by Tony Iozzo
Impunity Watch Reporter, Europe

PRAGUE, Czech Republic – Petr Necas stepped down as Prime Minister of the Czech Republic on Sunday after his top aide has been heavily implicated in a bribery and spying scandal.

Mr. Necas’ chief of staff, Jana Nagyova, has been charged with bribing members of parliament and giving orders to intelligence agents to spy on certain individuals. Nagyova allegedly offered government posts to these members of parliament, contingent upon relinquishing their parliamentary seats. She then allegedly ordered military intelligence to spy on three people.

The charges were brought after armed police raids in which roughly 400 police officers searched government offices, bank safes, and 31 different houses. Approximately $6 million in cash and tens of kilograms of gold were seized during the raids.

Seven other individuals were also arrested in connection with the bribery scandal, including the current and former heads of military intelligence, and former lawmakers in Necas’ Civic Democratic Party.

The Prime Minister is reported to be involved on a personal level in addition to his professional relation to the case. One of the spy targets in the scandal is said to be Necas’ wife, Radka, whom he is now divorcing. Though Necas has denied any sort of personal relationship with Nagyova, he stated upon his resignation, “I am fully aware how the twists and turns of my personal life are burdening the Czech political scene and the Civic Democratic Party.”

Necas has maintained his innocence as well as his party’s, however, stating: “I am personally convinced that I did not do anything dishonest and that my colleagues have not done anything dishonest either.”

Members of Necas’ coalition had indicated that they could no longer support him amidst the scandal, and members of the opposition Social Democrats coalition planned to raise a “no-confidence” motion in parliament. The resignation, which will send the country into a period of political uncertainty, will necessarily induce the entire government to step down as well, pursuant to the Czech Constitution.

Necas has stated that his coalition would attempt to form a new government with new leadership, to take charge until June 2014 and new elections. However, the Czech President Milos Zeman, a member of the Social Democrats, is not obligated to agree with Necas’ recommendations and can name his own interim government. Reports indicate that President Zeman has asked Necas to remain a “caretaker” until a new administration is in place.

This raid was a part of a larger anti-corruption operation, the largest the country has had since Czech dissident Vaclav Havel led a “Velvet Revolution” that overthrew Communist rule over 20 years ago. Since this revolution, however, the Czech Republic has experienced great corruption.

For more information, please see:

BBC News – Czech PM Petr Necas Resigns Over Aide Scandal – 17 June 2013

The Independent – Czech PM Petr Necas to Resign: ‘Mr. Clean Hands’ to Quit in Effort to End Political Turmoil Over Aide Spying and Corruption Scandal – 17 June 2013

Al Jazeera – Czech PM Resigns Amid Aide Scandal – 16 June 2013

New York Times – Czech Premier to Resign Amid Scandal – 16 June 2013

Reuters – Czech Prime Minister Steps Down After Graft Scandal – 16 June 2013

Impunity Watch – Czech President Impeached and Charged With Treason For Amnesty – 4 March 2013

PRESS RELEASE

Latvian Regulator Imposes Largest Possible Fine on a Latvian Bank involved in Money Laundering Connected to the Magnitsky Case

19 June 2013 – Following a probe into six Latvian banks, Latvia’s financial markets regulator, the Financial and Capital Market Commission, has imposed a fine of 100 thousand Lats (around $191,000) the maximum fine possible on one Latvian bank for its role in laundering the $230 million stolen from the Russian government directly connected to the Magnitsky case.

The probe was based on a complaint filed by Hermitage Capital Management with the Latvian authorities in July 2012 naming six banks (Aizkraukles Bank, Baltic International Bank, Baltic Trust Bank, PrivatBank, Rietumu Bank and Trasta Komercbank) that received funds directly or indirectly from the $230 million illegal tax refund exposed by the late Sergei Magnitsky.

The name of the sanctioned bank has not been disclosed by the regulator.

The aim of the probe was “to clarify whether the banks had complied with regulatory requirements for anti-money laundering and combating terrorist financing,” said the Financial and Capital Market Commission.

“Following inspections of six Latvian banks conducted in relation to Magnitsky case, Financial and Capital Market Commission (FCMC) adopted a decision to impose an administrative penalty for deficiencies in internal control system on one occasion, i.e. customer due diligence. A maximum fine of 100 000 lats is imposed for violations in the area of laundering the proceeds from criminal activities and terrorist financing,” said the Financial and Capital Market Commission of Latvia.

Commenting on the transnational nature of the money laundering conspiracy exposed by Sergei Magnitsky and which had victimized Hermitage in Russia, the Latvian regulator pointed out it spans “several dozens of banks” and many countries in Europe highlighting the need to unite forces against the common threat to EU financial systems.

A company that received the illicit funds in Latvia on accounts of PrivatBank, one of the banks inspected by the Latvian Financial and Securities Market Commission, called Technomark Business, was registered in the UK, had a parent company registered in Cyprus, which in turn had a Latvian director Erik Vanagels, named in this week’s Sunday Times (http://www.thesundaytimes.co.uk/sto/news/uk_news/People/article1274719.ece) for his involvement in other “several thousands (mainly UK) companies.”

It was previously reported that illicit funds stolen via a scheme exposed by Sergei Magnitsky were wired through six Latvian banks, including: Baltic International Bank: $8.5 million, Trasta Komercbank: $6.2 million, Rietumu Bank: $2.1 million, Aizkraukles Bank (now – ABLV Bank): $1.2 million, Baltic Trust Bank (now – GE Money Bank): $0.9 million, PrivatBank (previously Paritate bank): $0.5 million.

When this information was revealed last September by the Latvian investigative report “Nothing Personal” aired on TV3, none of the banks wanted to talk on camera, according to Latvian publication IR (http://www.ir.lv/2012/9/24/raidijums-magnitska-lieta-iesaistitas-vairakas-latvijas-bankas). ABLV Bank replied last September as follows: “Previously we had known this information. Currently, we are conducting the background investigation.”

The Trasta Komercbank’s comment at that time was: “At the moment we can only comment that, according to Latvian legislation, any kind of information on bank clients is confidential… TKB’s operation is in full compliance with national regulations and international banking standards.”

The news of the Latvian sanctions has been featured in the Latvian media (http://www.ir.lv/2013/6/16/fktk-magnitska-lieta-soda-vienu-latvijas-banku).

For further information, please see:

Law and Order in Russia