Bildt and Vostok Nafta

Carl Bildt, an alleged bribe and the Baltic pipeline


It is a question with ramifications for the whole of Europe. Is Carl Bildt, Sweden's foreign minister, in the pockets of a dubious independent oil company with too close links to authoritarian regimes?
The question has been exercising the second biggest daily newspaper, Expressen, for a few weeks.

The story is this: during his period as foreign minister, Bildt has received half a million euros (4.8m kronor) from a company which has huge business interests in the prospective gas pipeline under the Baltic Sea connecting Germany to Russia, a company with big interests in EU energy policy in general.

The Swedish Green party said this was a bribe - a bribe designed to bend Bildt's decision in the pipeline's favour, since the pipeline needs his authorisation to go ahead: while it its being built by a Russian German consortium and links German Greifswald to Viborg on the Russian coast, it has to pass through Swedish territorial waters. Near the island of Gotland a pumping station will be set up, guarded by Russian soldiers,
Bildt gave a press conference explaining why he had to augment his fortune in this way (already being Sweden's richest politician, thanks to his business interests), but Expressen, which drove the issue farther than other media, was not impressed.
He said he had no choice but to cash them in; in fact, as this paper and others found out, not only was he not obliged to cash them in, his entitlement to the options lapsed with his appointment to the Swedish foreign ministry and his departure from the board of the oil firm, called Vostok Nafta. The board then, against all regulations, reinstated his right to the options, which he duly cashed in.
Furthermore, it was discoevered that, as a mere board member, Bildt should not have had any options at all. And the amount, several million kronor, was far in excess of what executives ( who are entitled to options) receive in even the biggest Swedish companies.
Why did this particular board member receive so much for doing so little? In Bildt's case it was surely partly because of the work he did for a sister company of Vostok Nafta, Lundin petroleum, both owned by the roguish and recently deceased oil entrepreneur Adolf Lundin, who functioned as a paymaster and godfather to Bildt after he left his EU posts in 2001. Bildt was a prominent board member of Lundin oil also until last autumn; and this job certainly did require much work, especially for a former prime minister of Sweden. Lundin Oil prospects for oil in a number of troubled countries, including Sudan. Lundin's role here has been heavily criticised by a number of NGOs; as complicit in the Sudanese pariah government's ethnic cleansing of the area around the oil fields so that extraction could securely take place. For a small independent oil company engaged in a dirty business and run by a man whom Bildt described as "not exactly a man of the fine salons" it was a coup to land Bildt as a board member, with his strategic skills, his negotiating experience, his articulacy and political credibility.
This was put to good use when the Swedish press got wind of the cleansings and Bildt was wheeled out to explain what Lundin was doing. (see next story) He convinced Swedish public opinion, so Lundin kept its concession, while a Canadian company prospecting a neighbouring concession didn't - lacking an effective advocate of its own in Canada. Bildt's prestige and diplomatic skills may also have help Lundin's contacts with the Sudanese presidency.
That was five years ago; today, Expressen argued, he might once again do his old company's bidding - by giving the green light to the oil pipeline. In case he forgot his loyalties, helped along by the "bribe" of the bogusly awarded share options.
Sweden's chief prosecutor, however, last week said that Bildt had no case to answer, "objectively it could be seen as a bribe, but there is no legal case", and the story has died down. It coincided with the finding that Bildt is the most popular politician in Sweden. "People like their ministers who have done time abroad; they like his cosmopolitanism" wrote one member of the public. "Who cares, people are too jealous of Bildt's contacts and his ability to make money," wrote another blogger.
The other papers started to run affectionate stories of how a stand up comedian made an impersonation of Bildt at a sports gala; the danger was over. Expressen was furious though, found a constitutional expert who called Sweden a "banana monarchy", and rang up a number of foreign journalists, from Der Spiegel to the Sydney Morning Herald, each of whom said that had Bildt been a public figure in their country, he would have been sacked. Jasper von Altenbockum, of the Frankfurter Allgemeine Zeitung, said: "The equivalent situation is almost unimaginable in Germany; it would have been regarded as amoral and the criticism would have been very hard." Claudia Schoch, of the Neue Zurcher Zeitung, said: "It would be difficult for a Swiss minister to stay in his job after such an incident." A journalist from the Sydney Morning Herald said:"If the Australian foreign minister Alexander Downer had received those sums of money from any company, he would not only have been driven out of his job but driven out of politics."
These comments were duly published, but have made no impact.
Swedish focus is now on the pipeline itself, which is pushed by President Putin, opposed by the leaders of the vulnerable Baltic states and Poland, who fear the ability of Putin to pipe gas directly to western Europe will enable Russia to put pressure on its former satellite states by cutting off their supplies without threatening western Europe's.
So far Bildt has not said a word about the biggest foreign policy issue in Europe. (Nor has he talked of Africa's biggest problem, Darfur, in Sudan, the massacres in which another Bildt contact, Sudanese President Omar al-Bashir, is deeply implicated.) The opposition social democrats are trying to make hay out of it, calling the pipeline very problematic for Sweden's interests. There are - possibly exaggerated - stories about the dangers of disturbing old chemical weapons and mines from the second world war on the sea floor; the dossier is with the ministry of the environment. Then it's back to Bildt. whose true allegiances he has yet to demonstrate.