It was painful to watch Valgerður Sverrisdóttir, who was Minister of Finance and Industry for the Progressive Party at the time when the banks were privatized, cross-examined on Kastljós this evening.
It is now generally agreed that the outrageous corruption that proliferated inside the banks ca. 2002-2008 began with their privatization. As I’ve written about before, the head of the privatization committee resigned abruptly in the midst of the process, claiming that the heads of the two coalition parties – Independence and Progressive – were interfering unduly in the privatization. Originally the condition for the privatization of the banks was supposed to have been distributed ownership, but suddenly the two coalition leaders – Davíð Oddsson and Halldór Ásgrímsson – wanted to hand-pick the buyers.
Landsbanki was delivered to Björgólfur Jr. and Sr. at the behest of the Independence Party. The other bank – Búnaðarbanki, which later became Kaupthing – was sold to a consortium called the S-Group, which was close to the Progressive Party.
The S-Group were allegedly in talks with a foreign bank to lend them the funds to acquire Búnaðarbanki. However, info surrounding this foreign bank [which first was supposedly French, then German] was all rather vague. In the end, the small German financial institution [that had suddenly replaced the original big French bank] sent a “representative” to be present at the signing of the contracts. Later it was revealed that the German financial institution never recorded any shares in Búnaðarbanki in its financial statements, i.e. it never owned any of the shares. It was a ruse to make it look like the S-Group fulfilled all conditions, which included having a strong financial backer.
So anyway, Valgerður Sverrisdóttir was heavily involved in the privatization process. In fact, as Minister of Industry she signed the contract for the sale even though she had been told a short while earlier that the German bank was a scam and privatization conditions had not been met. In Kastljós this evening, the interviewer, Helgi Seljan, tried to get her to say she had made a mistake by signing on the dotted line, even after she knew the whole thing was a big swindle. And she just … COULD … NOT … GET … THE … WORD … OUT. She could NOT admit she had made a mistake. It was everyone else’s fault. In this particular case, according to Valgerður, the fault of the foreign consulting firm that advised them on the sale. [When all else fails, blame a foreigner.]
It was also hard not to cringe when Helgi asked her exactly how Davíð Oddsson had made it known that he wanted the privatization to go his way, and not the way that had originally been agreed. She squirmed in her seat, fumbled with her water glass, tried so hard to maintain her carefully crafted facade. And failed.
There were 147 individuals called in for questioning by the committee behind the Black Report, and NOT ONE of those 147 was willing to shoulder ANY responsibility for the collapse of the Icelandic economy. Not one.
On the whole, though, there is widespread satisfaction in Icelandic society with the report that was published yesterday. It appears to be a very well-crafted document, very thorough and direct, yet suitably objective. Most importantly, it is credible — the authors were very clearly not out to please anyone or to perform any sort of whitewash. On the contrary, they seem to have performed the task with integrity and respect.
When one realizes this, one also realizes just how much anxiety there was around here that the report would somehow be a failure. And what an immense and overwhelming relief it is to realize that it’s actually better than people dared to hope. It’s like Egill Helgason wrote on his blog today, Icelanders have become so accustomed to things being half-assed that when they turn out to NOT be half-assed we’re all overjoyed. That’s kind of what it’s like around here today.