Long prison sentences for bribery offenses in regional procurement of IT systems
Long prison sentences for bribery offenses in regional procurement of IT systems
During the years 2018–2019, Region Skåne and Region Västra Götaland are jointly conducting a public procurement of an IT-based process support system for primary care. When an investigation conducted by Uppdrag granskning reveals that irregularities may have occurred during the procurement procedure, a preliminary investigation is initiated by the police. The preliminary investigation leads to the prosecution of two people who worked for Region Skåne on the procurement, as well as the owner of the winning company. According to the prosecutor, the defendants are guilty of corrupting the procurement procedure in various ways. The key evidence in the case consists of chat messages from before, during and after the procurement. According to the District Court, neither the defendants’ explanations for these messages nor other counter-evidence presented are sufficient to upset the solid evidence presented by the prosecutor. The court therefore sentences the two former regional employees to three and a half years in prison for gross breach of trust and aggravated bribery. The representative of the winning company is sentenced to four years in prison for aggravated bribery and aiding and abetting gross breach of trust.
Procurement contracts worth more than SEK 800 million signed
In 2017, Region Skåne will begin investigating the technical solutions available on the market for digitisation of physical health centres. The work subsequently culminates in the commencement of a procurement procedure. Furthermore, Region Skåne has the power of attorney to carry out the procurement on behalf of the Västra Götaland region. Region Skåne is putting together an expert group to work on the procurement and will hold a start-up meeting in March 2018.
The group includes J.G. and B.L. The expert group, which needs documentation to create a requirement specification for the procurement, is holding hearings with three actors from the industry to get an idea of what the market looks like. One of the players presenting his products during these hearings is a man named D.T. In May 2018, D.T. forms the company Vårdinnovation.
Later in May of the same year, Region Skåne announced a procurement for an IT-based process support system to be used in primary care. Four tenders are submitted, one of which comes from Vårdinnovation. After the tenderers have given their presentations, the expert group concludes that only Vårdinnovation meets the requirements specification for the procurement. Despite the fact that Vårdinnovation’s tender is more than twice as expensive as that of other bidders, the expert group therefore concludes an agreement for a pilot phase with the company on behalf of Region Skåne. The value of the agreement is estimated at SEK 320 million. Region Västra Götaland has also signed an agreement for a pilot phase estimated to be worth SEK 499 million. The pilot phase for Region Skåne will be extended on two occasions.
Investigation by Uppdrag Granskning leads to trial
At the beginning of 2020, an episode of Uppdrag Granskning will be broadcast in which reasons are presented for suspicion that the procurement procedure has been corrupted. Region Skåne is therefore ending the pilot project and appointing an external investigation to investigate whether the procurement was carried out correctly. Furthermore, Region Västra Götaland has decided not to extend the agreement. The review, initiated by Region Skåne, will lead to a preliminary investigation that will include several house searches. During those searches, evidence was found in the form of chat conversations and documents stored on and recovered from the computers and phones of J.G., B.L. and D.T. The evidence gives strong indications that J.G. and B.L. respectively, in order to obtain mainly financial benefits, had close contact with D.T. in connection with the procurement in order to help Vårdinnovation win the contract. The prosecutor therefore brings an action against J.G., B.L. and D.T. in the District Court with a claim that the defendants should be convicted of breach of trust, or instigation or aiding and abetting breach of trust, and bribery.
General information about procurements
Issues relating to public procurement are regulated in the Public Procurement Act (LOU). The principles of equal treatment and transparency are relevant to the situation. In practice, this means, among other things, that no supplier may be favoured or disadvantaged on inappropriate grounds, that everyone must have access to the same information at the same time and that procurements must be carried out in an open manner. These principles also apply to the entire procurement process; That is, also during preparatory work and before decisions are made. Furthermore, a procuring government body, such as a region, that violates the Public Procurement Act may be liable for damages to suppliers who participated in the procurement. Furthermore, the District Court considers it clear that J.G. and B.L. were aware of relevant procurement law regulations which, in addition to the above principles, stipulate an obligation to disclose conflict of interest in the event of a conflict of interest.
Contacts with Vårdinnovation’s owners regarding the procurement
The evidence found by the police during the preliminary investigation shows that both J.G. and B.L. had extensive communications with D.T. since before the expert group’s start-up meeting. As far as J.G. is concerned, the contact with D.T. began as early as 2017, i.e. before the region had even decided to hold the procurement. The contacts have mainly taken place during evenings and weekends, and when the parties have scheduled meetings, they have been careful to choose places where they will not meet people they know. What the documented communication shows is that both J.G. and B.L. continuously provided D.T. with information in order to give Vårdinnovation the best possible chance of being awarded the contract. This has, among other things, resulted in D.T., before the procurement was announced, using the project directive and the project plan to design Vårdinnovation’s activities. It is established, inter alia, that B.L. contacted D.T. immediately after the start-up meeting to provide information regarding the procurement process. Furthermore, J.G. has given D.T. tips on how to act during the demonstration of Vårdinnovation’s tender and explained how the price negotiations will be conducted. Both J.G. and B.L. have also continued to have contact with D.T. after Vårdinnovation’s presentation and, among other things, reviewed the other tenderers.
J.G. also appears to have actively worked to disqualify other suppliers. This has been done, among other things, by making an effort to include requirements in the procurement terms that it seems likely that only Vårdinnovation will be able to live up to. In addition, in the case of demonstrations by other tenderers, Mr J.G. used questionnaires drawn up by D.T. in order to reveal defects in competitors’ products. According to the District Court, the documented contacts demonstrate flagrant violations of the principle of equal treatment and objectivity in the Public Procurement Act. It is also seen as proven that the information provided to D.T. had a negative impact on the cost results of the procurement for the regions.
About bribery
The District Court states that the legal definition of taking a bribe is when someone accepts a promise of or requests an improper benefit in order to exercise their employment in a certain way. What is to be regarded as a bribe does not even have to be handed over to the person being bribed in order for the crime to be considered completed, but a promise or offer may be enough. A further prerequisite for something to be considered a bribe is, as mentioned above, that the benefit in question is improper. According to the Court, an undue advantage is characterised by the fact that it objectively has the potential to influence the performance of certain tasks, or is perceived as a reward for tasks already performed. Whether the purpose or the actual effect was influenced by someone’s actions is thus not decisive; Rather, what matters is whether, objectively, the advantage appears to be sufficiently desirable to have that effect.
B.L. has been bribed with employment and offers of employment
B.L. admits that he sent D.T. draft contracts of employment for both himself and his wife, M.L. In the case of M.L., there is no doubt that she worked for Vårdinnovation, but B.L. denies that her employment was the result of a bribe. With regard to the employment contract which he sent for himself, B.L. claims that he and D.T. discussed his possible start at Vårdinnovation, but that this did not lead to employment. The District Court considers it proven that M.L. was offered a salary increase of SEK 2500-5000 per month, and B.L. better holiday conditions. In addition, both spouses have been offered the opportunity to participate in option programs or vesting. According to the Court, the values for the recipients were not insignificant, so that they were offers which, viewed objectively, had the potential to influence B.L.’s conduct.
In the light of what has been presented in the case, regarding B.L.’s communication with D.T. about the procurement, the court considers it to be proven that the jobs offered to the spouses constituted remuneration for the disclosure of information. Regarding the fact that B.L. states that he did not work at Vårdinnovation, the Court considers that this seems to be true in view of the communication between him and D.T. However, it is clear that B.L. received an offer of employment which he refused on the ground that he did not consider the role to be sufficiently attractive. According to the Court, it is therefore irrelevant that B.L. did not accept the offer, since a performance does not need to be completed in order for a bribery offence to be considered complete. In addition, according to the court, B.L. is nevertheless guilty of accepting a bribe as a result of M.L.’s employment with Vårdinnovation. It also finds that B.L. played an important role in a decision-making process concerning public procurement for significant values for two regions. It is thus believed that he had a special responsibility that he abused by his actions. Furthermore, the crime has been difficult to detect and has caused significant damage to the regions concerned. Therefore, the Court finds that B.L.’s acceptance of a bribe constitutes a serious crime.
J.G. has received bribes in the form of well-paid assignments
According to the prosecutor, J.G. received a bribe from D.T. in the form of employment, even though it is clear
that the parties have not signed an employment contract. The position is based on the fact that J.G., after resigning from Region Skåne, has carried out assignments on behalf of Vårdinnovation in his capacity as a consultant employed by the company Knowit. According to J.G., the consultancy assignment consisted of recruitments to Vårdinnovation. However, the prosecutor does not see this as a reasonable explanation since he received a monthly salary of SEK 90,000 from Knowit. In addition, it is apparent from documents found on a USB stick belonging to D.T. that J.G. was a deputy board member of Vårdinnovation’s parent company. It is also common ground that D.T. and J.G. discussed the possibility of the latter being employed by Vårdinnovation. During these discussions, J.G. stated, among other things, what role he wanted to have in the organization and that the remuneration, in addition to monthly salary, should include option programs and co-ownership.
As a preliminary point, the Court agrees with the prosecutor’s assessment that the remuneration that J.G. received from Knowit appears to be unreasonably high in relation to his assignment. According to the court, J.G.’s statements during the employment negotiations, including the fact that he himself had proposed what position he should be given and that he wanted to be a partner, also indicate that it was not a question of a normal employment negotiation. According to the District Court, these factors, combined with the information provided by J.G. to D.T. in connection with the procurement, show that it was a question of a bribe in order to influence J.G.’s actions. With regard to the grading of the offence, the Court largely follows the same reasoning as in the case of B.L. The District Court therefore finds that J.G. is guilty of aggravated acceptance of a bribe.
J.G. and B.L. are guilty of gross breach of trust
Regarding breach of trust, the Court states that the crime is characterized by an abuse of one’s own sphere of power, and that the perpetrator is in a special position of trust in relation to the principal. The exact role of the principal can vary, but it is often a person in some kind of managerial position. However, according to the District Court, what is special in the present situation is that it is a matter of public activities, which are considered to be run by the citizens. The breach of trust that the defendants may have shown has thus been towards the citizens of Region Skåne and Region Västra Götaland. In addition to holding a position of trust, the offender must also have been able to manage or supervise the management of a financial matter, for example.
In the case, the Court finds that both J.G. and B.L. were involved in the implementation of the procurement and that, through their roles in the expert group, they were able to influence the outcome of the procurement procedure. Thus, the court finds that the parties held positions of trust that included tasks to manage financial affairs. J.G. contends that his supervisor was aware of the contacts with D.T. without expressing any doubts about them. According to J.G., he could not therefore have been guilty of breach of trust.