Latvian Central Bank Bars Governor as Resignation Calls Grow

(Bloomberg) -- Latvia’s central bank barred Governor Ilmars Rimsevics from continuing work on its premises as parliament passed a motion calling on him to step down amid a bribery probe.

The bank’s board acted after learning from Rimsevics’s lawyer that he was restricted in his role on the European Central Bank’s Governing Council because of the corruption investigation. Lawmakers in Riga on Thursday voted 55-0 to call for his resignation via a non-binding motion. Rimsevics has repeatedly denied any wrongdoing.

The governor is battling for his career in the Baltic nation of 2 million people as calls grow for him to step aside, at least while the graft investigation is concluded. Latvia’s president, prime minister and finance minister have said he should leave. He’s fighting allegations he received bribes of at least 100,000 euros ($124,000). In another blow to Latvia’s financial image, its No. 3 lender was closed last month amid U.S. money-laundering claims.

Rimsevics’s “continued presence as Latvian central bank president can discredit decisions by the Latvian central bank, create doubts about the Latvian central bank’s institutional capacity and harm the interests of the Latvian state,” according to the text of the motion on parliament’s website.

The Latvian central banker rejected parliament’s call for him to resign and views the vote as “political pressure” on him and the ECB, his lawyer Saulvedis Varpins said, according to Leta.

Proxy Vote

In a sign he’ll continue to reject the pressure on him, Rimsevics will also withhold handing his proxy to Deputy Governor Zoja Razmusa, according to Latvian central bank spokesman Janis Silakalns. Rimsevics won’t receive a salary and won’t have access to the bank’s IT systems or documents while he’s restricted from carrying out his duties, he said.

Restrictions on Rimsevics’s ability to work and travel are the same as if he’d been removed from office, meaning the anti-corruption bureau is violating the ECB’s independence, his lawyer Saulvedis Varpins said Wednesday, according to the Leta news service.

Rimsevics wasn’t able to attend this week’s ECB policy meeting in Frankfurt because he’s prohibited from leaving the country. It’s unclear what role he’ll now be able to play at the ECB, which dialed back stimulus options Thursday as the euro-area economy strengthens.

President Mario Draghi said he doesn’t have enough information on Latvia, “and that’s why today we are sending a letter to the European Court of Justice.”

He said the Governing Council will ask whether the restrictions on Rimsevics “have had the effect of relieving him from office and if these measures comply with Union law.”

Rimsevics’s lawyers plan to challenge the restrictions on his travel and his ability to work via cases in the ECJ and in Latvia. They’re also sending legal opinions, translations of articles and information to the ECB’s legal department, lawyer Martins Kveps said Wednesday.

To contact the reporter on this story: Aaron Eglitis in Riga at aeglitis@bloomberg.net.

To contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Andrew Langley, Michael Winfrey

©2018 Bloomberg L.P.