At the beginning of this year, long-time deputy director of the wood products sales division at AS Latvijas Valsts meži (LVM), Andris Meirāns, changed jobs. Mr. Meirāns held a responsible position: he developed auction and pricing rules and regulations, in practice determining what, to whom, for how much and under what conditions LVM would sell and supply timber. For this responsible work, Mr. Meirāns was remunerated accordingly – his public official declaration shows that in 2024 his salary at LVM was 108 thousand euros. However, this January he both stopped working at LVM and started working at the timber industry company “Stiga RM”, that is, at a company whose business success or failure, including the amount of profit, is very significantly dependent precisely on the decisions in whose adoption, preparation, and drafting Mr. Meirāns was still participating just a month earlier.
At LVM, Meirāns could influence the criteria in the procurement regulations for birch veneer logs, the quality requirements for birch veneer logs, the price formation mechanism and indexation, and he influenced all other activities related to procurements in which Stiga RM also participated. Other industry entrepreneurs point out that in these procurements there are often situations where the auction rules are designed in such a way that only a few bidders qualify, and therefore the final auction price is significantly below the market price, thereby causing multi-million losses for LVM and granting unfair advantages, including to Stiga RM. In other words, exactly the kind of situation about which Stiga RM owner Ramoliņš has been so publicly concerned, when it is not about his own company.
Industry companies have drawn the attention of LVM and the Anti-Corruption Bureau (KNAB) to these circumstances, pointing, as an example of actual influence, also to the fact that in the 2021 procedure “Ilgāka termiņa sadarbība koksnes produktu iegādei 2022. – 2024.gadā” a requirement for electronic measurement was included, which is technologically unfounded and thus artificially restricted competition. In reality, the price at which timber was sold could have been up to twice as low as the market price. In a letter to LVM and KNAB that is in the possession of the author of the submission and Inc., it was indicated that both former LVM officials, through their actions or inaction, possibly acted in the interests of the company Stiga RM, causing tens of millions of euros in losses to LVM in various activities. Also, for example, in a 2018 transport procurement, a requirement was set that four drivers had to be provided per single timber truck, and only the companies “Stiga RM”, “Vella Kalpi” and “Līgo Auto” qualified for such a criterion, all of which are connected with Andris Ramoliņš.
Meanwhile, several forest industry representatives told Inc. that such a requirement is illogical because it makes the service more expensive. “The standard is 2 drivers per one log truck, then the truck can operate 7 days a week. LVM also has contracts with 3 drivers, then they drive 24 hours a day six days a week and keep rotating. But 4 drivers – that sounds somewhat excessive,” the owner of one of the largest companies in the sector, which is not PATA, confirms in writing.
As a result of including such illogical and unfounded requirements, the largest and strongest companies in the sector did not participate in the procurement, and this ensured victory for Ramoliņš’s companies.
Moreover, the case of Andris Meirāns is not the first; a similar situation also applies to Jānis Osis, who, like Meirāns but earlier, worked at LVM for 15 years and now holds the positions of board member and development director at Stiga RM.
Such a job change would make anyone ask whether positions in a private company with remuneration that most likely significantly exceeds that at LVM are not blatant corruption – in other words, whether this is not a “bonus” for decisions taken while holding public office?
The law “On Prevention of Conflict of Interest in Activities of Public Officials” stipulates that for two years after a public official has made a decision or participated in making a decision regarding a particular commercial entity, it is prohibited for that person to acquire this entity’s property, to become its member, shareholder, beneficial owner, or official. Thus, attention is drawn to the fact that Osis and Meirāns may not have observed this prohibition when they went to work for the company Stiga RM. LVM did not respond at all to the company’s letter, while KNAB did not establish a conflict of interest in the case of Andris Meirāns, because he is not an official of Stiga RM, and Osis’s case was not assessed at all, since he left LVM in 2018 and the limitation period for review has expired.
“KNAB does not establish” has already become part of popular folklore, and it cannot be denied that KNAB approached this superficially, formally and shallowly, not even attempting to examine what decisions Meirāns made, how they affected LVM’s interests and what benefit they brought to Stiga RM, as well as what sums in bonuses former LVM employees receive when leaving LVM and going to work for an LVM client.
However, it appears that there may also be a loophole in the law that allows the situation not to be assessed and not to be established on its merits. Specifically, jurisprudence emphasizes that the purpose of the “cooling-off period” in the law is to prevent situations in which the private interests of officials may conflict with the interests of the state. For example, if an official knew that after leaving office they could immediately obtain a benefit or position from a particular commercial entity, there would be a risk that decisions in office would be made with a view to personal benefit in the future. One of the purposes of such laws is also to maintain and strengthen public trust in public administration, and to reduce the risk of corruption and hidden influence – officials have less incentive to make biased decisions if immediate personal gain is not possible. Such a norm is usually part of a broader framework of ethics and good governance, which ensures that state power is not used in the interests of specific private individuals or companies and that fair competition is observed.
In Latvia, the law only prohibits being a beneficial owner, official, or co-owner, but being just an employee does not count. Thus, by closing one’s eyes to questions of an ethical nature, a person can work in any other position for two years, and formally no problems are perceived. In this way, a mechanism has emerged by which the essence of the legal norm can be circumvented. Osis has already become a board member of Stiga RM, and time will tell whether a similar career advancement will also befall Meirāns.
Accordingly, other public officials who decide in favor of a particular entrepreneur also need not worry about their future, since they are guaranteed a well-paid future under the wing of that entrepreneur. This would also explain, for example, certain activities of the Ministry of Agriculture state secretary Krūmiņš, given his close ties with that same Stiga RM owner, formed during joint trips to Ukraine and the discussion of global LVM issues in an informal setting.
In any case – a situation in which high-ranking public officials who take (un)economic multi-million decisions and, after making them, unhindered take up even better-paid positions with those on whose behalf they have decided, is fertile ground for the most basic form of corruption, which is of no interest to the responsible institutions, possibly because the mechanisms are already well-honed.
Originally published at https://inc-baltics.com/stiga-rm-jaunajiem-darbiniekiem-varetu-but-interesu-konflikti-caurums-likuma-lauj-knab-nevertet-un-nekonstatet/
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