groups’ representatives and making them public, relevant “soft law” means (e.g., rules of conduct imposing the requirement to publish agendas, information about meetings, meetings results, decisions adopted, actions planned), the minimum scope of information which must be made public, deadlines for its publication, counter-obligation to make public the information about the meetings, supervision over the effectiveness of the performance of the public advertising requirements.

Coordination of public and private interests in public service:

  • to improve the declarations publication in respect of accessibility of the declarations to the public (providing all types of public declarations data on the official webpage of the declaring person);
  • to improve the declaration procedure, inter alia, by ensuring, by legislative and other means, effective control over possible, alleged and real conflicts of interests, giving the priority to the prevention of conflicts of interests, assisting the persons engaged in public service to avoid real and alleged conflicts of interests.

Media regulation and self-regulation:

  • to consider good practices of the member states of the Organisation for Economic Cooperation and Development (hereinafter referred to as – OECD) in respect of media market regulation and consider a possibility to establish such a legal mechanism that would /allow ensuring media organisations management’s splitting from other certain businesses (especially engaged in trade in excise goods) as well as effective control over the influence of other businesses (e.g., advertising agencies, public communications enterprises) on media; effective control over media concentrations; independence of media organisations from the business interests; encourage effective pluralism in respect of the provision of information to the public and fair competition;
  • to propose measures allowing performing monitoring of the public-sector entities’ expenses on activity public advertising according to public information drafters and disseminators as well as according to the relation between orders of public and private sector and separate public information drafters, disseminators. To consider a possibility of including, for a specified period, public information drafters, disseminators into the “blacklists” in respect of public-sector orders for the violations identified.
  • to consider good practices of the OECD and, on the basis thereof, draft means on strengthening the investigative journalism. To consider whether the public information drafters fulfil the requirement to establish, in internal documents, the protection of journalist from prospective restrictions of his rights; where necessary, provide for the means ensuring the effectiveness of such protection;
  • to consider a possibility to initiate public cooperation agreement (-s) of public information drafters, disseminators, associated structures thereof, journalists, associated structures thereof, public representatives, aiming to ensure the media function of providing objective and non-biased information to the public.

To the Government and the General Prosecutor’s Office of the Republic of Lithuania

Taking into consideration the information collected during the investigation and the found out circumstances of creating the National Investor through founding LEO LT, to repeatedly evaluate whether a criminal act was committed in creating the National Investor;

To carry out investigation on the inappropriate influence exerted on the prosecutors and propose legal acts amendments, aiming to ensure independence of prosecutors and to protect them from the inappropriate influence;

To carry out an inspection of procedural decisions adopted by prosecutors in the pre-trial investigation or public interest protection cases in which one of the parties was a “MG Baltic”-owned company or a person affiliated with this corporate group.

To the Public Procurement Office

To carry out an analysis of public procurements won by “MG Baltic”-managed companies in the 2008-2016 period in respect of the spheres mentioned in the conclusion, an inspection on the legality of the transactions made, to evaluate the alleged damages incurred on the state and, where any damages are established, to initiate processes on the compensation of the damages incurred.

To the Public Procurement Office and the Special Investigation Service

To provide proposals on improving of public procurements in respect of allowing for carrying out anticorruption evaluations of the participants (providers) of the tenders implemented by public-sector or state-managed companies based on the information provided by the Special Investigation Service.

To the State Tax Inspectorate:

To evaluate the tax investigation carried out in respect of the alleged inadmissible evasion of tax obligations by VP Market companies and shareholders thereof which was established during the investigation, taking into account the inadmissible contacts of public officials of the STI with MG Baltic representatives, and to take measures to evaluate the validity of the calculated tax obligations and compensate for the damages allegedly inflicted on the state.

To the Seimas of the Republic of Lithuania:

  • to improve the Law on the Temporary Investigation Commissions of the Seimas by fixing a requirement prohibiting all persons (not only members of the commission) who, in execution of their official duties or in view of other circumstances, have investigation materials to transfer, without the commission’s consent, these materials to third persons until the commission finishes the investigation.
  • – to improve other provisions of the legal acts related to the activity of the temporary investigation commissions of the Seimas, defining the responsibility for violating the Law on the Temporary Investigation Commissions of the Seimas and refusing to follow the legitimate demands of the commission.
  • – to adopt legal acts obliging the Special Investigation Service and (or) Central Electoral Commission to exercise control over the funding of political parties and political campaigns, to provide the National Security and Defence Committee of the Seimas with estimation of the demand in necessary financial resources to perform this function;
  • to draft legal acts on founding the institute of independent supervision over the entities engaged in intelligence or criminal intelligence (intelligence ombudsman);
  • to refer to the Energy Commission of the Seimas of the Republic of Lithuania, requesting it to examine the damages which were incurred (or could have been incurred) by the Lithuanian state in relation to the establishment of the Independent Investor through founding LEO LT and the activity thereof and to propose measures for these damages to be compensated for.
  • to direct the National Security and Defence Committee of the Seimas to exert control over the implementation of the recommendations of this conclusion;
  • to propose to the National Security Department to work out the issue of declassifying the annexes to accompanying note No. (63)-19-3003S-575S “On the Enforcement of the Resolution of the Seimas” and submittal thereof to the Committee.

To the political parties represented in the Seimas of the Republic of Lithuania:

  • to propose to the political parties represented in the Seimas of the Republic of Lithuania to sign an anticorruption agreement of the parties, covering the issues of civil property confiscation, lobbying, public and private interests’ coordination in public service and declaration thereof, funding of political parties, and fighting against organized crime.

Please find the parliamentary investigation annexes, save for the information constituting state secret or official secret, attached to these conclusions.

[1] https://read.oecd-ilibrary.org/governance/preventing-policy-capture_9789264065239-en#page11

[2] Resolution of the Seimas of the Republic of Lithuania No. XIII-285 of 18 April 2017.

[3] http://www.lrkt.lt/lt/teismo-aktai/paieska/135/ta1773/content

[4] Since Vladimir Putin came to power, the electric energy export has become one of the most critical Russian foreign policy instruments (amid oil and gas) to receive economic benefits and ensure strategic interests. After the collapse of the Soviet Union, Russia established the Ministry for Atomic Energy, which was afterwards reorganized into the Federal Agency on Atomic Energy, and the latter was reorganized into state atomic energy corporation “Rosatom” in 2007. This corporation is under full effective control of the Kremlin, inter alia, as regards operating in the warfare sector, implementing the Russian national policy, geopolitical projects and receiving state tasks in the EU Member States.

[5] The construction of the two nuclear power plants – Baltic NPP and Belarusian NPP – near the Lithuanian borders is evaluated as geopolitical projects of Russia which pose threat to the national security of Lithuania and are aimed at exerting pressure on Lithuania and impose obstacles for electric energy transfer networks’ synchronization with the electric networks of the Continental Europe.

[6] General contractor in the Ignalina Nuclear Power Plant’s decommissioning projects is “NUKEM”, a German company controlled by “Rosatom” (since 2009).

[7] The Prime-Minister’s schedule specifies that the head of the Government was to visit the nuclear object’s construction sites at 10:30 a.m. (Drūkšniai village, Visaginas municipality).

[8] https://lrv.lt/lt/naujienos/ministras-pirmininkas-iae-nesutarimai-su-rangovu-turi-buti-isspresti-iki-kovo-pabaigos.

[9] Internet access: https://goo.gl/tyK7QP

[10] Internet access: https://www.stt.lt/documents/es_ataskaita_2014/ES_kovos_su_korupcija_ataskaita_visa_acr_2014_lt.pdf.

[11] https://www.delfi.lt/verslas/medija/lietuva-krenta-ziniasklaidos-laisves-indekse-ekspertai-perspeja-del-stambiojo-verslo-interesu.d?id=74470278

[12] Internet access: https://goo.gl/f532zi.

[13] In the period during and after the tender, NUKEM’s owners and corporative structure have changed several times: up to 2006, NUKEM had belonged to German energy corporate group RWE; in 2006, the company was purchased by international investment fund “Advent International” and divided into several companies, including “Nukem Technologies”, which was purchased by “Rosatom”-affiliated company “Atomstroyexport” in 2009.