Ruling party leader schemes for EU funds in Lithuania

A Lithuanian politician's family became landowners in a stratagem to take advantage of an EU subsidies program. The scandal dealt a blow to the image of the ruling party.

Daiva Repeckaite
Daiva Repeckaite NewsMavens, Lithuania
Ruling party leader schemes for EU funds in Lithuania - NewsMavens
Ramunas Karbauskis, Pulsaras, 206, Wikimedia Commons

Why this story matters:

When the Farmers and Greens Union won the election in Lithuania (a party with a nearly identical name also catapulted itself to prominence in Latvia), its moralist but socially sensitive stance sounded like a tame alternative to the right-wing populist wave sweeping other European countries.

In Lithuania, the so-called Peasants' party was busy with alcohol restrictions and the like, while other countries in the region saw governments attacking media, NGOs and the system of checks and balances.

However, a recent investigation shows that under promises of justice, transparency and social justice there has been a dark reality of accumulation of wealth that has bypassed regulations.

The investigation first was published in 15min.lt, but an English version is available on the OCCRP's website.

Details from the story:

  • With 56 parliamentary seats, the Farmers and Greens won one of the biggest electoral victories the country has ever seen.
  • Ruling party chairman Ramunas Karbauskis had made many promises: transparent politics, no more corruption, a crackdown on tax avoidance. Karbauskis holds no major government posts. His only official position is chairman of the parliamentary committee on culture.
  • His farming business, Agrokoncernas, is one of the largest landowners in Lithuania.
  • Lithuanian authorities also conducted an investigation into whether his business dodged taxes on a luxurious countryside property. Furthermore, reporters have found companies owned by his relatives that helped him bypass caps on European Union agricultural subsidies.
  • A law to promote competition prevented Karbauskis’ business from taking over his debtors’ land directly -- but did nothing to stop companies owned by his relatives from doing so. The politician's sister, a psychologist, became a land owner and benefited from EU subsidies after Karbauskis' main agricultural company reached the single entity's subsidy ceiling.
  • There is also evidence that Karbauskis is building a luxurious residence from his company's accounts, offering an opportunity to avoid taxes.
  • The prosecutor general’s office launched an official investigation on the heels of the 15min investigation.
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