FILE - In this Sunday, July 13, 2007 file photo, Governor of the Bank of Latvia Ilmars Rimsevics speaks during an interview with The Associated Press in Riga, Latvia. Latvia's state broadcaster said Saturday Feb. 18, 2018, that the national anti-corruption agency raided the office and a property of the head of the country's central bank, Ilmars Rimsevics. (AP Photo/Roman Koksarov, File)

Latvian member of ECB won't resign, rejects bribes report

February 20, 2018 - 8:38 am

LONDON (AP) — Latvia's official on the European Central Bank's main policymaking council refused Tuesday to heed calls to resign following an investigation into suspected bribery and an Associated Press report on allegations of extortion and connections to money laundering.

Ilmars Rimsevics, who was detained Saturday and released on bail two days later without charge, was defiant, dismissing the allegations against him as a smear campaign by commercial banks.

"I made a decision not to step down because I am not guilty," he said.

The country's anti-corruption agency has started a probe into suspected bribery. And the AP has reported that the chairman of local bank Norvik, Grigory Guselnikov, says Rimsevics had asked for bribes since 2015.

Guselnikov and Norvik have filed an international request for arbitration to a body of the World Bank to resolve what the document claims is the request for bribes and abuse of power by a "Senior Latvian Official." Guselnikov and Norvik CEO Oliver Bramwell have confirmed that official is Rimsevics.

Rimsevics said "my retreat would allow a man like Guselnikov to triumph."

In response, Guselnikov said Rimsevics' comments were contradictory.

"He says that he does not regulate the banking industry, that it is the financial regulator. Then why would commercial banks try to attack him? If he thinks commercial banks are attacking him, he's admitting that he's involved in financial regulation," he told the AP on Tuesday.

Guselnikov has claimed that Rimsevics told him that the financial regulator was loyal to him personally and that he used that to threaten his bank with regulatory measures.

He said his bank "still aims to find a win-win settlement with Latvia" in the arbitration process.

Guselnikov has also claimed that his bank had been asked by Rimsevics' associate to launder $100 million from Russia.

Rimsevics acknowledged knowing the middleman Guselnikov mentioned, Renars Kokins, but said he had met him only once with Guselnikov.

Latvia's president, prime minister and finance minister have all called on Rimsevics to step down from his post, at least while an investigation is underway. The government cannot force him to step down — only a court can — because the central bank is politically independent.

The standoff risks destabilizing the country's financial system, where one bank, ABLV, has already needed a rescue loan from the central bank to remain afloat. That all comes after the U.S. Treasury said last week that ABLV had "institutionalized money laundering" and recommended that ABLV be cut off from dollar transactions with U.S. banks.

The AP on Monday also published a photo that shows Rimsevics on a trip in 2010 that shows him in the company of the then-chief of a Russian military technology company. Data from the Russian border agency obtained by the AP shows Rimsevics was in Russia at the time.

Rimsevics said Tuesday that he did go on a fishing trip in the Russian region of Kamchatka in 2010 but that he doesn't know anybody in the photo and that the picture was likely tampered with.

The Latvian banking chief also said he had received death threats, which he had reported to the police.

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