A Christmas Tale: a key witness to how the EBRD failed to tackle corruption speaks out.

John Christmas, an ex Latvian banker living in exile, has been trying to expose ‘the largest fraud you've never heard of” for over a decade now. Yet, despite being able to show clear evidence that the European Bank for Reconstruction and Development (EBRD) is linked to historically fraudulent transactions, Christmas has been ignored by major media outlets, writes Stephen Komarnyckyj.

In his latest video, exclusively published by EU Today, he explains the fraud and what it means for the EU and Latvia. But before you click play let's take a few minutes to look at Christmas's career. Who is he and why should we believe him? What is the nature of the fraud and why does the EBRD's role matter?

Christmas, a US born Latvian banker, was once the head of Parex Bank's International Group. He secretly tried to expose frauds at the bank before being fired for whistle-blowing in 2004, he subsequently left Latvia in 2005 because he was in danger.

Then, on 25 January 2006, a former colleague telephoned him. She said that the bank was ‘hunting him down’ and that he should stay out of Latvia. Parex collapsed in 2008 because of the frauds Christmas had tried to reveal. He was told that the bank was ‘the KGB, the mafia, and they killed people who got in their way.'


They were right. The bank's owners, Valerijs Kargins and Viktors Krasovickis, were associates of ‘alleged’ Tamboskaya mafia boss Grigorijs Rabinovics (also known as Grigory Rabinovich). He in turn was part of a criminal gang presided over by Aleksandr Torshin, the Russian banker with close links to the FSB. Torshin became notorious as the ‘handler' of the stetson-wearing, six-gun toting Russian agent Maria Butina, who was involved in interfering in US politics in 2016. When Parex collapsed some of the funds were allegedly loaned to companies linked to Rabinovics, according to the Latvian media; Torshin subsequently laundered funds from a Moscow department store through Spain, according to Spanish court documentation.

If Parex had been allowed to collapse and then properly investigated, the links to the Russian intelligence and mafia might have been exposed. However, Latvia was then, and remains now, largely controlled by oligarchs who routinely strike deals with the Kremlin. Politicians and civil servants are often in their pocket. A crucial audit report detailing questionable transactions before the bank's collapse was suppressed. The Latvian government then brokered a strange deal with the EBRD which Christmas argues, compellingly, was fraudulent.

After Parex collapsed, the bank's bad assets remained with the successor to the original Parex bank which was renamed Reverta. They were serviced at a cost of billions of dollars by the Latvian taxpayer. The bank's good assets were incorporated in a new bank, Citadele. The EBRD ‘purchased’ a stake in Citadele when it was privatised in 2010. However, the terms of the transaction meant that the Latvian privatisation agency had to buy it back under certain conditions at a higher price. The EBRD was in effect being bribed to pretend to own part of Citadele. The failure to recoup the funds looted from the bank and prosecute those responsible has left criminals largely in charge of the Latvian economy.

Why does this matter to us? The EBRD was supposed to be about exporting not only western finance but western values of liberalism and democracy to the East. Christmas's video is filmed in Malta at the site of the summit between George H. W: Bush and Mikhail Gorbachev, which took place on December 2-3 1989 shortly after the collapse of the Berlin Wall. The Cold War ended and many commentators such as Francis Fukuyama believed that liberal democracy would triumph and this history would come to an end. How wrong they were. KGB agents have, as Christmas notes, turned the Russian government into an ‘aggressive meddler’.

He also stressed that two other banks linked to the crooks at Parex and in the Kremlin, ABLV and Ukio, would collapse in the years after Parex fell due to money laundering. Incredibly Arnis Lagzdins, who was in charge of the compliance at Parex until shortly before its collapse, was also the compliance officer at Ukio, which folded in 2013. The bank, based in Lithuania, had, like Parex, been used for Kremlin money laundering and would be bailed out in a mysterious deal by the EBRD. Lagzdins would subsequently head the Latvian government's attempt to restore trust in the country's banking sector. Alas, Latvia's ABLV bank was sanctioned for money laundering on his watch and collapsed in 2018.

However, while the West was failing to deal with criminality linked to Russian intelligence in the East, its own politics were being compromised. Russian and eastern oligarchs with questionable reputations were transforming Britain's capital into Londongrad. Some of them were parachuted into the West as supposed foes of the Kremlin, but then acted in ways that would make even Putin's botoxed features break into a smile.

The process accelerated after 2014 when Ukraine's Revolution of Dignity delivered a probably fatal blow to Russian imperialism. Russian money was pumped into the West and its propaganda machine went into overdrive. Western politicians across the political spectrum courted Russian money and support. Christmas's video explains how Moscow's money laundering is central to the criminality that destroyed the optimism embodied in the Malta Summit, and corrupted the West. He saw the process at first hand and explains how we might begin to tackle the crooks in the Kremlin and their western facilitators. We need to hear what he has to say...

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Steve Komarnyckyj

Steve Komarnyckyj

Steve Komarnyckyj's literary translations and poems have appeared in Index on Censorship, Modern Poetry in Translation and many other journals. He is the holder of two PEN awards and a highly regarded English language poet whose work has been described as articulating "what it means to be human" (Sean Street). He runs Kalyna Language Press with his partner Susie and three domestic cats.

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