People in Jelgava cannot understand how the Jelgava clinic fell into private hands

It was previously reported that a year and a half ago, deputies of the Jelgava Regional Duma suddenly discovered that the former Jelgava regional hospital had long been transferred to a private enterprise, and the local government was also paying extra for this. When deciding on an annual payment of 85,000 euros, deputies for the first time in 20 years had a question regarding what they were paying for.

In 2003, the clinic was transferred to the concession of the company “Kapitāla pārvaldes sistēmas”. One of the owners, Gundar Prolis, appointed himself and his mother to the board of the Zemgale Health Center, where they receive generous compensation. Typically, companies that receive benefits from the state or local government in the form of a concession pay for it. In this case, the Duma paid a private company to manage the medical center itself.

“The shareholder has delegated to a private person rights that he cannot delegate. And this private person, in our opinion, has a conflict of interest. We have also sent this information to KNAB so that they can evaluate it according to their competence. Law enforcement agencies clearly need to assess the situation,” says Peteris Vilks, head of the interdepartmental coordination center.

First, only the opposition, and then the Duma itself, turned to the Bureau for the Prevention and Combating of Corruption (KNAB) with a request to evaluate both the contract and annual payments, as well as the conflict of interest of the clinic’s management. The department came to the conclusion that the same persons who subsequently took possession of the property proposed to transfer the clinic into concession, but they refused to initiate a criminal case regarding past events. The prosecutor’s office ordered to check the situation once more.

In November last year, KNAB for the second time decided not to initiate a criminal case into how the Jelgava clinic fell into private hands and why local authorities still pay extra for it every year. In February of this year, the prosecutor’s office instructed KNAB to conduct an inspection for the third time.

“This is a working process, a democratic process. There are things we can do, but of course the prosecutor’s office can look and point out what else we need to do. We are following the instructions of the prosecutor and are currently continuing the investigation,” explained the head of the KNAB criminal procedural investigations department, Anda Rumyantseva.

The only thing that KNAB has discovered so far is that Guntar Prolis, whom the municipality assigned to supervise the clinic and who appointed himself as the head of the clinic, held multiple positions without permission. He paid an administrative fine of 170 euros.

“Last year, we established that a member of the board of the Zemgale Health Center actually combined his position with other positions without written permission. An administrative violation process was initiated, an administrative penalty was applied to the person, and a fine of 170 euros was imposed on him. This person paid the fine.” , – Anda Rumyantseva clarified.

The contract, signed twenty years ago, expired earlier this year. In October, the Duma voted to sell the center at auction. This would mean that the private concessionaire might claim the right of first refusal, since the company “Kapitāla pārvaldes sistēmas” received a 12% stake in the Zemgale Health Center on conditions that were unclear to everyone.

The value of the municipal enterprise is estimated at 2.5 million euros, but this is based on incomplete data provided by the private owner. He is interested in keeping the prices for the clinic as low as possible.

“We, as deputies, know very little regarding this capital company, we have very limited information regarding it, and I, as a former chairman of the Duma, know nothing regarding this capital company. All these years, deputies have been kept as aloof as possible, there are only all sorts of rumors in the city,” said former chairman of the Jelgava Regional Duma Madars Lasmanis (For the Development of Latvia).

There are rumors in the city that fired municipal officials find lucrative positions in the clinic, and close companies receive lucrative contracts there.

“If we open the Electronic Procurement System and enter the Zemgale Health Center, it is almost impossible to find a single record there. This means that they have not made any procurement in accordance with the Procurement Law. This is a huge violation in essence. It was one big financial fraud that was never in the interests of the municipality,” Lasmanis is sure.

In early April, following a loud scandal, Lasmanis resigned from the post of mayor. Before this, he was in a conciliatory mood. As chairman, he was satisfied with the clinic’s assessment, but was skeptical regarding terminating the concession agreement early, as this would mean litigation.

“At that time, it was necessary to find compromises so that these agenda items would be adopted at the Duma meeting, we needed the votes of the Peasants’ Union, we needed to find compromises with which they were ready to agree,” Lasmanis noted.

Until now, the owner of the shares of the health center was the executive director of the municipality, Liga Lonerte. She came to her post when the Duma was headed by Ziedonis Caune from the Peasants’ Union. Lonerte is also a member of the same party. After a public quarrel with Madars Lasmanis, she is now on sick leave. In March, supervision of the company was transferred to Lonerte’s deputy, Kaspars Sniedzitis.

“The concession agreement ended at the beginning of this year, a month ago a new board was appointed. The benefit to the municipality from the concession agreement was very neutral, if not whether there was any benefit to the municipality at all. As a municipality, we generally had very limited opportunities to participate in the monitoring and control of this company, we only received reports that were sent to us regularly, quarterly, and that was essentially all we might accept in this process. With the termination of this agreement, our responsibility has become much greater,” explained Sniedzitis.

With the approval of the Duma, he plans to order an inspection of the work of the Zemgale Health Center and another assessment of the clinic. At the first face-to-face meeting following the resignation of Lasmanis, the deputies of the Jelgava region decided to cancel the decision to sell the clinic. The only ones who voted once morest were members of the Association of Regions of Latvia, led by leader Dainis Liepins.

Deputy of the Jelgava Regional Duma from the Association of Latvian Regions Dainis Liepins said that the process looks suspicious. “Instead of conducting an inspection right now, I would first understand the situation that is happening there, and then decide what to do next with this company. The cancellation procedure today looks very suspicious. I definitely won’t support this until more is known. I suspect that someone stepped on a toe, which is why there was such a stir,” Liepins said.

On the other hand, MP from the New Unity party Uldis Ainars said that the decision was made too late. “This decision, in my opinion, is too late. It was necessary to react when emergency seizures were called in 2022; they would have saved several thousand more, but better late than never. Let’s find out what happened. This is taxpayers’ money, I hope it will be returned to the municipality,” Ainars said.

However, deputy Andris Ozolins from the Green Party of Latvia ironically says that deputy Liepins should look at his calluses: “If you evaluate whose calluses have been stepped on, then maybe if deputy Liepins looks at his calluses, then maybe he will understand who have arrived.”

After his resignation, Lasmanis and his party member Amis Dobrais joined the previous opposition. This means a change of power in the Jelgava region, where the new coalition will include the Green Party, New Unity, Harmony, “For the Development of Latvia” and two deputies who broke away from the Peasants’ Union.

The sale of the Zemgale Health Center was already planned in the budget of the Jelgava region for this year. The delay means that a hole of 2.5 million will remain in the regional budget. Agreeing on which investment projects to put on hold will determine whether the fragile new coalition can hold out and elect a new mayor.