Publication: Monitor Volume: 6 Issue: 75

Latvia’s government has fallen amid two unnecessary political scandals: one related to the privatization of industry, the other ostensibly to the sex industry. Prime Minister Andris Skele resigned on April 12–a step which, in accordance with the constitution, automatically entails the resignation of the cabinet of ministers. The Skele government will continue in a caretaker capacity pending the formation of a new one–a process which traditionally in Latvia takes some weeks and involves complicated bargaining among parties and factions. The outgoing government consists of the conservative People’s Party led by Skele, the right-of-center Latvia’s Way and the rightist-conservative Fatherland and Freedom. These parties hold twenty-four, twenty-one and sixteen seats, respectively, for a total of sixty-one in the 100-seat parliament.

The cabinet had been in office since July 1999 (see the Monitor, July 8, 13, 27, 1999; the Fortnight in Review, July 30, 1999). Skele had previously headed two coalition cabinets from December 1995 to February 1997. Those were plagued by conflict-of-interest accusations from outside the government, among its constituent parties, and within Latvia’s Way party. Skele himself is one of Latvia’s most substantial businessmen. His conglomerate, AveLat Grupa (ALG), includes the lion’s share of Latvia’s food-processing industry. To refute conflict-of-interest accusations, Skele recently sold his interest in ALG for US$29 million worth of promissory notes. The conglomerate changed its name to New Technology and Business Development Corporation (NTBDC) and also changed its top management.

The outgoing government was the ninth since the restoration of the country’s independence. Latvian governments rest as a rule on delicately balanced coalitions, their average tenure of office lasting less than a year. This situation should not, however, be mistaken for instability. While cabinets succeed one another, their political base remains more or less constant. Senior office holders stay at the top, redistributing ministerial portfolios and adjusting the balance of power and interests among components of the coalitions. Party leaders and the heads of parliamentary groups also are in their posts for the long haul. The pattern resembles that which existed in the French Fourth Republic (1947-58) and especially in Italy during the forty-year era of Christian-Democratic governance, when most cabinets also averaged one year in office, but their political base, leadership personnel and internal and foreign policies remained remarkably constant. Political scientists described that model as “short-term instability within long-term stability”–a formula applicable to Latvia today.

Last week, Economics Minister Vladimir Makarovs–a member of Fatherland and Freedom–annulled Latvian Privatization Agency General Director Janis Naglis’ right to issue orders and refused to renominate Naglis for a third term of office. Makarovs accused Naglis–a member of Latvia’s Way–of excessive solicitude to that party’s and also to Skele’s interests in the privatization process. Skele responded by dismissing Makarovs. Fatherland and Freedom counter-retaliated by withdrawing its political support to Skele and supporting a parliamentary motion of no confidence. The prime minister, with the agreement of his People’s Party leadership, decided to resign in the hope of saving the right-of-center government. Skele tendered his resignation to President Vaira Vike-Freiberga one day before a parliamentary ad-hoc investigative commission was due to issue its final report on the sex scandal.

On April 13 that commission, chaired by Social-Democratic Workers’ Party deputy Janis Adamsons, issued its report on the pedophilia case (see the Monitor, February 21). Without presenting any substantive evidence, the report named Skele, Justice Minister Valdis Birkavs (one of the leaders Latvia’s Way, former prime minister and long-serving foreign affairs minister), and three other state officials as suspects in an alleged ring of beneficiaries of sex services from a mafia-connected operation. Four commission members issued individual statements dissociating themselves from the report, challenging the methods and goals of its authors and impugning the motivations of witnesses questioned by the commission. Critics within and outside parliament commented that the commission’s report essentially is mainly based on hearsay and seems designed for character assassination.

The Chief Prosecutor’s Office and the Office for the Protection of the Constitution–which is the main internal security agency–had also looked into the allegations but found no evidence to implicate state officials. The prostitution-and-pedophilia ring does appear to exist, and at least one of its alleged leaders is in investigative custody. There is some evidence that he was a KGB agent in Soviet Latvia.

Adamsons himself has a tainted past as a former KGB major, albeit not in the agency’s intelligence departments, but in the USSR border troops which were subordinated to the KGB. The lustration proceedings against Adamsons recently ended with a report that he ought to be deprived of his parliamentary duty on the basis of his former KGB membership. Adamsons’ Social-Democratic Workers’ Party leader, Juris Bojars, is a self-confessed former KGB officer, albeit one who quit the agency before 1991. These two party leaders have a reputation for inflammatory and populist statements. The Adamsons commission’s verdict therefore has met with skepticism in Latvia, but has nevertheless contributed to poisoning the political atmosphere and bringing down the government (BNS, LETA, April 10-14).

The Monitor is a publication of the Jamestown Foundation. It is researched and written under the direction of senior analysts Jonas Bernstein, Vladimir Socor, Stephen Foye, and analysts Ilya Malyakin, Oleg Varfolomeyev and Ilias Bogatyrev. If you have any questions regarding the content of the Monitor, please contact the foundation. If you would like information on subscribing to the Monitor, or have any comments, suggestions or questions, please contact us by e-mail at, by fax at 301-562-8021, or by postal mail at The Jamestown Foundation, 4516 43rd Street NW, Washington DC 20016. Unauthorized reproduction or redistribution of the Monitor is strictly prohibited by law. Copyright (c) 1983-2002 The Jamestown Foundation Site Maintenance by Johnny Flash Productions