Norway’s small Center Party (Senterpartiet, Sp) logged one of its worst elections in years last week and has lost government power after eight years in the outgoing left-center coalition. Now its image is further tarnished by new revelations regarding its acceptance of illegal financial support from a publicly owned power company in Northern Norway.
The company, Troms Kraft, is owned by the county of Troms and the city of Tromsø. It’s been under massive investigation after heavy losses and questionable practices that, among other things, led to its entire board offering to resign this week. Results of the investigation revealed management incompetence and violations so serious that its local government owners are turning it over to the police for evaluation. Commentators including the award-winning Kjetil B Alstadheim at newspaper Dagens Næringsliv (DN) are calling it corruption.
The investigation, which cost NOK 30 million to carry out and has been called “undoubtedly Norway’s most comprehensive legal probe” into a company ever, studied six key issues and sought answers to 34 concrete questions regarding Troms Kraft’s operations over the past 14-and-a-half years. More than 100 persons were interviewed, 25 million documents examined and a 600-page report plus attachments has been compiled.
“In sum, this is very serious,” chief investigator Leiv Lea Nergaard told DN on his way into a Tromsø courtroom. He and his fellow investigators concluded that Troms Kraft has been a company with “weak management, weak economic operations and weak control systems.”
Management knew more than they admitted
The investigation concluded, for example, that heavy losses tied to Troms Kraft’s investment in a Swedish firm, Kraft & Kultur AB, could have been discovered much earlier and thus avoided. Losses tied to Kraft & Kultur amounted to around NOK 2 billion and could have been stemmed as early as 2003 through better accounting control, according to the investigators.
Management also knew, according to the investigation’s conclusions, that it was providing illegal financial support to the Center Party, even though they denied it at the time, claiming it was money meant to support renewable energy projects and that the party’s diversion of the money to fund its election campaign in 2009 was done behind their backs. Instead the money was transferred to the Center Party just when Troms Kraft need government help in its bid to take over a power plant in Bardufoss that was held by Statkraft, and when Troms Kraft wanted the state to buy into it as well.
Troms Kraft’s management also knew that the controversial public relations firm First House was being hired by Troms Kraft to help win influence with state politicians. Management earlier has given the impression that they weren’t aware of First House’s engagement.
Attempts to downplay involvement
Center Party leader Liv Signe Navarsete, who’s landed in trouble on a variety of other issues in recent years, has consistently tried to downplay her party’s involvement with Troms Kraft. Now it’s been revealed that Troms Kraft received political assistance from the Center Party’s secretary general at the same time the party had received illegal funding from Troms Kraft.
The chairman of Troms Kraft who offered to resign along with the rest of the board is Odd Roger Enoksen, a former top Center Party politician who earlier served as oil and energy minister in the left-center government that lost last week’s election.
Troms Kraft’s current management has agreed that the investigation’s conclusions are serious, but claims that new ethical guidelines were imposed after the illegal Center Party funding was first revealed. The party refunded the money under pressure and Troms Kraft officials claim such things couldn’t happen in the company today. Navarsete said after her party’s recent, poor election results that she has no intention of resigning as party leader.