Sunday, January 24, 2016

Sweden: The Downfall of Wallström?

Sweden's Foreign Minister Margot Wallström is in trouble again. This time it has nothing to do with her hostile statements towards Israel. Rather, it concerns the apartment she rents in central Stockholm -- an arrangement that could lead to charges of bribery and standing trial. The National Anti-Corruption Unit has decided to open a preliminary investigation into the circumstances surrounding an apartment she obtained through the biggest labor union in Sweden, Kommunal.
The story exploded in Swedish media on January 13 when the daily, Aftonbladet, revealed that Kommunal's management had speculated with hundreds of millions of kronor of union members' money on a prominent conference hall and a restaurant operation. So far this business venture has cost Kommunal over 320 million kronor ($35 million) in losses.
The labor union owns a luxury restaurant, Metropol Palais, in central Stockholm, and the exclusive conference facility, Marholmen, in the Stockholm archipelago. Although these facilities are bleeding money, Kommunal has continued to pump funds into them. By running Metropol and Marholmen as general partnerships ("handelsbolag") instead of limited companies, the union avoided public transparency into the accounts.
Board members of the union used to have their official dinners at Metropol Palais, where a bottle of wine can cost up to 32,000 kronor ($3,700 USD). A former head of Kommunal's conference company, told Aftonbladet:
"I was shocked when I came into the organization. I have seen a lot in the entertainment world, but this was unbelievable, and it was all about other people's money."
A lot has also been spent on the directors' luxury trips and alcohol consumption.
Kommunal, with more than half a million members who work in municipalities, county councils and the private sector, is the biggest labor union in Sweden. The union calls itself "the engine of the welfare state." Around 80% of its members are women in low-income jobs such as assistant nurses, nannies, cleaners and bus drivers. Together, they pay over one billion kronor ($116 million USD) in membership fees per year.
One of the details that has emerged, which upset Kommunal's members, was that on several occasions there had been a nude cabaret in the Metropol Palais. Kommunal has, for many years, campaigned against prostitution and pornography. In 2005, the union decided that all conference facilities it visits must be absolutely "porn-free." If a hotel had cable TV with pornography available, Kommunal would not stay there. "We want to safeguard human dignity," its decision stated, "and to show pornographic movies in hotels and conference centers is a humiliation of both women and men. It also creates a bad working environment for the employees."
Meanwhile, in the union's own restaurant, Metropol Palais, naked women were dancing to loud music and flowing champagne. One of the attractions was the famous porn star Puma Swede. In the union's restaurant, she performed naked; to attract people to the show, she wrote on her company's website: "I will be at Bubbles & Brunch on Saturday to party and I will bring dildos, woo hoo. Good if you get horny while you are partying!"
As part of its investigative report into Kommunal, Aftonbladet discovered that foreign minister Margot Wallström rents her apartment from Kommunal. The union owns a number of rental properties in central Stockholm and rewards managers, leading Social Democrats and union bosses with its upscale apartments. The rents are low, and several are snazzily refurbished. Other property owners in Stockholm are required to make 50% of their rental apartments available to the city's housing office -- but Kommunal has not released a single apartment in 16 years.
When Wallström was appointed minister in 2014 and needed a place to live in Stockholm, Kommunal provided her with one. She told the media that she made sure she did not bypass anyone in line, even though everyone knows that it is almost impossible to get a rental apartment in central Stockholm quickly. Wallström indicated that Kommunal must have lied to her: "I told them I would never take their apartment if that meant bypassing anyone in line. But it seems as if there is no line."
The union's president, Annelie Nordström, told the media that she did not want to talk about lies -- that Wallström must have misunderstood the message from Kommunal. Nordström's treasurer, Anders Bergström, who had been in charge of the apartments, resigned from all his posts in Kommunal the day after the scandal broke.
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