A law firm which was set to represent Estonia in money laundering hearings in the United States is claiming €60,000 from the Estonian state, following the scrapping of the controversial deal. The finance ministry is reportedly disputing the claim, as well as those on outstanding invoices.
Former finance minister Martin Helme (EKRE) signed a deal with the firm Freeh, Sporkin & Sullivan, whose leading partner, Louis Freeh, was a former FBI chief, last summer.
The deal almost immediately hit the headlines since the firm had previously represented Russian clients themselves involved in money laundering, some of the proceeds of which were thought to have passed through the portals of the now-defunct Danske Bank, the very focal point of money laundering allegations which had prompted the hiring of Freeh's firm.
Martin Helme's successor as finance minister, Keit Pentus-Rosimannus, provided the Riigikogu's anti-corruption special committee with an overview of the agreement signed with Freeh, Sporkin & Sullivan Monday, while the committee's chair, Eduard Odinets (SDE) said that the firm is claiming the money for the work that had been done, and also a contractual penalty.
The finance ministry had cast doubt over the content and extent of the work Freeh, Sporkin & Sullivan – which would have represented Estonia at money laundering hearings in New York State and would have taken a cut of any damages issued on behalf of Estonia, as well as performing public relations work following damage to the country's international reputation – and had objected to the fees requested.
Eduard Odinets said that the Estonian state had already paid Freeh's firm €600,000 so far; €200,000 in unpaid invoices is still outstanding, since the ministry is awaiting the fruits of the actual work done, while the contractual penalty, at 2 percent of the original fee, is €60,000.
Riigikogu corruption committee vice-chair Valdo Randpere (Reform) said that Keit Pentus had assured the group that the outstanding invoices would not be paid without specific explanations for what the money was being spent on, and also that the contractual penalty would not be paid – since, she said, Freeh, Sporkin & Sullivan had unilaterally terminated the contract.
Most reports have stated that prime minister Kaja Kallas canned the agreement in mid-February, after taking office the previous month.
Louis Freeh, who was in Estonia himself last September to answer Riigikogu questions, stepped down as a partner in the law firm last year.
As for payments which have been made already, Randpere said that those who initiated the deal from Estonia's side could be held responsible for these funds.
The original deal stood at €3 million, for a two-year term. The incoming coalition decided to earmark the allotted funds to other aspects of combating money laundering.
The Danske case saw well over €200 billion in potentially illicit funds pass through the Danish bank's Tallinn branch over the period 2007-2015.
Editor: Andrew Whyte