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News, 9/2/2009

Finnish parties learn glasnost the hard way

After a long fight, major Finnish political parties succumb to public pressure and disclose their money sources. This forms a seminal event in Finnish politics, writes Kyösti Karvonen, managing editor of the newspaper Kaleva.

Party secretary Jarmo Korhonen and Prime Minister Matti VanhanenParty secretary Jarmo Korhonen and Prime Minister Matti Vanhanen. Photo: Centre Party.

The Finnish summer is mostly known for its brevity, white nights, whimsy weather – and a news vacuum. The summer has been too short, the nights white and the weather surprisingly nice. Newswise, it’s been one heck of a summer, thanks to incomprehensible intransigence of the party elite.

What is it this time? In fact, it’s the same old story – unwillingness to disclose the sources of political funding in due time or in full. The first round was fought over Gorbachevian glasnost, or openness, as early as the spring of 2008. At the time, it appeared that many MPs elected in the parliamentary elections of 2007 had bent and even broken the lax rules about reporting on political financing.

Obviously no lessons were learnt. A new round was unleashed this year, showing definite signs of abating only in mid-August. This time, the campaign money given to the three biggest parties received the most attention.

Funding fallout

The fallout quickly materialised. An opinion poll published by the daily Aamulehti showed that 60 percent of respondents said politicians’ credibility had dropped. According to President Tarja Halonen, Finland’s international image as a minimally corrupted country had taken a hit.

After several years at number one, Finland fell last year to fifth place in Transparency International’s Corruption Perceptions Index (CPI), because of secretiveness around political financing. The Group of States against Corruption (GRECO), functioning under the auspices of the Council of Europe, also wrote a critical report.

Only now, after nearly two years of immense pressure by the media and the public at large, does it seem certain that party financing transparency will become the law of the land. A committee chaired by Lauri Tarasti, the best authority in this field in Finland, is writing the new rulebook.

Meeting with the Prime Minister

Before the holiday season, Vanhanen took a lot of heat because of his role in this meeting, not least for his sketchy recollection of the details. In Parliament, he was even accused of not telling the truth.

Speculation raged about whether Nova Group, its affiliates and some other business executives donated money to different campaign coffers in order to be rewarded with favourable zoning decisions about certain shopping malls and other projects. The Nova Group saga came to a fitting close when the company fell into bankruptcy this summer, leaving property worth only 15,000 euros, including laptops, books and a massage chair.

The role of the Local Government Pensions Institution, which paid public sector pensions worth 2.8 billion euros last year, was a similarly hot potato. Its CEO, a seasoned Centre Party hand, had to resign, after tampering with the receipt from a thank you party he threw for representatives of Nova Group and the Centre Party.

A Nova Group affiliate was also involved when Ilkka Kanerva, foreign minister at the time, celebrated his 60th birthday in January 2008. The company put up nearly 20,000 euros to cover the expenses. The money may have to be returned to the creditors of the bankrupt estate.

Centre Party changes tactics

Photo: Sampo Image Archive
Click to enlarge the picture
The Coalition Party may have received as much as 125,000 euros from the insurance company Sampo Group, where Björn Wahlroos was then serving as CEO and board member.

In the middle of the public outcry, the Centre Party shrewdly changed tactics and published a list of its recent financiers, and asked that other parties follow suit. This smart move left the other two big parties, the moderately conservative Coalition Party and the Social Democratic Party, in an awkward position. They did not want to march to the Centre Party tune and played for time, saying it was up to the donors to decide whether to publish their donations. By that time the Coalition Party, the Centre Party’s main government partner, had avoided bad publicity, giving the Centre Party the unenviable honour of basking in the media sun.

This cat-and-mouse game continued until early August. The breakthrough came when the Finnish News Agency broke the news of the Coalition Party receiving 75,000 euros in two years from the insurance company Sampo Group. The conservatives approached the then CEO and board member Björn Wahlroos. He said yes. He remained within the limits given by the board on donations.Wahlroos, a multimillionaire known for his dapper looks, happens to be an economic adviser to the Swedish People’s Party. Usually known for his colourful public image, he now chose not to be available to the media. It even appeared that later on Sampo Group had donated an additional 50,000 euros to the Coalition Party.

Competitors cry foul

Fourteen percent of Sampo’s stock is state-owned, which of course made competing parties cry foul. Some other partly state-owned companies were also reported to have given smaller amounts of money to several party coffers. The Finnish national broadcasting company YLE broke a related story by disclosing that a partly state-owned forest company, Stora Enso, had donated 350,000 euros to political parties in Brazil in 2006.

A few days later, the Coalition Party paid the piper and opened its records, explaining that the fury had caused “doubts and insinuations, even of possible corruption”. The last ones to follow were the Social Democrats and the Left-Wing Alliance, which both received substantial amounts of money from trade unions. The Social Democrats maintained that they disclosed their money trail to correct “false information”.

The pundits concur that the debate on party financing and the pressure that practically forced the political elite to disclose political money sources was a seminal event in Finland, paving the way for greater openness in the whole political process.

Text by Kyösti Karvonen


Corruption Perceptions Index by Transparency International
Group of States against Corruption

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Updated 9/2/2009

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