Minister Harakka has been hiding behind the Chancellor of Justice to publish his statements on Facebook, while MP Harakka still understood the importance of transparency well in 2015, writes Jlto Liski, Iltalehti’s policy editor.
Timo Harakka talks about the data management law in preparation at the European Transport and Telecommunications Council meeting on 3 December 2021. According to Haraka, the law protects the rights of individuals against “the great powers of data capitalism” such as Facebook and Google. Europa-neuvostojarno.liski@iltalehti.fiToday at 13:27
Minister for Transport and Communications Timo Harakka (sd) has been very reluctant to answer questions about the sale of his domain name to a law firm that apparently acted on Facebook’s behalf.
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The minister has opened shops the most – fun – in a post he posted on Facebook. He hasn’t had time to answer Iltalehti’s e-mail questions in a matter of days. This is what Minister Harakka wrote on Facebook on December 17, 2021:
In connection with the transaction, it has been agreed that the purchase price will not be disclosed, so I cannot comment on the estimates that have appeared in public. There were no other conditions or commitments attached to the sale in addition to the transaction itself, and no ties were established for Kansakunta Oy or myself with the buyer due to the non-recurring sale. During the negotiations, the buyer did not express the principal.
Prior to the transaction, I carefully sought to ensure that the transaction did not raise any specific issues and problems related to government membership. That is why I asked the Chancellor of Justice separately in advance. He confirmed to me that these problems did not appear to exist and stated that the declaration of interest would be updated as necessary.
In June 2015, Haraka had another sound on the clock. He spoke for the first time in a plenary session of Parliament on the recent declaration of interest by Prime Minister Juha Sipilä (Central). The Prime Minister’s millionaire had invested his assets in various investment instruments, of which he only mentioned the names.The investment in the Nordea Capital Private return basket mentioned by the Prime Minister needs additional lighting. This is probably a capitalization agreement, a tax envelope that allows for significant tax planning. When a trade is made inside the shell, the investor avoids capital gains and dividend taxation. Inheritance tax can be minimized.
The desire of Finns to click on the tax bear is so great that the value of capitalization agreements has more than doubled in two years to a total of EUR 9 billion. This tax avoidance is relevant when tax is thus passed on to the future, and the Prime Minister, if affected by future taxation, in this case the taxation of both capital and inheritance.
Tax planning could also be seen in Haraka’s recent activities. . Harakka sold the business of its company, Kansakunta Oy, in 2019, but did not liquidate the company. Leaving the company in the desk drawer saves Haraka a long penny in taxation in the domain store.
If Harakka had dissolved the company and re-registered the meta.fi ID for itself, its sale would have been taxed as earned income. The magpie would have paid almost 60 percent of the transaction amount at the tax rate on his ministerial income. If Harakka had acquired the domain name from its company, its capital gains would have been taxed as capital income at a tax rate of 30% or 34%.
The company pays 20 percent tax on capital gains. If, for example, the transaction amount were approximately EUR 100,000 according to the expert estimates used by Helsingin Sanomat, the tax planning benefit would be tens of thousands of euros compared to the sale of a domain name registered as a natural person.
Harakka can invest the amount remaining after paying corporate tax through its company and increase its income with a 7.5 per cent tax on the unlisted company’s dividend tax relief. These tax-deductible dividends can now also be raised by the minister’s spouse, who apparently became a minority shareholder in the desk drawer company just below the domain deals in late summer 2021.
I emphasize my own conclusion from the Prime Minister’s vague, downright evasive announcement. Needless to say, such theoretical connections, no matter how theoretical, should be accurately assessed from the declarations of interest presented. Here again, the Prime Minister should supplement his declaration and preferably with all his assets.
There’s nothing dark about the Haraka domain store itself. Harakka registered the meta.fi domain for his company in March 2013. At that time, he could not have known that almost a decade later the world’s largest social media company would change its name to Meta. He has hardly imagined him sitting in the country’s government at the time either.
It is therefore a mere coincidence that Facebook – or at least the law firm it used – ended up buying the domain from the seated Minister of Transport and Communications. In that respect, there is no conspiracy involved.
However, the situation was as it was. During the late summer and early fall, the minister held trade talks without telling the public anything about them. It is also unclear at what stage it has become clear to the Minister that Facebook has been represented by the law firm consulted with him.
Harakka writes that during the negotiations, “the buyer did not express the principal”. However, the chancellor of justice, whom Harakka asked for advice, said he understood the sale of the domain was a change in Facebook’s name.
As Minister, Haraka would have had excellent reasons to demand the knowledge of the final purchaser and the terms of the negotiations and trade conditions under which the transparency required of the Minister can be achieved. The magpie chose to act differently. He entered into a confidentiality agreement, which now prevents him from disclosing the purchase price and dispelling any doubts, for example, about the overcharge obtained on the basis of status. He could still answer many questions.
In addition to the purchase price, more detailed information is needed, for example, on whether Harakka has had to refrain from any ministerial duties, such as those related to EU regulations, in which Facebook may have an interest. .
This example should suffice to prove that it is not a matter of voyeurism or incitement to envy. On the contrary, the Prime Minister should show by his own example that there is nothing to be ashamed of in wealth. My wondering question is: what exactly is the Prime Minister ashamed of?
With his own escape, Harakka has had time to arouse more suspicion than there would be any reason in the shops themselves. It is also important to note that Harakka never reported on the transactions he made on his own initiative. Not even when Ilta-Sanomat, for example, approached her at the end of October regarding news of Facebook’s name change to Meta and the fact that the meta.fi domain has been registered in the name of her company.
The deals only came to light when Helsingin Sanomat noticed that the domain name registration had been transferred to a law firm used by Facebook in December. Since then, Harakka has refused to answer questions sent by Iltalehti, for example, and rushed away journalists who have tried to ask about it face-to-face.
Mr President! The Prime Minister’s very brief statement reportedly meets the minimum requirements of the law. As it turned out, there are good reasons to disagree. But transparency is not enough to fill the letter of the law as little as possible.
In 2015, Harakka himself understood the meaning of the declaration of interest. A declaration of interest is not an authorization procedure in which certain transactions or holdings are “accepted”. Nor is the Chancellor of Justice of the Government a licensing authority that approves or rejects transactions made by the Minister on his own behalf.
with advance notice. In practice, this meant that Harakka asked in connection with the Government Plenary Session whether there was anything to consider about the sale of the domain name. It is unclear whether Facebook was even mentioned or whether Pöysti inferred it himself. At least not the purchase price.
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The declaration of interest submitted to Parliament is one of the procedures by which ministers disclose information that may be relevant to the assessment of the impartiality of their activities. In the preliminary work of the Constitution, the purpose of the declaration of affiliation has been explained to prevent situations that could lead to a “jeopardy of confidence in the proper functioning of the activities of members of the Government”. At the same time, emphasis has been placed on shifting the focus from ex-post evaluation to action to prevent possible abuses.
The notice is intended to provide information to others, such as parliamentarians and journalists, to ask additional questions. The escape of questions based on the legality of the declaration of affiliation is as embarrassing and disgraceful for Haraka as it was for Sipila, whom he rebuked.
A declaration of interest is not the best means of indicating, for example, that a minister is negotiating a significant transaction with a significant company in his or her own area of government. Harakka would have done the best thing if he had found out who he was trading with and said that announcing the negotiations was a precondition for continuing the negotiations and that disclosing the purchase price was a precondition for the trade.
at least in accordance with the spirit of the Constitution, if the domain name transaction has materially affected the Minister’s financial position or the amount of the transaction can be thought to affect the Minister’s confidence in impartiality. Admittedly, the letter Harakka must have fulfilled the letter of the law even now – as little as it has glorified.
This intrigue is reminiscent of the Prime Minister’s fellow party, Representative [ Timo ] Kallin , who failed to report his major election funders in the spring of 2008 when no punishment was imposed for failing to do so. Thanks to him, the law was changed so that transparency is understood even by those who must be individually threatened with punishment. At the same time, Finland and other actors in the developing regions came to the fore, who are trying to create exactly the connections that the declaration of interest should bring out to the representatives.
In his Facebook update quoted at the beginning, Magpie is right that, technically, a one-time transaction does not create an actual connection, such as a permanent business relationship. Admittedly, Harakka himself did not apply such a strict definition of affiliation six years ago. At the time, he already thought election support could be a tie.
Against this background, as a minister, Harakan would have thought that when massaging trade, he would ensure that voters and parliament have the opportunity to assess even the scale of the purchase price of a domain name from a fresh point of view. At least this is what Harakka, an opposition MP, would have expected from the Minister – in the name of transparency.
purpose. Of course, the reporting obligations of the Electoral Money Act can already be circumvented, for example by providing support at a premium in shops. Legislation can hardly ever prevent such arrangements. It should happen through public debate and political responsibility. Haraka should be able to have an open discussion about where he thinks the boundaries of what is acceptable to the Minister are.
