Background checks when hiring an American law firm for legal help on anti-money laundering (AML) issues did not need to touch on potential conflicts of interest, foreign minister Urmas Reinsalu (Isamaa) says, since the role the firm is taking is not as all-encompassing as the media has portrayed. The media claims have necessitated government-level responses, he said.
Reinsalu added that the genesis of the idea came around 18 months ago, when an unnamed American lawyer visited the Estonian foreign minister, with media mogul Hans H. Luik acting as intermediary.
Following the publication of an investigative piece in daily Eesti Päevaleht (EPL) earlier in the week, the deal agreed earlier this month between finance minister Martin Helme (EKRE) and law firm Freeh, Sporkin & Sullivan, has come under increased scrutiny, principally over senior partner Louis Freeh's alleged acting on behalf of a Russian client facing money laundering charges and several million of whose funds had passed through the now-defunct Tallinn branch of Danske Bank. Freeh, a former FBI director under the Bill Clinton administration, denies having worked for the Russian client.
Several Estonian legal experts have since expressed their doubts about the deal, which cost €3 million and is set to run for two years.
Other concerns revolved around the confidential nature of the agreement – especially given it used public, i.e. taxpayer, funds, critics say, and that Martin Helme acted unilaterally – a charge justice minister Raivo Aeg (Isamaa) has since rejected.
Reinsalu: Estonia has its own AML competencies
Speaking at the government's regular Thursday press briefing, Urmas Reinsalu saaid that Estonia does not need the help of U.S .lawyers in investigating money laundering activities as such, since it has its own organs to carry out this role.
"Claims have been made to the effect that the law office was hired for the investigation of money laundering. However, for investigative authorities exist for that purpose in both countries," Reinsalu said, rejecting the idea of Estonia hiring a "Hercule Poirot" from the States in order to solve the task.
Freeh, Sporkin & Sullivan have been brought on board for potential work on cases involving out-of-court settlements, he added.
Reinsalu also said that a background check was indeed conducted by the Estonian embassy in Washington, on Freeh, Sporkin & Sullivan plus two other law firms Estonia had shortlisted for the potential role, but that this did not throw up any conflict of interest concerns.
The background check report did, however, refer to Freeh, Sporking & Sullivan having had: "Motley clients, as the media have reported as well," he said.
Since the topic has been reported widely in the media, a response was required, Reinsalu added.
EPL's own owner was intermediary in original US lawyer-Estonian government meeting
The foreign minister also said that Hans H. Luik, owner of the Ekspress Meedia group which includes EPL, the very paper that reported the links between Freeh and Russian clients in a network going all the way to significant individuals in the Donald Trump administration, had acted as middle-man between the foreign minister and an unnamed American lawyer.
The meeting had taken place as the Danske Bank money laundering saga started to break in the Estonian media, and the lawyer had Estonian connections, Reinsalu said.
"Hans H. Luik visited me with an American lawyer one-and-a-half years ago, and in fact that is where where the idea took seed. A partner at one the world's biggest law offices was connected with Estonia via family ties, somehow, and had seen in the media what kind of commotion we had had in connection with that money laundering 18 months ago and so offered their help," Reinsalu said.
Louis Freeh's roots are Italian.
Reinsalu, together with the prime minister, have stressed that the government office is looking into any potential conflict of interest regarding the law firm.
"A clear answer has to be given to this," Reinsalu said.
The original introduction via Hans H. Luik did not lead to that particular firm taking on the job, Reinsalu said, adding that it was during the previous administration (which the current finance minister was not a part of – EKRE were in opposition then) and that the law firm itself had declined the job.
Editor: Andrew Whyte