Volume 10 Numbers 2/3

Spring/Summer 2001

Constitutional Watch
     A country-by-country update on constitutional politics in Eastern Europe and the ex-USSR

Lithuania - Controversies over privatization continued to dog Prime Minister Rolandas Paksas's ruling coalition in recent months. On April 23, the Lithuanian State Property Trust signed two important privatization agreements. The Danish company DFDS Tor Lines purchased a 76 percent stake in LISCO, the state shipping company, for $47.6 million and pledged to invest an additional $60 million over the next three years. In addition, 90.7 percent of the shares of the Lithuanian Saving Bank were sold to Estonian Hansabank for $37.5 million, with a pledge to invest a further $37.5 million over the next two years. The government had been trying to sell LISCO, which operates 29 transport ships and six ferry lines to Sweden and Germany, for the past four years. The deal to sell the shipping company ran into fierce opposition from Linava, the Lithuanian truckers association, which staged protests, blocking traffic in Vilnius with convoys of trucks. The truckers claim that the sale of the company to a foreign competitor will harm the interests of local truck companies. DFDS Tor Lines also runs a trucking network through Europe.

Protests resounded in parliament as well. On April 24, the day after the LISCO deal was signed, parliament (the Seimas) voted against a moratorium on the LISCO privatization proceedings by a narrow vote-55 deputies had voted in favor of the moratorium, while 57 voted against it and two abstained. The moratorium was proposed by the opposition Lithuanian Social Democratic Party (LSDP) and supported, as well, by the Lithuanian Farmers Party (LFP) and by Rolandas Pavilonis of the New Union (Social Liberals) (NU[SL]), a member of the ruling coalition. In defeating the moratorium, NU(SL) and the Lithuanian Liberal Union (LLU), another member of the ruling coalition, were also helped by right-of-center opposition Homeland Union (Lithuanian Conservatives) (HU[LC]).

A few days earlier, on April 17, parliament had approved by a vote of 51 to 4, with 20 abstentions, an amendment to the Law on Public Circulation of Securities. According to the amendment, investors who buy more than 50 percent of the shares of a state company must also buy the shares of minority shareholders for the same price. Parliamentary speaker Arturas Paulauskas (NU[SL]) sent the amendments to the president, suggesting a "fast-track" decision- although the parliamentarians' probable reason for wanting a speedy adoption is suggested below. The amendment's supporters described it as a way to protect minority shareholders. But Paksas and Adamkus were skeptical about the amendment, especially its effect on the LISCO deal, where minority shareholders own 20 percent of the total member of shares. Indeed, the law would have substantially changed the terms of the deal. If the amendment had been adopted, rather than purchasing 76 percent of the shares, DFDS Tor Lines would have been required to purchase 96 percent.

In any case, a twist to the story surfaced on April 23 when the news agency ELTA disclosed that a number of deputies (from various parties) or their relatives are among the minority holders of LISCO shares. In reaction to the report, deputies have been exercising varying abilities to recall facts. Bronius Bradauskas (LSDP), the former environment minister, said he sold 2,000 shares a long time ago. Giedre Purvaneckiene (LSDP) initially said that reports that her son has 27 shares were lies; later she announced that her son had sold them, although she was not sure if he had sold all the shares. Raimundas Palaitis (LLU) acknowledged that he has LISCO shares, but he was not certain if the number stood at 4,057, the figure given by ELTA. Only Arturas Ploksto (LSDP) openly acknowledged that he owns 715 shares. Members of parliament are not banned from owning shares, but the parliamentary statute provides that, in a case of direct interest, a deputy should declare his or her involvement and not participate in debate or voting (Art. 18)-which did not happen in this case. At the request of HU(LC), the Parliamentary Commission on Ethics and Procedures will decide whether these deputies violated parliament's rules. Article 21 of parliament's rules provides that deputies found guilty of breaching the conflict-of-interest provision could possibly be banned from parliament for up to ten days and docked pay for this duration. In practice, the commission would most likely issue a reprimand or censure at most.

In any event, President Valdas Adamkus did not respond to Paulauskas's request to promulgate the amendment quickly and, on April 27, returned the legislation to parliament for further consideration (Art. 71). In his view, the matter should be decided on a caseby- case basis by the privatization agency when negotiating with a potential buyer of a state enterprise. On May 17, parliament again adopted the amendment in its original format (Art. 72). LSDP and NU(SL) supported the amendment, while LLU and HU(LC) were against it. The amendment, though, will not affect the LISCO deal since it was concluded before the amendment was adopted by parliament.

Both privatization deals-especially LISCO- were accompanied by a ferocious battle in parliament. The opposition LSDP fought the transactions at every step, often helped by a volatile group among NU(SL) deputies that was also opposed to the privatizations. While political skirmishes over privatization can always be expected, the rhetoric in these debates-the defense of Lithuanian capital against Western invaders-was disturbing, especially when "national capital" means Lithuanian oligarchs like Bronislovas Lubys, the former director turned owner of the fertilizer giant Achema and former prime minister in 1992-93. Lubys is currently president of the Lithuanian Confederation of Industrialists. The slogan "Lithuanian capital first" was tested by privatization foes during the saga of the Mazeikiai refinery privatization. Though it did not stop the deal with the American company Williams International, the anti-Western drive proved useful in the parliamentary elections in the fall of 2000.

While the battle over the privatization of LISCO and the bank tested the strength of the ruling coalition, the government of Prime Minister Paksas (LLU) continued to suffer self-inflicted casualties. On April 2, Minister of Health Vincas Janusonis (NU[SL]) resigned. He cited family reasons, although the resignation coincided with media reports on suspected conflicts of interest. The High Commission for Public Service Ethics has been investigating the activities of Konsiliumas, a company that trains doctors in Klaipeda. Janusonis was the head doctor of the Klaipeda town hospital and owned a majority stake in Konsiliumas. After he became a minister, Janusonis passed the shares to his son. Both before and after accepting the ministerial post, a case for a conflict of interest seems possible since Konsiliumas was paid for providing training from the hospital budget.

Janusonis is the third minister in Paksas's government to bow out after allegations of corruption. In January, Gintaras Striaukas (LLU), the minister of transportation, resigned over alleged ethical violations. On February 6, Eugenijus Maldeikis (LLU), minister of economics, resigned after a controversial visit to Moscow. Conflict of interest was suspected although not affirmed by parliament's ethics commission, which ruled that Maldeikis merely violated the rules for official travels. (See Lithuania Update, EECR, Vol. 10, No. 1, Winter 2001.) Maldeikis was replaced by Eugenijus Gentvilas (LLU), former mayor of Klaipeda.

Relations between President Adamkus and Prime Minister Paksas have become tense. Adamkus was booed at the congress of farmers in Vilnius, on March 13, after stating that the time of agricultural subsidies is over and that the state can no longer afford to bail out failing agriculture. Speaking right after Adamkus, Paksas instantly promised further subsidies, bringing a standing ovation from the unruly farmers. In 2000, the Ministry of Agriculture paid 140 million litas ($35 million) in subsidies. Notwithstanding Paksas's promises to the farmers, increasing-or even maintaining-this level of subsidies will be difficult in the face of Lithuania's accession to the EU (which will require dramatic decreases in this area) and the present shortage of budgetary funds. The growing strain between the president and the ruling coalition could be felt in Adamkus's annual address in parliament, on April 19. The president noted that LLU and NU(SL) are "novices at the steering wheel of the state," and that they are experiencing serious difficulties.

Though Paksas's government has been in troubled waters since its first days in office and lost the support of several small factions in parliament, including that of LFP and the Center Union, Paksas unexpectedly put on a show of strength and confidence in April. During the LISCO privatization debate, he took a bold stance, perhaps for the first time in his political career, in order to save the crucial deal. This was a clear reversal of his behavior in the Mazeikiai Nafta privatization in 1999, when he resigned dramatically, if not tearfully, citing disagreement with the conditions governing the deal. (He became prime minister again after elections in October 2000; see Lithuania Update, EECR, Vol. 8, No. 4, Fall 1999.)

On the foreign policy front, President Adamkus's visit to Moscow, on March 29-31, to meet Russian president Vladimir Putin was supposed to be a major event in Lithuanian foreign affairs. In reality, it brought no significant progress on the issues of primary importance to Lithuania. There was no agreement on oil supplies to the Mazeikiai refinery. (Russian oil giant Lukoil, which wants to take over the refinery from Williams International, is obstructing the delivery of supplies.) The Duma has still not ratified the Lithuanian-Russian border treaty. Putin also showed no signs of warming up to the idea of Lithuanian membership in NATO.

On February 14, in a rather symbolic move, the Vilnius district court found Kazys Gimzauskas, 93, guilty of genocide against Lithuania's Jewish population during World War II. The court did not hand down a sentence, since the convict suffers from an incurable mental disorder and is not capable of controlling his behavior, but rather handed him over to the custody of his relatives. Gimzauskas was the deputy security police chief in Vilnius during the Nazi occupation and was found guilty of signing orders to deliver Jews to the Nazi forces for extermination. His superior, Aleksandras Lileikis, accused of similar crimes, died last fall before the conclusion of his trial. Gimzauskas is the first to be found guilty of such charges by a Lithuanian court since independence in 1991. In late March, Lithuania sent an extradition request to Great Britain for Antanas Gecas (Gecevicius), 85, another war-crime suspect, who currently resides near Edinburgh. Gecas was the commander of Lithuanian police battalion that allegedly was involved in extermination of Jews.

On April 5, after a three-week trial, the Siauliai district court sentenced Petras Raslanas, a former Soviet secret-police officer, to life imprisonment in absentia. Raslanas, 87, was convicted of aiding and participating in the massacre of 76 civilians in the village of Rainiai on June 24-25, 1941. The victims, some of whom were tortured and decapitated, were prisoners in the Telsiai jail and their deaths were ordered by the NKVD in the face of advancing Nazi troops. Raslanas, who denies the accusation, fled to Russia in 1992 and holds a Russian passport. Russian officials have repeatedly declined Lithuanian requests for his extradition.

Such crimes are investigated by the International Commission for the Investigation of Crimes under Nazi and Soviet Occupation, founded in 1998 by President Adamkus. The body consists of historians, lawyers, representatives of international Jewish organizations, and human-rights activists from Lithuania, America, the United Kingdom, Germany, Russia, and other countries. In early March, the commission reached an agreement with the Yad Vashem in Jerusalem for the participation of its experts in investigating the Holocaust in Lithuania. Some data from a March commission meeting, which, leaked to the press, could shed light on the role of Lithuanians in the Holocaust. The information alleges that approximately 10 out of the 25 Lithuanian police battalions, similar to the one led by Gecas, had participated in the genocide of Lithuania's Jewish population during World War II. Arunas Bubnys, the historian researching the role of the wartime police in the Holocaust, compiled a list of some 1,000 members from the 10 battalions, who were in one or another way involved in killing Jews.

On February 12, the Constitutional Court ruled on the request of three regional courts to investigate the constitutionality of some provisions of the Law on Solicitors. Specifically, the request related to Art. 26.3, which bans lawyers' participation in a trial if they were a judge in the court where the trial is taking place within the preceding three years, and Art. 26.4, which bans participation if the lawyer is related to the judge hearing the case. Critics of the law contend that these provisions violate Art. 48.1 of the Constitution, which states that "every person may freely choose an occupation or business"; Art. 29.2, which states that "a person may not have his rights restricted in any way, or be granted any privileges, on the basis of his or her sex, race, nationality, language, origin, social status, religion, convictions, or opinions"; and Art. 31.6, which guarantees the "right to defense and legal counsel," meaning that those provisions of the law in question might restrict the defendant's right to choose a lawyer. The Court ruled against the complaint, arguing that these provisions are specific, limited, and are not based "on sex, race, nationality, language, origin, social status, religion, convictions, or opinions." Thus, the law does not ban lawyers from pursuing professional duties in general but only in certain courts or at certain time; similarly, the provisions do not harm the defendants' right to defense.

On February 22, the Constitutional Court confirmed the right of procurators to file an action in civil-law trials. On April 2, the Court found that some minor provisions of the Law on Real Estate Property Restitution contradict the Constitution, and, the next day, the Court dismissed the request to investigate some laws on privatization of state-owned apartments. The Court confirmed (on April 12) that the police have a right not to issue gun permits for persons in police register, that is, who have committed crimes in the past. On April 26, the Court found that the government decision from 1993 (which requires enterprises to continue some payments after a bankruptcy procedure is initiated) violates separation of powers as envisaged in Art. 5 and Art. 92.2 of the Constitution and the Bankruptcy Law.

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