Latvian oligarch hits back at corruption charges as U.S. clamps down

By Gederts Gelzis

By Gederts Gelzis

RIGA (Reuters) - Latvian politician and oligarch Aivars Lembergs, sanctioned this week by the U.S. over alleged corruption, hit back on Tuesday, saying allegations against him were "fake news" and instigated by his political opponents.

The sanction means U.S. citizens are prohibited from doing business with Lembergs and four entities the U.S. says he owns or controls and which are crucial to the running of Ventspils port, Latvia's second largest.

The port has an important transit role in the region - transporting oil products and coal out of the Baltics.

The U.S. sanction creates a headache for Latvia, which moved on Tuesday to ensure the port could still operate.

"Americans are being used in internal political infighting," Lembergs told a news conference in Ventspils. "I don't have a chance to defend myself just like during Stalin's regime in the Soviet Union."

Lembergs had already been suspended as mayor of Ventspils by Latvian authorities due to an ongoing investigation into charges of corruption and money laundering. Lembergs has denied any wrongdoing in that case. He has served as mayor of the city for more than 30 years.

The influential politician was once a candidate for prime minister and has business ties with Russia.


The Latvian Foreign Ministry warned on Monday that any financial institution carrying out a transaction with Lembergs or the four entities also risked being sanctioned.

Latvian Prime Minister Krisjanis Karins said on Tuesday the government was working to keep the Ventspils port operational and the government would hold an emergency meeting on Wednesday.

Legal changes would be implemented to put Latvia's largest two ports - Riga and Ventspils - under state control, Karins said.

"In that way we will remove any possible connection between the sanctioned individual and the port," Karins said.

Ownership of the two ports is currently equally split between the local municipality and the state.

According to the U.S. sanctions statement, Lembergs either owns or controls Ventspils Freeport Authority, Ventspils Development Agency, Business Development Association and Latvian Transit Business Association.

Lembergs wrote on Twitter on Tuesday he had asked to be replaced from the managing board of the Ventspils Freeport Authority in order to keep the port running.

"I have asked Ventspils City Council to appoint another member to the Board for the time being until the circumstances have been clarified," he said.

The U.S. alleges Lembergs controls "entities through political parties and corrupt politicians, and systematically exploits those entities and individuals for his own economic gain".

(Reporting by Gederts Gelzis, writing by Johan Ahlander, editing by Niklas Pollard, Ed Osmond and Alexandra Hudson)