What did senior banking executive Aivar Rehe know about an alleged gigantic Russian money laundering operation? WhoWhatWhy investigates.
This is Part 2 of a three-part series. Read Part 1 here.
My first full day in Tallinn, Thursday, the Rehe family held its funeral for Aivar, whose body, we were told, was on display, and later cremated. The family issued a request that the media stay away, though pictures of the attendees outside the church and of a wooden casket being carried into the sanctuary were published. I, being a foreigner and not wanting to be too intrusive, did not attend. Then I wished I had: I could not find a single account where anyone who had attended the funeral described it — or how Rehe looked, or whether the casket was open or closed. (Later, a friend informed me that he had spoken with someone who had attended the funeral and claimed that the casket was open; however this person was quite curt with my friend and would say no more, including whether he had a look at the body.)
I had to bide my time before I could approach those who knew Rehe best. It would be too raw right after the funeral. So I busied myself trying to line up contacts and helpers.
One of the first things I did was try to get in touch with those who worked with Rehe. That was clearly not going to be easy. One man I reached out to via LinkedIn, who ran Danske Bank’s Baltic Banking section, “declined” my request. For what it’s worth, he now lists his profession as “Gardening Leave.”
My efforts to hire a “fixer” did not go smoothly, and ended up consuming much of Friday. The first person recommended to me seemed interested — until she Googled me and found that I had been interviewed on a number of occasions by RT, the international TV network controlled by the Russian government.
I tried to explain that journalists routinely accept invitations to be interviewed by all manner of media, including those with which they may not agree — and that, besides, I hadn’t done so since the whole Trump/Russia story became front and center.
No matter. I got a hostile message saying that Estonians were very sensitive about Russia, based on the history of the two countries, and that was that.
Two more fixer candidates over the next two days ghosted me for various explained and unexplained reasons (one said the subject was “too big” for her; another expressed interest, then went silent).
Over breakfast at my hotel, I greeted another patron dining alone at the table next to mine and discovered she was a local. Why check in to a hotel, I asked? She said she was staying overnight to treat herself to the spa. Oh — and she had some work to catch up on at her office across the street. What did she do? She worked in banking. I mentioned Rehe. Oh yes, she said, brightly, she had worked with him at the bank across the street, after he’d left Danske.
He was apparently a tough taskmaster, always looking over her shoulder — not the sort of person who normally would have been unaware of what his subordinates at Danske Bank were doing with all those nonresident accounts.
The weather started to turn colder, and the rain and sharp wind seemed to be putting everyone in a winter state of mind. Then my luck turned. I was introduced to Aleksei Ivanov, a young journalist with a beard and man-bun who was glad to help me in his free time.
And two days later, I made another good contact, a skeptical former police investigator I’ll call “Mattias.” (He asked that I not use his real name.) Both Aleksei and Mattias found the Rehe mystery fascinating and were dissatisfied with official explanations and with what the media was reporting.
Mattias told me that the Estonian interior minister briefed all editors-in-chief on details of the case. Off the record, the official had revealed that Rehe had removed his wedding ring and left it in an envelope on the piano that morning.
So, presumably, Rehe’s wedding ring was found at home that morning — yet his corpse, lying just yards away in the back, was not discovered for two days?
Together with my new team, I started reviewing the tidbits that had emerged publicly.
Here’s how the local correspondent for Bloomberg reported the initial news:
Rehe’s body was found near his home, the police said in a statement on Wednesday. “This place had been checked earlier by his family. The body has no signs of violence, neither does anything point to an accident.” The police said no more details would be provided, out of courtesy to the family, and there would be no investigation into Rehe’s death.
Notice that the police were very careful not to indicate the actual location, nor the known cause of death, nor the method.
But: “This place had been checked earlier by his family.” How thoroughly? Did they look out the window earlier in the day, hoping to see him walking around back there? They would just have seen the empty rectangular garden, bordered by bushes and trees.
The following video shows the Rehe home and Danske Bank in Tallinn, Estonia. The limited dialogue is in Estonian.
In my whirlwind of conversations and emails, mostly inquiries to local journalists who had covered Danske Bank or the fallout, I heard many intriguing things, but they were almost all second or third hand; when I couldn’t establish the original source, I moved on.
Over the course of days, one person told me that someone else had heard that Rehe had hanged himself, but the family hadn’t seen the body because the branch it was hanging from had collapsed, and the body had fallen to the ground, where it was obscured by a rock. Later I heard from another party that, no, he had hanged himself with an extension cord, and that it had broken.
And Mattias added another layer of confusion: He said he had heard a confounding reformulation on Rehe’s first suicide attempt. That it happened just two days — not an entire month — before his actual suicide. That certainly bothered me. In a story with things that kept changing or did not add up, this was a doozy.
It seems to have gone undiscussed and unresolved, but the authorities at least felt the need to justify some of their seeming incompetence. Seeking to explain the failure to spot his body right away, police asserted that his corpse would have been hard to see because his gray hair and dark clothes blended in with the stones placed about on the ground. (He had been wearing a black jogging suit, according to police spokeswoman Kristjan Lukk.) (Go here to see photos taken by a drone.)
The most interesting issue, we agreed, was how a body could have lain in the backyard for two days with no one noticing. Besides the statements about the visibility of the body, there was the question of whether anyone had even looked in the garden.
On Friday, as criticism and questions mounted, Valdo Poder, the operations chief of the Northern Police Prefecture, told Postimees, a leading Estonian daily, that the official search had not extended to the backyard — at the request of family members, who had assured the police that Rehe had left the property, and who did not want the yard picked over by strangers. Poder said,
We only got a visual on the backyard, as much as could be seen when going from the fence to the door of the house. The PPA [Police and Border Guard] personnel who were inside the house had a view of the backyard through the windows. We didn’t search there specially. We received clear information that he had left. That was the basis for choosing the wrong direction.
Granted, it is a tactical recommendation to always commence searching as close as possible. But since the individuals looking for Aivar Rehe were clearly convinced that he was not there, we started searching further away … In addition, we heeded the wishes of the family that strangers would not enter their home, be it journalists or the PPA. We didn’t start putting too much pressure on them. We were told that Aivar Rehe had left home, that he was not in the house, and not in the garden.
Many observers expressed consternation. One was Priit Hobemagi, a commentator, former editor-in-chief of a major daily, and head of the journalism program at Tallinn University. When I asked him about it over coffee in my hotel lobby, he shook his head in disbelief. “The police ask dozens to help them look for Rehe — and they look for three days — but don’t check the yard? This is beyond unprofessional.”
Almost immediately, the authorities were under siege for incompetence, struggling to handle the public relations nightmare. But was it incompetence — or something else?
The authorities had even used drones to search for him. How could the drones not find his body lying on the ground in his backyard? Particularly if they had heat-seeking capability? (Even dead bodies give off heat signatures due to decomposition, and can be detected by thermal cameras.)
More important: Rehe’s family had previously searched the area where his body was eventually discovered, said Marianne Ubaleht, senior press officer for the PPA, and found nothing. Of course, none of this could be taken at face value, since reports, both official and unofficial, were highly inconsistent. One story attributed to police actually claimed Rehe was still alive as of Tuesday night.
Everything seemed up for dispute, including whether it really was a suicide. Both the government and the media had quickly declared that Rehe’s death had nothing directly to do with the Danske Bank scandal. It is unclear how they could possibly know that. Did they base that belief on the suicide note? What did it say?
‘It Is Wrong to Even Raise That Question’
The assertion that his death had nothing to do with the money laundering scandal seemed premature under the circumstances. Rehe was, by all accounts, a workaholic, and his whole life was banking. So at a minimum, the scandal had to have weighed heavily on him, even though the government had assured him he was not a suspect.
I found an interview that Rehe had given to Postimees in the spring of this year, in which he said he felt responsible for the problems at the bank. That seemed to be stating the obvious. As CEO, how could he not feel some responsibility, even if he denied personal knowledge or culpability?
But then I found an earlier interview of Rehe, from March 21, 2017 — one by Joosep Värk, an Estonian investigative journalist working with the Organized Crime and Corruption Reporting Project (OCCRP), the global network that produced the “Panama Papers.” This interview is fascinating because Rehe’s responses appear to be evasive. Considering his position, and aggressive hands-on approach to his banking work, it is striking that he would not answer this question, which appears near the end of the interview:
Should the CEO be aware of a situation where nearly $1.2 billion are moved from a bank in Moldova to the Estonian office of Danske over a period of 18 months?
To put that question, and Rehe’s halting responses, in context, here I excerpt at some length from the interview:
VÄRK: I am working with an international association of investigative journalists (OCCRP) on a case of international money laundering. It concerns the years 2013-2014 and how Moldovan banks were used to launder dirty money from Russia. Large sums from a bank in Moldova… also reached the Estonian branch of Danske bank, for a total of $1.18 billion…. You were CEO of Danske during that period; are you familiar with the transactions I’m referring to?
REHE: I definitely am not. It sounds somehow very unlikely.
VÄRK: You are not aware of a transaction of this magnitude from Moldova?
REHE: Sounds highly unlikely.
VÄRK: Your departure (fall of 2015 – J. V.) had nothing to do with…
REHE: No, definitely not. It sounds deeply illogical. Your source and the work you’ve done, they’re not accurate.
VÄRK: What do you mean they’re not accurate?
REHE: (Stutters at length – J. V.) I’m not familiar with the situation. This entire cash flow just doesn’t make sense.
VÄRK: Could it be illogical that banks in Moldova make transfers to Danske…
REHE: It’s just illogical information.
VÄRK: What do you mean, precisely?
REHE: I cannot even say. I’ll put it like this: I don’t know what I mean, just that what you’re saying doesn’t make sense….
REHE: It is no secret the bank serviced non-residents, and it is not the only bank that did…
VÄRK: However, what about what they are pointing to, changes in the management linked to these problems…
REHE: I do not know how to comment on that.
VÄRK: Just eighteen months before you left, the financial supervisory authority issued a [ruling] to Danske in connection with anti-money laundering and terrorist financing prevention measures.
REHE: I believe this is something the bank should comment on. I was doing my job; if such aspects exist, you should turn to the bank and they will tell you. I have no right… this is banking information, and you will get capable answers from authorized persons.
VÄRK: They have. I’m asking whether your departure had anything to do with that precept?
REHE: Definitely not. No, no, no. These things are not related.
VÄRK: What was it related to?
REHE: I explained it back when I made the decision. The bank changed its business heading; it will become a corporate bank and its grasp on the banking market will weaken. I’m the type of executive who wants to grow, to involve different categories of clients. My course was to try and get at least a quarter of a million clients for the bank, after which I was going to take a break and then move on. Because their heading is a different one, I made my decision.
VÄRK: Allow me to ask a hypothetical question then. Should the CEO be aware of a situation where nearly $1.2 billion are moved from a bank in Moldova to the Estonian office of Danske over a period of 18 months? Or could it be information that never reaches them?
REHE: I believe that it is speculation on such a level that it is wrong to even raise that question… You need a bank to get a competent answer to this question.
VÄRK: They have answered it, saying they’ve had problems with the “know your client” principle.
REHE: There is nothing more I can tell you…
What was it about this issue that made Rehe “stutter at length” after Värk said to him “What do you mean they [his sources and work Vark had done] are not accurate?”
Had he no knowledge of the Moldovan transfers? Since 2008, officials had been investigating illegal Moldovan transfers to Estonian banks, starting with Sampo Bank — at a time when Rehe was still working there. In 2015, the Estonian press and OCCRP reported that they had been looking for several years into large Moldovan/Estonian money transfers. The original impetus was the so-called Magnitsky case, which led to laws penalizing Russians for financial wrongdoing. And just one day before the OCCRP interview with Rehe took place, the Danish newspaper Berlingske published a major story mentioning the Moldovan angle.
Did Rehe hold the key to something that parties unknown did not want to see exposed? Anyone who has spent time looking into the global money laundering racket understands that insider knowledge about such matters can be dangerous.
Tomorrow, Part 3. Our reporter probes the Russian connection, and asks some key questions at the murder scene.
Related front page panorama photo credit: Adapted by WhoWhatWhy from Petar Milošević / Wikimedia (CC BY-SA 4.0), Hans Põldoja / Flickr (CC BY 2.0), Danske Bank / Wikimedia, President of Russia (CC BY 4.0), US Treasury / Wikimedia, and private collection.