Much as I would love to focus solely on these gorgeous summer days and forget all the dreariness that weighs upon this nation like a thick blanket of tar, no self-respecting chronicler of the meltdown can avoid mentioning the latest corruption scandal at old Kaupthing bank.
We already know that Kaupthing “loaned” some ISK 500 billion [USD 4 billion] to its largest owners and their affiliates just days before the bank collapsed last October. Now it has transpired that Kaupthing’s chief lawyer Helgi Sigurðsson received a bullet loan of ISK 450 million [USD 3.5 million] from the bank. This information was disclosed by Icelandic paper DV two days ago and Sigurðsson subsequently resigned from the bank, issuing a statement that read: “In light of the repeated and misleading discussion concerning my involvement in loans made to employees of Old Kaupthing, I consider it clear that the needed calm cannot be created around my work for the bank.”
Ah, I see. He is forced to resign because everyone keeps pestering him about those few bob the bank slipped him when nobody was looking. Glad he’s taking it like a man, though, and – you know – putting the bank’s best interests first. [*snort*]
Anyway, bad as that is, it pales in comparison to the nearly ISK 900 million [USD 7 million] loan awarded to one Kristján Arason, ex-head of the bank’s corporate division, who just happens to be the husband of Þorgerður Katrín Gunnarsdóttir, currently vice-chair of the Independence Party, who at the time of the collapse not only held that position [NB: at the time the IP was the largest and most powerful party in the country - and incidentally, according to the latest opinion polls it is the largest party again] but was also Minister of Education, Science and Culture. Oh, and sport. Which is why she used around ISK 3 million of taxpayer’s money to travel to Bejing with her husband to attend the Olympics last August. Guess he was too strapped for cash to pay his own way.
Outraged yet? – Wait, wait … it gets better. Immediately after the collapse, the bank planned to write off all personal responsibility for the loans it had awarded to its employees. That’s right – they got the loans [very often to buy shares in the bank - which pushed up share prices] but when it all went tits up [pardon my French] they got to walk away scot-free.
According to latest reports, the liquidation committee of the new bank has not approved that particular move – and if they have any sense of justice or decency, they won’t.
IT WAS ANOTHER GORGEOUS DAY
Took a long stroll with my father today through Fossvogsdalur valley in the centre of Reykjavík – an area I’m really not that familiar with, but which is pretty darn nice! Like me, he was away for a few days, and we were remarking how great it felt to get away from all the weight of the kreppa, however briefly … yet also how fundamentally good it is to live in Iceland and how good our quality of life is here, irrespective of the economic situation. Often in the blithe days of the Icelandic summer, all seems so perfectly well with the world, so sometimes the general situation in society these days just seems very unreal. Right now we have 13°C [55F] in the capital, and we’re due for some drizzle. The sun came up at 3.05 am, and set at 11.56.
{ 15 comments… read them below or add one }
It’s so frustrating to hear all those stories of corruption and selfishness without seeing anybody being held responsible and taken to court…
But I am on my way to share some days of your beautiful summer, which, at least, can’t be taken away by greediness.
Is the hope that Eva Joly’s investigation will, among other things, lead to criminal prosecutions of key officials involved?
This conduct sounds a lot like insider trading (a la Martha Stewart & Sam Waskal with ImClone), conspiracy and fraud, which generally leads to a hefty fine, loss of business/law license and jail time, in addition to public humiliation. Surely there is evidence out there (emails) that establishes knowledge of the banks’ imminent collapse around the time the loans were made.
Katrín Gunnarsdóttir actually traveled twice to the Beijing Olympics!
Simply loving your tone and style in this article—this has whiffs of the UK expenses scandal about it. Appropriate you should use my favourite expression then: all went tits up.
Oh Alda, how your blog posts never cease to brighten my day.
Oh, I so agree with your father. If it wasn’t so pathetic it would be really funny to listen to people talking about – oh, poor us, we will be back where we were 15 years ago, the horror!
Somehow I can’t remember life here 15 years ago like it was any worse. We had food on the table, could buy clothes for ourselves and our children, old and infirm people were looked after. So what, if we couldn’t own 3 Range Rovers per household? Yes, actually even if we went – what, 30 years back? 40 years back?
Þorgerður Katrín Gunnarsdóttir embodies the very worst of Iceland.
Wasn’t it her that dismissively told a financial expert to ‘learn his trade’ when he questioned the solidity of the Icelandic economy?
Truly staggering that someone so inept and corrupt is not investigated.
LDE – If it’s frustrating for you, imagine how it must be for us! Aaaaargh!!
Jessie – well, that’s what we’re all hoping, but as she herself pointed out the Icelanders have been dragging their heels in the investigation. It really is UNBELIEVABLE how slowly it is progressing.
Oscar – true, but only once with her husband, I think – to the finals.
Max – why thank you!
Hildigunnur – definitely. The sense I have of the era we’re about to sail into is that it’s similar to what it was like here 15 years ago when I moved back to Iceland. Sure, things were a little tough, I drove around on a ratty old Fiat and had hardly any money, but everything worked out fine. And I was SO happy to be back here after 20 years abroad – I appreciated the landscape so much, and the fresh air, and all the good things we have here.
Peter – yes indeed, that’s her!
“Outraged yet? – Wait, wait … it gets better”
LOL… It’s a long time since the collapse, so do Icelanders still genuinely think that Eva Joly will be able to sufficiently influence the prosecution culture? Or are Icelanders finally accepting that those responsible will never be held to account and most of those who committed crimes will never be charged? I suspect that an exasperated Eva Joly has already moved from the former to the latter as it became clear the investigation was a charade. Icelanders blamed the collapse on bankers, regulators and government; I wonder who they’ll blame for the lack of prosecutions; a modern-day playwright might muse that something is rotten in the state of Iceland…
I know that everyone wants to find these obviously corrupt execs and politicians that conveniently took billions for themselves days before the collapse. Prosecute, humiliate and everything else that makes it seem like justice is being done. After watching the handful that go on trial and ultimate jail time in North America I can say that the so called justice is short lived. The billions are still missing and we the so called people are still responsible for paying it back. Reality hits and the lawyers laugh hysterically all the way to another bank, again.
Justice can come later but how about reversing the original deals and call in those loans and making those involved responsible for paying them back just like us poor slobs? I’d even offer amnesty. Pay back the billions and we don’t prosecute. The bank itself and the criminals that gave it away and then forgave the loans are another story, they are hunted down and forced to play evil characters on Lazy Town for 10 years. Or something that makes us laugh and feel like justice is done. But get the money back first.
“wait wait”! HAHAH
I love your style. I never get tired of reading you.
I’m with Maria.
I presume that all this is illegal in Iceland!! If so, why hasn’t anyone been arrested yet?
I hope the Summer weather has improved your mood a bit!
Lee – well, Eva Joly is the cause of some controversy here as I’ve mentioned before, but I personally still think she’s our only hope of getting any justice.
maria, jim – thanks.
Andrew – I’m not sure it is illegal. Immoral, yes – but I think the illegal part is somewhere in a gray area. And that’s what the investigation will reveal.
Makes our swedish woes about Swedbank pale considerably. If this kind of behaviour (if this isn’t akin to stealing please inform me how) isn’t illegal, then that’s a regulation issue I understand. How hard can it be to create a banking system that is immune to the stupidity and evilness of bankers and politicians?
“How hard can it be to create a banking system that is immune to the stupidity and evilness of bankers and politicians?”
The system has been created by bankers and politicians and it has been very successful in funneling money from the taxpayers to both bankers and politicians.
Who would you suggest to create the next version, i.e. who should get rich next?