There are no no-risk countries

13 January 2022
Knowledge Base

by Geert Vermeulen

Two former employees of Dutch social housing corporation Vestia have been convicted for corruption. One of them received a 2,5 year jail sentence and the other one was sentenced to 1 year in jail. Cleaning companies, window cleaners and contractors who worked for Vestia paid the two employees large money amounts and goods in kind to get assignments from the housing corporation. The father of one of the employees and two intermediaries were involved as well. The Vestia employees told the suppliers in advance what price they should offer. Vestia estimates that the total damage of the fraud for them has been around EUR 3 million.

The directors of the companies involved in the fraud (the bribe payers) have received sentences ranging from nine months in prison to 240 hours of community service. There were also fines for the companies. In total 19 individuals and 14 companies have been condemned, which makes it a rather big and complex court case.

This case is especially disappointing, as it took place a few years after the big derivatives bribery and corruption scandal that costed Vestia some EUR 2 billion (!), brought them to the brink of bankruptcy, and still has an impact on the Dutch market for affordable housing. The former Treasurer of Vestia and his adviser have been convicted to jail for this, but we are still waiting and waiting and waiting for the appeal. Vestia has settled with a number of banks for some EUR 300 million, most of them in the UK, but this is still peanuts compared to the loss that they have suffered. I have often posted on this case and I am still using it when I am teaching my third party due diligence course.

There is a sharp contrast with another recent bribery and corruption case in The Netherlands, where
an employee of Delta Lloyd and an intermediary conspired to sell one of the investment funds of Delta Lloyd to another company, after which they would share the commission of the intermediary. They only received suspended jail sentences. Perhaps somebody can explain the difference to me.

I often quote Richard Bistrong: There are high risk countries, there are low risk countries, but there are no no-risk countries. These cases demonstrate again that The Netherlands is not a no-risk country in respect of bribery and corruption.

About the author : The mission of Geert Vermeulen (see photo) is to help organizations conduct business in an ethical and compliant way. Geert is specialized in establishing and improving ethics and compliance programs in general and anti-corruption and whistleblowing programs in specific. He has been the President of the Dutch Compliance Officers Association, where he founded the expert group on Financial Economic Crime. He is a member of the expert group on Culture and Behavior of the association and a member of the Professional Advisory Committee of the Law Compliance Minor at The Hague University. In 2020 Geert launched his new company called ‘The Integrity Coordinator’. This company is an independent, external coordinator of whistleblowing or speak up procedures.

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