RAY demands grant money back from foundation that aided Centre Party candidates

Former chairman Kaikkonen admits mistakes were made

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The Finnish Slot Machine Association (RAY) is proposing to the Ministry of Social Affairs and Health that Nuorisosäätiö, a foundation that provides housing for young people, should be asked to refund more than EUR 69,000 in RAY grant money.
      The foundation had asked for a raise in the RAY grant for 2006, saying that it was expanding its activities. An RAY inspection revealed that the money was actually used to cover the costs of the foundation’s 45th anniversary celebrations.
      RAY gets its revenue from legal gambling operations, and provides grants to a number of worthy social, cultural, and sport organisations.
     
Centre Party MP Antti Kaikkonen, who until recently, served as chairman of the board of the foundation, says that the view at the time was that spending RAY grants on the costs of the party would have been acceptable. RAY says that the information supplied by Nuorisosäätiö made no mention of any celebration.
      Kaikkonen denies that there was any intention to mislead, or that any information would have been deliberately withheld, but he did admit to “errorss” in recording the information.
     
On Thursday RAY completed its inspection of the finances of Nuorisosäätiö to ascertain if its grant money had been used for political donations to candidates running for office. The inspections covered the years 2005-2009.
      The inspection showed that the foundation had included costs under the heading of “social youth activities” which are not covered by RAY’s grants.
      The costs included over EUR 20,000 in travel expenses, and over EUR 8,000 for an honorary title for the foundation’s former managing director Jorma Heikkinen.
      The foundation paid EUR 24,000 for the production of a promotional video at a housing fair.
     
Tens of thousands of euros were spent on purchases from entities considered to be “close to the foundation”. It has been reported that the foundation bought works of art as a way of raising money for political campaigns.
      While Heikkinen headed the foundation, campaign contributions totalled EUR 55,000. Prime Minister Matti Vanhanen (Centre) received support from the foundation for his presidential election campaign.
      “I was not involved in any way in the funding of the campaign. Presidential candidates do not raise campaign funds, and do not even give reports on who has supported them. Apparently there are no problems with the law, and in this respect there is no refunding obligation”, Vanhanen said in Brussels on Thursday.
     
The RAY inspectors also found that using the association’s funds for pension costs was neither reasonable nor acceptable.
      RAY found a total of EUR 460,000 in unacceptable costs. RAY does not want all of it back, as the amount of acceptable costs exceeded the funding provided by RAY. However, the association does want a refund for the increase in funding which had been based on inaccurate information.
     
The bookkeeping of Nuorisosäätiö was found by the RAY inspectors to be below standard already before 2008.
      While Jorma Heikkinen was the managing director of Nuorisosäätiö, up to 2008, he had given out grants and authorised the payment of bills independently, without the authorisation of the boards of directors of the foundation, or the companies linked with it.
      Kaikkonen admits that the board that he headed did not sufficiently supervise Heikkinen’s activities. “We were too confident that everything was all right.”
      Kaikkonen resigned from his post as Nuorisosäätiö chairman in September.
     
RAY has decided that it will no longer give general grants to Nuorisosäätiö, but it is willing to assist the foundation in connection with specifically identified targets.


Previously in HS International Edition:
  RAY Chairman Vihriälä resigns in midst of election funding furore (23.9.2009)
  Vanhanen got campaign contributions for nonprofit housing foundation (21.9.2009)
  MP Antti Kaikkonen got considerable supplementary income from housing foundation chairmanship (9.10.2009)
  Vanhanen and Kaikkonen silent about alleged misdemeanours at Nuorisosäätiö (1.10.2009)

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