Bloomberg News

Swedes Enraged as Taxes Pay Dolphin PR Parties

September 02, 2012

Sweden's Prime Minister Fredrik Reinfeldt

Sweden's Prime Minister Fredrik Reinfeldt told news agency TT on Aug. 28 that independent agency heads have responsibility for their own budgets and need to use better judgment in how they spend taxpayers’ money. Photographer: Casper Hedberg/Bloomberg

Swedish government employees are being treated to wine tastings, communication courses with dolphins and a James Bond-theme party, all at the taxpayer’s expense.

The revelations, published in local media, have provoked a backlash from voters, who have punished the party seen responsible for failing to monitor the extravagances with poll ratings that would kick them out of parliament and undermine the coalition that Prime Minister Fredrik Reinfeldt needs to stay in power.

“There’s no respect for the fact that this involves other people’s money -- taxpayers’ money,” said Torsten Svenonius, spokesman for Skattebetalarna, a group of more than 100,000 members advocating tax cuts and more oversight. “This isn’t even the tip of the iceberg -- it’s just a snow flake. This really involves hundreds of billions of kronor.”

For Swedes, who bear the world’s highest tax burden after the Danes, the scandals have shaken confidence in the government. The excessive spending, with the James Bond-themed party thrown by the secret police alone costing 4.3 million kronor ($647,000), comes as voters across Europe are called on to endure cuts needed to rein in budgets.

Bearing the brunt of the dissatisfaction is Annie Loof, Center Party leader and enterprise minister, who is responsible for many of the agencies said to have thrown lavish parties. Support for her party has slumped to 3.8 percent from 6.6 percent in the 2010 election, according to a Novus Opinion and TV4 poll published Aug. 29. That’s below the 4 percent needed to be in parliament. The government has 42.8 percent backing, versus 50.1 percent for the opposition, according to the poll. The next election is in 2014.

Leader Crisis

The Center Party is “in a way fighting for their life,” said Jonas Hinnfors, a political science professor at Gothenburg University. “It would be a very difficult situation if there’s a party leader crisis.”

Examples of taxpayer-funded spending that have provoked censure in local media include an event organized by Loof’s ministry costing 10,000 kronor to visit the dolphins at the Kolmaarden safari park in Sweden in order to learn how to communicate and give feedback. Loof wasn’t available to comment, said her spokeswoman Anna-Karin Nyman. The Center Party was also found to have incorrectly billed taxpayers for a dinner party.

In a webcast interview with newspaper Expressen, Loof said she understood people’s “frustration and anger.”

Knowledge, Inspiration

Loof on Aug. 6 fired the head of the Swedish Agency for Economic and Regional Growth after it was revealed the authority had splurged 780,000 kronor on a party at Stockholm’s Grand Hotel. The May 23 event cost 2,690 kronor per staff member, which the agency now says “was too expensive and took place in the wrong place.”

Reinfeldt told news agency TT on Aug. 28 that independent agency heads have responsibility for their own budgets and need to use better judgment in how they spend taxpayers’ money.

The James Bond party held by Sweden’s Security Service in June 2011 was intended to “give knowledge, inspiration and solidarity at the end of a big reorganization of the authority and also followed a very work-intensive year for employees,” Anders Thornberg, who heads the security police, said in a statement on its website. “I understand that the cost of 4.3 million kronor, as a lump sum and taken out of context, can seem very ample and it’s of course a lot of money.”

Vinnova, Sweden’s Innovation Agency, said Aug. 1 it will tighten its standards after treating employees to wine tastings and overstepping spending rules on drinks at dinners.

Fiscal Discipline

The scandals contrast with the goals of fiscal discipline upheld by Reinfeldt and his Finance Minister Anders Borg, both members of the Moderate Party. After keeping the Swedish budget largely balanced through the financial crisis, Borg on Aug. 24 announced that the government will be able to boost spending by as much 50 billion kronor over the next two years to stimulate growth in the largest Nordic economy.

The Swedish National Audit Office said it’s increasing its focus to monitor areas where the risk of damaging taxpayers’ trust is high, such as internal representation.

A lack “of management of tax funds risks damaging faith in individual authorities but also faith in the entire operations of the state,” the agency said in an Aug. 16 statement.

“While in Sweden policies have led us to largely managing the economy well, there’s still a lot of money to be fetched by looking over the costs,” Svenonius at Skattebetalarna said.

To contact the reporters on this story: Niklas Magnusson in Hamburg at nmagnusson1@bloomberg.net; Johan Carlstrom in Stockholm at jcarlstrom@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net;


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