Tuesday, December 21, 2010

Sweden has its own corrution scandals

Sweden has its own corrution scandals....
By Ritt Goldstein

DALARNA, Sweden - As shock waves continue to emanate from Stockholm's recent terror bombing, such an event appearing all but unthinkable given the Sweden most people perceive, ongoing revelations highlight that Sweden has had some disturbing changes. In many ways, today's Sweden faces the same problems as other countries, including corruption and the sometimes nightmarish impact of it.

Emphasizing Swedish corruption's gravity, the vast bulk of cases that have come to light are occurring in municipal housing companies and the construction industry, with the substantive "human costs" of these scandals only beginning to be appreciated. So-called "sick houses", the significant health issues they've meant, are a recognized problem in Sweden, with the ongoing scandals now suggesting why.

"This is something that really needs to be looked upon and looked into," said Justice Chancellor Anna Skarhed of the scandals' health impact, sternly observing for Asia Times Online that "there is even more of this [the effects of corruption] than we've already seen, which is quite enough, and too much as it is."

China's infamous melamine scandal is said to have affected 300,000 people, or about .024% of its populace. But over 10% of Sweden's people are suffering varying degrees of ill health effects from badly constructed or maintained housing, with a not insignificant number suffering quite severely.

In 2008, Scandinavia's largest paper, Aftonbladet, noted, "In a new study from [Sweden's] Umea University, it was found that 45% of those affected by sick buildings - and who received medical treatment at a hospital clinic - are unable to work. Of these, 20% receive a disability pension, and 25% are on sick leave."

For much of its recent history, Sweden has represented what many consider the embodiment of governmental integrity and efficiency, with typical Swedes following rules so closely that virtually none even "jaywalk". Decades of cradle-to-grave government benefits have created a deep-felt faith in the authorities, present events providing a decidedly rude awakening for most, though not all.

Leif Kavestad - author of the Swedish book Sick Houses, building engineer, and a former environmental inspector who was personally decorated by the prior prime minister - has charged that "when residents complain about health hazards and health problems in municipal housing, it's not uncommon for the municipality to hire 'consultants' that will declare the property safe." Kavestad pointedly told ATol that "in legal disputes, the environmental agency always accepts the word of the municipality's 'bought' consultants. Tenants which complain over sick buildings with health complaints are sometimes threatened - the parties together can act like a mafia against the tenants."

In Sweden, municipal housing provides the majority of the country's rental apartments, some being "high-end" properties.

"It's a big problem, and it's a big problem for the trust in the authorities and the trust in the kommun [municipality] ... it has to be dealt with, and seriously," said Gustav Gellerbrant , spokesperson and political advisor for Justice Minister Beatrice Ask, regarding the human consequences of housing corruption.

Over the past months, increasing numbers of Swedes are examining their surroundings through new eyes. "Bribes are more common than we thought", "Bribery cases in many municipalities", "Corruption and abuse of power in Swedish municipalities" - these headlines representing but a few of the recent months' revelations. Law-enforcement authorities have seen a change.

Prosecutor Gunnar Stetler, director of the Swedish prosecution authority's National Anti-Corruption Unit (Riksenheten mot korruption), described for ATol the current level of municipal corruption complaints to his office as "at least 50% higher" than the same period last year. A new investigative group within the National Police to investigate corruption - including cross-border questions and financial crime - is also now being worked on, Stetler emphasized, describing expectations that the yet ongoing discussions would be finalized "during December, or during January".

Both Stetler and Justice Chancellor Skarhed are among a handful of key contributors to the new police group's formation, Chancellor Skarhed noting "the information I have from the prosecutor's office and the Riksenheten mot korruption strongly indicates that the resources the police have given to these [corruption] investigations have not been adequate for quite some time." The chancellor expects the new group to be formed in January.

Adding another dimension to the corruption problem, in September three rights groups filed a criminal complaint against Saab, alleging bribery was involved in the sale of Swedish fighter aircraft to South Africa. Prosecutor Stetler describes the status of this case as under "active consideration", a determination on the opening of a preliminary investigation yet to be forthcoming. But Stetler's unit has been busy.

Corruption revelations began detonating in April, with an investigative TV program resembling a Swedish version of 60 Minutes entitled Uppdrag Granskning (UG), exploding municipal corruption onto the national agenda. Their report centered on "bribery and corruption in Gothenburg", Sweden's second-largest city, and today a place where all four of the city's municipal housing companies have come under the National Anti-Corruption Unit's investigation.

Following the UG reports, charges ranging from aggravated corruption and fraud to breach of trust and embezzlement have become among those being investigated. Individuals focused on include local officials, municipal company executives, and construction industry figures.

Drawing considerable outrage, funds earmarked for construction and renovation of municipal housing appear to have gone to luxurious additions to officials' private homes. "If you are 'well-connected' locally ... there might be people then who are prepared to 'bend the rules' to give you favors, and maybe they get favors back. And we know that this happens in municipalities," said corruption expert and political scientist Staffan Andersson of Sweden's Linne University, cutting to the issue of so-called local "strongmen", an issue well publicized as a key corruption problem.

This autumn, Swedish National Television (SVT) aptly kicked off a new comedy series about an inept and corrupt municipal politician,Strong Man ("Starke man"), parodying the kinds of corrupt behaviors that have been making headlines.

Over the past 20 years, Sweden privatized increasingly large segments of its public sector, particularly in municipalities. It set up hybrid companies that were owned by municipalities but operated as semi-independent firms, firms with far looser controls than when their work was done as an official municipal organ. "We have been so focused on productivity, efficiency, and cost savings ... but there's also another side," Andersson explained. He added that when it came to effective controls within these new entities, events have "not been running as quick as we have done with productivity", questioning whether today's controls fit "the kind of administration we had 20years ago".

Illustrating his point, Andersson emphasized for ATol that "there are a lot of instances where ... municipalities are actually carrying out authority in a way which is regarded as illegal by courts, administrative courts, but they actually do it anyway". Paralleling this, an October SVT news report had earlier revealed how some municipal auditors whitewashed wrongdoing, then received legal immunity from the municipality for their actions, leaving no one legally culpable.

Pockets of widespread and deeply entrenched municipal problems have been increasingly seen.

In Falun, the municipal housing company, Kopparstaden, is particularly noteworthy, first making national headlines in 2009 with a story about its chief executive officer (CEO) and pornography. Following this, the CEO violated company rules by purchasing property for Kopparstaden's new headquarters from a close friend.

The transaction was first stated as approximately 3 million Swedish kronor (US$440,000), then later "revised" to about five million. Subsequent research revealed that the "revision" was due to debt which was acquired by Kopparstaden with its property purchase, though, according to the City of Falun's accounting firm, KPMG, apparently no documents were presented to Kopparstaden's board regarding that debt.

Kopparstaden's new headquarters eventually cost a third over budget, KPMG reporting that the firm's internal controls "had not worked", and that its CEO had wanted a 295,000 kronor tennis court at the new office. Subsequently, the CEO was quoted by a local paper as claiming KPMG was in error on its cost figures, that the new headquarters was in reality "great business".

When contacted, Kopparstaden refused to be interviewed for this article.

Prosecutor Stetler noted that the KPMG report indicated Kopparstaden violations of "law or regulation", but he added that under current Swedish law, it was necessary to prove "intent" in order for a prosecution to occur. Wrongdoing in itself is not actionable.

Andersson blamed weak municipal scrutiny and weak legal sanctions as key corruption problems.

Beyond financial issues, Kopparstaden has made headlines regarding tenant health problems, some health issues being severe, one even life-threatening. Notably, similar to its pronouncements on KPMG's "error", in court documents the firm describes an apartment the local environmental authority condemned as uninhabitable to be without any serious damage; though, substantive injuries to the tenant had resulted, and tests revealed the apartment had "unusually high" levels of toxic chemicals such as chloroform and benzene, plus a "powerfully elevated" mold level.

Notably, a report published by Swedish corruption researchers in November 2008, "Public Corruption in Swedish Municipalities - Trouble Looming on the Horizon?", did warn of potential problems with the municipal hybrid firms.

In subsequently explaining how Sweden's municipal corruption grew, one of the report's authors, political scientist Gissur Erlingsson of Linkoping University, placed blame on both the creation of "fast and loose" municipal hybrids, and an erosion of whistleblower protections beginning in the mid-1990s, saying "people got more and more wary and afraid of losing their job".

Examining another aspect of events, Dr Daniel Burston (PhD Psychology, PhD Social and Political Thought), chair of Pittsburgh's Duquesne University psychology department, observed a culture of corruption always contains a large "group of passive and increasingly indifferent people who simply 'go along' with the status quo". "They try to avoid losing what they have by not opposing the strongmen and their agents, and offering them bribes or 'cover', when necessary", Burston outlined for ATol, adding that such conduct "becomes the ‘new normal', and so routinized, in many ways, that it becomes completely unconscious - a tacitly accepted part of prevailing social and cultural expectations."

In societies where those in authority are particularly respected, Burston observed that public opinion, combined with the phenomenon of "group think", might well enable "corrupt leaders to gather the mantle of respectability around their shoulders, and then operate unhindered as 'wolves in sheep's clothing'."

"Prosecution has preventative effects," law professor Claes Sandgren of Stockholm University emphasized, "you don't just prosecute to put just one individual in prison, you also prosecute to deter others."