The Weekly Crier
News highlights from Lithuania, Latvia and Estonia.
Updated every Monday.

News Highlights from March 20 to March 27, 2000

A Latvian astronomer is struggling to repair a powerful Soviet-era radio telescope once used to listen in on satellite communications between Europe and the United States, The Wall Street Journal recently reported. 
       Juris Zagars, 50, has been working almost single-handedly for six years at the former Soviet military base where the telescope is located, some 200 kilometers west of Riga. He says he needs at least a million dollars to fix the 600-ton, 50-meter-high instrument, which was the USSR’s largest radio telescope. But Latvia’s government says it doesn’t have the money. 
       If restored to its former glory, Zagars said the telescope could be used to explore distant stars and galaxies. Vandals have stripped buildings and labs at the site of windows, doors and other fixtures. Departing Russians, apparently worried the telescope might be used to spy on them someday, ripped out critical wires and also poured acid on the engine that turns the giant dish into different positions. 

A spy saga, allegedly involving Great Britain, Russia and Estonia, continued this week with Moscow again pointing a figure at Estonia. 
       Russia FSB intelligence service, the successor of the KGB, said on March 22 that Estonians helped recruit a Russian arrested for spying for Great Britain. Russian authorities also named names for the first time, saying first secretary of the British embassy in Tallinn, Pablo Miller, was the spy's main handler; they also claimed Estonian security police chief Juri Pihl played a major role. 
       Estonian and British authorities continued to decline comment on the allegations, which were first made the week before. Privately, however, officials accused Vladimir Putin of trying to create a bogeyman in Estonia and Great Britain to score political points prior to the Russian presidential election. 
       Officials also dismissed a Russian-sourced report in the Times of London that Estonia had become the outpost of choice for Western intelligence agencies.
       In a story entitled Estonia Fosters Spy Links, The Times wrote that Russian charges this month of Estonian complicity in the spy scandal "came as no surprise to experts who see Estonia as a natural partner for Western intelligence services."
       "The tiny republic is the closest of the three Baltic republics to a major Russian city, offers a swift escape route to the West via Finland, and since independence ten years ago has espoused anti-Russian policies," The Times wrote.
       Locally, Estonian observers have doubted the claims, pointing out that the country's fledgling, small-scale intelligence services would lack the sophistication and experience to conduct effective intelligence—especially against such an experienced spy service as Russia's.
       In the past, Estonia has emphatically denied spying on Russia, saying it can get all the information and analysis it needs about its giant eastern neighbor from public sources, including the Internet. 
       (Also on this site, see Spies, where ex-KGB officer Oleg Gordievsky claims in an interview that Russian intelligence is still active in the Baltic countries. )

Alleged Nazi war criminal Aleksandras Lileikis said in his recently published memoirs that he actively backed the anti-Nazi resistance and tried to foil massacres of Jews.
       The 92-year-old, formally charged with genocide for sending scores of Jews to their deaths during the 1941-44 Nazi occupation, is regarded by Jewish groups and Nazi hunters as one of the most significant Nazi war criminals still living.
       But in his Lithuanian-language book, entitled In the Traces of the Awakening Time, he said he actually used his position as chief of the notorious Vilnius security police to secretly gather intelligence on occupying Nazi forces. 
       Many Lithuanians and Jewish groups roundly dismissed the claims as a cynical, desperate attempt to concoct a defense—should legal proceedings against him continue. 
       Lileikis said the resistance ordered him to stay in touch with organs of the occupying power and pass information on to the underground, so that they could better organize and distribute anti-Nazi fliers. He also insisted that he ordered his men not to take part in Nazi atrocities. 
       Lileikis was put on trial for Nazi war crimes in 1998; it was the first Nazi trial to begin in a former Soviet republic. But it was repeatedly delayed and finally halted on grounds the defendant was too ill to appear in court. 
       Newly adopted laws allowing for trials in absentia, however, have opened the way for the proceedings to begin again. Appellate judges this past week sent the case back to a lower court for a ruling on whether the trial should resume.
       After regaining independence from Moscow in 1991, Lithuania vowed to prosecute and convict Lithuanians who participated in the massacre of some 240,000 Jews during Nazi rule. 

News Highlights from March 13 to March 20, 2000

Russia on March 14 accused Estonia of helping Britain recruit a spy recently arrested in Moscow. In a statement, Russia's intelligence agency said the unnamed Russian citizen was recruited with "with direct participation of the Estonian special services."
       Both British and Estonian officials refused to comment on the matter though many Estonian analysts suggested the allegations were politically motivated; some said Moscow wanted to stir up a spy scandal to bolster support for Vladimir Putin prior to the Russian presidential election.
       It wasn't the first spy allegation made by Russia against Estonia. Last year, Moscow said it caught an Estonian spy, Pyotr Kalachyov, trying to gather intelligence near a Russian military base just across the Estonian-Russian border.
       Russian officials said Kalachyov had been seeking information by offering to take division officers to dinner. Estonian intelligence chief, Eerik Kross, adamantly denied the charges at the time.
       "If Estonians would spy in such a manner, it would be incredible," he said. "This would simply demonstrate that Estonians are idiots."
       Kross said Estonia did have an interest in monitoring developments in neighboring Russia. But he insisted Estonia didn't have to resort to spying.
       "We get all the public information we can," he said. "But Russia is an open society now, so we get most of what we need. Estonia doesn't need to send people to sneak around places…counting aircraft or troops."
       Since the Soviet collapse, Estonian-Russian relations have occasionally been tense. Russia has expressed anger at the Estonian, Latvian and Lithuanian bids to win membership in the NATO alliance. More recently Russia has blasted Estonia and the other two Baltic states for prosecuting Stalinist-era secret police agents for crimes against humanity.
      (Also on this site, see the related article, Spies, about whether Russian intelligence is still active in the Baltic. )

Lithuania's ruling Conservatives were roundly thrashed in countrywide municipal elections on March 19, almost certainly foretelling the party's defeat in upcoming general elections slated for September.
       Conservatives won only 199 out of 1,667 seats in different city and country councils; that's down from the almost 500 seats they won in the last local election
       With unemployment rising to 11 percent and the government implementing harsh austerity measures to rein in a large budget deficit, the ruling party has seen its popularity sink over the past year.
       The government was also bitterly criticized for the sale last year of  Mazeikiai Oil to American investors. Many critics said the oil conglomerate, which includes the region's only refinery and a pipeline, should have been kept in Lithuanian hands. 
       Others said the deal, especially the government's concession to fill a 350 million dollar shortfall in Mazeikiai's operating budget, was badly thought out.
       Publicly, the Conservatives seem resigned to defeat in September's parliamentary election, and many seemed to expect the big losses Sunday.
       The biggest winner was the center-left New Union, headed by 1998 presidential candidate Arturas Paulauskas. The party, which took 270 municipal seats, had campaigned against the government's privatization policies.
       The second place finisher, a coalition between the anti-EU Farmers Party and Christian Democratic Union, won 226 seats. The pro-market Liberal Union, led by ex-Prime Minister Rolandas Paksas, won 166 seats; it also won majorities in key city councils in Vilnius and also in Lithuania's second largest city, Kaunas.

Veterans of the Latvian Waffen SS walked in a slow procession through the streets of Riga and laid a wreath at the Freedom Monument on Match 16, a day the veterans traditionally remember their fellow soldiers who fell in battle.
       The highly controversial procession was criticized, as in previous years, by Moscow and also by many Jewish groups. Russia said the gathering was an affront to those who died in battle against the Nazis and in the Holocaust.
       But the former soldiers, most in their 70s and 80s, said they weren't making a political statement - just remembering 50,000 comrades who died in battle. The commemorations were forbidden during 50 years of Soviet rule.
       The annual march is held on March 16 to mark a major battle between the Latvian Waffen SS and Red Army on the same date in 1944.
       Some bystanders jeered the veterans as they passed, and others clapped in support.
       Latvian officials distanced themselves from the event, and parliamentarians earlier this year sought to avert controversy by withdrawing official recognition of March 16 as an official day of remembrance.
       Latvians say the Latvian Waffen SS, also known as the Latvian Legion, was strictly conscripted, front-line army and wasn't the same thing as the notorious Germany's SS—Adolf Hitler's elite force that helped mastermind and carried out the Holocaust.
       Others said the controversy stemmed from a misunderstanding of Latvian history.
       The Soviets occupied Latvia at the start of the war in 1940, Germany ruled from 1941-44, and the Soviets retook the country in 1944. Latvia regained its independence from Moscow only in 1991.
       With Latvia sandwiched between the Nazi and Soviet armies, 250,000 Latvians ended up fighting on one side of the conflict or the other, usually after being conscripted. Some 150,000 of the Latvian combatants died.
       Some Latvians, including those who ended up fighting in the Waffen SS, did volunteer to fight alongside the Germans. Many said they had no sympathy for Nazi ideology, but regarded the Soviets as the worse of two evils. Still others said they believed that fighting on the German side was the best hope for Latvia to eventually regain its independence.

News Highlights from March 6 to March 13, 2000

Lithuania is one of the most nuclear dependent countries in the world, relying on atomic power for about 73 percent of its energy needs, the International Atomic Energy Agency reported on March 6.
       In the agency's world rankings, Lithuania was in second place just behind France, where nuclear power provides 75 percent of the country's energy. In third place was Belgium, followed by Bulgaria, Slovakia and Sweden.
       Lithuania has only one nuclear power plant, Ignalina, located some 130 kilometers northeast of Vilnius. Ignalnia is Soviet built and modeled after the plant at Chernobyl, site of the world's worst nuclear accident in 1986.
       The European Union has said Lithuania should commit to closing down Ignalina or risk jeopardizing its membership bid.

In response to a long-running pedophile scandal, Latvia's parliament has  banned anyone under 18 from working as a model or competing in  beauty pageants.
       The issue arose last year after the director of one popular beauty pageant  was accused of running a boy-prostitution ring and a video company head was  arrested for peddling child pornography.
       Proponents of the law, which passed by an 81-to-0 vote in the 100-seat  Saeima legislature, say it will help prevent child abuse. But model agencies  said the ban will ruin them; many agencies often use girls as young as 13 as models.
       The pedophile scandal also touched the government when parliamentary  investigators last month linked Prime Minister Andris Skele and Justice Minister Valdis Birkavs to the pedophile investigation.
       No specific allegations were made about the two leaders, and both adamantly denied any involvement. They said the allegations were politically motivated and a sinister attempt by the opposition to destabilize the government.
       (See related story, Model City, in the current March/April edition of CITY PAPER.)

Nordic media giants Schibsted and Bonnier intend to unify loss-making publications in Estonia, said to be the first cooperation of its kind between the two powerful rivals.
       A detailed agreement has yet to be signed, but would likely involve merging the Baltic state's only two tabloids and several leading magazines, as well  as creating a single distribution system.
       Two years ago, Norway's Schibsted purchased over 90 percent of the shares in Eesti Meedia, which owns Estonia's largest daily, Postimees, as well as many best-selling magazines and the Sonumileht tabloid.
       At the same time, Sweden's Bonnier acquired 50 percent of Ekspress Grupp,  which owns the second largest daily, Paevaleht, along with a major weekly,  numerous magazines and the tabloid Ohtuleht. Estonian media mogul Hans Luik also owns 50 percent of Ekspress Grupp.
       Both Estonian concerns reported losses or slim profits last year, with especially heavy losses for the two tabloids. Combined, the tabloids lost 2.2 million dollars in 1999.
       While a Schibsted-Bonnier deal would most likely include forming a single tabloid—with ownership split down the middle—the Estonian dailies would not merge and would continue to compete against each other.
       Analysts said heavy financial losses were forcing the cooperation.
       "Eesti Meedia and Ekspress Grupp aren't going to the altar out of mutual love, but to avoid disaster," Postimees said in an editorial.
Hans Luik of Ekspress Grupp agreed, saying a country of just 1.5 million people couldn't sustain so many similar publications.
       "There are too many newspapers, magazines and TV stations here, as if there were at least 3 million Estonians," the Aripaev business daily quoted him as saying.
       Nordic investors in recent years have provided the bulk of foreign investment in the Baltic states, buying controlling or majority shares in most of the region's banks, media concerns and telecommunications companies.  
       (See related story, The Good Invasion, about the impressive wave of Nordic investment in the Baltic states in recent years.)

Only 100 ex-KGB agents and informers have come forward under a law requiring  them to register their past activities, even though the legislation may apply to as many as 10,000 people.
     The law, which came into effect earlier this year, requires former agents and informers to file detailed confessions about their KGB collaboration with a special commission, which then keeps the names in a confidential data base.
       The law supplements earlier legislation banning ex-agents from most public and even some private jobs. While informers must register, most job restrictions don't apply to them—only to former KGB employees.
       Officials on March 7 denied the process had so far been a failure, saying they expected the number of registrants to increase as an August deadline for filing confessions approached.
       If suspected collaborators don't come forward voluntarily and evidence  later points to their KGB links, their names would be made public and they could lose their jobs.
       Backers of Lithuania's tough KGB laws say they're needed to ensure ex-agents and collaborators aren't ever in a position to sabotage national security. But some critics charge that the laws are unnecessary and vindictive.
  
Latvian prosecutors on March 8 launched a formal criminal investigation into the wartime activities of Latvian-born Australian Karlis Ozols, suspected of participating in the massacre of Jews during World War II.
       Ozols, 87, allegedly served as a commanding officer in the notorious Arajs Kommando, which is believed to have murdered some 30,000 people, mostly Jews, during the 1941-44 Nazi occupation of Latvia.
       Early this year, a criminal investigation was opened against another Australian resident, 86-year-old Konrads Kalejs, who, like Ozols, served in the Arajs unit. Both men currently live in Melbourne.
       Ozols immigrated to Australia after the war. An accomplished, world-class chess player and one-time Australian champion, Ozols later coached Jewish children at an Australian chess club, Australia's Sunday Age newspaper reported.
       The Nazi-hunting Simon Wiesenthal Center has for years pointed to Ozols as one of the highest ranking ex-Nazis to have sought refuge in Australia, saying he played a key role in killing Jews in Belarus, which borders Latvia to the east.
       Ozols is also suspected of participating in the liquidation of
Riga's Jewish ghetto between 1941-1942, when thousands of Jews were marched out to the nearby Rumbula killing field and executed.

News Highlights from February 28 to March 6, 2000

Lithuanian officials said on March 3 that the national unemployment figure had reached 11.2 percent, a new post-Soviet high and almost double the jobless rate at the start of 1999. 
       All three Baltic states were affected by the collapse of the Russian market in August, 1998. But Lithuanian industries, which depended heavily on Russian buyers, appeared to be especially hard hit. Over the past, they've seen their orders drop sharply, forcing companies to lay off workers. 
       Analysts say that more major Lithuanian companies were left in states hands in the early '90s, and this has made them less efficient and less able to adapt quickly to crises. 
       Unemployment in Latvia stands at around 9 percent, and 5 percent in Estonia—also post-Soviet highs. Before the Russian crisis, unemployment hovered around 6 percent in Lithuania and Latvia, and around 2 percent in Estonia. 
       Higher growth in 2000 was expected to help bring down all three Baltic unemployment rates. But while Latvian and Estonian growth is expected to top 4 percent this year, observers say Lithuanian growth will rise by only about 1 percent. 

Police on February 29 dramatically captured two fugitive brothers who had become popular folk heroes by evading Soviet and then Estonian police in the country's forests for almost 15 years. 
       Aivar Voitka, 32, and his brother Ulo, 31, were surrounded in a forest farmhouse by heavily armed police, and surrendered after a six-hour siege; shots were fired, but no one was injured.
       The Voitka brothers first went into hiding in 1986, when Estonia was still under Soviet occupation. Soviet police said the brothers, then in their teens, were wanted on theft charges.
       But their relatives insisted they withdrew to the forest to avoid being drafted into the widely distrusted Soviet army. 
       After Estonia regained independence, Estonian police said they suspected the brothers of robbing several stores, and also of holding up two policemen and stealing their weapons.
       But some Estonians came to see the Voitkas as heroes, likening them to celebrated partisans who resisted Moscow rule from the forests after Soviet troops occupied Estonia in 1940. The resisters were dubbed Forest Brothers.
       One pop band recently released an album, called The Voitka Brother's Forest Songs, praising the fugitives; and a bakery said it was launching a new brand of bread featuring pictures of the Voitka brothers on its label.
       Tuesday's police operation, one of the largest of its kind in Estonian history, took place near the town of Viljandi, 160 kilometers southeast of Tallinn.

A pizza parlor in Vilnius has forgone standard modes of delivery, like cars, and opted instead for a band of couriers to hand carry pizzas through the city at a full sprint. 
       The Cili pizzeria recruited the runners this week after clients complained their orders were too often arriving late, and cold. 
       Managers said traffic and winding, one-way streets meant cars could take half an hour or more to travel their usual delivery routes, about a two-kilometer radius around the city-center restaurant. 
       By handing pizzas to runners—who then dash down sidewalks and take shortcuts through alleys and parks—average delivery times have been cut to under 15 minutes. 
       (For more information on Cili, see Restaurants, in the Vilnius tourist section.)

Russia on March 1 again blasted Latvia for trying elderly Stalinist agents, suggesting that the country was attempting to soil the reputation of legitimate Soviet war heroes. 
       In a strongly worded statement, the Russian Foreign Ministry denounced the trial of 85-year-old Yevgeny Savenko, which began this past week. Savenko, an official in the Soviet secret police in the 1940s, is charged with ordering the arrest and deportation of scores of Latvians; many were eventually executed. 
       "Yet again, a veteran of the Great Patriotic War, an elderly man in poor health charged with genocide and crimes against humanity has been put on trial," the Russian statement said. "Latvian authorities are whipping up a political campaign aimed at rehabilitating Nazism and its accomplices, to sow hatred against those who freed Latvia from Nazi occupation."
       A week before, Acting Russian President Vladimir Putin also angrily criticized the conviction in Latvia of Vasily Kononov, 77, who was sentenced by a Latvian court last month to six years in prison for war crimes. 
       Latvia has dismissed the criticism, saying Russia was purposely distorting history in an attempt to smear Latvia's image. Latvian officials said Stalinist-era agents and soldiers were being tried strictly for crimes against humanity and not for their fight against the Nazis. 
       Latvia, Lithuania and Estonia have also argued that Russia's condemnations stem from its own unwillingness to face atrocities committed by Russians during the Stalinist era.
       Latvia said Russian rhetoric surrounding the war-crimes issue had whipped up emotions in Russia and was responsible for an attack by vandals on Latvia's embassy in Moscow on March 3; the building was spray painted and many windows broken. Riga formally protested to the Russian government about the attack. 

Analysis—Estonia on January 1 this year began imposing trade tariffs for the first time since regaining independence, a concession to the EU which critics say could undermine the nation's reputation of having one of the world's freest trade regimes.
       Around 1992, Estonia unilaterally slashed all trade barriers—an eight year, zero—tariff policy that thrilled market purists but outraged many local producers. But to meet EU demands for tariffs as a condition of membership, and also heeding complaints from farmers, parliament adopted a law in late 1999 establishing some trade barriers. 
       The law applies to non-EU nations, though not to countries which have free trade treaties with Estonia. That means countries like Russia, the United States and Canada are subject to the new tariffs which are modeled after the EU's . 
       Estonia's government said the tariffs are a step towards full integration into the EU's customs union. 
       "I certainly wouldn't say this means we will stop having a very liberal economy," said government spokesman Priit Põiklik. "But protective tariffs are part of the EU's ideology. We have to fit into that, and we will." 
       He said any downsides of tariffs would be offset by access to EU markets and greater security. 
       "Estonia will gain more than it loses by being in the EU," he said. 
       But some businessmen fear the whole EU drive could push Estonia into being less, not more market oriented. John Ferguson, an American who heads a leading equities fund in Tallinn, said many investors have been drawn to Estonia by its simplified taxes, minimal red tape and zero tariffs. 
       "Unlike the EU, Estonia's been fantastic about keeping bureaucrats out of the economy," he said. "What makes businessmen nervous is that these tariffs, while limited, could be the start of a creeping bureaucracy." 
       Similar fears have been expressed by businessmen in Latvia and Lithuania. A Latvian-American developer in Riga, Sol Bukingolts, told The Wall Street Journal he worried American firms could be sidelined to some extent in the EU Baltics. 
       "The EU is a wonderful thing," said Bulkingolts, who explained he generally backed Latvia's EU bid. "But Americans want to be sure we will be able to bid and invest in this wonderful thing."

News Highlights from February 21 to February 28, 2000

President Lennart Meri warned on February 24 that a newly entrenched, political and business elite threatened to retard Estonian development. 
       In a televised Independence Day speech, Meri said Estonia had succeeded in setting up a market economy and spurring strong growth. But he said "the generation of winners" were now occupying positions of power and influence—and many lacked the skills to bring their companies or government administrations to a new level. 
       "If we cling to the patterns of the past, the next upswing in the development of the Estonian economy will simply not begin," the president said. "Our leadership potential is threatened by stagnation, at the expense of past and coming generations."
       Meri said overconfidence and detachment from moral codes was another mark of the new elite, often young people who filled vacuums created by the collapse of the Soviet economy and who quickly became rich. 
       "We have inherited a lot of rootlessness from the times of Soviet colonialism: everyday haughtiness in behavior and the self-confident and almost self-evident boasting of the tycoons," he said. 
       Meri suggested that many Estonians who have become wealthy over the past decade are no longer driven to improve their skills and education; nor, complained the president, do they feel the need to contribute to strengthening the Estonian state. 
       "I can sense Estonia's state of mind: the hard work of restoring our own state is now behind us and it is time for carefree social pleasures," he said. 
       Further warning signs, said Meri, included an increasing sense of alienation among average Estonians from state institutions and a dramatic disparity in income levels. 
       In Estonia, many average laborers make little more than 200 dollars a month, while monthly wages for higher-level management can top 3,000 dollars.
       "In normal circumstances, inequality of incomes is a powerful engine for capitalism," he said. "But if the gap is wide enough, it becomes a restraining factor." 
       President Meri said administrative reform, especially of the court and education system, would be critical to the nation's progress. 
       "Administrative reform means nothing but providing fast, expedient and friendly service to the citizen," he said. "Administrative reform has only one way to succeed: we must get rid of unnecessary officials and heaps of paper." 
       (See full text of President Meri's speech, here.) 

The trial of an 85-year-old former officer in Stalin's secret police, Yevgeny Savenko, began in Latvia on February 28. It is another in a series of Baltic trials focusing on Soviet-era human rights abuses. 
       Savenko, who is a Russian citizen living in Latvia, is charged with genocide for allegedly participating in the arrest and deportation of scores of Latvians after the country was occupied by Soviet forces in 1940. 
       Prosecutors say Savenko signed orders for the arrest of some 50 people, including policemen, Latvian officers and even several high-school students. Many were eventually executed or died in prison. 
       Savenko, who has denied the charges, has been held in detention since his arrest last October; if convicted he faces a maximum sentence of life in prison. 
       After they regained in 1991, all three Baltic states pledged to indict and convict those responsible for Stalinist-era atrocities. 
       Half a dozen men have been convicted in the Baltic states for Stalinist-era crimes, and half a dozen other cases are expected to go to court in the coming weeks and months. 
       While Baltic officials say their primary aim is to shed light on the dark Stalinist era, Russian officials say the three countries are seeking revenge on elderly, ailing men—many of whom hold Russian passports. 
       Last week, acting Russian President Vladimir Putin bitterly condemned Latvia for the recent conviction of Vasily Kononov, a 77-year-year old former Soviet partisan.
       Latvian prosecutors said Kononov executed nine innocent civilians, including a pregnant woman, during World War II. Kononov said the victims got caught in the crossfire of a legitimate battle. 
       Putin said Latvia had persecuted a war hero.
       Latvians have roundly dismissed the criticism, saying Russia's anger stems from it's own failure to honestly confront, or to even acknowledge atrocities committed by Stalinist forces in the Baltic states and elsewhere. 
       (See related article, Off to Court, on this site.) 

Analysis—An increasing number of policy makers and analysts around the world appear to take the prospect of Baltic NATO membership seriously. But while the trend seems to be towards more and more people supporting rather than opposing the idea, there remain some vocal critics. One of the most prominent is George Kennan, a retired American diplomat and author of America's Russia-containment policy during the Cold War. Kennan, who is in his 90s, recently spoke to The New York Times Book Review about the issue. He told his interviewer that his opposition to Baltic NATO membership was grounded in history:
       "I will not go into the history of Russia's relations with those Baltic peoples other than to ask you to remember that they were included in the Russian empire for nearly two hundred years in the two centuries before World War I. They have been a part of Russia longer than they have been a part of anything else. For a time they were fully independent. I never doubted or challenged the desirability of their independence. I never ceased to advocate it in the years when they didn't have it. But I don't think that it would be a good thing for NATO to try to complicate that historic relationship by taking these countries into what the Russians are bound to see as an anti-Russian military alliance." 
       CITY PAPER recently asked Estonian Foreign Minister Toomas Hendrik Ilves, one of the most eloquent advocates of Baltic NATO membership, to respond to Kennan's comments. Minister Ilves scoffed at the notion that Russian rule over the Baltic states should count against them in their bids to enter NATO:
       "If one is to be intellectually consistent then Poland and Finland belong to the same group of former Russian colonies. What is the statute of limitations on being oppressed? I always respect corufe opinions, but being right on containment in 1950, as Kennan was, does not mean your views are valid 50 years later." 

News Highlights from February 14 to February 21, 2000

In one of the most murky, bizarre and potentially explosive political scandals in Latvian history, a parliamentary commission on February 17 linked three top-ranking government officials, including Latvia's prime minister, to a pedophile investigation.
       Rumors have been rampant since last year that some prominent public figures were involved in a long-running pedophile investigation, but a report delivered to parliament by the chairman of a special investigative commission was the first time any leaders were officially named.
       Without providing details, Janis Adamsons said in a speech to assembled deputies that some 40 witnesses had given statements to the commission, with several pointing to Prime Minister Andris Skele, Justice Minister Valdis Birkavs and the head of the state revenue service, Andrejs Sonciks.
       Amid a media frenzy that followed Adamsons' speech, the three officials adamantly denied any involvement with the pedophile case, arguing that the charges were politically motivated and part of a wider campaign to malign their political credentials and destabilize the nation's three-party coalition government. Adamson is a member of the parliamentary opposition.
       Birkavs, a former Latvian foreign minister and prime minister, announced that he was going on hunger strike to protest the allegations, and he threatened to bring those linking his name to the pedophile case to court. 
       The issue arose last year after the arrest of the head of a video company on charges of peddling child pornography, and journalists later broached the issue of a possible pedophile ring. 
       A news program on Latvian television around that time also ran interviews with two boys who, without naming names, said they had been forced to perform sex on two ministers. Many analysts questioned the credibility of the boys, saying they may have been paid to embellish their stories.
       From the start, critics have said the investigation into the affair has been reckless and disorganized. Political parties and media organizations have also offered virtually no hard evidence to back up a swirl of allegations and counter allegations in recent months. 
       The commission's report also seems to be disputed. Latvia's general prosecutor's office, which has been holding an investigation of its own, denied that any evidence pointed to the involvement of high officials. 
       Prime Minister Skele said he was concerned about the impact of the pedophile allegations on Latvia's image, but said that he wouldn't succumb to what he said were entirely groundless charges and that he wouldn't resign. 
       President Vaira Vike-Freiberga held meetings with Skele and other political leaders about the affair, but said she also would not call on the government to resign, saying the highest priority was for an open, thorough presentation of the facts. 

A high-profile meeting of international Nazi investigators apparently failed to make clear progress in uncovering new evidence against alleged Nazi war criminal Konrads Kalejs.
       Two days of meetings drew investigators from the United States, Canada, Australia, Great Britain, Germany and Israel to compare notes on the Latvian-born Kalejs, 86, accused of involvement in Nazi atrocities during Germany's 1941-44 occupation of Latvia.
       Latvia has said it is intent on bringing Kalejs to Latvia to stand trial. Kalejs was deported from the United States and Canada in the 1990s for lying about his wartime record: he fled in January this year from Great Britain to Australia, where he has had citizenship since 1957.
       So far, prosecutors in Latvia have said they don't have enough evidence or witnesses to indict Kalejs and ensure his conviction. Australia and Latvia have said, however, that they are working to quickly conclude an extradition treaty allowing him to be sent to Latvia should he be formally charged. 
       Kalejs is accused of involvement in the Arajs Kommando, a Nazi-sponsored death unit accused of murdering nearly 30,000 Jews. 
       Kalejs has denied the charges.

News Highlights from February 7—February 14, 2000

Computer companies have said the battle against software piracy in the Baltic states is going much better than expected, with software sales soaring. 
       Representatives of the U.S. conglomerate Microsoft said they were thrilled sales of their software have more than quadrupled in the last six months—up 500 percent in Lithuania, and 300 percent in Latvia and Estonia. 
       Analysts credit an aggressive anti-piracy campaign, which included police raids of private firms, for the sudden stampede to buy software. Companies caught with illegal software are subject to thousands of dollars in fines, and company owners can even face imprisonment. 
       Since the middle of last year, piracy rates have come down from 92 percent to 81 percent in Lithuania; from 90 percent to 85 percent in Latvia, and from 86 percent to 72 percent in Estonia. 
       Baltic piracy rates, however, still remain higher than in the European Union; in most EU countries around 40 percent of computers use illegally copied software. China is said to have among the highest piracy rates in the world, of over 95 percent. 
       All three Baltic governments have been anxious to show they can enforce copyright laws. The EU has said cracking down on piracy was one of the prerequisites to joining the trading bloc. 

Russia's government on February 10 formally approved a financing plan for the construction of an 800-million-dollar oil port and terminal to compete with ports in the Baltic states—possibly undermining Baltic transit-trade economies in the long run. 
       Russia has talked about building a port near St. Petersburg, giving Russian oil exporters direct access to the Baltic Sea, for the past three years. Many analysts have said the Russian plan is unrealistic—that's it's far too expensive, and also unnecessary given the availability of ports in Estonia, Latvia and Lithuania. 
       The Russian project is at least partly politically motivated, say analysts, an attempt to gain some economic leverage on the Western-looking Baltic countries. Latvia's economy is especially closely tied to the retransport of Russian oil; by some estimates, Russian oil exports through Latvia account for over 10 percent of the Baltic state's GDP. 
       Latvia's port of Ventspils, the largest port along the Baltic Sea by far, handles some 13 percent of Russia's total oil exports every year. 
       In recent years, nationalist politicians in Russia have said oil should be diverted from Latvia for what they claim has been the mistreatment of Latvia's large Russian-speaking population. Officials in Russia's oil industry have roundly rejected the suggestion—saying Russia's would be shooting itself in the foot by refusing to use Latvia's well-developed, high-tech port facilities. 
       Many analysts have said that even if Russia manages to built a new Baltic Sea terminal and port, ports in Estonia, Latvia and Lithuania will continue to get plenty of business from Russia. Russia has always tended to have more oil than it could manage to export, they say, and that is likely to continue to be the case. 
       "I think there is probably enough oil there for all the export routes to exist, though pressure will mount on (port companies' profit) margins," Ruslan Nickolov, of Nomura International, told Reuters. 

The European Union has said EU-candidate countries should not be overly-optimistic about the date on which they will join the trading bloc.
       Many candidate countries, including Estonia, have said they are shooting to be ready for membership by 2003. Some Latvian and Lithuanian leaders have spoken about being prepared a year or two later. 
       But the EU enlargement commissioner, Guenter Verheugen, appeared to throw cold water on hopes for quick membership, saying that even nations that have been holding membership talks with the EU for the last two years have a lot of work yet to do. At best, he said only 10 out of some 30 negotiation chapters had been concluded with them.
       "We have still the biggest number of chapters to discuss and to negotiate and the most difficult chapters are not opened. So I really could not say how much time we will need to have an accession scenario, to know which countries, when, will become a member," Verheugen told Reuters in an interview. 
       He refused to say whether the first members could be invited to join in 2003 or 2004. 
       "It is impossible, we cannot set a date," he said. 
       The EU commissioner also said that the EU should not allow Austria's far-right political leader, Joerg Haider, to slow the expansion process. Haider, whose Freedom Party is in a new Austrian coalition government, has said that the EU should expand much more cautiously. 
       Commissioner Verheugen said he understood Austrian concerns that employees from new member states could take jobs from native Austrians. But he said he rejected Haider's proposal that salaries in EU-candidate nations must first reach Western European levels before they are admitted. 
       He said before they entered the EU, countries like Ireland, Portugal and Greece had lower average salaries than most other EU states. 
       Analysts have said it could take 10 or 20 years for salaries in former Soviet-bloc nations to come up to Western European levels. 

Estonian stock prices jumped by an average of almost 5 percent on February 14, bringing the main TALSE index to its highest level in a year and a half, and seeming to mark the end of a recent era of flat or falling prices. 
       Estonia's stock exchange, much like its counterparts in Latvia and Lithuania, saw a boom in prices for much of 1996-1997, with some share values doubling or tripling in a year. But prices suddenly collapsed in a November, 1997 stock market crash, and they never really rebounded. 
       Prices in Latvia and Lithuania haven't performed as well in recent months. But since the beginning of 2000, many share prices on the Tallinn Stock Exchange have increased by nearly 50 percent—with the TALSE index rising from around 100 to 154 on February 14.
       Prior to the 1997 crash, the TALSE was nearly 400.
       Increased share activity seems to have been prompted by growing optimism about the Estonian economy, which should see strong 4 percent growth this year, compared to near-zero growth in 1999. Price-earnings ratios of many leading Estonian stocks are also said to be among the lowest in Europe, apparently attracting bargain hunters in recent weeks. 
       Investors are also bullish about profits of Estonian banks, which have tended to drive the stock market's performance in the past. The Tallinn-based Hansapank, the largest bank in the region, has recently announced healthy profits for 1999 and is expected to do even better in 2000.

Also see CITY PAPER's report on the Baltic stock markets in the January/February, 2000 edition. For background on the share price boom of several years ago, see Market Mania. Black November is a description of the stock market crash of 1997. 

News Highlights from January 31—February 7, 2000

A special commission set up to register Lithuanians who collaborated with the KGB began its work collecting confessions on February 1. 
       The recently adopted law creating the five-member panel calls on ex-agents and informers to file detailed accounts of their cooperation with the once-feared Soviet secret police. 
       The registration law supplements earlier legislation banning former agents from working in government, in key state industries and even in some private firms. 
       A data base of collaborators compiled by the commission will be used to monitor compliance with the job ban. Even though informers must register, most job restrictions do not apply to them—only to those once employed by the KGB. 
       The KGB collaborators have six months to come forward. They are required to fill out applications, write down what they did and name KGB staff who they dealt with. 
       By some estimates, the job restrictions could affect 4,000 Lithuanians. The number of people in Lithuania (pop. 3.7 million) who cooperated with the KGB in some form or another is thought to be much higher. 
       Names of collaborators who confess will be kept confidential. But if suspected collaborators don't come forward voluntarily and evidence later points to their involvement with the KGB, their names would be made public. 
       Backers of the KGB legislation say the primary aim is to ensure ex-agents and collaborators weren't in a position to sabotage national security. They say they hope light would also be shed on Soviet human rights abuses in the past. 
       Critics charge the KGB laws are unnecessary and vindictive. Other critics question the ability of authorities to prove claims of KGB collaboration. 
       The KGB-collaboration issue has been a highly emotional one for Lithuania since it regained independence in 1991. 
       At the end of January, the Lithuanian Catholic Church publicly apologized for the collaboration of some of its clergy with the secret police force.

Analysis—For anyone who thought the events of the 20th century were about to be consigned to the history books, a heated debate that flared up about the pre-war Baltic presidents suggests otherwise. Regional newspapers, citing research by Estonian historian Magnus Ilmjärv have reported that the three Baltic presidents, all three of whom dominated political developments in their countries in the 1920s and '30s, may have been on the Kremlin's payroll. 
       The allegations were front-page news in Estonia at the end of 1999 and prompted sharp reactions from politicians to academicians to average citizens alike. For many, the revelations called into question the hero-status of the first independence-era leaders—Estonian President Konstantin Päts, Latvian President Karlis Ulmanis and Lithuanian President Antanas Smetona. Others cried that allegations were shameful smears on the reputations of good men.
       With so few independence symbols to latch on to, the three pre-war presidents became icons of the movements to restore freedom in the early 1990s. The body of Konstantin Päts, who died while still in detention in Russia in 1956, was returned to Estonia in 1990. He was accorded a presidential-scale funeral, with tens of thousands of people marching behind his coffin from central Tallinn to a local cemetery. 
       "For many Estonians, defacing Päts is like denigrating George Washington for Americans, Charles de Gaulle for the French or Lajos Kosstuh for the Hungarians," Radio Free Europe's Baltic analyst Mel Huang wrote recently in the Central European Review. 
       The three presidents reportedly supplied information and did political favors for the Kremlin in exchange for money, business favors and Moscow's behind-the-scenes support, according to Ilmjärv, who spent nearly 10 years studying files at a foreign affairs archive in the Russian capital. His research and findings focus on the Estonian president. Päts reportedly was in close touch with the Russian embassy in Tallinn, providing intelligence and lobbying on Moscow's behalf in Estonia on a regular basis from 1924-34; he supposedly received 4,000 dollars a year for his services, a yearly salary for Estonian diplomats at the time, Ilmjärv said. Moscow supposedly also provided money to businesses closely associated with Päts. 
       "National interests serve an insignificant role in Estonia," Ilmjärv cited Russian ambassador to Estonia, Adolf Petrovsky as saying in a communiqué to Moscow. "It's almost always personal interest that matters."
       The other two Baltic presidents were supposedly also beholden to Moscow. Researchers said the Russians funded political organizations backing Lithuanian President Smetona and Latvian President Ulmanis. The Soviet embassy in Kaunas also actively backed the Lithuanian president in a successful 1926 coup. The Russians also reportedly backed Päts when he assumed more powers in 1934. Years later, when Smetona wanted to hand down death sentences to Communists who attempted to overthrow him, the Kremlin reportedly threatened to make the president's Moscow links public. Smetona backed down. Moscow also allegedly pressed Estonian President Päts to fire Foreign Minister Kaarel Robert Pusta, who was a main advocate of a pan-Baltic Alliance that would include Poland. Päts, says Ilmjärv, complied.
       The big question for many was: Did or didn't these shady relationships, if true, play a major role in the swiftness with which the Baltic states were subjugated by Stalin at the outbreak of World War II.
       At the time, the Baltic states were coming under increasing pressure by the Kremlin to allow Soviet troops onto their territories. With war breaking out across Europe, they accepted Moscow's ultimatums in 1939 and 1940 allowing Soviet forces in. Pro-Soviet governments were installed and leading officials, were arrested. The Estonian and Latvian presidents were arrested and deported by Soviet forces following the Stalinist takeover; they later died while in detention. Lithuania's leader managed to flee just prior to the occupation, and was killed in a fire in the United States a few years later.
       Historians have documented the desperation of the Baltic presidents to prevent the Soviet takeover, trying frantically to seek Western or even German assistance in fending off the Soviets. But the allegations call into question whether the Baltic states may, at least in small part, have contributed to their own demise. 
       Current Estonian President Lennart Meri, who has been critical of Päts in the past, suggested that they did. He said the revelations reemphasized that the pre-war president was in over his head, or even complicit as the Soviets brought heavy diplomatic and political pressure to bear on the Baltic states in the late 1930s. He said Päts' dissolution of parliament earlier in the decade also did not bode well for sound decision-making. "Estonia's mistakes of 1939 were the incorrigible and inevitable result of earlier mistakes," Meri told the Postimees newspaper. 
       Others said the allegations were untrue and possibly based on forged documents. They said in the grand scheme of things, they were irrelevant to the hopeless geopolitical situation as war broke out. Columnist Enn Soosaar said in the Eesti Päevaleht daily that nobody could have done anything to have stopped the Soviet takeover, and that any assertion to the contrary is 20-20 hindsight.
       In Estonia, in particular, the dispute took on surreal proportions, as if it were a current political scandal involving modern-day ruling parties. One newspaper alleged that the study by Ilmjärv was funded in large part by the son of one of Päts' main rivals in the 1920s, Jaan Tõnisson, and that Päts' political opponent may be exacting his revenge from the grave. It all demonstrated that, to paraphrase one historian, the past in the Baltic states still has the tendency of walking around pretending it's the present.
       In the midst of the heated public debate, Prime Minister Mart Laar, himself a historian, said the whole affair illustrated how important it was to demystify history. He said it was time to take emotion out of the history of the 20th century and to start focusing on the cold hard facts.
       Don't hold your breath on that happening any time soon.

News Highlights from January 24—January 31, 2000

Lithuanian officials on January 27 released yet more bad news on the economic front, announcing minus 3 percent annual growth for 1999—Lithuania's first negative GDP rate since 1994. 
       The Thursday figure came on top of earlier news that industrial production dropped by over 9 percent in 1999 and that unemployment now stands at 10 percent—a post Soviet high. 
       After market reforms in the early 1990s, the Lithuanian economy experienced strong growth. For 1998, GDP growth was 5 percent. 
       Analysts say the economy's recent dismal performance has mainly been a consequence of financial turmoil in neighboring Russia, long one of Lithuania's primary export markets. 
       Lithuanian farmers, the giant oil refinery industry and domestic producers were hit especially hard by the sudden collapse of Russia's market in August, 1998. With falling sales, many companies had to lay workers off en masse.
       Others say the half-baked nature of some earlier reforms, including policies which left some key industries in state hands, have also made the Lithuanian economy less efficient and less able to bounce back. 
       Still other critics charge slow government reaction exacerbated the crisis. They say leaders should have moved faster to shore up economic fundamentals—by reducing spending and reining in Lithuania's ballooning national deficit. 
       But Lithuanian leaders say they're confident the economy has bottomed out, pointing to growth figures for the fourth quarter of 1999, which showed a 1.2 percent expansion compared to the same period one year before. 
       Government officials predict growth for 2000 will be around 1 percent, slightly down from earlier, more optimistic predictions. 
       "The worst appears to be over," said Violeta Gaizauskaite, press spokesperson for the Lithuanian president's office.
       She said the government this year planned to accelerate the privatization of some large industries, including in the energy sector, which she said would provide an additional boost to the economy. 
       She said restoring fiscal order was also now a No. 1 priority. 
       Silvestras Tamutis, an analyst at the securities firm Suprema in Vilnius, was also optimistic, saying many industries have succeeded in reorienting their exports from Russian to Western European markets. 
       "Already, most of our exports go to Western Europe. But thanks to the Russian turmoil, this is happening at a faster and faster pace," he said. "This will help reinvigorate our economy." 
       He said whether exports improve significantly this year partly depends on whether the dollar weakens against the euro. The Lithuanian currency, the litas, is pegged to the dollar and the strong dollar has made Lithuanian exports more costly and harder to sell abroad. 
       Gaizauskaite, the presidential spokesperson, said she didn't think Lithuania's current economic difficulties would retard the country's drive to win European Union membership in the next five to ten years. 
       "If you look at other EU-candidate countries, like Bulgaria and Romania, they are worst off than us," she said. "In comparison, our situation is not that bad at all," she said. 
       Estonia and Latvia, while also affected by Russia's economic downtown, did not appear as hard hit as Lithuania. Various predictions put their expected GDP growth for 2000 at between 3-4 percent.

U.S. Deputy Secretary of State Strobe Talbott reassured the Baltic states on January 24 that the door to NATO remained open to them—despite strong Russian opposition. 
       Talbott, in a major speech to Estonian leaders and diplomats in Tallinn, said Washington had made a firm commitment to one day admitting Estonia, Latvia and Lithuania into the alliance. 
       "Because of what you've done, are doing and will continue to do, we're committed not only to keeping the door open, but to creating the conditions under which you and your Baltic neighbors can cross the threshold," he said. 
       At a news conference later, Talbott wouldn't say if he thought the stated Baltic goal of NATO membership within five years was realistic. But he suggested they couldn't be kept waiting in the wings indefinitely. 
       "We can ensure that there is a level playing field and that the goaline doesn't keep receding into the distance like a mirage," he said. 
       Moscow has denounced moves to extend NATO membership to the Baltic nations, saying it would be perceived as a threat to Russian security. 
       The issue has also been controversial in the West. Critics say the three Baltics, sandwiched between the Baltic Sea and Russia, are too vulnerable military and would weaken NATO as members. 
       Talbott disagreed, arguing that Baltic membership would enhance the security of all countries in the region, including Russia. 
Talbott praised the Baltic countries for their open-market reforms and fast-paced development, and he said they shouldn't be shunned just because of any geopolitical complexities. 
       "It remains a bedrock principle of American foreign policy that no country should be disadvantaged for reasons of history or geography," he said in his speech. 
       He added that Russians needed to abandon outdated, Soviet-era notions that increased security for one country in their neighborhood meant a corresponding loss in security for themselves. 
       "Russia has tended to define security in zero-sum terms," he said. "The Soviet Union seemed unable to feel totally secure unless everyone else felt totally insecure…(this) posed a clear and present danger to others, especially small countries on its periphery." 
       He added that the security of the Baltic states was important to American interest, saying "the fate of the Baltic states is nothing less than a litmus test for the fate of the entire region." 
       Talbott said he backed proposals for stronger economic ties between the Baltics, the Nordic nations and Russia, saying the Hanseatic trading system that thrived in this region in the Middle Ages was a good model. He said such ties would help bolster security. 
       "Our hope is that Russia will come, over time, to view this region not as a fortified frontier, but as a gateway—not as a buffer against invaders who no longer exist, but as a trading route," he said. 
       (See the full Talbott speech at Speech of the Week) 

The Lithuanian Catholic Church has apologized for the collaboration of some of its clergy with the KGB during fifty years of Soviet rule. 
       A statement adopted at a Lithuanian bishops' conference this past week in Kaunas said a number of priests and members of the Church hierarchy had succumbed to KGB coercion and agreed to cooperate with the feared Soviet secret police. 
       During the five decades of Soviet rule, until 1991, it was widely believed that the Lithuanian Catholic Church had been infiltrated by KBG informers and agents. 
       After the Soviet Union occupied and annexed Lithuania in 1940, it outlawed religious activity in the staunchly Catholic country. Millions of religious books were burned, and many clergy were arrested, deported or even executed. 
       In later decades, the Soviet Union allowed a degree of religious practice. But it is widely believed that Moscow wanted to have as much control over the inner workings of the church as possible. 
       The Church is also drafting a statement which apologizes for the participation of some Lithuanian Catholics in the massacre of more than 200,000 Jews during the 1941-44 Nazi occupation. 
       The statement on the Holocaust in Lithuania is expected to be ready for public release by April. 
       (Also see A Crisis of Faith.)

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