Estonia still has roughly €200,000 worth of unpaid bills from Freeh Sporkin & Sullivan. The Ministry of Finance says that the money will not be paid before the law firm provides a clear overview of what it has been doing since last summer.
The government announced, immediately after coming to power, on February 18 that it will terminate Estonia's contract with U.S. law firm Freeh Sporkin & Sullivan. The bureau was notified soon after. Since then, the ministry and the firm have exchanged eight letters but have not gotten as far as terminating the contract.
"We want more information on what has been done over those six months before we close the book on this," Erki Peegel, adviser for the finance ministry, told ERR.
The Ministry of Finance signed a contract with Louis Freeh's law firm in June of last year. Minister at the time Martin Helme (EKRE) said that Freeh was tasked with collecting information in Estonia that would help U.S. authorities in their money laundering investigations. In return, Estonia hoped to share in revenue from potential fines for Scandinavian banks.
"Basically, what they did was search for whistleblowers and relay what they said to the authorities," Helme explained. "People were glad to come in and talk, produce documents and explain various schemes or work procedures."
He added that people did not have to be afraid of being investigated because they were questioned by a law firm.
The politician said that efforts to collect information paid off, especially in the Danske Bank investigation. "They were not collecting that information for the finance ministry. I did not see those materials and was not present," Helme said. "They took the information straight to America for different investigations, some on the federal and some on the state level. There are ongoing civil disputes there."
Ministry: what did €581,500 buy?
The ministry now wants access to the information. Erki Peegel said that the Ministry of Finance wants to know, among other things, who the bureau has been meeting with and access to any documents produced. Peegel added that the correspondence has been amicable and that the ministry has been shown some things.
"What we have received so far is not much and we definitely want additional information," Peegel said, adding that Estonia has paid the law firm nearly €600,000, which is not a trifling sum.
Martin Helme said that the ministry was never meant to access the information.
"Our task was to create a framework in which these investigations and anti-money laundering efforts could take place. We were supposed to be the middlemen bringing institutions together," Helme explained.
ERR asked Peegel whether the law firm is even contractually obligated to share its findings with the ministry. The adviser said he would refrain from going into details.
"It makes sense for an overview of work done to be presented to the client," Peegel added.
Based on which documentation has €581,500 been paid to the law firm in the first place?
"It was paid out based on invoices with rather laconic descriptions of the work done," Peegel said.
Martin Helme confirmed that the law firm listed work-hours and activities on invoices. But added that there was more oversight.
"They gave my advisers regular overviews of what they had been doing more or less once every two weeks," Helme said.
Unfortunately, not one of Helme's former advisers still works for the ministry, meaning that the information has been lost. There was no written record of these meetings. "We do not have that information," Peegel admitted.
Outstanding invoices for €200,000
The law firm's contract prescribes that Estonia should spend no more than €3 million. Payments have been made for work completed. That is why Martin Helme cannot understand why the contract needs to be terminated at all.
"It would be enough to tell the firm not to move onto the next phase and the contract would simply expire," Helme said.
This would likely mean that Estonia could avoid a contractual penalty of roughly €60,000. But Erki Peegel says that the missing information is not the only loose end.
"We are looking at invoices for work done in January and February. They total a few hundred thousand euros," the adviser said.
The ministry has asked what kind of activities were pursued for that money. Peegel added that the ministry is not prepared to pay the bills until it receives all the information it has requested for work done this year and the last.
"We want to get a clear picture of what has been accomplished, which is when we can terminate the contract and pay all outstanding bills," Peegel said.
The ministry has received some of the materials requested that offer little in the way of surprises, according to Peegel. He added, however, that once the ministry has all the information it wants, it will likely be shared with Estonian investigative organs. He said that there are laws to protect whistleblowers in Estonia.
Erki Peegel did not provide any explanation as to why Freeh Sporkin & Sullivan has not handed over all the necessary information, only saying that correspondence is ongoing. He also said that to the best of his knowledge, the ministry is talking to the U.S. law firm without the help of outside legal advisers.
Martin Helme said that Estonia might not be successful should a legal dispute follow.
"Going against one of the largest and most powerful law firms in the world would very likely end in Estonia having to pay the bills, contractual penalty and any late fees," the former finance minister predicted. "But [Minister of Finance] Keit Pentus-Rosimannus has taxpayer money to spend," he added.
Editor: Marcus Turovski