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The independence of the Republic of Estonia was proclaimed on 24 February 1918, in Tallinn. On the following day German troops took control of the town and a 9-month-long occupation started, at the end of which the Germans handed over the power to the Estonian Provisional Government. The Estonian Police was established on 12 November 1918, but already on 28 November the newly started developing of the country was disrupted by the Red Army attack and the outbreak of the War of Independence. In the wartime the investigation of political crimes as well as intelligence and counterintelligence were the responsibilities of the Department of Military Information Gathering of the Directorate of the General Staff.

In July 1919 the Government of the Republic convened a committee which started to develop a law enforcement agency that would tackle crimes targeted against constitutional order. The Estonian Internal Security Service, initially under the subordination of the Ministry of Court, was placed in the area of government of the Ministry of Internal Affairs in January 1920. The legal basis for the activities of the Internal Security Service was established by the Order of the  Internal Security Service of the Republic of Estonia signed by Prime Minister Jaan Tõnisson and Minister of Internal Affairs Aleksander Hellat on 12 April 1920. The main task assigned to the Internal Security Service was combating crimes aimed at overthrowing the democratic republic and constitutional order.

The anniversary of the establishment of the Estonian Internal Security Service is celebrated every year on 12 April.

The Estonian Internal Security Service started work de facto on 1 May 1920 when the office of the Internal Security Service Headquarters was opened in Tallinn. Captain Helmut Veem, who had previously worked in the Directorate of the General Staff, was appointed the first Head of the Internal Security Service. In the same summer Internal Security Service stations were also opened in county centres. As the team building process started almost from scratch, the composition of staff had mostly military background.

Eduard Alver, who had previously headed the Police Headquarters, was appointed the Head of the Internal Security Service Headquarters on 21 February 1921. His term of office was also of short duration, as already on 5 October in the same year Eduard Lensin became the new Head of the Internal Security Service. He was lawyer by profession and had worked in the Ministry of Internal Affairs.

In 1924, when the police agencies were joined with the intention of strengthening the law enforcement structures, the Estonian Internal Security Service as an independent department was placed under the subordination of the Police Headquarters, where it remained until its liquidation in 1940. In 1925 the Internal Security Service was renamed "political police" and its commissars on the spot were subordinated to the Deputy Director of the Police Headquarters and to the command structure of the Inspector of the Political Police under its subordination. The Deputy Commissar and executive officials - senior assistants, assistants, senior agents and agents - were subordinated to the Political Police commissar on the spot. In its activities the Political Police developed cooperation with the criminal police, other state agencies and pertinent services of foreign states (especially those of Great Britain and Finland).

The most merited of the heads of the Internal Security Service was Johan Sooman who managed the Board for 15 years - from the beginning of 1923 until 1938, when he was promoted the Head of the Police of the whole state. After his term of office the Political Police was headed by the Deputy Director of the Police Administration Konstantin Kirsimägi who remained in office until his arrest in June 1940.

In the years 1920-1940 the Internal Security Service had to combat crime in the following areas:

  • subversive activities of leftwing extremist persons and organisations targeted against constitutional order;
  • subversive activities of rightwing extremist persons and organisations targeted against constitutional order;
  • espionage of foreign states;
  • desertion;
  • smuggling;
  • terrorism;
  • other serious crimes.

No doubt it was mostly the communist movement that kept the Internal Security Service occupied. Throughout the first independence period the Soviet government, the Bolshevist Party of Russia and the Comintern mobilised extensive financial and human resources against Estonia and conducted subversive activities in a variety of ways. Communist propaganda was disseminated, strikes and demonstrations were organised and infiltration into communities and organisations was practised by way of bribery and blackmailing. Besides legal and semi-legal ways also illegal "shock troops" were organised by communists, the aim of which was the ultimate overthrow of the democratic state authority of Estonia.

As a result of the activities of the Internal Security Service hundreds of individuals were prosecuted in courts and tribunals for communist activities in 1920-1925. On 1 December 1924 the communists organised an armed revolt to seize power in Estonia. The incident cost the Soviet Union dear as during the suppression of the attempted coup d'etat 125 rebels fell in Tallinn and more than 500 people were arrested later. Subsequent trials and shutdowns of several underground print shops enfeebled the communist movement considerably.

After the so-called period of mass trials, Head of the Internal Security Service Johan Sooman focused attention on the prevention of political crimes, trying to avoid the recurrence of attempted coup d'etats in the future. The years 1930-1933 witnessed a rapid increase in the number of persons arrested on charge of espionage, at its peak in 1933 the service detected 23 espionage cases and imprisoned 51 alleged spies. Changes were also made in the composition of staff of the Internal Security Service in order to consolidate work methods characteristic to peacetime conditions and democratic states, and to gain public support.

In addition to communists, also rightwing extremist organisations with German national socialist orientation and Russian extremist monarchic organisations fell within the sphere of interest of the Estonian Internal Security Service. The activity of the Estonian Liberation War Union was also considered a threat originating from rightwing extremism. By the order of Johan Laidoner the Estonian Liberation War Union with all its departments was dissolved on 22 March 1934. At the end of 1935 the Political Police detected a riot plot of the Estonian Liberation War Union, as a result of which the leaders of the movement were imprisoned.

After the Soviet occupation of Estonia on 17 June 1940 and the subsequent coup d'etat the Political Police was one of the very first administrative agencies repressed almost in corpora. On the first days of the Soviet power Director of the Police Administration Johan Sooman and the leading figures of the Political Police were arrested, including the Deputy Director of the Police Administration, the Inspector of the Political Police, the Commissar of the Tallinn Department etc. Like the police chiefs of Lithuania and Latvia, they were taken to imprisonment to Moscow or murdered on the spot, the fate of some of them is still unknown. The rank and file of the Political Police was destroyed in the same manner - the last employees were arrested and deported to Siberian prison camps during the mass deportation conducted in June 1941. Thus approximately 90% of the security police officers had been killed already prior to the end of World War II. Their families were repressed in the same way.

During the Soviet times in 1940-1941 and 1944-1991, the occupying regime accused the Estonian Internal Security Service of persecuting individuals due to their political views and especially of imprisoning communists.  It should be noted however that in its activities the Internal Security Service proceeded from the then legislation of the independent Republic of Estonia and participated only in the investigation and evidencing of criminal offences while the criminals were convicted by the court.