Toomas Kivimägi (Reform), deputy chairman of the Riigikogu's legal affairs committee, has called the recent hiring of American law firm Freeh, Sporkin & Sullivan by the Estonian government a questionable move from a legal perspective.
In an interpellation to justice minister Raivo Aeg (Isamaa) Kivimägi wrote: "Finance minister Martin Helme (EKRE) has concluded an agreement that is questionable both in substance and legal nature and undermines the reputation and credibility of Estonia. Statements by ministers raise serious doubts that no other members of the government save for Martin Helme have familiarized themselves with said agreement."
The firm, whose senior partner is former FBI chief Louis Freeh, was hired by finance minister Martin Helme (EKRE) on a two-year, €3-million contract, tasked with representing Estonia in international money laundering cases.
Controversy followed regarding Freeh's alleged representation of a Russian money launderer whose funds had, among other vectors, passed through the now-defunct Tallinn branch of Danske Bank, center of a major money laundering scandal last year. This prompted claims of conflict of interest, something Helme denies (Freeh also denies having acted for the Russian client).
Another point of contention is the fact the content of the agreement betwen the finance ministry and the law firm has not been made public.
In the interpellation, Toomas Kivimägi asks Aeg whether the Ministry of Justice has considered it necessary to familiarize itself with the agreement, and wishes to know whether the finance minister's refusal to make the text of the agreement public is justified legally and substantively, plus whether members of the Riigikogu are entitled to familiarize themselves with agreements concluded by the minister of finance.
Kivimägi is also asking for an assessment on whether the Ministry of Justice and members of the government were aware of a potential conflict of interest before the agreement with Freeh, Sporkin & Sullivan LLP was concluded and if a conflict of interest is entailed, and whether there are legal grounds for the termination of the agreement in question.
Furthermore, Kivimägi wants to know whether the Ministry of Justice is informed about what sort of information about criminal proceedings investigating money laundering that are underway in Estonia the Ministry of Finance shares with the US law firm and whether the Minister of Justice considers it justified that Estonia shares information garnered in the course of a criminal proceeding with said contractual partner of the Ministry of Finance.
Finally, Kivimägi asks the minister to describe the role that the Ministry of Justice has had in the conclusion of said agreement on legal assistance for Estonia. Specifically, whether the Ministry of Finance asked the Ministry of Justice for an opinion, analysis or endorsement on the matter.
Controversial law firm hired to represent Estonia in money laundering investigations
On July 3, ERR News wrote that finance minister Martin Helme had entered into an agreement with United States law firm Freeh, Sporkin & Sullivan LLP to provide legal services to the Estonian state in international money laundering investigations.
Helme said at a press conference the fee for the contract with the law firm is €3 million for two years. The terms of the agreement have not been made public.
An investigative piece published by daily Eesti Päevaleht (link in Estonian) on July 28 made the claim that lawyer Louis Freeh - a former FBI director - had previously represented Russian company Prevezon, which had allegedly laundered around €6 million via the now-defunct 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 rejected EPL's claims, calling the article slanderous. He added 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 hiring of the law firm led to many opposition MPs calling for an extraordinary meeting to get to the bottom of the details of the deal, with opposition Reform Party leader Kaja Kallas specifically calling Helme out, saying that allocating taxpayer funds to a law firm is arrogant and demanding that the terms of the legal agreement be made public.
Members of the opposition Social Democratic Party (SDE) sent out a press release requesting that Riigikogu finance committee chair Aivar Kokk (Isamaa) convene an extraordinary meeting of the committee as soon as possible, to review the agreement Helme made with the law firm.
Reform also made a written query to Minister of Foreign Affairs Urmas Reinsalu (Isamaa) on whether the ministry had warned the government of a possible conflict of interests of the law firm.
Minister of Justice Raivo Aeg (Isamaa) said on July 29 that the government authorized Helme in hiring a law firm to represent Estonia's interests in international money laundering investigations.
He added: "[Louis Freeh] is a former director of the FBI, which should serve as a guarantee of his trustworthiness."
Louis Freeh himself denies having acted for the Russian company linked with the Danske money laundering episode.
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: Kristjan Kallaste