Reform Party MP cleared of rental expenses fraud
Reform Party MP Kalle Laanet has been acquitted of expenses benefits relating to a property he had rented in Tallinn.
The second-tier Tallinn Circuit Court acquitted Laanet, a former justice minister, overruling a Harju County Court decision from February.
He has also been awarded over €36,000 in damages relating to legal costs incurred.
"Every person who receives an acquittal is happy," Laanet told ERR after learning of the circuit court decision.
"I have not committed any crime. Everyone who has looked into this case agrees. If the prosecution does not appeal, there will be another feeling of relief that the acquittal remains in force," he went on.
The Prosecutor's Office can appeal the decision with the Supreme Court, but no announcement has been made yet whether this will happen. Laanet reiterated a claim that the investigation and charges were the result of a vendetta against him by the Prosecutor's Office due to "certain questions" he had raised with the Prosecutor General while he was justice minister.
"I stand by my position [that this is retaliation by the prosecution]. It all began when, as justice minister, I started raising certain questions with the state prosecutor general. Based on my own experience, I also tried to help them. That's where it all started," Laanet said Wednesday.
Laanet had been charged with knowingly submitting reimbursement requests on a Tallinn property he was renting from his stepson, and the county court had sentenced him to one year and four months in a suspended sentence.
The rental expenses were billed to the Ministry of Justice and the Riigikogu Office in 2022-2023.
The lease agreement submitted by Laanet had been signed with a private limited company whose owner and sole board member was his wife's son.
Officials at the Riigikogu Office and the Ministry of Justice were unaware of this relationship. Laanet was reportedly reimbursed to the tune of €13,000 in housing rental expenses during that time.
On the question of whether the lease agreement had been concluded with a related party, the Tallinn Circuit Court agreed with the county court. However, the circuit court found that the rules governing reimbursement of housing expenses for the justice minister differed from others and that such reimbursement for the justice minister did not depend on whether the lease agreement had been concluded with a related party.
Circuit court: Laanet did not conduct due diligence, but did not intentionally set out to defraud
At the same time, and dissenting from the county court's view on this point, the circuit court found Laanet's claim that he did not know his spouse's child qualified as a related party under Section 7 of the Anti-Corruption Act to be credible. According to the circuit court, there was no evidence disproving Laanet's assertion that he had not familiarized himself with Section 7 of the Anti-Corruption Act, nor his explanation of how he understood the concept of a related party.
The circuit court noted that Laanet had not acted with sufficient due diligence by failing to familiarize himself with the law, but said this alone was not sufficient to obtain a fraud conviction. Fraud is considered to have happened when an individual knowingly submits false information.
The Tallinn Circuit Court also ordered the state to pay €36,548.40 in legal costs to Kalle Laanet.
The ruling has not entered into force.
Prosecutor likely to appeal
The Prosecutor's Office has indicated it may be appealing the decision with the Supreme Court.
District Prosecutor Olgerd Petersell, of the Prosecutor's Office economic and corruption crimes department, said in the case the prosecution had relied on evidence which demonstrated that Laanet had submitted false information when applying for reimbursement of housing expenses.
"In the Prosecutor's Office's assessment, this constituted fraud. Justice is administered by the courts, hence why we brought the evidence before the court," Petersell said.
Petersell noted that, having analyzed the prosecution's charges and evidence, two judicial panels had concluded that a spouse's child is also considered a related person, in the understanding of the Anti-Corruption Act.
The difference of opinion between the prosecution and the circuit court comes down to whether Laanet was aware he was submitting false information, Petersell said. "The Harju County Court found the crime proven and convicted Laanet of fraud. The Tallinn Circuit Court found that Laanet had indeed submitted false information and thereby misled officials, but, according to the court, it was not proven that he was aware of this legal provision — in other words, that he knew he was submitting false information."
"The Tallinn Circuit Court found that superficiality, indifference, and a failure to properly examine important matters demonstrate negligence. However, in the [circuit] court's view, these do not prove an intent to deceive. In other words, the appellate court found that Kalle Laanet acted improperly and negligently when applying for reimbursement of housing expenses, but, according to the court, this was not sufficient to convict him of fraud," the district prosecutor went on.
The Prosecutor's Office does not share this view, he noted. "We proceeded from the position that a minister is aware of the rules established by the Anti-Corruption Act. We will examine the circuit court's arguments more thoroughly, but in all likelihood we will file an appeal with the Supreme Court," Petersell concluded.
Background
As is standard practice when a sitting MP goes on trial, he had been stripped of his parliamentary immunity ahead of the February county court hearing.
Speaking before the Riigikogu at the time, Laanet said his intention had never been to request anything from the state which he was not entitled to. Laanet added he had never concealed who he was renting the Tallinn apartment from, adding all lease agreements had been submitted to the ministries and the Riigikogu Office.
Laanet was justice minister from April 2023-April 2024 as part of then prime minister Kaja Kallas' third cabinet.
He had also served as defense minister from 2021-2022.
Editor's note: This piece was updated to include comment from district prosecutor Olgerd Petersell,
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Editor: Andrew Whyte
