Supposed tourism farm turned country home: Ilves’ Ermamaa builds farm with EU support, never puts it to intended use (27)

President Toomas Hendrik Ilves and his wife Ieva hosted the Polish presidential couple in Ärma. (Elmo Riig)
10/21/2016 9:59 AM
Category: News

Former president Toomas Hendrik Ilves’ company received €190,392 in 2006 to turn the family’s country home of Ärma into a tourism farm. Then owned by his ex-wife, it negotiated new conditions in 2012: Even if the farm was never put to its intended use, the company would have to pay back just 10% of the grant.

On Oct. 14, Toomas Hendrik Ilves posted a statement on Facebook. In it, he said that he didn’t know about the conditions of Enterprise Estonia’s decision in 2012 to demand part of the grant back until Oct. 12 this year, when the matter became public. This seems less and less likely to have been the case.

Member of committee that approved Ermamaa grant later became director of Office of the President

Siim Raie, later to become director of the Office of the President, was a member of the committee that approved the €190,392 grant to Ermamaa OÜ, owned by Toomas Hendrik Ilves’ then-wife, Evelin Ilves.

Raie represented the employers on the committee in his function as chairman of the Estonian Chamber of Commerce and Industry.

Office of the President director involved in changing Ermamaa grant terms in 2012

On Oct. 13, a day before Ilves’ response on social media, it turned out that Raie, by then director of the Office of the President, accompanied Evelin Ilves to Enterprise Estonia in 2012 during her negotiations to change the terms of the grant.

In his first public appearance since the publication of Enterprise Estonia’s decision last week, Raie suggested on TV3’s “Kolmeraudne” that what was going on was that journalists and other critics were getting back at Ilves now that there was no state office anymore between them and the former president.

Asked about what had actually happened, Raie did not offer any new information and repeated that what had taken place had been legal.

Former accountant of Office of the President added to Ermamaa management in 2014

ERR’s Estonian news portal reported on Thursday that Mai Piirmets, formerly the chief accountant of the Office of the President and at the time also the accountant of Ilves’ Foundation Estonian Cooperation Assembly, had been added to Ermamaa’s management board in 2014.

Asked by ERR, Piirmets stated that she hadn’t known about Enterprise Estonia’s 2012 decision to demand part of the grant back either.

According to the business register, Piirmets has been the only member of Ermamaa’s management board since 2014. She took over after the company passed from the sole ownership of Evelin Ilves into that of Toomas Hendrik Ilves.

Enterprise Estonia informed Office of the President about repayments again in 2015

CEO of Enterprise Estonia, Hanno Tomberg, said in an interview with daily Eesti Päevaleht published on Friday that they had informed the Office of the President about their demands to Ermamaa again in 2015.

“I learned about a potential repayment in spring last year, from then onwards we were in touch with the Office of the President,” Tomberg said in the interview. “A year ago we were asked if the president had to continue his tourism farm business as well. Back then we reminded the Office once again that the decision made was conditional.”

The Päevaleht journalist doing the interview pointed out to Tomberg that it seemed strange that Ilves had stated he hadn’t known anything about that before Oct. 12 this year. To which Tomberg answered, “We talked to the Office, not to the president. I can’t say any more.”

Ilves’ country home built with Enterprise Estonia support never to be put to use as tourism farm

In 2006, Ermamaa OÜ was granted €190,392 in financial support for the project to turn the Ilves’ country home, Ärma, into a tourism farm. Later the same year, Toomas Hendrik Ilves was elected president.

During his time in office, Ermamaa repeatedly hosted the president and his guests in Ärma. The Office of the President paid the wages of two staff members for Ärma as well as maintenance expenses for the complex. These expenses amounted to between €60,000 and €65,000 a year.

At some point before the company entered negotiations with Enterprise Estonia in 2012 to change the conditions of the grant, Ermamaa decided not to go ahead with the plan to turn the Ilves’ country home into a tourism farm. At the time new conditions were agreed on, which included the repayment of 10% of the grant, the funds granted by Enterprise Estonia had already been or were already being used to expand and complete Ärma.

Until 2014, Toomas Hendrik Ilves’ ex-wife, Evelin Ilves, was the sole owner of Ermamaa. In 2014 this changed, since then, the former president himself has been the only owner of the company.

The agreement with Ermamaa made public by Enterprise Estonia on Oct. 12, after Toomas Hendrik Ilves informed the fund that he didn’t intend to operate Ärma as a tourism business, stated that Ermamaa would have to repay 10% of the original sum of €190,392 in case Ärma wouldn’t be run as an accommodation establishment by Jan. 1, 2017.

Ilves stated on his Facebook page on Oct. 14 that he hadn’t been aware of the now public conditions of the grant before Enterprise Estonia had published them a few days before.

Audits and investigations already ongoing

Enterprise Estonia announced earlier this week that it had commissioned an external audit of the Ermamaa grant project. As a state fund, Enterprise Estonia falls within the jurisdiction of the Ministry of Finance. The ministry’s Financial Control Department announced on Oct. 18 that it would open an inquiry of its own.

The office of Corina Crețu, the European Commission’s commissioner for regional affairs, said on Oct. 18 that they had followed the developments via the media, and requested additional information from Enterprise Estonia. Press spokesman Jakub Adamowicz pointed out to daily Postimees that according to EU policy, the member state distributing support funds was responsible for the correct use of the money.

The Riigikogu’s Anti-Corruption Select Committee are investigating the issue as well, with opposition party members demanding hearings involving Maria Alajõe, at the time Enterprise Estonia’s CEO, former Minister of Economic Affairs and Communications Juhan Parts (IRL), and current Minister of Entrepreneurship Liisa Oviir (SDE).

Editor: Dario Cavegn

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