A Stockholm District Court’s acquittal of three former executives of Swedish telecom giant Telia of bribery shocked the global anticorruption community and has smirched Sweden’s reputation as a clean government champion (original decision; English translation). Despite overwhelming evidence, the court refused to find the three guilty of paying Gulnara Karimova, daughter of the then president Uzbekistan, over $300 million in bribes for the right to operate in the country.
E-mails showed defendants directed the money to a Karimova shell company, hid their dealings with her from Telia’s board, and knew paying her violated American antibribery law. (Telia subsidiary’s Statement of Facts in the U.S. prosecution.) Though defendants argued Karimova had no official role in telecom licensing, the evidence showed her father had given her de facto control of the telecom licensing agency. Perhaps most damning, the court had the sworn statement Telia made in settling the FCPA case arising from the bribery. It there admitted “Executive A . . . a high-ranking executive of Telia who had authority over Telia’s Eurasian Business Area” and “certain Telia executives” had been the principals behind the bribery scheme (Statement of Facts, ¶s 12, 17, 19, 26, 30, and 34).
The court defended its acquittal of Tero Kivisaari, apparently Telia “Executive A,” Lars Nyberg, CEO when the bribes were paid, and the lawyer who counseled them on two grounds. One, the prosecutor had not provided “hard evidence” of bribery, and two, even if he had, the law then in effect did not reach defendants’ conduct.
Google’s translation of the decision is rough (mutanklagelser, Swedish for bribery, is rendered as “manslaughter”) but not too rough to see through the court’s skewed findings of fact and flimsy legal reasoning.
Facts. One need only a passing familiarity with Uzbekistan to know that during her father’s presidency Karimova was one of the most powerful people in the country. In a 2007 U.S. lawsuit, Farhod Inogambaev, forced to work for Karimova after she threatened his family, recounted instances where she dictated the decisions judges were to deliver in cases where she had an interest (Affidavit Farod Inogambaev). Radio Free Europe/Radio Liberty reports she took whatever she pleased from the national museum to decorate her Geneva mansion, and in a confidential report appearing in The Guardian, U.S. diplomats described how she used her father to “to crush business people or anyone else who stands in her way,” making her “the single most hated person in the country.”
The prosecution introduced into evidence e-mails defendants sent one another showing they knew how powerful Karimova was. In one they agreed to hold off meeting the then Minister of Telecommunications (current Prime Minster Abdulla Aripov) until they had reached an “understanding” with Karimova (decision ¶86).
The decision shows too the court scraped the record for snippets of testimony and bits of documents that undercut the evidence Karimova was a high-level fixer. Piecing them all together, it concluded that it was just as plausible to infer from the evidence that Karimova “was a serious businesswoman” (decision ¶96). That conclusion can only leave those familiar with Karimova’s portrayal in the fashion pages of European and American newspapers as a modern-day Marie Antoinette wondering at the court’s determination to exonerate defendants.
More evidence of the court’s search for a justification for acquitting defendants comes from the way ignored strong evidence of their guilt. The prosecution introduced the testimony an executive of Telia’s Uzbek subsidiary gave in the U.S. FCPA case where she swore under oath that company personnel well- knew Karimova controlled the telecom sector. The court gave it no weight. Why? Because it said the employee had had access to her files and those of the company to help refresh her recollection (decision ¶100).
Law. The court’s principal reason for excusing defendants was the Swiss-cheese nature of Sweden’s antibribery law during the first decade of the 21st century. Only in 2012, after prodding by the OECD and its own civil society, did Sweden close loopholes that had allowed Swedish companies to escape liability if their foreign subsidiary was the one that actually paid the bribe or if the money was paid through some intermediary. As the court explained in its decision and in a press statement, under the old law, to be guilty of bribery a defendant had to have paid money “to someone who belongs to the circle of persons who, according to applicable law, could be made liable for taking bribes.” (För att mutlagstiftningen överhuvudtaget ska bli tillämplig förutsätts att påstådda mottagare är mutbara, dvs. de måste falla in under den begränsade krets av mutbara personer som gällde enligt dåtidens svenska lagstiftning, decision summary.)
Throughout the decision, the court stressed that prior to 2012 the circle of “bribables” was limited to those who were government employees or were in a position of trust with the government. Again and again it emphasizes that Karimova was not part of that circle. She had no official position with the telecom regulator (examples at decision ¶s 87, 98, 112) nor was she a contractor in a position of trust (examples at decision ¶s 10,45, 48, 56, 61, 66).
While OECD reports explain these were indeed two positions that made an individual “bribable” under the law then in force, there was also a third. In 2004 the antibribery law was amended to bring within the bribable circle “a person who, without holding an appointment or assignment as aforesaid [i.e. government employees], exercises public authority,” Penal Code chapter 20(2)(4), OECD 2005 report p. 38). Although the prosecution must have surely pressed this point, the court waived it off in a brief aside in the decision summary (p. 8) and never considered it thereafter. In its legal ratiocination, the court analyzed only sections one, two, five, and six of chapter 20(2) (decision §4.2).
To be sure, it may be that a careful reading of the decision in Swedish would reveal the court was more judicious in weighing the facts and analyzing the law than the mangled Google translation shows. It could be too that the court’s decision is an outlier, a deviation from the reputation Sweden has as a strong rule of law state, one where defendants are judged on the facts and the law rather than how important they, and their company is, to the national economy.
Furthermore, Sweden’s legal system leaves more room to correct erroneous trial court decisions than many others. The prosecution can appeal the acquittal, and if Sweden follows the usual continental procedure, the appellate court can entertain additional evidence. So all may not be lost after all.
Or perhaps not. There is the 2017 inexplicable acquittal for bribery of a high ranking employee of Bombardier and the 2009 refusal to prosecute Saab for foreign bribery. As renowned corruption fighter Fritz Heimann and Mark Pieth suggest in their 2018 book Confronting Corruption, Sweden may be “one of those countries with a good reputation on corruption,” but which is reluctant to pursue “key corporations” for bribery “when fundamental interests are at stake.”
Let us hope that is not the case and that Sweden’s appellate court acts swiftly to overturn the Telia decision.