“We Have Been Thrown Under the Bus”: Corporate Versus Individual Defense Mechanisms Against Transnational Corporate Bribery Charges

Previous Research

The research on neutralizations of white-collar and corporate crime can be traced all the way back to Sutherland, who was responsible for coining the term “white-collar crime,” and his descriptions of how businesspeople embrace an ideology that encourages them to engage in illegal practices and that provides rationalizations for such activity as being necessary and ordinary (Sutherland, 1961, pp. 240–247). Further, prior to Sykes and Matza’s (1957) publication of Techniques of Neutralization, Cressey (1953/1973, p. 94) explored in Other People’s Money how an embezzler or some other violator of trust may use rationalizations to “‘adjust’ his conception of himself as a trusted person.” Later, Geis (1968), Benson (1985), and Coleman (1987) have analyzed how white-collar criminals neutralize their behavior and, for example, found that white-collar criminals’ accounts were unique to the crimes they had committed (Benson, 1985). More recent studies of neutralizations of white-collar crime have developed the ideas of these classics (e.g., Goldstraw-White, 2011; Klenowski & Copes, 2013; Piquero et al., 2005). Most studies on the neutralizations applied by white-collar criminals differ from corporate accounts, since they have focused on individual rationalizations by corporate employees (neutralizing crimes against the corporation) in contrast to corporate accounts (which neutralize crimes by the corporations). Studies of corporate accounts include examples of different forms of neutralizations employed by corporations (Box, 1983, p. 54), corporate responses to allegations of wrongdoing in the automobile industry (Whyte, 2016), neutralizations employed by large international corporations involved in international crimes (Huisman, 2010; Schoultz & Flyghed, 2016), neutralizations used by the tobacco industry (Fooks et al., 2013), neutralizations made by corporations involved in tax avoidance (Evertsson, 2019), and corporate responses from oil companies in connection with disasters (Breeze, 2012; Mathiesen, 2004). In these studies, scholars have both applied the traditional techniques of neutralization to corporations and identified new techniques that specifically apply to the corporate context.

There is also an extensive communications literature focused on corporate crises, in particular image repair theory and corporate apologia, that is worth taking into account (e.g., Benoit, 1995, 2015; Hearit, 2006). While focusing on what constitutes the most effective corporate response, the crisis communication literature directs its principal focus at the avoidance of liability concerns (Bachmann et al., 2015; Coombs & Holladay, 2008; Hearit, 2006, p. 42; Kramer & Lewicki, 2010, p. 252). When a mediated scandal occurs, PR consultants may typically recommend apologizing in order to leave the affair behind as quickly as possible (Allern & Pollack, 2012b). Although an apology may prevent a legal dispute, an apology may also be used as evidence of guilt and thus invite legal actions against the company (Coombs & Holladay, 2008; Hearit, 2006, p. 42). One corporate tactic that may be used to purge the corporation of guilt and to restore legitimacy is the use of a scapegoating discourse (see Hearit, 2006, p. 20). By means of scapegoating, “a division is made by which guilt is transferred from the many to the one” (Hearit, 2006, p. 31), while the roots of the problem are not dealt with (Bachmann et al., 2015, pp. 1128–1129).

The literature on white-collar criminals’ accounts helps us understand how individuals frame their defense, while the existing literature on corporate denials and neutralizations, as well as the corporate crisis literature, can tell us more about the organizational aspects of neutralizations. However, none of the cited literature compares individual and organizational forms of accounts, nor how the accounts are developed from public discourse defenses into the legal defenses employed in a criminal trial, as this article sets out to. In addition, there is little literature based on court observations from white-collar or corporate crime trials. Much of the “court ethnography” has focused on juveniles (e.g., Barrett, 2013; Emerson, 2008; Kupchik, 2006) and has in addition been conducted in the United States (Paik & Harris, 2015), which has a different legal system and court culture from that of Sweden. The American legal system, in contrast to the Swedish, is characterized by a plea bargaining culture, not least in relation to white-collar crime (Askinosie, 1989; Mann, 1988). Croall (1993, p. 364) has studied how business offenders in court used strategic arguments (including both defense and mitigation) in an attempt to “minimize imputations of blame and to present themselves as honest, respectable and competent businesspersons.” These arguments include pointing to a diffusion of responsibility or someone else’s fault, claiming that the offense is merely technical and that the problems were inevitable, denying the seriousness of the offense and appealing to the defendant’s character or business competence (Croall, 1988, 1993). Croall’s work was based on observations in court and as such captured the legal strategic defense. The cases studied in that work, business regulatory crime under consumer protection legislation, differ in many ways from the high-profile Telia case on transnational corporate bribery. Levi (1991), however, has followed a well-publicized white-collar crime in the UK, the so-called Guinness Four case, which was focused on theft and false accounting. He makes observations on the relations between the judge and the defendants, and also those between the defendants and the media/public, but does not explicitly cover the defense mechanisms utilized.

Theoretical Approach—Understanding Neutralizations

Stanley Cohen (2009) describes the use of neutralization techniques in relation to state violations of human rights and uses these techniques as a tool to deconstruct official discourses. Cohen (2009) identifies three overarching strategies, which together form a spiral of denial, and which may appear separately or in sequence. In the first, literal denial, the event itself is denied, for example by claiming that “nothing has happened.” The second form of denial, interpretative denial, occurs when the media and human rights organizations show that the event really has taken place. In these situations, those responsible must retreat and admit that the event has happened, but they then defend their actions by attempting to reformulate the description of the problem in various ways and by denying the extent of what has happened. In the third form of denial, implicatory denial, there is no attempt to deny either the facts or the conventional interpretation of these facts. Instead, the focus is directed at contesting the implications of what has happened. Cohen (2009, p. 103) points out that in practice the three forms of denial seldom run in sequence and that they more often appear simultaneously. Within these three principal forms of denial, Cohen (2009) identifies seven different techniques, of which five are drawn from Sykes and Matza’s (1957) theory (denial of responsibility, denial of injury, denial of the victim, condemnation of the condemners, and appeals to higher loyalties), while two were developed specifically in relation to political actors (denial of knowledge and moral indifference). Although Cohen’s development of the theory has been commended for the way in which it analyzes official discourse by linking individual denials to organizational denial (Whyte, 2016), the distinction between the individual level and the organizational is not always clear. In his book States of denial, Cohen (2009) uses empirical evidence to support his claims based on individuals, such as Israeli torturers and Nuremberg defendants, as well as on governments, without making a clear distinction between the two. This is an inherent limitation in Cohen’s theoretical framework. In consequence, it is our hope that this article will be able to contribute to a clarification of individual and corporate forms of denial, and as such, it constitutes a theoretical contribution to the literature on denial.

In their original theory, Sykes and Matza (1957, p. 666) argued that neutralizations “precede deviant behavior and make deviant behavior possible.” As both Minor (1981, p. 300) and Maruna and Copes (2005, pp. 230–231) emphasize, this implies that neutralization techniques are not merely after-the-act rationalizations, they also enable crime. However, as the theory has been developed, one of the subjects of discussion has focused on when the accounts are employed. Benson (1985, p. 587) has noted that “[i]t is important to distinguish between neutralizations that cause or allow an offense to be committed and accounts that are developed afterwards to excuse or justify it.” White-collar crime scholars such as Cressey (1953 /1973, pp. 94, 118) and Benson (1985, p. 587) have adopted a similar position, reasoning that techniques of neutralization are available before the offense takes place. While Cohen’s (2009, p. 58f) development of the techniques of neutralization is based on analyses of perpetrators’ and bystanders’ denials of atrocities ex post facto, he argues that the use of neutralization techniques must be present, to some extent, prior to crimes being committed. In contrast to neutralizations that cause or allow an offense to be committed, the legal defense that constitutes part of the current study is undoubtedly comprised of after-the-fact accounts. The legal defense accounts also differ in the sense that they have been framed in order to avoid criminal culpability for the acts in question and not necessarily to serve to justify acts in order to avoid self-blame or the blame of others (although this might also be the case).

Methodological Approach

The empirical material employed in the article was collected in four steps and is drawn from different sources. The first step involved the collection of official statements in which Telia’s response to the accusations is expressed in sources such as press releases, annual reports, letters to shareholders, dominant national newspapers, and radio and TV interviews. These sources covered the period from 2007, when Telia first entered Uzbekistan and the first allegations were made, to the end of 2017, and they include the corporate response to the global settlement and to the criminal charges. The official material from Telia was collected from the corporation’s website, and the national media material was obtained by means of a systematic search in the digital news archive, Retriever Research. Altogether, the sample includes more than 400 publications in which the corporation has defended itself. The material was gathered at several points during the period 2015–2018. It is employed in this article to describe the corporate responses leading up to the global settlement and the criminal trial in Sweden.

In the second step, we have collected and analyzed the written judgments relating to the global settlement. The judgments from the U.S. DoJ and SEC have been employed to understand Telia’s position on the settlement and also to make sense of the public statements made by the corporation in relation to the settlement (collected in the first step).

Third, observational data were collected in 2019 during the Telia trial. This part of the analysis is based on the observations made during the trial at Stockholm District Court between September 5th and December 19th. We participated in those parts of the court proceedings that we viewed as being most relevant from the perspective of our research, primarily during the prosecutor’s presentation of the charges, the opening presentations of the prosecution and defense cases, the presentation of the defense case for each point in the indictment, the cross-examination of the defendants, and the lawyers’ closing arguments. In addition, the trial comprised several weeks of witness testimony, which we have only observed on a small number of occasions which we regarded as being relevant. The Telia company only presented its defense case in general terms, without presenting a detailed defense in relation to each point in the indictment of the kind presented by the three indicted individuals. Nor was there any cross-examination of any current representative of the corporation in connection with the different points in the indictment.

During the trial, we made detailed field notes of what was said in court and also of the way the different actors acted in the courtroom. Observing proceedings from the open gallery at the back of the courtroom created a distance to the courtroom actors and allowed for the writing of extensive field notes in real-time on a laptop. Since we were also able to audio-tape the court hearings on the days we were present, this allowed us to transcribe parts of the hearings verbatim, and also to add details from memory that were not “talk,” thus producing the so-called full or complete field notes (Emerson et al., 2011). In addition, we added our own impressions following a given day, preliminary ideas, and an analysis of what we had observed, in a separate document (see Paik & Harris, 2015). This means that we have made extensive notes on those days during which we observed the court proceedings. While field notes usually focus on describing scenes (Emerson et al., 2011), our own have instead largely focused on what was said, and only to a lesser extent on people’s behavior (e.g., in the form of gestures and other forms of nonverbal information).

Official documentation related to the court case, the so-called court files, which include the written judgment, the police investigation report, the defense lawyer’s power-point presentations, and recorded court cross-examinations, comprise a fourth form of empirical data. The court files were requested from the district court following the conclusion of the trial and have been analyzed in parallel with the field notes made during the court observations. For example, when we have noted that the defense referred to a document that had been filed with the court, the relevant annex in the court documentation has been used to assist in our analysis of the field notes. All presented quotes have been translated from Swedish to English.

The coding and analysis of all the empirical material has been focused on the manifestations of defense strategies, the so-called accounts (see Scott & Lyman, 1968; Cohen, 2009), and has been approached by means of frame analysis, that is, an analysis of how the phenomenon in question is framed. Frame analysis involves a focus on discourses, which may be described as the language, key concepts, and categories that are used to frame a given issue (Bacchi, 1999). By contrast with more customary analyses of discourses, frame analysis focuses on capturing the conscious formulation of statements (Bacchi, 1999). Although the empirical material is drawn from two different forums, the public discourse and the court proceedings, both comprise conscious formulations, often prepared by a team of legal or media consultants.

Analysis of the Defense—Corporate Versus Individual and Public Versus Court

The analysis is presented in the chronological order of the events, from the first accusations, through the global settlement, to the criminal court proceedings in Sweden.

Denial of Responsibility

A prominent part of the framing of the defense in court involved a denial of responsibility, with the defendants accepting that something had happened but denying their own responsibility (Cohen, 2009, p. 61). As has been shown above, the three defendants did not accept that the acts were illegal but did not deny that the transactions had taken place. Instead, they referred to others as constituting the responsible party. However, this type of defense was applied somewhat differently by the three defendants.

During the first day, the counsel for the president of the Eurasian operation argued for an absence of responsibility by referring to people above his client in the corporate hierarchy as being responsible for the decisions: “He has not made any of the relevant decisions, has not executed any payments. The decisions have been made by the Board and the CEO, when he has been responsible” (statement of defendant’s position in relation to the charges, day 1). Locating the responsibility for the actions with the Board, and the Board’s decision to enter the Uzbekistan market, was a prominent element in the defense of all three of the accused. The defense of the CEO was mainly focused on the fact that the decision to enter Uzbekistan had been taken by the Board prior to his becoming CEO. The counsel for the president of the Eurasian operation also referred to the fact that his client “has not been responsible, or had the competence, to assess the legal issues” (day 2), while the company lawyer argued that he was not the individual who had “been holding the pen” (field notes, day 6, presentation of the case, charge no. 1); instead, three different external law firms had been involved, along with Telia’s chief legal officer (closing arguments, defense, day 42, power-point presentation, case no. B 12201-17, B 12203-17, annex 414).

During the trial, the company lawyer’s defense counsel repeatedly referred to a long list of people who had been involved in the business deals. During the presentation of the defense case on the fifth day of the court hearing, the counsel concluded: “Again—an extremely large number of people are involved in these transactions. Many have played a much greater role than [the client]. [The client’s] role is very, very peripheral.” Others have pointed out that corporate structures create unique opportunities for another form of denial of responsibility, namely diffusion of responsibility, since these structures make it difficult to determine who is to blame (Bandura, 1999; Croall, 1988, 1993). Similarly, we observed during the trial that the defendants ascribed responsibility for various decisions to different levels of the organizational hierarchy or referred to a large group of actors being involved in the decision. Nor was this a claim that was only made by the defense. One of the witnesses, another senior official of the corporation, stated in a police interrogation that the division of responsibility in a company is “blurry” and that it is impossible to identify a single person as being responsible (preliminary investigation, annex J. p. 10).

Another way of denying responsibility involves referring to a lack of any intention to produce harm or commit a crime (Box, 1983, p. 55; Cohen, 2009, p. 60), which can be labeled a denial of intent. The defense lawyers repeatedly denied that their clients had any “intent to commit a bribery offense according to Swedish law” (closing arguments, day 41). One part of the denial of intent can also involve framing the accused as having made no personal gains from the affair, as in the following example: “[the client] has been an employee and has only had the ambition of performing his work in the best way. Has not had any personal interest in the relevant business and has above all lacked any motive.” In contrast, the defendants stressed the corporate gains and the corporation’s interest in the Uzbek market: “There has been a powerful desire on the part of TeliaSonera to implement this business transaction” (counsel for the president of the Eurasian operation, day 2).

Yet, another form of denial of responsibility involves what may be labeled a denial of control (see van Dijk, 1992, p. 92), which involves attempts to repudiate responsibility for an act by referring to having no or only limited control over the situation. For example, the CEO’s defense was based on the fact that he had not taken over as CEO at the time that the first decision to enter Uzbekistan had been taken by the Board. During the presentation of the defense case, the CEO’s counsel claimed that his client “could not interrupt the business transactions” and that “breaking off a transaction involves a terribly high cost” (day 3).

The other two defendants instead employed what may be interpreted as a defense of necessity (see Benson, 1985; Cohen, 2009, pp. 91–92; Coleman, 1987; Minor, 1981, p. 412), which includes references to obedience (see Cohen, 2009, p. 89) and “acting under orders” (Box, 1983, p. 55). During the court hearing, we repeatedly observed framings such as the obligation to “follow instructions received from his superiors” (presentation of defense case, charge no. 3, day 14). The CEO’s defense counsel also employed a form of defense of necessity by referring to the CEO’s position in relation to the Telia Board: “What does [the client] do following a decision from the board? What does he have to do? Well, he has to implement it” (presentation of defense case, charge no. 3, day 14).

On several occasions during the trial, the defendants described that they have felt abandoned by the company, not least in relation to the global settlement. The CEO’s defense lawyers pointed out that “the former employer, TeliaSonera, has not once made contact with my client” (presentation of defense case, day 3). In the transcript from the 39th day of the court hearing, we can read that one of the other defendants was “very disappointed with Telia, who have chosen to sacrifice certain individuals in order to save the company.” The defendants’ expressions of disappointment with the corporation were expanded into a defense that may be categorized as another form of denial of responsibility, whereby the responsibility for the act or event is transferred from the corporation to one or a few symbolic figures, a claim of being scapegoated. As was mentioned above, scapegoating reduces complexity and allows the corporation to avoid scrutiny (Bachmann et al., 2015). This is also what the defendants would argue in court when they referred to the global settlement: “Telia has had powerful commercial reasons for entering into this contract and it should not be ascribed any evidentiary value. The incentive, we have already said, was 1.4 billion [Swedish Kronor].” In the closing arguments on the last day, one of the defendants described finding the company’s behavior “cowardly” and as “backstabbing.” He continued: “The company decided to throw three individuals under the bus in order to receive hundreds of millions of dollars in reduced costs.” Contesting the definition of the accused as a criminal is a recurrent theme in white-collar crime prosecutions (Levi, 2006). However, what is significant here in relation to all of the forms of denial of responsibility is the relationship between the large corporation and the three prosecuted individuals. They were not accused of committing crimes against the company, but for the company, and perceived that they were being scapegoated and sacrificed in order for the company to be able to continue doing business.

Concluding Discussion

When the court announced the acquittal of the three defendants in January 2018, it was evident that the central legal issue had been that of Gulnara Karimova’s position within Uzbekistan and the limitations of the Swedish anti-bribery legislation. The presiding judge, in a comment made in the court press release, stated that “In order for criminal liability for bribery to become applicable at all, it is required that the recipient of alleged bribes is included in the limited circle of persons who, according to the applicable law, could be held liable for the taking of bribes. It has not been proven in the case that Gulnara Karimova held any such position in connection to the telecom sector, which has been the prosecutor’s main alternative” (Stockholm District Court, 2019). In the media discussion following the verdict, the case has been used as a symbol for the ineffectiveness of the former bribery legislation (e.g., Sveriges Television (SVT), 2019).

In this article, we have analyzed corporate and individual accounts in a case of corporate crime, that is, a case concerning offenses that were “committed for the corporation and not against it” (Box, 1983, p. 20). The case was one of transnational corporate bribery (Lord & Levi, 2016) with both international and national consequences, in which the company had been forced to enter into a global settlement and acknowledge criminal activity, at the same time as three former executives have been prosecuted in a criminal case in Sweden, in which they have been acquitted by the court of first instance. In this article, we have shown how the case illustrates the transformation from a media scandal to a legal process, in which two types of interest are clearly expressed—the organizational and the individual. These different interests are both at stake in this case, which from the beginning was not about individuals having benefited, but rather about business dealings that benefited the company, and by extension also the Swedish state as the principal shareholder in the telecom company.

The corporation must protect what is best for the corporation in accordance with its legal responsibilities toward its shareholders (Hearit, 2006, p. 51). A mediated scandal requires some form of resolution that signals change (Allern & Pollack, 2012b). While Telia initially denied the accusations, this shifted into a partial acknowledgment and temporal containment (see Cohen, 2009) in combination with a form of scapegoating, which was due to several factors, including investigations that the company itself had initiated, and legal investigations by American and Dutch authorities. During this process, the company distanced itself from its former leadership and identified specific individuals as being responsible. One important detail in this context is the fact that Sweden does not apply criminal liability for legal persons, which means that the company cannot legally be convicted of a crime. By the time of the trial in Sweden, the company had nothing to lose besides the confiscation of profits if the individuals placed on trial were convicted of criminal offenses. And since this amount would be confiscated by the Dutch authorities in the case of the defendants being acquitted, the company was not at risk of having to make any additional payments. However, since the company was required to keep to the acknowledgment of guilt that had already been made in the American courts, in order to avoid breaking the agreement reached with the American authorities, it had little room for maneuver.

By contrast, the prosecuted individuals risked, and since the verdict has been appealed still risk, being sentenced to 6 years’ imprisonment. For a long time now, they have been forced to focus on saving their own skin and not primarily on defending the company. The defense counsel therefore argued that the prosecuted acts did not fall within the remit of the legislation that was in place at the time, but that they might possibly be offenses under the legislation as it stands today. This type of argument is difficult to grasp within the framework of the logic of the media, since it is not exculpatory in relation to moral guilt. In van Dijk (1993) terms, this could be understood as an example of different discourse genres, in terms of different forums requiring different accounts, or of “audience segregation,” whereby specific performances are given to specific audiences (Goffman, 1956, p. 137). Beyond the use of the legality defense, the defendants denied knowledge, deviance, and responsibility. One of the more significant denials of responsibility involved the claim of having been scapegoated. While the scapegoating moved the blame from the corporation to a few individuals (Bachmann et al., 2015, p. 1129), the process of blaming a few selected individuals also constitutes part of the logic of the criminal proceedings. It is difficult to imagine a court hearing in which everyone involved in the decision-making process and implementation of a business deal like Telia’s in Uzbekistan could be prosecuted. When the defense argued during the trial that the defendants were not being prosecuted because they were the individuals who bore the most guilt, but rather because they were the most practical/convenient scapegoats, they were probably right. This article thus illustrates the complexity of corporate crime, and of how it can contribute to our understanding of the accounts that are used by organizations and individuals when they face accusations of criminal wrongdoing.