VZCZCXRO1744
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHRA #0737 3331500
ZNR UUUUU ZZH
P 281500Z NOV 08
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC PRIORITY 5423
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
UNCLAS RIGA 000737
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: PHUM ECON EFIN LG
SUBJECT: LATVIA: TROUBLING USE OF LEGAL PRESSURE TO SQUELCH
ECONOMIC DOUBTS
1. (SBU) Summary: With the econmic situation in Latvia becoming
more tense, law enforcement agencies are applying hard measures
against individuals publicly doubting the stability of banking
system or the national currency. A Latvian law, amended after fears
of Lat devaluation in 2007, makes it a crime to knowingly
disseminate untrue data or information about the condition of the
Latvian finance system, punishable by fines and jail time up to six
years. Criminal proceedings have been launched against a college
lecturer and a pop singer, triggering criticism from human rights
experts and free speech activists. Several journalists have also
said they feel intimidated by the government's use of the legal
provision, and that the situation reminds them more of journalistic
pressures that exist in Russia. End summary.
2. (SBU) Utilizing a law against dissemination of untrue financial
information, police have been actively questioning, and even
detaining, persons for making negative comments about the Latvian
banking system and national currency. Rumors about eventual
devaluation of the Lat have been circulating in Latvia in the past
weeks despite numerous government officials assuring this would not
occur. Dmitry Smirnovs, a finance lecturer at Ventspils College,
was taken into police custody for two days for urging people to
withdraw their savings from banks in a discussion organized by a
local newspaper. He has since been released but is not permitted to
leave the country and is required to notify police of any change of
address.
3. (SBU) Similarly, investigations have been launched against
Valters Fridenbergs, a popular singer who made a joke about banks
and withdrawing deposits during a concert and was later questioned
by the police. In both cases, the Security Police (the agency
dealing with threats to national security), was the acting
authority. It has refused to comment on the investigations. In
neither case are we aware of any suggestion that the individuals
were deliberately seeking to destabilize the national currency, the
Lat, or to manipulate markets for personal financial gain.
4. (SBU) Human rights commentators and free speech web sites have
condemned the actions taken by the police and described them as an
overreaction. Political commentator Karlis Streips said using the
police to silence dissent from the official line was unwarranted and
set a dangerous precedent. Despite that, Bank of Latvia Governor
Ilmars Rimsevics stated in an interview with Latvian National Radio
that in "every other country, people spreading rumors about
devaluation of the currency would be arrested within 10 or 15
minutes".
5. (SBU) The Latvian press was quick to report on these events and
the editorial pages of major Latvian newspapers have been openly
critical of the government's actions. Several journalists have
commented that they feel intimidated by the use of such police
actions, noting that the practice is reminiscent of governmental
pressures placed on journalists and editors in Russia. An Amcit
reporter for an American financial news service told us that he had
received calls from the Ministry of Finance and the Bank of Latvia
for his reporting on the financial situation in Latvia. The
reporter told us that he is nervous that he will be targeted next
and said that many journalists were talking among themselves about
how to fully cover this story given what they feel is the
government's hyper sensitivity and overreaction, and willingness to
use security institutions to intimidate critics.
6. (SBU) Comment: The use of security laws to intimidate honest
critics of the economic situation is troubling. Though one of the
three sub-sections of the law addresses the dissemination of untrue
information for the purpose of acquiring property, the other two
sections make no mention of the need that such untrue statements
have a motive for personal gain or intent to alter markets to be a
crime. In a climate where corruption concerns are ever growing,
this pressure to squelch journalistic and free speech freedoms is
disturbing.
Larson