The Nordics lag behind in the fight against economic crime

“Think it is relatively risk-free to engage in labour market crime in Norway, said Kjersti Barsok, President of the Norwegian Civil Service Union (NTL) as she opened the annual conference on the black economy in front of a packed hall in Folkets Hus in Oslo.

Union leader Kjersti Barsok of the Norwegian Civil Servants' Association (NTL) believes that more resources are needed for the work against economic crime.

The conference is part of The Norwegian Union of Municipal and General Employees’ and NTL’s fight against economic crime and gathers experts, researchers, politicians and not least many representatives from the trade union movement.

This year, the conference focused on the Nordic labour market. On the agenda were topics like the role of the facilitator, welfare crime and hidden ownership.

Interest in the conference was reported to be record-high.

More and better measures needed

NTL President Kjersti Barsok underlined that collaborative efforts to fight labour market crime and improved access to information sharing are good things, but she also said more is needed.

“The very few actors who are caught get a low or no penalty. The sentences for tax fraud are low or non-existent. Could it be that the de-prioritisation of economic crime and wage theft is actually a reflection of class justice in the ‘egalitarian society’ of Norway?,” she asked. 

“The regulations are not good enough to facilitate enough cross-agency cooperation. The resources that are allocated to this work are not nearly as large as the resources criminals use when they come under the spotlight,” the union leader said. 

No lone swan

One of the speakers was the man behind the Danish documentary “The Black Swan”, Mads Brügger. He took the audience behind the scenes and spoke about the methods he had used in the making of the documentary.

The Nordic Labour Journal has previously written about the documentary: Denmark cracks down on social dumping and money laundering.

Brügger believes it is crucial for Nordic welfare societies to succeed in fighting economic crime.

In a debate after his talk, Brügger warned against believing “The Black Swan” is a lone swan. He thinks there are many more out there and that they are far more dangerous than what many believe. 

“The criminals are creative and have long-term strategies,” he said. Brügger believes it is time police, politicians and others opened their eyes to what is happening. So far too many have been too naïve and controls have not been good enough, he argued.

The documentary has helped a bit, he hopes. 

“It looks like Danish politicians have understood that there is something seriously wrong with our control agencies,” said Brügger.

Transparency vs. privacy

Tor-Arne Vikingstad is an economist and NRK journalist. He worked with the Danish documentary when it was shown on Norwegian television. The retrained economist was surprised at how hard it is to get people engaged in this issue.

“Transparency is one of the most important tools in the fight against labour market crime. But we often face closed doors. The information we are looking for is not available to us. Privacy concerns often trump transparency,” Vikingstad said. 

How to create the right measures?

Leif Vagle is head of Fair Play Bygg Agder, an organisation working against labour market crime, in particular in the construction industry. He believes the situation is as serious in Norway as in the neighbouring countries.

NRK journalist Tor Arne Vikingstad believes that in their job, they face far too many closed doors.

Through their work, Vagle and his colleagues come into close contact with foreign workers in Norway. They have access to environments that the police do not. 

“I don’t think neither police nor politicians know the scale of economic crime in Norway. So how can they implement the right measures to stop this type of crime?,” asked Vagle. 

Doctors, do they cheat?

Linnéa Graaf calls herself “an engaged welfare crime nerd”. She is focused on how we get the most and best possible welfare for our tax money. She now runs her own company, but earlier she worked as a coordinator against welfare crime in the health and care sector in Region Stockholm.

Graaf explained that she was met with scepticism when she wanted to investigate economic crime in health and care services. 

“Many argued that we surely don’t need to investigate doctors because we trust doctors,” remembered Graaf.

Real, not ritualistic controls

Today, she can tell a different story. Because her investigations show that many, including several doctors, were carrying out comprehensive welfare crime in the health and care sector. Some of the things that were revealed included cheating in private care services, in pharmacies and among botox doctors.

When the scandals were revealed, Linnéa Graaf told Swedish media: “The financial statements tell you so much about health personnel’s activities that it becomes like a mirror. If you lack finances, you probably also lack quality and patient safety.”

She told the audience in Folkets Hus in Oslo:

“There is loads of money in health, and where there is money there are criminals. But we are not only talking about money here, we are talking about economic crime that involves life and death. This is about human beings, after all,” said Graaf.

Privatisation, a risk factor?

Lars Korsell is a criminologist at the Swedish National Council for Crime Prevention. He believes that Sweden has potential for improvement when it comes to preventative measures. 

“We have to do more in this area. For instance, it is about the business community and trade union movement playing a larger role in the preventative work.”

Korsell was also wondering about the question that many in the hall were focused on: Does the privatisation of health and care services make them more vulnerable to economic crime?

“It might be that it is better for the state to run these kinds of services,” said Korsell in a later debate. 

Lars Korsell believes it is important to look at whether privatization of welfare services leads to more economic crime. 

Linn Herning is the leader of For Velferdsstaten (For the welfare state) in Norway, an alliance that works against the increased privatisation of public services. She believes that experiences from Sweden show that the risk of financial crime increases alongside privatisation. 

"There is no reason to believe that we are shielded from this in Norway. Experiences from Sweden show that no sectors are protected," she said.

Hidden ownership, a threat?  

Hidden ownership was the topic for the concluding discussion. In Norway, the Police Security Service (PST), the Norwegian Intelligence Service (E-tjenesten), and the National Security Authority (NSM) have warned that hidden ownership poses a national security threat.

Prime Minister Jonas Gahr Støre of Norway characterized economic crime as poison.

Over ten years ago, the Norwegian parliament decided that there should be more transparency regarding ownership. The conference asked why this had not been achieved.

Several speakers called for more transparency.

Henning Lauridsen, CEO of Realestate Norway, shared the following paradox: In Norway, there are rules for registering the purchase of a moped, but if you buy a property worth 100 million kroner, the state does not require it to be registered anywhere.

"Norway has rules for a 'nice' society where not many do what they're not supposed to," Lauridsen said.