February 23, 2018 / 10:33 AM / 10 months ago

RPT-INTERVIEW-Latvian minister urges central bank chief to quit over graft probe

(Repeats Thursday story without changes)

* Economy minister says banker should go ‘voluntarily’

* Banker Rimsevics denies wrongdoing, fighting to stay

* Minister says time to stop reliance on foreign money

By John O’Donnell and Gederts Gelzis

RIGA, Feb 22 (Reuters) - Latvia’s Economy Minister called on its central bank chief to quit over a probe into whether he accepted a bribe, allegations Ilmars Rimsevics has denied as his lawyers fight for him to keep his job.

Late last week, Rimsevics was detained by anti-corruption agents who said they suspected him of taking a bribe of more than 100,000 euros ($123,000). He is refusing to resign, landing the government, which cannot sack him, with a political dilemma.

Speaking to Reuters, minister Arvils Aseradens said the central bank governor should go voluntarily, urging the European Central Bank to intervene. Rimsevics is a member of the ECB’s policy-setting body, the governing council.

“It is in the interests of society that Rimsevics step down,” said Aseradens, a member of the Unity party that is part of the governing coalition. Aseradens said he should do so “voluntarily”.

His comments echoed Ainars Latkovskis, the head of the national parliament’s anti-corruption committee of lawmakers, who also urged Rimsevic to step down.

Latkovskis, who is authorized to listen to reports from the heads of the Latvian intelligence agencies, dismissed hints by some local officials and politicians that a Russian campaign of disinformation might be behind the case.

“Russian policy is opportunistic. But this is nothing to do with our investigation. We don’t have criminal proceedings because of Russian information. It’s based on facts. The evidence has been accumulated.”

RISKY BUSINESS MODEL

Latvia, which has close ties to its neighbour and former political master, has come under increasing scrutiny in recent years as a conduit for illicit financial activities.

Rimsevics has dismissed the allegations he took a bribe as part of a smear campaign orchestrated by banks seeking to settle old scores.

A lawyer representing him said on Thursday that he had lodged a legal complaint against the investigators so that he could continue to carry out his job as governor.

Under the terms of his release from detention, he is not authorised to travel outside the country or visit his office.

“We see that his rights have been dramatically abused,” the lawyer, who asked not be named, told Reuters, suggesting that Rimsevics should be allowed travel to meetings of the ECB governing council in Frankfurt.

“We want his rights to be observed ... not just to go to the governing council meeting.”

Economy minister Aseradens also said it was time for Latvia to pare back its reliance on foreign money, which he said accounted for roughly half of bank deposits in the country. Much of it comes from Russia.

Earlier on Thursday, one of Latvia’s largest banks said it had asked for an emergency loan from the central bank as part of efforts to reopen for business after being forced to halt all payments in the face of money laundering accusations.

The request for credit from the Baltic state’s central bank comes amid frantic efforts by ABLV’s management to keep the bank afloat after U.S. authorities singled it out for alleged money laundering. It has denied the claims.

Aseradens said this type of business had brought little economic benefit for the country.

“For quite a long time, there was a myth that this was good for the Latvian economy. It was quite a risky business model,” he said, adding that the country now needed to show it could tackle corruption.

“Eliminate all toxic assets from the environment.”

($1 = 0.8109 euros)

Writing by John O'Donnell; editing by John Stonestreet

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