In its ruling last Thursday, the second-tier Tallinn Circuit Court cleared Kersti Kracht of bribery and money laundering charges.

The court issued a 149-page ruling, which included its rejection of the Prosecutor's Office claims in respect of Kracht, who had served as an advisor to then-finance minister Martin Helme (EKRE).

Surveillance used in the case was handled arbitrarily, the circuit court found.

On January 12, 2021, the day before the Riigikogu was due to decide on holding a referendum on marriage, public procedural actions began in the case involving Kracht and real estate developer Hillar Teder. The result was searches were carried out at various locations across Estonia in what became known as the Porto Franco case, after the Tallinn real estate development which the suspicions revolved around.

The case led to the resignation of Jüri Ratas as prime minister the very next day, and the collapse of the Center-EKRE-Isamaa coalition of the time.

The Prosecutor's Office separated the aspect concerning Teder, the Center Party, and its former secretary general Mihhail Korb. A conviction from the Supreme Court has now been reached on this aspect.

Kracht, Teder, businessman Toomas Tamm, and Teder's business partner Jüri Põld were brought to trial via this now separate case.

The first-tier county court acquitted all defendants save for Kracht, who had worked as an advisor to Martin Helme (EKRE), who had been finance minister in the Center-EKRE-Isamaa coalition.

The court found Kracht guilty concerning the commissioning of advisory services from a law firm while serving as an adviser to the Ministry of Finance.

The Prosecutor's Office appealed that decision, as did Kracht: Last week's circuit court ruling is the result of that appeal and found Kracht not guilty of any offenses.

In its 149-page decision, the circuit court found it did not agree with the prosecutor's view of Kracht's actions.

The ruling repeatedly states that even if the prosecution does not agree with the county court's positions and conclusions, this does not mean the county court had reached incorrect conclusions or had failed to sufficiently assess the evidence.

The circuit court's ruling showed that Kracht had financial difficulties relating to earlier legal disputes. She had also communicated with various individuals both as an adviser to Helme as finance minister, and in a private capacity, the court found.

At the same time, in the circuit court's view, the prosecution had failed to present evidence that Kracht had requested or received a bribe as an incentive to act in the interests of either Tamm or Teder.

Based on the material brought before the court, Kracht and others had been extensively monitored and surveilled.

According to the circuit court, the prosecutor used intercepted material arbitrarily on several occasions in an attempt to find wrongdoing in Kracht's actions.

By way of example, the court pointed out that when a conversation Tamm had with an acquaintance was recorded, the prosecution extracted parts of the conversation where the discussion clearly moved on. This, the court said, created the impression that Kracht had colluded with Tamm on an illegal act.

The circuit court's decision provided further examples where the Prosecutor's Office had relied on recordings to prove the guilt of Kracht or other defendants, but when the evidence was reviewed in full, the court concluded that in editing the content, the prosecutor had reached incorrect conclusions.

The ruling indicates that Kracht and Tamm indeed had a close relationship, had met on several occasions, and that Tamm had also lent Kracht money.

Kracht also, as an adviser to Helme, helped implement a Center-EKRE-Isamaa coalition intention to alter the fishing system on Lake Peipus (Peipsi järv) in a way which Tamm also supported. However, in the view of both the county court and the circuit court, there was nothing in this which required a penalty, nor had the alterations to the fishing system been unduly influenced by Kracht.

As for communication between Teder and Kracht, the circuit court found that this, too, reflected a cordial rather than a corrupt relationship. There is no evidence, the court found, that Teder had offered Kracht a bribe, nor that Kracht sought one from him.

The court found it was indeed the case that Teder had aided Kracht in finding an investor who could buy Kracht's house, with the option of selling it back later, but in reality the transaction never materialized; it did not constitute a bribe arranged by Teder, the court found.

The fact that Kracht was also dealing with KredEx financial measures aimed at mitigating the effects of the Covid pandemic and which the Porto Franco real estate development received a loan from was immaterial, the court found.

The circuit court also noted that Kracht, as an adviser to the finance minister or as a member of EKRE, had no influence, actual or claimed, over the positions and decisions made by Helme as finance minister, or by other government members. This included IT and Foreign Trade Minister Kaimar Karu and his successor in that post Raul Siem (EKRE), who had coordinated KredEx activities in expanding support measures or deciding on their application to companies related to nationally important projects, including Porto Franco.

In the aspect where Kracht had been found guilty by the county court in relation to ordering an analysis of pension system reform from law firm TGS and procuring an analysis of public-private cooperation, the circuit court ultimately concluded that the act might constitute a misdemeanor, but not a criminal offense.

ERR reported last week (link in Estonian) that the Tallinn Circuit Court had overturned part of a Harju County Court ruling in the case involving Kracht, but left several acquittals unchanged.

Kracht had been previously convicted by the Harju County Court of a large-scale breach of procedural restrictions; this was the conviction the circuit court overturned, finding one of the alleged acts may instead qualify as a misdemeanor rather than a criminal offense.

The court also fully upheld the acquittals on bribery charges of Kracht, Teder, Tamm, and Põld, as well as acquitting Kracht, Teder and Põld on money laundering agreement charges, and Põld on illegal weapons handling charges. The court also acquitted Kracht of ordering a legal analysis of the pension reform bill from a law firm, reversing the lower court's conviction on that point.

Proceedings were also terminated regarding allegations tied to guidance materials for a public-private partnership (PPP) project due to lack of criminal liability.

The court ordered the state to pay €2,286 to Kracht for non-pecuniary damages related to her arrest and detention. Kracht was also awarded €92,332 in reimbursement for legal fees incurred before appeal proceedings.

Tamm was awarded €1,500 in compensation for non-pecuniary damage caused by unlawful procedural actions.

The court granted partial reimbursement of legal costs as follows: €8,804.60 (for Teder), €6,114 (Põld), €15,057.21 (Tamm), and €25,296 (Kracht) for appeal-stage defense work.

The ruling is not yet in force and can still be appealed at the Supreme Court.

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