UPDATE 1-Latvian oligarch hits back at corruption charges as U.S. clamps down

* Latvian oligarch Lembergs denies corruption charges

* Blames domestic political opponents for sanctions

* Transport minister says working to secure service at port

* (Adds details, transport minister quotes)

By Gederts Gelzis

RIGA, Dec 10 (Reuters) - Latvian politician and oligarch Aivars Lembergs, who was put on a U.S. corruption sanctions list on Monday, hit back on Tuesday, saying allegations against him were "fake news" and instigated by his political opponents.

Lembergs, an oligarch with substantial political influence in Latvia, was hit with a sanction by the U.S. Treasury that means U.S. citizens are prohibited from doing business with him and four entities he owns or controls which are connected to the running of the Ventspils port.

"Americans are being used in internal political infighting," Lembergs told a news conference in Ventspils. "I don't have a chance to defend myself just like during Stalin's regime in the Soviet Union."

Lembergs has been mayor of Ventspils, the second largest port city in Latvia with an important role in the country's transit industry, for more than 30 years.

Before Latvia's independence from the Soviet Union in the early 1990s Lembergs held various positions in the Communist Party. He has been a candidate for prime minister for former ruling coalition party The Union of Greens and Farmers, now an opposition party, and has business ties with Russia.

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Lembergs was already suspended as mayor by Latvian prosecutors and courts due to an ongoing investigation and charges of corruption and money laundering. Lembergs has denied any wrongdoing in that case.

The Latvian Foreign Ministry warned on Monday that any financial institution carrying out a transaction with Lembergs or the four entities linked to him also risked becoming subject to the U.S. sanctions.

Latvian Transport Minister Talis Linkaits said earlier on Tuesday that the government was working to mitigate any negative effects the sanctions could have on the Ventspils port, which is crucial for Latvian trade.

"We have to provide a procedure of payments for the services of the free port," he told Latvian public radio. "We have to guarantee that companies can operate within the territory of the free port, both at the industrial area and to provide transportation of passengers and cargo," he added.

Story continues

Ventspils is an important port for transporting oil products and coal out of the Baltics.

Lembergs wrote on Twitter on Tuesday he had asked to be replaced from the managing board of the Ventspils Freeport Authority in order to keep the port running.

"I have asked Ventspils City Council to appoint another member to the Board for the time being until the circumstances have been clarified," he said. (Reporting by Gederts Gelzis, writing by Johan Ahlander, editing by Niklas Pollard and Ed Osmond)

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