TALLINN, 1 March 2005 - The SAO asked Central Criminal Police to find out whether the rural municipality government of Keila under the leadership of Tiit Mae acted lawfully in 2000 when selling a building to a private limited company whereby the buyer got right to privatise 23,4 ha land for servicing the building at the seaside.

Likewise, the SAO informed the Ministry of Finance and Public Prosecutor’s Office about the results of special audit where it appears that the rural municipality government of Keila has cheated the state with inexpedient use of money in the amount of approximately one million kroons.

The SAO is of the opinion that in the course of audit the rural municipality government of Keila has tried to mislead the auditor and that Lea Papp, rural municipality mayor, has given knowingly false information to the SAO for which the Council of the Commune of Keila (Tiit Mae, chairman) might consider her prosecution. In the course of the audit the auditor of the SAO experienced reluctance from the side of the Commune government and attempts to create false perception by the auditor.

The audit was commenced after the letter of the inhabitants of Keila Commune, received by the SAO, where the inhabitants queried the use of money in 1999 and 2000 by Keila Commune received from the state through Privatisation Agency. Keila Commune got money for fixing up the structures in Keila-Joa and Klooga, earlier belonged to military forces, and for reconstruction of two houses and a storegouse in Laoküla into shelter and subsidised residential accommodation.

No works have been actually done by the Commune government in Laoküla, neither have been used the buildings by the Commune government that they got from the Ministry of Defence. EEK 910,000, received from the state, were allegedly used by the Commune government for financing construction work of a subsidised residential accommodation in Karjaküla. „The commune has at the moment a necessary subsidised residential accommodation, but this does not annihilate the fact that the commune had presented knowingly false information to the Privatisation Agency in order to receive money for the funding from the state", told Olav Lüüs, the Chief Auditor of the SAO who lead the auditing.

As the Commune government did not use EEK 910,000 purposefully, the SAO made the Ministry of Finance a proposal to claim the sum back from the commune. The state had not allocated the money to the commune if they knew that it will go to additional financing of another object.

When clarifying the use of money for construction work of subsidised residential accommodation by the commune in Karjaküla received from the state, the SAO had to assert that on the basis of the documents available in the Commune government it was not possible to ascertain afterwards which works and to what extent were actually done on the object by the construction companies and whether the works they were paid for were actually performed on the relevant object. The SAO was not presented the documents that could enable clarification, according to the statements of employees of the Commune government most of the documents had already been disappeared. The member of the Commune government who had in essence acted as project manager on the object, gave the auditor confusing, in a way misleading explanations.

Toomas Mattson, the Head of the Public Relations Service of the SAO noted that as the SAO is not entitled to check local governments in full, the SAO is not able to take a position on the suspicions, spreading among the inhabitants of Keila Commune, that for a part of the money paid officially for construction work of a subsidised residential accommodation also for the works on the object in private premises could be paid.
The SAO has asked the Central Criminal Police to initiate an investigation in order to find out about the transactions made by the Commune government of Keila in 2000. The SAO asks to find out whether the Commune government of Keila was entitled to sell a building at the seaside as a storehouse whereby the buyer got right to privatise 23.4 ha of land for servicing the building at the seaside. The SAO wants to find out whether the transactions include elements of a criminal offence.

In the beginning and during the audit the leaders of the Commune government of Keila confirmed the SAO that the storage of electronic goods that the commune got from the Ministry of Defence was situated in the same place where the dwellings which were built for accommodation of the military men working in that storage. The Commune government planned to dispose the land under and around the building, Otherwise the building would have gone to the landowner with the land free of charge.

But in the end of the audit, in the opinion submitted on the draft of the report, the Commune government stated that the storage in question was situated in another place, some kilometres away at the seaside and that it was sold already in 2000 in conformity with the decision of the council of the Commune. Thereby the Commune government confirms that the storage in question near the dwellings (a big, well preserved building, with a roof in good condition) has not been delivered over by the Ministry of Defence.

It does not appear from the documents of the Commune government, neither from the documents of the council of the Commune where the storehouse which the council of the Commune had planned to dispose was exactly situated in Laoküla. Neither the dwellings nor the former storehouse of electronic goods near them in Laoküla, likewise the building at the seaside in Laoküla have ever been registered as municipal property in accounting of the Commune.

As only one storehouse in Laoküla belonged to the Ministry of Defence and this was the building near the dwellings, the council of the Commune could only take a decision about that storehouse in February 2000, and the statement of the Commune government that the decision of the council of the rural concerns the building at the seaside, cannot be true.

The SAO is of the opinion that the Commune government of Keila used the decision on disposal of the storehouse at the seaside in order to legalise the building (it appears from the drawings available in the register of construction works) as a property of Commune and to dispose as the storehouse. The SAO is of the opinion that the Commune government of Keila was not entitled without the decision of the council of the Commune to dispose the building at the seaside in Laoküla. The council of the Commune was not entitled to take decision on the building as it did not belong to the Commune, as ownerless structure should have belonged to the state. The value of the building is not so valuable but the land that was acquired by right of pre-emption is very valuable.

The building at the seaside (cadastral unit „Puhkerand”) as a storehouse was bought by OÜ Caparison who sold it further to its shareholder. The named person asked the council of the Commune to change the application of the building as from the storehouse into the dwelling and allowed the owner of the building to privatise 23.4 ha of land for servicing the building at the seaside. The person who had bought the building from the Commune for EEK 400,000 sold it as a dwelling in March 2001 or 11 months after the purchase.



Toomas Mattson
Communication Manager of National Audit Office
Telephone: 6400 777
Mob: 51 34900
E-mail: [email protected]

• Posted: 3/1/2005 12:00 AM
• Last Update: 9/22/2015 10:22 AM
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