Tallinn City Council Audit Committee to investigate Porto Franco case

The Porto Franco real estate development in Tallinn.
The Porto Franco real estate development in Tallinn. Source: Siim Lõvi /ERR

Tallinn City Council will look into the decision-making processes which granted the land rights for the Porto Franco real estate development after reports of corruption were published by the media.

An audit will be led by Chairman of the Audit Committee Anto Liivat (SDE) and the members of the Committee Priidu Pärna (Isamaa) and Helve Särgava (Center). It was proposed by the Social Democratic Party, Isamaa and Reform Party and was unanimously supported by all members of the Audit Committee.

Liivat said: "We are trying to answer the question of whether the measures of the city's corruption prevention strategy are effective enough." 

The audit committee will start work immediately so the results are known before the council goes on summer vacation. 

It was recently reported in the media that Hillar Teder, a major Center Party donor, was able to reduce the price of the plot of land for the Porto Franco development in Tallinn's harbor district over the course of two meetings. Tallinn's Center Party-led city government had denied any wrong-doing in the case.

"Given the latest information in the press about the acquisition of Porto Franco 20 years ago, there are obvious questions for me as well. I hope we will get answers during the audit," Särgava said.

"The only position of all the members of the Center Party commission is that the city's activities must be transparent and free of corruption. An audit is one of the main tools that will help to pull out the last root of corruption."

Porto Franco corrpution scandal

Hillar Teder is one of five suspects following the investigation which became public on January 12, into activities at state loan agency KredEx, which issued a €39-million loan to Porto Franco at a time when aid was mainly required for existing businesses struggling under the coronavirus crisis.

While the Center Party is in office alone at city government level, the latter denied any wrongdoing in the case. Center as a whole was declared suspect, with its secretary-general, Mihhail Korb, resigning the same day the investigation became public.

Korb had allegedly struck a €1-million deal with Hillar Teder in return for favorable treatment from city authorities in obtaining the land needed for access roads to the Porto Franco site.

Jüri Ratas resigned in the small hours of January 13 causing the whole government to resign.

The allegations about the reduced price of the plot of land were published by newspaper Eesti Päevaleht on January 20.


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Editor: Helen Wright

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