Minister of Finance Martin Helme (EKRE) said the recent hiring of American law firm Freeh, Sporkin & Sullivan was handled correctly by the government and he sees no reason to terminate the contract. He also noted that the hiring process was led by advisors Kersti Kracht and Kristel Menning.
Following the publication of an investigative piece in daily Eesti Päevaleht (link in Estonian) on July 28, the deal agreed in early-July 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.
Helme told ERR on Monday that the investigative piece is part of a slandering campaign intended to hurt his reputation.
The finance minister said: "I think it is obvious that this entire slandering and belittling campaign is not only aimed at me, but the entire government who is actually dealing with money laundering actively and from another viewpoint than earlier governments."
Helme said the plan to hire an international law firm to protect Estonia's interests in a money laundering case against Scandinavian Danske Bank was brought to the table by Minister of Foreign Affairs Urmas Reinsalu (Isamaa) in 2019. The plan was forgotten at the time due to elections.
Helme added that after he had picked up the plan and gotten it approved by government, a lawyer in London was contacted to discuss further proceedings and to set criteria for the hiring of a law firm.
He said companies that fit the criteria were not easy to find, as there are not many who are represented in both America and Europe. Initially, eight companies were chosen, after which many of those were also filtered out due to conflicts of interest and other connections.
Helme said: "Some, who we turned to, turned us down saying they are not interested in the case. Of that entire process, three or four companies remained and after government approval, we made offers to three.
"And the only one of those three companies, who we extended offers to, who confirmed there is no conflict of interests, was the one we chose (Freeh, Sporkin & Sullivan - ed.).
He added that the hiring process was headed by his political advisors - Kersti Kracht and Kristel Menning. "The main leaders of the process were my political advisors, but the procurement department of the Ministry of Finance were also involved in the process. In the later stages, when we were doing background checks, the Estonian Embassy to the United States was involved, but we also made queries to the Ministry of Finance, so the circle was not as small as everyone is trying to mystify."
Kersti Kracht told ETV's daily affairs show "Aktuaalne kaamera" on Monday that the process to find a law firm was long and had many parties involved, including top lawyers from Estonia and abroad.
She added it is not easy to ask for advice in Estonia, as many lawyers are connected to banks.
Kracht said there was one specific condition when selecting the law firm. "Our strict condition was that the firm had not represented any of the Pohjola banks (now belonging to OP Corporate Bank - ed.). It is about the banks, not the banks' clients. /.../ In the end, the firm who we have signed a contract with was the only one left who had no conflicts of interest relating to those banks."
Helme concluded by saying he would not do anything differently.
The finance minister said: "Quite the contrary. If we are looking at it now, I would say that this rage-filled reaction shows we made the right decision. I would also like to emphasize that we have done everything correctly both legally and politically, it was agreed upon by the coalition, discussed and authorized in government. The offer was made correctly, background checks were thorough and used multiple sources, nothing was done wrong and nothing has gone wrong. The contrary, because there was such a ruckus made, it shows us that we made the right decision."
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.
Editor: Kristjan Kallaste