Thursday 28.05.2020

Business Finland scandal and Coronavirus surround Sanna Marin

Finnish press reveals that the Prime Minister husband's company offered services to get "free money" from Bussiness Finland to various companies by appealing to his wife's position. Coinciding with those revelations, Marin announced she will be working remotely because one employee of her residence has coronavirus. Celebrities and politicians also appear on the list of main beneficiaries of the state funding.

Prime Minister Sanna Marin. Photo: Lauri Heikkinen/Vnk.
Prime Minister Sanna Marin. Photo: Lauri Heikkinen/Vnk.

The Business Finland subsidy scandal continues to flare up. And the outrage of many citizens increases as the local media scatter the distribution of the grants.

The money -800 million euros in non-reimbursable direct aid of which more than 212 million have been already given- was announced in March by the Government as a support for companies in trouble due to the coronavirus. But so far a huge amount of the funds ended up in the accounts of large consulting firms or celebrity-owned businesses or people with ties to politics, while regular entrepreneurs have seen their applications rejected.

Prime Minister Sanna Marin has also seen her reputation damaged, because the two companies from Tampere that employ her husband, Markus Raikkonen, have been also benefited from the public aid.

MarkkinointiAkatemia, a consulting firm where he works as a communications director, got 45,000 euros. And Haltu Oy, a software company in which he is a member of the Board of Directors, also received 60,000 euros from Business Finland.

On Tuesday, Marin was the first to write about it in her Twitter account.

Do you know about the free money?

But this has not been the only source of displeasure for the young Finnish Prime Minister.

On Thursday, the newspaper Iltalehti reported that her husband's company had been offering services to various companies to get aid from Business Finland for them. And according to the newspaper, they did it by appealing to have the husband of the prime minister among the staff. The newspaper quotes the CEO of a company from the Tampere region as a the source.

"I was called from the MarkkinointiAkatemia a couple of weeks ago. I was asked if I had already applied for free money from Business Finland. I was a little confused about what it was all about," the CEO told to Iltalehti.

The revelations about the activity of her husband have left the prime minister in a difficult position.

Coinciding with those revelations, on Thursday, the Government Communications Department announced that she would withdraw temporarily from the public sphere to work "remotely" because one of the employees of her residence had been diagnosed with Covid-19.

"This is a precautionary measure." "The Prime Minister is asymptomatic and feeling fine," the Government emphasized in its release.

Anger increased

The scandal around Business Finland started last weekend.

Many small entrepreneurs, especially in the restaurant and tourism sector, complained in the social media that they have received nothing. They also asked how is it possible that the money had gone to very rich companies with millions in turnover who were not as hard hit by the Government's restrictions.

Among those large enterprises there is a consulting firm, Miltton Group Oy, which is a service provider for Business Finland itself.

In the last financial year, Miltton Group had a turnover of 2.8 million euros, according to the trade registry. Still, Business Finland thought they deserved the maximum amount permitted by the law, a grant of 100,000 euros.

As the week progressed, citizen anger has been increasing. And although authorities still maintain that everything was done according to the law, on Tuesday, the Minister of Economic Affairs, Mika Lintilä, announced an investigation overwhelmed by criticism.

In a country that boasts one of the lowest levels of corruption in the world, plenty of Finns have raised their voices these days to accuse Business Finland of distributing money to the left and to right, among the most prominent members of society.

The matter has been trending topic on Twitter and in the most popular forums of the country, for example Vauva.fi.

BF's manager admits possibility of errors

On Wednesday, Business Finland's CEO Nina Kopola told the economic newspaper Kauppalehti that all decisions had been made in accordance with the stated criteria. And she admitted no criticism at all.

“I don’t mind the need for such an internal audit, but I don’t feel we had any shortcomings. We have not divided the money right and left. We have a clear process, and each application has one rapporteur and one decision-maker," Kopola said.

Kopola also claimed that Business Finland audits its own decisions regularly and no errors have been detected.

However, Business Finland's Executive Director Reijo Kangas was much more prudent. Already on Tuesday, he admitted that "it is unrealistic to assume that no mistakes would have been made in such a process."

Still, Kangas said he has "full confidence" in the process. 

The company's financial situation

According to Kangas, rejections are caused by the poor financial condition and structure of companies, the content of applications and duplicate applications.

“There are two main criteria. First, the company has to demonstrate the business disruption caused by the corona virus, which affects almost all industries. Secondly, the development project that is being set up must be told credibly and clearly. These and the company's financial situation are reviewed,” Kangas told Uusi Suomi.

So, the company's financial situation is key. Since the crisis erupted, Government authorities have explained publicly that Business Finland's aid to overcome the problems caused by the coronavirus is not intended to rescue companies in financial trouble. The aim is that successful companies can continue innovating.

But this argument has not convinced many, as some of the companies that have received high amounts of money are showing lack of solidity or losses in their last records, or in some cases they even have no turnover at all.

In all cases, it is the investigation launched by the Government that will determine if the funds have been correctly assigned. However, below, there is a list of some cases which made news in Finland.

Green Farm Oy - A celebrity's nightclub

This is a nightclub in Turku owned by television celebrity Jethro Rostedt, who runs it with his wife. According to the Trade Registry, the firm has lost money in the past 4 years.

Last year, Green Farm Oy lost 50,000 euros. And the previous 2 years the turnover is unknown. Business Finland gave them 100,000 euros.

Click on the image if you want to visit the original source page.Turnover-Green-Farm-OyImage sources: Suomen Asiakastieto/Finder.fi. Screenshot. 

Utopia Analtiycs - Truly Finnish software

This is a software company located in Helsinki. It was founded by Tom Eric Packalén, a politician of the True Finns Party (Perussuomalaiset) and Member of the Parliament.

The company lost 124,000 and 166,000 euros in the last financial years reported. Business Finland granted them 100,000 euros.

Click on the image if you want to visit the original source page.Turnover-Utopia-AnalyticsImage sources: Suomen Asiakastieto/Finder.fi. Screenshot. 

Blic - Politicians and consultants

Blic is another among the criticized consulting firms awarded with a large amount of money. In this case, they got 94,000 euros.

The most striking thing about this company is that it has among its staff management a former Prime Minister of Finland, Mari Kiviniemi, from the Center Party (Keskusta).

Keskusta is currently one of the five-party government coalition.

Another of its prominent members is Lasse Pekka Männistö, a politician of the National Coalition Party (Kokoomus), former member of the Parliament and former member of the City Council of Helsinki. The company's turnover was 1.8 million in the last financial year reported and the profit was 203,000 euros.

Click on the image if you want to visit the original source page.Blic-Oy

Image sources: Suomen Asiakastieto/Finder.fi. Screenshot. 

Panimo Honkavuori Oy - Half owned by a minister's husband

Panimo Honkavuori Oy is a small brewery half owned by Ville Vuorio, the husband of the Minister of the Environment Krista Mikkonen (Green League/Vihreät).

The company had a turnover of 469,000 euros and 36,000 euros in profit in the last year that shows in the trade registry. In this case, they got a more modest sum (7,200 euros) from the ELY centers to cover employer's salaries.

Minister Mikkonen was the person who made it public "in the name of transparency."

Click on the image if you want to visit the original source page.Panimo-Honkavuori-OyImage sources: Suomen Asiakastieto/Finder.fi. Screenshot.

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