Former director of the State Digital Development Agency (VDAA), Jorens Liopa, owner and manager of the “Corporate Solutions” group of companies, Aigars Ceruss, and public procurement specialist Ainars Biders – Latvian Television’s program “de facto” reports that this trio was arrested by the court this week at the request of the State Police (VP) in the criminal case initiated by the European Public Prosecutor’s Office (EPPO) for possible fraud in IT procurement of the state administration.
Among the total of 21 detained persons are other state officials, such as the current head of the VDAA and a member of the board of “Rīgas pratmas”, managers and employees of several prominent IT companies, and representatives of two auditing companies from the so-called “big four”.
It has already been reported that the Corruption Prevention and Combating Bureau (KNAB) this week carried out criminal procedural actions in the case of the possible disclosure of undisclosed information. Information related to IT purchases in various state institutions was revealed to a businessman by two state officials – from the VDAA and the Ministry of Smart Administration and Regional Development (VARAM), which oversees it. Later, VARAM confirmed that its state secretary Edvīns Balšević was involved in the case, although he is not prohibited from continuing to perform his duties.
It is likely that VARAM Minister Raimonds Čudars (“New Unity”) was informed about this already on Tuesday during the recess of the government meeting, when he was addressed “de facto”.
“There have been procedural actions by VARAM as well. And here this information can really be given to the KNAB, taking into account this stage of the investigation, which is the very beginning. In any case, we are currently in a situation where these actions are directly carried out,” said Chudar. “In my opinion, it is very important that the information is accurate: exactly what is the nature of involvement of the specific people, what is their procedural status?”
The procedural status of Joren Liopas, former colleague of Balševics in the Judicial Administration, is now completely clear. The Department of Nature Protection under VARAM, where Liopa held the position of deputy director of the Department of Nature Protection since the summer, received approval from the VP for his arrest in the case of possible fraud in information technology procurement and suspended him from his position.
“de facto” it is known that in parallel with this position with a job in Sigulda, Liopa also became an employee in a department of the Ministry of Justice at the beginning of this year.
However, he also found time to organize a kind of reception in the cafes of the quiet center of Riga, where this official was visited one by one by the management and employees of various IT companies, according to “de facto” available information.
At the center of the criminal proceedings initiated and supervised by the EPPO and investigated by the Directorate for Combating Economic Crimes of the VP is a procurement worth 1.5 million euros, financed by European Union (EU) funds and organized by VDAA last year. The winners of this “umbrella procurement” would have the opportunity to influence the course and result of further related public procurements.
As a result of the procurement “Consulting services and software and documentation development quality monitoring services”, a general agreement was concluded with several companies in autumn. They were SIA “Agile & Co”, SIA “Corporate Consulting”, auditor company “Ernst & Young Baltic” and its “colleague” in the big four auditors “PricewaterhouseCoopers” (PwC) as the head of the supplier association.
The suspicion of the law enforcement authorities is that the victory of these companies in the procurement was illegally agreed upon by an organized group.
One of the central characters is Ainars Biders, a specialist in public procurement and an independent expert often hired by state institutions, who once created the portal “iperkumiem.lv”. He is said to have developed the technical specification for this procurement, adjusting it in such a way that the specific companies won. Then they could also act in favor of group members or persons related to them in further procurements. At the request of the investigators, on Wednesday, the court ordered the arrest of consultant Bider, who at least at that time was also an employee of the Ministry of Transport and the Child Protection Center.
On Wednesday, the former director of VDAA, Liopa, received the same court decision – on detention. As director of the procuring agency, and even after he had already been suspended, he met with the owners and representatives of the companies involved to agree on the distribution of work.
On Thursday, however, the court ordered the arrest of the head and owner of the company “Corporate Solutions”, Aigars Cerus. He was detained later than the others, because at the beginning of the day of the operation and also when the search was already carried out in the territory and office of the large group of companies, Cerus had not yet returned to Latvia from a trip abroad. One of the already mentioned procurement winners, “Corporate Consulting”, is a subsidiary of the Cerusa company. Cerus has agreed with the other members of the organized group on what kind of work it will do.
In addition to the three arrested members of the group, according to the investigators, Ivars Šults – an IT specialist, former head of JSC “Capital”, who is now a public official, as he became a member of the board of “Rīga heat” in November.
He allegedly communicated with the members of the group and distributed the procurement work between the participating companies before the procurement took place.
Šults, who withdrew his candidacy at the last moment in the competition for the Latvian Public Media Board in the fall of 2024, commented on his detention in writing. “Within the framework of this case, I cooperate with the law enforcement authorities. Unfortunately, I cannot make a big contribution to the case, because I know only a few of the 20 people involved. I have not been in any way connected with the purchase of election services and I have not communicated about these issues with any of the people involved in the case or other people who are also not involved in this case,” Schultz wrote “de facto” on Thursday evening.
The investigators believe that Harijs Baranovs, head of PwC’s IT consulting department, Rudīte SpriŘe-Karnīte, director of the Technology and Cyber Management consulting practice of “Ernst & Young Baltic” and Aigars Staks, board member and participant of SIA “Agile&Co”, met with other members of the group before the procurement took place and agreed on the distribution of work.
Both auditing companies gave identical answers to “de facto” questions about the searches of their offices and the detention of employees: there will be no comments. Stak, on the other hand, explained in a telephone conversation that he had signed documents prohibiting him from speaking, but urged not to get too excited about calling his company “Agile&Co”, because in the future such messages may have to be retracted.
“de facto” reports that on Tuesday several other IT companies received uninvited guests – those performing procedural actions from the VP. For example, “RIX Technologies”, whose chairman of the board Eva Fadejeva did not make any comments about it; “Baltic Software Factory”, whose board confirmed that one company employee had been detained; SIA “Orange 4 IT”, whose manager and owner Āris Āriņš once worked in Cerusa company structures. Several current or former employees of Cerusa were also among the other detainees.
The chairman of the commission for the procurement of consultancy services organized by VDAA, the already mentioned many times, Arvis Širaks, deputy director of VDAA, whose phone was switched off for two days, on Thursday “de facto” justified it by being on vacation. Chirac did not want to answer direct questions about whether he had been detained: “I do not deny, I do not confirm, but I simply do not answer such questions and tell you that I was on vacation and I am on vacation this week.”
The director of VDAA, Valdis Pusvācietis, could not be contacted for two days, and the agency’s press secretary could not tell where he was either. On Thursday, the half-German came to the extraordinary session of the Saeima commission on election security as if nothing had happened.
“I have not been assigned any security measures. This means that I am not a suspect. Accordingly, I can also hold a position and perform my duties,” the half-German commented “de facto” after the hearing. “I was detained and at the moment I am accordingly… (..) I am not a suspect!”
The director of VDAA also stated: “We have not received information officially from the law enforcement authorities or from the entrepreneurs themselves that they would have any restrictions on continuing to cooperate with us.” It was the half-German who signed the general consultation agreement at the heart of the EPPO case, and the role of his deputy Chirac in the outcome of this VDAA procurement is also not entirely clear.
Asked on Tuesday about how the criminal process could affect the VDAA, Minister Čudars stated: “I hope to receive this information in full from the law enforcement authorities in the near future, because it is possible that we need to take immediate actions, in fact, to stabilize the operation of the agency itself. I do not rule it out, because there are many jobs ahead, very responsible jobs. We have to achieve a situation where the agency is fully able to fulfill the tasks given to it.”
At the coalition meeting on Monday, an explanation could be demanded from “Jaunajai Vienotība”, because the ministries headed by its ministers and their subordinate institutions are involved in the scandal, even at the management level. It should be noted that this is the first time in Latvia that the EPPO has asked the court to apply detention in a case concerning the use of EU funds, and Jorens Liopa is the first state official with whom this has happened.
