(Bloomberg) -- Ilmars Rimsevics, a member of the European Central Bank’s Governing Council, allegedly sought as much as 500,000 euros ($580,000) and a fishing trip to Russia’s Far East as bribes from a small lender, according to Latvian prosecutors investigating his case.
Rimsevics, who’s refused to step down and denies all allegations against him, got half that amount in several cash payments over five years, Prosecutor Viorika Jirgena told reporters in Riga on Friday, citing testimony and evidence collected during the investigation. Latvian authorities, who are now weighing whether to send the case to court, said the central bank governor in exchange helped Trasta Komercbanka -- since closed in a money-laundering investigation -- answer questions in a regulatory probe.
“From 2010 when the trip took place until the end of 2015, the bank’s president helped the shareholders of Trasta Komercbanka prepare answers that they had to submit to the bank regulator” about issues the bank had with liquidity and non-residents, according to Jirgena. Rimsevics never got the full amount of the bribe because Trasta’s problems persisted, she said.
Rimsevics, who was briefly detained in February, may face an 11-year prison sentence in the case that highlights the euro-area nation’s battles with corruption in its financial industry. The rippling scandal has included the closing of Latvia’s third-largest banks, U.S. money-laundering allegations, accusations that the country’s lenders helped funnel criminal funds into the European Union and even breached sanctions against North Korea.
The glut of banking scandals has prompted Latvia to overhaul its finance industry, which had acted as a regional hub for cash from the former Soviet Union since the collapse of communism. Rimsevics, as governor and before that as deputy governor, has overseen the industry since 1992. His legal woes have deprived him of his seat at ECB policy-making meetings and he’s banned from travel.
Latvia, where foreign deposits once eclipsed local savings, is dismantling the so-called non-resident industry and banning the use of shell companies. The U.S., whose report of wide-spread money-laundering violations triggered the demise of ABLV Bank AS, says authorities must still do more to cleanse the sector.
Prosecutors are reviewing all the evidence before deciding whether to send the governor’s case to court. The process may take “a few months” and could be resolved “by fall, or the end of the year,” Jirgena said. The probe has unearthed claims including death threats, Russian meddling and suggestions of score-settling among Latvia’s elite.
Speaking in an interview with Latvian TV on Thursday, Rimsevics denied all wrongdoing. Some of the alleged events took place five to eight years ago, he said. His lawyer hasn’t been available for comment since Thursday, when authorities said the governor will face prosecution.
The 53-year-old official now cuts an isolated figure in his Baltic homeland, with the president, government and parliament all urging him to quit before his terms ends in 2019. Due to laws on central-bank independence, it’s proving difficult to force him out.
The bribery case has strained ties between Latvia and the ECB, which has challenged some of the domestic restrictions on Rimsevics. Other ECB policy makers also have run into legal difficulties in the past. An ECB spokesman declined to comment.
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