Swedish government "shaken" by funding scam

As ministers and government officials grapple with the news that a senior civil servant netted almost a million kronor through a funding application scam, further details have been made public - revealing the extent of the fraud and exposing a lack of control in the government's distribution of financial support.

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The 44 year old civil servant is alleged to have invented organisations promoting equality in society and faked applications, putting them before ministers who would propose donations at government meetings.

On Thursday, the prime minister's secretary of state, Lars Danielsson, who is running the internal investigation said that the fact that the man was caught "shows that the control routines in the government offices work".

But on Friday, the minister for equality and integration, Jens Orback, was calling for far-reaching measures to avoid such incidents in the future. One suggestion was to set up a completely new organisation to deal with funding applications.

"The government shouldn't be handing out this kind of money," he told Expressen.

"In any case, I look forward to further proposals for tightening things up - I believe that is necessary."

What is most embarrassing to the government is that the internal control procedures appear not to have been followed. Dagens Nyheter revealed that all projects which are awarded state financing should be audited according to the government offices guidelines.

The beneficiary of funding must provide both a financial report and a report on the project's progress. In the four cases linked to the civil servant, totalling 875,000 kronor, no reports were submitted.

But it was not financial irregularities which led the government's internal security department to the man; instead, it was his excessive use of the internet during working hours.

Another civil servant reported receiving threatening emails from a man and a woman, both from Hotmail accounts. Both had been sent from a computer in the government offices and the names were invented. But the woman's name matched the name of an applicant for funding - which the 44 year old had submitted for ministerial approval.

It later turned out that 100,000 kronor had been donated to a project opposing "the sexualisation of public places". The correspondence had been sent to a PO box in central Stockholm. The name on that PO box was the same as that on the other Hotmail account.

The man, who is expected to face charges of either serious fraud or serious embezzlement, spoke briefly to Dagens Nyheter from "a secret location in the west of Sweden".

His comments neither confirmed not denied the allegations.

"It's one thing to be a fraud, it's another to earn money as a salary," he said, somewhat cryptically.

"Even organisations which are not yet formed, like networks, can be considered for state funding. It's the work itself which should be supported."

DN also revealed that the man, whose salary amounts to 30,600 kronor a month and who owns no property, recently bought a brand new Volvo V70 for 314,000 kronor in cash.

"I have no more comments. Now I just want to be left in peace," he said, referring the media to his lawyer, Leif Silbersky.

"He denies that he has done anything which is in any way criminal," said Silbersky to DN. "This is obviously a stressful situation for him."

Sources: Dagens Nyheter, Svenska Dagbladet, Expressen