Last week a Swedish appellate court issued an opinion confirming the anticorruption community’s worst fear. The decision stems from a 2017 U.S. prosecution of Swedish telecommunications giant Telia for bribing the Uzbekistan president’s daughter. The evidence showed Telia’s then CEO and two other executives countenanced the bribery, and Swedish prosecutors promptly charged the three with bribing a foreign official. To the surprise and shock of both prosecutors and observers, all three were acquitted at a 2019 trial (here).
It was widely assumed the Stockholm Court of Appeals, the nation’s oldest and most prestigious appeals court, would reverse the trial court’s decision. Instead, in a February 4th opinion it affirmed it.
UPDATE. Chief prosecutor Kim Andrews termed the decision “offensive,” telling OCCRP in a statement that the decision means “Swedish companies can jump queues” by bribing, that Sweden “is failing to live up to its international obligations, . . . and that we leave it up to other European countries and the United States to clean up our mess.”
Former South African MP Andrew Feinstein once asked a senior Swedish official about foreign bribery. His reply:
“All bribes are illegal but if a Swedish company paid bribes in another country, I can’t say we would do anything about it.”
The Telia acquittal is the latest sign that this attitude continues to prevail. That the anticorruption community’s worst fear about Sweden is true. That to protect the export earnings of Swedish multinationals and to shield the Swedish elites who run them, the government will condone the bribery of foreign public officials no matter how egregious. Indeed, the first and still most appalling example of the lengths Sweden will go to derail a foreign bribery investigation was in a case that implicated its now prime minister.
The case arose from Saab’s push to expand sales of “Gripen,” a second-rate fighter jet that did not meet the demanding specifications of the world’s leading armed services. As Heimann and Pieth explain in Confronting Corruption, Saab’s response was to go for “fringe markets,” newly emerging democracies like the Czech Republic, Romania, and South Africa, where weak domestic controls gave companies willing to bribe a way to compensate for the poor quality of their product.
When media reports of Saab payoffs began appearing, Swedish prosecutors opened an investigation. Christer van der Kwast, the senior prosecutor on the case, then unexpectedly announced he was closing the case, telling the press that while the evidence showed Saab’s partner in several of the bribe-tainted sales, BAE, had made payoffs:
“From the evidence available, I cannot prove that any representative of Saab AB or Gripen International has intentionally contributed to BAE in a way that entails criminal liability.”
In an appearance on Swedish TV, van der Kwast admitted senior politicians had pressured him to close the case. What follows is, as Heimann and Pieth document, this “remarkable” exchange with reporters:
Van der Kwast: They have emphasized that these inquiries are of course damaging to Swedish business.
Questioner: But who is it that says that?
Van der Kwast: I don’t want to go into that. I don’t want to say more than that. But from my position, from the policeman’s position, it is understood as sort of an indirect hint to take it carefully.
Questioner: Has it affected your decision to drop the inquiry?
Van der Kwast: Not for a second.
Van der Kwast then immediately retired.
The decade old squelching of the Saab investigation remains of immediate relevance. First. it established the precedent the Telia appeals court reaffirmed, that Sweden has no intention of honoring its obligation under the OECD Antibribery Convention to punish nationals and companies who bribe foreign public officials.
Second, it is as vivid an illustration as one could imagine of what can happen if a nation lets bribe payers off. Dropping the Saab case allowed one of the payers to scramble to the top of the Swedish political heap. While a South African MP, Andrew Feinstein had investigated reports that Saab had bribed South African officials to peddle its jet fighter. He furnished Swedish prosecutors with documents he had obtained from his parliamentary inquiry into who had taken bribes, “official contracts and other documents pertaining to the bribes paid” he explained in an email he sent me after the Telia decision. He then made this extraordinary revelation:
“The current PM of Sweden was, at the time of the deal with South Africa, head of international relations at the Metalworkers union in Sweden. He facilitated a bribe to the leaders of the equivalent union in South Africa, which was in alliance with the ruling ANC, to ensure the ANC supported SAAB/BAE’s appalling bids for two contracts.”
Sweden’s refusal to honor its obligation to prosecute those who bribe foreign officials has not gone unnoticed by the international community. In a 2012 review of its compliance with the Antibribery Convention, the OECD said:
“More than twelve years after making foreign bribery a crime, Sweden needs to make much greater efforts to actively enforce its anti-bribery legislation, according to a new OECD report. Despite a number of allegations against Swedish companies, Sweden has prosecuted only one case in 2004 and has never proceeded against a company for foreign bribery. Furthermore, the OECD Working Group on Bribery cites a need for greater support and awareness in the Swedish public for foreign bribery enforcement.”
What the OECD neglected to say is the one case Sweden did prosecute over the 12 years was by any measure a minor one and was only as the result only of work done by the World Bank. The Bank had discovered that three of its employees took bribes to award contracts from a Swedish contribution to the Bank to two Swedish consultants. It passed the results of its investigation to Sweden, and the two were prosecuted and convicted (here and here).
The only other case where it seems Sweden has convicted a Swede of foreign bribery involves an even more insignificant matter. Alerted by a tip from Switzerland, Swedish prosecutors learned that a small Swedish translation company run by a father/daughter team had paid for spa treatments and other “leisure” expenses for employees of the World Intellectual Property Organization at a professional retreat. The total came to $993. The two were prosecuted, and while the father was acquitted, his daughter was convicted and fined an amount equal to 100 days of her salary (here).
As Transparency International notes in its 2020 edition of Exporting Corruption, Sweden does not keep official statistics on foreign bribery prosecutions. OECD reports and other sources disclose that these two minor cases involving the employees of international organizations appear to be the only two successful prosecutions for foreign bribery. According to the EU, Sweden has more multinational firms per capita than any other European nation; it is also major seller of military equipment, the export market most susceptible to bribery. One would expect far more cases would have been investigated and successfully prosecuted, especially from a country that consistently rates as one of the world’s least corrupt on international indices and one with a fiercely active media and engaged citizenry.
I have no answer to the question the title poses. It seems clear from the OECD’s repeated pleas to Swedish governments of all political stripes that the international community can do little. Those committed to a world free of corruption can only hope that the many Swedes that share this commitment will not only seek an answer to the question but to act once they have.
So you don’t like the rule of law and judicial scrutiny of enforcement theories?
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