Andris Bērziņš: president or oligarch?
By Howard Jarvis.
14.09.2011
It’s not unusual for a complete unknown to become president of Latvia. The previous holder of this position was a surgeon who confessed after being elected that he knew about politics only from reading the newspaper. So who is Andris Bērziņš?
In a process that is currently being debated in Latvia, the president is elected not by the population but by politicians in the parliament, once several candidates are nominated by the key parties. Luckily, Valdis Zatlers, the surgeon, learned quickly about the irreparable damage that can be done to a country by corrupt politicians, many of whom fall into the role out of greed rather than compassion for the people they govern.
Zatlers also proved himself to be independent from the corrupt forces who elected him on the assumption that he could be their puppet.
So who is his successor, Andris Bērziņš? Will he be similarly independent from corrupting forces? A lot of people know now who he is, but not who he will turn out to be. An extremely wealthy man, Bērziņš is a landowner who is politically active, running unsuccessfully for Mayor of Riga in 2005 on behalf of the Greens and Farmers Union, then elected as an MP for the same party in 2010.
He is also a pensioner, known to be the wealthiest pensioner in Latvia. As well as making a fortune by selling one company in 2007, immediately before Latvia’s severe economic recession, he also receives a monthly pension of LVL 4,200 (€6,000). This sum is a percentage of his earnings from his last private-sector job, as president of the bank Unibanka, and, when it became part of the SEB network, advisor to the president.
But, contrary to the descriptions in numerous media reports, Bērziņš is not an oligarch. By definition, oligarchs are rich, certainly, but they also tend to control their own political party and their own media empire.
Bērziņš has neither. Through his early actions as president, he gives the impression that he’s made his fortune and has no desire to create another one by using his newly elevated position of power.
Signs of independence
Pensions may seem like a tedious topic, but debate on pension reform in Latvia has offered one of the early insights into what kind of president Bērziņš could be.
During the “fat years” – the boom before the bust – pensions were tied to the rate of inflation. This was cancelled when the economy began to contract, although pensioners gained anyway when inflation abruptly turned to deflation.
In June this year, a man who perhaps more than anyone else in Latvia is associated with the term “oligarch” raised the pensions issue again.
Aivars Lembergs is one of Latvia’s richest and most powerful men, whose LVL 200 million worth of property assets dwarf those of the president. His base is Ventspils, his political party is For Latvia and Ventspils, and his national political power is exercised through a three-way merger with the Greens and Farmers Union, a well-established party that has been in government coalitions for almost 10 years and which Lembergs is widely believed to control.
So in June, Lembergs, who is currently under investigation for alleged money laundering among other things, called for the indexation of pensions, benefits and state salaries to inflation. His motive? Easy and immediate access to the most reliable part of the electorate. The oldest trick in the book.
Bērziņš, a former chief of several major financial institutions such as the Bank of Latvia’s Privatization Fund and the Latvian Chamber of Industry and Commerce, as well as Unibanka, says he wants Latvia to fulfill its international obligations and is against any budget deficit increases at this sensitive time.
At a recent meeting between government and president in Riga Castle, where the president and his team sit, Bērziņš firmly said no when a Greens member tried to insist that indexation must return. By stressing that this is a matter strictly for the Finance Ministry, he is making it clear that it is he who is setting the agenda. The implication seems to be that Bērziņš is another Zatlers in the sense that he is refusing to live up to the expectations of those who put him in office.
All this is another blow to Lembergs, who during the summer unexpectedly announced that he would not be running for parliament in September’s parliamentary elections, although he still heads the Greens’ list as candidate for prime minister.
This is the third consecutive occasion he has done this, after a build-up of great public trepidation. He was as close as he ever has been to running as this would have given him immunity from prosecution. One can only speculate that his reasoning may be that in moving to Riga he would have had to relinquish his hold on his fiefdom in Ventspils. But there may be another reason.
Anti-oligarch
When the national daily Diena was bought on behalf of unidentifiable business interests in early 2010, a group of its truth-seeking journalists broke away to form the independent political magazine IR. In an interview with IR in the run-up to the parliamentary elections, Bērziņš was asked what his main criteria were for any prime ministerial candidates. He replied that law enforcement agencies must confirm that the candidates’ reputations are sound – the implication being that this would clearly not be the case with Lembergs.
The message to Lembergs was that if he aimed for the coveted prime ministerial post he could expect a very public battle with the president that would likely result in failure.
Opting not to head the party list for the third time severely damages Lembergs’ political future and shows that his influence is on a steep decline. He is still forced to spend a humiliating one day a week in court to participate in the slow-going investigation into his alleged financial misdeeds. He also faces court proceedings against him in London. Around €135 million of his assets have been arrested.
Paradoxically, the first glimmer of Bērziņš’ independence came in his decision to appoint Gundars Daudze, a former parliamentary speaker and Lembergs loyalist, as head of his chancery. The question was immediately raised: if Bērziņš was Lembergs’ man, why bother to put another one in Riga Castle?
In another early sign of political independence, Bērziņš refused to put on the parliament’s agenda a vote of no-confidence against Minister of Justice Aigars Štokenbergs, a prominent member of the reform-minded Unity party. The president’s decision to veto a motion that would have been in Lembergs’ interests, due to the minister’s ongoing efforts to investigate him, was clearly not influenced by the oligarchs.
The question then was: how much influence does another of Latvia’s super-wealthy oligarchs, Andris Šķēle – a former prime minister known to wield considerable influence over the People’s Party – have over the new president?
During the parliamentary vote on the president, Šķēle was spotted chasing around the parliament trying to secure MPs’ support for Bērziņš. But like other oligarch figures, such as the right-wing politician Ainārs Šlesers, Šķēle has lost influence in parliament since the economic crisis set in, and there seem to be very few possibilities to exert influence in the castle.
Another of the president’s appointees is surely the most significant. His choice for national security advisor is Jānis Maizītis, a fierce anti-corruption figure who was Latvia’s embattled prosecutor general for two consecutive terms. His presence in the president’s inner circle, as secretary of a security board that includes the president, the current prosecutor general, the corruption-busting body KNAB, and the interior, foreign and justice ministers, will undoubtedly impede questionable influences.
Election fever
The parliamentary elections are about to take place. There is huge support for Zatlers’ brand new party, named rather opportunistically after himself. Much of the initial public support for the Zatlers Reform Party is a result of the former president’s stand against corrupt influences, when he proposed the dissolution of parliament in a referendum that led to the new elections.
Zatlers has since been under pressure to create a meaningful party list within the space of a couple of months. Few political figures have defected to the new party, but, more promisingly, Zatlers has been at pains to bar anyone with any hint of a questionable past. When Andrejs Požarnovs, for many years a member of the right-wing For Fatherland & Freedom party, applied to join, Zatlers refused.
There is no hard evidence against such people, and Zatlers may simply be remembering Požarnovs’ inglorious spell as welfare minister in 2002, but the party leader obviously feels that including them would not feel right. More than a thousand people have put themselves forward – a lot of candidates with backgrounds to weed through before the deadline to present the party lists.
Unity, paradoxically, after riding high in polls for its admirable handling of the economic crisis, now suffers from disunity. Also formed with the promise of keeping corrupt political decision-making at bay, this diffuse amalgamation of varied interests may have made too many compromises with its coalition partners – including the Greens and Farmers Union and the People’s Party – to continue as a credible force for the long term.
Unity’s extremes are represented by a group centered around Solvita Āboltiņa, a former justice minister who has been very active in setting the agenda, and Prime Minister Valdis Dombrovskis, who is not participating in political debate at all, happy to focus purely on economics.
Harmony Center, the main political alliance that says it has the interests of Latvia’s Russian speakers at heart, currently has a strong 29 seats. It may even win more seats than any other party in September. But it will most probably once again be locked out of a government coalition.
The structure of the next parliament largely depends on how well Zatlers’ party performs. Many influential figures and commentators, such as the former president Vaira Vīķe-Freiberga, have taken a cool, wait-and-see attitude towards the surgeon’s hasty moves.
Once all of the post-election bickering and deal-making is over, President Andris Bērziņš will play a significant role in deciding who should emerge as prime minister. He is a shrewd calculator who has been name-dropped as a possible president for Latvia many times over the last decade.
He has outplayed Lembergs who, together with the other oligarchs, are on the defensive. Public opinion seems no longer to be at the mercy of media swayed by business and political interests that are controlled by a handful of powerful individuals. We can only hope that the president builds on his early moves, helping to create a society out of the ashes of the economic crisis that is fair and prosperous for all.
All photos courtesy Latvijas Valsts Presidents
