Parliamentary Investigation Committee: Estonian Banks Lied, Favored One VEB Creditor Over Others (1)
Days after a National Audit Office report was released, the Parliament's VEB Fund investigation committee has communicated its own findings in the case of the money lost in a Soviet bank 20 years ago: namely, that a Russian-resident company, TSL International, was able to recover some of the money only due to the complicity of Estonian central bank officials and directors of a commercial bank.
"On the basis of the documents and statements, it's clear that this was a premeditated and planned activity in which then key persons in Põhja-Eesti Pank (Bank of North Estonia), the Bank of Estonia and TSL International participated. As a result, VEB Fund creditors were treated unequally," said investigation committee chairman Rainer Vakra today.
Russia said that only Russian residents could recover the frozen funds in the Vneshekonombank, so in that connection VEB Bank asked the Estonian central bank for data on claims held by Russian residents. A letter was drafted at the central bank in which TSL International was credited - falsely - with 32.3 million dollars.
Back then, money laundering law was far less airtight than it is today, and lack of records made it impossible to determine where the money went, the committee said. The National Audit Office, which worked together with the Parliamentary committee, was unable to retrieve documents from Russia.
It was also not possible to establish the exact paper trail and genesis of the idea to falsely credit TSL with the money. Then central bank governor Vahur Kraft confirmed to the committee that his signature did appear on the Bank of Estonia letter. But as far as the big question - the current whereabouts of that 32.3 million dollars - Vakra said it was now up to courts to determine why and by whom the fraudulent letter was drafted.
Over a year, the committee held 40 hearings and questioned 49 people. It continued where a Bank of Estonia internal probe left off. The Bank of Estonia internal auditors found that the central bank had indeed submitted false data regarding TSL.
The committee - its full title being Committee of Investigation to Ascertain the Circumstances of the Proceeding and Satisfaction of the Claims Collected to the VEB Fund - was formed by a Parliament decision of March 12, 2013.