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Arbitration court: Center Party to pay ad agency Midfield €533,000

Paavo Pettai.
Paavo Pettai. Source: (Siim Lõvi /ERR)

An arbitration court decided to partially satisfy the claims of OÜ Midfield, the ad agency owned by the Center Party’s long-time campaign advertising partner, Paavo Pettai. The party had issued letters of guarantee to Pettai’s business on instruction of its then-chairman, Edgar Savisaar.

In September last year information was leaked to the Estonian press that then-secretary-general of the party, Priit Toobal, had signed letters of guarantee to Pettai’s business promising to cover financial obligations of the company towards third parties.

The letters were signed in 2014, at the time this was allegedly only known by Priit Toobal and then-chairman Edgar Savisaar, who had instructed Toobal to issue the letters. Based on them, Pettai claimed a total of €800,000 including fines for delayed payment.

The court’s decision is final and doesn’t satisfy Midfield’s claim to its full extent, ordering the Center Party to pay €533,000. The current secretary-general of the party, Mihhail Korb, confirmed on Friday that the original claim had been €800,000.

Korb said the arbitration court’s decision was “regrettable”, but added that it wouldn’t affect the party’s ongoing campaign for the local elections in October.

“Despite the negative decision, we will meet all of our party’s financial obligations,” Korb also said. He explained that in order to meet all of them, the party’s property and former headquarters in Tallinn’s Old Town had already been put up for sale, and that there was interest.

“With the sale of the party’s headquarters we will be able to meet all existing and potential future claims, and will be able to move on stronger than before,” Korb added.

He also called the fact regrettable that Toobal had signed the letters of guarantee. “This is a decision that is causing direct damage to the party, and that benefited only a narrow circle,” Korb said. It remained unclear to whose benefit the decision had been made.

The case demonstrates that the party’s finances had to be run transparently, and that was exactly what its current leadership was doing, Korb added.

When the letters surfaced roughly a year ago, notable party members all rejected the idea that they implied an actual financial obligation, and pointed to the long-time relationship with Pettai and his company.

Editor: Dario Cavegn

Source: BNS

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