Finland Loses Least-Sleazy Reputation as Lawmakers Flout Rules
By Kati Pohjanpalo
June 5 (Bloomberg) -- Finland, ranked the world's least corrupt country, turns out to have dozens of lawmakers who are lawbreakers -- and broke the rules knowingly.
The country is in the middle of its biggest campaign- financing scandal ever. It was sparked last month by parliament member Timo Kalli's confession on national television that he hadn't disclosed campaign donors last year, even though required to, because there was no penalty for violations.
The resulting outcry led Kalli and 26 other members of parliament to file disclosure amendments revealing contributors of more than 400,000 euros ($618,400) in last year's elections -- tarnishing Finland's reputation as the epitome of political purity.
``A long honeymoon and age of innocence in Finnish politics has ended,'' said Markku Jokisipilae, a researcher in contemporary history at the University of Turku.
The Nordic nation of 5.3 million -- located next to Russia, and known for Nokia Oyj's wireless telephones -- has been ranked the least corrupt country in the world out of about 180 countries every year but one since 2001 by the Berlin-based anti-graft watchdog Transparency International. In the wake of the scandal, political leaders are now pledging to tighten the rules.
Kalli, parliamentary leader of the governing Center Party, first refused in a May 7 interview on a Finnish news program to name his campaign funders, although he had disclosed the amount of contributions he received. A week later, he revealed the sources.
Backers
According to an amended report filed May 22, his backers in the 2007 election included Ruukki Group Oyj, a Finnish sawmilling company, and Kehittien maakuntien Suomi ry, an association registered in January 2007 whose name means Finland's Developing Provinces.
``I think I at first thought I would get the donors mixed up; there was nothing more to it,'' Kalli, 61, said in a telephone interview. ``The new law will likely be better. This won't happen again in the future.''
The provinces association said in a May 31 fax to Finnish news agency STT and confirmed to Bloomberg News that it had contributed to 20 percent of the members of the 200-seat parliament in the 2007 election -- including half of Prime Minister Matti Vanhanen's 20-member cabinet.
Vanhanen, 52, who disclosed in a May 16, 2007, filing that he had received 10,000 euros from the association, said on May 15 of this year that he didn't know who was behind it.
Retail Entrepreneurs
It turns out that funds channeled through the association came from retail entrepreneurs Kyoesti Kakkonen and Harri Toivainen, they said in telephone interviews. A reported third backer, Toivo Sukari, didn't return phone calls to his office.
Helsingin Sanomat, Finland's biggest newspaper, reported May 30 the men were seeking to promote the construction of shopping centers and warehouse stores. More than 73 percent of Finland is forest, the highest proportion in Europe.
Asked about his donations, Kakkonen said in a telephone interview that ``the idea was very noble and idealistic.'' The donors wanted to support candidates with ``skills, vision and an understanding of how to advance the nation's interests,'' he said.
Sukari is the developer of Finland's biggest shopping center, Ideapark Oy, which is looking to expand to become a chain, according to a statement on the Ideapark Web site. Kakkonen runs a chain of more than 130 discount stores, the company's Web site says. Toivainen owns Suomi-Soffa SSF Oy, a furniture retailer with 20 stores, according to a press release.
Private and Public
The association gave 406,000 euros, or 5 percent of the total 7.8 million euros spent by elected parliamentarians in the 2007 election. Elections in Finland are financed through private contributions and government donations to parties.
Prime Minister Vanhanen, in a May 20 interview with Helsingin Sanomat, called the scandal a ``crisis of legitimacy'' that threatens to erode people's confidence in government.
``Some members of parliament knowingly went looking for loopholes in the funding law,'' Timo Soini, parliament member and the leader of the True Finns party, said in an interview. ``The illusion that this can't happen here has now been shed.'' The association didn't offer Soini any funds.
Fearing a backlash in October municipal elections, leaders of all eight parties agreed May 28 to cap the amount for individual campaign donations at the parliamentary level at 6,000 euros, and have established a committee to draft a new law with sanctions for non-compliance. They also agreed to limit individual contributions to 3,000 euros in municipal elections.
`Open and Transparent'
``This isn't about corruption,'' said Pekka Ravi, a member of parliament for the National Coalition party, who according to the amended report he filed May 16 took 10,000 euros from the businessmen's association. ``I think it reinforces the view that Finland wants to proceed in a more open and transparent direction.''
Others say the net result may be increased voter cynicism and apathy. ``I'm afraid this scandal may make voters more passive'' in coming elections, Risto Parjanne, director general of the Association of Finnish Local and Regional Authorities, said in a telephone interview.
More than one-third of the country's respondents said in a may 29 poll by Finnish broadcaster YLE that their trust in the political system has eroded as a result of the financing flap. Three-fourths of respondents said they believe election campaign donations are aimed at buying favorable votes from politicians.
``It's pure greed and staying in power,'' Leila Mustanoja, Transparency Finland's founder and first president, said in a telephone interview. ``Every person is as corrupt as the system allows. Finns are no better than anyone else.''
To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net
Last Updated: June 4, 2008 17:00 EDT
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ien maakuntien Suomi ry, an association registered in January 2007 whose name means Finland's Developing Provinces.
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