Pos­ted on Feb­ru­ary 10, 2021 by Richard Mes­sick

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 4^th 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.

Ori­gin­al at https://globalanticorruptionblog.com/2021/02/10/why-wont-sweden-punish-swedes-for-bribing-foreign-government-officials/