Corruption in Finland

Extent

The perception and the occurrence of corruption are generally very low in Finland. Petty and administrative corruption is more or less non-existent which means that citizens or businesses are not likely to face corruption when having contact with public officials. However, some cases have shown that personal ties, gifts and hospitality and conflict of interest are problems areas which represent some types of nontraditional corruption.

Elections

According to Transparency International in 2008 the lack of transparency of the Finnish political finance had caused international amazement. According to GRECO in 2007 corruption should be taken into account in the Finnish system of election funds better. Finance scandal of election in 2007 in Finland started in spring 2008. Nine Ministers of Government had lack in their report and even more of the members of parliament. The law includes no punishment of false funds reports of the elected politicians and the conservative National Coalition Party or rural Centre Party (Finland) has not demanded resign of the in court convicted politicians from the parliament.

Political appointments

Two thirds of the state and municipal public servants are appointed from the members of parties. Only 5% of citizens are members in the parties. The constitution article 6 states that everyone should have equal right in the public jobs. The constitution article 6 states that the selection should be made based on competence. It has been criticized that the number of public servants may be excessive by political appointments. The parties decide also the salaries of the public posts.

Tax avoidance

Tax havens were examined in 2013 in Sweden by 200 tax officers, in Denmark about 100, Norway 80 and in Finland 10–20 officers. Sweden received €100 million extra taxes in 2012 with help of Unreported employment inspections, Finland none. Jyrki Katainen of the Finnish government claimed its objective to be fighting against unreported employment (Schwarzarbeit) but according to expert of this theme Mr Markku Hirvonen the resources in Finland have not been sufficient. In Sweden all transactions abroad above 150,000 Swedish kronor (about €15,000) are required to be reported to the tax officers. This is not the case in Finland. Prime minister Jyrki Katainen is responsible.

According to Taloussanomat Finland loses €320 million taxes in tax havens annually. According to business watchdog organization Finnwatch Finnish companies have 438 subsidiaries in countries classed as tax havens. Finland's 20 top firms were found by Finnwatch to have subsidiaries in tax havens.

Germany bought bank data of the LGT Bank Liechtenstein from Heinrich Kieber in 2008. According to the LGT Bank some 20 Finns have evaded tax in Finland via accounts with €50-60 million in deposited funds. This was the largest known tax avoidance case. All the names will be kept are secret and police will not investigate tax avoidance of these rich persons in Finland.

Based on these data the Finnish tax agency has collected unpaid tax more than €10 million until 2013. Foreign accounts as such are not illegal if taxes are paid. According to Helsingin Sanomat in Sept/Oct 2013 Liechtenstein bank accounts include funds of Casimir Ehrnrooth (UPM (HS 21.9.2013) family major owners in e.g. construction YIT, Jaakko Pöyry, Guggenheim Helsinki Plan, exploding rocks), Bertel Paulig (coffee, spices) and a construction company owners in Turku.

Many persons, e.g. Jorma Ollila, Kari Stadigh and Ehrnrooth family, have investments in Luxembourg.

Total collected annual taxes are €65 billion and Finland's annual fiscal deficit is estimated as between €4.6 and €7.7 billion. Finland is only just figuring out how the tax gap should be assessed, unlike many other countries. According to Parliamentary Audit Committee chairperson Tuija Brax. "Sweden has been actively addressing this tax gap problem for some time.”

Finnish Tax Authorities started the 2008 Liechtenstein tax affair investigation in 2008. Seventeen Finns paid additional taxes totalling €10 million. The taxpayers made reclamation in the Administrative Court. According to Finnish law the cost of hidden taxes can be up to 30%. The decisions are not public. In two cases shown for the reporters the administrative Court acted ca 1% payment which is in conflict with the Tax Administration general rules. There must be special reasons for very low tax not known. In one case hidden was €483.000 and acted additional tax was €4.350. This is paid as interest of the money not paid in time. According to the Supreme Administrative Court of Finland no other legal procedures are possible, whan collecting the hidden tax and its 1% interest rate. The tax officers have no education in the legal issues.

Corruption in construction

Account audit will be done in 2012 in the public construction office of Helsinki based on corruption doubts. Doubts have not been confirmed yet. This concern work with YIT. Six person were arrested in May 2012 by order of Helsinki District Court in the investigation of corruption in Helsinki city building contracts. The detainee is suspected of acceptance of bribes. Public HKR-Rakennuttaja purchases services from the building sector with a value of up to around 100 million euros per year. Pribes may add up to around 100,000 euros in several years.

Destia, state owned company that builds public roads, is examined for alleged treason in January 2013.

Ex Mayor of the City of Espoo Marketta Kokkonen, and Olavi Louko, the director of Espoo’s Technical and Environment Services, received bribery charges linked to major construction companies in 2010. Olavi Louko makes town planning suggestions in Espoo since 2001. Before he worked in Helsinki real estate department (Helsingin kiinteistövirasto). With exception he continues more than 7 years since 2007. Bribes were given at least between 2004-2008. State demanded Louko to pay back €7.500 while each public presentation of a construction decision is in value of several millions of euros. Already the metro budjet is €800 million. Louko has responsibility of the construction and environmental protection. Olavi Louko Espoo construction planning was convicted of having travels from construction industry and media. The decision was same at all levels of justice: he has taken illegal presents. The last court decision pointed out that it is important that citizens have trust in independence of public projects and true democracy.

In Espoo board of directors only the True Finns voted no confidence to Olavi Louko based on receiving bribes according to the court decision in 2010. All other parties considered it ok. Members can be seen in the document enclosed. The Court of Appeal consider the bribes to effect the confidence at work. Juridical court in Espoo (käräjäoikeus) judged Olavi Louko from bribes from construction companies in 26.5.2011. Thereafter, he has continued in his position as before. TkT Antti Louko, son of Olavi Louko, is advisor for investor property selling and buying since 2002 Catella Property Group (2002-2003), Aberdeen Property Investors (2004-2005), Advium Corporate Finance (since 2005, with name change to eQ.

In the Guggenheim Helsinki Plan art museum director Gallen-Kallela-Sirén was not neutral in his position according to Maija Saxlin in the Parliamentary Ombudsman investigation released in May 2013. According to Carl Gustaf Ehrnrooth, the major owner of construction companies including YIT and Pöyry, Janne Gallen-Kallela-Sirén made the proposal of the Guggenheim museum. Gallen-Kallela-Sirén was member in a company administration board major owned by C–G Ehrnrooth . His ( J. G.-K.-S.) wife worked also in this company. When tax havens were criticised, and the tax havens accounts of funds of Casimir Ehrnrooth were public, Helsinki politicians accepted a tax haven funded project in front of the president castle in Helsinki center.

Competition authorities critics of retail was published in June 2013.

2007 Finnish campaign finance scandal bribery sentences were overturned in the Helsinki Court of Appeal in the end of June 2013.

Ex major of Vantaa Jukka Peltomäki is accused in 2013 of €500,000 benefit from Forma Futura in 2006-2011. Forma Futura has planned buildings for VVO, NCC, YIT and Citycon.

Olkiluoto nuclear plant

Olkiluoto nuclear plant construction project is accused of grey work. It was not possible to check the foreign workers employment circumstances without prior notice. Controllers or police had no access to area in surprise. After notice the work circumstances were often changed. In addition the foreign workers often left the country before the criminal case was evaluated. Workforce changed a lot and persons working were not registered in tax or other official registers.

Political appointments

Political appointments make the democratic decisions making of construction questionable. The share of the member of the municipal board of directors in the municipal appointements is very much higher than in average by citizens. Nonpolitical citizens have low chance of any municipal director appointement. In the end the politicians will never be politically responsible for their activity after working in the municipal job. The ability of politicians to make best decision of recruiting has not been proved.

Salora-case

Salora-case in 1977 was at its time the largest tax evasion and bribery case. TV Nurmi and Salora sold televisions in the value of 6 million Finnish marks excluding accounting procedures during 1970–1975. In Imatra started a new factory Valco (construction cost Fmk265 million) in 1978, which was in bankruptcy after two years. Politicians were accused of bribery since they received presents from Salora (TV and stereo equipment). None of these leading politicians were accused in the court, but social democrats lost in the next elections because of claimed receiving stereos (in addition to RKP, Liberals and center party politicians) from Salora. Bror Wahlroos, father of Björn Wahlroos, was accused of receiving stereos in value of Fmk2,000. He was convicted in Fmk3,000 fine. Chief director of Salora was convicted of bribery to five ministers, two secretary general, one governor and 30 tax officers. The conviction was prison for 3.5 years.

Political corruption

Director Mikko Laaksonen Tax Administration found company elections funds for the National Coalition Party that were incorrectly reduced as expense of the company operations in the 1980s. In 1979 the biggest newspaper advertisement expenses in Helsinki were by the Members of Construction Committee.

Mikko Sauli told (Helsingin Sanomat 11.5.2012) that political youth organizations have the habit to overestimate the number of their members in order to have more state financial support. All the large parties refused to give their member list for the control authorities saying that it is illegal. Political parties have acted the control methods. State support was in 2012 largest for the Centre Party €670,000 and National Coalition Party €657,000.

Ilkka Kanerva National Coalition Party was convicted in April 2012 for accepting bribes. He withdrew from Turku council in May 2012.

Parliament and Government

In November 2016 Juha Sipilä government booked €100 million public funds for Terrafame known as Talvivaara Mining Company. In November 2016 YLE TV NEWS reported that a company owned by children, uncles and cousins of Sipilä have ca half a million contract with Terrafame. According to Sipilä Pöyry made the contract as a consult. Major owner of Pöyry is Henrik Ehrnrooth and his family. In 2016 Yle reported that Georg and Henrik Ehrnrooth own a company in Luxemburg that organize Tax haven companies for their customers including Jorma Ollila and Kari Stadigh. Company made years cooperation with Mossack Fonseca in Panama.

Corruption in sports

In 2011 several football players were charged for bribery. Singaporean match-fixer Wilson Raj Perumal was accused for agreed matches in 2008–2011. Total 11 players were charged.

Anti-corruption conventions

Agreements include: