Finance minister Martin Helme (EKRE) says that there is no conflict of interest with the Estonian government's agreement with a United States law firm whose senior partner has allegedly in the past represented Russian money laundering clients linked to the Danske bank case.
Helme was responding to an investigative piece published by daily Eesti Päevaleht (EPL - link in Estonian) which made the claim that lawyer Louis Freeh - a former FBI director - had represented Russian company Prevezon, which had allegedly laundered around €6 million via the now-defunct Estonian branch of Danske Bank.
Freeh's law firm Freeh Sporkin & Sullivan LLP is now acting for Estonia via a two-year contract, tasked with investigating alleged money laundering.
Helme and his ministry acted unilaterally in the deal, without the involvement of the rest of the Estonian government, the piece said.
The article also linked the wider activities of associates of both Prevezon and Louis Freeh to the 2016 U.S. presidential election.
As reported by ERR News, Minister of Finance Martin Helme (EKRE) entered into an agreement with the U.S law firm Freeh, Sporkin & Sullivan LLP in early July. The firm will provide legal services to the Estonian state in international money laundering investigations, and will cost €3 million over a two-year period.
The terms of the agreement have not been made public.
EPL wrote on Tuesday that Freeh, Sporkin & Sullivan has in the past acted for a company Prevezon, some of whose money had flowed via the Estonian branch of Danske Bank.
Danske Estonia was closed in late 2019 following revelations that over €230 billion in potentially illicit funds, primarily of Russian origin, had flowed via the bank's portals in the period 2007-2015.
Helme: That people are criticizing the law firm deal tells me we did the right thing
Helme rejected EPL's claims, calling the article slanderous.
"Today's government and my activities in the fight against money laundering are likely antagonistic to many who have ever been involved," Helme said, speaking on Vikerraadio's "Uudis+" show.
Helme added that the government monitored conflict of interest issues in a number of ways and from a variety of sources, adding that the very fact it had been picked up gave him confidence in the government's use of the law firm.
"I see no reason to terminate this agreement, on the contrary, that this idea is brought to the table at all rather gives me confirmation that we are on the right track," Helme said.
Helme said that the agreement brought a front-rank U.S. law firm, which has also worked with the U.S. government, and with experience in international financial crime representation, on board for Estonia.
The likelihood of finding a law firm in that field who had not had some client relations relating to Russia somewhere down the line was unrealistic, Helme added, noting that two other law firms had turned the Estonian government down on the basis of potential conflict of interest.
Reform Party leader: We have a right to know where taxpayer's money is going
Opposition Reform Party leader Kaja Kallas said that the government must disclose the terms of the agreement, given it used €3 million of taxpayer's funds.
"I listened to Martin Helme's Vikerraadio interview relating to the EPL article and was amazed by his arrogance," Kallas wrote on her social media account Tuesday.
"As if to say there noone has the right to ask any questions, because we (the government-ed.) have decided to do something. The Estonian government chose to pay €3 million to this law firm."
"These are not Martin Helme's personal funds, nor is it that of any government members; it is our money as taxpayers."
"We, as taxpayers, have the right to ask where the money is going and what we will get for it."
"(Just for comparison, training school psychologists to help children in our schools requires a year's professional training, costing €225,000 to train 10 specialists. The government has not found the money for this (author's parenthesis-ed.))."
"The Reform Party demands that the terms of the legal agreement be made public. The taxpayer has the right to know."
Helme: Not a standard procurement
Martin Helme said the agreement was signed in the manner it had been since legal services for the government are not procured as such, but it is permitted to make targeted offers, hence the choice of Freeh Sporkin & Sullivan and the two other firms (names not reported-ed.), which he said had a large network of offices and staff.
Freeh Sporkin & Sullivan rejects claims it has represented companies suspected of money laundering, saying it acted as mediator in negotiations between the company in question and the American state, Helme says.
EPL article quick facts
The EPL article (in Estonian) is here, with much of the original documentation in English. The piece was written in conjunction with the Dossier Center (link in Russian), a site which says it investigates criminal activities linked to the Kremlin, and U.S. news and opinion site The Daily Beast.
Its main claims are:
- The content of the €3 million-contract signed between the Estonian state and Freeh, Sporkin & Sullivan remains confidential.
- Martin Helme acted unilaterally, using only his ministry's advisors and without the involvement of the rest of the government, with foreign minister Urmas Reinsalu (Isamaa) saying that the Estonian embassy in Washington had conducted quick background checks into Freeh, Sporkin & Sullivan and the other two law firms selected by Helme as being in the running for the contract.
- Money laundering expert Graham Barrow told EPL the choice of Freeh, Sporkin & Sullivan was interesting: "...considering that [Louis] Freeh has previously represented a party that is on the other side in the same matter and used Danske's Estonian branch as part of a [money laundering] network."
- Louis Freeh has represented a company, Prevezon Holdings Limited, registered in Cyprus and owned by Russian businessman Denis Katsyv, though Freeh denies this. Prevezon had allegedly been involved in money laundering, with the New York Southern District Prosecutor's Office wanting confiscate over US$20 million-worth of luxury Manhattan real estate from the company and its subsidiaries in a case relating to the so-called Magnitsky case.
- Sergei Magnitsky had uncovered US$230 million had been embezzled from the Russian treasury, at least €6 million of which went through Danske Estonia via intermediate, offshore shell companies, before dying in Russian custody in 2009.
- Graham Barrow (see above) says Danske was at the center of the Magnitsky money flow.
- Natalia Veselnitskaya, a Russian lawyer who has represented Prevezon had meetings with Donald Trump's son Donald Junior, his son-in-law Jared Kushner and campaign chief Paul Manafort (the latter convicted for fraud in 2019 following the Mueller report), ahead of the 2016 U.S. presidential election, had allegedly offered compromising material about Hilary Clinton, and had corresponded with Louis Freeh – the latter reaching a US$5.9 million out-of-court settlement for Prevezon after U.S. President Donald Trump in March 2017 fired the New York prosecutor (Preet Bharara) representing the state in the Prevezon case.
- Natalia Veselnitskaya was later charged in the U.S. with obstructing justice in the Prevezon case.
- EPL says neither Louis Freeh, fifth director of the FBI (1993-2001) and a former judge, nor his office, have responded to its inquiries other than to deny having represented Prevezon, calling earlier coverage by Bloomberg and others false.
- Freeh, Sporkin & Sullivan's main task is to portray Estonia as a victim in U.S. money laundering investigations, EPL says, which may lead to Estonia getting a slice of the damages the U.S. claims from Danske, and also Swedbank, another major bank which has come under scrutiny due to alleged money laundering.
Editor: Andrew Whyte