Latvian official misses ECB meeting as investigation deepens

RIGA, Latvia (AP) — Latvia’s banking chief missed a meeting Wednesday of the European Central Bank’s top council, amid a suspected corruption scandal that is rattling confidence in the Baltic state’s political and financial world.

Ilmars Rimsevics has been barred from performing his duties amid an investigation into suspected corruption that continued to deepen Wednesday. That left his deputy, Zoja Razmusa, to attend an ECB meeting, the Bank of Latvia’s spokesman, Janis Silakalus, said.

The ECB declined to comment on whether the council discussed Latvia’s situation or Rimsevics’ situation in particular. Besides Rimsevics’ probe, a local bank, ABLV, has needed a rescue loan after the U.S. Treasury accused it of massive money laundering.

Rimsevics has been barred from performing his duties by Latvia’s anti-corruption agency, but cannot be fired by the government. The prime minister and president have called on Rimsevics to step down amid an AP report that he is accused of extortion and connections to money laundering from Russia.

Latvia’s Constitution Protection Bureau, which controls access to state secrets, says that following the AP reports it has also started an investigation into Rimsevics and cut off his access to top secret information. Rimsevics denies any wrongdoing.

Meanwhile, U.S. Deputy Secretary of State John Sullivan is due to visit Latvia on Thursday.

Ahead of his visit, the United States government issued a statement saying it has “full confidence” that Latvia will take “the necessary steps” to uphold the integrity of its banking and financial sector.

The comments, from State Department spokesperson Heather Nauert, come after the U.S. Treasury last week accused Latvian bank ABLV of actively laundering money and breaching North Korea sanctions.

Nauert said Washington would continue to support and help the Latvian government, financial regulators and its law enforcement officials “to realize our shared vision of a strong and well-regulated Latvian financial sector.”

She stressed that Washington and Riga have already been working together “for many years” in combatting corruption and money laundering.

ABLV has denied the accusations but its finances apparently deteriorated since then, leading the European Central Bank on Monday to prohibit the bank from making any payments. ABLV needed a rescue loan from the Latvian central bank.

ABLV, Latvia’s third largest bank by assets, is largely focused on serving non-Latvian clients from the former Soviet republics and other regions outside the European Union.

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