Investigations

30 June

Cleaning reputations. How businessman involved of laundering tens of millions of euros received help from Belarus democratic forces in exchange for donations

With this publication, BIC launches a debate on the limits of cooperation between civil society organizations and businessmen whose activities are being questioned by European law enforcement agencies and others.

Eduard Apsit, a cleaning company businessman and the central figure of a previous BIC investigation, built his business including with the help of shady government contracts in Belarus. In applications for Lithuanian residence permits for his family, it was stated that the Apsits might face danger in Belarus because he allegedly donated to the BYSOL Foundation. But investigators found out that at the time of the application, Eduard Apsit had a residence permit in the United Arab Emirates, and that he and his wife Elena are also Cyprus citizens.  

With this publication, BIC launches a debate on the limits of cooperation between civil society organizations and businessmen whose activities are being questioned by European law enforcement agencies and others. 

Rescuing the benefactor from danger or a commercial relationship

At the end of May, BIC published an investigation into the cleaning services business of Eduard and Elena Apsits. We found that the couple's business in Belarus grew including through bribery of officials and rigging tenders. In Russia, companies linked to the Apsit brands were in collusion with Wagner Group leader Yevgeny Prigozhin's interests, while affiliated businesses in Ukraine were subjects of investigations regarding bid-rigging. Eduard Apsit came to the attention of Latvian investigators when he used ABLV Bank to transfer his earnings to the EU. Investigators believe companies linked to Apsit laundered €73 million. That case is still under investigation.

BIC is also continuing our inquiry. We learned Apsit family members were granted humanitarian residence permits in Lithuania. Elena's parents received residence permits valid until the end of December 2022, while Eduard's mother's permit expires in mid-July 2023. 

Although nothing seemed to connect them to Lithuania, Eduard and Elena also applied. The reasons are unclear: Elena has held a Cypriot “golden passport” since 2018, as has Eduard, who also has a residence permit in the UAE. According to data available to BIC, the couple has no business or property in Lithuania. 

Investigators found an explanation. Apsit applied for a residence permit in Lithuania with the help of Belarusian democratic forces. BIC saw a letter written by a legal entity affiliated with the BYSOL Foundation. It states that Eduard Apsit donated money to the organization through the Stichting Belarus Solidarity Foundation. The total donated from February 2021 to May 2022 was 94,670 euros. The letter claims Apsit has been financially supporting Ukrainians affected by the war since March 2022.

Source: BIC

When asked by BIC to comment, BYSOL Foundation head Andrei Stryzhak said he could neither confirm nor deny the information: 

“We do not disclose the names of our donors because they face prosecution in Belarus for promoting extremist activities. However, I would like to point out that we do not impose any restrictions on who can donate. Anyone can support BYSOL and be assured that their details will not be disclosed.”

Political stance or financial crime

BIC has evidence that BYSOL Foundation co-founder Yaraslau Lihacheuski approached the Lithuanian office of the human rights organization Freedom House seeking letters of recommendation for Apsit which stated he was a donor. 

Speaking to BIC, BYSOL Foundation co-founder Yaraslau Likhacheuski did not disclose information about the donors. In response to BIC's questions, he claimed that he could not recall any donations from Eduard Apsit as an individual, but did not rule out that they could have been made through a legal entity owned by the businessman. He also noted that Apsit's last name “did not ring a bell” with him.

A businesswoman who knew Apsit put him in touch with BYSOL, BIC was told by sources who wish to remain anonymous. We cannot publish the woman’s name for security reasons: her family is in Belarus. In a conversation with BIC, she stated that she could not disclose information about donors, but since some details are already known to us, she agreed to comment on Apsit's philanthropy.

According to the businesswoman, the main purpose of her cooperation with Apsit was to get money to support political prisoners:

“We swore by Apsit because when we launched fundraisers for political prisoners, he would cover most of them.”

She believes that Apsit's “black marks” in business should not be confused with his “political stance”.

“It's one thing to run a business, and having a political position is something else. You should not mix one with the other. Let's say somewhere out there you have business faults, but you have a clear political position. If you are guilty of one thing, why should you be punished for everything else?” the businesswoman told BIC. She also added that Apsit did not only help BYSOL.

Background check or donor protection

BYSOL did not have a solid system for vetting donors, Lihacheuski told BIC. “If there were donors who had been portrayed negatively in the media, we certainly paid attention to them. If the person was introduced by a trusted employee of the foundation, they were considered a trustworthy donor by default.”

A Freedom House representative in Lithuania, Vytis Yurkonis, confirmed to BIC that Belarusian civil society organizations had asked Lithuanian authorities for help in obtaining residence permits for the Apsits' relatives. He said he was unaware of the spouses' “golden passports” for Cyprus and Eduard's residency status in the UAE before the BIC investigation.

“Several civic initiatives assured that Eduard Apsit was helping political prisoners in Belarus and also supporting Ukraine. Their recommendations signaled that the man could potentially face political persecution for such activities. BIC's investigation revealed that Eduard Apsit was eligible for long-term residence in other countries, so his justification for a humanitarian residence permit automatically disappears. The information he concealed can be interpreted as deliberate misuse,” Yurkonis told BIC.

In addition to their Cypriot citizenship, Eduard and Elena Apsits own property in EU countries Latvia and Italy. The couple owns a mansion in Jurmala, 200 meters from the Baltic Sea, worth €1.2 million, and a villa in Tuscany, valued at €3.5 million.

Source: Firmas.lv, information service for business decisions
Source: Firmas.lv, information service for business decisions
Source: Italian cadastre database; data courtesy of OCCRP (Organized Crime and Corruption Reporting Project)

Eduard Apsit was contacted for comment on his cooperation with the Belarusian democratic forces but did not respond by the time of publication. 

The BIC investigation team had several issues with Apsit's cooperation with Belarusian democratic forces. 

First, is it even valid? Apsit's family received an opportunity to be granted legal status in a European Union country in exchange for his donations to the democratic forces of Belarus. This is also what Eduard wanted for himself and his wife. Such a relationship between a businessman and the foundation goes beyond charity and can be interpreted as commercial relations: providing services in exchange for donations.

A second issue is ethical. Can a person, by donating to democratic forces, compensate for possible money laundering? Is it enough for civic initiatives to help him obtain legal status in the EU, especially when he already has the right to reside in countries where he is not in danger of being persecuted by the Belarusian regime?

“Eduard Apsit may have donated money free of interest, but let's be clear – after the full-scale invasion of Ukraine, many businesses in Russia and Belarus have found it much harder to exist and operate. For a particularly large company, even a six-figure sum is not a major investment to whitewash its reputation in the West,” said Vytis Jurkonis, head of Freedom House's Lithuanian office.

The €94,670 that Apsit transferred to the BYSOL Foundation likely benefited people or organizations working against repression. However, this amount does not seem impressive compared to Apsit’s earnings from shady schemes. 

The minimum condition for atonement for an economic crime, from the point of view of the judicial system, is compensation for damages. The amount of money donated by Apsit is not close to the amount of money he allegedly laundered – the investigation in Latvia alone concerned 73 million euros.

Jurkonis says Freedom House will now pay even more attention to vetting donors:

“It is important for Belarusian civil society initiatives to understand that they can be used, and as someone who mediates, we need to focus even more on the verification process, although there is already enough dissatisfaction with our strict approach.”

The BIC investigative team believes members of democratic forces should take responsibility for vetting individuals and for providing information about their activities to human rights organizations they may approach. Civil society initiatives and foundations need to vet donors before vouching for them. Their reputation is at stake. There is no obligation to give anything in return – it is a charitable donation. 

The BIC team also believes that civil society and independent media will be stronger, more professional and more independent if they continue to be supported by ordinary Belarusians who have a stake in their activities.

Dear readers!

The following inaccuracies were discovered in this article.

In the case of the tender for the Brest locomotive depot maintenance (held in 2015), the amount of money discussed in the article was in non-denominated rubles. The audit report from the prosecutor's office (dated July 2016, after the denomination) did not indicate that the amount was not denominated. So this led us to the conclusion that we were dealing with denominated rubles. In the original investigation, we did not clarify this and applied the ruble exchange rate after the denomination. We offer our apologies.

Also, in the investigation, we did not mention that along with two companies related to Eduard Apsit, the third party, an affiliated company of the Presidential Administration, had participated in the tender of the Republican Clinical Medical Center of the Administration of the President of the Republic of Belarus.

Though, in our opinion, these mistakes do not change the essence of the investigation, we apologize over again.

The full story with BIC’s comments on possible errors in the material, can be found here.

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