Corruption Crime Bureau Overview 2016-2017 Central Criminal Police Corruption Crime Bureau

keskkriminaalpolitsei

Overview of the activities of the Corruption Crime Bureau 2016–2017 2 Foreword

Dear reader,

In this overview of the Corruption Crime Bureau, we bring you a summary of the main activities in 2016 and 2017. We cover the proceedings carried out and crime prevention efforts for raising public awareness. This overview, the third of its kind, is gradually becoming a tradition, shedding as much light as possible on what has been accomplished in this field. We consider this overview as a valuable resource for people in need or interested in police work, policy planners and for those who need additional information in their work. The material in this report was amassed over two years. It is predominantly unique as it consists of individual cases and statistics, but it bears a pervasive message: actions result in change. Our government and we ourselves become better not just through “activity” (which includes passive activities and doing nothing) but by taking action. If we want to make the state function in a more effective, honest and transparent manner, we need an uniformed view. Effectiveness will be obtained through carefully planned preventive activities involving people who represent different regions, associations, institutions, companies and ordinary citizens. If we have one goal that is as wide-ranging as possible, we will achieve the desired result faster. Currently, one big goal appears to be ’’to join the ranks of the wealthiest nations’’– but the activities related to reducing corruption have dropped to secondary or tertiary importance. Unfortunately, this material does not provide a full look at the fight against corruption in Estonia. A number of other institutions have a weighty role to play in the big picture. Even so, the material in this overview provides a look at how much progress people in Estonia still have to make toward honesty and which procedures involve a high risk of an unlawful activity. Crimes and misdemeanours related to corruption can be recognized in both less and more serious cases. Thus, in this edition of the overview as well, we can provide many examples of mistakes that could be avoided in future. In this edition of the overview, we will acquaint the reader with a number of a court decisions that were not previously publicly disclosed. In addition, we cover a selection of proceedings in cases that are essentially consistent with violations of law but in which no court decision was yet made or prosecution was not considered opportune enough because it was not sufficiently in the public interest to conduct proceedings. The capability of Estonian legal protection and the court system of conducting proceedings on a very large quantity of misdemeanour and criminal cases is exemplary when compared to other countries. We are fortunate that legal protection and the judicial system are functional and diligent. As a result, the state can point to judicial decisions that were handed down regardless of the party membership, public status and personal wealth of the persons involved. The court decisions include both convictions and acquittals. Such an outcome is appropriate for a state governed by the rule of law. Without convictions, it would be very hard to talk about a corruption problem. The capacity of legal protection to bring concealed crime to light is a separate matter. As to the cases presented in this report, it is far from an exhaustive list; they represent only one component in corrupt criminal behaviour. We have to assemble the big picture from results encompassed by existing resources, cooperation with partner institutions and risk analysis. For that reason, I would argue that proceedings bring to the forefront only the biggest problems – or some share of them. The responsible company or the institution itself must deal with the reasons behind the problems outside of proceedings. In the last two years, we can still see that slightly fewer than half of the proceedings sent to the prosecutor’s office dealt with offences committed by people working at local government or institutions related to local government. In 3

the last overview, we wrote about the dishonest examiners at the Road Administration and cases of first-time registration of vehicles, this time, it is gratifying to note that Road Administration officials are behaving more honestly and dishonest client shall be held liable. In the last few years, the Road Administration has completed necessary reforms and now examinations can only be taken in an honest manner. We provide separate coverage of the details of one criminal proceeding that culminated in a judicial decision, which should shed light on the nature of violations of procedural restrictions. A substantial part of this publication focuses on prevention and communications with institutions that have had some contact with a criminal case. In cooperation with the institution that fell victim to the offence, our findings and proposals give agencies a chance to fix flaws and adopt measures necessary for avoiding new similar cases. We hope the examples of good cooperation will encourage others in a similar situation to perform the necessary actions and make changes to the internal procedures. Out of our desire to instil even more value to add our overview, we asked a number of public figures to contribute opinion articles on how the state could be even more effective in prevention. The opinions are certainly worth read- ing and in a number of cases lead to real actions toward the goal. Now we need to find leaders to help start to move mountains. This English translation of the report is an abridged version of the original Estonian-language version. I would like to thank everyone who has contributed to detection of crimes and reduction of corruption.

Bonne lecture!

Mati Ombler Head of the Corruption Crime Bureau 4 Contents

Foreword ...... 2

What does today’s Estonia look like through the eyes of an

investigative body? ...... 5

Corruption Crime Bureau: structure ...... 9

Investigative jurisdiction of the KOKB ...... 10

List of corruption crimes ...... 12

Criminal proceedings ...... 13

Significant criminal proceedings, 2016 and 2017 ...... 18

An example of violation of procedural restriction and a related criminal proceeding ...... 21

A selection of a court decisions ...... 23

Misdemeanour proceedings ...... 34

International cooperation and exchange of practices ...... 36

Background of suspects ...... 37

Prevention activities ...... 38

What can we do to make life in Estonia even better? We ask opinion ...... 45

Sending authorities a tip related to corruption ...... 55

Where to turn if you have witnessed or experienced corrupt

behaviour or have information about it? ...... 56 What does today’s Estonia look like 5 through the eyes of an investigative body?

I asked myself this question two years ago when we their work and for a several times already, we get to carry wrote a sort of opinion piece for the 2014-2015 overview out criminal proceedings where the accused is a customer on Estonia’s health in terms of corruption. The prede- who has offered a bribe. Honest examiners have turned cessor of this opinion is lengthy and comprehensive, so down bribes and reported incidents to their superiors. it would be hard to highlight completely new findings Another good example that can be cited is related to or ground-breaking recommendations. Implementing people who are conducting supervision for probationary changes that prioritise moral principles and transparency work. Namely, a few years ago we saw that there was a risk is anything but a short-term process, and getting used to for corruption related to supervisors of people. Based on it and making it a habit require even more time. We can several sources and proceedings, it became evident that highlight effectively-functioning cooperation formats there was a significant risk of the supervisors recording with various participants when it comes to mitigating the wrong hours worked and of being influenced by the and preventing risks. Looking back at the last two years, probationers. From the criminal cases under proceedings, we can also emphasise obvious common features that we learned information, which we sent out in the form of stand out in the proceedings conducted, and common a memorandum to the Ministry of Justice, recommending reasons and context in which the crimes were commit- that the risks be reviewed again and mitigated if possible. ted. This time, I reflect on the following topics: On this occasion, similarly to the memorandum we sent 1) preventive activities help to fix flaws in the system; to the Road Administration, our observations were taken 2) local government is an area with a high risk of cor- seriously and last year, there were many meetings with ruption; probation supervision personnel and probationers across Estonia to increase their awareness and avoid such trans- 3) corruption in the medicine sector. gressions in future. We have been able to send findings and recommenda- Preventive activities help to fix flaws in the tions from the proceedings to other institutions as well. system Cooperation has not always gone as positively as it did in Punitive measures alone will not succeed in reducing the above examples. Yet citing the good working exam- corruption in Estonia. Holding perpetrators accountable ples will hopefully allow other institutions and companies and punishing them is, of course, necessary in order to to be more resolute in their decision-making and com- keep corruption from spreading and to effectively curtail mitted to making the maximum change in the situation. greed. Preventive activities that go hand in hand with le- Neglecting a work environment that is brimming with gal options speak to more people and increase awareness. dishonesty is certainly a managerial mistake and does not Precautionary action will hopefully succeed in preventing create the desire in the other employees to contribute in the commission of similar unpleasant crimes related to the best way possible. Change toward greater effective- the violation of the duty of honesty in future. Once again, ness is possible only when the person speaking out is a I can cite the Road Administration as an example of good leader. In an organisation where more than one person cooperation, where the public disclosure of the dishonest has been able to practice dishonest behaviour by com- conduct of more than 10 employees revealed after sev- mitting crimes will take more time. Ascertaining the flaws eral criminal proceedings led to major changes there, in- in work procedures that made the dishonest behaviour cluding the sacking of the dishonest officials, but this was possible and finding and adopting mitigation measures not all. At the initiative of the agency, the Road Adminis- is only part of the work that leads to change. These ac- tration started looking for errors in the system, assessing tivities are not actually made part of the plan unless the risks and taking measures so that similar incidents would organisation’s leader is committed and keeping an eye on not have to be dealt with again. In this agency with over the developments. The words and actions of the manag- 500 people, the strong leadership and diligent risk assess- er have a very important role in introducing the changes. ment work has drawn a red line when it comes to dishon- Currently it seems that the role is underestimated in many est work and attitude. Thanks to the risk reduction activi- cases. Do they simply shrug their shoulders and ask what ties, practical driving test examiners now value honesty in can be done anyway, saying that employees are adults and no one has been found guilty of anything. Why is the 6

role of the manager so important and why doesn’t the of several times the norm. This will not change unless the manager want changes? One should always examine the current reputation of local governments also changes. reasons why a manager might not want to adopt a programme that is full of transparent and honest actions. Is it Naturally, instilling this mindset is not a one-year project because the leader uses outdated managerial techniques, – it will take time. Considering their image and associa- underestimates the role of values, or is there a question tion with dishonesty, local governments can only proof self-enrichment or links to activities that they want to gress so far before the next similar criminal proceeding keep concealed? If none of these are involved, the head of for an unethical action drags them back down. To ensure an organisation should be expected to have enough cour- that local governments operate transparently and make age to take responsibility if something has gone wrong honest use of public funds, we need local government but they still have a real desire to redress the past actions. leaders to be dedicated to organising local affairs in an The words and actions of the leader change the organisa- honest manner. It should no longer be allowed in local tion’s course. But if the manager doesn’t say anything, the governments and related foundations, limited compa- course will not change- there will be a few or no changes. nies and non-profits, to perform suspicious transactions, use resources for impermissible purposes or make deci- Institutional heads and responsible officials: if you find sions and perform procedures in a situation where mat- yourself in a situation where a dishonest employee does ters involving the same person or persons connected something damaging, contact us! We can assess the sit- to them are decided on. The first step towards change uation and discuss together what needs to be done next. would be the local government leaders speaking with an If there are circumstances that point to a crime having oc- unanimous voice in starting to practice these principles. curred, we will determine the damage through criminal As the next step, it would be necessary to start evaluating proceedings and give recommendations for changing the the necessary risks. If additional assistance was needed processes that made the crime possible. for this, an advisory set of guidelines is being developed for lessening corruption risks in local governments. Ma- Local government: an area with a high risk of terials can also be found online and assistance can be obtained by contacting the Association of Estonian Cit- corruption ies. Certainly, the commitment to change the unsavoury Local governments keep us very busy. Namely, close to aura around local governments should be advanced by 40% of the criminal cases launched and sent to the pros- the nationwide association of local governments, as the ecutor’s office are related to local government or agen- goal is to protect the common interests of its members. cies in their jurisdiction. This has been the case in all six Naturally, if change is to be positive, it is important that years of activity. As to whether the situation will become the local governments themselves want the changes. better in 2018 and 2019, it is still too early to say. Admin- As mentioned earlier, nothing will become better by it- istrative reform did reduce the number of local govern- self and no one will do their work for them. So it must be ment units to 79 but there are just as many people, of done in one’s area of governance itself. In any case, we do course. Those who stand as candidates for local councils have faith in local government leaders that they will want every four years have yet to exhibit purely honest inten- to restore their good reputation. They will need a helping tions and habits. In the background, behind the façade of hand for achieving the best result. We should realise that working in the public interest, binding decisions are also institutions opposing corruption are prepared to provide made with one’s own interests in mind; and on some oc- support to local governments as they make changes. To- casions, public matters are resolved based those person- gether, we can manage to get more done. al interests. This sort of way of thinking must be changed. Reducing the number of local government units will not Local government leaders, don’t hesitate to let us know by itself result in this kind of change. Individual criminal of your wishes and needs! proceedings (such as the cases of vote-buying) during the 2017 local election period demonstrate this vividly as well. It was precisely during the election period that tips and reports regarding dishonesty were received at a rate 7

Corruption in the medicine sector ployee is interested in people defending honesty and being able to do work without infringing on this value. To Is it normal for one or two doctors to be prosecuted each keep honesty from being abused, hospital administrators year for forging documents or accepting a bribe? Is it nor- must try to keep the topic front and centre in interactions mal if the only reaction is a shrug – where doesn’t that with personnel and subordinates. sort of thing happen? But what if there were more such doctors who get caught? Would that change the attitude In the medical sector, constant contact between pa- of people in leadership positions toward people working tients and their family members and doctors encourages in the healthcare sector? Or how many doctors should the dark dishonest side to come to the surface. Clients be involved to a given bribery case to exceed the level want treatment to start right away, better conditions, of tolerance of the Hospitals Association and Medical As- better care; they want the state to pick up the tab. That sociation and put these advocacy organisations on their means one party is interested in the best quality of ser- heels? In Estonia, where public interest in news of misuse vice where they are concerned. To achieve this, it is hu- of public funds has remained high for more than 10 years, man nature to resort to all possible means and some will cases involving the medical sector described in the me- abuse this. They will offer gratuities to doctors so as to get dia in recent years should wake up the heads of hospitals the best treatment. People forget that the offering the and associations and other administrators to the pros- best medical care and compassion is already part of the pect that there are traits characteristic of criminal behav- profession of physician. To get even better, they should iour even among those who have taken the Hippocratic choose either for a longer waiting period or for a private oath and for whom professional prestige of physicians is practice. Pressure from patients to get better treatment very important. For tiny fees, it is possible to buy a certifi- in exchange for a sweetener is something doctors have cate, acquire papers that substantiate a health condition, experienced since time immemorial and this will not go which result in an certificate of incapacity for work or ex- away abate by itself. If we want doctors to feel safer and emption from compulsory military service, give eligibility more secure and not have to feel bad about their own or for nursing care such as independent inpatient nursing their colleague’s ethical lapses, we should train our doc- care defrayed by the Health Insurance Fund. tors to say “no” when dealing with patients. It is not that hard for a doctor to say “no” if they are offered cash to These examples should be sufficient to necessitate a get a certain medication or jump the queue. They need to review of the reasons that such affairs come about and make it a habit, and it is easy to achieve if it has become how they can take place. What is it in the way that hospi- the norm and the default behaviour. On the other side, tals and clinics conduct their business that allows this to our patient should not even offer the doctor candy and happen? It is completely possible that the causes will be flowers, envelopes and gift certificates as a token of grat- found to go beyond the institution itself and it will lead itude. Our diligent doctors can perform their good work to a discovery of deficiencies in the healthcare system just fine without it, only in exchange for a grateful “thank or compensation mechanisms. Without looking for and you”. I don’t think patients who want to give the doctor determining the risks caused by them, the doctors are a gift really want to get the doctor in trouble over ac- still pressurised by the working system, perhaps even its cepting such things and possibly lose their job. But that victims. Naturally, dishonest behaviour is everyone’s own is exactly what giving gratuities like that could lead to! choice. But if the absence of supervision and reporting Remember that it is prohibited by law to give an induce- in the internal procedures of a workplace make it pos- ment in exchange for receiving a preferential position or sible to make decisions for personal gain without likely to buy or receive a treatment decision. People often have getting caught, will tempt people, including doctors, to a hard time telling the difference if the accepted behav- go astray. Everyone makes mistakes and this is natural. iour is to accept flowers and candy left on the corner of a Leaders’ function is to create the best, most secure work table or gifts and envelopes that were given in exchange conditions to spare employees’ professional honour. If for writing a prescription or allowing the patient to jump anyone has got caught accepting a bribe or falsifying a queue. Hence a recommendation to patients: please be a document, this leaves a deep stigma on the person’s good to our doctors and don’t bring them boxes of can- honest colleagues for quite some time. Every honest em- dy. They can’t manage to eat it all by themselves anyway. 8

Figure 1. Transparency International’s Corruption Perception Index shows how Estonia ranks in the years 1998–2017

Constant thanking of doctors is a slippery slope leading According to the February 2018 report from the anti-cor- to actions that are definitely impermissible. To avoid this ruption movement Transparency International, Estonia and achieve the best result in the fastest way possible, ranks 21st in the word in corruption perceptions. Estonia the ordinary expressions of politeness in the form of giv- is about at the same level as last year, having gradually ing flowers and chocolates should be ceased in the med- climbed in the rankings since 2012. Making the top 25 ical sector. This would also lead to much less pressure in the world is a good accomplishment. Yet we see that on doctors to provide services to patients in an unusual if the state and various participants were able to devote manner. Less pressure means better work conditions and more attention to developments and start patching the lower stress. It will reduce additional obligations and pro- deficiencies in previous work, we would be even more hibited promises and actions. In this way, we would make successful and in a few years, crack the top 15 in the rank- the Estonian healthcare system more honest. But, again, ings. We don’t need to take action because of the study it isn’t enough just to talk about it here. We need doc- but rather to make Estonia a better place to live. To make tors to want this themselves and for hospital and clinic public services actually free of charge and keep prices of administrators to propagate this principle. This mode of service from rising due to spending on bribery, so com- action could be supported and made influential through petition would be fair and to make it impossible to ac- all kinds of additional activities and notifications. quire privileges by dishonest means. So: doctors, hospitals, clinics and heads of associations, I wish everyone plenty of will to contribute to the dis- let us know that you’re prepared to open the discussion cussion and help to improve the situation! for improving the situation and we will certainly be prepared to help you with ideas! Corruption Crime Bureau: structure 9

The Corruption Crime Bureau (KOKB) was established at managed in 2012 at the Police and Border Guard Board the Police and Border Guard Board (PPA) on 1 September and the services located in regions are now part of the 2011. structure of the KOKB in the Central Criminal Police. Starting on 1 January 2012, the Northern Prefecture crim- The function of the KOKB is to conduct proceedings on inal bureau’s corruption crimes division and the South- both criminal and misdemeanour proceedings. We also ern, Western and Eastern Prefecture’s criminal bureaus’ deal with prevention and raise awareness among person- corruption crimes service was merged into the KOKB. In nel at institutions and companies. this way, the fight against corruption became centrally

Photo: Maria Papunova 10 Investigative jurisdiction of the KOKB

As the PPA and Internal Security Service (Kaitsepolitsei, 2) the crimes set forth in sections 201, 2172, 2901, 2911, KAPO) both fight corruption and in the last few years the 294, 296, 298–299, 3001,3113, 313 and 315-3161 of the regulation pertaining to the KOKB’s investigative jurisdic- Penal Code, if the act was committed by an official or tion for corruption has been supplemented, it is appro- employee of KAPO. [RT I, 29.12.2014, 6 – entered into priate to set forth the primary regulations that help bring force 1 Jan 2015] clarity to the investigative jurisdiction. Section 2. Investigative jurisdiction of KAPO The Code of Criminal Procedure (1) KAPO shall conduct pre-trial proceedings: Investigative jurisdiction in relation to pre-trial proceed- .... ings is set forth in Section 212 of the Code of Criminal 4) in a crime set forth in Section 3113 of the Penal Code Procedure. The Code notes the following: if the case involves granting permission for ending or 1) pre-trial proceedings are conducted by the PPA and criminal proceedings or unlawfully ending proceedings KAPO. and if the crime was committed by a prosecutor or head 2) The investigative jurisdiction between the PPA and of investigative authority or a structural unit thereof or KAPO is established by regulation of the Government an official performing management functions; of the Republic; 5) in a crime set forth in Section 313, 316 and 3161 of the 3) based on expedience, the prosecutor’s office may, by its Penal Code if the crime was committed by a judge or regulation, change investigative jurisdiction in a specif- prosecutor or head of investigative authority or struc- ic criminal case. tural unit thereof or official performing management functions; The Anti-Corruption Act 6) in a crime set forth in Section 315 of the Penal Code if the crime was committed by a judge or prosecutor or On the basis of subsections 21 (2) of the Anti-Corruption head of investigative authority or structural unit there- Act, the extrajudicial processor of the misdemeanours set of or official performing management functions; forth in Sections 17 to 19 of the Act is a police institution. If KAPO establishes a misdemeanour specified in sections .... 17 to 19 of the Act in the course of proceedings on an (2) in the crimes set forth in Section 201, 2172, 2901, 2911, offence, KAPO shall be the extrajudicial processor. 294, 296 and 298–3001 of the Penal Code, KAPO shall conduct pre-trial proceedings if the crime was com- Government of the Republic regulation mitted by: no. 60, “Investigative jurisdiction between [RT I, 29.12.2014, 6 – entered into force. 1 Jan 2015] the PPA and KAPO” 1) President of the Republic, member of Parliament, The investigative jurisdiction between the PPA and KAPO member of the Government of the Republic, state au- is established by Government of the Republic regulation ditor, chancellor of justice, judge or prosecutor; no. 60 (adopted 11 April 2013). The regulation has been updated several times since then. The excerpt below cov- 2) official or employee of a government institution, Par- ers solely corruption-related topics. liament Chancellery, Office of the President, Office of the Chancellor of Justice, National Audit Office, court Section 1. Investigative jurisdiction of the or head of structural unit thereof or other official or PPA employee performing management functions; 3) commander in chief of the Defence Forces, deputy The PPA conducts pre-trial proceedings: commander in chief of the Defence Forces, head of 1) on all crimes where the competence on pre-trial pro- branch of the defence forces, commander of the De- ceedings has not been granted to KAPO or any other fence League or head of structural unit of the Defence investigative authority on the basis of subsection 212 League or other Defence Forces or Defence League (2) of the Code of Criminal Procedure; 11

official or employee who is not an active-duty mem- public or in the public law, legal person with state ber and is performing management functions; holding, legal person established by its group or by the state; head of the structural units or official of em- [RT I, 29.07.2014, 6 – entered into force. 1 Aug 2014] ployee performing management functions, or mem- 4) head of a local government unit of Tallinn, Tartu, Nar- bers of other management or supervisory bodies of va, Pärnu, Kohtla-Järve or Jõhvi or head of an agency any of the aforementioned institutions, if their action thereof or other official or employee thereof who per- may pose a risk to national security. forms management functions; [RT I, 07.02.2017, 3 – entered into force 10 Feb 2017] 5) head of the Bank of Estonia, Financial Supervision As to the KOKB’s jurisdiction in total, 73 of the 79 local Authority, Office of the State Conciliator, state com- governments in Estonia are in its investigative jurisdic- mercial institution, the Registers and Information tion, as are the officials in lower positions in the six larg- Centre as a state institution administered by a gov- est local governments. The jurisdiction includes a sev- ernment institution, the Estonian Forensic Science eral times greater number of government institutions, Institute, Estonian Maritime Academy, Academy of sub-agencies, local government-established institutions Security Sciences, Estonian Aviation Academy, State and companies. The KOKB also has remit to conduct pro- Shared Service Centre, the Ministry the Interior’s IT ceedings on corruption cases in the private sector related and Development Centre, the State Defence Invest- to bribery crimes.1 ments Centre, the Ministry of Finance’s Information Technology Centre and Ministry of the Environment’s Information Technology Centre or legal person, either

Photo from opening of the exhibition ’’The Many faces of Corruption’’

1 Good to know The functions of the Internal Affairs Bureau situated at the Police and Border Guard Board include preventing, combating and detecting offences by civil servants at working for the PPA and to conduct misdemeanour and disciplinary proceedings. The Internal Affairs Bureau also has the power to conduct proceedings on corruption crimes committed by civil servants working for the police. The Ministry of Justice is in charge of anti-corruption policy in Estonia and coordinates implementation of the strategy. 12 List of corruption crimes

The jurisdiction of the Corruption Crime Bureau includes § 3111. Knowingly making an unlawful court decision crimes in the following list, which among others things by an assistant judge are considered corruption crimes in the PPA: § 3112. Knowingly making an unlawful decision in § 161. Interference with elections or referendum misdemeanour proceedings § 162. Violation of freedom of election § 3113. Knowing unlawful termination of proceedings § 163. Falsification at elections on an offence 3 § 201 lg 2 p 3. Embezzling committed by official § 331 . Knowingly unlawful seizure and sale of property by bailiff § 209 lg 2 p 2. Fraud committed by official § 391 lg 2 p 1. Illicit traffic committed by official § 213 lg 2 p 2. Computer fraud committed by official § 4021. Making and accepting prohibited large-scale § 2172. Abuse of trust /comment: this charge is used donations only if the act was committed by an official / § 402³. Acceptance of bribe in private sector § 2911. Unlawful exercise of state supervision § 4024. Giving of bribe in private sector § 294. Acceptance of bribe In addition, the extrajudicial proceedings on misde- § 296. Arranging of bribe meanours set forth in the Anti-Corruption Act is in the § 298. Giving of bribe procedural remit of the KOKB: § 2981. Influence peddling § 17. Corrupt use of official position, public resources, § 299. Counterfeiting or falsification of documents by influence or inside information officials § 18. Violation of requirement relating to notification § 300. Violation of requirements for public procure- of receipt of income derived from corrupt practices ment and transfer thereof § 3001. Violation of procedural restrictions § 19. Violation of procedural restrictions § 310. Unlawful bringing of charges During the period 2016-2017, there were no changes in the elements of crimes. In some cases, the court has been § 311. Knowingly making an unlawful court decision given additional power to apply expanded confiscation of by a judge assets received through commission of a crime.

Photo: Maria Papunova Criminal proceedings 13

Registered crimes Terminated criminal cases Decisions not to launch criminal case In 2016, the KOKB registered 448 crimes (in 20 crime classifications) and in 2017, 233 crimes (in 21 crime classifications). The number of crimes in the last two years is 158 more compared to the two previous years. Over the last five years, the registration of crimes related to embezzlement has been declining. The numerous bribery-related crimes in 2016 were largely related to cases occurring at vehicle inspection stations.

Criminal cases not started and ending Figure 2. Number of criminal cases not started at the KOKB and proceedings terminated over the last six years The number of criminal cases not started and the num- tor’s office for a procedural decision to be made, with 540 ber of criminal cases terminated by the police decreased total crimes in 11 different crime classifications. In 2017, in 2017. In 2016, however, there were significantly more the KOKB sent 25 criminal cases to the prosecutor’s office of both, and the time spent on such materials and pro- consisting of 230 total crimes in 19 different crime classi- ceedings was more resource-intensive. fications. Compared to previous years, the number of crimes sent Crimes sent to the prosecutor’s office to the prosecutor’s office in 2016-2017 has increased In 2016, the KOKB sent 25 criminal cases to the prosecu- above all due to certain large-scale proceedings sent to

Tabel 1. Number of crimes sent by the KOKB to the prosecutor’s office, 2012-2017

Crimes sent to the prosecutor’s office, 2012-2017 Number of crimes

Crimes set forth in the Penal Code 2012 2013 2014 2015 2016 2017

§ 162. Violation of freedom of election 1 1 § 164. Bribery of electorate 2 8 § 184. Unlawful handling of large quantities of narcotic drugs or psychotropic substances 1 1 § 199. Larceny 2 § 201. Embezzlement 10 30 22 21 18 13 § 202. Acquisition, storage or marketing of property received through commission of offence 12 § 209. Fraud 3 2 5 8 23 § 210. Benefit fraud 1 3 5 6 4 3 § 217'2. Abuse of trust 1 1 § 219. Violation of authorship 1 § 281. Submission of incorrect information to registrar of court register, Estonian 1 Central Register of Securities, marital property register, notary or bailiff § 293. Acceptance of gratuities 15 18 16 15 § 294. Acceptance of bribe 7 43 23 4 140 20 § 295. Arranging of receipt of gratuities 3 12 § 296. Arranging bribe 55 4 1 38 15 § 297. Granting of gratuities 16 27 7 8 14

§ 298. Giving of bribe 4 52 22 120 32 § 2981. Influence peddling 3 § 299. Counterfeiting or falsification of documents by officials 2 5 28 4 182 8 § 300. Violation of requirements for public procurement 1 10 § 3001. Violation of procedural restrictions 3 7 4 4 2 § 329. Evasion of service of sentence 7 1 § 344. Counterfeiting of documents, seals or blank document forms 6 18 6 11 11 44 § 345. Use of falsified documents, seals or blank document forms 3 18 11 42 13 47 § 346. Destruction, damaging, theft, withholding or concealment of documents, seals 1 or stamps § 3811. Violation of obligation to maintain accounting 3 1 § 3851. Concealment of property in bankruptcy and execution proceedings 1 § 394. Money laundering 2 2 3 § 3941. Money laundering agreement 1 § 400. Agreements, decisions and concerted practices prejudicing free competition 1 1 § 4021. Violation of prohibition on restrictions imposed on economic activity and 1 assets of political party § 4023. Acceptance of bribe 3 2 § 4024. Giving of bribe in private sector 12 1 § 424. Driving of power-driven vehicle, off-road vehicle or tram in state of intoxication 1 Total 80 293 166 154 540 230

the prosecutor’s office in 2016. prosecutor’s office has seen significant growth from the past two years. The number of suspects grew in 2016 due Over the last six years, crimes related to bribery, document to the establishment of persons who gave and received falsification and use and embezzlement made up the bribes at vehicle inspection stations. The number of sus- greatest number of cases sent to the prosecutor. The total pects in cases sent to the prosecutor in 2016 was 268; in number of crimes sent to the prosecutor’s office is 1,463. 2017, 102. Over half (about 53%) of the criminal proceedings sent to In six years, the KOKB has sent 754 suspects to the pros- the prosecutor started from information obtained by the ecutor’s office, of whom 144 were officials, 529 were not KOKB employees, tips or cooperation with colleagues. officials, and 81 were legal persons. In recent years, the In 2016 and 2017, the number of suspects sent to the

Figure 3. Share of cases sent by the KOKB to the prosecutor’s of- Figure 4. Number of suspects in criminal cases sent by KOKB to the fice, 2012–2017, with an indication of what led to the opening of prosecutor’s office proceedings 15

Figure 5. Share of suspects in criminal cases sent by KOKB to the Figure 6. Duration of proceedings conducted on the 142 criminal prosecutor’s office, by place of employment. Over the six-year peri- cases sent to the prosecutor’s office from commencement until the od, the number of suspects who fulfilled official functions was 144. case was sent to the prosecutor, 2012–2017 share of suspects with non-official status has increased The average time spent on proceedings has become above all because criminal behaviour lasting a longer longer in recent years. In addition, the average has also period was established by criminal proceedings, where a been increased by individual criminal cases that have large number of people start taking advantage of a per- been in proceedings for several years, and which were son offering dishonest public service. sent to the prosecutor in 2016. A change regarding the criminal cases sent to the pros- Over six years, the KOKB has sent 142 criminal cases to ecutor stems from certain criminal proceedings with the prosecutor for making a procedural decision. The av- a large number of suspects and which were related to erage time for proceedings on these cases is 317 days. Road Administration examiners and inspectors working Figure 7 shows a comparison between the time in days at vehicle inspection stations. For this reason, there were spent on the criminal cases sent to the prosecutor over more than the usual number of suspects in the definition six years and, shown as a line, the ratio to the number of of government institutions and the private enterprise criminal cases sent to the prosecutor. category. In the last two years, the share of suspects who worked in local governments has remained on par with previous years; in 2016-2017, a total of 26 local government employees were sent to the prosecutor. In the criminal cases sent to the prosecutor over the last six years, the greatest number of the officials who are suspects (63) worked for local governments or institutions related to local governments. Of the suspects, 16 worked for education institutions, 29 were in responsible positions in private companies and 36 worked for government institutions, state-owned companies and legal persons in the public law.

Time expended on conducting proceedings Figure 7. Number of criminal cases sent to the prosecutor and av- on criminal cases erage duration of proceedings from commencement until the case was sent to the prosecutor, in days, 2012–2017 Over the six years, the duration of proceedings conducted on the criminal cases sent to the prosecutor – from launching the case to sending the case to the prosecutor Criminal cases sent to the prosecutor’s office – has predominantly been over 10 months. Some of the Even in the invetigative body, quite some time is expend- proceedings have even been pending for over 3 years. ed on proceedings in criminal cases, this means that de- 16

pending on the procedural load, reaching decisions in the proceedings are under way in 10 cases, and eight crim- prosecutor’s office takes time, the same is true for courts inal cases are pending a procedural decision in the pros- when reaching a judicial decision. The current speed of ecutor’s office. Eight criminal cases were dismissed due proceedings – dependent on procedures and volumes – to lack of public interest in prosecuting and one criminal requires enough time to ensure procedural quality. For case because punishment was not considered to serve this reason, the code on proceedings does not specify a any purpose. limit on the amount of time that can be spent on pre-tri- To sum up, the situation is the following in regard al investigations. This is quite wise, as establishing a time to the criminal cases sent to the prosecutor over six limit on pre-trial proceedings leads to excess obligations years: 14 cases were ended because they did not satisfy for legal enforcement to re-examine resources, which the elements of the crime in question, 28 were terminat- is not reasonable. Concealed crime is not detected or ed because of lack of public interest, eight are awaiting a proved in a matter of five, seven or ten months. Maybe decision from the prosecutor, 18 are in court proceedings it might be in simpler cases, but in more complex cas- and 71 cases have reached a guilty verdict. es where foreign assistance may be required on top of everything else, the terms extend to several years. Of the 37 criminal cases sent to the prosecutor in 2012- 2013, as of 16 March 2018, 11 criminal cases have been resolved (i.e. criminal proceedings were terminated due to lack of public procedural interest and culpability was not major) – in other words, a prosecution was cancelled based on the principle of opportunity. One criminal case is still in judicial proceedings and a judicial decision has been handed down in the other 21 criminal cases. Reference to the principle of opportunity in these texts Figure 8. Court decisions in criminal cases sent to the prosecutor means the complete cancellation of criminal proceed- as of 16 March 2018 ings due to lack of public interest in prosecuting the case. This summary is not a complete list of criminal cas- A total of 74 criminal cases reached a judicial decision. es where proceedings were not considered opportune. Of these, three were acquittals, and two of the acquittals Naturally there are a number of criminal cases where the involved proceedings that were conducted separately on principle of opportunity was applied in regard to some of one person but joined together after the cases were sent the persons and where the prosecutor has gone to court to the prosecutor. with accusations against other persons. Where a judicial decision has not been reached, plea bargains under the principle of opportunity are not counted in the figures below. Of the 55 cases sent to the prosecutor’s office in 2014- 2015, as of 16 March 2018, 30 criminal cases had reached a judicial decision. Three of them ended in an acquittal and 27 a conviction. There are yet another seven criminal cases in judicial proceedings, 9 were dismissed due to lack of public interest and nine criminal cases did not satisfy the requisite elements of the crime. Two of the three acquittals involved proceedings that were conducted Figure 9. Court decisions in criminal cases sent to the prosecutor separately on one person but joined together after the in the past six years, as of 16 March 2018 cases were sent to the prosecutor. As of 16 March 2018, 23 of the 50 cases sent to the prosecutor in 2016-2017 had reached a conviction. Court 17

Impoundment of assets in criminal cases sent to the prosecutor Assets acquired by criminal means cannot be left at the disposal of the perpetrator. They must be impounded, kept inviolable until the court decision and depending on the decision, the assets are either returned to the owner, transferred to state revenue or used to cover a civil action From year to year, the value of suspects’ assets impounded has increased. The value and quantity of the assets impounded depends on the crimes committed and the standard of living of the suspects. Many of the Figure 10. Value of assets seized in criminal cases sent to the suspects however live from payday to payday and the prosecutor in the past six years unlawful gains are simply spent. These individuals have no assets that can be seized. On the other hand, there In 2016, the value of the assets seized in criminal cases are proceedings where the amount of damage or bene- sent to the prosecutor’s office was 420,506 euros; and in fit earned is great and the assets of criminal origin have 2017, 823,060 euros. been identified.

Photo: Maria Papunova 18 Significant criminal proceedings, 2016 and 2017

Below, we describe the most important criminal proceed- another person to counterfeit documents in connection ings the KOKB has conducted in the last two years and with court proceedings in another criminal case. This was where a judicial decision is not yet in force or where the done in order to file, in a county court, counterclaims to proceedings were terminated due to lack of public inter- accusations brought by the circuit prosecutor. est or inexpedience to prosecute. The criminal proceed- As the persons were sentenced to prison for committing the ings are categorised according to the suspect’s place of crimes established in the abovementioned criminal case, employment or performance of functions. We considered and the punishment expected to be meted out for falsifica- it necessary to write about these proceedings in order to tion would be lesser, the prosecutor terminated the criminal give a sense of the kinds of problems that exist and note proceedings with regard to the persons because it was felt the possibilities where corruption can occur – without that it would be inexpedient to punish the lesser offence. getting into the particulars. Municipality mayor We lay out a selection of the criminal cases that have A municipality mayor was suspected under subsection been sent to the prosecutor’s office in 2016-2017 and in 299 (1) of the Penal Code for falsifying, over several years, a which a court decision has not yet been reached. travel log for a vehicle in the use of the municipality mayor. Corruption and violations established at local The prosecutor’s office terminated the criminal case due governments to lack of public interest in prosecuting the case, ordering the suspect to pay 1,800 euros into the state treasury. Substitute municipality mayor A person substituting for a municipality mayor was Municipality mayor suspected under subsections 201 (2), 299 (1) and 344 In 2016, a municipality mayor was suspected under subsec- (1) of the Penal Code of using municipal budget funds tions 300 (1) and 201 (2) of the Penal Code of violating in the for the benefit of a legal person connected to the per- capacity of municipality mayor and the person in charge of son (5,150.40 euros) and for the benefit of a third party procurements, the requirements of public procurements (175.20 euros); in their capacity as municipal representa- for the purpose of providing an advantage to a company. In tive, the person signed tenders and instruments of deliv- addition, the municipality mayor was suspected of embez- ery and receipt and prepared falsified invoices and docu- zling close to 8,500 euros of municipal government money ments allowing the bearer to acquire rights. for the benefit of a third party. The prosecutor’s office terminated the criminal case due The criminal case is in the prosecutor’s office. A court deci- to lack of public interest in prosecuting the case, ordering sion has not come into force. the suspect to pay 1,000 euros into the state treasury. City government official

Assistant municipality mayor A head of division in a city government is suspected under subsection 201 (2) of the Penal Code of misleading An assistant municipality mayor is suspected under sub- the city government over several years and defrauding section 300¹ (1) of the Penal Code of violation of proce- them of more than 22,000 euros for services that were dural restriction to a particularly large extent: the official never rendered. took part in performing procedures in the interests of a legal person related to themselves and providing sub- The criminal case is in the prosecutor’s office. The court stantive guidance to them. Subsection 11 (1) of the An- decision has not come into force. ti-Corruption Act prohibits officials from participating in such activity. The monetary value of the prohibited pro- Corruption and violations established in cedures was more than 1 million euros. the jurisdiction of local government or The criminal case is in judicial proceedings. A judicial de- institution established by a local government cision has not come into force. Nursery school director

Municipality mayor The director of a city nursery school is accused under subsection 299 (1) of the Penal Code of falsification of docu- The municipality mayor was suspected under subsec- ments by an official – submitting falsified documents to tion 344 (1) of the Penal Code of acting in concert with the city’s accounting department. 19

The criminal case is in the court of the first instance. There Head of food service for educational institutions is no court decision yet. The head of food service for two basic schools is sus- Member of management board of a foundation es- pected under subsection 201 (2) of the Penal Code of tablished by a local government transferring for their own benefit and another person’s A member of the management board of a foundation is benefit another person’s property entrusted to them. The suspected under subsection 201 (2) of the Penal Code of amount in question were city government budgetary embezzling more than 200,000 euros from the founda- funds, the proceeds from the dining halls and meals sold tion over several years. at two schools, totalling more than 5,500 euros. The criminal case is in the prosecutor’s office. No court The criminal case is in court. No court decision has yet decision has yet come into force. come into force.

Director of a nursing home administered by a local Corruption in the private sector government Development centre founded with a university The director of a nursing home is suspected under sub- holding section 201 (2) of the Penal Code of hiring a person at the nursing home who was paid salary over the years from the A member of the development centre’s supervisory board municipal budget although the person did not actually do and management board member are accused under sub- work for the nursing home. section 210 (2) of the Penal Code of committing benefit fraud pertaining to fostering a misleading impression of As the suspect had under an agreement with the local gov- self-financing for support obtained from Enterprise Es- ernment begun to pay back the damage before the start of tonia and inflating the price of equipment acquired by the criminal proceedings, the criminal case was terminated close to 200,000 euros. due to lack of public interest to prosecute, with the suspect being ordered to pay 470 euros into the state treasury. The criminal case is in judicial proceedings. No court decision has yet come into force. Board member at a company administered by local Member of the management board of a non-profit government association A member of a company’s management board is sus- The member of a non-profit association’s management pected under subsection 201 (2) of the Penal Code of board is accused under subsection 201 (2) of the Penal embezzling more than 26,000 euros from the company Code repeatedly and unlawfully transferring, for their own over several years. benefit or the benefit of others, funds allocated by the city The criminal case is in the prosecutor’s office. No court government to the non-profit as subsidies or other assets decision has yet come into force. bought for the funds, totalling more than 8,900 euros. The criminal case is in judicial proceedings. No court de- Corruption at education institutions cision has yet come into force. Employees of an education institution Problems related to vehicle inspections University employees were suspected under subsections Two persons who illegally requested an inspection of ve- 210 (2) and 345 (1) of the Penal Code committing bene- hicles at an inspection station in Sillamäe were suspected fit fraud and document falsification insofar as some per- under subsection 298 (1) and 299 (1) of the Penal Code sonal expenses were claimed as project expenses on the of being accessory to the falsification of data of the in- basis of falsified documents. The amount involved in the spection performed on their vehicle and giving a bribe in fraud exceeded 1,000 euros. exchange for said falsification. The prosecutor’s office terminated the criminal case due The prosecutor’s office terminated the criminal case due to lack of public interest in prosecuting the case, order- to lack of public interest in prosecuting the case, ordering ing the suspects to pay 1,000 euros into the state treasury the suspects to pay 250 and 430 euros, respectively, into and to perform 100 hours of community service. the state treasury. 20

Corruption in the medicine sector Director of a legal in the private law person fulfilling public functions and head of division Neurologist The director of a foundation and head of a division are A neurologist with West Tallinn Central Hospital is accused suspected under subsection 300 (1) and 210 (2) of the under subsection 294 (1) of the Penal Code of repeatedly Penal Code of repeatedly violating the requirements of accepting bribes and several persons are suspected/ac- public procurements and, by way of fraud, misleading cused of committing crimes related to accepting bribes the support payer for the purpose of obtaining support and falsification of documents in connection with the is- in excess of 45,000 euros. sue and use of documents certifying provision of healthcare service, which allowed persons to be exempted from The criminal case is in the prosecutor’s office. No court or defer compulsory Defence Forces service. decision has yet come into force. The criminal case is in the court of the first instance. No Mid-level manager at legal person in the private law court decision has yet come into force. Criminal proceed- fulfilling public functions ings have been terminated on the basis of Section 202 The person is suspected under subsections 294 (2) and of the Code of Criminal Procedure with regard to several 300 (1) and (2) of the Penal Code of committing crimes persons who consumed service or who aided the work- consisting of eliciting and accepting a bribe from compa- ings of the scheme. nies engaged in design development, construction and General practitioner with family medicine centre renovation and violating the rules on organising public procurements for the purpose of granting an advantage. A GP at a family medicine centre is suspected under subsection 294 (2) of the Penal Code of accepting and elicit- The criminal case is in the prosecutor’s office. No court ing a bribe as payment for misusing professional status decision has yet come into force. as general practitioner and drawing up a description of a person’s condition, entitling them to receive an allowance intended for those who are permanently incapaci- tated for work. The criminal case is in the prosecutor’s office. No court decision has yet come into force. Corruption established in government institutions and companies fulfilling public functions Road Administration A good example of an honest Road Administration employee An applicant for a category B driving licence was suspected under subsection 298 (1) of the Penal Code of promising a bribe in the parking lot of Narva office of the eastern region’s motor vehicle registry of the Road Administra- tion in March 2016. This happened after a Road Adminis- tration examiner decided that the person had not passed the category B driving test. The person then offered the bribe in exchange for receiving a passing score. The prosecutor’s office terminated the criminal case in regard to the person due to lack of public interest in prosecuting, ordering the suspect to perform 100 hours of Photo from opening of the exhibition community service. ’’The Many faces of Corruption’’ An example of violation of procedural 21 restriction and a related criminal proceeding

It is easier to recognise offences whose prohibited status Procedural restrictions are not based on the economic derives from the social contract and which have become benefit of a given decision; rather, the benefit it protects a legal norm because the state has accepted custom- lies further – procedural restrictions protect the trust- ary rules. It is not complicated to recognise an action worthiness of public authority and the principle of equal as a crime if it is an assault on such qualities as life and protection. It is entirely possible that a decision made by health or property. Anyone with any capacity for abstract a local government council is perfectly impeccable and thought can imagine the consequences of such actions useful and that the voting of one (or more) council mem- and thus understand the reasons that a given action is bers in favour of the decision is nevertheless a criminal prohibited. act. The public is used to evaluating whether an action More complicated is the situation with offences that is prohibited based on the immediately visible harmful are prohibited as a result of a country’s legislations and consequence, and may not, in the absence of such a con- which are not explicitly linked with a social norm or at sequence, see the impairment of equal treatment or the least where the link is harder to trace. That is the case with advantages that the decision-maker themselves receives. a number of official crimes – above all ones where the This circumstance often encourages transgression of re- prohibited status of the action stems from the Anti-Cor- strictions. ruption Act. Even though the duty of honesty (this be- In 2017, the decision of the Tartu Circuit Court regarding ing the requirement that is most often infringed on by the conviction of Kallaste City council chairman Fjodor official crimes), being a fundamental value, is protected Plešankov, entered into force. Plešankov was found guilty by time-honoured unwritten rules and society may have of violating the procedural restrictions described in Sec- grown habituated to refraining from committing this of- tion 300¹ (2) of the Penal Code. This case was noteworthy fence, the reality is different. Quite often, decisions made from the aspect described above – a consistent pattern in the public interest are actually based in full or in part of actions by the chairman of the city council for his own on personal interests, even though the Anti-Corruption benefit was overlooked by the community for several Act expressly prohibits a person serving the public good years due to the lack of transparency of the decisions from participating in a decision where the decision af- made and also by the lack of a clearly harmful conse- fects the person themselves, their family members or quence. their economic interests. It is explicitly forbidden to take In 2010, the Kallaste city council, backed by various struc- part in making a decision if anyone’s private interest may tural funds, launched the preparation of a detailed plan start affecting the decision. for an area along the Lake Peipus (area between Võidu On one hand, there is the potential – arising from socie- street, Tööstuse street and the northern city limits) so as ty’s historical memory – for honouring the duty of hones- to create legal basis for engineering and establishing a ty but in practice the potential is not realised in full. Why dock for ships, production facilities and port infrastruc- such a conflict? ture, as well as for the construction of a stationary dock There are definitely many different reasons, but I would and slip along the Port of Kallaste’s boat channel and for refer to one of them in particular in the context of this maintenance of the area adjoining the port and open- article: shortcomings in assessments arising from the su- ing it for public use. Along with self-financing from the perficiality of social control. city (18,933 euros), the total volume of the project was 597,741 euros and the city council discussed and took Social control is effective when the link between an ac- decisions related to the project (including initiation of tion and the deleterious consequence – the chain of plans, taking of loans for self-financing, etc.) on at least causation – is clear and short. In the case of theft, it is easy nine occasions over the years. On all these occasions, the to understand that someone’s property was diminished city council chairman, Fjodor Plešankov, also took part in as a result of the actions of the perpetrator, or that some- the decision-making. one’s health is harmed by a violent act. But is the harmful consequence always so easily perceived when a proce- In Kallaste, where the various city authorities have not dural restriction is violated? No, it isn’t, and this is primar- been able to implement many development programmes ily because there is generally a longer chain of causation and the city’s development has thus stalled, such an eco- between the corruption and the harmful consequence. nomic stimulus was, understandably, welcomed. In a 22

city where the annual budget was barely 1 million euros, not realise the relationship between his decisions and the planning an investment of close to 600,000 euros was interests of the company owned by him. The Circuit Court indisputably a praiseworthy idea. And yet criminal pro- did not consider it material whether the features estab- ceedings were started. lished on the immovable of AS Kallaste Kalur or dredging The criminal proceedings did not take into account the operations were necessary for the company; rather, all feasibility of the entire project but rather looked at the decisions that pertain to material changes in the condi- impact of the project on the economic interests of one tion of the immovable properties inevitably had an in- participant in the decision-making process – Kallaste city fluence on the economic interests of a person infringing council chairman Fjodor Plešankov. It turned out that the on the decision. The court emphasised that the accused city council’s 2009 to 2014 decisions related to the pro- were not being censured for causing damage or for de- ject had, among others, a direct effect on the immovable cisions not being in the interests of the city of Kallaste; properties owned by a company belonging to Plešankov, rather only for the fact that the decisions pertained to a AS Kallaste Kalur. As part of the project, the waters of the person related to Fjodor Plešankov – AS Kallaste Kalur – port and AS Kallaste Kalur Projekt, whose economic ac- and its economic interests. tivities include fishing and port services, were dredged. How should Fjodor Plešankov have acted in the case of A floating dock and slip were established on the port this incident? He should have recused himself from all territory. The area surrounding the port was also recondi- preparation and taking of decisions pertaining to the tioned and a recreational area was established. abovementioned projects. The decision should have Besides downplaying the economic effect of the city been left to those whose private interests were not af- council’s decisions (on AS Kallaste Kalur economic inter- fected by the decision. It is entirely normal that those ests) F. Plešankov and his defender supported their coun- exercising public authority – like all other people – have terclaims among other things by citing the fact that the personal interests and objectives besides their duties of city council decisions served the interests of the city and employment. They do not have to conceal them, and the state. It was also speculated that if Plešankov had not indeed they are not allowed to conceal them. It should cast a vote, his not voting could have prevented the pro- simply be borne in mind that an official does not exercise jects from being implemented, which would have been a their power in their own interests – not even if their inter- harmful consequence from the perspective of public in- ests happen to coincide with public interests. terest. F. Plešankov argued that the infrastructure built on The Circuit Court pecuniary punished Plešankov at the the AS Kallaste Kalur immovable property was not mate- daily rate of 200 fine units, i.e. 8,600 euros, for violation of rial to the company’s economic activity. procedural restriction. In its decision to convict, the Circuit Court ruled that as The development plan, which initially appeared positive, the projects were so clearly linked to the immovables of ultimately had a devastating effect on the Kallaste towns- AS Kallaste Kalur, it was not plausible that Plešankov did people’s trust in the local government.

Photo from the opening of the exhibition ’’The Many Faces of Corruption’’ A selection of a court decisions 23

As of 16 March 2018, the KOKB has sent 142 cases to the prosecutor’s office, of which a court decision has come into force in 74 cases. Of these, three were acquittals, and two of the acquittals involved proceedings that were conducted separately on one person but later joined together after the cases were sent to the prosecutor.

Figure 12. Punishments handed down in criminal cases sent to the prosecutor in the past six years and in which a conviction was reached, as of 16 March 2018

Figure 11. Number of criminal cases processed by KOKB that have reached a court decision, as of 16 March 2018

The following graphs show the stage of proceedings as of 16 March 2018. Of the criminal cases sent to the prosecutor’s office in 2012 and 2013, criminal cases have reached a court decision with regard to 41 persons, of whom 18 were pecuniary punished, nine received sentences of up to one year, Figure 13. Punishments handed down in criminal cases sent to six were sentenced to up to 2 years and eight sentences the prosecutor in the past two years and in which a conviction was were over 2 years. Most of the sentences were suspended. reached, as of 16 March 2018 Of the criminal cases sent to the prosecutor’s office in 2014-2015, 16 persons were pecuniary punished, nine received sentences of up to one year, seven were sentenced to up to 2 years and two sentences were over 2 years. Most of the sentences were suspended. Of the criminal cases sent to the prosecutor’s office in 2016–2017, 11 persons were pecuniary punished, 12 received sentences of up to one year, six were sentenced to up to 2 years and 10 sentences were over 2 years. Most of the sentences were suspended.

During the past six years (as of 16 March 2018) the court has handed down rulings on 107 persons, of whom Figure 14. Duration of criminal cases sent to the prosecutor in the past four years and in which a court decision was reached, from the 45 were punished with a pecuniary punishment, 30 commencement of proceedings to entry into force of a court deci- sentenced to up to a year, 19 sentenced to up to 2 years sion, as of 16 March 2018 and 13 sentenced to more than 2 years. Most of the sentences were suspended. office in 2014–2017, which have reached a court deci- In this overview, we also highlight the duration of pro- sion in force. Above all, the need to discuss this matter ceedings in the criminal cases sent to the prosecutor’s comes from the desire to shed light on the amount of 24

Figure 16. Duration of criminal cases sent to the prosecutor in the past two years and in which a court decision was reached, from the commencement of proceedings to entry into force of a court deci- Figure 15. Duration of criminal cases sent to the prosecutor in the sion, as of 16 March 2018 past four years and in which a court decision was reached, from the commencement of proceedings to entry into force of a court deci- The figures above show clearly that establishing short sion, as of 16 March 2018 deadlines in proceedings would lead to a setback in the fight against concealed crime. If close to one year on aver- time spent on detection of concealed crimes and subse- age is spent on solely gathering evidence for conducting quent actions by the prosecutor’s office and the courts. In proceedings on criminal cases sent to the prosecutor’s the last five years, there has been recurrent pressure for office shown in the figures in the middle of the overview, setting time limits on carrying out criminal proceedings it also takes much time to carry out obligatory activities and shortening the time allowed for pre-trial investiga- from the prosecutor’s office stage until the court decision tion. Among other things, deadlines at the legislative lev- is reached and comes into force. We see that it often takes el have been sought on the time by which criminal cases two or more years for cases sent to the prosecutor in the must be sent to court. last four years to go from commencement of proceedings to a court decision.

Photo: Maria Papunova 25

We introduce thus far unpublished court decisions that have entered into force in 2016–2018. in criminal cases that the KOKB sent to the prosecutor in 2017 and earlier.

Court decisions that entered into force in 2018 • PS was convicted under subsection 298 (1) of the Penal Code of promising a bribe. • The chief accountant of Võhma city government, TR, was convicted under clause 201 (2) 3) and subsection PS, in taking an examination required for obtaining 299 (1) of the Penal Code of embezzling and falsifica- driving privileges in category B under the supervision tion of a document by an official. of an official with the Mustamäe service office of the The chief accountant executed unlawful transfers of Road Administration Traffic Register in Saue in 2016, city funds and disbursements of salary and advances offered the examiner a necklace PS was wearing, in to themselves and third parties, embezzling 29,941.96 exchange for the official using their official status and euros of city funds in this manner. In committing the marking the examination as passed. The examiner re- embezzlement, the accountant falsified data in the city fused to accept the item and notified the Road Admin- treasury ledger. istration of the incident. The court sentenced TR to one year and six months’ im- The court sentenced PS to four months’ imprisonment prisonment with probation of 1 years and 6 months. with probation of 1 years and 6 months. In a civil action, the court ordered TR to pay 27,632.46 Court decisions that entered into force in 2017 euros to the municipality government. • RV, a member of the board of a subsidiary of a compa- • AV, a member of the Jõgeva municipality council, was ny owned by Viimsi Municipality, OÜ Viimsi T, was con- convicted under subsection 3001 (1) of deliberately victed of under clause 201 (2) 2) of embezzlement to violating the procedural restriction in a large extent. a large extent and under subsection 345 (1) of the Pe- The member of the council took part in a session of the nal Code of use of falsified documents, and MA-V was council in 2017, including voting on a motion to sell for convicted under clause 201 (2) 2) – subsection 22 (3) 84,000 euros land units belonging to the municipality of the Penal Code of abetting embezzlement in a large to a company where the member’s sister’s child was extent. a supervisory board member. The member of the As member of OÜ Viimsi T, RV during the period 2008- council knowingly violated the procedural restriction 2013, made inessential expenditures using OÜ Viimsi T established in clauses 11 (1) 1) to 3) of the Anti- assets in transactions with 28 companies, thus using Corruption Act under which officials are prohibited assets unlawfully for personal benefit and benefit of to make decisions if the decision is made against the third parties in a large extent – i.e. in the amount of official or a person related thereto. 559,378.72 euros. To commit embezzlement, RV used The court pecuniary punished AV 5,620 euros. falsified documents to acquire rights. MA-V provided moral and material assistance to RV in making the ex- • LB was convicted under subsection 298 (1) of the Penal penditures from OÜ Viimsi T funds that were inessen- Code of giving a bribe. tial and inexpedient for the company, thus abetting the LB, in taking an examination required for obtaining unlawful use of the assets for the benefit of RV, herself driving privileges in category B under the supervision and third parties on a large scale – i.e. 66,113.44 euros. of an official with the Jõhvi service office of the Road RV was sentenced to four years and six months’ impris- Administration Traffic Register in Paide in 2017, offered onment, of which eight months must be served. On the the examiner money in exchange for the official using basis of subsections 73 (1) and (3) of the Penal Code, their official status and marking the examination as three years and 10 months shall be suspended if RV passed. The examiner refused to accept the money and does not commit a new intentional criminal offence notified the Road Administration of the incident. within a five-year probation period. The court sentenced LB to six months’ imprisonment MA-V was sentenced to two years and four months’ im- with one year of probation. prisonment, of which five months must be served. On 26

the basis of subsections 73 (1) to (3) of the Penal Code, On the basis of Section 84 of the Penal Code, the court 1 year and 11 months of that time shall be suspend- confiscated assets acquired by the intentional offence. ed if MA-V does not commit a new intentional criminal offence within a three-year probation period. On the • KP, the head of an office of Enterprise Estonia, a state basis of subsection 831 (1) of the Penal Code, the court foundation, was convicted under clause 201 (2) 3) and confiscated assets acquired by the intentional offence. subsection 344 (1)- subsection 22 (2) and subsection 345 (1) of the Penal Code of embezzling by an official, In a civil action, the court ordered RV and MA-V to pay incitement to falsification of a document and use of a OÜ Viimsi T a total of 477,103.65 euros. falsified document. • VM was convicted under subsection 298 (1) of the Pe- In 2014 and 2015, the foundation’s official falsified vari- nal Code of giving a bribe. ous documents for the purpose of acquiring rights and VM, in taking an examination required for obtaining ordered products on behalf of Enterprise Estonia from driving privileges in category B under the supervision companies for 1,801.42 euros. The office manager -ex of an official with the Rakvere service office of the Road propriated these products and incited the representa- Administration Traffic Register in Jõhvi in 2017, offered tives of companies that issued the invoice to change the examiner money in exchange for the official using the product designations listed on the invoice. KP also their official status and marking the examination as embezzled Enterprise Estonia assets in various years by passed. The examiner refused to accept the money and using reward points to purchase airfares for themselves notified the Road Administration of the incident. and third parties and products for 14,298.23 euros. The court pecuniary punished VM 50 daily units – 933 The court sentenced KP to one year and six months’ euros – with one year of probation. imprisonment with probation of 2 years and 6 months’ probation. • SD, the head of the department of a legal person in In a civil action, the court ordered KP to pay Enterprise private law VKG S, and VK, the head of a department of Estonia a total of 12,302.42 euros. legal person in private law VKG E, were convicted un- 3 der subsection 402 (1) of the Penal Code of accepting • VM, the head of a regional department of the Ministry a bribe in the public sector and LN was convicted under of the Interior’s information technology and develop- subsections 344 (1) and 345 (1) of the Penal Code of fal- ment centre (SMIT), was convicted under clause 201 sification of document and use of a falsified document. (2) 1) and 3), subsection 344 (1)- subsection 22 (2) and In March or April 2017, VKG department head SD asked subsection 345 (1) of the Penal Code of repeated em- and received from a representative of the company T a bezzling by an official, incitement to falsification of a bribe in the form of repair work on vehicles, promising document, incitement to falsification of a document in exchange to outsource various work ordered by VKG S and use of a falsified document. to the company T. The department head of VKG E VK re- VM, who worked as a the head of the SMIT regional de- ceived bribes of 320 euros on repeated occasions from partment in 2014, embezzled a camera and two mobile the representative of T, promising in exchange to act in phones, thereby causing a total 1,671 euros in damage. the interests of T and to outsource various work to the To conceal the embezzlement, VM incited the repre- company. LN, as the member of the management board sentative of the company from which the items were of OÜ V, was asked by SD to prepare fictitious invoices on acquired to falsify documents. VM then submitted the behalf of OÜ V, which were presented to OÜ T for payment falsified invoices to SMIT accounting for payment. for concealing the repair works being used as a bribe. The court sentenced VM to eight months’ imprison- The court pecuniary punished SD 59 fine units, i.e. ment with one year of probation. 2,944.10 euros. On the basis of subsection 831 (1) of the Penal Code, The court sentenced LN to one year of imprisonment the court confiscated assets gained by the intentional with one year of probation. offence. The court sentenced VK to one year of imprisonment MH, who worked for a government institution in the ju- with one year of probation. • risdiction of the Ministry of the Environment, was con- 27

victed of knowingly violating the procedural restriction imprisonment with four years’ probation. On the basis in a particularly large extent under subsection 3001 (2), of clause 50 (1) 1) of the Penal Code, the court suspend- subsection 300 (2), subsection 344 (1)- subsection 22 ed MH’s driving privileges for three months. (2), clause 201 (2) 3) and Section 424 of the Penal Code. HK, the member of the management board of founda- MH, who worked in various positions in a government • tion KS; established by the city of Kärdla, was convicted institution in the jurisdiction of the Ministry of the Envi- under subsection 210 (1) and (2), clauses 394 (2) 1) and ronment, was also responsible for organising manage- 3), subsection 344 (1), subsection 345 (1) and subsec- ment of public property in 2011-2016 and organising tion 3001 (1) of the Penal Code of benefit fraud, mon- public procurements in their field of work. ey laundering, falsification of a document and use of a MH took part in developing the conditions of procure- falsified document. The company N was also convicted ments, organising procurement and selecting the win- under clauses 394 (2) 1) and 3), subsection 344 (2) and ner. At the same time, companies related to MH took subsection 345 (2) of the Penal Code of money laun- part in the procurements as contractors. Having worked dering, falsification of a document and use of a falsified as a contractor in the framework of the procurement document by a legal person. contracts, MH also accepted the work as a representa- In 2012 and 2013, the foundation board member HK tive of the government institution. After receipt of pay- submitted, on behalf of the foundation, false data to ments from the ministry, transfers were made from the Enterprise Estonia in project reports regarding eligible accounts of the companies that won the procurement documented work that was actually not performed, was to the accounts of companies controlled by MH, in a to- done partially or financed a second time through other tal of at least 447,148.78 euros. Thus, while working in public procurements. The aim of this activity was to ob- a government institution in the capacity of an official, tain a benefit by way of fraud. As a consequence, Enter- MH performed procedures and made decisions with prise Estonia sustained 179,424.99 euros of damage. regard to persons connected thereto. By entering into agreements in respect to a person related thereto, MH HK, who represented KS foundation and the company knowingly and in a large extent violated the procedural N, also committed money laundering in 2013 with a restriction established in clause 11 (1) 1) of the Anti-Cor- number of other companies and their representatives, ruption Act. In organising the procurement announced where several fictitious transactions as well as related in 2015, MH violated the general principles for organis- transfers on various companies’ bank accounts were ex- ing public procurements, failing as the contracting au- ecuted for to conceal the origin of the 108,045.89 euros thority to ensure transparency and verifiability of public acquired by fraud. In addition, HK, the board member procurements and to avoid a conflict of interest injuri- of the KS foundation, entered into commercial lease ous to competition. In this manner, the winner of the agreements with the company N, which HK was board procurement had an advantage over other tenderers member of, worth a total 54,000 euros. By entering into and the winner received a procurement contract worth agreements in respect to a person related thereto, HK 746,159.15 euros, plus VAT. In the course of the above- knowingly and in a large extent violated the procedural mentioned works under contract, MH submitted to KIK restriction established in clause 11 (1) 1) of the Anti-Cor- and a government institution various documents with ruption Act. incorrect information, documenting the performance The court sentenced HK to four years’ imprisonment of work at the wrong time in a total of 57,751.50 euros. with four years’ probation. The court pecuniary pun- MH also, as representative of government institution ished company N 6,000 euros. and endorser of invoices, accepted invoices submitted • The mayor of Puka municipality, HK, was convicted in a procurement held in 2015, where the work on the under subsection 299 (1) and subsection 345 (1) of the invoices was not actually performed or had been per- Penal Code of falsification as an official and use of a fal- formed only in part, and embezzled 46,116 euros for sified document. the benefit of third party. In addition, MH drove a motor In 2012-2013, the mayor of Puka municipality prepared vehicle while intoxicated. four sale contracts containing inaccurate data for trans- The court sentenced MH to two years and six months’ actions that never took place. The falsified documents 28

were submitted by HK to the municipality govern- court ordered VP to pay 1,000 euros and PM to pay 749 ment’s accounting department for obtaining a cash euros. disbursement. • Chairman of Kallaste City Council FP was convicted un- The court sentenced HK to five years’ imprisonment der subsection 3001 (2) of the Penal Code of deliberate- with one year and six months’ probation. ly violating the procedural restriction established in the Anti-Corruption Act in a large extent. • The mayor of Nõva municipality, DR, was convicted under subsection 299 (1) and subsection 345 (1) of the In the years 2009-2014, the chairman of Kallaste City Penal Code of falsification as an official and use of a fal- Council, FP, who was simultaneously a member of sified document. the management board and a shareholder in AS KK The mayor of Nõva municipality, DR, who was obliged took part in city council sessions and voted in favour to fill in a travel log on official travel, falsified the travel of decisions in matters pertaining to KK’s real estate, logs for use of the municipality government’s vehicle, i.e. a conflict of interest situation. By doing so, the city entering false data on use of the car and the distance council chairman violated the procedural restriction to travelled. The mayor submitted the travel logs with the extinct of 594,741.58 euros. According to the court the falsified data to the municipality government’s ac- decision, the projects related to AS KK’s real estate sig- counting department in 2014-2015 to make it appear nificantly infringed on the public limited company’s as the activities not connected with his official or ser- economic interests and in this sense, FP violated the vice duties were actually official business. procedural restrictions on participating in making the relevant decisions. According to the documents related The court pecuniary punished DR 150 fine units, i.e. to the project, various civil engineering works were to 7,569 euros. be erected on the public limited company’s immovable • Two vehicle inspectors at a Sillamäe inspection station, property. Solely improving the real estate of the public PM and VP, were convicted of falsification and repeat- limited company can be considered to be a material ed acceptance of bribes, i.e. under subsection 299 (1) economic impact. and subsection 294 (1) of the Penal Code. The court pecuniary punished FP 200 fine units, i.e. PM and VP, being responsible for organising inspec- 8,600 euros. tions at Sillamäe inspection station in 2015, accept- PK, a member of the management board of the legal ed bribes of 10-30 euros from at least 59 people who • person of the Järvselja educational and experimental wanted to pass inspection. In exchange, the inspec- forestry district established by a legal person in public tors falsified inspection cards for at least 120 vehicles law, and a forest administrator, was convicted of ac- that were supposed to go through inspection but cepting a gratuity under subsection 293 (1) of the Pe- were actually not brought to the inspection, and not- nal Code (as of 1 January 2015, accepting a bribe under ed that the vehicles were in satisfactory technical con- subsection 294 (1) of the Penal Code.). dition. As member of the board of the aforementioned SA The court sentenced PM to four years’ imprisonment Järvselja Õppe- ja Katsemetskond and forest head, PK with four years’ probation. received in 2013 from a representative of a private lim- The court sentenced VP to three years’ imprisonment ited company (OÜ) a gratuity of 300 euros in exchange with three years’ probation. for having concluded with the OÜ a contract on transfer Under Section 49 of the Penal Code, the court also sus- of cutting rights to growing forest, promised as member pended PM and VP’s privileges to work as a motor ve- of the board, if necessary, to guarantee a prepayment to hicle and trailer inspector or an assistant inspector for the OÜ for the work performed, promised the compa- three years. nies related to OÜ’s representatives transactions with SA 1 On the basis of subsection 83 (1) and Section 84 of the Järvselja Õppe- ja Katsemetskond, and organised pay- Penal Code, the court ordered PM to pay 5,000 euros in ment of invoice to the OÜ in an expedited manner. lieu of confiscation of the assets received from the crime. The court pecuniary punished PK 150 fine units, i.e. 2 On the basis of subsection 83 (1) of the Penal Code, the 6,045 euros. Of the punishment meted out on the basis 29

of subsections 73 (1) and (2) of the Penal Code, the fine prisonment with two years’ probation. of 25 fine units had to be paid immediately. As to the The court pecuniary punished AT 200 fine units, i.e. remaining 125 fine units, i.e. 5,037 euros, this was sus- 2,000 euros. pended on condition that PK does not commit another On the basis of subsection 831 (1) and Section 84 of the intentional crime during a one-year probation period. Penal Code, the court ordered MR to pay 1,750 euros, On the basis of Section 84 of the Penal Code, the court IP to pay 1,790 euros and IU to pay 600 euros, which ordered PK to pay 300 euros, which corresponds to the corresponded to the value of the assets subject to con- value of the assets subject to confiscation acquired by fiscation. the misconduct. Under Section 49 of the Penal Code, the court also, as an additional punishment for MR and IU, suspended • MR, chief specialist of the Tallinn/Mustamäe service of- for two years their privileges to work in fields related to fice of the Road Administration and specialist IU were motor vehicle and trailer inspections. convicted under subsection 294 (1), subsection 299 (1), subsection 296 (1) and subsection 298 (1) of the Penal • EL, the head of the youth and culture sector of the Code of accepting a bribe and falsification as an official North Tallinn city district administration, was convicted and IP was convicted of arranging a bribe and AT was under subsection 344 (1) – subsection 22 (2) and sub- convicted of giving a bribe. section 345 (1) of the Penal Code of incitement to falsi- In 2015, MR, who worked as chief specialist of the Tal- fication of a document and use of a falsified document. linn/Mustamäe service office of the Road Administra- On two occasions in 2014, EL incited the city district tion, accepted bribes from IP on at least 13 occasions government employee to look for falsified invoices to- in exchange for vehicles not conformant with require- talling 3.050 euros for two events that were held. Being ments and to be registered for the first time in Estonia aware that the invoices received by the local govern- passing inspection as well as for enabling the registra- ment were false, EL coordinated the received fraudu- tion of vehicles introduced into use in 2009 and later lent invoices with the e-invoice centre along with ex- without documents having first been verified by the planatory note and made the relevant transfers to the Tax and Customs Board and receiving endorsement al- companies that presented the falsified invoices. lowing the vehicle to be registered. While performing The court sentenced EL to one year of imprisonment duties of employment, in the register MR falsified the with one year of probation. inspection reports required prior to registration for 18 vehicles. • A member of the management board of SA Rõngu Likewise, in 2015, IU, who worked as specialist with the Hooldusravikeskus (Rõngu Nursing Care Centre Foun- Tallinn/Mustamäe service office of the Road Admin- dation), MT, was convicted of embezzling by an official istration, accepted bribes from IP in exchange for the under clause 201 (2) 3) of the Penal Code. latter performing registration procedures in the traffic In 2014, MT embezzled cash belonging to the founda- register for vehicles introduced into use in 2009 and lat- tion, totalling 1,559.92 euros. er without the documents for the passenger cars hav- The court sentenced MT to 10 months’ imprisonment ing first been verified by the Tax and Customs Board with one year of probation. Based on the court deci- and receiving endorsement that would have allowed sion, MT is obliged to pay the damage to the founda- the vehicles to be registered. In this manner, IU ensured tion which brought a civil action. the registration of seven vehicles each time for a 100- euro bribe. In addition, AT gave IP a bribe so that the • SK, who supervises community service, was convicted vehicle would pass its pre-registration inspection and of falsification of a document by an official, under 299 be registered in the register. (1) of the Penal Code. The court sentenced MR to two years’ imprisonment As a member of the board of a non-profit association with two years’ probation. and on the basis of a contract entered into with Pärnu The court sentenced IU to one year and eight months’ probation supervision department of Tallinn Prison for imprisonment with two years’ probation. organising community service, SK was assigned to be the person supervising community service for a con- The court sentenced IP to one year and six months’ im- 30

vict, HT. According to a Pärnu County Court decision, of imprisonment with probation of three years and HT was obliged as a substitutive punishment to per- nine months. form 1,440 hours of community service over two years. The court sentenced PP to four years of imprisonment, SK, as the supervisor of the community service, each of which one month and 27 days must be served; the month presented the Pärnu probation supervision de- rest of the sentence is suspended on condition that PP partment of Tallinn Prison with record sheets regarding does not commit a new intentional criminal offence HT’s performance of community service, which listed within a four-year probation period. significantly more hours than HT had actually per- On the basis of subsections 83 (2) and 831 (1) and Sec- formed. SK did not perform the obligation, imposed tion 84 of the Penal Code, the court confiscated, and or- on SK, of direct verification of the probationer, nor did dered AK to pay 1,260 euros, NK to pay 400 euros, MM SK keep correct records of the number of hours per- to pay 480 euros, AA to pay 300 euros, JT to pay 480 formed by the probationer. SK falsified data for a total euros and PP to pay 320 euros which corresponded to of 12 months of community service record sheets, by the value of the assets subject to confiscation. recording more than 342 hours works that were not actually performed. • EM, the director of Esku-Kamari School, was convicted The court pecuniary punished SK 200 fine units, i.e. under clause 201 (2) 3), and subsections 345 (1) and 2,400 euros. On the basis of subsections 73 (1) and (3) 345 (1) of the Penal Code of embezzling by an official, of the Penal Code, the punishment shall be suspended falsification of a document and use of a falsified docu- if SK does not commit a new intentional criminal of- ment. fence within a one-year probation period. The director of Esku-Kamari School embezzled assets entrusted to them in Jõgeva County, Põltsamaa ru- • PP, JT and AA, examiners at the Tallinn/Mustamäe ral municipality, transferring the assets unlawfully for service office of the Road Administration, were con- the benefit of a third party. On 12 October 2013, EM victed under clauses 294 (2) 1) and 296 (2) 1) of the falsified a sole proprietor (FIE)’s invoice that left the im- Penal Code of repeatedly accepting a bribe, and MM pression that the FIE had provided a total of 600 euros was convicted of repeatedly accepting a bribe and of transport service on five occasions to the school in arranging a bribe. Besides the officials, the court also the context of the project “Environmental education convicted driving instructors AK and NK were con- at Esku-Kamari School”. It was substantiated that the victed under subsection 296 (1) of the Penal Code of transport service was only rendered on one occasion. arranging a bribe. EM, while serving as Esku-Kamari School director and At different times in the period 2013-2015, PP, JT, AA knowing that it was a falsified invoice, confirmed by sig- and MM, examiners of the Tallinn/Mustamäe service nature that the service on the invoice and the amount office of the Road Administration, repeatedly accepted were expenses related to the school, after which the bribes, in exchange for passing their practical driving invoice no. 203 was forwarded to the Põltsamaa mu- test, from driving instructors AK and NK and other per- nicipality government for payment. On 18 October sons who channelled people to the examiners to take 2013, the Põltsamaa municipality government made a the practical driving test for obtaining a driving licence. transfer to the FIE’s Swedbank account on the basis of The court sentenced AK to three years’ imprisonment the invoice approved by the director, transferring 600 with three years’ probation. euros – 480 euros more than the cost of the service ac- The court pecuniary punished NK 250 fine units, i.e. tually provided – to the FIE’s account. 2,500 euros. The court pecuniary punished EM 100 fine units, i.e. The court sentenced MM to four years and three 1,720 euros. months’ imprisonment with probation of four years Court decisions that entered into force in 2016 and three months. The court sentenced AA to three years’ imprisonment • Three vehicle inspectors at a Tallinn-based inspection with three years’ probation. station, VM, VV and JH, were convicted under subsec- The court sentenced JT to three years and nine months tion 299 (1), clause 294 (2) 1) and subsection 296 (1) of 31

the Penal Code of falsification as an official and repeat- On the basis of subsection 831 (1) and Section 84 of the ed acceptance of a bribe. A fourth inspector, MR, was Penal Code, the court ordered GO to pay 30 euros in convicted of arranging the bribe. lieu of confiscation. VM, VV and JH, while responsible for organising inspec- • KK was convicted of promising a bribe – i.e. of commit- tions at the Tallinn inspection station in 2015, accepted ting a crime classifiable under subsection 298 (1) of the bribes of 5 to 25 euros from people who brought vehi- Penal Code. cles or trailers in for inspection, including from MR, who KK, in taking an examination required for obtaining was providing intermediation service, in exchange for driving privileges in category B under the supervision falsifying inspection certificates for at least 37 techni- of an official with the Põlva service office of the Road cally non-conformant vehicles or trailers brought in in- Administration Traffic Register in the city of Põlva in spection, recording them as technically in satisfactory 2016, offered the examiner 50 euros in exchange for condition. the official to overlook errors evident from the practical The court pecuniary punished MR 300 fine units, i.e. driving test that would affect the examination result 3,000 euros. and using their official status and marking the exami- The court sentenced VM to one year of imprisonment nation as passed. The examiner refused to accept the with probation of one year and six months. money promised as a bribe and reported the incident The court sentenced VV to one year of imprisonment to the director of the Võru Service Office of the Road with two years’ probation. Administration. The court sentenced JH to 1 year and six months’ im- The court pecuniary punished KK 150 fine units, i.e. prisonment with 2 years’ probation. 1,500 euros. Under Section 49 of the Penal Code, the court also suspended for two years PM and VP’s privileges to work • RK, the mayor of Risti municipality, was convicted un- as a motor vehicle and trailer inspector or assistant in- der subsections 210 (1), 299 (1) and 345 (1) of the Penal spector. Code of benefit fraud, falsification of a document by an On the basis of subsection 831 (1) and Section 84 of the official and use of a falsified document. Penal Code, the court ordered VM, VV and JH to pay, By decision of Risti municipality government, it was respectively, 140, 115 and 30 euros, this being the value planned to build a health service in an old library building of assets subject to confiscation. at Jaama 1 in Risti. To fund the construction of the health centre, it was decided to apply under the LEADER meas- • A vehicle inspector at a Tallinn-based inspection sta- ure administered by the Agricultural Registers and Infor- tion, GO, was convicted under subsection 299 (1) and mation Board (PRIA). In 2011, the mayor of Risti munici- clause 294 (2) 1) of the Penal Code of falsification as an pality, RK, submitted false information in the application official and repeated acceptance of bribe. for funding to PRIA, in order to obtain eligible support by In 2015, GO, being responsible for organising inspec- fraudulent means. Namely, RK falsified data on price of- tions at a Tallinn inspection station, accepted bribes fers received from companies for the construction (works of a total 30 euros over three occasions from a person were added and tender prices were inflated) such that a who was a middleman for funds received from users specific contractor’s tender was the lowest bid. of various vehicles. The inspector falsified the inspec- By filing an application with inaccurate data and falsi- tion certificates for vehicles that were supposed to go fied price offers, the mayor left PRIA with a false impres- through inspection but were not actually brought to sion regarding the actual cost of the renovation costs, the inspection, and recorded the vehicles as being in aimed at promoting economic activity and receiving satisfactory technical condition. a benefit, i.e. free of charge disbursement from public The court sentenced GO to six months’ imprisonment funds for a person participating in economic activity. with two years’ probation. RK received a financial gain of 32,952.24 euros as dis- Under Section 49 of the Penal Code, the court also sus- bursement from PRIA. pended for two years GO’s privileges to work as a mo- The court pecuniary punished RK 300 fine units, i.e. tor vehicle and trailer inspector. 7,440 euros. 32

• AL, the social affairs adviser of Pihtla Municipality gov- • AS was convicted under subsection 162 (1) of the Penal ernment, was convicted under clause 201 (2) 3) and Code (previously Section 164 of the Penal Code) of vio- subsection 344 (1) of the Penal Code of embezzling and lation of freedom of election. falsification of a document. AS, while working as an activity leader at AS Hoolekan- From 2013 to 2016, AL, who worked as social affairs ad- deteenuse SK, offered and gave people living in the nurs- viser at Pihtla municipality government, embezzled sub- ing home during the period of elections of Lääne-Saare sistence allowances of 3,935.86 euros allocated by the municipality council in December 2014 material com- municipality government to six people. To embezzle the pensations to sway them to vote for candidate no 149. money, the adviser falsified decisions entitling six peo- The court pecuniary punished AS 100 fine units, i.e. ple to subsistence allowance. The people did not them- 1,050 euros. selves express a desire to do so. The official then drew up cash treasury sheets, entered the names of the persons • Piirissaare municipality mayor JU was convicted of and the amounts to be paid in cash as the allocated sub- concealment of official documents under Section 346 sistence allowance. Al forged the persons’ signatures to of the Penal Code. show that the person had received their allotted allow- JU, while serving as Piirissaare municipality mayor from ance, although the recipients did not actually receive it. 13 November 2013 to 15 October 2014, took official Through these actions, AL caused 3935.86 euros of dam- municipality documents home, after which JU con- age to Pihtla municipality government. cealed them at home until a search in 2015, thus mak- The court sentenced AL to one year and six months of ing Piirissaare municipality – the person controlling imprisonment with two years’ probation. them – impossible to use during this period. The court pecuniary punished JU 80 fine units, i.e. 1,784 • Two vehicle inspectors at a Tartu-based inspection sta- euros. tion, SL and RT, were convicted under subsection 299 (1) and clause 294 (2) 1) of the Penal Code of falsifica- • The chief specialist of the Food Office of Tartu County tion of documents as an official and repeated accept- Veterinary Centre of the Veterinary and Food Board, ET, ance of bribes. was convicted of accepting a bribe under subsection In 2015, SL and RT, while responsible for organising 294 (1) of the Penal Code and falsification of a docu- inspections at the inspection station in Tartu, accept- ment under subsection 299 (1) of the Penal Code. ed bribes from people who brought in vehicles for in- In December 2013 and January 2014, on a total of three spection: occasions, the VTA chief specialist falsified the health SL accepted bribes totalling 461 euros on 25 occasions, certificates for 75,031 kg of fish by-products to be -ex and RT accepted bribes in the amount of 40 euros, in ported to third countries, by confirming by signature exchange for repeatedly falsifying inspection certifi- the conformity of the goods to the requirements with- cates for technically non-conformant vehicles brought out actually seeing the goods. Through the actions in for inspection, recording the vehicles as in technical- described above, the chief specialist violated the obli- ly satisfactory condition. gations arising from subsections 48 (1) and (2) of the The court sentenced SL to two years and four months Trade in, Import and Export of Animals and Animal of imprisonment with probation of two years and six Products Act, which prohibit the certifying official from months. certifying data that cannot be ascertained by the official, and from signing certificates or animals and ani- The court sentenced RT to one year of imprisonment mal by-products that the official has not inspected. In with one year of probation. addition, in February 2014, ET accepted 4 kg of smoked Under Section 49 of the Penal Code, the court also sus- fish worth 40 euros from the representative of the expended for two years and six months SL’s privileges and porting company in exchange for issuing the health for one year RT’s privileges to work as a motor vehicle certificate signed in January. and trailer inspector or assistant inspector. The court sentenced ET to one year of imprisonment The court confiscated 461 euros of SL’s assets and 40 with probation of one year and six months. euros of RT’s assets acquired by way of the crime. 33

• Kohtla Municipality Mayor HL was convicted under frauded from the municipality budget and transferred clause 201 (2) 3) of the Penal Code of embezzling and by the municipality, 15,192 euros, was transferred from under subsection 344 (1) of the Penal Code of falsifica- the company on the basis of the invoices falsified by HL, tion of a document. to the next company’s bank account, from which HL In 2015, Kohtla Municipality Mayor HL falsified instru- embezzled it for their own and a third party’s benefit. ments of delivery and receipt of works drawn up by the The court sentenced HL to two years’ imprisonment performers of works under public contract for “repair with probation of two years and six months. of Kohtla municipality gravel roads 2015”, showing the volume of the works as greater than they were. On the • The senior warrant officer of the Defence League’s Tar- basis of the said reports, the municipality mayor also tu defence district MN was convicted of embezzling superscribed invoices drawn up for the municipality under clauses 201 (2) 1) and 3) of the Penal Code. by the company for the falsified volumes of works, on In 2012, the individual sold scrap metal belonging to the basis of which the municipality transferred, to the the Defence League on his own behalf and embezzled successful bidder and undertaking that performed the 450.95 euros of the Defence League’s assets. work in a smaller volume, larger amounts than would The court sentenced MN to three months’ imprison- have actually been due for the works. The amount de- ment with one year of probation.

Photo: Maria Papunova 34 Misdemeanour proceedings

Statistics on misdemeanours Municipality mayor In 2016, 10 misdemeanour cases were registered in the In 2015, the municipality mayor embezzled 175.62 euros KOKB’s proceedings; in 2017 there were 19. In 2016, six of Tartu municipality government assets for the benefit misdemeanour proceedings were left not started; in of third parties: using a fuel card belonging to the mu- 2017, eight misdemeanour proceedings. In 2016, two nicipality, the municipality mayor refuelled an acquaint- misdemeanour proceedings were terminated, and in ance’s vehicle on one occasion and daughter’s vehicle on 2017, two were terminated. In 2016, eight proceedings two occasions, submitting the receipts to the municipal- reached a court decision and in 2017, six did. ity government accounting department for reimbursement. By doing so, the municipality mayor committed an Below, we describe the most important misdemeanour offence against property in regard to an object of low val- court decisions from 2016 and 2017 that entered into ue, i.e. a misdemeanour classifiable under subsection 218 force, with regard to violations specified in the Anti-Cor- (1) of the Penal Code. The municipality mayor was fined ruption Act. 280 euros for committing the misdemeanour. Municipality mayor Assistant mayor In 2017, municipality mayor TT assigned a subordinate, In an official capacity in the period 2014-2016, the assis- construction and economic adviser, the task of entering tant mayor made decisions at city government sessions into, on behalf of the municipality government with MK that dealt with granting support for non-profit associ- MTÜ – a member of the board of which was the spouse of ations in which the assistant mayor was a management the municipality mayor – an agreement on granting free board member. By doing so, the person violated the use of a municipality-owned day centre for up to seven procedural restriction set forth in clause 11 (1) 1) of the years. By doing so, the person violated the procedural re- Anti-Corruption Act: it is prohibited for an official to per- striction set forth in clauses 11 (1) 1) – subsection 11 (2) form or take a procedure or decision if it is done in regard of the Anti-Corruption Act: it is prohibited for an official to themselves or a person related to them. The assistant to perform or take a procedure or decision if it is done mayor was fined 200 euros for committing a misdemean- in regard to themselves or a person related to them. The our classifiable under Section 19 of the Anti-Corruption municipality mayor was fined 300 euros for committing Act. a misdemeanour classifiable under Section 19 of the An- ti-Corruption Act. Chairman of municipality council Municipality mayor In 2016, the council chairman took part in the municipality council session and took part in making decisions in In 2014-2015, the municipality mayor signed invoices for the chairman’s own regard, i.e. taking part in a vote that goods and services submitted by the school director – decided on raising the compensation for the city council the brother of the municipality mayor – and the company chairman. By doing so, the person violated the procedur- in which the municipality mayor’s domestic partner is a al restriction set forth in clause 11 (1) 1) of the Anti-Cor- board member, and directed for payment. On the basis ruption Act: it is prohibited for an official to perform or of the specified invoices, the municipality paid the school take a procedure or decision if it is done in regard to and company a total 792 euros. By doing so, the person themselves or a person related to them. The municipal- violated the procedural restriction set forth in clause 11 ity council chairman was fined 80 euros for committing (1) 1) of the Anti-Corruption Act: it is prohibited for an a misdemeanour classifiable under Section 19 of the An- official to perform or take a procedure or decision if it is ti-Corruption Act. done in regard to themselves or a person related to them. The municipality mayor was fined 200 euros for commit- Member of city council ting a misdemeanour classifiable under Section 19 of the Anti-Corruption Act. In 2015, a member of a city council took part in a city council session and took part in a vote on agenda item no. 6 where it was decided to grant the city’s port infrastructure, port building and beach area for a specified 35

term and free of charge to Linnavara OÜ, in which the in clauses 11 (1) 1) and 2) of the Anti-Corruption Act: it is member is a board member. By doing so, the person vio- prohibited for an official to perform or take a procedure or lated the procedural restriction set forth in clause 11 (1) decision if it is done in regard to themselves or a person 1) of the Anti-Corruption Act: it is prohibited for an official related to them. The member of the management board to perform or take a procedure or decision if it is done was fined 200 euros for committing a misdemeanour clas- in regard to themselves or a person related to them. The sifiable under Section 19 of the Anti-Corruption Act. council member was fined 48 euros for committing a misdemeanour classifiable under Section 19 of the Anti-Cor- Director of a music school ruption Act. In 2016-2017, the director of T Music School, KL entered into contracts for services with their own son, who is for Municipality government’s economic director the purposes of clause 7 (1) 1) of the Anti-Corruption Act In early 2016, the municipality government’s economic a person related to KL. By doing so, the person violated director performed procedures and made a decision to the procedural restriction set forth in clause 11 (1) 1) of order, on behalf of the Valjala municipality government, the Anti-Corruption Act: it is prohibited for an official to 3500 euros’ worth of roadside brush and branch clearing perform or make a procedure or decision if it is done in re- and disposal from OÜ T, a company in which the eco- gard to themselves or a person related to them. The direc- nomic director is the sole shareholder and management tor was fined 200 euros for committing a misdemeanour board member. In this manner, the person committed a classifiable under Section 19 of the Anti-Corruption Act. violation of procedural restriction set forth in Section 19 of the Anti-Corruption Act, as the person – being an offi- School director cial – was prohibited under clause 11 (1) 1) of the Act to From 2015 to 2017, the school director KK ordered 3,434 perform a procedure and make a decision in regard to OÜ euros of transport and repair services from a company T. The economic director was fined 200 euros for commit- whose sole shareholder is the director’s domestic partner. ting a misdemeanour classifiable under Section 19 of the The director approved all of the invoices presented by the Anti-Corruption Act. company and sent them to the municipality government for payment. By doing so, the person violated the pro- Director of a company in which a municipality has a cedural restriction set forth in clause 11 (1) 1) of the An- holding ti-Corruption Act: it is prohibited for an official to perform In 2015-2016, VU, member of the board of a company in or take a procedure or decision if it is done in regard to which a municipality has a holding, V OÜ, made decisions themselves or a person related to them. The director was in their own regard, in deciding on three occasions to give fined 300 euros for committing a misdemeanour classifia- a pay raise and bonus to company employees, including ble under Section 19 of the Anti-Corruption Act. themselves. By doing so, the person violated the procedural restriction set forth in clauses 11 (1) 1) and 2) of the Gender equality and equal treatment commissioner Anti-Corruption Act: it is prohibited for an official to per- In 2014, the gender equality and equal treatment com- form or take a procedure or decision if it is done in regard missioner entered into an agreement on behalf of their to themselves or a person related to them. The member of office with a law office in which the commissioner’s broth- the management board was fined 400 euros for commit- er held a 1/8 share. The agreement was signed by the ting a misdemeanour classifiable under Section 19 of the commissioner and representative of the law office’s rep- Anti-Corruption Act. resentative and the commissioner’s brother, who began providing service under contract. The commissioner also, Member of the management board of Valla Huvitege- in 2015, approved invoices presented by the law office for vuse ja Noorsootöö SA the work done, after which disbursements were made. By The member of the management board of the foundation doing so, the commissioner violated the procedural re- Valla Huvitegevuse ja Noorsootöö SA ordered training striction set forth in clause 11 (1) 1) of the Anti-Corruption from a company half-owned by the member, after which Act: it is prohibited for an official to perform or take a pro- the foundation paid 226.80 euros for the training. By doing cedure or decision if it is done in regard to themselves or so, the person violated the procedural restriction set forth a person related to them. The municipality council chair- 36 International cooperation and exchange of practices

man was fined 300 euros for committing a misdemeanour • In 2016 and 2017, the annual conferences and work- classifiable under Section 19 of the Anti-Corruption Act. ing group meetings took place at European Partners In 2016 and 2017, we continued taking part in inter- Against Corruption (EPAC) and the European Anti-Cor- national discussions and exchange of preventive and ruption Network (EACN). One of the most important practices at several meetings. Below, just a few more im- working groups was on the topic of “Corruption in portant meetings, conferences and working groups are healthcare.” It is now possible for the KOKB to have a mentioned, in which we have participated in the recent more effective say in the planning of future direction years. and principles of the organisation. In November 2017, two new vice-presidents were elected to the EPAC • In April 2016, representatives of several Estonian part- board: Jack Vissers from Belgium and Mati Ombler from ner agencies and us visited the Republic of Moldova, Estonia. where we trained local employees from the public ser- • In March 2017, we took part in a major conference or- vice and talked about our practices in combating cor- ganised by the OECD, “Integrity Forum“, which brought ruption. together representatives from various sectors and • In May 2016, we visited employees of an Austrian unit countries from all over the world to share practices, fighting corruption, BAK. We exchanged practices and research, recommendations and ideas to take effective experience to make prevention more effective. action against corruption. • In November 2016, we travelled to Finland to talk to • In winter 2017, we continued the existing tradition of local police officials about anti-corruption activities in chairing the meeting between anti-corruption institu- Estonia. Due to development of cooperation with our tions in the Nordics and Baltics. On this occasion, the close neighbours, Finnish colleagues arrived in Estonia main topic dealt with between representatives from in autumn 2017 to learn more about our activities. Co- eight countries was corruption in the medical sector operation meetings in the field of corruption between and increasing analytical capability. the two countries are planned in future as well. Background of suspects 37

Below, as a new statistical indicator, we provide general data related to the background of the suspects in the criminal cases sent to the prosecutor’s office. Naturally, these figures do not provide comprehensive information but deal with specific proceedings in the given year and the suspects involved in them. Nevertheless, we did look at 50 criminal cases sent to the prosecutor’s office in the last two years and the suspects in the cases. Who are they in terms of gender, age, education and citizenship? The data used for categorisation originates from sources that may be prone occasional gaps – we have noted “not known” in these cases. The suspects in cases sent to the prosecutor’s office in Figure 19. Suspects in criminal cases sent to the prosecutor in the 2016-2017 are 86% male and 14% female. past two years, by citizenship

In the last section, we look at the suspects’ education. Of all the suspects included, 23% have a higher education, 26% have secondary education, 10% have basic education, 2% have professional higher education; the educational level of 8% of the suspects is unknown.

Figure 17. Suspects in criminal cases sent to the prosecutor in the past two years, by gender By age, these same suspects were 7% aged 18-24, 14% 25-29, 21% 30-39, 38% 40-45 and 20% over 55. Thus, 79% of the suspects were over 30 years of age.

Figure 20. Suspects in criminal cases sent to the prosecutor in the past two years, by education

Figure 18. Suspects in criminal cases sent to the prosecutor in the past two years, by age

By citizenship, 72% of the suspects were Estonian, 13% Russian, 1% Ukrainian, 1% Lithuanian and 13% undeter- mined citizenship, 1% unknown. 38 Prevention activities

Planning corruption prevention activities has much in students as the most suitable target group. Many of them common with traffic safety. Traffic safety messages seen will be on the workforce market in a few years and these and heard have an impact on many diligent, careful and are the people who will do the most to shape the envi- law-abiding people – it reminds them of the need for ronment over the next decades. Their awareness has a safety and has a disciplining effect on their family mem- major impact; furthermore, starting in 2017, 16-year-olds bers. There is a small percentage of drivers who do not could vote at local council elections for the first time. appear to be influenced by any preventive measure. We During 2017, we met with about 800 students at 15 upper hear of repeat-offender speeders and drunk drivers and secondary schools in various counties, along with many it seems that prevention resources are wasted on these teachers and school administrators. At the meetings, we people. In the case of such individuals, our only option is talked with the youths about honesty, ethics and cor- to step up checks and apply punishments after the viola- ruption and gained immediate feedback on how young tion. Exactly the same is seen in the corruption sphere, as people see things and their experiences. As a result of the unfortunately there are officials whose avarice and greed meetings, we concluded that: cannot be tamed by mere words. Here the KOKB has an 1) youth knowledge about corruption is low, because important role of detecting violators as early as possible they don’t follow mainstream media and there is little and, after effective pre-trial investigation, sending the talk of these topics at home; case file to the prosecutor’s office for further decisions to 2) the corruption topic receives only minimal coverage in be made. the school curriculum; 3) teachers do not cover corruption topics because they Activities aimed at increasing youth lack information and experience; awareness 4) the textbooks have shortcomings or do not exhibit Still, we know that most drivers are law-abiding; they awareness of the current situation. respect each other and get along well. Likewise, govern- 5) teachers consider it necessary to cover corruption, ment institutions employ many diligent, honest people they need guidelines and study textbooks that “work”; who do their work well and with dedication. Such traits 6) teachers need more information and input for dealing are not only inborn. Our upbringing instils much of our with corruption topics in class. wisdom and attitudes toward life, and schools do even To draw attention and find solutions, in June 2017, we more in this regard. After all, the police start traffic safe- sent a memorandum to the Ministry of Education and ty campaigns aimed at children starting from the age of Research with our own observations and recommen- three or four. dations for improving the situation. As a result of the In planning corruption prevention activities, indeed we memorandum, we have, in cooperation with the Ministry think mainly about youths. What do they know about of Education and Research and the Estonian Society of corruption? What is their view on it? What have they Economics and Business Teachers, reached the following been told at home? What knowledge comes from com- activity plan: pleting the school curriculum and how do teachers cover 1. In cooperation with teachers, we plan to provide input the topic? And most important: what “language” should for production of an instructional film dealing with cor- be used to talk to youths about corruption to gain their ruption cases attention and be comprehensible? It doesn’t seem re- alistic that such a treatment would work in the case of 2. In cooperation with teachers, we will find the best municipality council members and schoolchildren. In ad- methodology for conveying the topic dition, there is also the fact that the latest studies have 3. We want to expand teachers’ knowledge of corruption indicated that youths have a relatively lenient attitude 4. As a result of the previous activities, we aim to increase toward corruption. the amount of coverage devoted to corruption in class From the above, we considered it necessary to integrate Currently, the two first items on the action plan have oneself with how youth see the world, find a common been implemented thanks to the Tallinn University of language with them. We chose upper secondary school Technology Film and Theatre club and the Estonian So- 39

Lecture for upper secondary school students on corruption ciety of Economic and Business Teachers. Instructional films are being produced and methodologies are being developed. The goal is to provide significantly greater coverage on the curriculum of the concealed aspects of corruption. For now, we will continue meeting with secondary school students to keep up to date with the young people’s views. Initially, we focused on the aspect of who our target au- dience should be, and when would be the right time to start preventive activities; how to do it is just as important. How to draw attention to the consequences of corrupt behaviour so that everyone would understand it and so it would sink in without long-winded explanation? From the opening of the exhibition “The Many Faces of Again, we can draw the parallel to traffic safety: if we talk Corruption’’ about how dangerous it is to exceed the speed limit and show a photograph of a car that has been in a serious conception of corruption. Thanks to the enthusiasm from accident or where people have been killed, it’s easy to the school director and the teachers, four student groups understand the consequences of traffic violations. But were given this assignment for their examination. The corruption? How exactly to understand it? Is it a case of results were impressive, and what is more, it was direct dishonest behaviour or simply string-pullers who try to feedback about how people acting in a corrupt manner derive gains from every situation? Due to its latent na- are viewed and how the consequences are perceived. ture, it does not even seem to create significant damage. Human evolutionary theory was turned on its head. As What example could be used to illustrate the harmful the young artists saw it, corruption’s effect is the opposite effects of corruption and attitudes that should be taken – as greed and preoccupation with one’s own well-being toward corrupt officials? grow, human footprints devolve and go back to hoof We turned to the Tartu Art School hoping to find a visual marks; such a behaviour does away with everything hu- image to fit corruption. We asked art school students to man, honesty and ethics and is based on only on animal use their artist’s skills and sensibility to visualise their instincts, and its apotheosis is a corrupt official who is wearing a slick suit but has a pig’s head. 40

From the opening of the exhibition “The Many Faces of Corruption’’

The work of the art school students is a major help to us court-mandated community service. in making prevention efforts more effective and impact- In pre-trial proceedings on criminal cases, the KOKB as- ful. The best works became a travelling exhibition “The certained a number of risks in the activities of supervisors Many Faces of Corruption”, the opening event of which of community service and the organisation of enforce- took place with the minister of justice in attendance as ment of the work. The risks promote the rise of fraud part of International Anti-Corruption Day proceedings on and the risk of corruption. Proceedings have established 12 December 2017 in the joint ministry building in Tal- various ways of how community service hours could be linn. The exhibition will travel through Estonia’s regions dishonestly recorded. There were cases where: and institutions through 2018. 1) on agreement with the supervisor, the hours were marked down as completed, regardless of the fact Mitigating corruption risks related to that no work in that volume could be assigned or per- community service formed; The old folk wisdom of lending a helping hand instead 2) the supervisor marked down the hours as performed of just criticising naturally applies to preventing acts in exchange for a bribe; of corruption. If infringement appears to be frequent and concentrated in a specific sector, it is not enough 3) due to lack of responsibility and interest from the em- to talk loudly and point fingers. All participants need to ployer and/or supervisor, the person subject to pro- be committed and work toward solving the problem. A bation supervision performed the community service good example of how to combat corruption is response in a significantly lower amount than mandated by the to violations related to supervision and enforcement of court as punishment. 41

From the opening of the exhibition “The Many Faces of Corruption’’

By sending a corresponding memorandum to the Minis- Memorandum regarding mitigating risks of try of Justice in 2016, the KOKB made several proposals corruption in local governments for reducing the risks of fraud and corruption related to On behalf of the Central Criminal Police Corruption Crime probation supervision. After this, representatives of the Bureau, we are sending local governments a memoran- Tartu and Tallinn prisons contacted the KOKB, wishing to dum in which we wish to direct the attention of local gov- involve the KOKB’s staff in organising training events. As ernment leaders and officials to potential risks of corrup- a result of the effective cooperation, in 2017 we trained tion during the period of elections to municipal councils 134 community service supervisors in nine cities and 20 in 2017 and in managing institutions that exercise local probation supervision officials at Tartu Prison. authority and perform public functions. The objective of these observations is to prevent corruptive behaviour Local governments and to provide recommendations for avoidance of cor- In the period 2012–2016, 40% of the subjects who could ruption risks. be viewed as officials in criminal cases sent to the prose- Based on the KOKB’s statistics in the period 2012–2016, cutor were employees of local governments, institutions it is regrettable that about 40% of the suspects who can of local governments or staff who had some connection be classed as officials in criminal cases sent to the pros- to the local government and their institutions. Bearing in ecutor’s office were employees of local governments, mind the elections to municipal councils in autumn 2017, institutions of local governments or staff who had some the KOKB on 12 September 2017 sent all local govern- connection to local government and their institutions. ments the following memorandum, the content of which The suspects included 17 local government leaders, four we are reproducing nearly in full (excerpt of memoran- council members and nine directors of companies held dum sent to local governments): by the local government. The crimes these individuals 42

were primarily charged with were classified as falsifica- • To avoid violation of procedural restrictions in pur- tion, embezzling, violation of procedural restriction or chase transactions involving the use of local govern- acceptance of bribes. Besides the problems pertaining ment funds; to local governments, there were violations committed • to avoid determining fee for oneself or related persons; during the 2013 municipal election period – vote-buying, • to reform the procedures for use of official vehicles to and misleading election campaign ads. prevent misuse of the official cars and fuel cards; These statistical figures give reason to draw attention to a • to increase the effectiveness of adherence to avoid- serious need to prevent corruptive activities in local gov- ance of conflict of interest in institutions adminis- ernments and institutions belonging to them. It should tered by or held by local governments; be borne in mind that the actions of corrupt officials are to make sure that local governments’ financial claims accompanied by deficient public services or poor quality • in regard to their employees would be in written of service, which could lead to public dissatisfaction and form and reimbursement would take place within set lowered trust in local authorities. The lack of trust from time limits; the population slows local development, worsens the business environment and casts shadows on the locali- • to ensure the availability of information on local gov- ty’s reputation. Thus, local government have a very im- ernment websites; portant role in prevention of corruption. • to increase the local government employees’ aware- The National Audit Office audit prepared in June 2017, ness in the field of corruption; “Implementation of the Anti-Corruption Act in local gov- • to publicly declare zero tolerance for corruption (e.g. ernment”, notes that the risk of conflict of interest situa- a banner and on the local government website, read- tions is high in local government, due to which care must ing “Our municipality is corruption-free” or “We are be taken in keeping private and public interests separate keeping our local government corruption free”, etc.); to avoid the risk of corruption. Local governments need • to contribute to the introduction of an internal con- to pay much more attention to corruption risks – they un- trol system for hedging corruption risks; derstand corruption as a phenomenon but when think- • to consult the website www.korruptsioon.ee for ad- ing about their own institution or company, they turn a ditional information and advice; blind eye to risks, to say nothing of systematically hedg- to contact the KOKB to report corrupt activity via ko- ing them. http://www.riigikontroll.ee/ • [email protected]; Considering this year’s elections, the territorial and gov- to use the advice in the memorandum for evaluat- ernance related changes arising from administrative re- • ing corruption risks in the local government’s area of form and mitigation of corruption risks, we recommend: governance and implement prevention measures. • to proceed at the 2017 municipal council elections from legitimacy good practices and to deplore the I hope our proposals will be of help in reducing corrup- use of dishonest means by candidates or supporters tion risks and starting a positive discussion. for obtaining better results; As the memo contained important prevention messages to proceed during the municipal council election pe- • for future use, we deem it necessary to reproduce it in riod from the use of and time limits for use of election this publication for easy retrieval by users. advertising allowed by law; • to avoid use of local government funds for financing I am pleased to note that the number of local govern- activities used in election campaigns during the mu- ment spokespersons who have realised the importance nicipal council election period; of improving awareness is growing and we have been more frequently invite to talk about the risks of corrup- • to proceed only from public interests in carrying out tion and analyse various cases. Such meetings are ben- the mergers arising from administrative reform; eficial to both sides, as on the one hand, we can share to become the leader in the campaign to prevent • our knowledge and experience and on the other hand, corruption and to be a role model in establishing full we hear from the local governments about what sorts of zero-tolerance for corruption; problems come up in their everyday work, allowing to 43

draw objective conclusions and to shape opinions not Administration campaign “Choose an honest inspection”: only while seated at a desk. Since then, the Road Administration has made a number of changes for providing a more honest and transparent Inspection stations service, which have been very important from the point of view of reducing fraud and corruption risks. The con- In 2015-2016, the KOKB gave increased scrutiny to inci- sistent contribution made by responsible authorities for dents at vehicle inspection sites. In 2016, 11 inspectors creating a more honest environment has paid off, and is a received accusations of acceptance of bribes and falsifi- good example for others who are not yet planning or are cation of documents for approximately 200 criminal ep- only starting to adopt measures. isodes. The office estimates that the proceedings organised show that often the inspectors at fault and the manag- Local elections 2017 ers or owners of their inspection stations do not com- In the KOKB’s prevention activities, we devoted atten- prehend their role and responsibility. A one-time slip-up tion to honesty and correctness of the local government at an inspection station is generally followed by other election results. As younger people aged 16 and up par- cases where cars were unlawfully declared roadworthy. ticipated in these elections, this increased the electorate Furthermore, it leads to the wrong behavioural patterns size by about 24,000 people, making young people a in households and in all of society. If a faulty vehicle is considerable source of potential votes. We informed the allowed to pass inspection in exchange for a bribe, the younger people of potential attempts to influence them next attempt will be made to bribe a practical driving test in casting their vote and at all our meetings with upper examiner, a doctor to get an earlier slot for an operation, secondary schools, we talked about the elections and and finally, in conducting affairs with local governments the importance of casting one’s vote. At the behest of the all the way up to senior state positions. A new generation KOKB, the State Election Service added to the voter cards of people with a predilection for corruption will rise in- sent out to all voters (over 300,000) the message “If some- stead of consigning such values to the dustbin. one attempts to sway your election decision by promis- In 2016, the KOKB sent memoranda to the Estonian ing or giving you assets or some other benefit, notify the Technical Inspectors Association and the Road Admin- police immediately. In this way, you will contribute to an istration, aimed at contributing to the association and honest election.” administration’s actions for reducing corruption risks at At the behest of the KOKB, a reminder was inserted in the inspection stations. envelope containing new ID cards received during the period May to October 2017: Elections 15 October 2017. Problem on road examinations at the Road Your ID card, your vote – IT’S A RESPONSIBILITY! Administration In pre-trial proceedings on criminal cases in 2015-2016, the KOKB ascertained a number of risks in the activities of Road Administration employees who deal with registration of vehicles and organising practical driving tests. The risks promote the rise of fraud and the risk of corruption. The knowledge gained from the proceedings allowed an overview to be drawn up of the findings and recommendations Our own forebears’ tried and true wisdom that has ap- that we sent to the Road Administration for use. plied for centuries can help navigate the tangle of new In recent years, the KOKB has worked effectively with the opportunities, norms and regulations and keep a steady Road Administration and the Estonian Technical Inspectors mindframe. The KOKB has promoted the old Estonian Association to advance the provision of honest and trans- proverb “Aus nimi on kallim kui kuld” (an honest name is parent service with an eye to making traffic safer. The KOKB more valuable than gold). For two years, we have sent all staff took part in joint discussions and supported the Road local governments, political parties and institutions and 44

companies battling corruption Christmas cards with this Figure 21. KOKB’s contribution to prevention activity and meet- simple but fundamental truism. ings during the last three years. In the last two years, the number of information days, Eesti Energia SA, Elektrilevi OÜ, AbeStock AS, local gov- training events and occasions where the KOKB’s activi- ernment service, community service supervisors, proba- ties have been introduced have increased. We managed tion supervisors and vehicle inspectors. to meet upper secondary school students, people from the Ministry of Culture, the Ministry of Environment, the The PPA website’s corruption heading has materials Ministry of Finance, the State Forest Management Centre, containing recommendations and brief descriptions Ministry of Finance IT Centre, Land Board, Defence Forc- of the judicial decisions that have entered into force es, National Audit Office, State Real Estate Ltd, Innove SA, regarding criminal cases processed by the KOKB.

Photo: Maria Papunova What can we do to make life in Estonia 45 even better? We ask opinion

This time we asked 14 people in Estonia from four local The concept of corruption in its old-fashioned sense refers municipalities and cities, various institutions and compa- to something rotting from within. It characterises corrup- nies to write a short opinion piece to analyse activities or tion in its modern-day sense pretty well, too – institutions guidelines for timely and effective prevention of corrup- (whether state or private sector) are not attacked from the tion. What should we pay more attention to? What could outside but rather problems develop from within. be done better or differently? We did this to get input and The private sector is mainly seen as the “supplier” in the observations from people from different walks of life to corruption chain – it initiates the corrupt relationship, initiate more influential prevention, elicit recommenda- for example by offering a bribe to an official in return for tions for hedging risks in different fields and to better un- being awarded a public contract. Yet it is misleading to derstand the sensibility of corruption through different think that corruption involving private companies can people. It stems from a desire to put down good ideas so only be expressed in bribery of officials. On the world that both we by ourselves and with other people in Esto- scale, a large share of corrupt transactions in the private nia can prevent corruption and avoid its consequences. sector consist of corrupt transactions entered into be- Every new criminal case is already a consequence. tween representatives of private companies – so-called We got a total of eight opinion pieces that had to be a business-to-business corruption. One form of corruption little shortened in the editing and layout process. Still, the in the private sector is also damage done by employees key part of all of the opinion pieces survived the cuts. We to their employer. In this manner, the only employees at thank all contributors! large companies who can execute transactions are ones whose actions are complicated to monitor. The potential These are the thoughts of eight people on how to make corrupt relationships between employees – which can prevention more effective. affect the content and terms of transactions – are often unknown to owners or management. Corruption in the private sector Just as in the case of public sector corruption, the biggest Norman Aas problem in the private sector is the concealed nature of Sworn advocate such abuses. For instance, fraud committed by potential Law Offices of Sorainen transaction partners are discovered quite rapidly (so-called red flags pop up as soon as invoices are not paid or goods In the Fraser Institute’s economic freedom rankings re- are not delivered); fraud committed by the company’s own leased last autumn, Estonia placed 10th out of 159 coun- personnel can last years without anyone being aware of it. tries rated. Hong Kong is still the frontrunner. Yet private sector corruption leads to losses just as great The cornerstones of economic freedom are personal free- for the company as in the case of crimes committed from dom of choice, voluntary exchange of goods and services, the outside. It could lead to increase in expenses (goods open market and protection for private property. In con- and services are bought from outside at a higher price ditions of economic freedom, people make their own de- as the contracts were not concluded in the best interests cisions as to which goods to trade and services to provide. of the company), damage to reputation (clients, investors Mutual trust and cooperation in the private and public and partners lose confidence) and various restrictions sector contributes to the development of economy and and prohibitions on activities (such prohibition on partic- economic freedom. On the other hand, economic free- ipating at public tender if the company is convicted for a dom declines where political processes and administra- crime committed one of its managing employees). tive decisions – or thefts of their property and fraud – start impacting their economic decisions to a greater extent. Being aware of and preventing corruption risks The state has a determining role in ensuring econom- It would be wrong to think that the state alone can hedge ic freedom, above all making sure that the restrictions all private sector corruption risks. In trying to do so, the stemming from the state itself (e.g. tax and finance policy) public sector would start restricting economic liberty would be optimal. It is just as important that the legal or- with excess controls. Thus the values and behaviour of the der also be functional and that the legal protection system private sector are very important. Getting an overview of be able to protect people from crimes against property. 46

the corruption risks is the primary precondition for devel- have a very hard time to establish the person to bring ac- oping and applying measures needed for hedging risks. tion against, let alone find evidence against that person. A systematic anti-corruption programme (or special pro- A transparent economic environment thus requires clear grammes for adherence to competition rules or business rules about which crimes are priorities for the state. Failed secret protection) help run a company’s activities in a hopes in the criminal justice system in a specific case can manner where procedures are as transparent as possible undermine trust in the economic environment even more and every employee knows their role in the system. For than knowing in advance which problems business peo- example, emphasis should be laid on developing operat- ple generally have to get by on their own and where the ing guidelines in situations with a high risk of corruption, state is unable to assist. And the opposite is true – the state such as acceptance and giving of gifts, conflict of interest should state more clearly what type of contribution and and communications with officials. First off, very simple cooperation business people or their representatives who measures can help, such as limiting cash transactions or have sustained harm in criminal proceedings can expect, checking whether the transaction partners include any without the impartiality of the investigation being placed companies related to (managerial) employees. in doubt. The Code of Criminal Procedure is quite flexible in Hopefully the legislative amendments that entered into this regard and today, the boundaries in the way of greater force in 2015 (section 371 of the Penal Code) will also cooperation and openness (e.g. in disclosure of informa- help implement anti-corruption programmes, which im- tion on criminal proceedings to the victim) are imposed pose the duty of diligence under penal law on the man- mainly by established practices, not so much legislation. agers of a company. Thus, a legal person needs (through its management bodies and managerial employees) to Conclusion ensure that the persons empowered to act in its inter- Economic freedom is initially based on the functioning ests do not commit offences. International experience of the state and its democratic institutions. If the public is familiar with such measures as risk assessment, codes authority is not functional or is corrupt, even the most of ethics along with implementation mechanisms, op- ethical entrepreneur will find it hard to do honest busi- erating guidelines, measures for protecting tipsters and ness. But the more “finished” and refined the rule of law whistleblowers. The company can, either itself or through becomes and the more the market economy grows, the professional advisers, select the measures suitable for its greater the risks to economic freedom within the private situation. A legal person may be released from responsi- sector itself. If the main economic model is small busi- bility if the measures were proportional (size of the legal nesses managed by the owners, the managers generally person, complexity of the organisation, market size and do not steal from the owners, meaning themselves. As position on the market, risk of violations of law), applied companies grow and become more international, there is in reality and in a systematic manner, and effective. For- greater distance between owners and management and mal programmes alone are not enough; the company’s corruption risks also increase. Entrepreneurs themselves actual business culture must also be on board. should be more cognizant of these risks and hedge them; at the same time, as the economy grows, the state should Proceedings on crimes devote greater attention not just to the public sector but also to abuses taking place in the private sector. While the main responsibility for preventing private sector corruption lies on the companies themselves, it is still the In closing, it would be appropriate to come back to the state’s function to investigate crimes committed. Although place with the greatest economic freedom – Hong Kong. the state legal protection and court system understanda- In the 1970s, a separate anti-corruption committee, the bly has to work in conditions of limited resources, the as- ICAC, was set up to investigate corruption crimes. The sets of individuals must not be left without sufficient pro- original reason for establishing the committee was cor- tection under penal law. Companies themselves can apply ruption that flourished in the public sector. In recent civil law measures to protect their interests mainly against years, two-thirds of their investigations have involved the first-tier perpetrators. If, for example, money obtained from private sector, not corruption cases in the public sector. companies by fraud has been laundered and passed on to The society and economy have seen so much develop- the next companies or a foreign country, the victim will ment in the intervening years. 47

Solely in cooperation between public and private sector public servants working there must deal with as they and through development of the sectors will it be possi- avoid corruption risks. A clearly formulated message ble to achieve even greater economic freedom in Estonia must also reach the public in the big picture, and in great- as well. er detail everyone who has some connection to official misconduct or incite such misconduct from the outside. A prosecutor’s perspective on prevention of It is eminently reasonable for us to be asked questions corruption through criminal proceedings and expected to provide clear, advisory and solution-oriented responses about prevention as well as dealing with Steven-Hristo Evestus the consequences. Leading public prosecutor Office of the Prosecutor General Communication – at several levels – can be highlighted as the main function. First of all, our activities and the The prosecutor’s office is in charge of pre-trial procee reasons for our actions must be explained to the officials dings and takes part in judicial proceedings as the state who have fallen under suspicion and their employers. De- accuser. Thus, the prosecutor is abreast of the entire pending on the specifics of criminal cases, this may not course of criminal proceedings and sees and senses vari- be the best possible solution in the first stages of a pub- ous undercurrents and nuances that often escape the at- lic investigation and cooperation tends to be avoided. At tention of bystanders. Corruption crimes are intrinsically the same time, we should not underestimate the readi- well-concealed and conspiratorial, and establishing their ness of an open and contemporary institution exercising facts requires time, consistent activities and planning ev- a public function to engage in cooperation to prevent idence-gathering. As in many other types of crimes (such harmful consequences and preserve/restore their trust- as crimes that harm minor children, domestic violence, worthiness. A second important step is communication economic crime, etc.) we cannot overlook the reasons with parties that often trigger a chain of corruption, i.e. behind the relevant type of crime, and our function must those offering or giving and/or arranging inducements, not be limited solely to dealing with consequences. in regard to raising their awareness of activities that are For precisely this reason, prevention plays an important prohibited. There are other fields and erroneous opinions role, i.e. functions must be performed so as to prevent (e.g. aspects related to vehicle inspections or medicine harmful consequences more broadly and pre-emptively sector), where people who consume services or seek help and to devote attention to the essence of the crime and cannot distinguish between what is allowed and prohib- the reasons that the crime was committed. In the last few ited. It is no longer in fashion to thank officials by giving years, everyone has been impacted by various topics re- them inappropriate gifts appraisable in monetary terms, lated to buying citizenship, offering inducements to have and so resorting to this excuse may not be the best pos- vehicles pass inspection, or suspicious transactions and sible argument. The importance of communication for misuse of assets in local governments. Many of these cas- determining the root causes and preventing them in fu- es reached a successful culmination from a legal protec- ture must not be downplayed; and any investigator, pros- tion standpoint, as the outcome of the work and proof of ecutor and judge involved in a criminal case can make a commitment was the judicial convictions that followed. contribution in this manner. But can the role of law enforcement in such cases be re- A third and most important area where a contribution stricted solely to satisfaction with the conviction or is it a can be made is cooperation that results from determin- basis for expecting and requiring more from us? ing the reasons for corruption. Thus, all findings gathered I would dare answer this by saying that today the con- from criminal proceedings are to be welcomed, as they tribution from the investigative body and prosecutor’s can be moulded into clear messages and advisory guide- office cannot and must not be limited to a final judicial lines. Direct communication in a form that raises aware- decision. We should be expected to have the ability to ness and promotes avoidance of situations in future is conduct analysis and address the problem, i.e. the ability the best way of conveying a message. Learning a lesson not only to gather evidence for the conviction but iden- from a bad experience can become fruitful only through tify bottlenecks that institutions in our sphere of interest implementing changes in practice, and for precisely this have run up against and which the honest officials and purpose, we have to make ourselves visible to organisa- 48

tions and institutions that unite the respective fields. Cur- healthcare sector needs. It is a problem, and it cannot be rently, positive examples of communication oriented at only the task of the hospital that is caught up in a spiral of raising awareness – and stemming from criminal cases – events; instead responsible state institutions for the rele- can be noted in the case of the Road Administration, the vant field must also contribute. Estonian Technical Inspectors Association and the North I believe that PR cannot be a one-way street – only aimed Estonia Medical Centre. The above has laid a good basis at healthcare workers – it has to be meant for pharma- for developing communication not based on coercion or ceutical industry, medical tech companies and patients fear of sanctions. and family members. Yes, studies from different years Local governments continue to be a problem. Coope have shown that the population perceives that there is ration with them is partly smooth, but in a majority of corruption in the healthcare sector but it is a separate cases, it has failed or been hindered. All too often, we matter as to whether we actually know as citizens what collide with opposition and circling the wagons, and in is corrupt. Flowers and a box of candy for doctors or nurs- some cases, we even see behaviour that condones the es? A ballpoint pen or calendar/daytimer for a head of violation. A presumption for enthusiastic action would unit? If these are solely tokens of goodwill and politeness be the establishment of a transparent internal control and ordinary business culture, it isn’t prohibited. Is this system, careful review of companies’ management prin- knowledge rooted and expressed in the population’s an- ciples, increasing awareness of conflicts of interest and swers, I would doubt this in the current time and space. impartial and legitimate collection of damage caused by At the North Estonia Medical Centre, we have devoted a crime. By no means unimportant is removing the con- attention to prevention in the last year and we see that victed persons from participating in decision-making or more of it has to be done. First of all, not everything can providing guidance to them in spheres where they com- be accomplished in a few months and the prevention has mitted official misconduct. to be consistent. The fact that we are bringing up this To sum up, we can take the position that a judicial deci- topic is not waggling a finger at anyone. We are talking sion on paper does not have a preventive effect aimed with a specific goal so that we’d all know what is allowed at avoidance of corruption; instead, this can be ensured and what is not. It’s for the protection of the employees by remaining continuously up to date and cooperation themselves, the patients, partners and the hospitals’ rep- aimed at increasing awareness and hedging risks. The utation. Our information outreach efforts can’t remain at keyword of this kind of position is trust, and the result is the level of flowers, candy boxes and notebooks, we have an increase in honesty and transparency. to talk about the risk areas related to business transactions.

Agris Peedu I believe that the conflict of interest heading in the NEMC Intranet has helped the hospital personnel get answers Chairman of the management board to their questions. For more than a year all NEMC employ- North Estonia Medical Centre ees have had to write down their sponsor name in their In recent years, the healthcare sector has received nega- training applications if their training costs are not paid for tive coverage due to corruption suspicions hovering over by the NEMC alone but by the pharma industry as well. person in managerial positions at hospitals. Hospitals and Everyone serving on procurement committees fill in a healthcare workers have taken these incidents serious- declaration in which they certify they have no conflicts ly and more and more, the topic concerns avoidance of of interest in regard to what is being purchased. Thus, we conflict of interest and corruption risk. Unfortunately, in have taken resolute steps and these steps give certain- some cases, the discussion takes place from a defensive ty of transparency for employees, the hospital itself, and footing, not in the spirit of changes. Yet, I have also noted partners. We continue our information work, are seeking changes. Above all, the healthcare field and the people to draft a code of ethics and establish an ethics commit- working for it need outreach in form of information. To tee whose function is to develop a procedure for accept- some extent they have information, but they do not have ance of gifts. We will also make changes in our processes enough specific information concerning the healthcare to conform as a hospital to the code of ethics of medical field. It is precisely such information and training that the 49

equipment manufacturers, the MedTech Europe Code of because from time to time there’s work travel on off days. Ethical Business Practice. It’s hard to distinguish when an ethical dilemma crosses Our goal is that our employees have clear information on the line and becomes corruption. Besides influencing rights and responsibilities and that this allows them to people’s values, institutions and other employers have devote themselves to their main work – treating patients. a major role in recognising corruption. They can organ- Our goal is to be a transparent and advanced organisa- ise their work so people do not find themselves in a cor- tion, for our international partners in the financial sector ruption risk situation or would be well-trained to resolve to consider us trustworthy and be our loan partners in such situations. our new development projects. For example, you’re a hard-working politician, you work to make sure the nursery school gets a new building and potholes get patched, but you know that family and Airi Mikli friendship must not have any influence on whom the Adviser to auditor general road repair contract goes to. And if a family member has National Audit Office a very good road repair company, you’re aware of the What is corruption? risk and consider whether their participation in the decision-making process would be honest. Does everything First of all, perhaps people associate corruption with an seem OK? Yes! While awareness of potential corruption image of an official accepts a fat envelope from a busi- risks in executing transactions is more or less known, the nessman seeking an advantage over competitors. In real understanding of forms of corruption such as political life, corruption is much more diverse than this stereotyp- corruption is poorer. ical example. For many it comes as a surprise that corruption is not an unequivocal term. One could say that if corruption were so deplorable, it should be defined word for What forms of political corruption should be given word in legislation so that the law could followed by the more attention in the near future? letter and such a undignified action avoided. Yet it isn’t I’ll continue the example above. The nursery school so simple. Greed, avarice or lust for power are not foreign building is completed and it’s time to announce it to to us as people. Corrupt behaviour is related to a motive parents. Does the municipality’s newsletter talk about or a state of mind. It’s clear that life is unpredictable and the comfortable new building for the kids or does the actions spurred by emotions cannot be exhaustively list- article also discuss the hard-working politician? Maybe ed. The result could instead encourage one to look for a picture of the politician appears next to the picture of alternative ways or formal loopholes to portray an action the nursery school or – or only the politician is pictured. performed with an unethical motive as correct. This often happens in the run-up to elections. It isn’t rare Thus, for both the person and society, the actual motive for a politician to use a success story to announce they of the action and society’s reaction to it have defining are running for re-election or to promote themselves for importance. Both depend on values, cultural contest and election campaigns. awareness. If we want a fair society that takes each oth- Why does any sort of campaign ads have to kept away er into account, we have to strive to ensure that people from taxpayer-funded news? Because the possibility of make the right choices in the context of society. using public money for election campaigns puts a candidate in a better position and creates the risk of selective How to recognise corruption? and unbalanced coverage. There are similar possibilities You take a ballpoint pen home from work – well, let’s for misusing public money in election campaigns. For ex- be honest, maybe it was in your pocket and you forgot ample, voters can be swayed with entertainment events about it. If you buy an airfare with bonus points you re- paid for by taxpayer money or subordinates can be given ceived from other official travel – you say that the bonus tasks not connected to their position but related to work- is earned by work and the institution doesn’t bear any ing for the campaign. Political corruption is not remotely losses. You use an official car for personal travel – it’s fair limited to the above, but these examples are common 50

enough that they immediately, rapidly require broader cions exist at the practical level but there is a lack of suf- attention from all of society. ficient evidence, the employment relationship has to be terminated. “Trust but verify” is a useful approach. Every employee has to realise that their transgressions also af- Little by little, Estonia moving closer to fect their colleagues. It isn’t fair, but the world rarely is. Nordics Taavi Aas Corruption as an election canard Mayor of Tallinn It’s unfortunate that corruption became a sort of canard Estonian society is capable of self-improvement. A num- during autumn elections – everyone who is in some way ber of negatives have slowly but surely faded away. This connected to the Tallinn city system is accused of it at is the case with aggressive drivers, fights on the street, all times. Responsibility has to be personal, specific and murders – all these have declined compared to the peri- provable, not something used to mock all people work- od 20 or even 15 years ago. The same has happened with ing for the good of Tallinn. Accusations or suspicions lev- corruption. Estonia was 27th in the corruption percep- elled against a few people do not give any right to smear tion index in 2005, but we have since risen six places to the reputation of all employees of the Tallinn city chan- 21st. Little by little, we are moving closer to the Nordics. cellery or departments. The misuse of accusations under- mines the content of the message. Certainly the cleansing of Estonian society of all sorts of abuses has not been spontaneous. We have matured I have a few recommendations on behalf of the Estonian as a society and as citizens. Just as we buckle up in our state and cleaner local governments. Firstly, proceedings cars much more than we did 20 years ago, Estonians also on cases must become speedier and this is something make better decisions in other walks of life. that is necessary for society’s sense of justice alone. Ver- dicts that never come point to deficits in the investiga- On one hand, people are more aware of the impact of haz- tion. Secondly, corruption should be more a topic for ardous decisions; on the other hand, companies, local gov- investigative bodies, not political rhetoric. This is a topic ernments and the state’s investigative bodies are all more where we can’t cry wolf. If we are able to abide by these capable of establishing corrupt behavioural patterns. principles, Estonian society will continue to mature and Just one fly in the ointment … vices will fade. This year, Estonia has again risen a place in the rankings. Over the years, the rise has taken place hand in hand A set of proposals for filling in loopholes and with comments about how Estonia is at best stalled or, gaps worse scenario, corruption is flourishing everywhere un- Olari Koppel checked. Adviser and deputy chancellor of justice Corruption statistics never give reason to celebrate, be- Director of the Office of the Chancellor of Justice cause it just takes one fly in the ointment for trust to dis- In September 2017, Chancellor of Justice Ülle Madise appear. And unfortunately, wherever there are people, contacted the parliamentary Constitutional Committee temptations, greed and foolishness follow. Not everyone proposing to amend legislation that currently does not can distinguish good from evil. sufficiently allow corruption in cities and municipalities I, too, have faced situations where investigative bodies to be prevented or controlled. Specifically, the chancellor pay a visit to city government or its institutions. I have of justice proposed the following. dealt with an employee who signed himself to an employment contract providing for a 300-euro phone ex- 1. Increase possibilities for enforcement proceedings penses every month, six times more than anyone else in on damage caused to local governments the city system. That employee had to leave. If an official is convicted of an offence where the local government suffered losses, the local government has What can counter such situations? One thing that helps in some cases forgone seeking compensation. A claim is for people to know what sort of behaviour can be infor damage can be submitted solely by the relevant city terpreted as corrupt. Better staff selection helps. If suspi- 51

or municipality itself. If a local government does not get the aforementioned organisations, the municipality or money back from an accuser, public interest suffers and city government exercises supervision over the council as a result so do all of the city or municipality inhabitants. member. Sometimes political collusion cannot be ruled out, as a On the other hand, it is precisely the council that must consequence of which the ruling political force reaps ensure sufficient, independent and transparent supervi- benefits. It can happen that the gains from an offence are sion over the activities of the city and municipality gov- greater than the fine. In such a case, the conviction does ernment and its subordinate institutions. If the council not deter corruption – the offence is “worth it”. member is simultaneously related to the institutions and To avoid such situations, a government institution such companies that are supervised, a classic question can as the Office of the Prosecutor General should be given arise: who guards the guards, is the supervision sufficient the right to collect damage in lieu of the local govern- and objective? This is especially the case in local government if the local government waives its right. Such a solu- ments where the supervisory boards and management tion would reduce the temptation to use public resources boards are manned by a overwhelming majority and in personal interests. where the opposition does not have enough power to perform effective oversight. 2. Persons with unexpunged punishments in local For this reason, the chancellor of justice considers it justi- government service fied to supplement the restrictions on position and place The Public Service Act prohibits hiring of persons who of business in regard to council members, encompassing have been punished for an intentionally committed the council members in key positions – the chairman of crime. Such a restriction only applies to officials. For this the council and deputy chairmen and members of the reason, we know of cases where, for evading the restric- audit committee. tions of the Public Service Act, a local government enters 4. Deciding on official trips taken by municipality and into an employment contract with a person who is exer- city mayors cising public authority yet has been previously punished. Overnight, a former official becomes an adviser to a local In some cases, a conflict of interest comes up by a council city council, for instance. Such an employment contract regulation that assigns to the municipality or city gov- can’t be challenged by anyone besides the local govern- ernment the duty to take decisions pertaining to city ment itself. Consequently, evasion of the restrictions set government members. For example, the council has au- forth in law – which are completely justified ones – must thorised the municipality or city government to decide be prevented by the power of the law. on the mayor’s official travel. Decisions related to the other members of the municipality or city government 3. Grounds for premature termination of the powers are made by the mayor. The Anti-Corruption Act prohibits of municipal council member officials from delegating their functions to a subordinate The risk of corruption at the local level can also be caused in case of conflict of interest. This provision does not ap- if the council member belongs to management bodies ply to decisions pertaining to the mayor’s personal rights, of companies, foundations and non-profits in which the as the municipality government has not been authorised city or municipality has a holding. The law provides for a for this by the mayor but by the council. number of restrictions to prevent conflicts of interest, but For this reason, the chancellor of justice recommends the current wording of the law does not consider serv- that Parliament consider a rule under which the respon- ing as a council member as one of them. Nor does the sibility to decide on official travel undertaken by govern- restriction in the Anti-Corruption Act apply if the council ment members (especially the mayor) be given to the member was appointed director of the company as the chairman of the city or municipality council. representative of the city or municipality. 5. Making the local government supervision system The municipality or city government performs owner’s generally more effective supervision with regard to the municipality or city-held company, foundation and non-profit in the capacity as As a result of administrative reform, the local govern- founder or shareholder. If a council member is a mem- ments formed have greater financial responsibility and ber of the management board or supervisory board of their financial capability and administrative capacity will 52

grow. This creates better preconditions for organising in- of the basic training for examiners. Unfortunately, each ternal audits and gives a possibility of subjecting a local year brings up new situations where our employees re- government to external auditing if necessary. The chan- port small gifts and favours inducements that clients try cellor of justice advises Parliament to weigh the option to leave for them. Paying attention to such situations of involving competent government institutions in pre- and the courage to report them to the management and paring appropriate auditing rules and thus ensuring pre- oversight organisations is the first step every person can vention and control of corruption and effective oversight take in the fight against corruption. in the local government units without harming constitu- Besides in-house information efforts, we also reduce tional guarantees. corruption pressure on our partners, using various campaigns to notify our partners of risks. The campaign What happened after that? “Choose an Honest Inspection” reminded car owners that The Constitutional Committee and the Reform Party an honest and correct inspection ensures the safety of the faction in Parliament initiated several bills to bring the driver and the passengers. Moreover, an amendment to chancellor of justice’s proposals into law. The new rules the regulation governing repeat inspections entered into for reducing the corruption risks will hopefully enter into force on 1 September 2017. If a vehicle fails inspection, force in 2019. but there are no hazardous problems, the user can continue driving and has at least 30 days to repair the faults Prevention of corruption at the Road and go to inspection a second time. This amendment sig- Administration nificantly reduced the pressure on inspectors. Although the vehicle still has to pass inspection, life doesn’t come Priit Sauk to a halt for the vehicle owner. This also reduced car own- Director general of the Road Administration ers’ interest in trying to offer inspectors inducements to The Road Administration has been rocked by several cor- make decisions that could harm public safety. ruption incidents before, and through our everyday work Besides raising people’s awareness and reducing pres- we want to significantly reduce the likelihood of this oc- sure to commit corruption, we also made our internal curring in future. Whether it actually happens or there is processes more effective. After a corruption scandal that only the semblance of corruption, the consequences are hit examiners in 2015, we re-organised the management still damage to reputation, loss of trust in government in- structure in this field. All examiners now work in a com- stitution and unpleasant rumours. Thus, we need to fight mon examination centre that ensures a shorter and clear- bribery before this behavioural pattern has even reared er chain of command and more standardised approach to its head. examinations throughout Estonia. The new structure also Actions that prevent corruption are important. We need means greater mobility for examiners. That means that in to remember that there are always two parties to bribery. smaller county population centres in particular, clients do Supply presumes that there is demand. Thus, we need to not know which examiner they will get on a certain day in consistently work to build awareness of the existence of a specific inspection station. We hope that this will make corruption risks, both with or employees, the public, our it impossible to engage in corrupt agreements to explic- partners and clients. itly agree on being seen by a specific examiner. The Road Administration has zero tolerance in regard to Last spring, we started renewing contracts with the Road corruption. In summer 2016, we decided to add trust- Administration’s partners at inspection stations and worthiness to our list of core organisational values in our making the whole inspections system more transpar- strategy to remind us that our activity must both be and ent. From 1 July 2018, all inspection stations must start appear honest. The Road Administration employs adults using surveillance cameras whose recordings are visible and we can’t go back and change anyone’s upbringing. to the Road Administration. Above all, we see a benefit But what we can do is explain to people the behaviour- in improving each station’s own supervision within their al norms, rules and ethical convictions and require then organisation. After all, there is no reason for either the to abide by them. For example, professional ethics and Road Administration or PPA to start investigating honest recognising manipulation and corruption are a key part inspectors. 53

To sum up, we prevent corruption every day, through explained who is considered a related person and how publicity efforts, additional measures to reduce corrupt related persons should be reported to the direct super- pressure or making processes more effective. Should any visor; principles of giving and accepting gifts were also employee slip up or if a client offers our colleague and discussed. In 2014, KPMG prepared guidelines for pre- partners money or other inducements, we report the in- vention of corruption, and these will start to be supple- cident to the PPA immediately. mented as new knowledge comes to light. All Road Administration employees and partners already In 2017, five corruption prevention training events were know that the Road Administration has a high regard for organised in all of Estonia, aimed at reaching all RMK honesty and trustworthiness, and that this is something employees. At the training events, the PPA employees expected from partners and clients. explained the types of corruption and the links between the factors leading to corruption. The concepts of official Corruption prevention at the State Forest and related person were analysed and examples were Management Centre provided of establishment of procedural restrictions and violations. Aigar Kallas Chairman of the management board, State Forest Manage- PPA certified the principles already implemented in RMK ment Centre (RMK) for registering public procurements and which are used RMK is a steward for half of Estonian forests – the state for simplified procurements as well, and the years-long forest, which is a very important part of Estonia’s state re- tradition of explaining all processes in the various fields sources. All employees take part in creating and maintain- of RMK and evaluating all process risks, including risk of ing the image of RMK as an honest and transparent or- corruption. ganisation. This requires RMK employees to be up to date As a result of cooperation with PPA, the RMK personnel and proceed from the corruption prevention regulations. now have a greater awareness of corruption-risk situa- As the specialists employed by the PPA have broad tions and the need and possibilities to avoid such situ- knowledge of the requirements of anti-corruption legis- ations. Several regulations established for preventing lation and major experience in recognising and avoiding corruption at RMK have been updated and a code of situations with the risk of corruption, it was decided to conduct for corruption-risk situations has been devel- contact PPA to review the rules and regulations estab- oped for employees. lished at RMK. It was discussed whether the measures in place to this date were sufficient to prevent corruption and updates and addenda were introduced to various documents. We’d like to add a few ideas to the opinions expressed above, inspired by the recommendation that an ounce A large organisation’s options for preventing of prevention is worth a pound of cure. Readers of the orruption overview can use or follow this advice in their own RMK employs about 700 people every day, plus seasonal activity. employment for about 5,000 people under temporary contracts and public contracts. RMK offices are located 1. Efforts start from the home. Values, honesty, dos and throughout Estonia and people cannot be brought to- don’ts start from the home and gain additional nuanc- gether in one space. With such a large employee body, es in school. It’s important for family members to set a the question inevitably is how to get the notifications to role model for the growing child. Children imitate what everyone and how to lessen the risks. they see their family members do. What adults say and do have to go hand in hand – that will make upbringing We decided to start with what people deal with every much more likely to be impactful. day. The internal procedures were updated to bring them into conformity with the Anti-Corruption Act: for So the raising of children requires greater attention. Par- example, we listed the sectors in which employment ents count too much on young people learning right at or management of a company is not allowed; it was and wrong on their own. If a person has left their safety 54

belt unbuckled, a child who has received corresponding ing anti-corruption activity – actions based on honesty – training in preschool or elementary school will say some- in a company is part and parcel with the company’s main thing. If the child is not in the car, the car’s audio sensor activity. will alert people to the unfastened belt. We provide our 4. More prevention-oriented attention has to be paid children with guidance for safer and higher-value life in to the healthcare system. Based on the findings of inter- both words and deeds. Just like a safety belt could save national and Estonian research and the findings of crim- someone’s life in an accident, following honest principles inal proceedings, our healthcare sector has a high risk of can ensure an honest, enjoyable and moral path in life. corruption. This risk could be mitigated more effectively. 2. Business and organisation leaders should take a The state should start training leaders in the medical sec- greater role in leading prevention efforts. We don’t tor and raise their awareness, encompassing hospitals, know how many corruption crimes are committed each clinics, professional associations, etc., to get the latter to year and how many corrupt people are involved in them. share relevant information in their own institutions. We We only know how much we can process and what recommend reviewing whether the existing risk manag- these things are by their nature. Thus there is much that ers, internal auditors and controllers are already being we don’t know and won’t get to know. To increase the used in the optimum manner. In the absence of the latter, knowledge that gives the idea that the state’s prevention we should thoroughly consider why assistance from such is broad-ranging, effective and sustainable, we need to professions is not used. involve as many participants as possible. Among those 5. The best possible result can be obtained through with a leading role are the heads of institutions and com- prevention projects that involve multiple partici- panies. To achieve a better result, the heads of the organi- pants. The above would be one activity out of a greater sations must instil the desire and commitment to engage set. To increase awareness and consolidate, flesh out and in more robust anti-corruption activity and prevention. adopt measures in the medical sector, we need a prop- This would allow the message and ethos to be taken to er prevention initiative that would encompass hospitals, all employees. Through raising awareness, new threats hospital staff, other medical institutions, the Health Insur- could be avoided. ance Fund, pharmaceutical industry and suppliers, etc. 3. The prevention theme must be included in the Anti-corruption policies should be applied for large pro- agendas of professional associations and societies. jects, as results will be better if participants are involved A great help for developing a more fraud and corrup- and interest and commitment develop. tion-free situation would be for associations and organ- 6. What is legal may not necessarily be ethical. We are isations to include the topic of transparent and honest aware that activities that are not offences from the aspect enterprise on their agenda. The associations could amass of penal law do infringe on people’s sense of justice. In the best practices when it comes to risk assessment and such cases, the question may be left in the air: if it isn’t mitigation and start sharing it with members and gather- an offence, what is it? Ethical conduct and attitudes are ing feedback for development and functioning. Develop- something that everyone must address. Sending authorities a tip 55 related to corruption

The KOKB introduced a tipster line on 30 December 2011, and 71 in 2017. The growth in high-quality tips is a very [email protected]. Each year, the num- positive trend and we hope it will increase further in the ber of tips and reports has grown slightly. One-third of years ahead. We note that not every tip has to lead to pro- them have been specific to a sector and led us to verify ceedings, but it is very important from the standpoint of information suspected of involving corruption. The num- analysis and information-gathering. ber of high-quality tips received and which dealt with a Tips can also be made by telephone on 612 3657, a tip- potential case of corruption on some scale is as follows: ster line introduced on 6 September 2012, and which has 26 in 2012, 36 in 2013, 41 in 2014, 61 in 2015, 46 in 2016 voice mail functionality.

Figure 22. Number of high-quality tips sent by email to [email protected] over six years 56

Where to turn if you have witnessed or experienced corrupt behaviour or have information about it?

You can send information to the Central Criminal Po- You can also come in person to the KOKB to make a report. lice Corruption Crime Bureau: If necessary, we will guarantee the tipster’s anonymity. 1) by email to [email protected]; 2) to the tipster telephone line 612 3657; The KOKB divisions are located in Tallinn, Tartu, Jõhvi 3) by post to Tööstuse 52, 10416 Tallinn. and Pärnu.

Procedural division Eastern division Tööstuse 52 Rahu 38 Head of office 10416 Tallinn 41588 Jõhvi Tööstuse 52 tel 612 3880 tel 337 2455 10416 Tallinn tel 612 3827 Southern division Western division Riia 132 Pikk 18 50096 Tartu 80089 Pärnu tel 746 8504 tel 444 6472

Compiled by: Corruption Crime Bureau Cover: Tartu Kunstikool Photographs: PPA, Maria Papunova Tallinna Polütehnikumi Filmiring Layout and printing: Trükikoda Auratrükk keskkriminaalpolitsei

Corruption Crime Bureau Overview 2016-2017