Estonia Minister Blames Rival Parties for Laundering Scandal

(Bloomberg) -- A minister from Estonia’s ruling coalition accused past governing parties, including one that’s currently in power, of allowing dirty cash to flow through the country’s banks in one of Europe’s largest money-laundering scandals.

Prosecutors are investigating a case involving multiple lenders after Danske Bank A/S admitted last year that much of about $230 billion that flowed through its Estonian unit in the nine years through 2015 was probably suspicious. Swedbank AB, the Baltic region’s largest lender, faces allegations it may have handled more than $100 billion in potentially dirty money.

Mart Helme, Estonia’s interior minister from the nationalist EKRE party, said past ruling parties had let “hundreds of billions of rubles, dollars and euros” pass through the financial system. Citing information he gleaned from his ministry, he said the laundered funds had remained in the Baltic euro-member state in amounts "sufficient to pay off everyone," according to an interview with the Delfi news website.

“This thing is really, really bad,” Helme said. “This bomb contains huge corruption. Corrupt money for a lot of different people has remained here in Estonia.”

Helme’s accusation comes as the Baltic nation’s authorities are looking for ways to mend its reputation and just before this month’s European Parliament elections. In February, he sent a public letter to the prosecutor general and security service, urging them to publish all the information they had on the Estonian cases a month before a general ballot that led to his party joining the new government.

Helme’s son and EKRE deputy chairman Martin Helme, now the finance minister, has also accused politicians of complicity in money laundering. However, his first statement as the minister last month was that the alleged laundering cases “belong to the past, and the present situation is completely different.”

Parties Accused

The fallout from the scandal may worsen the funding conditions of the Nordic banks, which could also make loans more expensive for Estonian individuals and companies, the central bank said last month.

Helme specifically blamed the opposition Reform Party and the Social Democrats. He also named the Isamaa party, which is now one of EKRE’s partners in the three-party government.

“No one has established any political corruption in the case, so this is pure speculation,” Isamaa spokesman Mart Luik told by phone. “If the investigation establishes anything on this, obviously those involved would have to be held accountable.”

The Social Democrats denounced Helme’s accusation as a “provocation” and accused him in turn of a political attack that “hardly helps the investigation,” spokesman Andri Maimets said by email.

“We are also interested in the investigation establishing how such money laundering was possible, to rule out it being repeated in future,” Maimets said. The Reform party did not immediately comment.

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

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

©2019 Bloomberg L.P.