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On making amends

Back in January I wrote a wee post about Iceland’s future economic prospects, in particular the fact that a company called Verne Holding was looking to construct a data centre on the Reykjanes peninsula.

The idea of setting up a data centre in Iceland is excellent. Data centres require a lot of cooling, so the climate here is ideal. They also require a lot of energy, which we have here, too. And best of all — they are not aluminium plants, which some people consider a quick-fix solution to all of Iceland’s economic problems, and which we have plenty of already, thanksverymuch. So the prospect of Verne Holding coming in to set up a data centre was like a total windfall.

The only cloud in an otherwise brilliant sky: Björgólfur Thor Björgólfsson was a 40% owner of Verne Holding. Which raised a rather ethical dilemma — should we allow the oligarchs, who for all intents and purposes got us into this mess, to help us out of it again? Should we take Björgólfur Thor’s cash, which for some of us at least represents tainted money? Or should Björgólfur Thor and his ilk simply be banned for participating in Icelandic commercial ventures until their names are cleared and they have paid back their dues to Icelandic society, like many of them now claim they intend to do?

Yes, Björgólfur Thor has come out with a public apology, like several other key players in the meltdown — apologies that have been met with mixed reactions. He has promised to pay back every króna that he took out of Iceland.

And the latest: It is now reported that he has reached an agreement with Icelandic authorities to turn over all of his profits from the Verne Holding venture to the state.

I must say that I am among the group of sceptics of all these mea culpas that are now being heard. Mostly because they are only being made now that the Black Report is out, when these key players have been exposed for what they are and what they did. Their apologies ring a bit hollow, particularly when contrasted with the arrogant tone that generally prevailed in the 18 months that passed from the collapse to the publication of the report. A recent “apology” by Jón Ásgeir Jóhannesson in Fréttablaðið, which was clearly written by one of his minions, was particularly distasteful, particularly when contrasted with his earlier writings and the now-exposed nature of his misdemeanors before the collapse.

That said, I’m all for giving people a chance to make amends. Nota bene:  Amends are not the same as a glib little “sorry”. Amends are, as the term suggests, all about “mending” — about amending one’s behavior in the wake of an event, behaving differently, and trying to make up for a wrongdoing. Viewed in that context, Björgólfur Thor’s gesture is a step in the right direction, for as the Icelanders say: Batnandi manni er best a lifa — A man in recovery stands a good chance at life. We will  just have to see how many those steps are, and where they will take him in the end.



Comments on this entry are closed.

  • Michael Lewis April 29, 2010, 2:34 pm

    Maybe translate this (see link) to Icelandic and hand it to an Icenlandic lawmaker. I’m quite suprised that the authorities are dealing with his companies.


  • Tom Harper April 29, 2010, 2:37 pm

    My opinion:

    Short answer: Yes, they do.

    Longer answer: The fact is that these men were extremely skilled in their manipulation of business and money. In the wrong hands, that has terrible results (i.e. the kreppa). In the right hands, however, it is a valuable and rare skill.

    Like many people with their personality types, these are all the kind of men who will push any boundaries to accomplish their task (usually monetary gain). I would say that whatever moral stance one takes about the actions of various financial sectors (I am sharply disapproving), the fact of the matter is that it is naïve to assume that people won’t do, at least, anything the law allows them to for financial gain. That’s why regulatory frameworks are so critical.

    Men like these need to be properly reined in, by the law, by watchdogs, and by regulatory agencies. Iceland needs those to watch the current BÞ and the next one (he’s out there, I’m sure). That being said, they have the potential to turn the Icelandic economy around just as well as they annihilated it. I think that locking them away from the business world completely would be justified, but a missed opportunity as well.

    People have spoken about the data centre potential of Iceland for a while. It simply won’t come from outside, though. People that know the ins and outs of doing business in Iceland, speak the language, know who to talk to when the red tape appears, etc, are the only ones that will be willing to assume such risk. I think that BÞ should be given a chance, but the pressure for atonement should be kept high so that he remembers that this is a 2nd chance. Also, I hope the government and the press watch him like hawks.

  • alda April 29, 2010, 2:53 pm

    Tom – totally agree. Very well put. Wee pedantic remark, tho’ — his name is actually Björgólfur Thor, i.e. not Björgólfur Þór. 🙂

  • Tom Harper April 29, 2010, 2:55 pm

    Thanks for letting me know. I can never tell because Icelanders (esp the media!) do varying degrees of anglicisation of names. Drives me insane, but I should have had more trust in you!

  • kevin oconnor,waterford ireland April 29, 2010, 3:06 pm

    Yea atone or go to jail, like Tiger Woods he atoned for all those blondes ha ha, to keep that product placement sponsorship sucker rolling.

  • Michael Lewis April 29, 2010, 3:31 pm

    “That being said, they have the potential to turn the Icelandic economy around … ”

    Tom, isn’t it the same as bailing out banks, if you bail out people, banks etc.. you just create a moral hazard. Of course if the “Black Report” indicates that he is fit and proper and has no case moral, legal or ethical, then you would expect authorities to deal with him.

    If not (and I’m not implying this) or otherwise, it leads others to believe that they can basically ‘get away with it’ in the future.

  • Vikingisson April 29, 2010, 4:20 pm

    Instead of the handing over the profits to make amends which does ring hollow, why not take his 40% now and let the people own his share from the start? Why move money around in a paper trail that will no doubt be full of barely legal tomfoolery? Let the state get the profits directly instead of later on which will be minus huge sums like so many NGOs will do with you contributions.

    How are any of these criminals able to own 40% of anything? That share belongs to the people.

  • Kris April 29, 2010, 6:50 pm

    I disagree. I believe prison is the place for amends and reform. At least that has been the general idea for the last couple of hundred years. If I steel everything you own and burn down your house, do I make ‘amends’ by allowing you to work in my factory and live in my dormitory? That, by the way, I purchased with the money I stole from you. The apologies are crocodile tears.
    Here is my solution. Lure B back to Iceland under false pretenses, place him under arrest. Tell him that you are building a special prison for him on Grimsey, and then take everything that he owns.
    The blather about the ‘special’ financial people is just that, blather. The ‘contribution’ to society these people make is nil, nuncio, nada, nothing, ekkert. But they do end up with really killer yachts.

  • alda April 29, 2010, 8:12 pm

    Grímsey!? Whatever have the people of Grímsey done to deserve that? — Besides, being banished to Grímsey would by no means constitute punishment. Personally I’d love to spend some time in Grímsey.

    No, I like Víkingsson’s solution. Quite logical — of course he should just hand over his 40% share right away.

  • Peter Reeves April 29, 2010, 8:40 pm

    Despite everything they are still trying to con the Icelandic people!
    BT has salted away billions and now tries another cheap manipulation.
    The real value is in the equity and eventual sale price, not the profits.
    These can be reinvested and diminished by paying high salaries etc.
    Wake Up!!

  • sylvia hikins April 29, 2010, 8:40 pm

    In order to make amends, they all have to put their money where their mouth is. And quickly.
    sylvia from viking wirral

  • Gordon April 29, 2010, 9:08 pm

    I hope that the new datacenter is just the start of a broader IT boom in Iceland. If the state can even just skim off the top of that profit potential, it’ll be good for the area.

  • American Lawyer April 29, 2010, 9:54 pm

    A veteran prosecutor recently told me that, in her long experience in dealing with miscreants, the single most important factor–by far–in determining whether someone would commit a crime was whether they had previously done so. This, she explained, was the reason there are so many disabilities attached to ex-convict status (ineligibility to sit on boards of directors, for example).
    Charles de Gaulle once commented that the cemeteries are filled with indispensable men. I think Iceland would be much better off if it turned its back on this “opportunity” and limited its dealings to honorable men and women (I seem to recall that the “Anthill” chose integrity as the single most important societal value). If this is a deal only BT can pull off, why would you want it?

  • rod April 29, 2010, 10:06 pm

    Leaving aside varying points of view on the content, this piece is really well written.

  • alda April 29, 2010, 10:18 pm

    Why thank you Rod! 🙂

  • Simon Brooke April 30, 2010, 12:09 pm

    OK, now I’m utterly confused. Icelandic orthography frequently does this for me. The alphabet used in the English speaking world no longer has thorn or eth, although once it had both. The Icelandic alphabet still has both. In English we use the digraph ‘th’ to represent the sound which we would formerly have represented by the single letter thorn, and mostly ignore the sound once represented by eth (the Welsh use the digraph ‘dd’).

    So, there is a name which was once the name of the god of thunder, which is normally represented in English ‘Thor’, and, as I understand it, normally represented in Icelandic thorn o-acute r, or sometimes thorn o-acure r r.

    Now, in Scots we have names which have several variant spellings – for example ‘Alastair’, ‘Alistair’, ‘Alasdair’, ‘Allister’. But they’re all pronounced the same…

    Is ‘Thor’ viewed as a different name from thorn o-acute r r, or as a variant spelling of the same name? If it’s a different name, is it pronounced differently? Is it seen as being an authentically Icelandic spelling, or a foreign spelling?

  • idunn April 30, 2010, 8:05 pm

    I can make a distinction between Björgólfur Thor Björgólfsson and the development of data centers in Iceland. As long as in proper regulation he, or others, are not allowed to exploit or otherwise corrupt such an enterprise, then their money and contribution might be welcome. The matter of his apologies and any restitution can be another separate matter.

    Data centers are a great idea suitable for Iceland. As said, the weather and relative surplus of energy favor them. But only in measure, as in example from aluminum plants that any energy comes from somewhere, with sometimes a high environmental price to pay for it. Then also the question of latency, so these centers best positioned for archival purposes.

    In such an enterprise it might be nice to spread the wealth around, particularly given the difficult economy at present. Many could use a little extra income. If Reykjavik were optically wired, and it may be close to that now, and if not then possible, then every home in town could maintain a few servers in a spare closet or somewhere. Combined they could equal the capacity of large stand-alone data centers. Everyone paid by the amount of storage they provide. With the right software such a system would be wonderfully redundant and safe.

  • Vikingisson May 4, 2010, 2:27 pm

    “special prison for him”. This reminds me of “tres estrellas” which was the special prison built for Pablo Escobar near Medellin Colombia. It was built on a mountain with a view of his village. Entrepreneurs charged a few pesos to view it with a telescope. Perhaps on Esja? Better yet, a hut on top of Katla. The lottery could sell tickets whether he’ll sink into a fiery hell or spend 200 boring years on the ice.

    Prison is called for but the primary focus has to be the money and to take whatever he has hidden away so he can’t hide in luxury. Justice will only feel good for a moment.

    I’ve always liked the data centre industry idea as a better business than smelters. There is a lot of fibre ‘to the curb’ already but you need to finish the new links across the pond. Latency is good, I had perfect VoIP calls over random WiFI locations downtown.