Audit committee recommends Tallinn avoid risk of conflict of interest ({{commentsTotal}})

An advertisement for a newspaper on the side of a tram in Tallinn.
An advertisement for a newspaper on the side of a tram in Tallinn. Source: (Postimees/Scanpix)

The council audit committee has recommended avoiding situations in which the city buys services from a nonprofit belonging to Center Party board member Yana Toom or the business of the party’s longtime financial partner Paavo Pettai.

The audit committee, which examined the 2014 and 2015 transactions of the Tallinn City Council’s Public Relations Department, did not encounter any big mistakes, however they did highlight certain doubts, reported daily Postimees (link in Estonian).

For example, it turned out that in 2014, the city paid OÜ Midfield and MTÜ IPIC for various services. OÜ Midfield belongs to advertiser Paavo Pettai, who has organized a number of campaigns for the Center Party various services; the business charged the city €19,000 for advertising, media and communications services. Meanwhile, Center Party board member and MEP Yana Toom is also a member of the board of the nonprofit MTÜ IPIC, which received €5,120 from the city.

The audit report did not address expenditures on Tallinn TV.

The inquiry was initiated last year by city commissioner Kaido Kukk (IRL), according to whom the city's promotional spending over the years has raised a lot of public questions and doubts.

Midfield and the letters of guarantee

On Sept. 13 last year, Midfield OÜ, owned by Paavo Pettai, turned to the arbitration court of the Estonian Chamber of Commerce and Industry with a claim that the financial obligation arising from letters of guarantee issued by the Center Party be met and to have the action secured. Two days later, Harju County Court issued a ruling to secure the action and established a judicial mortgage with regard to three properties belonging to the Center Party for a total amount of €800,680.

The Center Party thereafter appealed the court's decision, but Tallinn Circuit Court, having agreed with the reasoning offered by the first-tier court, left the ruling unchanged. The party then took their appeal to the Supreme Court, who accepted it in January of this year.

The letters of guarantee issued to Pettai and his company, totaling into the hundreds of thousands of euros, were signed in 2014 by former party secretary general Priit Toobal. Edgar Savisaar, who was chairman of the Center Party at the time, claimed he had been unaware of the letters of guarantee Toobal had issued.

Editor: Aili Vahtla

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